EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
dated as of
June 28, 2000
among
CENTRAL NEWSPAPERS, INC.,
GANNETT CO., INC.,
and
PACIFIC AND SOUTHERN INDIANA CORP.
TABLE OF CONTENTS
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PAGE
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ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions...................................................1
ARTICLE 2
THE OFFER
SECTION 2.01. The Offer.....................................................6
SECTION 2.02. Company Action................................................9
SECTION 2.03. Directors....................................................10
ARTICLE 3
THE MERGER
SECTION 3.01. The Merger...................................................12
SECTION 3.02. Conversion of Company Stock..................................12
SECTION 3.03. Surrender and Payment........................................13
SECTION 3.04. Dissenting Shares............................................14
SECTION 3.05. Stock Options................................................14
SECTION 3.06. Restricted Stock.............................................15
SECTION 3.07. Adjustments..................................................15
SECTION 3.08. Withholding Rights...........................................15
SECTION 3.09. Lost Certificates............................................15
ARTICLE 4
THE SURVIVING CORPORATION
SECTION 4.01. Certificate of Incorporation.................................15
SECTION 4.02. Bylaws ......................................................16
SECTION 4.03. Directors and Officers.......................................16
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 5.01. Corporate Existence and Power................................16
SECTION 5.02. Corporate Authorization......................................16
SECTION 5.03. Governmental Authorization...................................17
SECTION 5.04. Non-contravention............................................17
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SECTION 5.05. Capitalization...............................................18
SECTION 5.06. Subsidiaries.................................................19
SECTION 5.07. SEC Filings..................................................19
SECTION 5.08. Financial Statements.........................................20
SECTION 5.09. Disclosure Documents.........................................20
SECTION 5.10. Absence of Certain Changes...................................20
SECTION 5.11. No Undisclosed Material Liabilities..........................21
SECTION 5.12. Compliance with Laws and Court Orders........................21
SECTION 5.13. Litigation...................................................21
SECTION 5.14. Finders' Fees................................................21
SECTION 5.15. Opinion of Financial Advisor.................................22
SECTION 5.16. Taxes ......................................................22
SECTION 5.17. Employee Benefit Plans.......................................23
SECTION 5.18. Environmental Matters........................................25
SECTION 5.19. Intellectual Property........................................26
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PARENT
SECTION 6.01. Corporate Existence and Power................................26
SECTION 6.02. Corporate Authorization......................................26
SECTION 6.03. Governmental Authorization...................................27
SECTION 6.04. Non-contravention............................................27
SECTION 6.05. Disclosure Documents.........................................27
SECTION 6.06. Financing....................................................27
ARTICLE 7
COVENANTS OF THE COMPANY
SECTION 7.01. Conduct of the Company.......................................28
SECTION 7.02. Stockholder Meeting; Proxy Material; Merger Without
Stockholder Meeting........................................30
SECTION 7.03. Access to Information........................................30
SECTION 7.04. No Solicitation; Other Offers................................31
ARTICLE 8
COVENANTS OF PARENT
SECTION 8.01. Confidentiality..............................................33
SECTION 8.02. Obligations of Merger Subsidiary.............................34
SECTION 8.03. Company Stockholder Meeting..................................34
SECTION 8.04. Director and Officer Liability...............................34
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SECTION 8.05. Employee Matters.............................................35
ARTICLE 9
COVENANTS OF PARENT AND THE COMPANY
SECTION 9.01. Best Efforts.................................................37
SECTION 9.02. Certain Filings..............................................37
SECTION 9.03. Public Announcements.........................................37
SECTION 9.04. Further Assurances...........................................38
SECTION 9.05. Notices of Certain Events....................................38
ARTICLE 10
CONDITIONS TO THE MERGER
SECTION 10.01. Conditions to Obligations of Each Party.....................38
ARTICLE 11
TERMINATION
SECTION 11.01. Termination.................................................39
SECTION 11.02. Effect of Termination.......................................40
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Notices.....................................................40
SECTION 12.02. Non-Survival of Representations and Warranties..............42
SECTION 12.03. Amendments; No Waivers......................................42
SECTION 12.04. Expenses....................................................42
SECTION 12.05. Successors and Assigns......................................43
SECTION 12.06. Governing Law...............................................43
SECTION 12.07. Jurisdiction................................................43
SECTION 12.08. WAIVER OF JURY TRIAL........................................44
SECTION 12.09. Counterparts; Effectiveness; Benefit........................44
SECTION 12.10. Entire Agreement............................................44
SECTION 12.11. Captions....................................................44
SECTION 12.12. Severability................................................44
SECTION 12.13. Specific Performance........................................45
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of June 28, 2000, among Central
Newspapers, Inc., an Indiana corporation (the "Company"), Gannett Co., Inc., a
Delaware corporation ("Parent"), and Pacific and Southern Indiana Corp., an
Indiana corporation and a wholly-owned subsidiary of Parent ("Merger
Subsidiary").
WHEREAS, the respective Boards of Directors of Parent, Merger Subsidiary
and the Company have approved this Agreement, the Offer and the Merger (as
defined below) and deem it advisable and in the best interests of their
respective stockholders to consummate the Offer and the Merger on the terms and
conditions set forth herein;
WHEREAS, as a condition to Parent entering into this Agreement, Parent has
required that, immediately prior to the execution and delivery of this
Agreement, Parent, Merger Subsidiary and the Xxxxxx X. Xxxxxxx Trust (the
"Trust"), a significant stockholder of the Company, enter into a voting and
tender agreement (the "Voting Agreement") pursuant to which the Trust agrees to
vote its shares of Company Stock in favor of the Merger and tender Company
Class B Stock in connection with the Offer; and
WHEREAS, prior to the execution and delivery of the Voting Agreement and
this Agreement, the Board of Directors of the Company has duly amended its
bylaws to provide that the entry by the Trust, Parent and Merger Subsidiary
into the Voting Agreement and the acquisition of the Company Stock by Parent or
Merger Subsidiary will not be subject to the Indiana control share acquisition
statutes (i.e., Chapter 42 of the Indiana Business Corporation Law).
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein, have
the following meanings:
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by or under common control with such
Person.
"Benefit Arrangement" means any employment, severance or similar contract
or arrangement providing for compensation, bonus, profit-sharing, or other
forms of incentive or deferred compensation, health or medical benefits,
disability benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life insurance or
other benefits) that (i) is not an Employee Plan, (ii) is entered into,
maintained, administered or contributed to, as the case may be, by the Company
or any of its Affiliates and (iii) covers any employee or former employee of
the Company or any of its Subsidiaries.
"Business Day" means a day other than Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.
"Code" means the Internal Revenue Code of 1986.
"Company Balance Sheet" means the consolidated balance sheet of the
Company as of December 26, 1999 and the footnotes thereto set forth in the
Company 10-K.
"Company Balance Sheet Date" means December 26, 1999.
"Company Class A Stock" means the shares of Class A Common Stock, no par
value, of the Company.
"Company Class B Stock" means the shares of Class B Common Stock, no par
value, of the Company.
"Company Intellectual Property Rights" means all material Intellectual
Property Rights owned or licensed and used or held for use by the Company or
any of its Subsidiaries.
"Company Stock" means the Company Class A Stock and the Company Class B
Stock.
"Company 10-K" means the Company's annual report on Form 10-K for the
fiscal year ended December 26, 1999.
"Employee Plan" means any "employee benefit plan", as defined in Section
3(3) of ERISA, that (i) is subject to any provision of ERISA, (ii) is
maintained, administered or contributed to by the Company or any of its
Affiliates and (iii) covers any employee or former employee of the Company or
any of its Subsidiaries.
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"Environmental Laws" means any federal, state, local or foreign law,
regulation, rule, order or decree, in each case as in effect on the date
hereof, that has as its principal purpose the protection of the environment.
"Environmental Permits" means all permits, licenses, certificates or
approvals necessary for the operation of the Company or any of its Subsidiaries
as currently conducted to comply with all applicable Environmental Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any entity that, together with the Company, would
be treated as a single employer under Section 414 of the Code.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
"Indiana Law" means the Indiana Business Corporation Law.
"Intellectual Property Right" means any trademark, service xxxx, trade
name, mask work, invention, patent, trade secret, copyright, know-how
(including any registrations or applications for registration of any of the
foregoing) or any other similar type of proprietary intellectual property
right.
"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest, encumbrance or other adverse claim of any
kind in respect of such property or asset. For purposes of this Agreement, a
Person shall be deemed to own subject to a Lien, any property or asset that it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such property or asset.
"Material Adverse Effect" means, (a) with respect to any Person, a
material adverse effect on the condition (financial or otherwise), business,
assets or results of operations of such Person and its Subsidiaries, taken as a
whole, except any such effect resulting from or arising in connection with: (i)
changes in circumstances or conditions generally affecting the industry in
which such Person operates, (ii) changes in general economic or business
conditions or in financial markets in the United States or in the markets in
which such Person operates, or (iii) this Agreement or the transactions
contemplated hereby or the announcement hereof, and (b), without limiting the
foregoing, with respect to the condition in paragraph (d) of Annex A hereto
insofar as it pertains to the Company's representations and warranties in
Section 5.02 and 5.05 of this Agreement, one or
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more failures of such representations and warranties to be true and correct
that, individually or in the aggregate, would reasonably be expected to make
the Offer or the Merger more costly to Merger Subsidiary or Parent by an amount
that is material in the context of the entirety of the transactions
contemplated hereby (a "Specified Failure") and any such Specified Failure or
Specified Failures shall for the purposes of this subparagraph (b) be deemed to
have a Material Adverse Effect on the Company.
"1933 Act" means the Securities Act of 1933.
"Option" means the option to purchase shares of Company Class B Stock
granted under Section 3.01(b) of the Voting Agreement.
"1934 Act" means the Securities Exchange Act of 1934.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"SEC" means the Securities and Exchange Commission.
"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at any time directly or indirectly owned by such Person.
"Third Party" means any Person, as defined in Section 13(d) of the 1934
Act, other than Parent or any of its Affiliates.
Any reference in this Agreement to a statute shall be to such statute, as
amended from time to time, and to the rules and regulations promulgated
thereunder.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Acquisition Proposal..................... 7.04
Certificates............................. 3.03
Class A Offer Price...................... 2.01
Class B Offer Price...................... 2.01
Company Disclosure Schedule.............. Article 5
Company Employees........................ 8.05
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Company Proxy Statement.................. 5.09
Company SEC Documents.................... 5.07
Company Securities....................... 5.05
Company Stockholder Approval............. 5.02
Company Stockholder Meeting.............. 7.02
Company Stock Option..................... 3.05
Company Subsidiary Securities............ 5.06
Confidentiality Agreement................ 7.03
Constructive Satisfaction of the Minimum
Condition............................. 2.01
Continuing Directors..................... 2.03
Cutoff Date.............................. 7.04
DLJ...................................... 2.02
DLJ Fairness Opinion..................... 2.02
Effective Time........................... 3.01
Exchange Agent........................... 3.03
GAAP..................................... 5.08
HSR Condition............................ Annex A
Indemnified Person....................... 8.04
Initial Expiration Date.................. 2.01
IRS...................................... 5.16
Material Assets.......................... 9.01
Merger................................... 3.01
Merger Consideration..................... 3.02
Minimum Condition........................ 2.01
Non-Union Company Employees.............. 8.05
Union Employees.......................... 8.05
Offer.................................... 2.01
Offer Completion Date.................... 7.02
Offer Documents.......................... 2.01
Offer Price.............................. 2.01
PCBs..................................... 5.18
RCRA..................................... 5.18
Schedule 14D-9........................... 2.02
Schedule TO.............................. 2.01
Specified Failure........................ 1.01
Superior Proposal........................ 7.04
Surviving Corporation.................... 3.01
Tax Return............................... 5.16
Taxes.................................... 5.16
Taxing Authority......................... 5.16
Termination Fee.......................... 12.04
Transactions............................. 2.02
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ARTICLE 2
THE OFFER
SECTION 2.01. The Offer. (a) Provided that this Agreement shall not have
been terminated in accordance with Article 11 and none of the events set forth
in Annex A hereto shall have occurred or be existing, Merger Subsidiary shall,
and Parent shall cause Merger Subsidiary to, as promptly as practicable after
the date hereof (but in no event later than the fifth Business Day after the
public announcement of the terms of this Agreement), commence (within the
meaning of Rule 14d-2(a) of the 1934 Act), an offer (the "Offer") to purchase
(x) any and all of the outstanding shares of Company Class A Stock for a
purchase price of $64.00 per share (the "Class A Offer Price") and (y) any and
all (subject to the Minimum Condition (as defined below)) of the outstanding
shares of Company Class B Stock for a purchase price of $6.40 per share (the
"Class B Offer Price" and, together with the Class A Offer Price, the "Offer
Price"), in each case, net to the seller in cash, subject to reduction for any
applicable withholding taxes and, but only if such payment is to be made other
than to the registered holder, any applicable stock transfer taxes payable by
such holder. The Offer will be made pursuant to an Offer to Purchase and
related Letter of Transmittal containing the terms and conditions set forth in
this Agreement. The initial expiration date of the Offer shall be the twentieth
Business Day from and after the date the Offer is commenced (the "Initial
Expiration Date"). The obligation of Merger Subsidiary to accept for payment,
purchase and pay for any shares of Company Stock tendered pursuant to the Offer
shall be subject, except as provided in Section 2.01(b), only to the
satisfaction of (i) the condition that at least 45,815,000 shares of Company
Class B Stock (subject to adjustment for stock splits, stock dividends,
recapitalizations and similar events) (less any shares of Company Class B Stock
owned by Parent or Merger Subsidiary or any Affiliate of Parent or Merger
Subsidiary on the date such shares are purchased pursuant to the Offer) have
been validly tendered and not withdrawn prior to the expiration of the Offer
(the "Minimum Condition") and (ii) the other conditions set forth in Annex A
hereto; provided, however, that Merger Subsidiary expressly reserves the right
to waive any of the conditions to the Offer (other than the Minimum Condition)
and to make any change in the terms or conditions of the Offer (other than the
Minimum Condition) in its sole discretion, subject to Section 2.01(b).
Notwithstanding the previous sentence, Merger Subsidiary may waive the Minimum
Condition so long as (x) it has irrevocably waived all other conditions to the
Offer (and may, as a legal matter, irrevocably waive such conditions and
otherwise purchase shares of Company Stock pursuant to the Offer), (y) Parent
has irrevocably exercised or irrevocably committed to exercise the Option and
(z) the shares of Company Stock acquired pursuant to the Offer and through such
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Option exercise would satisfy the Minimum Condition (such event being referred
to as a "Constructive Satisfaction of the Minimum Condition").
(b) Without the prior written consent of the Company, neither Parent nor
Merger Subsidiary will (i) decrease the price per share of Company Class A
Stock or Company Class B Stock payable in the Offer, (ii) decrease the number
of shares of Company Class A Stock or Company Class B Stock sought in the
Offer, (iii) change the form of consideration payable in the Offer, (iv) impose
conditions to the Offer in addition to those set forth in Section 2.01(a) and
Annex A, (v) except as provided below or required by any rule, regulation,
interpretation or position of the SEC applicable to the Offer, change the
expiration date of the Offer, or (vi) otherwise amend or change any term or
condition of the Offer in a manner adverse to the holders of shares of Company
Class A Stock or Company Class B Stock. Notwithstanding anything in this
Agreement to the contrary, without the consent of the Company, Merger
Subsidiary shall have the right to extend the Offer beyond the Initial
Expiration Date in the following events: (i) from time to time, but in no event
later than the date which is 60 days from the Initial Expiration Date, if, at
the Initial Expiration Date (or extended expiration date of the Offer, if
applicable), any of the conditions to the Offer (other than the Minimum
Condition to which this clause does not apply) shall not have been satisfied or
waived, until such conditions are satisfied or waived; (ii) for any period
required by any rule, regulation, interpretation or position of the SEC or the
staff thereof applicable to the Offer or any period required by applicable law;
(iii) if all conditions to the Offer other than the Minimum Condition are
satisfied or waived, for one or more periods not to exceed ten (10) business
days each (but no more than an aggregate of thirty (30) business days for all
such extensions); or (iv) if all of the conditions to the Offer are satisfied
or waived but the number of shares of each class of Company Stock validly
tendered and not withdrawn is less than ninety percent (90%) of the then
outstanding number of shares of each class of Company Stock, for an aggregate
period not to exceed twenty (20) business days (for all such extensions),
provided that Merger Subsidiary shall accept and promptly pay for all
securities tendered prior to the date of such extension and shall waive any
condition to the consummation of the Merger other than the condition in Section
10.01(c) that may fail to be satisfied during such extension. In addition,
Parent and Merger Subsidiary agree that notwithstanding clause (iii) of the
previous sentence, Merger Subsidiary may, and if requested by the Company
shall, from time to time extend the Offer, if at the Initial Expiration Date
(or any extended expiration date of the Offer, including pursuant to this
sentence, if applicable), no conditions to the Offer other than the Minimum
Condition, the HSR Condition (as defined in Annex A) and/or the conditions set
forth in clause (a) or clause (b) of Annex A shall excuse performance by Merger
Subsidiary under Annex A, until the earlier of ten (10) business days after
such previously scheduled expiration date or March 31, 2001; provided that the
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Company will not make such a request where a Constructive Satisfaction of the
Minimum Condition exists. Upon the prior satisfaction or waiver of all the
conditions to the Offer and subject to the terms and conditions of this
Agreement, Merger Subsidiary will, and Parent will cause Merger Subsidiary to,
accept for payment, purchase and pay for, in accordance with the terms of the
Offer, all shares of Company Stock validly tendered and not withdrawn pursuant
to the Offer as soon as reasonably practicable after the expiration of the
Offer. Parent shall provide or cause to be provided to Merger Subsidiary on a
timely basis the funds necessary to accept for payment, and pay for, any shares
of Company Stock that Merger Subsidiary becomes obligated to accept for
payment, and pay for, pursuant to the Offer.
(c) As soon as reasonably practicable on the date of commencement of the
Offer, Parent and Merger Subsidiary shall file or cause to be filed with the
SEC a Tender Offer Statement on Schedule TO (together with any amendments or
supplements thereto, the "Schedule TO") with respect to the Offer. Parent and
Merger Subsidiary agree that the Schedule TO will comply as to form and content
in all material respects with the applicable provisions of the federal
securities laws, shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading, and will contain the offer to purchase
and form of the related letter of transmittal (such Schedule TO and such
documents included therein pursuant to which the Offer will be made, together
with any supplements or amendments thereto, the "Offer Documents"). Parent and
the Company each agree to correct promptly any information provided by it for
use in the Offer Documents if and to the extent that such information shall
have become false or misleading in any material respect and to supplement the
information provided by it specifically for use in the Schedule TO or the other
Offer Documents to include any information that shall become necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. Parent and Merger Subsidiary agree to take all steps
necessary to cause the Offer Documents as so corrected or supplemented to be
filed with the SEC and be disseminated to holders of shares of Company Stock,
in each case, as and to the extent required by applicable federal securities
laws. The Company and its counsel shall be given a reasonable opportunity to
review and comment on the Offer Documents prior to their being filed with the
SEC. Parent and Merger Subsidiary agree to provide to the Company and its
counsel any comments or other communications which Parent, Merger Subsidiary or
their counsel may receive from the Staff of the SEC with respect to the Offer
Documents promptly after receipt thereof.
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SECTION 2.02. Company Action. (a) The Company hereby consents to the Offer
and represents and warrants that its Board of Directors, at a meeting duly
called and held, has unanimously (i) determined that this Agreement and its
contemplated transactions, including the Offer, the Merger, and the purchase of
shares of Company Stock contemplated by the Offer (the "Transactions"), are
advisable and fair to and in the best interests of the Company and the
Company's shareholders, (ii) approved and adopted this Agreement and the
Transactions, including the Offer, the Merger, and the purchase of shares of
Company Stock contemplated by the Offer, in accordance with the requirements of
the Indiana Law, which approval satisfies in full the requirements of prior
approval contained in Sections 23-1-40-1, 23-1-43-18 and 23-1-43-19(1) of the
Indiana Law, (iii) taken all requisite action to amend, and has duly and
validly amended, the Company's bylaws to provide that Chapter 42 of the Indiana
Law does not apply to control share acquisitions of shares of Company Stock
(including, without limitation, by Parent or Merger Subsidiary pursuant to the
Offer or the Merger) and (iv) resolved, subject to Section 7.04 to recommend
that the shareholders of the Company accept the Offer, tender their shares of
Company Stock pursuant to the Offer and approve and adopt this Agreement and
the Merger. The Company hereby consents to the inclusion in the Offer
Documents, the Schedule 14D-9 (as defined below) and the Proxy Statement (as
defined below) (if any) of such recommendation of the Board of Directors. The
Company represents and warrants that the Board of Directors has received the
written opinion (the "DLJ Fairness Opinion") of Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation ("DLJ"), stating that as of the date of such opinion,
the proposed consideration to be received by the holders of shares of Company
Stock pursuant to the Offer and the Merger is fair to such holders from a
financial point of view. The Company has been authorized by DLJ to permit,
subject to the prior review and consent by DLJ (such consent not to be
unreasonably withheld), the inclusion of the DLJ Fairness Opinion (or a
reference thereto) in the Offer Documents and the Schedule 14D-9.
(b) The Company will cause its transfer agent promptly to furnish Parent
and Merger Subsidiary with a list of the Company's shareholders, mailing labels
and any available listing or computer file containing the names and addresses
of all record holders of shares of Company Stock and lists of securities
positions of shares of Company Stock held in stock depositories and to provide
to Parent and Merger Subsidiary such additional information (including, without
limitation, updated lists of shareholders, mailing labels and lists of
securities positions) and such other assistance as Parent or Merger Subsidiary
or their agents may reasonably request in connection with the Offer. Subject to
the requirements of applicable law, and except for such steps as are necessary
to disseminate the Offer Documents and any other documents necessary to
consummate the Transactions, Parent and Merger Subsidiary and each of their
affiliates, associates and agents will hold in confidence the information
contained in any such labels, listings and
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files, will use such information only in connection with the Offer and the
Merger and, if this Agreement is terminated, will deliver, and will cause their
agents to deliver, to the Company all copies and any extracts or summaries from
such information then in their possession or control.
(c) As soon as reasonably practicable on the date of commencement of the
Offer, the Company shall file with the SEC and disseminate to holders of shares
of Company Stock, in each case as and to the extent required by applicable
federal securities laws, a Solicitation/Recommendation Statement on Schedule
14D-9 (together with any amendments or supplements thereto, the "Schedule
l4D-9") that shall reflect the recommendation of the Board of Directors
referred to in clause (iv) of Section 2.02(a) hereof. The Company and Parent
each agrees promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that it shall have become false or
misleading in any material respect and to supplement the information provided
by it specifically for use in the Schedule 14D-9 to include any information
that shall become necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company agrees to
take all steps necessary to cause the Schedule 14D-9 as so corrected or
supplemented to be filed with the SEC and to be disseminated to holders of
shares of Company Stock, in each case, as and to the extent required by
applicable federal securities laws. Parent and its counsel shall be given a
reasonable opportunity to review and comment on the Schedule 14D-9 prior to its
being filed with the SEC. The Company agrees to provide to Parent and Merger
Subsidiary and their counsel any comments or other communications which the
Company or its counsel may receive from the staff of the SEC with respect to
the Schedule 14D-9 promptly after receipt thereof. Parent, Merger Subsidiary
and the Company each hereby agree to provide promptly such information
necessary to preparation of the exhibits and schedules to the Schedule 14D-9
and the Offer Documents which the respective party responsible therefor will
reasonably request.
SECTION 2.03. Directors. (a) Promptly following the purchase of and
payment for a number of shares of Company Stock that satisfies the Minimum
Condition, and from time to time thereafter, Merger Subsidiary shall be
entitled to designate the number of directors, rounded up to the next whole
number, on the Board of Directors of the Company that equals the product of (i)
the total number of directors on the Board of Directors of the Company (giving
effect to the election of any additional directors pursuant to the Section) and
(ii) the percentage that the voting power of shares of Company Stock
beneficially owned by Parent and Merger Subsidiary (including shares of Company
Stock paid for pursuant to the Offer or the Option), upon such acceptance for
payment, bears to the total voting power of shares of Company Stock
outstanding, and the Company shall take all action within its power to cause
Merger Subsidiary's designees to be
10
elected or appointed to the Board of Directors of the Company, including,
without limitation, increasing the number of directors, and seeking and
accepting resignations of incumbent directors. At such time, the Company will
also, upon request of Parent or Merger Subsidiary, use its best efforts to
cause individual directors designated by Merger Subsidiary to constitute the
number of members, rounded up to the next whole number, on (i) each committee
of the Board of Directors of the Company other than any such committee of such
Board of Directors established to take action under this Agreement and (ii)
each Board of Directors of each Subsidiary of the Company, and each committee
thereof, that represents the same percentage as such individuals represented on
the Board of Directors. Notwithstanding the foregoing, in the event that Merger
Subsidiary's designees are to be appointed or elected to the Board of
Directors, until the Effective Time (as defined below), such Board of Directors
shall have at least two directors (x) who are directors on the date of this
Agreement or otherwise not Affiliates of Parent and (y) who are not officers of
the Company (the "Continuing Directors"); provided that in the event that the
number of Continuing Directors shall be reduced below two for any reason
whatsoever, any remaining Continuing Directors (or Continuing Director, if
there shall be only one remaining) shall be entitled to designate persons to
fill such vacancies who shall be deemed to be Continuing Directors for purposes
of this Agreement.
(b) The Company's obligations to appoint Merger Subsidiary's designees to
the Board of Directors shall be subject to Section 14(f) of the 1934 Act and
Rule 14f-1 promulgated thereunder. The Company shall promptly take all actions
and shall include in the Schedule 14D-9 such information with respect to the
Company and its officers and directors (or an amendment thereof or an
information statement pursuant to Rule 14f-1 if Merger Subsidiary has not
theretofore designated directors), as Section 14(f) and Rule 14f-1 require in
order to fulfill its obligations under this Section. Parent and Merger
Subsidiary shall supply to the Company, and be solely responsible for, any
information with respect to themselves and their nominees, officers, directors
and affiliates required by Section 14(f) and Rule 14f-1.
(c) Following the election or appointment of Merger Subsidiary's designees
pursuant to Section 2.03(a) and until the Effective Time, the approval of the
Continuing Directors shall be required to authorize (and such authorization
shall constitute the authorization of the Company's Board of Directors and no
other action on the part of the Company, including any action by any other
directors of the Company, shall be required to authorize) any termination of
this Agreement by the Company, any amendment of this Agreement requiring action
by the Company's Board of Directors, any amendment of the certificate of
incorporation or bylaws of the Company, any extension of time for performance
of any obligation or action hereunder or under the Offer by Parent or Merger
11
Subsidiary, any waiver of compliance with, or enforcement of, any of the
agreements or conditions contained herein, or under the Offer for the benefit
of the Company and any material transaction with Parent, Merger Subsidiary or
any affiliate thereof.
ARTICLE 3
THE MERGER
SECTION 3.01. The Merger. (a) At the Effective Time, Merger Subsidiary
shall be merged (the "Merger") with and into the Company in accordance with
Indiana Law, whereupon the separate existence of Merger Subsidiary shall cease,
and the Company shall be the surviving corporation (the "Surviving
Corporation").
(b) As soon as practicable after satisfaction or, to the extent permitted
hereunder, waiver of all conditions to the Merger, the Company and Merger
Subsidiary will file articles of merger with the Secretary of State of the
State of Indiana and make all other filings or recordings required by Indiana
Law in connection with the Merger. The Merger shall become effective at such
time (the "Effective Time") as the articles of merger are duly filed with the
Secretary of State of the State of Indiana or at such later time as may be
specified in the articles of merger.
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, powers, privileges and franchises and be subject to all
of the obligations, liabilities, restrictions and disabilities of the Company
and Merger Subsidiary, all as provided under Indiana Law.
SECTION 3.02. Conversion of Company Stock. At the Effective Time:
(a) except as otherwise provided in Section 3.02(b) or Section 3.04, (i)
each share of Company Class A Stock outstanding immediately prior to the
Effective Time shall be converted into the right to receive $64 in cash and
(ii) each share of Company Class B Stock outstanding immediately prior to the
Effective Time shall be converted into the right to receive $6.40 in cash (in
each case, the "Merger Consideration");
(b) each share of Company Stock held by the Company as treasury stock or
owned by Parent or any of its Subsidiaries immediately prior to the Effective
Time shall be canceled, and no payment shall be made with respect thereto; and
12
(c) each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and become one
share of common stock of the Surviving Corporation with the same rights, powers
and privileges as the shares so converted and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
SECTION 3.03. Surrender and Payment. (a) Prior to the Effective Time,
Parent shall appoint an agent (the "Exchange Agent") reasonably acceptable to
the Company for the purpose of exchanging certificates representing shares of
Company Stock (the "Certificates") for the Merger Consideration. At the
Effective Time, Parent will deposit with the Exchange Agent the Merger
Consideration to be paid in respect of the shares of Company Stock. Promptly
after the Effective Time, Parent will send, or will cause the Exchange Agent to
send, to each holder of shares of Company Stock at the Effective Time a letter
of transmittal and instructions (which shall specify that the delivery shall be
effected, and risk of loss and title shall pass, only upon proper delivery of
the Certificates to the Exchange Agent) for use in such exchange.
(b) Each holder of shares of Company Stock that have been converted into
the right to receive the Merger Consideration will be entitled to receive, upon
surrender to the Exchange Agent of a Certificate, together with a properly
completed letter of transmittal, the Merger Consideration in respect of each
share of Company Stock represented by such Certificate. Until so surrendered,
each such Certificate shall represent after the Effective Time for all purposes
only the right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a Person
other than the Person in whose name the surrendered Certificate is registered,
it shall be a condition to such payment that the Certificate so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Exchange Agent any transfer
or other taxes required as a result of such payment to a Person other than the
registered holder of such Certificate or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
(d) After the Effective Time, there shall be no further registration of
transfers of shares of Company Stock. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be canceled
and exchanged for the Merger Consideration provided for, and in accordance with
the procedures set forth, in this Article 3.
(e) Any portion of the Merger Consideration made available to the Exchange
Agent pursuant to Section 3.03(a) (and any interest or other income
13
earned thereon) that remains unclaimed by the holders of shares of Company
Stock one year after the Effective Time shall be returned to Parent, upon
demand, and any such holder who has not exchanged shares of Company Stock for
the Merger Consideration in accordance with this Section 3.03 prior to that
time shall thereafter look only to Parent for payment of the Merger
Consideration in respect of such shares without any interest thereon.
Notwithstanding the foregoing, Parent shall not be liable to any holder of
shares of Company Stock for any amount paid to a public official pursuant to
applicable abandoned property, escheat or similar laws. Any amounts remaining
unclaimed by holders of shares of Company Stock three years after the Effective
Time (or such earlier date immediately prior to such time when the amounts
would otherwise escheat to or become property of any governmental authority)
shall become, to the extent permitted by applicable law, the property of Parent
free and clear of any claims or interest of any Person previously entitled
thereto.
SECTION 3.04. Dissenting Shares. Notwithstanding Section 3.02, shares of
Company Stock outstanding immediately prior to the Effective Time and held by a
holder who has not voted in favor of the Merger or consented thereto in writing
and who has demanded appraisal for such shares in accordance with Indiana Law
shall not be converted into a right to receive the Merger Consideration, unless
such holder fails to perfect, withdraws or otherwise loses its right to
appraisal. If, after the Effective Time, such holder fails to perfect,
withdraws or loses its right to appraisal, such shares of Company Stock shall
be treated as if they had been converted as of the Effective Time into a right
to receive the Merger Consideration. The Company shall give Parent prompt
notice of any demands received by the Company for appraisal of shares of
Company Stock. Except as required by applicable law or with the prior written
consent of Parent, the Company shall not make any payment with respect to, or
settle or offer to settle, any such demands.
SECTION 3.05. Stock Options. At or immediately prior to the Effective
Time, each stock option to purchase shares of Company Class A Stock outstanding
under any stock option or compensation plan or arrangement of the Company (a
"Company Stock Option"), whether or not vested or exercisable, shall be
canceled, and the Company shall pay each holder of any such option at or
promptly after the Effective Time for each such option an amount in cash
determined by multiplying (i) the excess, if any, of the Merger Consideration
per share of Company Class A Stock over the applicable exercise price of such
option by (ii) the number of shares of Company Class A Stock such holder could
have purchased (assuming full vesting of all options) had such holder exercised
such option in full immediately prior to the Effective Time.
14
SECTION 3.06. Restricted Stock. Any shares of Company Stock that are
outstanding immediately prior to the Effective Time and are unvested or subject
to a repurchase option, risk of forfeiture or other condition shall become
vested as of the Effective Time and will no longer be subject to such
repurchase option, risk of forfeiture or other condition.
SECTION 3.07. Adjustments. If, during the period between the date of this
Agreement and the Effective Time, any change in the outstanding shares of
capital stock of the Company shall occur, including by reason of any
reclassification, recapitalization, stock split or combination, exchange or
readjustment of shares, or stock dividend thereon with a record date during
such period, the Merger Consideration and any other amounts payable pursuant to
this Agreement shall be appropriately adjusted.
SECTION 3.08. Withholding Rights. Each of the Surviving Corporation and
Parent shall be entitled to deduct and withhold from the consideration
otherwise payable to any Person pursuant to this Article 3 such amounts as it
is required to deduct and withhold with respect to the making of such payment
under any provision of federal, state, local or foreign tax law. If the
Surviving Corporation or Parent, as the case may be, so withholds amounts, such
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the shares of Company Stock in respect of which the Surviving
Corporation or Parent, as the case may be, made such deduction and withholding.
SECTION 3.09. Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such Person of a bond, in such
reasonable amount as the Surviving Corporation may direct, as indemnity against
any claim that may be made against it with respect to such Certificate, the
Exchange Agent will pay, in exchange for such lost, stolen or destroyed
Certificate, the Merger Consideration to be paid in respect of the shares of
Company Stock represented by such Certificate, as contemplated by this Article.
ARTICLE 4
THE SURVIVING CORPORATION
SECTION 4.01. Certificate of Incorporation. The certificate of
incorporation of the Company in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law.
15
SECTION 4.02. Bylaws. The bylaws of the Company in effect at the Effective
Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 4.03. Directors and Officers. From and after the Effective Time,
until successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the directors of Merger Subsidiary at the Effective Time
shall be the directors of the Surviving Corporation and (ii) the officers of
the Company at the Effective Time shall be the officers of the Surviving
Corporation.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the corresponding sections or subsections of the
disclosure Schedule delivered by the Company to Parent on or prior to the date
hereof (the "Company Disclosure Schedule") or in the Company SEC Documents, the
Company represents and warrants to Parent that:
SECTION 5.01. Corporate Existence and Power. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Indiana and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted, except for those licenses, authorizations, permits,
consents and approvals the absence of which would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company. The Company is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where such qualification is
necessary, except for those jurisdictions where failure to be so qualified
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company. The Company has heretofore made
available to Parent true and complete copies of the certificate of
incorporation and bylaws of the Company as currently in effect. This Agreement
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
SECTION 5.02. Corporate Authorization. (a) The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby are within the Company's
corporate powers and, except for any required approval of the Company's
16
stockholders, have been duly authorized by all necessary corporate action on
the part of the Company. The affirmative vote of the holders of a majority of
the voting power of the outstanding shares of Company Stock, voting together as
a single class (the "Company Stockholder Approval"), is the only vote of the
holders of any of the Company's capital stock which may be necessary in
connection with the consummation of the Merger. This Agreement constitutes a
valid and binding agreement of the Company. Except for Sections 23-1-42-5, 23-
1-43-18 and 23-1-43-19 of the Indiana Law (the restrictions on voting rights
and business combinations of which have been rendered inapplicable or otherwise
satisfied) and 23-2-3.1-.5 of the Indiana Law, no state takeover statute is
applicable to the Offer, the Merger or other transactions contemplated by this
Agreement.
(b) At a meeting duly called and held, the Company's Board of Directors
has (i) determined that this Agreement and the transactions contemplated hereby
are fair to and in the best interests of the Company's stockholders, (ii)
approved and adopted this Agreement and the transactions contemplated hereby
and (iii) resolved (subject to Section 7.04(c)) to recommend approval and
adoption of this Agreement by its stockholders.
SECTION 5.03. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby require no action by or in
respect of, or filing with, any governmental body, agency, official or
authority, domestic or foreign, other than (i) the filing of articles of merger
with respect to the Merger with the Secretary of State of the State of Indiana
and appropriate documents with the relevant authorities of other states in
which the Company is qualified to do business, (ii) compliance with any
applicable requirements of the HSR Act and of laws, rules and regulations in
foreign jurisdictions governing antitrust or merger control matters, (iii)
compliance with any applicable requirements of the 1933 Act, the 1934 Act and
any other applicable securities or takeover laws, whether state or foreign, and
(iv) any actions or filings the absence of which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect
on the Company or materially to impair the ability of the Company to consummate
the transactions contemplated by this Agreement.
SECTION 5.04. Non-contravention. The execution, delivery and performance
by the Company of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) contravene, conflict with, or
result in any violation or breach of any provision of the articles of
incorporation or bylaws of the Company, (ii) assuming compliance with the
matters referred to in Section 5.03, contravene, conflict with, or result in a
violation or breach of any
17
provision of any applicable law, regulation, judgment, injunction, order or
decree, (iii) require any consent or other action by any Person under,
constitute a default under, or cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or the loss of any
benefit to which the Company or any of its Subsidiaries is entitled under any
provision of any agreement or other instrument binding upon the Company or any
of its Subsidiaries or any license, franchise, permit, certificate, approval or
other similar authorization affecting, or relating in any way to, the assets or
business of the Company and its Subsidiaries or (iv) result in the creation or
imposition of any Lien on any asset of the Company or any of its Subsidiaries,
except, in the case of clauses (ii), (iii) and (iv), for such matters as would
not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company.
SECTION 5.05. Capitalization. (a) The authorized capital stock of the
Company consists of 280,000,000 shares of common stock, no par value per share,
of which 150,000,000 shares have been designated as Company Class A Stock and
130,000,000 shares have been designated as Company Class B Stock. As of June
23, 2000, there were outstanding: (1) 32,724,324 shares of Company Class A
Stock (which amount includes 184,000 shares of restricted stock of the
Company); (2) 55,356,010 shares of Company Class B Stock; and (3) employee and
director stock options to purchase an aggregate of 3,132,832 shares of Company
Class A Stock. All shares of capital stock of the Company outstanding as of the
date hereof have been duly authorized and validly issued and are fully paid and
nonassessable. All shares of Company Class A Stock issuable upon exercise of
outstanding employee or director stock options have been duly authorized and,
when issued in accordance with the terms thereof, will be validly issued and
will be fully paid and nonassessable.
(b) Except as set forth in this Section 5.05 and for changes since June
23, 2000 resulting from the exercise of employee or director stock options
outstanding on such date, there are no outstanding (i) shares of capital stock
or voting securities of the Company, (ii) securities of the Company convertible
into or exchangeable for shares of capital stock or voting securities of the
Company or (iii) options or other rights to acquire from the Company or other
obligation of the Company to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of the Company (the items in clauses (i), (ii) and (iii) being
referred to collectively as the "Company Securities"). There are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any of the Company Securities. Without limiting the
generality of the foregoing, neither the Company nor any of its Subsidiaries
has adopted a shareholder rights plan or similar plan or arrangement.
18
SECTION 5.06. Subsidiaries. (a) Each Subsidiary of the Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, has all powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted, except for those licenses, authorizations,
permits, consents and approvals the absence of which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect
on the Company. Each such Subsidiary is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be
so qualified would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company. All material Subsidiaries
of the Company and their respective jurisdictions of incorporation are
identified in the Company 10-K.
(b) All of the outstanding capital stock of, or other voting securities or
ownership interests in, each Subsidiary of the Company, is owned by the
Company, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other voting
securities or ownership interests). There are no outstanding (i) securities of
the Company or any of its Subsidiaries convertible into or exchangeable for
shares of capital stock or other voting securities or ownership interests in
any Subsidiary of the Company or (ii) options or other rights to acquire from
the Company or any of its Subsidiaries, or other obligation of the Company or
any of its Subsidiaries to issue, any capital stock or other voting securities
or ownership interests in, or any securities convertible into or exchangeable
for any capital stock or other voting securities or ownership interests in, any
Subsidiary of the Company (the items in clauses (i) and (ii) being referred to
collectively as the "Company Subsidiary Securities"). There are no outstanding
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any of the Company Subsidiary Securities.
SECTION 5.07. SEC Filings. (a) The Company has made available to Parent
(i) the Company's annual report on Form 10-K for its fiscal year ended December
26, 1999, (ii) its quarterly report on Form 10-Q for its fiscal quarter ended
Xxxxx 00, 0000, (xxx) its proxy statements relating to meetings of, or actions
taken without a meeting by, the stockholders of the Company held since December
26, 1999, and (iv) all of its other reports, statements, schedules and
registration statements filed with the SEC since December 26, 1999 (the
documents referred to in this Section 5.07(a), collectively, the "Company SEC
Documents".)
19
(b) As of its filing date, each Company SEC Document complied as to form
in all material respects with the applicable requirements of the 1933 Act and
the 1934 Act, as the case may be. The Company has filed all material contracts,
agreements and other documents or instruments required to be filed as exhibits
to the Company SEC Documents.
(c) As of its filing date (or, if amended or superceded by a filing prior
to the date hereof, on the date of such filing), each Company SEC Document
filed pursuant to the 1934 Act did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 5.08. Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company included in the Company SEC Documents or delivered to Parent pursuant
to this Agreement fairly present or will fairly present, in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
(except as may be indicated in the notes thereto), the consolidated financial
position of the Company and its consolidated Subsidiaries as of the dates
thereof and their consolidated results of operations and cash flows for the
periods then ended (subject to normal year-end adjustments in the case of any
unaudited interim financial statements).
SECTION 5.09. Disclosure Documents. The proxy or information statement of
the Company which may be filed with the SEC in connection with the Merger (the
"Company Proxy Statement") and any amendments or supplements thereto will, when
filed, comply as to form in all material respects with the applicable
requirements of the 1934 Act. At the time the Company Proxy Statement or any
amendment or supplement thereto is first mailed to stockholders of the Company,
the Company Proxy Statement, as supplemented or amended, if applicable, will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. The
representations and warranties contained in this Section 5.09 will not apply to
statements or omissions included in the Company Proxy Statement based upon
information furnished to the Company by Parent specifically for use therein.
SECTION 5.10. Absence of Certain Changes. Since the Company Balance Sheet
Date, the business of the Company and its Subsidiaries has been conducted in
the ordinary course consistent with past practices and there has not been (a)
any Material Adverse Effect on the Company or any event, change, effect or
development that would, individually or in the aggregate, reasonably by
expected
20
to have a Material Adverse Effect on the Company or (b) any action taken by the
Company or any of its Subsidiaries from the Company Balance Sheet Date through
the date of this Agreement that, if taken during the period from the date of
this Agreement through the Effective Time, would constitute a breach of Section
7.01.
SECTION 5.11. No Undisclosed Material Liabilities. There are no
liabilities or obligations of the Company or any of its Subsidiaries of any
kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, other than:
(a) liabilities or obligations disclosed or provided for in the Company
Balance Sheet or in the notes thereto or in the Company SEC Documents filed
prior to the date hereof,
(b) liabilities or obligations that would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the
Company, and
(c) liabilities or obligations under this Agreement or incurred in
connection with the transactions contemplated hereby.
SECTION 5.12. Compliance with Laws and Court Orders. Neither the Company
nor any of its Subsidiaries is in violation of, or has since the Company
Balance Sheet Date violated, any applicable law, statute, ordinance, rule,
regulation, judgment, injunction, order or decree, except for violations that
have not had and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company.
SECTION 5.13. Litigation. There is no action, suit, investigation or
proceeding pending, or, to the knowledge of the Company, threatened, against
the Company or any of its Subsidiaries, or any of their respective properties
before any court or arbitrator or before or by any governmental body, agency or
official, domestic or foreign, that, if determined or resolved adversely in
accordance with the plaintiff's demands, would reasonably be expected to have a
Material Adverse Effect on the Company.
SECTION 5.14. Finders' Fees. Except for DLJ, a copy of whose engagement
agreement has been provided to Parent, and Xxxxxxx Xxxxx & Co., there is no
investment banker, broker, finder or other intermediary that has been retained
by or is authorized to act on behalf of the Company or any of its Subsidiaries
who might be entitled to any fee or commission from the Company or any of its
Affiliates in connection with the transactions contemplated by this
21
Agreement. The Company has provided to Parent a good faith estimate and
description of the professional expenses of the Company and its Subsidiaries
that the Company expects to incur or has incurred in connection with the Offer,
the Merger and the other transactions contemplated by this Agreement, or are
payable by the Company pursuant to Section 12.04(c).
SECTION 5.15. Opinion of Financial Advisor. The Company has received an
opinion of DLJ that, as of the date of such opinion, the consideration to be
received by the holders of shares of Company Stock pursuant to the Offer and
the Merger is fair to such holders from a financial point of view.
SECTION 5.16. Taxes. (a) Company and each of its Subsidiaries has timely
filed (or has had timely filed on its behalf) or will file or cause to be
timely filed all material Tax Returns required by applicable law to be filed by
it prior to or as of the Effective Time, and all such Tax Returns are, or will
be at the time of filing, true and complete in all material respects.
(b) The Company and each of its Subsidiaries has paid (or has had paid on
its behalf), or, where payment is not yet due, has established (or has had
established on its behalf and for its sole benefit and recourse) or will
establish or cause to be established in accordance with GAAP on or before the
Effective Time an adequate accrual for the payment of, all taxes due with
respect to any period ending prior to or as of the Effective Time.
(c) The federal income Tax Returns of Company and its Subsidiaries have
been examined and settled with the Internal Revenue Service (the "IRS") (or the
applicable statutes of limitation for the assessment of federal income Taxes
for such periods have expired) for all years through 1997.
(d) There are no material Liens or encumbrances for Taxes on any of the
assets of Company or any of its Subsidiaries.
(e) The Company and its Subsidiaries have complied in all material
respects with all applicable laws, rules and regulations relating to the
payment and withholding of Taxes.
(f) No federal, state, local or foreign audits or administrative
proceedings are pending with regard to any material Taxes or Tax Return of
Company or its Subsidiaries and none of them has received a written notice of
any proposed audit or proceeding regarding any pending audit or proceeding.
(g) "Taxes" shall mean any and all taxes, charges, fees, levies or other
assessments, including income, gross receipts, excise, real or personal
property,
22
sales, withholding, social security, retirement, unemployment, occupation, use,
goods and services, service use, license, value added, capital, net worth,
payroll, profits, withholding, franchise, transfer and recording taxes, fees
and charges, and any other taxes, assessment or similar charges imposed by the
IRS or any taxing authority (whether domestic or foreign including any state,
county, local or foreign government or any subdivision or taxing agency thereof
(including a United States possession)) (a "Taxing Authority"), whether
computed on a separate, consolidated, unitary, combined or any other basis; and
such term shall include any interest whether paid or received, fines, penalties
or additional amounts attributable to, or imposed upon, or with respect to, any
such taxes, charges, fees, levies or other assessments. "Tax Return" shall mean
any report, return, document, declaration or other information or filing
required to be supplied to any taxing authority or jurisdiction (foreign or
domestic) with respect to Taxes, including information returns, any documents
with respect to or accompanying payments of estimated Taxes, or with respect to
or accompanying requests for the extension of time in which to file any such
report, return, document, declaration or other information.
SECTION 5.17. Employee Benefit Plans. (a) The Company has made available
to Parent a list and copies of the material Employee Plans (and, if applicable,
related trust agreements) and all material amendments thereto and material
written interpretations thereof together with the most recent annual report
(Form 5500 including, if applicable, Schedule B thereto).
(b) No transaction prohibited by Section 406 of ERISA or Section 4975 of
the Code has occurred with respect to any employee benefit plan or arrangement
that is covered by Title I of ERISA, which transaction has or will cause the
Company to incur any material liability under ERISA or the Code. No
"accumulated funding deficiency," as defined in Section 412 of the Code, has
been incurred with respect to any Employee Plan subject to such Section 412,
whether or not waived. No "reportable event", within the meaning of Section
4043 of ERISA, other than a "reportable event" that would not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect
on the Company, and no event described in Section 4062 or 4063 of ERISA, has
occurred in connection with any Employee Plan. The Company does not sponsor or
contribute to any "multiple employer welfare arrangement" as defined in Section
3(40) of ERISA. Neither the Company nor any ERISA Affiliate has engaged in, or
is a successor or parent corporation to an entity that has engaged in, a
transaction described in Sections 4069 or 4212(c) of ERISA or incurred, or
reasonably expects to incur prior to the Effective Time, any liability under
Title IV of ERISA arising in connection with the termination of, or a complete
or partial withdrawal from, any plan covered or previously covered by Title IV
of ERISA or any liability under Section 4971 of the Code that in either case
could
23
become a liability of the Company, Parent or any ERISA Affiliate after the
Effective Time. The Company does not contribute to any "multiemployer plan", as
defined in Section 3(37) of ERISA. The assets of the Company are not now, nor
will they after the passage of time be, subject to any lien imposed under Code
Section 412(n) by reason of a failure of the Company to make timely
installments or other payments required under Code Section 412 prior to the
Effective Time.
(c) The Company has made available to Parent the most recent determination
letter, if any, of the IRS relating to each Employee Plan intended to qualify
under Section 401(a) of the Code. Each Employee Plan has been maintained in
substantial compliance with its terms and with the requirements prescribed by
any and all applicable statutes, orders, rules and regulations, including but
not limited to ERISA and the Code. Without limiting the foregoing, with respect
to each Employee Plan all required employer contributions have been made.
(d) The Company has provided Parent with a list and copies or descriptions
of each material Benefit Arrangement (and, if applicable, related trust
agreements) and all material amendments thereto and material written
interpretations thereof. Each Benefit Arrangement and any stock option or other
stock related right or plan has been maintained in substantial compliance with
its terms and with the requirements prescribed by any and all applicable
statutes, orders, rules and regulations and has been maintained in good
standing with applicable regulatory authorities.
(e) There has been no failure of any Employee Plan which is a group health
plan (as defined in Section 5000(b)(1) of the Code) to meet the requirements of
Code Section 4980B(f) with respect to a qualified beneficiary (as defined in
Section 4980B(g)), other than a failure that would not be reasonably expected
to have, individually or in the aggregate, a Material Adverse Effect on the
Company.
(f) No employee or former employee of the Company or any Subsidiary will
become entitled to any bonus, retirement, severance, job security or similar
benefit or enhanced such benefit (including acceleration of vesting or exercise
of an incentive award) as a result of the transactions contemplated hereby. No
independent contractors of the Company or any Subsidiary have asserted any
claims for benefits under any Employee Plans.
(g) There is no contract, plan or arrangement (written or otherwise)
covering any employee or former employee of the Company or any Subsidiary that,
individually or collectively, could give rise to the payment of any amount
24
that would not be deductible by Parent, the Company or any Subsidiary by reason
of Section 280G or 162(m) of the Code.
SECTION 5.18. Environmental Matters. (a) Except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect
on the Company:
(i) no written notice, demand, request for information, citation,
summons or order has been received, no penalty has been assessed, and no
investigation, action, claim, suit or proceeding is pending or, to the
knowledge of the Company, threatened by any governmental entity or other
Person which alleges a violation by the Company or any Subsidiary of the
Company of any Environmental Law;
(ii) the Company and its Subsidiaries are in compliance with all
Environmental Laws and all Environmental Permits;
(iii) there are no liabilities of the Company or any of its
Subsidiaries of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise arising under any
Environmental Law; and
(iv) in connection with the real property owned or leased by the
Company, no release, emission, or discharge into the environment of
hazardous substances, waste or air pollutants, as defined under any
Environmental Laws, has occurred within the past twenty-four months, is
presently occurring, or is anticipated to occur in excess of permitted
levels or reportable quantities, under any Environmental Law. No hazardous
waste or hazardous substance including Polychlorinated Biphenyls ("PCBs")
has been disposed of by the Company, and to the Company's knowledge, no
hazardous waste or hazardous substance including PCBs has been disposed of
by any other Person, on the real property occupied by the Company. As used
herein, the term "hazardous waste" shall have the same meaning as it has
in the Resource Conservation and Recovery Act ("RCRA"), as amended, and in
the equivalent state statutes, if any, of the states in which the Company
operates any newspaper or conducts any commercial printing.
(b) Except as set forth in this Section 5.18, or Sections 5.07 or 5.11, no
representations or warranties are being made with respect to environmental
matters.
25
SECTION 5.19. Intellectual Property. No Company Intellectual Property
Right is subject to any outstanding judgment, injunction, order, decree or
agreement restricting the use thereof by the Company or any of its Subsidiaries
or restricting the licensing thereof by the Company or any of its Subsidiaries
to any Person, except for any judgment, injunction, order, decree or agreement
which would not reasonably be expected to have a Material Adverse Effect on the
Company. Since the Company Balance Sheet Date, neither the Company nor any of
its Subsidiaries has been a defendant in any action, suit, investigation or
proceeding relating to, or otherwise has been notified of, any alleged claim of
infringement of any Intellectual Property Right. The Company and its
Subsidiaries have no outstanding claim or suit for any continuing infringement
by any other Person of any Company Intellectual Property Rights.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company that:
SECTION 6.01. Corporate Existence and Power. Each of Parent and Merger
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
corporate powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted,
except for those licenses, authorizations, permits, consents and approvals the
absence of which would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on Parent. Since the date of its
incorporation, Merger Subsidiary has not engaged in any activities other than
in connection with or as contemplated by this Agreement or in connection with
arranging any financing required to consummate the transactions contemplated
hereby.
SECTION 6.02. Corporate Authorization. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions contemplated
hereby are within the corporate powers of Parent and Merger Subsidiary and have
been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and binding agreement of each of Parent and Merger
Subsidiary.
SECTION 6.03. Governmental Authorization. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions contemplated
26
hereby require no action by or in respect of, or filing with, any governmental
body, agency, official or authority, domestic or foreign, other than (i) the
filing of articles of merger with respect to the Merger with the Secretary of
State of the State of Indiana and appropriate documents with the relevant
authorities of other states in which Parent is qualified to do business, (ii)
compliance with any applicable requirements of the HSR Act and of laws, rules
and regulations in foreign jurisdictions governing antitrust or merger control
matters, (iii) compliance with any applicable requirements of the 1933 Act, the
1934 Act and any other applicable securities or takeover laws, whether state or
foreign, and (iv) any actions or filings the absence of which would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Parent or materially to impair the ability of Parent and
Merger Subsidiary to consummate the transactions contemplated by this
Agreement.
SECTION 6.04. Non-contravention. The execution, delivery and performance
by Parent and Merger Subsidiary of this Agreement and the consummation by
Parent and Merger Subsidiary of the transactions contemplated hereby do not and
will not (i) contravene, conflict with, or result in any violation or breach of
any provision of the certificate of incorporation or bylaws of Parent or Merger
Subsidiary, (ii) assuming compliance with the matters referred to in Section
6.03, contravene, conflict with, or result in any violation or breach of any
provision of any law, regulation, judgment, injunction, order or decree or
(iii) require any consent or other action by any Person under, constitute a
default under, or cause or permit the termination, cancellation, acceleration
or other change of any right or obligation or the loss of any benefit to which
Parent or Merger Subsidiary is entitled under any provision of any agreement or
other instrument binding upon Parent or Merger Subsidiary, except, in the case
of clauses (ii) and (iii), for such matters as would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on Parent.
SECTION 6.05. Disclosure Documents. The information with respect to Parent
and any of its Subsidiaries that Parent furnishes to the Company specifically
for use in the Company Proxy Statement will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
are made, not misleading at the time such Company Proxy Statement or any
amendment or supplement thereto is first mailed to stockholders of the Company.
SECTION 6.06. Financing. Parent has, or will have prior to the expiration
of the Offer, sufficient funds to consummate the transactions contemplated by
this Agreement, including payment in full for all shares of Company Stock
validly tendered in the Offer or outstanding at the Effective Time.
27
ARTICLE 7
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 7.01. Conduct of the Company. From the date hereof until the
Effective Time, the Company and its Subsidiaries shall conduct their business
in the ordinary course consistent with past practice and shall use their
reasonable best efforts to preserve intact their business organizations and
relationships with third parties and to keep available the services of their
present officers and employees. Notwithstanding the foregoing, except with the
prior written consent of Parent or as contemplated by this Agreement or as set
forth in the Company Disclosure Schedule, from the date hereof until the
Effective Time the Company shall not, and shall not permit any of its
Subsidiaries to:
(a) declare, set aside or pay any dividend or other distribution with
respect to any share of its capital stock, other than (w) customary quarterly
cash dividends on the shares of Company Stock, (x) preferred quarterly
dividends payable to preferred shareholders of Indiana Newspapers, Inc. and (y)
dividends and other distributions paid by any Subsidiary of the Company to the
Company or any wholly-owned Subsidiary of the Company;
(b) repurchase, redeem or otherwise acquire any shares of capital stock or
other securities of, or other ownership interests in, the Company or any of its
Subsidiaries;
(c) issue, deliver or sell any shares of Company Stock, or any securities
convertible into shares of Company Stock, or any rights, warrants or options to
acquire any shares of Company Stock, other than (i) issuances pursuant to
stock- based awards or options that are outstanding on the date hereof or are
granted in accordance with the following clause (ii), and (ii) additional
options or stock- based awards to acquire shares of Company Stock granted under
the terms of the Company's stock plans as in effect on the date hereof in the
ordinary course consistent with past practice;
(d) amend its articles of incorporation or by-laws or other comparable
organizational documents or amend any material terms of the outstanding
securities of the Company or its Subsidiaries;
(e) merge or consolidate with any other Person or acquire a material
amount of stock or assets of any other Person;
28
(f) sell, lease, license or otherwise dispose of any material subsidiary
or material amount of assets, securities or property or make any investments
other than (i) pursuant to existing contracts or commitments or (ii)
transactions that are in the ordinary course consistent with past practice and
not material to the Company and its Subsidiaries taken as a whole, including
without limitation, investments previously committed to (whether orally or in
writing) by CNI Ventures, Inc.;
(g) incur any indebtedness for borrowed money, guarantee any such
indebtedness, issue or sell any debt securities or warrants or other rights to
acquire any debt securities or guarantee any debt securities, other than any
indebtedness, guarantee or issuance incurred in the ordinary course of business
consistent with past practice or incurred between the Company and any of its
wholly-owned Subsidiaries or between any of such wholly-owned Subsidiaries;
(h) except as required under any existing collective bargaining agreement
or under Section 3.05 or as may be mutually agreed upon between Parent and the
Company, enter into or adopt any new, or amend or renew any existing, Employee
Plan or Benefit Arrangement or any collective bargaining agreement, other than
as required by law;
(i) except (i) as permitted under Section 7.01(h) or (ii) to the extent
required by any existing collective bargaining agreement or by written
employment agreements existing on the date of this Agreement, increase the
compensation payable or to become payable to its officers or employees, except
for increases in the ordinary course of business consistent with past practice
in salaries or wages of employees of the Company or any of its Subsidiaries;
(j) adopt any change, other than in the ordinary course of business
consistent with past practice or as required by the SEC, GAAP or by law, in its
accounting policies, procedures or practices;
(k) take any action that would, or that would reasonably be expected to,
result in any of the representations and warranties of the Company set forth in
this Agreement becoming untrue;
(l) enter into any contract or agreement involving annual consideration in
excess of $200,000 and/or renewing any such existing contracts or agreements
except, in each case, in the ordinary course of business;
(m) enter into any contracts of employment (other than contracts
terminable by the Company without liability immediately following the Closing)
or any severance, retention or similar agreement; or
29
(n) agree or commit to do any of the foregoing.
SECTION 7.02. Stockholder Meeting; Proxy Material; Merger Without
Stockholder Meeting. (a) If required by applicable law to consummate the
Merger, the Company shall cause a meeting of its stockholders (the "Company
Stockholder Meeting"), to be duly called and held as soon as practicable
following the date on which the Merger Subsidiary completes the purchase of
shares of Company Stock pursuant to the Offer (the "Offer Completion Date"), or
the Option, for the purpose of voting on the approval and adoption of this
Agreement and the Merger. Subject to Section 7.04(c), the Board of Directors of
the Company shall recommend approval and adoption of this Agreement and the
Merger by the Company's stockholders. In connection with such meeting, the
Company will (i) promptly prepare and file with the SEC, use its best efforts
to have cleared by the SEC and thereafter mail to its stockholders as promptly
as practicable the Company Proxy Statement and all other proxy materials for
such meeting, (ii) use its best efforts to obtain the necessary approvals by
its stockholders of this Agreement and the transactions contemplated hereby and
(iii) otherwise comply with all legal requirements applicable to such meetings.
(b) If Merger Subsidiary shall acquire at least 90% of the outstanding
shares of each class of Company Stock pursuant to the Offer or otherwise, the
parties hereto agree, subject to satisfaction or (to the extent permitted
hereunder) waiver of all conditions to the Merger, to take all necessary and
appropriate action to cause the Merger to be effective as soon as practicable
after the acceptance for payment and purchase of shares of Company Stock
pursuant to the Offer without the Company Stockholder Meeting.
SECTION 7.03. Access to Information. From the date hereof until the
Effective Time and subject to applicable law and the Confidentiality Agreement
dated as of May 26, 2000 between the Company and Parent (the "Confidentiality
Agreement"), the Company shall (i) give Parent, its counsel, financial
advisors, auditors and other authorized representatives reasonable access to
the offices, properties, books and records of the Company and its Subsidiaries,
(ii) furnish to Parent, its counsel, financial advisors, auditors and other
authorized representatives such financial and operating data and other
information as such Persons may reasonably request and (iii) instruct the
employees, counsel, financial advisors, auditors and other authorized
representatives of the Company and its Subsidiaries to cooperate with Parent in
its investigation of the Company and its Subsidiaries. Any investigation
pursuant to this Section shall be conducted in such manner as not to interfere
unreasonably with the conduct of the business of the Company and its
Subsidiaries. No information or knowledge obtained by
30
Parent in any investigation pursuant to this Section shall affect or be deemed
to modify any representation or warranty made by the Company hereunder.
SECTION 7.04. No Solicitation; Other Offers. (a) From the date hereof
until the earlier of the Effective Time and the termination of this Agreement
in accordance with Article 11, neither the Company nor any of its Subsidiaries
nor any of the officers, directors, employees, investment bankers, consultants
or other agents of the Company and its Subsidiaries will, directly or
indirectly, (i) solicit, initiate, encourage, induce or knowingly facilitate
(including, without limitation by way of furnishing information) the submission
of any Acquisition Proposal or any inquiries with respect thereto, (ii) engage
in discussions or negotiations with any Person concerning an Acquisition
Proposal or knowingly facilitate any effort or attempt to make an Acquisition
Proposal or accept an Acquisition Proposal or (iii) disclose any nonpublic
information relating to the Company or any of its Subsidiaries to any Person
who, to the knowledge of the Company, is making or considering making, or who
has made, an Acquisition Proposal. The Company will notify Parent as promptly
as practicable (but in no event later than 24 hours) after receipt by the
Company of any Acquisition Proposal or any request for nonpublic information
relating to the Company or any of its Subsidiaries by any Person who, to the
knowledge of the Company, is making or considering making or who has made, an
Acquisition Proposal. The Company shall provide such notice orally and in
writing and shall identify the Person making, and the terms and conditions of,
any such Acquisition Proposal or request. The Company shall keep Parent
informed of the status and details (including, without limitation, amendments
or proposed amendments) of any such Acquisition Proposal or request. The
Company shall, and shall cause its Subsidiaries and the directors, employees
and other agents of the Company and its Subsidiaries to, cease immediately and
cause to be terminated all activities, discussions and negotiations, if any,
with any Persons conducted prior to the date hereof with respect to any
Acquisition Proposal and, to the extent within its power, to recover or cause
to be destroyed all information concerning the Company and its Subsidiaries in
the possession of such Persons and their Affiliates, representatives and
advisors. Nothing contained in this Agreement shall prevent the Board of
Directors of the Company from complying with Rule 14d-9 or Rule 14e-2 under the
1934 Act with respect to any Acquisition Proposal.
(b) Notwithstanding the first sentence of Section 7.04(a), the Company
may, until the earliest to occur of the Offer Completion Date, a purchase of
Company Stock pursuant to the Option, and the Company Stockholders Meeting
(such earliest date the "Cutoff Date"), negotiate or otherwise engage in
substantive discussions with, and furnish nonpublic information to, any Person
in response to an unsolicited Acquisition Proposal by such Person if (i) the
Company has complied with the terms of this Section 7.04, (ii) the Board of
Directors of the
31
Company determines in good faith that such Acquisition Proposal could
reasonably be expected to result in a Superior Proposal and, after consultation
with and receipt of advice from outside legal counsel, that the failure to take
such action could reasonably be deemed to constitute a breach of its fiduciary
duties under applicable law, (iii) such Person executes a confidentiality
agreement with terms no less favorable to the Company than those contained in
the Confidentiality Agreement (including the standstill provisions unless the
Company shall have amended the Confidentiality Agreement to modify the
standstill provisions therein to be no more restrictive of Parent than such
Person is restricted pursuant to such confidentiality agreement) and (iv) the
Company shall have delivered to Parent prior written notice advising Parent
that it intends to take such action. The Company shall provide Parent any
information regarding the Company or its Subsidiaries provided to any Person
making an Acquisition Proposal which was not previously provided to Parent.
(c) Except as permitted in this Section 7.04(c), neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw or
modify, or publicly propose to withdraw or modify, in a manner adverse to
Parent, or take any action not explicitly permitted by this Agreement that
would be inconsistent with its approval of the Offer and the Merger or with the
recommendation to stockholders referred to in Section 7.02 hereof, (ii) approve
or recommend, or publicly propose to approve or recommend, any Acquisition
Proposal or (iii) cause the Company to enter into any letter of intent,
agreement in principle, acquisition agreement or similar agreement related to
any Acquisition Proposal. Notwithstanding the foregoing, prior to the Cutoff
Date, the Board of Directors of the Company shall be permitted not to recommend
to its stockholders acceptance of the Offer and/or approval and adoption of
this Agreement and the Merger, or to withdraw, or modify in a manner adverse to
Parent, its recommendation to its stockholders referred to in Section 2.02
and/or Section 7.02 hereof, but only if (i) the Company has complied with the
terms of this Section 7.04, (ii) the Company has received an unsolicited
Acquisition Proposal which the Board of Directors determines in good faith
constitutes a Superior Proposal, (iii) the Board of Directors of the Company
determines in good faith, after consultation with and receipt of advice from
outside legal counsel, that the failure to take such action could reasonably be
deemed to be inconsistent with its fiduciary duties under applicable law and
(iv) the Company shall have delivered to Parent a prior written notice advising
Parent that it intends to take such action.
(d) For purposes of this Agreement:
"Acquisition Proposal" means any offer or proposal for a merger,
reorganization, consolidation, share exchange, business combination, or other
similar transaction involving the Company or any of its Subsidiaries or any
32
proposal or offer to acquire, directly or indirectly, securities representing
more than 50% of the voting power of the Company, or a substantial portion of
the assets of the Company and its Subsidiaries taken as a whole, other than the
Offer and the Merger contemplated by this Agreement.
"Superior Proposal" means any bona fide written Acquisition Proposal which
(i) the Board of Directors of the Company determines in good faith (after
consultation with a financial advisor of nationally recognized reputation and
taking into account all the terms and conditions of the Acquisition Proposal)
is (a) more favorable to the Company and its stockholders (in their capacities
as stockholders) from a financial point of view than the transaction
contemplated hereunder, and (b) reasonably capable of being completed,
including a conclusion that its financing, to the extent required, is then
committed or is in the good faith judgment of the Board of Directors of the
Company, reasonably capable of being financed by the Person making such
Acquisition Proposal.
(e) During the period from the date of this Agreement until the Effective
Time or earlier termination of this Agreement, the Company shall not terminate,
amend, modify or waive any provision of any confidentiality or standstill
agreement to which it or any of its Subsidiaries is a party (other than any
involving Parent or its Subsidiaries). During such period, the Company agrees
to enforce, to the fullest extent permitted under applicable law, the
provisions of any such agreement, including obtaining injunctions to prevent
any breaches of such agreements and to enforce specifically the terms and
provisions thereof in any court of the United States or any state thereof
having jurisdiction.
ARTICLE 8
COVENANTS OF PARENT
Parent agrees that:
SECTION 8.01. Confidentiality. Prior to the Effective Time and after any
termination of this Agreement, Parent will hold, and will use its reasonable
best efforts to cause its officers, directors, employees, accountants, counsel,
consultants, advisors and agents to hold, in confidence all documents and
information concerning the Company or any of its Subsidiaries furnished to
Parent or its Affiliates in connection with the transactions contemplated by
this Agreement in accordance with the terms of the Confidentiality Agreement.
SECTION 8.02. Obligations of Merger Subsidiary. Parent will take all
action necessary to cause Merger Subsidiary to perform its obligations under
this
33
Agreement and the Offer and to consummate the Merger on the terms and
conditions set forth in this Agreement.
SECTION 8.03. Company Stockholder Meeting. At the Company Stockholder
Meeting, if any, the Parent and Merger Subsidiary agree that each shall vote,
or cause to be voted, in favor of the Merger all shares of Company Stock
directly or indirectly beneficially owned by it or any Subsidiary.
SECTION 8.04. Director and Officer Liability. Parent shall cause the
Surviving Corporation, and the Surviving Corporation hereby agrees, to do the
following:
(a) For six years after the Effective Time, the Surviving Corporation
shall indemnify and hold harmless each present and former officer and director
of the Company (each an "Indemnified Person") in respect of acts or omissions
in his or her capacity as an officer or director of the Company or one or more
of its Subsidiaries occurring at or prior to the Effective Time to the fullest
extent permitted by Indiana Law or any other applicable laws or provided under
the Company's articles of incorporation and bylaws in effect on the date
hereof, provided that such indemnification shall be subject to any limitation
imposed from time to time under applicable law.
(b) The Surviving Corporation shall pay all expenses, including reasonable
fees and expenses of counsel, that an Indemnified Person may incur in enforcing
the indemnity and other obligations provided for in this Section 8.04. The
Indemnified Person shall be entitled to control the defense of any action,
suit, investigation or proceeding with counsel of its own choosing reasonably
acceptable to the Surviving Corporation and the Surviving Corporation shall
cooperate in the defense thereof; provided that the Surviving Corporation shall
not be liable for the fees of more than one counsel for all Indemnified
Persons, other than local counsel, unless a conflict of interest shall be
caused thereby, and provided further that the Surviving Corporation shall not
be liable for any settlement effected without its written consent (which
consent shall not be unreasonably withheld).
(c) For six years after the Effective Time, the Surviving Corporation
shall provide officers' and directors' liability insurance in respect of acts
or omissions occurring prior to the Effective Time covering each such
Indemnified Person currently covered by the Company's officers' and directors'
liability insurance policy on terms with respect to coverage and amount no less
favorable than those of such policy in effect on the date hereof (true and
complete copies of which have been made available to Parent); provided if the
aggregate annual premiums for such insurance at any time during such period
shall exceed 200% of
34
the per annum rate of premium paid by the Company and its Subsidiaries as of
the date hereof for such insurance, then Parent shall, or shall cause its
Subsidiaries to, provide only such coverage as shall then be available at an
annual premium equal to 200% of such rate.
(d) If Parent, the Surviving Corporation or any of its successors or
assigns (i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any Person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Parent or
the Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 8.04.
(e) The rights of each Indemnified Person under this Section 8.04 shall be
in addition to any rights such Person may have under the certificate of
incorporation or bylaws of the Company or any of its Subsidiaries, under
Indiana Law or any other applicable laws or under any agreement of any
Indemnified Person with the Company or any of its Subsidiaries. These rights
shall survive consummation of the Merger and are intended to benefit, and shall
be enforceable by, each Indemnified Person.
(f) The obligations of the Surviving Corporation under this Section 8.04
shall be joint and several obligations of Parent and the Surviving Corporation.
SECTION 8.05. Employee Matters. (a) For a period of one year after the
Effective Time, Parent shall or shall cause the Surviving Corporation to
provide employee compensation (consisting of base pay, commission rates and
bonuses) and benefits (consisting of benefits similar to those under the
Employee Plans and Benefit Arrangements) to current and former employees of the
Company and its Subsidiaries who are not included in any collective bargaining
unit ("Non-Union Company Employees") that are in the aggregate not less
favorable to such employees than such compensation provided to such employees
as of the date hereof and the benefits provided to such employees under the
Employee Plans and Benefit Arrangements as of the date hereof. The foregoing
notwithstanding, in the event the employment of any Company Employee is
terminated other than for cause during the one year period beginning at the
Effective Time, such employee shall receive severance or separation benefits in
an aggregate amount no more favorable than the severance or separation benefits
such employee would have been entitled to receive under plans or arrangements
provided by Parent or its Affiliates to similarly situated employees. With
respect to employees of the Company and its Subsidiaries who are included in
any collective bargaining unit ("Union Employees"), Parent shall provide or
cause the Surviving Corporation to
35
provide the Union Employees compensation and benefits required by their current
collective bargaining agreement as the same may be in effect from time to time.
(b) Service Credit. Each Company Employee shall be given full credit for
all service with the Company and its Affiliates and their respective
predecessors under any plans or arrangements providing vacation, severance,
retirement, pension or retiree welfare benefits maintained by Parent or the
Surviving Corporation or any of their respective Affiliates in which such
Company Employees participate for all purposes that such service was recognized
under any similar Employee Plan or Benefit Arrangement as in effect immediately
prior to the Effective Time (including, without limitation, for purposes of
eligibility, vesting, benefit accrual and forms of benefit); provided, however,
that any benefit provided under such plans and arrangements maintained by
Parent or the Surviving Corporation or any of their respective Affiliates in
respect of any period of service prior to the Effective Time may be reduced in
amount by the benefit accrued by such Company Employee under any similar
Employee Plan or Benefit Arrangement in respect of the same period of service.
(c) Pre-Existing Conditions and Credit for Deductibles. In the event of
any change in the welfare benefits provided to Company Employees following the
Effective Time, Parent shall or shall cause the Surviving Corporation to (i)
waive all limitations as to preexisting conditions, exclusions and waiting
periods with respect to participation and coverage requirements applicable to
the Company Employees under any such welfare benefits to the extent that such
conditions, exclusions or waiting periods would not apply in the absence of
such change and (ii) credit each Company Employee with any co-payments and
deductibles paid prior to any such change in satisfying any applicable
deductible or out-of-pocket requirements after such change.
ARTICLE 9
COVENANTS OF PARENT AND THE COMPANY
The parties hereto agree that:
SECTION 9.01. Best Efforts. Subject to the terms and conditions of this
Agreement, the Company and Parent will use their best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement. In furtherance and not in
limitation of the foregoing, each of Parent and Company agrees to make an
appropriate filing of a Notification and Report Form pursuant to the HSR Act
with respect to the
36
transactions contemplated hereby as promptly as practicable and in any event
within five Business Days of the date hereof and to supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act and to take all other actions necessary to
cause the expiration or termination of the applicable waiting periods under the
HSR Act. Notwithstanding the foregoing, Parent shall not be required to agree,
and the Company shall not agree without Parent's consent, to waive any
substantial rights or to accept any substantial limitation on its operations,
in each case, in respect of any assets constituting a material portion of the
assets of the Parent and its Subsidiaries, taken as a whole ("Material Assets")
or to dispose of any Material Assets in connection with obtaining any such
expiration or termination of the applicable waiting periods under the HSR Act.
SECTION 9.02. Certain Filings. The Company and Parent shall cooperate with
one another (i) in connection with the preparation of the Company Proxy
Statement, (ii) in determining whether any action by or in respect of, or
filing with, any governmental body, agency, official, or authority is required,
or any actions, consents, approvals or waivers are required to be obtained from
parties to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (iii) in taking such actions or
making any such filings, furnishing information required in connection
therewith or with the Company Proxy Statement and seeking timely to obtain any
such actions, consents, approvals or waivers.
SECTION 9.03. Public Announcements. Parent and the Company will consult
with each other before issuing any press release or making any public statement
(including any broadly issued statement or announcement to employees) with
respect to this Agreement or the transactions contemplated hereby and, except
as may be required by applicable law or any listing agreement with any national
securities exchange, will not issue any such press release or make any such
public statement prior to such consultation.
SECTION 9.04. Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Merger
Subsidiary, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Company or Merger Subsidiary, any other
actions and things to vest, perfect or confirm of record or otherwise in the
Surviving Corporation any and all right, title and interest in, to and under
any of the rights, properties or assets of the Company acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with,
the Merger.
37
SECTION 9.05. Notices of Certain Events. Each of the Company and Parent
shall promptly notify the other of:
(a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or regulatory
agency or authority in connection with the transactions contemplated by this
Agreement;
(c) any actions, suits, claims, investigations, orders, decrees,
complaints or proceedings commenced or, to its knowledge, threatened against,
relating to or involving or otherwise affecting the Company, Parent or any of
their respective Subsidiaries that relate to the consummation of the
transactions contemplated by this Agreement;
(d) the occurrence of or becoming aware of the impending or threatened
occurrence of any event which would cause a breach of any of such party's
representations or warranties; and
(e) any substantial damage to any material assets of the Company or any
Subsidiary.
ARTICLE 10
CONDITIONS TO THE MERGER
SECTION 10.01. Conditions to Obligations of Each Party. The obligations of
the Company, Parent and Merger Subsidiary to consummate the Merger are subject
to the satisfaction of the following conditions:
(a) Merger Subsidiary shall have purchased shares of Company Stock
pursuant to the Offer or the Option; provided, that this condition shall be
deemed to have been satisfied with respect to the obligation of Parent and
Merger Subsidiary to effect the Merger if Merger Subsidiary fails to accept for
payment or pay for shares of Company Stock pursuant to the Offer or the Option
in violation of the terms of the Offer, the Voting Agreement or of this
Agreement;
(b) if required by applicable law, this Agreement shall have been approved
and adopted by the stockholders of the Company in accordance with Indiana Law;
and
38
(c) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prevent or prohibit the consummation of the
Merger.
ARTICLE 11
TERMINATION
SECTION 11.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time:
(a) by mutual written agreement of the Company and Parent;
(b) by either the Company or Parent, if:
(i) without material breach by the terminating party of its
obligations under this Agreement or (in the case of termination by Parent)
the Offer, the purchase of shares of Company Stock pursuant to the Offer
or the Option shall not have occurred on or before November 30, 2000;
provided that if the HSR Condition (as defined in Annex A) and/or the
conditions in paragraphs (a) and (b) of Annex A shall not have been
satisfied, such date shall be March 31, 2001;
(ii) there shall be any law or regulation that makes consummation of
the Merger illegal or otherwise prohibited or any judgment, injunction,
order or decree of any court or governmental body having competent
jurisdiction enjoining Company or Parent from consummating the Merger is
entered and such judgment, injunction, judgment or order shall have become
final and nonappealable; or
(iii) upon final adjournment of the Company Stockholder Meeting, this
Agreement shall not have been approved and adopted in accordance with
Indiana Law by the Company's stockholders at the Company Stockholder
Meeting (or any adjournment thereof), if required; or
(c) by Parent, if the Board of Directors of the Company shall have failed
to recommend or withdrawn, or modified in a manner adverse to Parent, its
approval or recommendation of this Agreement, the Offer or the Merger or shall
have approved or recommended a Superior Proposal.
39
The party desiring to terminate this Agreement pursuant to this Section 11.01
(other than pursuant to Section 11.01(a)) shall give notice of such termination
to the other party.
SECTION 11.02. Effect of Termination. If this Agreement is terminated
pursuant to Section 11.01, this Agreement shall become void and of no effect
with no liability on the part of any party (or any stockholder, director,
officer, employee, agent, consultant or representative of such party) to the
other party hereto, provided that, if such termination shall result from the
willful (i) failure of either party to fulfill a condition to the performance
of the obligations of the other party or (ii) failure of either party to
perform a covenant hereof, such party shall be fully liable for any and all
liabilities and damages incurred or suffered by the other party as a result of
such failure. The provisions of Sections 8.01, 12.04, 12.06, 12.07 and 12.08
shall survive any termination hereof pursuant to Section 11.01.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given,
if to Parent or Merger Subsidiary, to:
Gannett Co., Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx
Attention: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
with a copy to:
Gannett Co., Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx
Attention: General Counsel
Fax: (000) 000-0000
and to:
40
Xxxxx Peabody LLP
000 Xxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Xx.
Fax: (000) 000-0000
if to the Company, to:
Central Newspapers, Inc.
000 X. Xxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Fax: (000) 000-0000
with copies to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx.
Fax: (000) 000-0000
and
Xxxxxx X. Xxxxxxx Trust
c/o Xxxxx Xxxxxxx
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
and
Xxxxxx, Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5 p.m. in the place of
receipt and such day is a
41
Business Day in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding Business Day in the place of receipt.
SECTION 12.02. Non-Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Effective Time or the
termination of this Agreement.
SECTION 12.03. Amendments; No Waivers. (a) Any provision of this Agreement
may be amended or waived prior to the Effective Time if, but only if, such
amendment or waiver is in writing and is signed, in the case of an amendment,
by each party to this Agreement or, in the case of a waiver, by each party
against whom the waiver is to be effective, provided that, after the adoption
of this Agreement by the stockholders of the Company and without their further
approval, no such amendment or waiver shall reduce the amount or change the
kind of consideration to be received in exchange for the shares of Company
Stock.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 12.04. Expenses. (a) Except as otherwise provided in this Section,
all costs and expenses incurred in connection with this Agreement shall be paid
by the party incurring such cost or expense.
(b) If:
(i) Parent shall terminate this Agreement pursuant to Section
11.01(c); or
(ii) either the Company or Parent shall terminate this Agreement
pursuant to Sections 11.01(b)(i) or (iii) and (x) prior to the termination
or expiration of the Offer (in case of Section 11.01(b)(i)) and the final
adjournment of the Company Stockholder Meeting (in case of Section
11.01(b)(iii)) an Acquisition Proposal is made by any Person and (y) the
Company enters into a definitive agreement in connection with an
Acquisition Proposal or an Acquisition Proposal is consummated, in either
case, within twelve months after termination of this Agreement,
42
then in any case as described in Section 12.04(b)(i), the Company shall pay to
Parent (by wire transfer of immediately available funds not later than the date
of termination of this Agreement or, in the case of Section 12.04(b)(ii), the
earlier of the date of such definitive agreement and the date of consummation
of such Acquisition Proposal) an amount equal to $97,000,000 (the "Termination
Fee"); provided, however, that payment of the Termination Fee shall not prevent
Parent or Merger Subsidiary from seeking specific performance against the Trust
based on any breach of the Voting Agreement by the Trust.
(c) The Company agrees to pay the reasonable investment banking and legal
counsel fees incurred by the Trust in connection with the transactions
contemplated hereby.
SECTION 12.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto, except that Parent or Merger
Subsidiary may transfer or assign, in whole or from time to time in part, to
one or more of its Affiliates, the right to enter into the transactions
contemplated by this Agreement, but no such transfer or assignment will relieve
Parent or Merger Subsidiary of its obligations hereunder.
SECTION 12.06. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Indiana, without regard to
the conflicts of law rules of such state.
SECTION 12.07. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in any federal court located in the State of Indiana, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
that it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of
process on such party as provided in Section 12.01 shall be deemed effective
service of process on such party.
43
SECTION 12.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 12.09. Counterparts; Effectiveness; Benefit. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Except as provided in Section 8.04, no provision of this Agreement is intended
to confer any rights, benefits, remedies, obligations, or liabilities hereunder
upon any Person other than the parties hereto and their respective successors
and assigns. Execution of this Agreement may be made by facsimile signature
which, for all purposes, shall be deemed to be an original signature.
SECTION 12.10. Entire Agreement. This Agreement and the Confidentiality
Agreement constitute the entire agreement between the parties with respect to
the subject matter of this Agreement and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter of this Agreement.
SECTION 12.11. Captions. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
SECTION 12.12. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent
possible.
SECTION 12.13. Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to
44
enforce specifically the performance of the terms and provisions hereof in any
federal court located in the State of Indiana, in addition to any other remedy
to which they are entitled at law or in equity.
45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
CENTRAL NEWSPAPERS, INC.
By: /s/ XXXXX X. XXXX, III
--------------------------------
Name: XXXXX X. XXXX, III
Title: President & Chief
Executive Officer
GANNETT CO., INC.
By: /s/ XXXXX X. XXXXXX
--------------------------------
Name: XXXXX X. XXXXXX
Title: Executive Vice President
PACIFIC AND SOUTHERN INDIANA
CORP.
By: /s/ XXXXX X. XXXXXX
--------------------------------
Name: XXXXX X. XXXXXX
Title: Vice President
46
ANNEX A
CONDITIONS TO THE OFFER
Capitalized terms used but not defined herein shall have the meanings set
forth in the Agreement and Plan of Merger (the "Agreement") of which this Annex
A is a part. Notwithstanding any other provision of the Offer, Merger
Subsidiary shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c)
promulgated under the 1934 Act (relating to the obligation of Merger Subsidiary
to pay for or return tendered shares of Company Stock promptly after
termination or withdrawal of the Offer), pay for, any tendered shares of
Company Stock and (subject to any such rules or regulations) may delay the
acceptance for payment of or the payment for any tendered shares of Company
Stock and (except as provided in the Agreement) amend or terminate the Offer as
to any Company Stock not then paid for if (i) there are not validly tendered
(and not withdrawn) prior to the expiration date for the Offer that number of
shares of Company Class B Stock which, when added to any such shares owned by
Parent or any of its Affiliates, will at least satisfy the Minimum Condition,
(ii) any applicable waiting period under the HSR Act shall not have expired or
been terminated prior to expiration of the Offer (the "HSR Condition") or (iii)
at any time on or after the date of the Agreement and before the expiration
date of the Offer, any of the following events shall have occurred and be
continuing:
(a) there shall have been instituted or be pending any action, suit or
proceeding by or on behalf of any governmental entity (i) challenging or
seeking to make illegal, materially delay, or otherwise, directly or
indirectly, restrain or prohibit the making of the Offer, the acceptance for
payment of any Company Stock by Parent or Merger Subsidiary, or the
consummation of the Merger, or seeking to obtain material damages in connection
with the Offer or the Merger; (ii) subject to Section 9.01 of the Merger
Agreement, seeking to prohibit or limit materially the ownership or operation
by the Company, Parent or any of their Subsidiaries of all or any of the
business or assets of the Company, Parent or any of their Subsidiaries that is
material to either Parent and its Subsidiaries or the Company and its
Subsidiaries, in either case, taken as a whole, or, to compel the Company,
Parent or any of their Subsidiaries as a result of the Offer or the Merger, to
dispose of or to hold separate all or any portion of the business or assets of
the Company, Parent or any of their Subsidiaries that is material to either
Parent and its Subsidiaries or the Company and its Subsidiaries, in each case,
taken as a whole; (iii) subject to Section 9.01 of the Merger Agreement,
seeking to impose or confirm any limitation on the ability of Parent or Merger
Subsidiary to exercise effectively full rights of ownership of any Company
Stock, including, without limitation, the right to vote any Company Stock
acquired by Merger
Subsidiary pursuant to the Offer or otherwise on all matters properly presented
to the Company's shareholders including, without limitation, the approval and
adoption of this Agreement and the Merger; (iv) seeking to require divestiture
by Parent or Merger Subsidiary of any Company Stock; or (v) which otherwise
would have a Material Adverse Effect on the Company; or
(b) there shall be in effect an injunction or other order, decree,
judgment or ruling by a governmental entity of competent jurisdiction or a law,
rule or regulation shall have been promulgated, or enacted by a governmental
entity of competent jurisdiction which in any such case, subject to Section
9.01 of the Merger Agreement, (i) restrains, prevents or prohibits the making
or consummation of the Offer or the consummation of the Merger or would make
such consummation illegal, or (ii) prevents, prohibits or restricts the
ownership by Parent (or any of its Affiliates or Subsidiaries) of any material
portion of the Company's business or assets or which would substantially
deprive Parent and/or its Affiliates or Subsidiaries of the benefit of
ownership of the Company's business or assets, or (iii) imposes material
limitations on the ability of Merger Subsidiary or Parent effectively to
acquire the shares of Company Stock; or
(c) the Agreement or the Voting Agreement shall have been terminated in
accordance with its terms or any event shall have occurred which gives the
Parent or Merger Subsidiary the right to terminate either the Agreement or the
Voting Agreement or not consummate the Merger; or
(d) any of the representations and warranties of the Company contained in
the Agreement or any of the representations and warranties of the Trust in the
Voting Agreement, in each case, disregarding all qualifications and exceptions
contained therein relating to materiality or Material Adverse Effect or any
similar standard or qualification, shall not be true and correct in all
respects as of the date of determination, as if made at and as of such time,
except (i) to the extent that any such representation or warranty, by its
terms, is expressly limited to a specific date, in which case such
representation or warranty shall not be true and correct as of such date, or
(ii) where the failure of such representations and warranties to be true and
correct would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company; or
(e) the Company shall have failed to perform in all material respects any
of its agreements contained in the Agreement required to be performed at or
prior to the date of determination; or
(f) since the date of the Agreement there shall have occurred any event,
change, effect or development that, individually or in the aggregate with any
other
2
event, change, effect or development, has had or would reasonably be expected to
have a Material Adverse Effect on the Company; or
(g) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on any national securities exchange or in
the over-the-counter market in the United States (other than a shortening of
trading hours or any coordinated trading halt triggered solely as a result of a
specified increase or decrease in a market index), (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) any limitation (whether or not mandatory) by any
governmental entity on, or other event that materially and adversely affects,
the extension of credit by banks or other lending institutions, (iv) a
commencement of a war or armed hostilities or other national or international
calamity directly or indirectly involving the Untied States or (v) in the case
of any of the foregoing existing at the time of the execution of the Agreement,
a material acceleration or worsening thereof; or
(h) the Board of Directors of the Company or any committee thereof, (i)
shall have withdrawn or modified in a manner adverse to Merger Subsidiary
(including by amendment of the Schedule 14D-9) its approval or recommendation
of the Offer, the Merger or the Agreement or recommended or approved any
Acquisition Proposal or (ii) shall have resolved to do any of the foregoing;
which in the good faith judgment of Merger Subsidiary, in any such case, and
regardless of the circumstances giving rise to such condition makes it
inadvisable to proceed with the Offer or the acceptance for payment of or
payment for the Company Stock.
The foregoing conditions are for the sole benefit of Parent and Merger
Subsidiary and may be asserted by Parent and Merger Subsidiary, and, except for
the Minimum Condition and otherwise subject to the terms of the Agreement, may
be waived by Parent and Merger Subsidiary, in whole or in part, at any time and
from time to time, in the sole discretion of Parent and Merger Subsidiary. The
determination as to whether any condition has been satisfied shall be deemed a
continuing right which may be asserted at any time and from time to time.
Notwithstanding the fact that the Parent and Merger Subsidiary reserve the
right to assert the failure of a condition following acceptance for payment but
prior to payment in order to delay payment or cancel their obligation to pay
for properly tendered shares of Company Stock, the Parent and Merger Subsidiary
will either promptly pay for such Company Stock or promptly return such Company
Stock. Should the Offer be terminated pursuant to the foregoing provisions, all
tendered shares of Company Stock not theretofore accepted for payment pursuant
thereto shall forthwith be returned to the tendering shareholders.
