EXHIBIT 1
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
among
LOUISIANA-PACIFIC CORPORATION
STRIPER ACQUISITION, INC.
and
ABT BUILDING PRODUCTS CORPORATION
dated as of January 19, 1999
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TABLE OF CONTENTS
Page
ARTICLE I THE OFFER..............................................................................1
Section 1.1 The Offer..............................................................................1
Section 1.2 Offer Documents........................................................................2
Section 1.3 Company Actions........................................................................3
Section 1.4 Directors..............................................................................4
ARTICLE II THE MERGER.............................................................................5
Section 2.1 The Merger.............................................................................5
Section 2.2 Closing................................................................................5
Section 2.3 Effective Time.........................................................................5
Section 2.4 Effects of the Merger..................................................................5
Section 2.5 Certificate of Incorporation; Bylaws...................................................5
Section 2.6 Directors; Officers....................................................................6
ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF
CERTIFICATES...........................................................................6
Section 3.1 Effect on Capital Stock................................................................6
Section 3.2 Stock Options..........................................................................7
Section 3.3 Payment for Shares.....................................................................7
ARTICLE IV REPRESENTATIONS AND WARRANTIES.........................................................9
Section 4.1 Representations and Warranties of Company..............................................9
Section 4.2 Representations and Warranties of Parent and Merger Sub...............................21
ARTICLE V CONDUCT OF BUSINESS OF COMPANY........................................................23
Section 5.1 Conduct of Business of Company........................................................23
ARTICLE VI ADDITIONAL COVENANTS..................................................................26
Section 6.1 Company Stockholders Meeting; Preparation of the Proxy
Statement; Short-Form Merger..........................................................26
Section 6.2 Access to Information; Confidentiality................................................26
Section 6.3 Reasonable Best Efforts...............................................................27
Section 6.4 Public Announcements..................................................................27
Section 6.5 No Solicitation; Acquisition Proposals................................................27
Section 6.6 Consents, Approvals and Filings.......................................................29
Section 6.7 Employee Benefit Matters..............................................................29
Section 6.8 Indemnification; Directors' and Officers' Insurance...................................30
ARTICLE VII CONDITIONS PRECEDENT...........................................................................31
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger............................31
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER..............................................................32
Section 8.1 Termination...........................................................................32
(i)
PAGE
Section 8.2 Effect of Termination.................................................................33
Section 8.3 Amendment.............................................................................33
Section 8.4 Extension; Waiver.....................................................................34
Section 8.5 Procedure for Termination, Amendment, Extension or Waiver.............................34
ARTICLE IX GENERAL PROVISIONS....................................................................34
Section 9.1 Nonsurvival of Representations and Warranties.........................................34
Section 9.2 Fees and Expenses.....................................................................34
Section 9.3 Definitions...........................................................................34
Section 9.4 Notices...............................................................................36
Section 9.5 Interpretation........................................................................37
Section 9.6 Entire Agreement; Third-Party Beneficiaries...........................................37
Section 9.7 Governing Law.........................................................................37
Section 9.8 Assignment............................................................................37
Section 9.9 Enforcement...........................................................................37
Section 9.10 Severability..........................................................................38
Section 9.11 Counterparts..........................................................................38
EXHIBIT A - Conditions to the Offer
(ii)
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of January 19, 1999 (this
"Agreement"), is made and entered into among Louisiana-Pacific Corporation, a
Delaware corporation ("Parent"), Striper Acquisition, Inc., a Delaware
corporation and wholly owned subsidiary of Parent ("Merger Sub"), and ABT
Building Products Corporation, a Delaware corporation ("Company").
RECITALS:
A. The respective Boards of Directors of Parent, Merger Sub and Company
have determined that it would be advisable and in the best interests of their
respective stockholders for Parent to acquire Company, by means of a merger of
Merger Sub with and into Company (the "Merger"), on the terms and subject to the
conditions set forth in this Agreement.
B. To effectuate the acquisition, Parent and Company each desire that
Parent cause Merger Sub to commence a cash tender offer to purchase all of the
outstanding shares of common stock, par value $0.01 per share (the "Company
Common Stock"), of Company (the "Shares") on the terms and subject to the
conditions set forth in this Agreement and the Board of Directors of Company has
approved such tender offer and is recommending (subject to the limitations
contained herein) that Company's stockholders accept the tender offer and tender
their Shares pursuant thereto.
C. Concurrently with the execution and delivery of this Agreement and
as a condition to Parent's and Merger Sub's willingness to enter into this
Agreement, Parent has entered into a Stockholder Agreement, dated as of the date
hereof (the "Stockholder Agreement"), with each of the Principal Stockholders
(as defined in Section 9.3), pursuant to which each Principal Stockholder has
(i) agreed, among other things, to tender all Shares owned by such Principal
Stockholder pursuant to the Offer (as defined in Section 1.1) and (ii) granted
to Parent an option to purchase all Shares owned by such Principal Stockholder.
D. Parent, Merger Sub and Company desire to make certain
representations and warranties and to enter into certain covenants in connection
with the Offer and the Merger and also to prescribe various conditions to the
consummation thereof;
NOW, THEREFORE, in consideration of the representations, warranties and
covenants contained in this Agreement, the parties hereto hereby agree as
follows:
ARTICLE I
THE OFFER
Section 1.1 THE OFFER. (a) Provided that none of the events set forth
in Exhibit A hereto shall have occurred and be continuing, as promptly as
practicable (but in any event not later than five business days after the public
announcement of the execution and delivery of this Agreement), Parent shall
cause Merger Sub to commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act")), an offer to purchase (the "Offer")
all outstanding shares of Company Common Stock at a price of $15.00 per share,
net to the seller in cash (such price or any higher price as paid pursuant to
the Offer, the "Offer Consideration"). Notwithstanding the foregoing, if between
the date of this Agreement and the Effective Time the outstanding Shares shall
have been changed into a different number of shares or a different class, by
reason of any stock dividend, subdivision, reclassification, recapitalization,
split, combination or exchange of shares, the Offer Consideration shall be
correspondingly adjusted on a per-share basis to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, combination or exchange
of shares. The obligation of Parent and Merger Sub to commence the Offer, to
consummate the Offer and to accept for payment and to pay for Shares validly
tendered in the Offer and not withdrawn shall be subject only to those
conditions set forth in Exhibit A hereto. The Offer shall initially expire 20
business days after the date of its commencement.
(b) Without the prior written consent of Company, Merger Sub
shall not (and Parent shall cause Merger Sub not to) (i) decrease or change the
form of the Offer Consideration or decrease the number of Shares sought pursuant
to the Offer, (ii) amend any term of the Offer in any manner adverse to holders
of Shares, (iii) change the conditions to the Offer, (iv) impose additional
conditions to the Offer, (v) waive the condition that there shall be validly
tendered and not withdrawn prior to the time the Offer expires a number of
Shares (together with any Shares then owned by Parent or any of its
Subsidiaries) which constitutes a majority of the Shares outstanding on a
fully-diluted basis on the date of purchase ("on a fully-diluted basis" meaning,
as of any date, the number of Shares outstanding (excluding any Shares held as
treasury stock by Company or any of its Subsidiaries), together with the Shares
which Company may be required to issue pursuant to obligations outstanding at
that date under employee stock or similar benefit plans or otherwise (other than
unvested Options), or (vi) extend the expiration date of the Offer beyond the
initial expiration date of the Offer (except that Merger Sub may, without the
consent of Company, (A) extend the Offer, if at the then scheduled expiration
date of the Offer any of the conditions to Merger Sub's obligation to purchase
Shares is not satisfied, until such time as such condition is satisfied or
waived, and (B) extend the Offer for any period required by any rule,
regulation, interpretation or position of the United States Securities and
Exchange Commission (the "SEC") or the staff thereof); provided, however, that,
except as set forth above and subject to applicable legal requirements, Merger
Sub may amend the Offer or waive any condition to the Offer in its sole
discretion. Assuming the prior satisfaction or waiver of the conditions to the
Offer set forth in Exhibit A hereto, Merger Sub shall, and Parent shall cause
Merger Sub to, accept for payment, and pay for all Shares validly tendered and
not withdrawn pursuant to the Offer as soon as practicable after the expiration
date thereof.
(c) Parent shall provide or cause to be provided to Merger Sub
on a timely basis the funds necessary to purchase any Shares that Merger Sub
becomes obligated to purchase pursuant to the Offer and shall be liable on a
direct and primary basis for the performance by Merger Sub of its obligations
under this Agreement.
Section 1.2 OFFER DOCUMENTS. (a) As soon as practicable on the date of
commencement of the Offer, Parent and Merger Sub shall file or cause to be filed
with the SEC a Tender Offer Statement on Schedule 14D-1 (together with any
supplements or amendments thereto, the "Schedule 14D-1") with respect to the
Offer which shall comply as to form in all material respects with the provisions
of applicable federal securities laws, shall contain the offer to purchase and
related letter of transmittal and other ancillary Offer documents and
instruments
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pursuant to which the Offer will be made (collectively with the Schedule 14D-1,
and with any supplements or amendments thereto, the "Offer Documents") and shall
be mailed to the holders of Shares. Company will promptly supply to Parent and
Merger Sub in writing, for inclusion in the Offer Documents, all information
concerning Company required under the Exchange Act to be included in the Offer
Documents.
(b) Each of Parent, Merger Sub and Company shall promptly
correct any information provided by them for use in the Offer Documents if and
to the extent that such information shall be or have become false or misleading
in any material respect, and Parent and Merger Sub shall take all lawful action
necessary to cause the Offer Documents as so corrected to be filed promptly with
the SEC and to be disseminated to holders of Shares as and to the extent
required by applicable law. In conducting the Offer, Parent and Merger Sub shall
comply in all material respects with the provisions of the Exchange Act and any
other applicable law. Company and its counsel shall be given a reasonable
opportunity to review and comment on the Offer Documents and any amendments
thereto prior to the filing thereof with the SEC.
Section 1.3 COMPANY ACTIONS. (a) Company hereby consents to the Offer
and represents and warrants that (i) its Board of Directors (at a meeting duly
called and held) has (A) determined that each of this Agreement, the Offer and
the Merger are fair to and in the best interests of Company and its
stockholders, (B) approved and declared the advisability of this Agreement and
the transactions contemplated hereby, including the Offer and the Merger, and
(C) resolved (subject to the limitations herein contained) to recommend
acceptance of the Offer and adoption of this Agreement by the holders of Shares,
and (ii) Warburg Dillon Read LLC ("WDR") has delivered to the Board of Directors
of Company its opinion that the Offer Consideration to be received by the
holders of Shares in the Offer is fair, from a financial point of view, to such
holders. Subject to the provisions of Section 6.5(b), Company hereby consents to
the inclusion in the Offer Documents of the recommendations of the Board of
Directors of Company in favor of the Offer and the adoption of this Agreement.
(b) Company shall file with the SEC, simultaneously with the
filing by Parent and Merger Sub of the Schedule 14D-1, a Solicitation
Recommendation Statement on Schedule 14D-9 (together with any supplements or
amendments thereto, the "Schedule 14D-9") containing, subject to the provisions
of Section 6.5(b), the recommendations of the Board of Directors of Company in
favor of the Offer and the adoption of this Agreement. Each of Parent and Merger
Sub will promptly supply to Company in writing, for inclusion in the Schedule
14D-9, all information concerning Parent's Designees (as such term is defined in
Section 1.4 hereof), as required by Section 14(f) of the Exchange Act and Rule
14f-1 thereunder, and Company shall include such information in the Schedule
14D-9. Each of Company, Parent and Merger Sub shall promptly correct any
information provided by them for use in the Schedule 14D-9 if and to the extent
that such information shall be or have become false or misleading in any
material respect and Company shall take all lawful action necessary to cause the
Schedule 14D-9 as so corrected to be filed promptly with the SEC and
disseminated to the holders of Shares as and to the extent required by
applicable law. Parent, Merger Sub and their counsel shall be given a reasonable
opportunity to review the Schedule 14D-9 and any amendments thereto prior to the
filing thereof with the SEC.
(c) In connection with the Offer, Company shall promptly
furnish Parent with (or cause Parent to be furnished with) mailing labels,
security position listings and all available
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listings or computer files containing the names and addresses of the record
holders of Shares as of the latest practicable date and shall furnish Parent
with (or cause Parent to be furnished with) such information and assistance
(including updated lists of stockholders, mailing labels and lists of security
positions) as Parent or its agents may reasonably request in communicating the
Offer to the record and beneficial holders of Shares. Subject to the
requirements of applicable law, and except for such actions as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Offer and the Merger, Parent and Merger Sub and each of their affiliates,
associates, partners, employees, agents and advisors shall hold in confidence
the information contained in such labels, lists and files, shall use such
information only in connection with the Offer and the Merger and, if this
Agreement is terminated in accordance with its terms, shall deliver promptly to
Company (or destroy and certify to Company the destruction of) all copies of
such information (and any copies, compilations or extracts thereof or based
thereon) then in their possession or under their control.
Section 1.4 DIRECTORS. (a) Promptly upon the purchase by Merger Sub
pursuant to the Offer of such number of shares of Company Common Stock (together
with any Shares then owned by Parent or any of its Subsidiaries) as represents a
majority of the outstanding shares of Company Common Stock (on a fully diluted
basis) on the date of purchase, and from time to time thereafter, (i) Parent
shall be entitled to designate such number of directors ("Parent's Designees"),
rounded up to the next whole number that will give Parent, subject to compliance
with Section 14(f) of the Exchange Act, representation on the Board of Directors
of Company equal to the product of (x) the number of directors on the Board of
Directors of Company (giving effect to any increase in the number of directors
pursuant to this Section 1.4) and (y) the percentage that such number of shares
of Company Common Stock so purchased in the Offer (together with any Shares then
owned by Parent or any of its Subsidiaries) bears to the aggregate number of
shares of Company Common Stock outstanding on the date of purchase (such number
being, the "Board Percentage"), and (ii) Company shall, upon request by Parent,
promptly cause Parent's Designees constituting the Board Percentage to be
elected to Company's Board of Directors by (x) increasing the size of the Board
of Directors of Company or (y) using reasonable efforts to secure the
resignations of such number of directors as is necessary to enable Parent's
Designees to be elected to the Board of Directors of Company and shall use best
efforts to cause Parent's Designees promptly to be so elected, subject in all
instances to compliance with Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder. At the request of Parent, Company shall take, at
Parent's expense, all lawful action necessary to effect any such election.
Parent will supply to Company in writing and be solely responsible for any
information with respect to itself, Parent's Designees and Parent's officers,
directors and affiliates required by the Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder to be included in the Schedule 14D-9.
Notwithstanding the foregoing, at all times prior to the Effective Time (as
defined in Section 2.3) Company's Board of Directors shall include at least two
Continuing Directors (as defined in Section 1.4(b)).
(b) Following the election or appointment of Parent's
Designees pursuant to this Section 1.4 and prior to the Effective Time of the
Merger, any amendment or termination of this Agreement, waiver of the
obligations or other acts of Parent or Merger Sub or waiver of Company's rights
hereunder shall require the concurrence of a majority of the Continuing
Directors then in office. For purposes of this Agreement, the term "Continuing
Directors" means at any time (i) those directors of Company who are directors on
the date hereof and who voted to approve this Agreement, and (ii) such
additional directors of Company who are not affiliated
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with Parent, Merger Sub or any of their affiliates and who were designated as
"Continuing Directors" for purposes of this Agreement by a majority of the
Continuing Directors in office at the time of such designation.
ARTICLE II
THE MERGER
Section 2.1 THE MERGER. On the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL"), the Merger shall be effected and Merger Sub shall be merged
with and into Company at the Effective Time. At the Effective Time, the separate
existence of Merger Sub shall cease and Company shall continue as the surviving
corporation (as such, the "Surviving Corporation").
Section 2.2 CLOSING. Unless this Agreement shall have been terminated
and the transactions contemplated hereby shall have been abandoned pursuant to
Article VIII, and subject to the satisfaction or waiver of all of the conditions
set forth in Article VII, the closing of the Merger (the "Closing") will take
place as soon as practicable, but in no event later than 10:00 a.m. on the
second business day (the "Closing Date") following satisfaction or waiver of all
of the conditions set forth in Article VII, other than those conditions that by
their nature are to be satisfied at the Closing, but subject to the fulfillment
or waiver of those conditions, at the offices of Xxxxx, Day, Xxxxxx & Xxxxx, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, unless another date, time or place is
agreed to in writing by the parties hereto.
Section 2.3 EFFECTIVE TIME. On the Closing Date (or on such other date
as Parent and Company may agree), the parties hereto shall file with the
Secretary of State of the State of Delaware (the "Delaware State Secretary") a
certificate of merger and any other appropriate documents, executed in
accordance with the relevant provisions of the DGCL, and shall make all other
filings or recordings required under the DGCL in connection with the Merger. The
Merger shall become effective upon the filing of the certificate of merger with
the Delaware State Secretary, or at such later time as is specified in the
certificate of merger (the "Effective Time").
Section 2.4 EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all
property of Company and Merger Sub shall vest in the Surviving Corporation, and
all liabilities and obligations of Company and Merger Sub shall become
liabilities and obligations of the Surviving Corporation.
Section 2.5 CERTIFICATE OF INCORPORATION; BYLAWS. At the Effective
Time, (a) the certificate of incorporation of Merger Sub as in effect at the
Effective Time shall, from and after the Effective Time, be the certificate of
incorporation of the Surviving Corporation until thereafter changed or amended
in accordance with the provisions thereof and applicable law and (b) the bylaws
of Merger Sub as in effect at the Effective Time shall, from and after the
Effective Time, be the bylaws of the Surviving Corporation until thereafter
changed or amended in accordance with the provisions thereof and applicable law.
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Section 2.6 DIRECTORS; OFFICERS. From and after the Effective Time, (a)
the directors of Merger Sub shall be the directors of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be, and (b) the
officers of Merger Sub shall be the officers of the Surviving Corporation, until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 3.1 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue
of the Merger and without any action on the part of any holder of Shares or any
other shares of capital stock of Company or Merger Sub:
(a) COMMON STOCK OF MERGER SUB. Each share of common stock,
par value $0.01 per share, of Merger Sub issued and outstanding immediately
prior to the Effective Time shall be converted into and become one validly
issued, fully paid and nonassessable share of common stock, par value $0.01 per
share, of the Surviving Corporation.
(b) CANCELLATION OF TREASURY SHARES AND PARENT-OWNED SHARES.
Each Share issued and outstanding immediately prior to the Effective Time that
is owned by Company or any Subsidiary (as defined in Section 9.3) of Company or
by Parent, Merger Sub or any other Subsidiary of Parent (other than shares in
trust accounts, managed accounts, custodial accounts and the like that are
beneficially owned by third parties) shall automatically be canceled and retired
and shall cease to exist, and no cash or other consideration shall be delivered
or deliverable in exchange therefor.
(c) CONVERSION OF SHARES. Each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time (other than
Shares to be canceled and retired in accordance with Section 3.1(b) and any
Dissenting Shares (as defined in Section 3.1(d)) shall be converted into the
right to receive the Offer Consideration, payable in cash to the holder thereof,
without any interest thereon (the "Merger Consideration"), in accordance with
Section 3.3. Notwithstanding the foregoing, if between the date of this
Agreement and the Effective Time the outstanding Shares shall have been changed
into a different number of shares or a different class, by reason of any stock
dividend, subdivision, reclassification, recapitalization, split, combination or
exchange of shares, the Merger Consideration shall be correspondingly adjusted
on a per-share basis to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares.
(d) DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, Shares issued and outstanding immediately prior to
the Effective Time held by any person who has the right to demand, and who
properly demands, an appraisal of such Shares ("Dissenting Shares") in
accordance with Section 262 of the DGCL (or any successor provision) shall not
be converted into a right to receive the Merger Consideration unless such holder
fails
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to perfect or otherwise loses such holder's right to such appraisal, if any. If,
after the Effective Time, such holder fails to perfect or loses any such right
to appraisal, each such Share of such holder shall be treated as a Share that
had been converted as of the Effective Time into the right to receive the Merger
Consideration in accordance with Section 3.1(c). At the Effective Time, any
holder of Dissenting Shares shall cease to have any rights with respect thereto,
except the rights provided in Section 262 of the DGCL (or any successor
provision) and as provided in the immediately preceding sentence. Company shall
give prompt notice to Parent of any demands received by Company for appraisal of
Shares, and Parent shall have the right to participate in and direct all
negotiations and proceedings with respect to such demands. Company shall not,
except with the prior written consent of Parent, make any payment with respect
to, or settle or offer to settle, any such demands.
Section 3.2 STOCK OPTIONS.
(a) At the Effective Time, each holder of a then-outstanding
option to purchase Shares under Company's Amended and Restated Stock Option
Plan, 1994 Director Stock Option Plan, 1994 Employee Stock Option Plan and new
employee compensation policy (collectively, the "Stock Option Plans") (true and
correct copies of which have been delivered or made available by Company to
Parent), whether or not then exercisable (the "Options"), shall, in settlement
thereof, receive for each Share subject to such Option an amount (subject to any
applicable withholding tax) in cash equal to the difference between the Merger
Consideration and the per Share exercise price of such Option to the extent such
difference is a positive number (such amount being hereinafter referred to as,
the "Option Consideration"); provided, however, that with respect to any person
subject to Section 16(a) of the Exchange Act, any such amount shall be paid as
soon as practicable after the first date payment can be made without liability
to such person under Section 16(b) of the Exchange Act. Upon receipt of the
Option Consideration therefor, each Option shall be canceled. The surrender of
an Option to Company in exchange for the Option Consideration shall be deemed a
release of any and all rights the holder had or may have had in respect of such
Option.
(b) Prior to the Effective Time, Company shall use its
reasonable best efforts to obtain all necessary consents or releases from
holders of Options under the Stock Option Plans and take all such other lawful
action as may be necessary to give effect to the transactions contemplated by
this Section 3.2. Except as otherwise agreed to by the parties, (i) the Stock
Option Plans shall terminate as of the Effective Time and the provisions in any
other plan, program or arrangement providing for the issuance or grant of any
other interest in respect of the capital stock of Company or any Subsidiary
thereof shall be canceled as of the Effective Time and (ii) Company shall use
its reasonable best efforts to assure that following the Effective Time no
participant in the Stock Option Plans or other plans, programs or arrangements
shall have any right thereunder to acquire any equity securities of Company, the
Surviving Corporation or any Subsidiary thereof and to terminate all such plans.
Section 3.3 PAYMENT FOR SHARES.
(a) PAYMENT FUND. Concurrently with the Effective Time, Parent
shall deposit, or shall cause to be deposited, with or for the account of a bank
or trust company designated by Parent, which shall be reasonably satisfactory to
Company (the "Paying Agent"), for the benefit of the holders of Shares, cash in
an amount sufficient to pay the aggregate Merger
7
Consideration payable upon the conversion of Shares pursuant to Section 3.1(c)
(the "Payment Fund").
(b) LETTERS OF TRANSMITTAL; SURRENDER OF CERTIFICATES. As soon
as reasonably practicable after the Effective Time, Parent shall instruct the
Paying Agent to mail to each holder of record (other than Company or any of its
Subsidiaries or Parent, Merger Sub or any other Subsidiary of Parent) of a
certificate or certificates that, immediately prior to the Effective Time,
evidenced outstanding Shares (the "Certificates"), (i) a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent, and shall be in such form and have such other
provisions as Parent may reasonably specify) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent together with such letter of transmittal, duly executed, and such other
customary documents as may be required pursuant to such instructions, the holder
of such Certificate shall be entitled to receive in exchange therefor cash in an
amount equal to the product of (i) the number of Shares theretofore represented
by such Certificate and (ii) the Merger Consideration, and the Certificate so
surrendered shall forthwith be canceled. No interest shall be paid or accrued on
any cash payable upon the surrender of any Certificate. If payment is to be made
to a person other than the person in whose name the surrendered Certificate is
registered, it shall be a condition of payment that the Certificate so
surrendered shall be properly endorsed or otherwise in proper form for transfer
and that the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of the surrendered Certificate or established to the satisfaction of
Parent and the Surviving Corporation that such taxes have been paid or are not
applicable.
(c) CANCELLATION AND RETIREMENT OF SHARES; NO FURTHER RIGHTS.
As of the Effective Time, all Shares (other than Shares to be canceled in
accordance with Section 3.1(b)) issued and outstanding immediately prior to the
Effective Time shall cease to be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of any such Shares shall
cease to have any rights with respect thereto or arising therefrom (including
without limitation the right to vote), except the right to receive the Merger
Consideration, without interest, upon surrender of such Certificate in
accordance with Section 3.3(b), and until so surrendered, each such Certificate
shall represent for all purposes only the right to receive the Merger
Consideration, without interest. The Merger Consideration paid upon the
surrender for exchange of Certificates in accordance with the terms of this
Section 3.3 shall be deemed to have been paid in full satisfaction of all rights
pertaining to the Shares theretofore represented by such Certificates.
(d) INVESTMENT OF PAYMENT FUND. The Paying Agent shall invest
the Payment Fund, as directed by Parent, in (i) direct obligations of the United
States of America, (ii) obligations for which the full faith and credit of the
United States of America is pledged to provide for the payment of principal and
interest, (iii) commercial paper rated the highest quality by either Xxxxx'x
Investors Services, Inc. or Standard & Poor's Corporation, or (iv) certificates
of deposit, bank repurchase agreements or bankers' acceptances of commercial
banks with capital exceeding $500 million. Any net earnings with respect to the
Payment Fund shall be the property of and paid over to Parent as and when
requested by Parent.
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(e) TERMINATION OF PAYMENT FUND. Any portion of the Payment
Fund which remains undistributed to the holders of Certificates for 180 days
after the Effective Time shall be delivered to Parent, upon demand, and any
holders of Certificates that have not theretofore complied with this Section 3.3
shall thereafter look only to Parent, and only as general creditors thereof, for
payment of their claim for any Merger Consideration.
(f) NO LIABILITY. None of Parent, Merger Sub, the Surviving
Corporation or the Paying Agent shall be liable to any person in respect of any
payments or distributions payable from the Payment Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any Certificates shall not have been surrendered prior to five years after
the Effective Time (or immediately prior to such earlier date on which any
Merger Consideration in respect of such Certificate would otherwise escheat to
or become the property of any Governmental Entity (as defined in Section
4.1(c)), any amounts payable in respect of such Certificate shall, to the extent
permitted by applicable law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any person previously entitled
thereto.
(g) WITHHOLDING RIGHTS. Parent shall be entitled to deduct and
withhold, or cause to be deducted or withheld, from the consideration otherwise
payable pursuant to this Agreement to any holder of Shares, Options or
Certificates such amounts as are required to be deducted and withheld with
respect to the making of such payment under the Internal Revenue Code of 1986,
as amended (the "Code"), or any provision of applicable state, local or foreign
tax law. To the extent that amounts are so deducted and withheld, such deducted
and withheld amounts shall be treated for all purposes of this Agreement as
having been paid to such holders in respect of which such deduction and
withholding was made.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES OF COMPANY. Company
represents and warrants to Parent and Merger Sub as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of
Company and each Subsidiary of Company is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated and has the requisite corporate power and authority to carry on its
business as now being conducted. Each of Company and each Subsidiary of Company
is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect (as defined in Section 9.3) on Company. Company has delivered or
made available to Parent true, complete and correct copies of the certificate of
incorporation and bylaws or comparable governing documents of Company and each
Subsidiary of Company, in each case as amended to the date of this Agreement. A
true, correct and complete list of all Subsidiaries of Company, together with
the jurisdiction of incorporation of each such Subsidiary and the percentage of
each such Subsidiary's capital stock
9
owned by Company or another Subsidiary, is set forth in Section 4.1(a) of the
Disclosure Schedule (as defined in Section 9.3).
(b) AUTHORITY; NONCONTRAVENTION. Company has the requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Company and the consummation by Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Company, subject, in the case of the Merger, to the adoption of this
Agreement by its stockholders as contemplated by Section 6.1(a). This Agreement
has been duly executed and delivered by Company and, assuming that this
Agreement constitutes a valid and binding obligation of Parent and Merger Sub,
constitutes a valid and binding obligation of Company, enforceable against
Company in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and to general principles of
equity. Except as specified in Section 4.1(b) of the Disclosure Schedule, the
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the provisions hereof will
not, (i) conflict with any of the provisions of the certificate of incorporation
or bylaws of Company or the comparable governing documents of any Subsidiary of
Company, in each case as amended to the date of this Agreement, (ii) subject to
the governmental filings and other matters referred to in Section 4.1(c),
conflict with, result in a breach of or default (with or without notice or lapse
of time, or both) under, or give rise to a material obligation, a right of
termination, cancellation or acceleration of any obligation or a loss of a
material benefit under, or require the consent of any person under, any
indenture or other agreement, permit, concession, franchise, license or similar
instrument or undertaking to which Company or any of its Subsidiaries is a party
or by which Company or any of its Subsidiaries or any of their respective assets
is bound or affected, or (iii) subject to the governmental filings and other
matters referred to in Section 4.1(c), contravene any domestic or foreign law,
rule or regulation or any order, writ, judgment, injunction, decree,
determination or award currently in effect, which, in the case of clauses (ii)
and (iii) above would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Company.
(c) CONSENTS AND APPROVALS. No consent, approval or
authorization of, or declaration or filing with, or notice to, any domestic or
foreign governmental agency or regulatory authority (a "Governmental Entity")
which has not been received or made is required by or with respect to Company or
any of its Subsidiaries in connection with the execution and delivery of this
Agreement by Company or the consummation by Company of the transactions
contemplated hereby, except for (i) the filing of premerger notification and
report forms under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (ii) the filing with the SEC of (A) the Schedule 14D-9,
the information statement required under Rule 14f-1 of the Exchange Act and, if
required by applicable law, the Proxy Statement (as defined in Section 6.1(b)),
(B) such reports under the Exchange Act as may be required in connection with
this Agreement or the Stockholder Agreement and the transactions contemplated
hereby and thereby, (iii) the filing of the certificate of merger or, if
permitted, a certificate of ownership and merger with the Delaware State
Secretary and appropriate documents with the relevant authorities of other
states in which Company is qualified to do
10
business, (iv) such other consents, approvals, authorizations, filings or
notices as are specified in Section 4.1(c) of the Disclosure Schedule, (v)
applicable environmental statutes, and (vi) any other consents, approvals,
authorizations, filings or notices the failure to make or obtain which would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Company.
(d) CAPITAL STRUCTURE. The authorized capital stock of Company
consists solely of (i) 40,000,000 shares of Company Common Stock and (ii)
1,000,000 shares of Preferred Stock, par value $0.01 per share, of Company
("Company Preferred Stock"). At the close of business on January 14, 1999
("Capital Structure Date"): (i) 10,674,160 shares of Company Common Stock were
issued and outstanding, (ii) no shares of Company Preferred Stock were issued
and outstanding, (iii) 2,522,425 shares of Company Common Stock were reserved
for issuance pursuant to outstanding Options granted under the Stock Option
Plans, and (iv) 1,537,000 shares of Company Common Stock were held by Company in
its treasury. Except as set forth in the immediately preceding sentence or on
Section 4.1(d) of the Disclosure Schedule, at the close of business on the
Capital Structure Date, no shares of capital stock or other equity securities of
Company were issued, reserved for issuance or outstanding. Since the close of
business on the Capital Structure Date, no shares of capital stock or other
equity securities of Company have been issued or reserved for issuance or become
outstanding (other than any Shares described in clause (iii) of the first
sentence of this Section 4.1(d) that have been issued upon the exercise of
outstanding Options granted under the Stock Option Plans). All outstanding
shares of capital stock of Company are duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights. Except as specified
above or in Section 4.1(d) of the Disclosure Schedule, neither Company nor any
Subsidiary of Company has or is subject to or bound by or, at or after the
Effective Time will have or be subject to or bound by, any outstanding option,
warrant, call, subscription or other right (including any preemptive right),
agreement or commitment which (i) obligates Company or any Subsidiary of Company
to issue, sell or transfer, or repurchase, redeem or otherwise acquire, any
shares of the capital stock of Company or any Subsidiary of Company, (ii)
restricts the transfer of any shares of capital stock of Company or any of its
Subsidiaries, or (iii) relates to the voting of any shares of capital stock of
Company or any of its Subsidiaries. No bonds, debentures, notes or other
indebtedness of Company or any Subsidiary of Company having the right to vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which the stockholders of Company or any Subsidiary of Company
may vote are issued or outstanding. Except as specified in Section 4.1(d) of the
Disclosure Schedule, all of the outstanding shares of capital stock of each
Subsidiary of Company have been duly authorized, validly issued, fully paid and
nonassessable and are owned by Company, by one or more Subsidiaries of Company
or by Company and one or more such Subsidiaries, free and clear of Liens (as
defined in Section 9.3).
(e) SEC DOCUMENTS. Company has filed all required reports,
schedules, forms, statements and other documents with the SEC since December 31,
1996 (such reports, schedules, forms, statements and other documents being
hereinafter referred to as the "SEC Documents"). As of their respective dates,
the SEC Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act,
as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such SEC Documents, and none of the SEC Documents as of
such dates contained any untrue statements of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the
11
circumstances under which they were made, not misleading. As of their respective
dates, the consolidated financial statements of Company included in the SEC
Documents complied as to form in all material respects with the published rules
and regulations of the SEC with respect thereto, had been prepared in accordance
with generally accepted accounting principles (except, in the case of unaudited
consolidated quarterly statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may otherwise be
indicated in the notes thereto) and fairly presented in all material respects
the consolidated financial position of Company and its consolidated Subsidiaries
as of the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended (subject, in the case of unaudited
quarterly statements, to normal year-end audit adjustments).
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS; NO UNDISCLOSED
MATERIAL LIABILITIES.
(i) Except as disclosed in the SEC Documents filed
and publicly available prior to the date of this Agreement (the "Filed SEC
Documents") or specified in Section 4.1(f) of the Disclosure Schedule, since the
date of the most recent audited financial statements included in the Filed SEC
Documents, Company and its Subsidiaries have conducted their businesses only in
the ordinary course, and there has not been: (A) any change, event or occurrence
which has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Company; (B) any declaration, setting
aside or payment of any dividend or other distribution in respect of shares of
Company's capital stock, or any redemption or other acquisition by Company of
any shares of its capital stock; (C) any increase in the rate or terms of
compensation payable or to become payable by Company or its Subsidiaries to
their directors, officers or key employees, except increases occurring in the
ordinary course of business consistent with past practice; (D) any entry into,
or increase in the rate or terms of, any bonus, insurance, severance, pension or
other employee or retiree benefit plan, payment or arrangement made to, for or
with any such directors, officers or key employees, except increases occurring
in the ordinary course of business consistent with past practices or as required
by applicable law; (E) any entry into any agreement, commitment or transaction
by Company or any of its Subsidiaries which is material to Company and its
Subsidiaries taken as a whole, except for agreements, commitments or
transactions entered into in the ordinary course of business consistent with
past practice; (F) any change by Company in accounting methods, principles or
practices, except as required or permitted by generally accepted accounting
principles; (G) except to the extent specifically reserved for in the financial
statements included in the Filed SEC Documents, any write-off or write-down of,
or any determination to write-off or write-down, any asset of Company or any of
its Subsidiaries or any portion thereof which write-off, write-down or
determination exceeds $500,000 individually or $1,000,000 in the aggregate; (H)
any announcement or implementation of any reduction in force, lay-off, early
retirement program, severance program or other program or effort concerning the
termination of employment of employees of Company or its Subsidiaries; or (I)
any announcement of or entry into any agreement, commitment or transaction by
Company or any of its Subsidiaries to do any of the things described in the
preceding clauses (A) through (H) otherwise than as expressly provided for
herein.
(ii) As of the date hereof, except as disclosed in
the Filed SEC Documents or specified in Section 4.1(f) of the Disclosure
Schedule and liabilities incurred in the ordinary course of business consistent
with past practice since the date of the most recent
12
financial statements included in the Filed SEC Documents, there are no
liabilities of Company or its Subsidiaries of any kind whatsoever, whether
accrued, contingent, absolute, due, to become due, determined, determinable or
otherwise, having or which would reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on Company.
(g) CERTAIN INFORMATION. Subject to Parent's and Merger Sub's
fulfillment of their respective obligations hereunder with respect thereto, the
Schedule 14D-9 and the Proxy Statement will contain (or will be amended in a
timely manner so as to contain) all information which is required to be included
therein in accordance with the Exchange Act and the rules and regulations
thereunder and any other applicable law and will conform in all material
respects with the requirements of the Exchange Act and any other applicable law,
and neither the Schedule 14D-9 nor the Proxy Statement will, at the respective
times they are filed with the SEC or published, sent or given to Company's
stockholders, 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 therein, in light of the circumstances under which they are made,
not misleading; provided, however, that no representation or warranty is hereby
made by Company with respect to any information supplied or to be supplied by
Parent or Merger Sub in writing for inclusion in, or with respect to Parent or
Merger Sub information derived from Parent's public SEC filings which is
included or incorporated by reference in, the Schedule 14D-9 or the Proxy
Statement. None of the information supplied or to be supplied by Company in
writing for inclusion or incorporation by reference in, or which may be deemed
to be incorporated by reference in, any of the Offer Documents will, at the
respective times the Offer Documents are filed with the SEC or published, sent
or given to Company's stockholders, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading. If at any time prior to the Effective Time
any event with respect to Company, or with respect to any information supplied
by Company for inclusion in any of the Offer Documents, shall occur which is
required to be described in an amendment of, or a supplement to, any of the
Offer Documents, Company shall so describe the event to Parent.
(h) REAL PROPERTY; OTHER ASSETS. (i) Section
4.1(h)(i) of the Disclosure Schedule sets forth all of the real property owned
in fee by Company and its Subsidiaries (the "Owned Real Property").
(ii) Company or one of its Subsidiaries has good and
valid title to each parcel of Owned Real Property and to each other asset
reflected in the latest balance sheet of Company included in the Filed SEC
Documents (other than as disclosed in the Filed SEC Documents, or any such other
asset disposed of or consumed in the ordinary course of business or as specified
in Section 4.1(h)(ii) of the Disclosure Schedule) free and clear of all Liens
except (A) those specified in Section 4.1(h)(ii) of the Disclosure Schedule or
reflected or reserved against in the latest balance sheet of Company included in
the Filed SEC Documents, (B) taxes and general and special assessments not in
default and payable without penalty and interest, and (C) other Liens that
individually or in the aggregate would not have a Material Adverse Effect on
Company (collectively, "Permitted Liens").
(iii) Company has heretofore made available to
Parent true, correct and complete copies of all leases, subleases and other
agreements (the "Real Property Leases") under which Company or any of its
Subsidiaries uses or occupies or has the right to use or occupy, now
13
or in the future, any real property or facility (the "Leased Real Property"),
including all modifications, amendments and supplements thereto. Except in each
case where the failure would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on Company: (A) Company or one of
its Subsidiaries has a valid leasehold interest in each parcel of Leased Real
Property free and clear of all Liens except Permitted Liens and each Real
Property Lease is in full force and effect, (B) all rent and other sums and
charges due and payable by Company or its Subsidiaries as tenants thereunder are
current in all material respects, (C) no termination event or condition or
uncured default of a material nature on the part of Company or any such
Subsidiary or, to Company's knowledge, the landlord, exists under any Real
Property Lease, and (D) Company or one of its Subsidiaries is in actual
possession of each leased Real Property and is entitled to quiet enjoyment
thereof in accordance with the terms of the applicable Real Property Lease.
(i) YEAR 2000 COMPLIANCE.
(i) Company presently expects that all
reprogramming, remediation and testing of Information Systems and Equipment (as
defined below) that is required to make it in all material respects Year 2000
Compliant will be completed no later than December 31, 1999. Except as otherwise
disclosed in the Filed SEC Documents, the cost of all such reprogramming,
remediation and testing, together with the reasonably foreseeable consequences
of any reasonably foreseeable failure of such Information Systems and Equipment
to be or timely become Year 2000 Compliant will not have, individually or in the
aggregate, a Material Adverse Effect on Company.
(ii) (A) As used in respect of Information Systems
and Equipment, "Year 2000 Compliant" means that such Information Systems and
Equipment will not cease to properly function, produce erroneous results or
otherwise experience diminished performance or functionality when presented with
or when calculating, comparing, sequencing or otherwise processing date data
before, during and after the year 2000 and (B) "Information Systems and
Equipment" means all computer hardware, firmware, software and information
processing systems and all equipment containing embedded microchips that is used
by Company or any of its Subsidiaries in the conduct of their respective
business.
(j) INTELLECTUAL PROPERTY.
(i) Section 4.1(j)(i) of the Disclosure Schedule
sets forth a true, correct and complete list (including, to the extent
applicable, registration, application or file numbers) of all patents,
registered trademarks and service marks, trade names, domain names and
registered copyrights owned by Company or any Subsidiary of Company, and all
applications for registration of any of the foregoing, including any additions
thereto or extensions, continuations, renewals or divisions thereof (setting
forth the registration, issue or serial number and a description of the same)
(collectively, together with all trade dress, trade secrets, processes,
formulae, designs, know-how and other intellectual property rights that are so
owned, the "Intellectual Property"). Company has heretofore provided or made
available to Parent true, correct and complete copies of each registration or
application for registration covering any of the Intellectual Property which is
registered with, or in respect of which any application for registration has
been filed with, any Governmental Entity.
14
(ii) The Intellectual Property and that intellectual
property licensed to Company and its Subsidiaries under the license agreements
listed in Section 4.1(j)(ii) of the Disclosure Schedule includes all of the
material intellectual property rights that are reasonably necessary to conduct
Company's business as it is now conducted. Except as specified in Section
4.1(j)(ii) of the Disclosure Schedule, (A) Company, directly or through its
Subsidiaries, has good, marketable and exclusive title to, and the valid and
enforceable power and right to use, the Intellectual Property free and clear of
all Liens (other than Permitted Liens and except where the failure to have such
title, power and rights has not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Company)
and (B) neither Company nor any of its Subsidiaries has granted any license to a
third party with respect to the Intellectual Property or any portion thereof or
any rights to use, market or exploit the Intellectual Property or any portion
thereof.
(k) NO INFRINGEMENT. Except as specified in Section 4.1(k) of
the Disclosure Schedule, neither the existence nor the sale, license, lease,
transfer, use, reproduction, distribution, modification or other exploitation by
Company or any Subsidiary of Company of any Intellectual Property, as such
Intellectual Property is sold, licensed, leased, transferred, used or otherwise
exploited by such persons, (i) infringes on any patent, trademark, copyright or
other right of any other person or (ii) constitutes a misuse or misappropriation
of any trade secret, know-how, process, proprietary information or other right
of any other person (except in each of clauses (i) and (ii) where any such
infringement, misuse or misappropriation has not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Company). Except as specified in Section 4.1(k) of the Disclosure Schedule, as
of the date hereof, neither Company nor any of its Subsidiaries has received any
written complaint, assertion, threat or allegation or otherwise has notice of
any lawsuit, claim, demand, proceeding or investigation involving matters of the
type contemplated by the immediately preceding sentence. Except as specified in
Section 4.1(k) of the Disclosure Schedule, there are no restrictions on the
ability of Company, any Subsidiary of Company or any of their respective
successors or assigns to sell, license, lease, transfer, use, reproduce,
distribute, modify or otherwise exploit any Intellectual Property.
(l) MATERIAL CONTRACTS. There have been made available to
Parent and its representatives true, correct and complete copies of all of the
following contracts to which Company or any of its Subsidiaries is a party or by
which any of them is bound (collectively, the "Material Contracts"): (i)
contracts with any current officer or director of Company or any of its
Subsidiaries; (ii) contracts (A) for the sale of any of the assets of Company or
any of its Subsidiaries, other than contracts entered into in the ordinary
course of business or (B) for the grant to any person of any preferential rights
to purchase any of its assets; (iii) contracts which restrict Company or any of
its Subsidiaries from competing in any line of business or with any person in
any geographical area or which restrict any other person from competing with
Company or any of its Subsidiaries in any line of business or in any
geographical area; (iv) indentures, credit agreements, security agreements,
mortgages, guarantees, promissory notes and other contracts relating to the
borrowing of money; and (v) all other agreements, contracts or instruments that
are material to Company and its Subsidiaries taken as a whole. Except as
specified in Section 4.1(l) of the Disclosure Schedule, all of the Material
Contracts are in full force and effect and are the legal, valid and binding
obligation of Company and/or its Subsidiaries, enforceable against them in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting
15
creditors' rights and remedies generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity), except where the failure of such Material
Contracts to be in full force and effect or to be legal, valid, binding or
enforceable against Company and/or its Subsidiaries has not had and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Company. Except as specified in Section 4.1(l) of the
Disclosure Schedule, neither Company nor any of its Subsidiaries is in breach or
default in any material respect under any Material Contract nor, to the
knowledge of Company, is any other party to any Material Contract in breach or
default thereunder in any material respect, except where such breaches or
defaults have not had and would not reasonably be expected to have a Material
Adverse Effect on Company.
(m) LITIGATION, ETC. As of the date hereof, except as
disclosed in the Filed SEC Documents or specified in Section 4.1(m) of the
Disclosure Schedule, (i) there is no suit, claim, action, proceeding (at law or
in equity) or investigation pending or, to the knowledge of Company, threatened
against Company or any of its Subsidiaries before any court or other
Governmental Entity, and (ii) neither Company nor any of its Subsidiaries is
subject to any outstanding order, writ, judgement, injunction, decree or
arbitration order or award that, in any such case described in clauses (i) and
(ii), has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Company. As of the date hereof, there
are no suits, claims, actions, proceedings or investigations pending or, to the
knowledge of Company, threatened, seeking to prevent, hinder, modify or
challenge the transactions contemplated by this Agreement.
(n) COMPLIANCE WITH APPLICABLE LAWS. All federal, state, local
and foreign governmental approvals, authorizations, certificates, filings,
franchises, licenses, notices, permits and rights ("Permits") necessary for each
of Company and its Subsidiaries to own, lease or operate its properties and
assets and to carry on its business as now conducted have been obtained or made,
and there has occurred no default under any such Permit, except for the lack of
Permits and for defaults under Permits which lack or default would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Company. Except as disclosed in the Filed SEC Documents or
specified in Section 4.1(n) of the Disclosure Schedule, Company and its
Subsidiaries are in compliance with all applicable statutes, laws, ordinances,
rules, orders and regulations of any Governmental Entity, except for
non-compliance which would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on Company.
(o) ENVIRONMENTAL LAWS. Except as disclosed in the Filed SEC
Documents or as specified in Section 4.1(o) of the Disclosure Schedule or as
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Company: (A) neither Company nor any of its
Subsidiaries has violated or is in violation of any Environmental Law (as
defined in Section 9.3); (B) none of the Owned Real Property or Leased Real
Property (including without limitation soils and surface and ground waters) are
contaminated with any Hazardous Substance (as defined in Section 9.3) in
quantities which require investigation or remediation under Environmental Laws;
(C) neither Company nor any of its Subsidiaries is liable for any off-site
contamination; (D) neither Company nor any of its Subsidiaries has any liability
or remediation obligation under any Environmental Law; (E) no assets of Company
or any of its Subsidiaries are subject to pending or, to Company's knowledge,
threatened Liens under any Environmental Law; (F) Company and its Subsidiaries
have all
16
Permits required under any Environmental Law ("Environmental Permits"); and (G)
Company and its Subsidiaries are in compliance with their respective
Environmental Permits.
(p) TAXES. Except as specified in Section 4.1(p) of the
Disclosure Schedule:
(i) Except where the failure to do so would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Company, each of Company and each Subsidiary of Company (and
any affiliated or unitary group of which any such person was a member) has (A)
timely filed all federal, state, local and foreign returns, declarations,
reports, estimates, information returns and statements ("Returns") required to
be filed by or for it in respect of any Taxes (as hereinafter defined) and has
caused such Returns as so filed to be true, correct and complete, (B)
established reserves that are reflected in Company's most recent financial
statements included in the Filed SEC Documents and that as so reflected are
adequate for the payment of all Taxes not yet due and payable with respect to
the results of operations of Company and its Subsidiaries through the date
hereof, and (C) timely withheld and paid over to the proper taxing authorities
all Taxes and other amounts required to be so withheld and paid over. Each of
Company and each Subsidiary of Company (and any affiliated or unitary group of
which any such person was a member) has timely paid all Taxes that are shown as
being due on the Returns referred to in the immediately preceding sentence.
There have been made available to Parent and its representatives true, correct
and complete copies of all Returns filed by or for Company and each Subsidiary
of Company (and any affiliated or unitary group of which any such person was a
member) in respect of any Taxes.
(ii) As of the date hereof, (A) there has been no
taxable period since 1992 for which a Return of Company or any of its
Subsidiaries has been or is being examined by the Internal Revenue Service (the
"IRS") or any other federal, state, local or foreign taxing authority, and (B)
except for alleged deficiencies which have been finally and irrevocably
resolved, Company has not received formal or informal notification that any
deficiency for any Taxes, the amount of which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Company,
has been or will be proposed, asserted or assessed against Company or any of its
Subsidiaries by any federal, state, local or foreign taxing authority or court
with respect to any period.
(iii) Neither Company nor any of its Subsidiaries is
a party to, is bound by or has any obligation under any tax sharing agreement or
similar agreement or arrangement with any person other than Company or any of
its Subsidiaries.
For purposes of this Agreement, "Taxes" shall mean all
federal, state, local, foreign income, property, sales, excise, employment,
payroll, franchise, withholding and other taxes, tariffs, charges, fees, levies,
imposts, duties, licenses or other assessments of every kind and description,
together with any interest and any penalties, additions to tax or additional
amounts imposed by any federal, state, local or foreign taxing authority.
(q) BENEFIT PLANS. Section 4.1(q) of the Disclosure Schedule
sets forth a true, correct and complete list of all the employee benefit plans
(as that phrase is defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) maintained or contributed to (or to
which Company has any obligation to contribute) for the benefit of any current
or former employee, officer or director of Company or any of its
17
Subsidiaries ("Company ERISA Plans") and any other benefit or compensation plan,
program or arrangement maintained or contributed to (or to which Company has any
obligation to contribute) for the benefit of any current or former employee,
officer or director of Company or any of its Subsidiaries (Company ERISA Plans
and such other plans being referred to as "Company Plans"). Company has no
liability with respect to any plan, program or arrangement of the type described
in the preceding sentence other than the Company Plans.
Company has furnished or made available to Parent and its
representatives a true, correct and complete copy of every document pursuant to
which each Company Plan is established or operated (including any summary plan
descriptions), a written description of any Company Plan for which there is no
written document, all determination letters from the IRS with respect to any
Company Plan, all trust agreements, insurance contracts, and other documents
relating to the funding or payment of benefits under any Company Plan and the
six most recent annual reports, financial statements and actuarial valuations
with respect to each Company Plan, where applicable. Except as specified in
Section 4.1(q) of the Disclosure Schedule:
(i) none of the Company ERISA Plans is a
"multiemployer plan" within the meaning of Section 3(37) of ERISA or a "multiple
employer plan" within the meaning of Section 210(a) of ERISA or Section 413(c)
of the Code;
(ii) no Company ERISA Plan has incurred an
accumulated funding deficiency within the meaning of Section 302 of ERISA or
Section 412 of the Code, nor has any waiver of the minimum funding standards of
Section 302 of ERISA and Section 412 of the Code been requested of or granted by
the Internal Revenue Service with respect to any Employee Plan, nor has any lien
in favor of any Employee Plan arisen under Section 412 of the Code or Section
302(f) of ERISA;
(iii) the Company has not been required to provide
security to any defined benefit plan pursuant to Section 401(a)(29) of the Code;
(iv) (A) the Pension Benefit Guaranty Corporation
("PBGC") has not instituted proceedings to terminate any Company ERISA Plan that
is a "defined benefit plan" within the meaning of Section 3(35) of ERISA of
Company or its Subsidiaries or members of their "controlled group" or to appoint
a trustee or administrator of such defined benefit plan, (B) no circumstances
exist that constitute grounds under Section 404 of ERISA entitling the PBGC to
institute any such proceedings, (C) no liability to the PBGC or under Title IV
of ERISA has been incurred or is expected with respect to any such defined
benefit plan that could result in liability to any member of the "controlled
group" or Parent other than for premiums pursuant to Section 4007 which are not
yet due and payable, and (D) no such defined benefit plan has been terminated by
Company, its Subsidiaries or members of their "controlled group";
(v) there has been no "reportable event" within the
meaning of Section 4043 and the regulations and interpretations thereunder which
has not been fully and accurately reported in a timely fashion, as required, or
which, whether or not reported, would constitute grounds for the PBGC to
institute termination proceedings with respect to any Company ERISA Plan;
18
(vi) as of the last valuation date for which a
report has been completed, the fair market value of the assets of each Company
ERISA Plan that is a defined benefit plan exceeds the accumulated benefit
obligation thereunder (all determined in accordance with Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 87).
(vii) none of the Company Plans promises or provides
retiree health benefits or retiree life insurance benefits to any person except
as required by Section 4980B of the Code;
(viii) none of the Company Plans provides for
payment of a benefit, the increase of a benefit amount, the payment of a
contingent benefit or the acceleration of the payment or vesting of a benefit by
reason of the execution of this Agreement or the consummation of the
transactions contemplated by this Agreement;
(ix) neither Company nor any of its Subsidiaries has
an obligation to adopt, or is considering the adoption of, any new benefit or
compensation plan, program or arrangement or, except as required by law, the
amendment of an existing Company Plan;
(x) each Company ERISA Plan intended to be qualified
under Section 401(a) of the Code has received a favorable determination letter
from the IRS that it is so qualified and each trust created thereunder has
heretofore been determined by the IRS to be exempt from tax under the provisions
of Section 501(a) of the Code, and nothing has occurred since the date of any
such determination that could reasonably be expected to affect the qualified
status of such Company ERISA Plan or the tax-exempt status of any such trust;
(xi) each Company Plan has been operated in
accordance with its terms and the requirements of all applicable law, and no
prohibited transaction (for which an exemption does not apply) described in
Section 406 of ERISA or Section 4975 of the Code has occurred with respect to
any Company ERISA Plan;
(xii) neither Company nor any of its Subsidiaries or
members of their "controlled group" has incurred any direct or indirect
liability under ERISA or the Code in connection with the termination of,
withdrawal from or failure to fund, any Company ERISA Plan or other retirement
plan or arrangement, and no fact or event exists that could reasonably be
expected to give rise to any such liability;
(xiii) Company is not aware of any claims relating
to the Company Plans, other than routine claims for benefits;
(xiv) none of the Company Plans provides for
benefits or other participation therein, and Company has received no written
claims or demands for participation in or benefits under any Company Plan, by
any individual who is not a current or former employee of Company or a dependent
or other beneficiary of any such current or former employee;
(xv) with respect to each group health plan
benefitting any current or former employee of Company, its Subsidiaries or
members of their "controlled group," that is subject to Section 4980B of the
Code, or was subject to Section 162(k) of the Code, Company,
19
its Subsidiaries and members of their "controlled group" have complied with (x)
the continuation coverage requirements of Section 4980B of the Code and Section
162(k) of the Code, as applicable, and Part 6 of Subtitle B of Title I of ERISA
and (y) the Health Insurance Portability and Accountability Act of 1996;
(xvi) with respect to each group health plan that is
subject to Section 1862(b)(1) of the Social Security Act, Company has complied
with the secondary payer requirements of Section 1862(b)(1) of such Act;
(xvii) no Company Plan is or at any time was funded
through a "welfare benefit fund" as defined in Section 419(e) of the Code, and
no benefits under any Company Plan are or at any time have been funded through a
voluntary employees' beneficiary association (within the meaning of Section
501(c)(9) of the Code) or a supplemental unemployment benefit plan (within the
meaning of Section 501(c)(17) of the Code);
(xviii) with respect to any insurance policy
providing funding for benefits under any Company Plan, (x) there is no liability
of Company in the nature of a retroactive rate adjustment, loss sharing
arrangement or other actual or contingent liability, nor would there be any such
liability if such insurance policy was terminated on the date hereof, and (y) no
insurance company issuing any such policy is in receivership, conservatorship,
liquidation or similar proceeding and, to the knowledge of Company, no such
proceedings with respect to any insurer are imminent;
provided, however, that the failure of the representations set forth in clauses
(iv), (x), (xi), (xii) and (xiii) to be true and correct shall not be deemed to
be a breach of any such representation unless such failures would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Company;
(r) ABSENCE OF CHANGES IN BENEFIT PLANS. Except as disclosed
in the Filed SEC Documents or in Section 4.1(r) of the Disclosure Schedule,
since the date of the most recent audited financial statements included in the
Filed SEC Documents, neither Company nor any of its Subsidiaries has adopted or
agreed to adopt any collective bargaining agreement or any Company Plan.
(s) LABOR MATTERS.
(i) Except as specified in Section 4.1(s)(i) of the
Disclosure Schedule, neither Company nor any of its Subsidiaries is a party to
any employment, labor or collective bargaining agreement, and there are no
employment, labor or collective bargaining agreements which pertain to employees
of Company or any of its Subsidiaries. Company has heretofore made available to
Parent true, complete and correct copies of the agreements set forth in Section
4.1(s)(i) of the Disclosure Schedule, together with all amendments,
modifications, supplements or side letters affecting the duties, rights and
obligations of any party thereunder.
(ii) Except as specified in Section 4.1(s)(ii) of
the Disclosure Schedule, as of the date hereof, there are no (A) unfair labor
practice charges, grievances or complaints pending or threatened in writing by
or on behalf of any employee or group of employees of Company or any of its
Subsidiaries, or (B) complaints, charges or claims against
20
Company or any of its Subsidiaries pending, or threatened in writing to be
brought or filed, with any Governmental Entity or arbitrator based on, arising
out of, in connection with, or otherwise relating to the employment or
termination of employment of any individual by Company or any of its
Subsidiaries.
(t) BROKERS. No broker, investment banker, financial advisor
or other person, other than WDR and Kohlberg & Company, L.L.C., the fees and
expenses of which will be paid by Company, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of Company.
(u) WRITTEN OPINION OF FINANCIAL ADVISOR. Company has received
the opinion of WDR on January 18, 1999 (a true, correct and complete copy of
which will be delivered to Parent by Company), to the effect that, based upon
and subject to the matters set forth therein and as of the date thereof, the
Offer Consideration and the Merger Consideration to be received by the holders
of Shares in the Offer and the Merger, respectively, is fair, from a financial
point of view, to such holders and such opinion has not been withdrawn or
modified.
(v) VOTING REQUIREMENTS. In the event that Section 253 of the
DGCL is inapplicable and unavailable to effectuate the Merger, the affirmative
vote of the holders of a majority of the outstanding Shares entitled to vote at
the Stockholders Meeting (as defined in Section 6.1(a)) with respect to the
adoption of this Agreement is the only vote of the holders of any class or
series of Company's capital stock or other securities required in connection
with the consummation by Company of the Merger and the other transactions
contemplated hereby to be consummated by Company. The restrictions contained in
Section 203 of the DGCL are not applicable to the transactions contemplated
hereby or the transactions contemplated by the Stockholder Agreement.
Section 4.2 REPRESENTATIONS AND WARRANTIES OF PARENT
AND MERGER SUB. Parent and Merger Sub jointly and severally represent and
warrant to Company as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of Parent
and Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated and has
the requisite corporate power and authority to carry on its business as now
being conducted. Each of Parent and Merger Sub has delivered to Company true,
complete and correct copies of its certificate of incorporation and bylaws, in
each case, as amended to the date of this Agreement.
(b) AUTHORITY; NONCONTRAVENTION. Parent and Merger Sub have
the requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and Merger Sub and the consummation by Parent and
Merger Sub of the transactions contemplated hereby have been duly authorized by
the Executive Committee of the Board of Directors of Parent and the Board of
Directors of Merger Sub and have been duly approved by Parent as sole
stockholder of Merger Sub, and no other corporate proceedings on the part of
Parent or Merger Sub are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of Parent and Merger Sub and, assuming this Agreement
constitutes a valid and binding obligation of Company, constitutes a
21
valid and binding obligation of each of Parent and Merger Sub, enforceable
against each such party in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and to general
principles of equity. The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated hereby and compliance with the
provisions of this Agreement will not (i) conflict with any of the provisions of
the certificate of incorporation or bylaws of Parent or Merger Sub, in each case
as amended to the date of this Agreement, (ii) subject to the governmental
filings and other matters referred to in Section 4.2(c), conflict with, result
in a breach of or default (with or without notice or lapse of time, or both)
under, or give rise to a material obligation, a right of termination,
cancellation or acceleration of any obligation or loss of a material benefit
under, or require the consent of any person under, any indenture, or other
agreement, permit, concession, franchise, license or similar instrument or
undertaking to which Parent or Merger Sub is a party or by which Parent or
Merger Sub or any of their respective assets is bound or affected, or (iii)
subject to the governmental filings and other matters referred to in Section
4.2(c), contravene any domestic or foreign law, rule or regulation, or any
order, writ, judgment, injunction, decree, determination or award currently in
effect, which, in the case of clauses (ii) and (iii) above, could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Parent.
(c) CONSENTS AND APPROVALS. No consent, approval or
authorization of, or declaration or filing with, or notice to, any Governmental
Entity which has not been received or made is required by or with respect to
Parent or Merger Sub in connection with the execution and delivery of this
Agreement by Parent or Merger Sub or the consummation by Parent or Merger Sub,
as the case may be, of any of the transactions contemplated hereby, except for
(i) the filing of premerger notification and report forms under the HSR Act,
(ii) the filing with the SEC of (A) the Schedule 14D-1, the information
statement required under Rule 14f-1 of the Exchange Act and (B) such reports
under the Exchange Act as may be required in connection with this Agreement or
the Stockholder Agreement and the transactions contemplated hereby and thereby,
(iii) the filing of the certificate of merger or, if permitted, a certificate of
ownership and merger with the Delaware State Secretary and appropriate documents
with the relevant authorities of other states in which Company is qualified to
do business, (iv) applicable environmental statutes, and (v) any other consents,
approvals, authorizations, filings or notices the failure to make or obtain
which would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Parent.
(d) CERTAIN INFORMATION. Subject to Company's fulfillment of
its obligations hereunder with respect thereto, the Offer Documents will contain
(or will be amended in a timely manner so as to contain) all information which
is required to be included therein in accordance with the Exchange Act and the
rules and regulations thereunder and any other applicable law and will conform
in all material respects with the requirements of the Exchange Act and any other
applicable law, and the Offer Documents will not, at the respective times they
are filed with the SEC or published, sent or given to Company's stockholders,
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
therein, in light of the circumstances under which they are made, not
misleading; provided, however, that no representation or warranty is hereby made
by Parent or Merger Sub with respect to any information supplied or to be
supplied by Company in writing for inclusion in, or with respect to Company
information derived from Company's public SEC filings which is included or
incorporated by reference in the Offer Documents. None of the
22
information supplied or to be supplied by Parent or Merger Sub in writing for
inclusion or incorporation by reference in, or which may be deemed to be
incorporated by reference in, the Schedule 14D-9, the information statement
required under Rule 14f-1 of the Exchange Act or the Proxy Statement will, at
the respective times the Schedule 14D-9, the information statement required
under Rule 14f-1 of the Exchange Act and the Proxy Statement are filed with the
SEC or published, sent or given to Company's stockholders, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any time prior to
the Effective Time any event with respect to Parent or Merger Sub, or with
respect to any information supplied by Parent or Merger Sub for inclusion in the
Schedule 14D-9, the information statement required under Rule 14f-1 of the
Exchange Act or the Proxy Statement, shall occur which is required to be
described in an amendment of, or a supplement to, such document, Parent or
Merger Sub shall so describe the event to Company.
(e) FINANCING. Parent and Merger Sub collectively have cash on
hand or credit facilities with financially responsible third parties, or a
combination thereof, in an aggregate amount sufficient to enable Parent and
Merger Sub to timely perform their obligations hereunder, including to (i) pay
in full (A) the aggregate Offer Consideration, (B) the aggregate Merger
Consideration and the aggregate Option Consideration, and (C) all fees and
expenses payable by Parent and Merger Sub in connection with this Agreement and
the transactions contemplated thereby and (ii) satisfy and discharge such of
Company's existing indebtedness as, pursuant to its terms, will become due and
payable prior to its stated maturity as a result of the consummation of the
transactions contemplated hereby.
(f) BROKERS. No broker, investment banker, financial advisor
or other person, other than Xxxxxxx, Xxxxx & Co., the fees and expenses of which
will be paid by Parent, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangement made by or on behalf of Parent or
Merger Sub.
(g) OPERATIONS OF MERGER SUB. Merger Sub (or any other
wholly-owned Subsidiary of Parent which may be used to effect the Offer and the
Merger contemplated by the Agreement) was formed solely for the purpose of
engaging in the transactions contemplated by this Agreement, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby.
ARTICLE V
CONDUCT OF BUSINESS OF COMPANY
Section 5.1 CONDUCT OF BUSINESS OF COMPANY. Except as expressly
provided for herein or in the Fiber Cement Agreement, during the period from the
date of this Agreement to the Effective Time, Company shall, and shall cause
each of its Subsidiaries to, act and carry on its business only in the ordinary
course of business consistent with past practice and, to the extent consistent
therewith, use reasonable efforts to preserve intact its current business
organizations, keep available the services of its current key officers and
employees and preserve the goodwill of those engaged in material business
relationships with Company. To that end,
23
without limiting the generality of the foregoing, except as expressly provided
for in this Agreement or the Fiber Cement Agreement, Company shall not, and
shall not permit any of its Subsidiaries to, without the prior consent of
Parent:
(i) (A) declare, set aside or pay any dividends on,
or make any other distributions (whether in cash, securities or other property)
in respect of, any of its outstanding capital stock (other than, with respect to
a Subsidiary of Company, to its corporate parent), (B) split, combine or
reclassify any of its outstanding capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its outstanding capital stock, or (C) purchase, redeem or
otherwise acquire any shares of outstanding capital stock or any rights,
warrants or options to acquire any such shares, except, in the case of this
clause (C), for the acquisition of Shares from holders of Options in full or
partial payment of the exercise price payable by such holder upon exercise of
Options;
(ii) issue, sell, grant, pledge or otherwise
encumber any shares of its capital stock, any other voting securities or any
securities convertible into or exchangeable for, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible or
exchangeable securities, other than upon the exercise of Options outstanding on
the date of this Agreement;
(iii) amend its certificate of incorporation, bylaws
or other comparable charter or organizational documents, except for any
amendment required in connection with the performance by Company of its
obligations under this Agreement, including but not limited to its obligations
under Section 1.4;
(iv) directly or indirectly acquire, make any
investment in, or make any capital contributions to, any person other than in
the ordinary course of business consistent with past practice;
(v) directly or indirectly sell, pledge or otherwise
dispose of or encumber any of its properties or assets that are material to its
business, except for sales, pledges or other dispositions or encumbrances in the
ordinary course of business consistent with past practice;
(vi) (A) incur any indebtedness for borrowed money
or guarantee any such indebtedness of another person, other than indebtedness
owing to or guarantees of indebtedness owing to Company or any direct or
indirect wholly owned Subsidiary of Company or (B) make any loans or advances to
any other person, other than to Company or to any direct or indirect wholly
owned Subsidiary of Company and other than routine advances to employees
consistent with past practice, except, in the case of clause (A), for borrowings
under existing credit facilities described in the Filed SEC Documents in the
ordinary course of business consistent with past practice;
(vii) enter into any compromise or settlement of, or
take any material action with respect to, any litigation, action, suit, claim,
proceeding or investigation other than the prosecution, defense and settlement
of routine litigation, actions, suits, claims, proceedings or investigations in
the ordinary course of business;
24
(viii) grant or agree to grant to any officer,
employee or consultant any increase in wages or bonus, severance, profit
sharing, retirement, deferred compensation, insurance or other compensation or
benefits, or establish any new compensation or benefit plans or arrangements, or
amend or agree to amend any existing Company Plans, except as may be required
under existing agreements or by law or pursuant to the normal severance policies
or practices of Company or its Subsidiaries as in effect on the date of this
Agreement, or increases in salary or wages payable or to become payable in the
ordinary course of business consistent with past practice;
(ix) accelerate the payment, right to payment or
vesting of any bonus, severance, profit sharing, retirement, deferred
compensation, stock option, insurance or other compensation or benefits;
(x) enter into or amend any employment, consulting,
severance or similar agreement with any individual other than in the ordinary
course of business consistent with past practice, except with respect to new
hires of non-officer employees in the ordinary course of business consistent
with past practice;
(xi) adopt or enter into a plan of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other material reorganization or any agreement relating to
an Acquisition Proposal (as defined in Section 6.5(d));
(xii) make any tax election or settle or compromise
any income tax liability of Company or of any of its Subsidiaries involving on
an individual basis more than $100,000;
(xiii) make any change in any method of accounting
or accounting practice or policy, except as required by any changes in generally
accepted accounting principles;
(xiv) enter into any agreement, understanding or
commitment that restrains, limits or impedes Company's ability to compete with
or conduct any business or line of business;
(xv) plan, announce, implement or effect any
reduction in force, lay-off, early retirement program, severance program or
other program or effort concerning the termination of employment of employees of
Company or its Subsidiaries; or
(xvi) authorize any of, or commit or agree to take
any of, the foregoing actions in respect of which it is restricted by the
provisions of this Section 5.1.
25
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.1 COMPANY STOCKHOLDERS MEETING; PREPARATION OF THE
PROXY STATEMENT; SHORT-FORM MERGER.
(a) As soon as practicable following the acceptance for
payment of and payment for Shares by Merger Sub in the Offer, if required by law
to consummate the Merger, Company shall take all action necessary, in accordance
with the DGCL, the Exchange Act and other applicable law and its certificate of
incorporation and bylaws to convene and hold a special meeting of the
stockholders of Company (the "Stockholders Meeting") for the purpose of
considering and voting upon this Agreement and to solicit proxies pursuant to
the Proxy Statement in connection therewith. Subject to the provisions of
Section 6.5(b), the Board of Directors of Company shall recommend that the
holders of Shares vote in favor of the adoption of this Agreement at the
Stockholders Meeting and shall cause such recommendation to be included in the
Proxy Statement. At the Stockholders Meeting, Parent and Merger Sub shall cause
all of the Shares owned by them to be voted in favor of the adoption of this
Agreement.
(b) As soon as practicable following the acceptance for
payment of and payment for Shares by Merger Sub in the Offer, if required by
applicable law in order to consummate the Merger, Company, in consultation with
Parent, shall prepare and file with the SEC a proxy statement or information
statement (together with any supplement or amendment thereto, the "Proxy
Statement") relating to the Stockholders Meeting in accordance with the Exchange
Act and the rules and regulations thereunder. Parent, Merger Sub and Company
will cooperate with each other in the preparation of the Proxy Statement.
Without limiting the generality or effect of the foregoing, Company shall use
its reasonable efforts to respond to all SEC comments with respect to the Proxy
Statement and, subject to compliance with SEC rules and regulations, to cause
the Proxy Statement to be mailed to Company's stockholders at the earliest
practicable date. Each of Parent and Merger Sub shall promptly supply to Company
in writing, for inclusion in the Proxy Statement, all information concerning
Parent and Merger Sub required under the Exchange Act and the rules and
regulations thereunder to be included in the Proxy Statement.
(c) Notwithstanding the foregoing clauses (a) and (b), in the
event that Merger Sub or any other wholly-owned Subsidiary of Parent shall
acquire at least 90% of the outstanding shares of Company Common Stock in the
Offer, the parties hereto shall, at the request of Merger Sub, take all
necessary actions to cause the Merger to become effective, as soon as
practicable after the expiration of the Offer, without a meeting of stockholders
of Company, in accordance with Section 253 of the DGCL.
(d) Parent shall: (i) cause Merger Sub promptly to submit this
Agreement for adoption by its sole stockholder; (ii) cause the outstanding
shares of capital stock of Merger Sub to be voted in favor of the adoption of
this Agreement; and (iii) cause to be taken all additional actions necessary for
Merger Sub to adopt this Agreement.
Section 6.2 ACCESS TO INFORMATION; CONFIDENTIALITY.
Company shall, and shall cause each of its Subsidiaries to, afford to Parent and
its officers, employees, counsel, financial
26
advisors and other representatives reasonable access (subject, however, to
existing confidentiality and similar non-disclosure obligations) during normal
business hours and upon reasonable notice during the period prior to the
Effective Time to all of Company's and its Subsidiaries' properties, books,
contracts, commitments, Returns, personnel and records and, during such period,
Company shall, and shall cause each of its Subsidiaries to, furnish as promptly
as practicable to Parent such information concerning Company's and its
Subsidiaries' businesses, properties, financial condition, operations and
personnel as Parent may from time to time reasonably request. Any such
investigation by Parent shall not affect the representations or warranties of
Company contained in this Agreement. Except as required by law, Parent and
Company will hold, and will cause its directors, officers, employees,
accountants, counsel, financial advisors and other representatives and
affiliates to hold, any non-public information obtained from the other in
confidence to the extent required by, and in accordance with the provisions of,
the letter agreement, dated October 19, 1998, between Parent and Company with
respect to confidentiality and other matters.
Section 6.3 REASONABLE BEST EFFORTS. On the terms and subject to the
conditions set forth in this Agreement, each of the parties shall use its
reasonable best efforts to take, or cause to be taken, all actions, and do, or
cause to be done, and assist and cooperate with the other parties in doing, all
things necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the Offer, the Merger and the other
transactions contemplated hereby, including the satisfaction of the respective
conditions set forth in Article VII.
Section 6.4 PUBLIC ANNOUNCEMENTS. Parent and Merger Sub, on the one
hand, and Company, on the other hand, shall consult with each other before
issuing, and provide each other the opportunity to review and comment upon, any
press release, SEC filing (including without limitation the Offer Documents, the
Schedule 14D-9 and the Proxy Statement) or other public statements with respect
to the transactions contemplated hereby, including the Offer and Merger, and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by applicable law, by court
process or by obligations pursuant to any listing agreement with any national
securities exchange.
Section 6.5 NO SOLICITATION; ACQUISITION PROPOSALS.
(a) During the period from and including the date of this
Agreement to and including the Effective Time, Company shall not, and shall not
authorize or permit any of its Subsidiaries, or any of its or their affiliates,
officers, directors, employees, agents or representatives (including without
limitation any investment banker, financial advisor, attorney or accountant
retained by Company or any of its Subsidiaries), to, directly or indirectly,
initiate, solicit or encourage (including by way of furnishing information or
assistance), or take any other action to facilitate, any Acquisition Proposal
(as defined in Section 6.5(d)), or enter into or maintain or continue
discussions or negotiations with any person in furtherance of, or approve, agree
to, endorse or recommend, any Acquisition Proposal; provided, however, that
nothing in this Agreement shall prohibit the Board of Directors of Company,
prior to the time at which this Agreement shall have been adopted by Company's
stockholders, from furnishing information to, or entering into, maintaining or
continuing discussions or negotiations with, any person that makes a bona fide
written Acquisition Proposal after the date hereof under circumstances not
involving any breach of the provisions of this Section 6.5(a) if, and to the
extent that, (i) the
27
Board of Directors of Company, after consultation with and based upon the advice
of independent legal counsel, determines in good faith that the failure to take
such action would constitute a breach by the Board of Directors of Company of
its fiduciary duties to Company's stockholders under applicable law and (ii)
prior to furnishing any non-public information to such person, Company receives
from such person an executed confidentiality agreement with provisions no less
favorable to Company than the letter agreement relating to the furnishing of
confidential information of Company to Parent referred to in the last sentence
of Section 6.2. Company shall promptly (and, in any event within 24 hours)
notify Parent after receipt of any Acquisition Proposal or any request for
information relating to Company or any of its Subsidiaries or for access to the
properties, books or records of Company or any of its Subsidiaries by any person
who has informed Company that such person is considering making, or has made, an
Acquisition Proposal (which notice shall identify the person making, or
considering making, such Acquisition Proposal and shall set forth the material
terms of any Acquisition Proposal received), and Company shall keep Parent
informed in reasonable detail of the terms, status and other pertinent details
of any such Acquisition Proposal.
(b) During the period from and including the date of this
Agreement to and including the Effective Time, neither the Board of Directors of
Company nor any committee thereof shall withdraw or modify, or propose publicly
to withdraw or modify, in a manner adverse to Parent or Merger Sub, the approval
of this Agreement or the transactions contemplated hereby or the recommendations
referred to in Section 1.3 or the penultimate sentence of Section 6.1(a);
provided, however, that nothing contained in this Agreement will prohibit the
Board of Directors of Company from withdrawing or modifying the recommendations
referred to in Section 1.3 or the penultimate sentence of Section 6.1(a)
following the receipt by Company after the date hereof, under circumstances not
involving any breach of the provisions of Section 6.5(a), of an Acquisition
Proposal if, and to the extent that, the Board of Directors of Company, after
consultation with and based upon the advice of independent legal counsel,
determines in good faith that the failure to take such action would constitute a
breach by the Board of Directors of Company of its fiduciary duties to Company's
stockholders under applicable law; and provided further that nothing contained
in this Agreement will prohibit the Board of Directors of Company from, to the
extent applicable, complying with Rule 14e-2 promulgated under the Exchange Act
with regard to an Acquisition Proposal.
(c) Subject to Company's right to terminate this Agreement
pursuant to Section 8.1(a)(vi), nothing in this Section 6.5, and no action taken
by the Board of Directors of Company pursuant to this Section 6.5, will permit
Company to enter into any agreement providing for any transaction contemplated
by an Acquisition Proposal for as long as this Agreement remains in effect.
(d) For purposes of this Agreement, "Acquisition Proposal"
means an inquiry, offer, proposal or other indication of interest regarding any
of the following (other than the transactions provided for in this Agreement,
the Stockholder Agreement or the Fiber Cement Agreement involving Company: (i)
any merger, consolidation, share exchange, recapitalization, business
combination or other similar transaction; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of all or substantially all the
assets of Company and its Subsidiaries, taken as a whole, in a single
transaction or series of related transactions; (iii) any tender offer or
exchange offer for or other acquisition of 20% percent or more of the
outstanding
28
shares of capital stock of Company or the filing of a registration statement
under the Securities Act in connection therewith; or (iv) any public
announcement of a proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing.
Section 6.6 CONSENTS, APPROVALS AND FILINGS. Upon the terms and subject
to the conditions hereof, each of the parties hereto shall (a) make promptly its
respective filings, and thereafter make any other required submissions, under
the HSR Act and the Exchange Act, with respect to the Offer, the Merger and the
other transactions contemplated hereby and (b) use its reasonable best efforts
to take, or cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the Offer, the Merger and the other
transactions contemplated hereby, including without limitation using its
reasonable best efforts to obtain all licenses, permits, consents, approvals,
authorizations, qualifications and orders of Governmental Entities and parties
to contracts with Company and its Subsidiaries as are necessary for the
consummation of the Offer, the Merger and the other transactions contemplated
hereby and to fulfill the conditions to the Offer and the Merger; provided,
however, that in no event shall Parent or any of its Subsidiaries be required to
agree or commit to divest, hold separate, offer for sale, abandon, limit its
operation of or take similar action with respect to any assets (tangible or
intangible) or any business interest of it or any of its Subsidiaries (including
without limitation the Surviving Corporation after consummation of the Offer or
the Merger) in connection with or as a condition to receiving the consent or
approval of any Governmental Entity (including without limitation under the HSR
Act). In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement shall use their
reasonable best efforts to take all such action.
Section 6.7 EMPLOYEE BENEFIT MATTERS.
(a) From and after the Effective Time, Parent shall, and shall
cause its Subsidiaries (including the Surviving Corporation) to, honor and
provide for payment of all accrued obligations and benefits, including but not
limited to any bonus payments earned in respect of fiscal 1998 but not yet paid,
under all Company Plans and employment or severance agreements between Company
and persons who are or had been employees of Company or any of its Subsidiaries
at or prior to the Effective Time ("Covered Employees"), all in accordance with
their respective terms.
(b) From and after the Effective Time, Parent shall, and shall
cause its Subsidiaries (including the Surviving Corporation) to, provide Covered
Employees who remain in the employ of Parent or any such Subsidiary employee
benefits that are reasonably comparable to the employee benefits provided to
similarly situated employees of Parent or any such Subsidiary who are not
Covered Employees. To the extent that Covered Employees are included in any
benefit plan of Parent or its Subsidiaries, Parent agrees that the Covered
Employees shall receive credit under such plan for service prior to the
Effective Time with Company and its Subsidiaries to the same extent such service
was counted under similar Company Plans for purposes of eligibility, vesting,
eligibility for retirement (but not for benefit accrual) and, with respect to
vacation, disability and severance, benefit accrual. To the extent that Covered
Employees are included in any medical, dental or health plan other than the plan
or plans they participated in at the Effective Time, no such plans shall include
pre-existing
29
condition exclusions, except to the extent such exclusions were applicable under
the similar Company Plan at the Effective Time, and all such plans shall provide
credit for any deductibles and co-payments applied or made with respect to each
Covered Employee in the calendar year of the change.
(c) Notwithstanding anything in this Agreement to the
contrary, from and after the Effective Time, the Surviving Corporation will have
sole discretion over the hiring, promotion, retention, firing and other terms
and conditions of the employment of employees of the Surviving Corporation.
Except as otherwise provided in this Section 6.7, nothing herein shall prevent
Parent or the Surviving Corporation from amending or terminating any Company
Plan in accordance with its terms.
Section 6.8 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) The provisions with respect to indemnification set forth
in the certificate of incorporation and bylaws of Merger Sub as in effect on the
date of this Agreement (true, correct and complete copies of which have been
provided to Company) shall be substantially identical to the corresponding
indemnification provisions, if any, contained in the certificate of
incorporation and by-laws of Company and, for a period of six years after the
Effective Time, shall not be amended, repealed or otherwise modified in any
manner that would adversely affect the rights thereunder of individuals who at
any time prior to the Effective Time were directors or officers of Company in
respect of actions or omissions occurring at or prior to the Effective Time
(including without limitation the transactions contemplated by this Agreement),
unless such modification is required by law.
(b) From and after the Effective Time, Parent shall, or shall
cause the Surviving Corporation to, indemnify, defend and hold harmless each
person who is now, or has been at any time prior to the date hereof or who
becomes prior to the Effective Time, an officer or director of Company (the
"Indemnified Parties") against all losses, claims, damages, costs, expenses
(including reasonable attorneys' fees and expenses), liabilities or judgments or
amounts that are paid in settlement with the approval of the indemnifying party
(which approval shall not be unreasonably withheld) incurred in connection with
any threatened or actual action, suit or proceeding based in whole or in part on
or arising in whole or in part out of the fact that such person is or was a
director or officer of Company ("Indemnified Liabilities"), including all
Indemnified Liabilities based in whole or in part on, or arising in whole or in
part out of, this Agreement or the transactions contemplated hereby, in each
case, to the full extent that a corporation is permitted under the DGCL to
indemnify its own directors or officers, as the case may be (and shall pay
expenses in advance of the final disposition of any such action, suit or
proceeding to each Indemnified Party to the full extent permitted by the DGCL,
upon receipt of an undertaking by or on behalf of such Indemnified Party to
repay such amount if it shall ultimately be determined that such person is not
entitled to be so indemnified). In the event any such claim, action, suit,
proceeding or investigation is brought against any Indemnified Party, the
indemnifying party shall have a right to assume and direct all aspects of the
defense thereof, including settlement, and the Indemnified Party shall cooperate
in the vigorous defense of any such matter. The Indemnified Party shall have a
right to participate in (but not control) the defense of any such matter with
its own counsel and at its own expense. The indemnifying party shall not settle
any such matter unless (i) the Indemnified Party gives prior written consent,
which shall not be unreasonably withheld, or (ii) the terms of the settlement
provide that the
30
Indemnified Party shall have no responsibility for the discharge of any
settlement amount and impose no other obligations or duties on the Indemnified
Party and the settlement provides the Indemnified Parties with a full release
and discharges all rights against the Indemnified Party with respect to such
matter. In no event shall the indemnifying party be liable for any settlement
effected without its prior written consent. Any Indemnified Party wishing to
claim indemnification under this Section 6.8(b), upon learning of any such
claim, action, suit, proceeding or investigation, shall notify Parent and the
Surviving Corporation (but the failure so to notify shall not relieve the
indemnifying party from any liability which it may have under this Section
6.8(b) except to the extent such failure prejudices such indemnifying party),
and shall deliver to Parent and the Surviving Corporation the undertaking
contemplated by Section 145(e) of the DGCL. The Indemnified Parties as a group
will be represented by a single law firm with respect to each such matter unless
there is, under applicable standards of professional conduct (as determined in
good faith by counsel to the Indemnified Parties), a conflict on any significant
issue between the positions of any two or more Indemnified Parties. The rights
to indemnification under this Section 6.8(b) shall continue in full force and
effect for a period of four years from the Effective Time; provided, however,
that all rights to indemnification in respect of any Indemnified Liabilities
asserted or made within such period shall continue until the disposition of such
Indemnified Liabilities.
(c) For a period commencing at the Effective Time and expiring
on the sixth anniversary of the Effective Time, Parent shall cause to be
maintained in effect policies of directors' and officers' liability insurance,
for the benefit of those persons who are covered by Company's directors' and
officers' liability insurance policies at the Effective Time, providing coverage
with respect to matters occurring prior to the Effective Time that is at least
equal to the coverage provided under Company's current directors' and officers'
liability insurance policies, to the extent that such liability insurance can be
maintained at an annual cost to Parent not greater than $350,000; provided that
if such insurance cannot be so maintained at such cost, Parent shall maintain as
much of such insurance as can be so maintained at a cost equal to $350,000.
(d) The provisions of this Section 6.8 (i) are intended to be
for the benefit of, and will be enforceable by, each Indemnified Party, his or
her heirs and his or her representatives and (ii) are in addition (without
duplication) to any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger shall be subject to
the satisfaction or written waiver on or prior to the Closing Date of the
following conditions:
(a) COMPLETION OF THE OFFER. Merger Sub shall have accepted
for payment and paid for all Shares validly tendered in the Offer and not
withdrawn; provided, however, that neither Parent nor Merger Sub may invoke this
condition if Merger Sub shall have failed to purchase Shares so tendered and not
withdrawn in violation of the terms of this Agreement or the Offer.
31
(b) STOCKHOLDER APPROVAL. This Agreement shall have been
adopted by the affirmative vote of the holders of the requisite number of shares
of capital stock of Company if such vote is required pursuant to Company's
certificate of incorporation, the DGCL or other applicable law.
(c) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; provided, however, that prior to
invoking this condition, the party so invoking this condition shall have
complied with its obligations under Section 6.6.
(d) HSR ACT. All necessary waiting periods under the HSR Act
applicable to the Merger shall have expired or been earlier terminated.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 TERMINATION.
(a) This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Effective Time,
notwithstanding adoption thereof by the stockholders of Company, in any one of
the following circumstances:
(i) By mutual written consent duly authorized by the
Boards of Directors of Parent and Company, subject to Section 1.4(b).
(ii) By Parent or Company, if Shares have not been
purchased by Merger Sub pursuant to the Offer on or before April 30, 1999,
otherwise than as a result of any material breach of any provision of this
Agreement by the party seeking to effect such termination.
(iii) By Parent or Company if, as the result of the
failure of any of the conditions set forth in Exhibit A to this Agreement, the
Offer shall have expired or Merger Sub shall have terminated the Offer in
accordance with its terms without Merger Sub having purchased any Shares
pursuant to the Offer; provided, however, that the right to terminate this
Agreement pursuant to this Section 8.1(a)(iii) shall not be available to any
party whose breach of or failure to fulfill its obligations under this Agreement
resulted in the failure of any such condition;
(iv) By Parent or Company, if any court of competent
jurisdiction or other Governmental Entity shall have issued an order, decree or
ruling or taken any other action permanently enjoining, restraining or otherwise
prohibiting the Merger or the acceptance for payment of, or payment for, the
Shares pursuant to the Offer and such order, decree or ruling or other action
shall have become final and nonappealable, provided that the party seeking to
terminate this Agreement shall have used its reasonable best efforts to remove
or lift such order, decree or ruling;
32
(v) By Parent, if the Board of Directors of Company
or any committee thereof shall have (A) withdrawn or modified in a manner
adverse to Parent or Merger Sub, or publicly taken a position materially
inconsistent with, its approval or recommendation of this Agreement, the Offer,
the Merger or the other transactions contemplated hereby, (B) approved, endorsed
or recommended an Acquisition Proposal, or (C) resolved or publicly disclosed
any intention to do any of the foregoing;
(vi) By Company, following the receipt by Company
after the date hereof, under circumstances not involving any breach of the
provisions of Section 6.5(a), of a bona fide written Acquisition Proposal, if
the Board of Directors of Company, after consultation with and based upon the
advice of independent legal counsel, shall have determined in good faith that
the failure to terminate this Agreement would constitute a breach by the Board
of Directors of Company of its fiduciary duties to Company's stockholders under
applicable law; provided that (A) Company has complied with all provisions of
Section 6.5, including the notice provisions therein, (B) Company enters into a
definitive agreement providing for the transactions contemplated by such
Acquisition Proposal immediately following such termination, and (C) such
termination shall not be effective until Company shall have paid to Parent the
Fee (as defined below) in accordance with provisions of Section 8.1(b); or
(vii) by Company if Merger Sub or Parent shall have
(A) failed to commence the Offer within five business days after the public
announcement by Parent and Company of this Agreement, (B) failed to pay for the
Shares pursuant to the Offer in accordance with this Agreement, or (C) breached
in any material respect any of their respective representations, warranties,
covenants or other agreements contained in this Agreement, which breach
described in this clause (C) is incapable of being cured or has not been cured
within 20 days after the giving of written notice to Parent or Merger Sub, as
applicable, except such breaches described in this clause (C) as individually or
in the aggregate would not reasonably be expected to materially and adversely
affect the ability of Parent or Merger Sub to complete the Offer or the Merger
on the terms and subject to the conditions of this Agreement.
(b) If this Agreement is terminated pursuant to
Section 8.1(a)(v) or (vi), then, in such event, Company shall pay to Parent a
fee in the amount of $5,000,000 (the "Fee"), which amount shall be payable in
immediately available funds (i) promptly (and in any event within three business
days) after such termination, in the case of termination pursuant to Section
8.1(a)(v) or (ii) prior to or concurrently with such termination, in the case of
termination pursuant to Section 8.1(a)(vi).
Section 8.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1(a) hereof, this Agreement
(except for the provisions of Section 4.1(t), Section 4.2(f), Section 6.2,
Section 6.4, paragraph (b) of Section 8.1, this Section 8.2 and Article IX)
shall forthwith become void and cease to have any force or effect, without any
liability on the part of any party hereto or any of its affiliates; provided,
however, that nothing in this Section 8.2 shall relieve any party to this
Agreement of liability for any willful or intentional breach of this Agreement.
Section 8.3 AMENDMENT. Subject to any applicable provisions of the DGCL
and Section 1.4(b), at any time prior to the Effective Time, the parties hereto
may modify or amend this Agreement by written agreement executed and delivered
by duly authorized officers of the
33
respective parties; provided, however, that after adoption of this Agreement at
the Stockholders Meeting, no amendment shall be made which would reduce the
amount or change the type of consideration into which each Share shall be
converted upon consummation of the Merger. This Agreement may not be modified or
amended except by written agreement executed and delivered by duly authorized
officers of each of the respective parties.
Section 8.4 EXTENSION; WAIVER. At any time prior to the Effective Time,
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement, or (c)
subject to Section 8.3, waive compliance with any of the agreements or
conditions of the other parties contained in this Agreement, in each case
subject to Section 1.4(b). Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in a written instrument
executed and delivered by a duly authorized officer on behalf of such party. The
failure of any party to this Agreement to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of such rights.
Section 8.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER.
A termination of this Agreement pursuant to Section 8.1, an amendment of this
Agreement pursuant to Section 8.3 or an extension or waiver pursuant to Section
8.4 shall, in order to be effective, require in the case of Parent, Merger Sub
or Company, action by its Board of Directors or the duly authorized designee of
its Board of Directors.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time. This Section 9.1
shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
Section 9.2 FEES AND EXPENSES. Whether or not the Merger shall be
consummated, each party hereto shall pay its own expenses incident to preparing
for, entering into and carrying out this Agreement and the consummation of the
transactions contemplated hereby.
Section 9.3 DEFINITIONS. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person;
(b) "business day" means any day other than Saturday, Sunday
or any other day on which banks in the City of New York are required or
permitted to close;
(c) "Disclosure Schedule" means the disclosure schedule
delivered by Company to Parent simultaneously with the execution of this
Agreement;
34
(d) "Environmental Laws" means any federal, state or local law
relating to: (i) releases or threatened releases of Hazardous Substances or
materials containing Hazardous Substances; (ii) the manufacture, handling,
transport, use, treatment, storage or disposal of Hazardous Substances or
materials containing Hazardous Substances; or (iii) otherwise relating to
pollution of the environment or the protection of human health;
(e) "Fiber Cement Agreement" means the Asset Purchase
Agreement, dated December 21, 1998, among Company, ABTco, Inc. and CertainTeed
Corporation, including all its schedules and exhibits, as the same may be
amended from time to time with Parent's prior written consent;
(f) "Hazardous Substances" means: (i) those materials,
pollutants and/or substances defined in or regulated under the following federal
statutes and their state counterparts, as each may be amended from time to time,
and all regulations thereunder: the Hazardous Materials Transportation Act, the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act, the Clean Water Act, the Safe Drinking
Water Act, the Atomic Energy Act, the Federal Insecticide, Fungicide and
Rodenticide Act and the Clean Air Act; (ii) petroleum and petroleum products
including crude oil and any fractions thereof; (iii) natural gas, synthetic gas
and any mixtures thereof; (iv) radon; (v) any other contaminant; and (vi) any
materials, pollutants and/or substance with respect to which any Governmental
Entity requires environmental investigation, monitoring, reporting or
remediation;
(g) "knowledge" means the actual knowledge of any executive
officer of Company or Parent, as the case may be;
(h) "Liens" means, collectively, all pledges, claims, liens,
charges, mortgages, conditional sale or title retention agreements,
hypothecations, collateral assignments, security interests, easements and other
encumbrances of any kind or nature whatsoever;
(i) a "Material Adverse Effect" with respect to any person
means a material adverse effect on (i) the ability of such person to perform its
obligations under this Agreement or to consummate the transactions contemplated
hereby or (ii) the assets, liabilities (actual or contingent), financial
condition, results of operations or business of such person and its Subsidiaries
taken as a whole, excluding any change or development resulting from (x) events
adversely affecting any principal markets served by the business of Company
generally or affecting the hardboard siding industry generally which do not have
a disproportionate adverse effect on Company or its Subsidiaries, (y) general
economic conditions, including changes in the economies of any of the
jurisdictions in which Company or any of its Subsidiaries conduct business which
do not have a disproportionate adverse effect on Company or its Subsidiaries, or
(z) this Agreement, the Stockholder Agreement or any transaction contemplated
hereby or thereby;
(j) a "Permitted Lien" has the meaning set forth in
Section 4.1(h)(ii) hereof;
(k) a "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity;
35
(l) "Principal Stockholders" means Kohlberg
Associates, L.P., KABT Acquisition Company, L.P. and Xxxxxx X. Xxxxxx;
(m) a "Subsidiary" of any person means any other person of
which (i) the first mentioned person or any Subsidiary thereof is a general
partner, (ii) voting power to elect a majority of the board of directors or
others performing similar functions with respect to such other person is held by
the first mentioned person and/or by any one or more of its Subsidiaries, or
(iii) at least 50% of the equity interests of such other person is, directly or
indirectly, owned or controlled by such first mentioned person and/or by any one
or more of its Subsidiaries.
Section 9.4 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
(i) if to Parent or to Merger Sub, to
Louisiana-Pacific Corporation
000 XX Xxxxx Xxxxxx, #-0000
Xxxxxxxx, Xxxxxx 00000
Attention: Xx. Xxxx Xxxxx
Chairman and Chief Executive Officer
Telecopy: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx, 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Xxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
(ii) if to Company, to
ABT Building Products Corporation
Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
Telecopy: (000) 000-0000
36
with a copy (which shall not constitute notice) to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopy: (000) 000-0000
Section 9.5 INTERPRETATION. When a reference is made in this Agreement
to a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for convenience of reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation".
Section 9.6 ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES. This Agreement
constitutes the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement (except for the letter agreement referenced in
the last sentence of Section 6.2). Except to the extent set forth in Section
6.8, this Agreement is not intended to confer upon any person (including without
limitation any employees or former employees of Company), other than the parties
hereto, any rights or remedies.
Section 9.7 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 9.8 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement may be assigned or delegated, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties, and any such assignment without
such prior written consent shall be null and void, except that Parent and/or
Merger Sub may assign this Agreement to any direct or indirect wholly owned
Subsidiary of Parent without the prior consent of Company; provided that Parent
and/or Merger Sub, as the case may be, shall remain liable for all of its
obligations under this Agreement. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
Section 9.9 ENFORCEMENT. Irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. Accordingly, the parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement
in the Court of Chancery in and for New Castle County in the State of Delaware
(or, if such court lacks subject matter jurisdiction, any appropriate state or
federal court in New Castle County in the State of Delaware), this being in
addition to any other remedy to which they are entitled at law or in equity.
Each of the parties hereto (i) shall submit itself to the personal jurisdiction
of the Court of Chancery in and for New Castle County in the State of Delaware
(or, if such court lacks subject matter jurisdiction, any appropriate state or
federal court in New Castle County in the State of Delaware) in the event any
dispute arises out of this Agreement or
37
any of the transactions contemplated hereby, (ii) shall not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, and (iii) shall not bring any action relating to this Agreement or
any of the transactions contemplated hereby in any court other than the Court of
Chancery in and for New Castle County in the State of Delaware (or, if such
court lacks subject matter jurisdiction, any appropriate state or federal court
in New Castle County in the State of Delaware).
Section 9.10 SEVERABILITY. Whenever possible, each provision or portion
of any provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
Section 9.11 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same instrument
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
[signature page follows]
38
IN WITNESS WHEREOF, Parent, Merger Sub and Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
LOUISIANA-PACIFIC CORPORATION
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
STRIPER ACQUISITION, INC.
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
ABT BUILDING PRODUCTS CORPORATION
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
39
EXHIBIT A
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings ascribed to them in the Agreement and Plan of Merger among the
Parent, Merger Sub and Company to which this Exhibit A is attached (the
"Agreement").
CONDITIONS TO THE OFFER. Notwithstanding any other provision of the
Offer, Merger Sub shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act (relating to Merger Sub's obligation to pay for or return tendered
Shares promptly after expiration or termination of the Offer), to pay for any
Shares tendered, and may postpone the acceptance for payment or, subject to the
restrictions referred to above, payment for any Shares tendered, and, subject to
the terms of the Agreement, may amend or terminate the Offer (whether or not any
Shares have theretofore been purchased or paid for pursuant to the Offer) if (i)
there shall not have been validly tendered and not withdrawn prior to the time
the Offer shall otherwise expire a number of Shares (together with any Shares
then owned by Parent or any of its Subsidiaries) which constitutes a majority of
the Shares outstanding on a fully-diluted basis on the date of purchase (the
"Minimum Share Condition") ("on a fully-diluted basis" having the following
meaning, as of any date: the number of Shares outstanding (excluding Shares held
as treasury stock by Company or any of its Subsidiaries), together with the
number of Shares Company is then required to issue pursuant to obligations
outstanding at that date under employee stock option or other benefit plans or
otherwise other than unvested Options), (ii) any applicable waiting periods
under the HSR Act shall not have expired or been terminated prior to the
expiration of the Offer, or (iii) if at any time on or after the date of the
Agreement and before acceptance for payment of, or payment for, the Shares, any
of the following events shall have occurred and remain in effect:
(a) any United States or Canadian governmental entity or
authority or any United States or Canadian court of competent
jurisdiction in the United States or in Canada shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order which is in effect
and which (1) materially restricts, prevents or prohibits consummation
of the transactions contemplated by the Agreement, including the Offer
or the Merger, (2) prohibits or limits materially the ownership or
operation by Parent or any of its Subsidiaries of all or any material
portion of the business or assets of Company and its Subsidiaries taken
as a whole or compels Company, Parent, or any of their Subsidiaries to
dispose of or hold separate all or any material portion of the business
or assets of Company and its Subsidiaries taken as a whole, or (3)
imposes material limitations on the ability of Parent, Merger Sub or
any other Subsidiary of Parent to exercise effectively full rights of
ownership of any Shares, including without limitation the right to vote
any Shares acquired by Merger Sub pursuant to the Offer or otherwise on
all matters properly presented to Company's stockholders, including
without limitation the approval and adoption of the Agreement and the
transactions contemplated thereby;
(b) there shall have been instituted or pending any action or
proceeding before any United States or Canadian court or governmental
entity or authority by any United
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States or Canadian governmental entity or authority seeking any order,
decree or injunction having any effect set forth in (a) above;
(c) the representations and warranties of Company contained in
the Agreement (without giving effect to the materiality qualifications
contained therein) shall not be true and correct as of the expiration
date of the Offer (as the same may be extended from time to time) as
though made on and as of such date (except for representations and
warranties made as of a specified date, which need be true and correct
only as of the specified date), except for any breach or breaches which
,individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on Company (provided that this exception
shall not apply to the representations and warranties of Company
relating to the capital structure of Company);
(d) Company shall not have performed or complied in all
material respects with its obligations under the Agreement to be
performed or complied with by it and such failure continues until the
later of (A) fifteen days after actual receipt by it of written notice
from Merger Sub setting forth in detail the nature of such failure or
(B) the expiration date of the Offer;
(e) there shall have occurred any material adverse change, or
any development that is reasonably likely to result in a material
adverse change in the assets, liabilities (actual or contingent),
results of operations or business of Company and its Subsidiaries taken
as a whole, excluding any change or development resulting from (A)
events adversely affecting any principal markets served by the business
of Company generally or affecting the hardboard siding industry
generally which do not have a disproportionate adverse effect on
Company or its Subsidiaries, (B) general economic conditions, including
changes in the economies of any of the jurisdictions in which Company
or any of its Subsidiaries conduct business which do not have a
disproportionate adverse effect on Company or its Subsidiaries, or (C)
this Agreement, the Stockholder Agreement or any transaction
contemplated hereby or thereby;
(f) the Merger Agreement shall have been terminated in
accordance with its terms;
(g) the Board of Directors of Company or any committee thereof
shall have (A) withdrawn or modified in a manner adverse to Parent or
Merger Sub, or publicly taken a position materially inconsistent with,
its approval or recommendation of this Agreement, the Offer, the Merger
or the other transactions contemplated hereby, (B) approved, endorsed
or recommended an Acquisition Proposal, or (C) resolved or publicly
disclosed any intention to do any of the foregoing; or
(h) there shall have occurred (i) any general suspension of,
or limitation on prices (other than suspensions or limitations
triggered by price fluctuations on a trading day) for, trading in
securities on any national securities exchange in the United States,
(ii) the declaration of a banking moratorium or any limitation or
suspension of payments in respect of the extension of credit by banks
or other lending institutions in the United States, (iii) any
commencement of war, armed hostilities or other international or
national calamity directly involving the United States having a
significant adverse effect on the
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functionality of financial markets in the United States, or (iv) in the
case of any of the foregoing, existing at time of the commencement of
the Offer, a material acceleration or worsening thereof.
The foregoing conditions (other than the Minimum Share Condition) are
for the sole benefit of Merger Sub and its affiliates and may be asserted by
Merger Sub regardless of the circumstances giving rise to any such condition or
may be waived by Merger Sub, in whole or in part, from time to time in its sole
discretion, except as otherwise provided in the Agreement. The failure by Merger
Sub at any time to exercise any of the foregoing rights shall not be deemed a
waiver of any such right and each such right shall be deemed an ongoing right
and may be asserted at any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions,
all tendered Shares not theretofore accepted for payment shall forthwith be
returned to the tendering stockholders.
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