EXHIBIT 2.1
Execution Copy
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AGREEMENT AND PLAN OF MERGER
AMONG
WOLTERS KLUWER N.V.,
WK ACQUISITION SUB, INC.
AND
CCH INCORPORATED
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TABLE OF CONTENTS
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Page
Parties and Recitals.................................. 1
ARTICLE I
THE OFFER
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Section 1.1 The Offer................................ 3
Section 1.2 Company Actions.......................... 4
ARTICLE II
THE MERGER
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Section 2.1 The Merger............................... 6
Section 2.2 Effective Time........................... 7
Section 2.3 Effects of the Merger.................... 7
Section 2.4 Certificate of Incorporation and Bylaws.. 7
Section 2.5 Directors and Officers................... 7
Section 2.6 Conversion of Securities................. 7
Section 2.7 Exchange of Certificates................. 8
Section 2.8 Dissenting Company Common Shares......... 10
Section 2.9 Merger Without Meeting of Stockholders... 10
Section 2.10 No Further Ownership Rights in Common
Stock.................................. 10
Section 2.11 Closing of Company Transfer Books........ 11
Section 2.12 Further Assurances....................... 11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
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Section 3.1 Organization, Standing and Power......... 11
Section 3.2 Authority; Non-Contravention............. 12
Section 3.3 Offer Documents and Proxy Statement...... 14
Section 3.4 Financing................................ 14
Section 3.5 Brokers.................................. 15
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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Section 4.1 Organization, Standing and Power......... 15
Section 4.2 Capital Structure........................ 15
Section 4.3 Authority; Non-Contravention............. 16
Section 4.4 SEC Documents............................ 18
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Section 4.5 Offer Documents and Proxy Statement...... 18
Section 4.6 Absence of Certain Events................ 19
Section 4.7 Section 203 of the DGCL.................. 19
Section 4.8 Taxes.................................... 19
Section 4.9 Compliance with Applicable Law........... 20
Section 4.10 Litigation............................... 21
Section 4.11 No Undisclosed Liabilities............... 21
Section 4.12 Benefit Plans............................ 22
Section 4.13 Trademarks, Patents and Copyrights....... 22
Section 4.14 Environmental Matters.................... 23
Section 4.15 Brokers.................................. 24
ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING SUB
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Section 5.1 Organization and Standing................ 24
Section 5.2 Capital Structure........................ 24
Section 5.3 Authority; Non-Contravention............. 25
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
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Section 6.1 Conduct of Business by the Company
Pending the Merger..................... 26
Section 6.2 No Solicitation.......................... 28
Section 6.3 Conduct of Business of Sub Pending the
Merger................................. 29
ARTICLE VII
ADDITIONAL AGREEMENTS
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Section 7.1 Company Stockholder Approval; Proxy
Statement.............................. 29
Section 7.2 Access to Information.................... 30
Section 7.3 Fees and Expenses........................ 31
Section 7.4 Company Stock Options.................... 31
Section 7.5 Reasonable Best Efforts.................. 32
Section 7.6 Public Announcements..................... 32
Section 7.7 Real Estate Transfer and Gains Taxes..... 33
Section 7.8 State Takeover Laws...................... 33
Section 7.9 Indemnification; Directors and Officers
Insurance.............................. 33
Section 7.10 Employee Benefits........................ 34
Section 7.11 Merit Bonuses; Severance Policy.......... 35
Section 7.12 Management Contracts..................... 36
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ARTICLE VIII
CONDITIONS PRECEDENT
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Section 8.1 Conditions to Each Party's Obligation
to Effect the Merger................... 36
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
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Section 9.1 Termination.............................. 37
Section 9.2 Effect of Termination.................... 39
Section 9.3 Amendment................................ 39
Section 9.4 Waiver................................... 40
ARTICLE X
GENERAL PROVISIONS
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Section 10.1 Non-Survival of Representations and
Warranties............................ 40
Section 10.2 Notices................................. 40
Section 10.3 Interpretation.......................... 41
Section 10.4 Counterparts............................ 41
Section 10.5 Entire Agreement; No Third-Party
Beneficiaries......................... 42
Section 10.6 Governing Law........................... 42
Section 10.7 Assignment.............................. 42
Section 10.8 Severability............................ 42
Section 10.9 Enforcement of this Agreement........... 43
EXHIBIT A Conditions of the Offer
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AGREEMENT AND PLAN OF MERGER
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AGREEMENT AND PLAN OF MERGER, dated as of November 27, 1995 (this
"Agreement"), among Wolters Kluwer N.V., a corporation organized under the laws
of The Netherlands ("Parent"), WK Acquisition Sub, Inc., a Delaware corporation
("Sub") and a wholly owned subsidiary of Parent, and CCH Incorporated, a
Delaware corporation (the "Company") (Sub and the Company being hereinafter
collectively referred to as the "Constituent Corporations").
W I T N E S S E T H:
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WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have unanimously approved the acquisition of the Company by Parent
pursuant to a tender offer (the "Offer") by Sub for all of the outstanding
shares of Class A Common Stock, par value $1.00 per share (the "Class A Common
Stock"), of the Company and all of the outstanding shares of Class B Common
Stock, par value $1.00 per share (the "Class B Common Stock" and, together with
the Class A Common Stock, the "Common Stock") of the Company, at a price of
$55.50 per share of Common Stock, net to the seller in cash, followed by a
merger (the "Merger") of Sub with and into the Company upon the terms and
subject to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company has (i) determined that
the consideration to be paid for each share of Common Stock in the Offer is fair
to and in the best interests of the stockholders of the Company, (ii) approved
and adopted this Agreement and the transactions contemplated hereby, and (iii)
adopted resolutions unanimously approving the Offer and the Merger and
recommending that the Company's stockholders accept the Offer and approve and
adopt the Merger Agreement;
WHEREAS, Parent has informed the Company that Parent has required as a
condition to entering into this Agreement that certain stockholders of the
Company (collectively, "Stockholders") enter into a Stock Option and Tender
Agreement (the "Option Agreement") pursuant to which Stockholders have agreed,
among other things, (i) to tender all of the shares of Common Stock that
Stockholders now own or hereafter acquire (the "Stockholder Shares") into the
Offer, (ii) to grant Parent the
option to purchase all of the Stockholder Shares, (iii) to appoint Parent under
certain circumstances as Stockholders' proxy to vote the Stockholder Shares that
are Class A Shares, and (iv) with respect to certain questions put to
stockholders of the Company for a vote, to vote such Stockholder Shares that are
Class A Shares, in each case, in accordance with the terms and conditions of the
Option Agreement; and
WHEREAS, pursuant to the Merger, each issued and outstanding share of
Common Stock not owned directly or indirectly by Parent or the Company will be
converted into the right to receive the per share consideration paid pursuant to
the Offer.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties agree
as follows:
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ARTICLE I
THE OFFER
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Section 1.1 The Offer. (a) Subject to the provisions of this
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Agreement, as promptly as practicable but in no event later than five business
days after the date hereof, Sub shall, and Parent shall cause Sub to, commence
the Offer. The obligation of Sub to, and of Parent to cause Sub to, commence
the Offer and accept for payment, and pay for, any shares of Common Stock
tendered pursuant to the Offer shall be subject only to the conditions set forth
in Exhibit A. Without the prior written consent of the Company, Sub shall not
(i) waive the Minimum Condition (as defined in Exhibit A), (ii) reduce the
number of shares of Common Stock subject to the Offer, (iii) reduce the price
per share of Common Stock to be paid pursuant to the Offer, (iv) modify or add
to the conditions set forth in Exhibit A (other than to waive any conditions to
the extent permitted by this Agreement), (v) extend the Offer if all of the
Offer conditions are satisfied or waived or, in the case of any single
extension, extend the offer for more than 3 business days, (vi) change the form
of consideration payable in the Offer, or (vii) otherwise amend, add or waive
any term or condition of the Offer in any manner that would adversely affect the
Company or its stockholders. The Offer shall not expire prior to January 4,
1996. So long as this Agreement is in effect and the Offer conditions have not
been satisfied or waived, Sub shall, and Parent shall cause Sub to, cause the
Offer not to expire. Subject to the terms and conditions of the Offer, Sub
shall, and Parent shall cause Sub to, pay for all shares of Common Stock validly
tendered and not withdrawn pursuant to the Offer as soon as practicable after
the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall
file with the Securities and Exchange Commission (the "SEC") a Tender Offer
Statement on Schedule 14D-1 with respect to the Offer, which shall contain an
offer to purchase and a related letter of transmittal and summary advertisement
(such Schedule 14D-1 and the documents therein pursuant to which the Offer will
be made, together with any supplements or amendments thereto, the "Offer
Documents"). The Company and its counsel shall be given an opportunity to
review and comment upon the Offer Documents prior to the filing thereof with the
SEC.
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The Offer Documents shall comply as to form in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (including the
rules and regulations promulgated thereunder, the "Exchange Act"), and on the
date filed with the SEC and on the date first published, sent or given to the
Company's stockholders, the Offer Documents shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
representation is made by Parent or Sub with respect to information supplied by
the Company for inclusion in the Offer Documents. Each of Parent, Sub and the
Company agrees promptly to correct any information provided by it for use in the
Offer Documents if and to the extent that such information shall have become
false or misleading in any material respect, and each of Parent and Sub further
agrees to take all steps necessary to cause the Offer Documents as so corrected
to be filed with the SEC and to be disseminated to the Company's stockholders,
in each case as and to the extent required by applicable Federal securities
laws. Parent and Sub agree to provide the Company and its counsel in writing
with any comments Parent, Sub or their counsel may receive from the SEC or its
staff with respect to the Offer Documents.
(c) Prior to the expiration of the Offer, Parent shall provide or
cause to be provided to Sub all of the funds necessary to purchase any shares of
Common Stock that Sub becomes obligated to purchase pursuant to the Offer.
Section 1.2 Company Actions. (a) The Company hereby approves of and
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consents to the Offer and represents that the Board of Directors of the Company
has duly adopted resolutions unanimously approving this Agreement, the Offer and
the Merger, determining that the Merger is advisable and that the terms of the
Offer and Merger are fair to, and in the best interests of, the Company's
stockholders and recommending that the Company's stockholders accept the Offer
and that the holders of Class A Common Stock approve the Merger. The Company
represents that its Board of Directors has received the opinion of Xxxxxxx,
Xxxxx & Co. (the "Financial Advisor") that the proposed consideration to be
received by the holders of shares of Common Stock pursuant to the Offer and the
Merger is fair to such holders. The Company
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has been authorized by the Financial Advisor to permit, subject to prior review
and consent by such Financial Advisor (unless such consent is innappropriate
under the circumstances), the inclusion of such fairness opinion and a reference
thereto in the Schedule 14D-9 referred to below, and the Proxy Statement
referred to in Section 7.1 and the Information Statement referred to in Section
3.3. The Company hereby consents to the inclusion in the Offer Documents of the
recommendations of the Company's Board of Directors described in this Section
1.2(a).
(b) On the date the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, the "Schedule 14D-9") and shall mail the Schedule 14D-9 to the
stockholders of the Company. Subject to the fiduciary duties of the Board of
Directors of the Company under applicable law as determined by the Board of
Directors in good faith after consultation with the Company's outside counsel,
and subject to the terms of this Agreement, the Schedule 14D-9 shall contain the
recommendations described in paragraph (a) above. Parent and its counsel shall
be given an opportunity to review and comment upon the Schedule 14D-9 prior to
the filing thereof with the SEC. The Schedule 14D-9 shall comply as to form in
all material respects with the requirements of the Exchange Act and, on the date
filed with the SEC and on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation is
made by the Company with respect to information supplied by Parent or Sub for
inclusion in the Schedule 14D-9. Each of the Company, Parent and Sub agrees
promptly to correct any information provided by it for use in the Schedule 14D-9
if and to the extent that such information shall have become false or misleading
in any material respect, and the Company further agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC
and disseminated to the holders of shares of Common Stock, in each case as and
to the extent required by applicable Federal securities laws. The Company
agrees to provide Parent and Sub and their counsel in writing with any comments
the Company or its counsel may receive
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from the SEC or its staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to furnish Sub with mailing labels containing the names and
addresses of the record holders of Common Stock as of a recent date and of those
persons becoming record holders subsequent to such date, together with copies of
all lists of stockholders, security position listings and computer files and all
other information in the Company's possession or control regarding the
beneficial owners of Common Stock, and shall furnish to Sub such information and
assistance (including updated lists of stockholders, security position listings
and computer files) as Sub may reasonably request in communicating the Offer to
the Company's stockholders. Subject to the requirements of law, and except for
such steps as are necessary to disseminate the documents constituting the Offer
and any other documents necessary to consummate the Merger, Parent and Sub and
each of their affiliates and associates shall hold in confidence the information
contained in any of such labels, lists and files, will use such information only
in connection with the Offer and the Merger, and, if this Agreement is
terminated, will promptly deliver to the Company all copies of such information
then in their possession.
ARTICLE II
THE MERGER
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Section 2.1 The Merger. Upon the terms and subject to the conditions
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hereof, and in accordance with the General Corporation Law of the State of
Delaware, as amended (the "DGCL"), Sub shall be merged with and into the Company
at the Effective Time (as hereinafter defined), and Purchaser hereby agrees to
use its best efforts to effect such Merger and to take all actions necessary or
desirable to effect such Merger. Following the Merger, the separate corporate
existence of Sub shall cease and the Company shall continue as the surviving
corporation (the "Surviving Corporation") and shall succeed to and assume all
the rights and obligations of Sub in accordance with the DGCL.
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Section 2.2 Effective Time. The Merger shall become effective when
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the Certificate of Merger or, if applicable, the Certificate of Ownership and
Merger (each, the "Certificate of Merger"), executed in accordance with the
relevant provisions of the DGCL, are accepted for record by the Secretary of
State of the State of Delaware. When used in this Agreement, the term
"Effective Time" shall mean the later of the date and time at which the
Certificate of Merger is accepted for record or such later time established by
the Certificate of Merger. The filing of the Certificate of Merger shall be
made as soon as practicable after the satisfaction or waiver of the conditions
to the Merger set forth herein.
Section 2.3 Effects of the Merger. The Merger shall have the effects
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set forth in Section 259 of the DGCL.
Section 2.4 Certificate of Incorporation and Bylaws. The Certificate
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of Incorporation and Bylaws of Sub, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation and Bylaws of the
Surviving Corporation until thereafter changed or amended as provided therein or
by Certificate of Incorporation and applicable law.
Section 2.5 Directors and Officers. The directors of Sub immediately
----------------------
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and Bylaws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their resignation or removal or
until their respective successors are duly elected and qualified.
Section 2.6 Conversion of Securities. As of the Effective Time, by
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virtue of the Merger and without any action on the part of any stockholder of
the Company:
(a) All shares of Common Stock that are held in the treasury of the
Company or by any Subsidiary (as hereinafter defined) of the Company and
any shares of Common Stock owned by Parent, Sub or any other Subsidiary of
Parent shall be cancelled and retired and
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no consideration shall be delivered in exchange therefor.
(b) Each share of Common Stock issued and outstanding immediately
prior to the Effective Time (other than shares to be cancelled in
accordance with Section 2.6(a) and other than Dissenting Company Common
Shares (as defined in Section 2.8)) shall be converted into the right to
receive from the Surviving Corporation in cash, without interest, the per
share consideration paid in the Offer (the "Merger Consideration"). All
such shares of Common Stock, when so converted, shall no longer be
outstanding and shall automatically be cancelled and retired and each
holder of a certificate or certificates (the "Certificates") representing
any such shares shall cease to have any rights with respect thereto, except
the right to receive the Merger Consideration.
(c) Each issued and outstanding share of the capital stock of Sub
shall be converted into and become one fully paid and nonassessable share
of common stock, par value $.01 per share, of the Surviving Corporation.
Section 2.7 Exchange of Certificates. (a) Paying Agent. Parent and
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the Company shall authorize a commercial bank (or such other person or persons
as shall be acceptable to Parent and the Company) to act as paying agent
hereunder (the "Paying Agent") for the payment of the Merger Consideration upon
surrender of Certificates. All of the fees and expenses of the Paying Agent
shall be borne by Parent.
(b) Surviving Corporation to Provide Funds. Parent shall take all
--------------------------------------
steps necessary to enable and cause the Surviving Corporation to deposit in
trust with the Paying Agent prior to the Effective Time cash in an amount
necessary to pay the Merger Consideration for all of the shares of Common Stock
pursuant to Section 2.6. Such amount shall hereinafter be referred to as the
"Exchange Fund." If the amount of cash in the Exchange Fund is insufficient to
pay all of the amounts required to be paid pursuant to Section 2.6 Parent from
time to time after the Effective Time shall take all steps necessary to enable
and cause
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the Surviving Corporation to deposit in trust additional cash with the Paying
Agent sufficient to make all such payments.
(c) Exchange Procedures. As soon as practicable after the Effective
-------------------
Time, the Paying Agent shall mail to each holder of record of a Certificate,
other than Parent, the Company and any Subsidiary of Parent or the Company, (i)
a letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon actual
delivery of the Certificates to the Paying Agent and shall be in a 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 or to such other agent or agents as may be appointed by the
Surviving Corporation, together with such letter of transmittal, duly executed,
and such other documents as may reasonably be required by the Paying Agent, the
holder of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration and the Certificates so surrendered shall forthwith be
cancelled. No interest will be paid or will accrue on the 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 Certificate so surrendered is registered, it shall
be a condition of payment that such Certificate 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 such
Certificate or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. Until surrendered as contemplated
by this Section 2.7, each Certificate (other than Certificates representing
Dissenting Company Common Shares and Certificates representing any shares of
Common Stock owned by Parent or any Subsidiary of Parent) shall be deemed at any
time after the Effective Time to represent only the right to receive upon such
surrender the Merger Consideration, without interest, into which the shares of
Common Stock theretofore represented by such Certificate shall have been
converted pursuant to Section 2.6. Notwithstanding the foregoing, neither the
Paying Agent nor any party hereto shall be liable to a former stockholder of the
Company for any cash or interest delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws. Any portion of the
Exchange Fund that remains unclaimed by
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the stockholders of the Company for one year after the Effective Time shall be
repaid to the Surviving Corporation. Any stockholders of the Company who have
not theretofore complied with Article II hereof shall thereafter look only to
the Surviving Corporation and Parent for payment of their claim for the Merger
Consideration, without any interest thereon.
Section 2.8 Dissenting Company Common Shares. Notwithstanding any
--------------------------------
provision of this Agreement to the contrary, if required by the DGCL but only to
the extent required thereby, shares of Common Stock which are issued and
outstanding immediately prior to the Effective Time and which are held by
holders of such shares of Common Stock who have properly exercised appraisal
rights with respect thereto in accordance with Section 262 of the DGCL (the
"Dissenting Company Common Shares") will not be exchangeable for the right to
receive the Merger Consideration, and holders of such shares of Common Stock
will be entitled to receive payment of the appraised value of such shares of
Common Stock in accordance with the provisions of such Section 262 unless and
until such holders fail to perfect or effectively withdraw or lose their rights
to appraisal and payment under the DGCL. If, after the Effective Time, any such
holder fails to perfect or effectively withdraws or loses such right, such
shares of Common Stock will thereupon be treated as if they had been converted
into and to have become exchangeable for, at the Effective Time, the right to
receive the Merger Consideration, without any interest thereon. The Company
will give Parent prompt notice of any demands received by the Company for
appraisals of shares of Common Stock.
Section 2.9 Merger Without Meeting of Stockholders. Notwithstanding
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the foregoing, in the event that Sub, or any other direct or indirect subsidiary
of Parent, shall acquire at least 90 percent of the outstanding shares of each
class of the stock of the Company, the parties hereto agree to take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the expiration of the Offer, but in no event later than six
business days thereafter, without a meeting of stockholders of the Company, in
accordance with Section 253 of the DGCL.
Section 2.10 No Further Ownership Rights in Common Stock. All cash
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paid upon the surrender of Certificates in
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accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to the shares of Common Stock.
Section 2.11 Closing of Company Transfer Books. At the Effective
---------------------------------
Time, the stock transfer books of the Company shall be closed and no transfer of
shares of Common Stock shall thereafter be made. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be cancelled
and exchanged as provided in this Article II.
Section 2.12 Further Assurances. If at any time after the Effective
------------------
Time the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation, its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
either of the Constituent Corporations, or (b) otherwise to carry out the
purposes of this Agreement, the Surviving Corporation and its proper officers
and directors or their designees shall be authorized to execute and deliver, in
the name and on behalf of either of the Constituent Corporations in the Merger,
all such deeds, bills of sale, assignments and assurances and do, in the name
and on behalf of such Constituent Corporations, all such other acts and things
necessary, desirable or proper to vest, perfect or confirm its right, title or
interest in, to or under any of the rights, privileges, powers, franchises,
properties or assets of such Constituent Corporation and otherwise to carry out
the purposes of this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
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Parent represents and warrants to the Company as follows:
Section 3.1 Organization, Standing and Power. Parent is a
--------------------------------
corporation duly organized, validly existing and in good standing under the laws
of The Netherlands and has the requisite
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corporate power and authority to carry on its business as now being conducted.
Section 3.2 Authority; Non-Contravention. Parent has all requisite
----------------------------
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 the consummation by Parent of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Parent. This Agreement has been duly executed and delivered by Parent and
(assuming the valid authorization, execution and delivery of this Agreement by
the Company) constitutes a valid and binding obligation of Parent enforceable
against Parent in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and except that the availability of equitable
remedies, including specific performance, injunction and any other form of
equitable relief, is subject to the discretion of the court before which
proceeding therefor may be brought. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated hereby
and compliance with the provisions hereof will not, conflict with, or result in
any violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to the loss of a material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
properties or assets of Parent or any of its Significant Subsidiaries under, any
provision of (i) the Charter or Bylaws of Parent (true and complete copies of
which as of the date hereof have been delivered to the Company) or any provision
of the comparable charter or organizational documents of any of its Significant
Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Parent or any of its Significant Subsidiaries or (iii)
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Parent or any of its Significant Subsidiaries or any of their
respective properties or assets, other than, in the case of clauses (ii) or
(iii), any such conflicts, violations, defaults, rights, liens, security
interests, charges or encumbrances that, individually or in the
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aggregate, would not have a Material Adverse Effect on Parent, materially impair
the ability of Parent to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby. No filing or
registration with, or authorization, consent or approval of, any domestic
(federal and state), foreign or supranational court, commission, governmental
body, regulatory agency, authority or tribunal (a "Governmental Entity") is
required by or with respect to Parent or any of its Significant Subsidiaries in
connection with the execution and delivery of this Agreement by Parent or is
necessary for the consummation of the Offer, the Merger and the other
transactions contemplated by this Agreement, except for (i) in connection, or in
compliance, with the Exchange Act, (ii) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware and appropriate documents
with the relevant authorities of other states in which the Company is qualified
to do business, (iii) such filings and consents as may be required under any
environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval triggered by the Offer, the Merger
or the transactions contemplated by this Agreement, (iv) such filings as may be
required in connection with the Gains Taxes described in Section 7.7, (v) such
other consents, approvals, orders, authorizations, registrations, declarations
and filings as may be required under the corporation, takeover or blue sky laws
of various states, (vi) such filings and approvals as may be required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"Improvements Act"), and (vii) such other consents, orders, authorizations,
registrations, declarations and filings which (A) may be required under the laws
of any foreign country or supra-national organization in which the Company or
any of its Subsidiaries conducts any business or owns any property or assets or
(B) the failure of which to be obtained or made would not, individually or in
the aggregate, have a Material Adverse Effect on Parent, materially impair the
ability of Parent to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby. For purposes of
this Agreement (a) "Material Adverse Change" or "Material Adverse Effect" means,
when used with respect to Parent, Sub or the Company, as the case may be, any
change or effect that is or may be materially adverse to the business, assets,
or financial condition, or results of operations of Parent and its Significant
Subsidiaries taken as a whole, Sub, or the Company and its Significant
Subsidiaries taken
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as a whole, as the case may be, (b) "Subsidiary" means any significant
corporation, partnership, joint venture or other legal entity of which Parent or
the Company, as the case may be (either alone or through or together with any
other Subsidiary), owns, directly or indirectly, 50% or more of the stock or
other equity interests the holders of which are generally entitled to vote for
the election of the board of directors or other governing body of such
corporation or other legal entity and (c) "Significant Subsidiary" means any
Significant Subsidiary within the meaning of Rule 1-02 of Regulation S-X of the
SEC.
Section 3.3 Offer Documents and Proxy Statement. None of the
-----------------------------------
information to be supplied by Parent or Sub for inclusion or incorporation by
reference in the Offer Documents, the Schedule 14D-9 or the proxy statement, if
any, (together with any amendments or supplements thereto, the "Proxy
Statement") relating to the Stockholder Meeting (as defined in Section 7.1) the
information statement, if any, filed by the Company in connection with the
Merger pursuant to Rule 14C-2 promulgated under the Exchange Act (the
"Information Statement"), will (i) in the case of the Offer Documents, the
Schedule 14D-9, the Proxy Statement and the Information Statement, at the
respective time such documents are filed with the SEC or first published, sent
or given to the Company's stockholders, or (ii) in the case of the Proxy
Statement or the Information Statement, at the time of the mailing of either of
such Statements and at the time of the Stockholder Meeting or action by written
consent, as the case may be, 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. If at any time prior to the purchase of shares
of Common Stock pursuant to the Offer there shall occur any event with respect
to Parent, its officers and directors or any of its Subsidiaries which is
required to be described in the Offer Documents, such event shall be so
described, and an amendment or supplement shall be promptly filed with the SEC
and, as required by law, disseminated to the stockholders of the Company.
Section 3.4 Financing. Parent has, or immediately prior to the
---------
expiration of the Offer will have, all of the funds necessary to consummate the
Offer and the Merger and the
-14-
transactions contemplated hereby on a timely basis and to pay any and all
related fees and expenses.
Section 3.5 Brokers. No broker, investment banker or other person,
-------
other than CS First Boston Corporation, the fees and expenses of which will be
paid by Parent, is entitled to any broker's, finder's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Parent or Sub.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to Parent and Sub as follows:
Section 4.1 Organization, Standing and Power. The Company and each
--------------------------------
of its Significant Subsidiaries 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. The Company and each of its Significant
Subsidiaries is duly qualified to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary, except where
the failure to be so qualified would not, individually or in the aggregate, have
a Material Adverse Effect on the Company.
Section 4.2 Capital Structure. The authorized capital stock of the
-----------------
Company is 80,000,000 shares of Common Stock, consisting of 40,000,000 shares of
Class A Common Stock and 40,000,000 shares of Class B Common Stock. At the
close of business on November 24, 1995, (i) 16,638,512 shares of Class A Common
Stock were issued and outstanding, (ii) 16,397,122 shares of Class B Common
Stock were issued and outstanding, (iii) 2,000,000 shares of Common Stock were
reserved for issuance upon the exercise of outstanding Company Stock Options (as
defined in Section 7.4) and (iv) 779,690 shares of Class A Common Stock and
1,021,080 shares of Class B Common Stock were held by the Company in its
treasury. There are no outstanding stock appreciation
-15-
rights ("SARs") which were not granted in tandem with a related Company Stock
Option. All outstanding shares of capital stock of the Company are validly
issued, fully paid and nonassessable and not subject to preemptive rights.
Except for the 1,217,000 Company Stock Options outstanding as of November 24,
1995, there are no options, warrants, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or any of its
Significant Subsidiaries is a party or by which any of them is bound obligating
the Company or any of its Significant Subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of the Company or of any of its Significant
Subsidiaries. There are no voting trusts or other agreements or understandings
to which the Company is a party with respect to the voting of the capital stock
of the Company.
Section 4.3 Authority; Non-Contravention. The Board of Directors of
----------------------------
the Company has declared the Merger advisable and the Company has all requisite
power and authority to enter into this Agreement and, subject to approval of the
Merger by the stockholders of the Company (if required), to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company, subject to such approval of the Merger by the
stockholders of the Company (if required). This Agreement has been duly
executed and delivered by the Company and (assuming the valid authorization,
execution and delivery of this Agreement by Parent and Sub) constitutes a valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms. Except as set forth in the Company SEC Documents (as
hereinafter defined) or the letter from the Company to Parent dated the date
hereof, which letter relates to this Agreement and is designated therein as the
Company Disclosure Letter (the "Company Disclosure Letter"), the execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof will not, conflict
with, or result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to the loss of a material benefit under, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of
-16-
the properties or assets of the Company or any of its Significant Subsidiaries
under, any provision of (i) the Certificate of Incorporation or Bylaws of the
Company (true and complete copies of which as of the date hereof have been
delivered to Parent) or any provision of the comparable charter or organization
documents of any of its Significant Subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to the Company
or any of its Significant Subsidiaries or (iii) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company or any of
its Significant Subsidiaries or any of their respective properties or assets,
other than, in the case of clause (ii) or (iii), any such conflicts, violations,
defaults, rights, liens, security interests, charges or encumbrances that,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company, materially impair the ability of the Company to perform its
obligations hereunder or prevent the consummation of any of the transactions
contemplated hereby. No filing or registration with, or authorization, consent
or approval of, any Governmental Entity is required by or with respect to the
Company or any of its Significant Subsidiaries in connection with the execution
and delivery of this Agreement by the Company or the consummation by the Company
of the transactions contemplated hereby, except for (i) in connection or in
compliance with the provisions of he Exchange Act, (ii) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in which the
Company is qualified to do business, (iii) such filings and consents as may be
required under any environmental, health or safety law or regulation pertaining
to any notification, disclosure or required approval triggered by the Offer, the
Merger or the transactions contemplated by this Agreement, (iv) such filings as
may be required in connection with the Gains Taxes described in Section 7.7, (v)
such consents, approvals, orders, authorizations, registrations, declarations
and filings as may be required under the corporation, takeover or blue sky laws
of various states, (vi) such filings and approvals as may be required under the
Improvements Act, and (vii) such other consents, orders, authorizations,
registrations, declarations and filings which (A) may be required under the laws
of any foreign country or supranational organization in which the Company or any
of its Subsidiaries conducts any business or owns any property or
-17-
assets or (B) the failure of which to be obtained or made would not,
individually or in the aggregate, have a Material Adverse Effect on the Company,
materially impair the ability of Company to perform its obligations hereunder or
prevent the consummation of any of the transactions contemplated hereby.
Section 4.4 SEC Documents. The Company has filed all required
-------------
documents with the SEC since January 1, 1993 (the "Company SEC Documents"). As
of their respective dates, the Company SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and none of the Company SEC Documents contained any untrue
statement 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 circumstances under which they were made, not misleading. The financial
statements of the Company included in the Company SEC Documents comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be indicated
therein or in the notes thereto) and fairly present the consolidated financial
position of the Company and its consolidated Subsidiaries as at the dates
thereof and the consolidated results of their operations and changes in
financial position for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments and to any other adjustments
described therein).
Section 4.5 Offer Documents and Proxy Statement. None of the
-----------------------------------
information supplied or to be supplied by the Company for inclusion or
incorporation by reference in the Offer Documents or the Schedule 14D-9, the
Information Statement, if any, the Proxy Statement, if any, or any amendment or
supplement thereto, will (i) in the case of the Offer Documents, the Schedule
14D-9 and the Information Statement, at the respective times such documents are
filed with the SEC or first published, sent or given to the Company's
stockholders, (ii) in the case of the Proxy Statement, if any, at the time of
the mailing of the Proxy Statement and at the time of the Stockholder Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to
-18-
be stated therein or necessary in order to make the statements therein, in the
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 the Company, its
officers and directors or any of its Subsidiaries should occur which is required
to be described in an amendment of, or a supplement to, the Proxy Statement or
the Offer Documents, such event shall be so described, and such amendment or
supplement shall be promptly filed with the SEC and, as required by law,
disseminated to the stockholders of the Company. The Proxy Statement will
comply as to form in all material respects with the requirements of the Exchange
Act.
Section 4.6 Absence of Certain Events. Except as may be disclosed in
-------------------------
the Company Disclosure Letter or in the Company SEC Documents filed with the SEC
prior to the date hereof, the Company has, in all material respects, conducted
its business only in, and has not entered into any material transaction (other
than the transactions contemplated by this Agreement) other than in accordance
with, the ordinary course, and since September 30, 1995, there has not been any
Material Adverse Change with respect to the Company.
Section 4.7 Section 203 of the DGCL. The Board of Directors of the
-----------------------
Company has approved this Agreement and the Option Agreement for all purposes
under Section 203 of the DGCL and the Company has heretofore furnished to Parent
a true and correct copy of resolutions duly adopted by the unanimous vote of
such board on November 26, 1995 and such resolutions are in full force and
effect on the date hereof. Such action is the only action necessary so that the
restrictions on business combinations contained in Section 203 of the DGCL will
not apply with respect to or as a result of the Merger or the Option Agreement
or any of the transactions contemplated herein or therein.
Section 4.8 Taxes. Except as may be disclosed in the Company
-----
Disclosure Letter, (i) the Company and each Significant Subsidiary has filed all
Tax Returns required to have been filed on or before the date hereof; (ii) all
Taxes shown to be due on the Tax Returns referred in clause (i) have been timely
paid; (iii) neither the Company nor any Significant Subsidiary has waived any
statute of limitations in respect of Taxes of the
-19-
Company or such Subsidiary; (iv) the Tax Returns referred to in clause (i)
relating to federal and state income Taxes have been examined by the Internal
Revenue Service or the appropriate state or appropriate foreign taxing authority
or the period for assessment of the Taxes in respect of which such Tax Returns
were required to be filed has expired; (v) no issues that have been raised in
writing by the relevant taxing authority in connection with the examination of
the Tax Returns referred to in clause (i) are currently pending; (vi) to the
best of the knowledge of the Company, none of the Internal Revenue Service, the
appropriate state taxing authority or the appropriate foreign tax authority,
have proposed any adjustments to tax against the Company or any Subsidiary; and
(vii) all deficiencies asserted or assessments made as a result of any
examination of the Tax Returns referred to in clause (i) by a taxing authority
have been paid in full. For purposes of this Agreement (a) "Tax" (and, with
correlative meaning, "Taxes" and "Taxable") means, when used with respect to
Parent or the Company, as the case may be, any federal, state, local or foreign
income, gross receipts, property, sales, use, license, excise, franchise,
employment, payroll, withholding, alternative or added minimum, ad valorem,
transfer or excise tax, or any other tax, custom, duty, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest or penalty, imposed by any governmental authority, and (b) "Tax Return"
means any return, report or similar statement required to be filed with respect
to any Tax (including any attached schedules), including, without limitation,
any information return, claim for refund, amended return or declaration of
estimated Tax.
Section 4.9 Compliance with Applicable Law. The Company and its
------------------------------
Subsidiaries hold all material permits, licenses, variances, exemptions, orders
and approvals of all United States Governmental Entities necessary for the
lawful conduct of their respective businesses (the "Company Permits"), except
for failures to hold such permits, licenses, variances, exemptions, orders and
approvals that would not, individually or in the aggregate, have a Material
Adverse Effect on the Company. The Company and its subsidiaries are in
compliance with the terms of the Company Permits, except where the failure so to
comply would not have a Material Adverse Effect on the Company. Except as
disclosed in the Company SEC Documents, to the best knowledge of the Company,
the businesses of the Company and its subsidiaries
-20-
are not being conducted in violation of any law, ordinance or regulation of any
United States Governmental Entity, except for violations that, individually or
in the aggregate, would not have a Material Adverse Effect on the Company or
prevent or materially delay the consummation of the Offer or the Merger. Except
as set forth in the Company Disclosure Letter, as of the date of this Agreement,
no investigation or review by any United States Governmental Entity with respect
to the Company or any of its subsidiaries is pending or, to the best knowledge
of the Company, threatened in writing, other than, in each case, those the
outcome of which would not be reasonably expected to have a Material Adverse
Effect on the Company or prevent or materially delay the consummation of the
Offer or the Merger.
Section 4.10 Litigation. Except as disclosed in the Company SEC
----------
Documents or in the Company Disclosure Schedule and except for suits filed in
connection with the Offer, there is no suit, claim, action, proceeding or
investigation pending before any United States Governmental Entity or, to the
best knowledge of the Company, threatened against the Company or any of its
subsidiaries that could reasonably be expected to have a Material Adverse Effect
on the Company. Except as disclosed in the Company SEC Documents or in the
Company Disclosure Letter, neither the Company nor any of its subsidiaries is
subject to any outstanding order, writ, injunction or decree that could
reasonably be expected to have a Material Adverse Effect on the Company.
Section 4.11 No Undisclosed Liabilities. Except as and to the extent
--------------------------
set forth in the Company's Annual Report to Stockholders for the year ended
December 31, 1994, or in any subsequently filed document by the Company with the
SEC prior to the date of this Agreement, neither the Company nor any of its
subsidiaries has any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, that would be required by generally accepted
accounting principles to be reflected on a consolidated balance sheet of the
Company and it subsidiaries (including the notes thereto), except for
liabilities or obligations incurred in the ordinary course of business since
December 31, 1994, that would not, individually or in the aggregate, have a
Material Adverse Effect on the Company.
-21-
Section 4.12 Benefit Plans. (a) Each "employee pension benefit plan"
-------------
(as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) (a Pension Plan"), "employee welfare benefit plan"
(as defined in Section 3(1) of ERISA) (a "Welfare Plan"), and each other plan,
arrangement or policy (written or oral) relating to stock options, stock
purchases, compensation, deferred compensation, bonuses, severance, fringe
benefits or other employee benefits, in each case maintained or contributed to,
or required to be maintained or contributed to, by the Company or its
subsidiaries for the benefit of any present or former employee, officer or
director (each of the foregoing, a "Benefit Plan") has been substantially
administered in accordance with its terms. The Company and its subsidiaries and
all the Benefit Plans are in compliance in all material respects with the
applicable provisions of ERISA, the Internal Revenue Code of 1986, as amended
(the "Code"), all other applicable laws and all applicable collective bargaining
agreements.
(b) None of the Company or other person or entity that, together with
the Company, is treated as a single employer under Section 414 of the Code
(each, including the Company, a "Commonly Controlled Entity") has incurred any
liability to a Pension Plan under Title IV of ERISA (other than for
contributions not yet due) or to the Pension Benefit Guaranty Corporation (other
than for payment of premiums not yet due), which liability has not been fully
paid.
(c) No Commonly Controlled Entity is required to contribute to any
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) or has
withdrawn from any multiemployer plan where such withdrawal has resulted or
would result in any "withdrawal liability" (within the meaning of Section 4201
of ERISA) that has not been fully paid.
Section 4.13 Trademarks, Patents and Copyrights. Except as set forth
----------------------------------
in the Disclosure Letter, (i) the Company and its subsidiaries own or possess
adequate licenses or other valid rights to use all patents, patent rights,
trademarks, trademark rights, trade names, trade dress, trade name rights,
copyrights, servicemarks, trade secrets, applications for trademarks and for
servicemarks, mask works, know-how and other proprietary rights and information
used or held for use in connection with the
-22-
business of the Company and the subsidiaries as conducted since December 31,
1993 or as currently conducted, except to the extent that the failure to so own
or possess would have a Material Adverse Effect, and (ii) the Company is unaware
of any assertion or claim challenging the validity of any of the foregoing
which, individually or in the aggregate, could have a Material Adverse Effect.
The conduct of the business of the Company and the Subsidiaries as conducted
since December 31, 1993 and as currently conducted did not and does not conflict
in any way with any applicable patent, patent right, license, trademark,
trademark right, trade dress, trade name, trade name right, service xxxx, mask
work or copyright of any third party that, individually or in the aggregate,
could have a Material Adverse Effect on the Company. There are no infringements
of any propriety rights owned by or licensed by or to the Company or any
subsidiary which, individually or in the aggregate, could have a Material
Adverse Effect on the Company. For purposes of this Section 4.12 only, the term
------------
"Material Adverse Effect" means Material Adverse Effect on the Company in an
amount equal to or greater than $100,000,000.
Section 4.14 Environmental Matters. (a) For purposes of this
---------------------
Agreement, the following terms shall have the following meanings: (i)
"Hazardous Substances" means (A) any asbestos-containing material, petroleum and
---------------------
petroleum products, including crude oil and any fractions thereof,(B) any
hazardous substance, hazardous waste, hazardous material, toxic substance, air
or water pollutant or contaminant, as those terms are defined by any federal,
state or local Environmental Law; (ii) "Environmental Law" means any federal,
state or local law relating to (A) releases or threatened releases into the
environment of Hazardous Substances; or (B) the generation, emission, discharge
or release, transport, treatment, storage or disposal of any Hazardous
Substances.
(b) Except as described in the Company Disclosure Letter: (i) neither
the Company nor any subsidiary is in material violation of any Environmental
Law; (ii) the Company and each of its subsidiaries has all material permits,
licenses and other authorizations required under any Environmental Law and each
of them is in compliance in all material respects with their requirements; (iii)
none of the Company or any of its subsidiaries has received any notice or claim
since December 31,
-23-
1993, alleging liability for or arising from the off-site disposal of Hazardous
Substance and, to the Company's knowledge, neither the Company nor any
subsidiary is liable for any off-site contamination caused by a Hazardous
Substance; and (iv) neither the Company nor any subsidiary has received any
notice of violation with or liability under any Environmental Law which,
individually or in the aggregate, would have a Material Adverse Effect on the
Company.
Section 4.15 Brokers. No broker, investment banker or other person,
-------
other than Xxxxxxx, Xxxxx & Co. and Xxxxxx X. Xxxxxx, the fees and expenses of
which will be paid by the Company, is entitled to any broker's, finder's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING SUB
--------------------------------------------
Parent and Sub jointly and severally represent and warrant to the
Company as follows:
Section 5.1 Organization and Standing. Sub is a corporation duly
-------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. Sub was organized solely for the purpose of acquiring the Company and
engaging in the transactions contemplated by this Agreement and has not engaged
in any business since it was incorporated which is not in connection with the
acquisition of the Company and this Agreement.
Section 5.2 Capital Structure. The authorized capital stock of Sub
-----------------
consists of 1,000 shares of common stock, par value $.01 per share, all of which
are validly issued and outstanding, fully paid and nonassessable and are owned
by Parent free and clear of all liens, claims and encumbrances.
Section 5.3 Authority; Non-Contravention. Sub has the requisite
----------------------------
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution
-24-
and delivery of this Agreement, the performance by Sub of its obligations
hereunder and the consummation of the transactions contemplated hereby have been
duly authorized by its Board of Directors and Parent as its sole stockholder,
and, except for the corporate filings required by state law, no other corporate
proceedings on the part of Sub are necessary to authorize this Agreement and the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Sub and (assuming the due authorization, execution and
delivery hereof by the Company) constitutes a valid and binding obligation of
Sub enforceable against Sub in accordance with its terms. The execution and
delivery of this Agreement do not, and the consummation of the transactions
contemplated hereby and compliance with the provisions hereof will not, conflict
with, or result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to the loss of a material benefit under, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of Sub under, any provision of (i) the
Certificate of Incorporation or Bylaws (true and complete copies of which as of
the date hereof have been delivered to the Company) of Sub, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Sub or (iii)
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Sub or any of its properties or assets, other than, in the case of
clauses (ii) or (iii), any such conflicts, violations, defaults, rights, liens,
security interests, charges or encumbrances that, individually or in the
aggregate, would not have a Material Adverse Effect on Sub, materially impair
the ability of Sub to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
-----------------------------------------
Section 6.1 Conduct of Business by the Company Pending the Merger.
-----------------------------------------------------
Except as otherwise expressly contemplated by this Agreement or as described in
the Company Disclosure
-25-
Letter, during the period from the date of this Agreement through the Effective
Time, the Company shall, and shall cause its Subsidiaries to, in all material
respects carry on their respective businesses in, and not enter into any
material transaction other than in accordance with, the regular and ordinary
course and, to the extent consistent therewith, use its reasonable best efforts
to preserve intact their current business organizations, keep available the
services of their current officers and employees and preserve their
relationships with customers, suppliers and others having business dealings with
them. Without limiting the generality of the foregoing, and, except as
otherwise expressly contemplated by this Agreement or as described in the
Company Disclosure Letter, the Company shall not, and shall not permit any of
its Subsidiaries to, without the prior written consent of Parent:
(a) (x) declare, set aside or pay any dividends on, or make any other
actual, constructive or deemed distributions in respect of, any of its
capital stock, or otherwise make any payments to stockholders of the
Company in their capacity as such, other than (1) ordinary quarterly
dividends by the Company consistent with past practice in an amount not in
excess of $0.17 1/2 per share of Common Stock per quarter, the first such
dividend to be with a record date no earlier than January 16, 1996, or (2)
dividends declared prior to the date of this Agreement;
(b) issue, deliver, sell, pledge, award, dispose of or otherwise
encumber, or authorize the issuance, delivery, sale, pledge, disposition or
other encumbrance of, any shares of its capital stock, any other voting
securities or equity equivalent or any securities convertible into, or any
rights, warrants or options to acquire, any such shares, voting securities
or convertible securities or equity equivalent (other than, in the case of
the Company, the issuance of Common Stock during the period from the date
of this Agreement through the Effective Time upon the exercise of Company
Stock Options outstanding on the date of this Agreement in accordance with
their current terms;
(c) amend its Certificate of Incorporation or Bylaws;
-26-
(d) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of or equity in, or by
any other manner, any business or any corporation, partnership, association
or other business organization or division thereof;
(e) other than in the ordinary course of business consistent with
past practice, sell, lease or otherwise dispose of or agree to sell, lease
or otherwise dispose of, any of its assets;
(f) incur, assume or prepay any indebtedness for borrowed money or
guarantee any such indebtedness or issue or sell any debt securities or
guarantee any debt securities of others, except for borrowings or
guarantees incurred in the ordinary course of business consistent with past
practice;
(g) alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of any
Subsidiary of the Company; or
(h) enter into or adopt any employee benefit plans or programs (which
if currently existing would come within the definition of Benefit Plans),
or amend any existing, Benefit Plan, agreement or arrangement, make any
contribution to any Benefit Plans which is disproportionately large when
compared to prior contributions made to such Benefit Plan or enter into or
amend any employee benefit plan (including without limitation, the Long-
Term Incentive Plan) or employment or consulting agreement, grant bonuses
or compensation increases except (x) as permitted by Section 7.11 or (y)
bonuses or compensation increases associated with Benefit Plans, promotions
and regular reviews in the ordinary course of business; or
(i) except as may be required as a result of a change in law or in
generally accepting accounting principles, change any of the accounting
practices or principles used by it;
(j) make any tax election or settle or compromise any federal, state,
local or foreign tax liability;
-27-
(k) settle or compromise any pending or threatened suit, action or
claim which is material;
(l) enter into any material contracts or modify, amend, terminate any
material contracts;
(m) take or offer or propose to take, or agree to take in writing or
otherwise any of the actions described in Sections 6.1 or any action which
would make any of the representations or warranties of the Company
contained in this Agreement untrue or incorrect as of the date when made if
such action had been taken, or would result in any of the Offer conditions
not being satisfied.
Section 6.2 No Solicitation. The Company, its affiliates and their
---------------
respective officers, directors, employees, representatives and agents shall
immediately cease any existing discussions or negotiations, if any, with any
parties conducted heretofore with respect to any acquisition or exchange of all
or any material portion of the assets of, or any equity interest in, the Company
or any of its subsidiaries or any business combination with the Company or any
of its subsidiaries. From and after the date hereof, the Company will not,
directly or indirectly, solicit or initiate any Takeover Proposal (as
hereinafter defined) from any person, or engage in discussions or negotiations
relating thereto (including by way of furnishing information); provided,
--------
however, that (i) the Company may engage in discussions or negotiations with a
-------
third party who seeks to initiate such discussions or negotiations or may
furnish such third party information concerning the Company and its business,
properties, assets, operating results and prospects, in each case only in
response to a request for such information or access to any person made after
the date hereof which was not encouraged, solicited or initiated by the Company
or any of its affiliates or any of its or their respective officers, directors,
employees, representatives or agents after the date hereof, pursuant to
appropriate confidentiality agreements, (ii) the Company's Board of Directors
may take and disclose to the Company's stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act and (iii) following receipt of
a Takeover Proposal or offer the Board of Directors of the Company may withdraw
or modify its recommendation referred to in Section 7.1, but in each case
referred to in the foregoing clauses (i) through (iii) only
-28-
to the extent that the Board of Directors of the Company shall conclude in good
faith after consultation with the Company's outside counsel that such action is
appropriate in order for the Board of Directors of the Company to act in a
manner which is consistent with its fiduciary obligations under applicable law.
The Company will promptly notify Parent of its receipt of any proposal or offer.
As used in this Agreement, "Takeover Proposal" shall mean any proposal or offer,
other than a proposal or offer by Parent or any of its affiliates, for a tender
or exchange offer, a merger, consolidation or other business combination
involving the Company or any Subsidiary of the Company or any proposal to
acquire in any manner a substantial equity interest in, or a substantial portion
of the assets of, the Company or any of its Subsidiaries or any other
transaction the consummation of which could reasonably be expected to impede,
interfere with, prevent or materially delay the Offer or the Merger or which
would reasonably be expected to dilute materially the benefits to Parent of the
transactions contemplated hereby.
Section 6.3 Conduct of Business of Sub Pending the Merger. During
---------------------------------------------
the period from the date of this Agreement through the Effective Time, Sub shall
not engage in any activities of any nature except as provided in or contemplated
by this Agreement.
ARTICLE VII
ADDITIONAL AGREEMENTS
---------------------
Section 7.1 Company Stockholder Approval; Proxy Statement. (a) If
---------------------------------------------
approval of the Merger by the holders of Class A Common Stock ("Class A
Holders") is required by applicable law, the Company shall either (i) call a
meeting of its Class A Holders (the "Stockholder Meeting") for the purpose of
voting upon the Merger and shall use its reasonable best efforts to obtain Class
A Holder approval of the Merger or (ii) if the holders of a majority of the
outstanding shares of Class A Common Stock intend to act by written consent,
comply with the requirements of Rule 14c-2 promulgated under the Exchange Act.
The Stockholder Meeting, if necessary, shall be held as soon as practicable
following the purchase of shares of Common Stock pursuant to the Offer and the
Company will, through its Board of
-29-
Directors but subject to the fiduciary duties of its Board of Directors under
applicable law as determined by the Board of Directors in good faith after
consultation with the Company's outside counsel, recommend to its Class A
Holders the approval of the Merger and not rescind its declaration that the
Merger is advisable. The record date for the Stockholder Meeting shall be a
date subsequent to the date Parent or Sub becomes a record holder of Common
Stock purchased pursuant to the Offer.
(b) If required by applicable law, the Company will, as soon as
practicable following the expiration of the Offer, prepare and file a
preliminary Proxy Statement or Information Statement, as the case may be, with
the SEC and will use its reasonable best efforts to respond to any comments of
the SEC or its staff and to cause the Proxy Statement to be mailed to the Class
A Holders. The Company will notify Parent of the receipt of any comments from
the SEC or its staff and of any request by the SEC or its staff for amendments
or supplements to the Proxy Statement or for additional information and will
supply Parent with copies of all correspondence between the Company or any of
its representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement or the Merger. If at any time prior
to the approval of this Agreement by the Class A Holders at the Stockholder
Meeting, if necessary, there shall occur any event that should be set forth in
an amendment or supplement to the Proxy Statement, the Company will prepare and
mail to its stockholders such an amendment or supplement.
(c) Parent agrees to cause all shares of Class A Common Stock
purchased pursuant to the Offer and all other shares of Class A Common Stock
owned by Sub or any other Subsidiary of Parent to be voted in favor of the
approval of the Merger.
Section 7.2 Access to Information. The Company shall, and shall
---------------------
cause each of its Subsidiaries to, afford to Parent, and to Parent's
accountants, counsel, financial advisors and other representatives, reasonable
access and permit them to make such inspections as they may reasonably require
during normal business hours during the period from the date of this Agreement
through the Effective Time to all their respective properties, books, contracts,
commitments and records (including the availability of an office at the
Company's corporate headquarters
-30-
where Parent's representatives may work on a day-to-day basis) and, during such
period, the Company shall, and shall cause each of its Subsidiaries to, furnish
promptly to Parent (i) a copy of each report, schedule, registration statement
and other document filed by it during such period pursuant to the requirements
of federal or state laws and (ii) all other information concerning its business,
properties and personnel as Parent may reasonably request; provided that no
investigation pursuant to this Section 7.2 or otherwise will affect or be deemed
to modify any of the representations and warranties made by the Company in this
Agreement. In no event shall the Company be requested to supply to Parent, or
to Parent's accountants, counsel, financial advisors or other representatives,
any information relating to indications of interest from, or discussions with,
any other potential acquirors of the Company which were received or conducted
prior to the date hereof, except to the extent necessary for use in the Offer
Documents, the Schedule 14D-9 and the Proxy Statement and/or the Information
Statement. Except as required by law, Parent will hold, and will cause its
affiliates, associates and representatives to hold, any nonpublic information in
confidence until such time as such information otherwise becomes publicly
available and shall use its reasonable best efforts to ensure that such
affiliates, associates and representatives do not disclose such information to
others without the prior written consent of the Company. In the event of
termination of this Agreement for any reason, Parent shall promptly return or
destroy all nonpublic documents so obtained from the Company or any of its
Subsidiaries and any copies made of such documents for Parent.
Section 7.3 Fees and Expenses. Whether or not the Merger is
-----------------
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses.
Section 7.4 Company Stock Options; Tax Gross-Up. Immediately upon
-----------------------------------
the consummation of the Offer, all outstanding employee stock options, whether
or not then fully exercisable or vested, to purchase shares of Common Stock (a
"Company Stock Option") heretofore granted under the Long-Term Incentive Plan
shall become fully exercisable and vested, and, pursuant to the terms of the
Long Term Incentive Plan, the Company Stock Options,
-31-
shall, upon their surrender to the Company by the holders thereof, be cancelled
by the Company, and the holders thereof shall receive a cash payment from the
Company in an amount equal to the number of shares of Common Stock subject to
each surrendered option multiplied by the difference between the exercise price
per share of Common Stock covered by the option and the Merger Consideration.
No additional awards shall be granted under the Long Term Incentive Plan.
Parent acknowledges that the Company has resolved to "gross-up" certain
executives for excise taxes due on any "excess parachute payment" as a result of
the acceleration of the vesting of the Company Stock Options (subject to a
maximum "gross-up" amount of $6,000,000 and undertakes to make such payments to
the extent due after the Effective Time.
Section 7.5 Reasonable Best Efforts. Upon the terms and subject to
-----------------------
the conditions set forth in this Agreement, each of the parties agrees to use
its reasonable best efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to 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 Merger, and the other
transactions contemplated by this Agreement, including (a) the obtaining of all
necessary actions or non-actions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations and filings
(including filings with Governmental Entities) and the taking of all reasonable
steps as may be necessary to obtain an approval or waiver from, or to avoid an
action or proceeding by any Governmental Entity, (b) the obtaining of all
necessary consents, approvals or waivers from third parties, (c) the defending
of any lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed, and (d)
the execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by this Agreement; provided, however, that the
-------- -------
Company shall be under no obligation to take any action to the extent that the
Board of Directors shall conclude in good faith, after consultation with the
Company's outside counsel, that such action could be
-32-
inconsistent with the Board of Directors' fiduciary obligations under applicable
law.
Section 7.6 Public Announcements. Parent and Sub, on the one hand,
--------------------
and the Company, on the other hand, will consult with each other before issuing
any press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement, 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 or by obligations pursuant to any listing
agreement with any national securities exchange.
Section 7.7 Real Estate Transfer and Gains Taxes. Parent and the
------------------------------------
Company agree that either the Company or the Surviving Corporation will pay any
stamp tax, recording tax, sales tax, use tax, real property transfer or gains
tax, stock transfer tax or similar tax, or any other state or local tax which is
attributable to the transfer of the beneficial ownership of the Company's or its
Subsidiaries real property, if any (collectively, the "Gains Taxes"), and any
penalties or interest with respect to the Gains Taxes, payable in connection
with the consummation of the Offer or the Merger. The Company agrees to
cooperate with Sub in the filing of any returns with respect to the Gains Taxes,
including supplying in a timely manner a complete list of all real property
interests held by the Company or its Subsidiaries and any information with
respect to such property that is reasonably necessary to complete such returns.
The portion of the consideration allocable to the real property of the Company
and its Subsidiaries shall be determined by Sub or Parent in its reasonable
discretion. The stockholders of the Company shall be deemed to have agreed to
be bound by the allocation established pursuant to this Section 7.7 in the
preparation of any return with respect to the Gains Taxes.
Section 7.8 State Takeover Laws. If any "fair price" or "control
-------------------
share acquisition" statute or other similar statute or regulation shall become
applicable to the transactions contemplated hereby, the Company and the members
of the Board of Directors of the Company shall use their reasonable best efforts
to grant such approvals and take such actions as are necessary so that the
transactions contemplated hereby may be consummated as promptly as practicable
on the terms contemplated hereby and
-33-
otherwise act to minimize the effects of such statute or regulation on the
transactions contemplated hereby.
Section 7.9 Indemnification; Directors and Officers Insurance. From
-------------------------------------------------
and after the Effective Time, Parent agrees to, and to cause the Surviving
Corporation to, indemnify and hold harmless all past and present officers,
directors, employees and agents of the Company and of its Subsidiaries to the
full extent such persons may be indemnified by the Company pursuant to the
Company's Certificate of Incorporation and Bylaws as in effect as of the date
hereof for acts and omissions occurring at or prior to the Effective Time and
shall advance reasonable litigation expenses incurred by such persons in
connection with defending any action arising out of such acts or omissions in
accordance with the terms and provisions of the Certificate of Incorporation and
Bylaws. In addition, Parent shall maintain in effect for a period of six years
the Company's current directors' and officers' liability insurance covering
those persons who are currently covered by such policy (a true and correct copy
of which has been made available to Parent); provided, however, that in no event
-------- -------
shall Parent be required to expend in any one year an amount in excess of 150%
of the annual premiums currently paid by the Company for such insurance which
the Company represents is $167,000 for the primary policy; and provided,
--------
further, that if the annual premiums of such insurance coverage exceed such
-------
amount, Parent shall be obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount.
Section 7.10 Employee Benefits. (a) Until at least December 31,
-----------------
1996, Parent shall maintain or cause to be maintained employee benefits and
programs for retirees, directors, officers and employees of the Company and its
Subsidiaries that are no less favorable in the aggregate than those being
provided to such retirees, directors, officers and employees on the date hereof
taking into account that the Company will be a private company without stock
options and the like. On or after January 1, 1997, the retirees, directors,
officers and employees of the Company and its Subsidiaries shall be eligible for
employee benefits, plans and programs (including but not limited to incentive
compensation, deferred compensation, pension, life insurance, medical, profit
sharing (including 401(k)), severance, salary continuation and fringe benefits)
which are no less favorable in the aggregate than those generally
-34-
available to similarly situated retirees, directors, officers and employees of
Parent and its Significant Subsidiaries in the relevant geographic regions. For
purposes of eligibility to participate in and vesting in all benefits provided
to retirees, directors, officers and employees, retirees, directors, officers
and employees of the Company and its Subsidiaries will be credited with their
years of service with the Company and its Subsidiaries and years of service with
prior employers to the extent service with prior employers is taken into account
under plans of the Company. Upon termination of any medical plan of the
Company, individuals who were directors, officers or employees of the Company or
its Subsidiaries at the Effective Time shall become eligible to participate in
the medical plan of Parent, provided that no condition that was eligible for
--------
coverage under any medical plan of the Company at the time of such termination
shall be excluded from coverage under the medical plan of Parent as a pre-
existing condition. Amounts paid before the Effective Time by retirees,
directors, officers and employees of the Company under any medical plans of the
Company shall after the Effective Time be taken into account in applying
deductibles and maximum out-of-pocket limits applicable under the medical plan
of Parent provided as of the Effective Time to the same extent as if such
amounts had been paid under such medical plan of Parent.
(b) Parent agrees that the following principles shall apply for
purposes of determining bonuses for 1995 under the Company's Short Term
Incentive Plan for 1995: (1) the Compensation Committee's determination to pay
certain persons who are employees of the Company or any of its Subsidiaries and
who are covered by such plan (other than employees whose employment is
terminated for any reason for cause on or prior to December 31, 1995) the
maximum amount of such bonuses is hereby ratified by Parent; (2) whether any
bonuses are payable under such plan to other employees and, if so, the amounts
thereof shall be determined as if the transactions contemplated hereby had not
occurred and the Company had remained an independent, publicly-owned company
through December 31, 1995, taking into account to the extent reasonably
applicable the limitations imposed by Section 6.1(a); and (3) any bonuses
payable pursuant to clause (2) above shall be paid by February 28, 1996. The
Company reasonably estimates that the total amount of such bonuses will not
exceed $3,000,000.
-35-
(c) Notwithstanding anything herein to the contrary, Parent agrees to
fulfill any obligations that may arise under any Welfare Plan to provide health
benefits to retirees or other arrangements to provide health benefits to
retirees, in either case, entered into prior to the date hereof.
Section 7.11 Merit Bonuses; Severance Policy. (a) From the date
-------------------------------
hereof up to the Effective Time, the Company shall be permitted to offer and pay
bonuses, in addition to any bonuses or payments pursuant to any existing bonus
or incentive plans of the Company, payable to officers and employees whose
performance and dedication to the Company or its Subsidiaries merits, in the
discretion of the Chief Executive Officer, special compensation ("Merit
Bonuses"); provided, however, that the aggregate amount paid by the Company
-------- -------
pursuant to such Merit Bonuses shall be no greater than $1,000,000.
(b) With respect to officers and employees who are or will be
terminated, Parent shall maintain the Company's severance policy as in effect on
the date hereof, or shall replace such policy with a policy providing equal or
more favorable compensation, for a period of at least one year from the
Effective Time.
(c) Parent shall honor or cause to be honored all existing severance
with the Company's officers and employees.
(d) Parent and its Subsidiaries shall provide reasonable and
customary outplacement services ("Outplacement Services") to officers of the
Company and its Subsidiaries who are terminated as a result of, or within
eighteen months following, the Merger, which Outplacement Services provided to
such officer and employees shall include one-on-one counseling and assistance.
Section 7.12 Management Contracts. The Company agrees to use its
--------------------
reasonably best efforts to cause the key members of its senior management to
enter into employment arrangements with the Surviving Corporation on terms and
conditions satisfactory to Parent and pursuant to which they shall remain as
employees of the Surviving Corporation following the Effective Time.
-36-
ARTICLE VIII
CONDITIONS PRECEDENT
--------------------
Section 8.1 Conditions to Each Party's Obligation to Effect the
---------------------------------------------------
Merger. The respective obligations of each party to effect the Merger shall be
------
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. If approval of the Merger by the Class A
--------------------
Holders is required by applicable law, the Merger shall have been approved
by the requisite vote of such holders.
(b) Purchase of Shares of Common Stock. Sub shall have accepted for
----------------------------------
payment and paid for the shares of Common Stock properly tendered pursuant
to the Offer; provided, however, that this condition will be deemed
-------- -------
satisfied with respect to the obligations of Parent and Sub if Sub fails to
accept for payment and pay for any shares of Common Stock pursuant to the
Offer in violation of the terms of this Agreement or the Offer.
(c) No Order. No Governmental Entity or court of competent
--------
jurisdiction shall have enacted, issued, promulgated, enforced or entered
any law, rule, regulation, executive order, decree or injunction prohibits
the consummation of the Merger; provided, however, that the Company, Parent
-------- -------
and Sub shall use their reasonable best efforts to have any such order,
decree or injunction vacated.
(d) Improvements Act Waiting Period. The applicable waiting period
-------------------------------
under the Improvements Act shall have expired or been terminated.
-37-
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
Section 9.1 Termination. This Agreement may be terminated at any
-----------
time prior to the Effective Time, whether before or after any approval by the
stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by the Company if:
(i) the Offer has not been timely commenced in accordance with
Section 1.1(a); or
(ii) the Offer shall expire or is terminated without any shares of
Common Stock being purchased thereunder due to the conditions set forth in
Exhibit A (other than the Minimum Condition) failing to be met; or
(iii) there is an offer to acquire all of the outstanding shares of
Common Stock or substantially all of the assets of the Company for
consideration that provides stockholders of the Company a value per share
of Common Stock which, in the good faith judgment of the Board of Directors
of the Company, provides a higher value per share than the consideration
per share pursuant to the Offer or the Merger and as a result of which, the
Board of Directors of the Company is obligated in accordance with its
fiduciary duty under applicable law, as advised by its counsel, to
terminate this Agreement; or
(iv) there has been (y) a material breach by Parent or Sub of any
representation or warranty that is not qualified as to materiality or (z) a
breach by Parent or Sub of any representation or warranty that is qualified
as to materiality, in each case which breach has not been cured within five
business days following receipt by Parent or Sub of notice of the breach;
or
(v) Parent or Sub fails to comply in any material respect with any of
its material obligations or covenants
-38-
contained herein which failure to perform is incapable of being cured or
has not been cured within five (5) business days following receipt by
Parent or Sub of written notice of the failure to perform.
(c) by either Parent or the Company if:
(i) the Merger has not been effected on or prior to the close of
business on May 31, 1996; provided, however, that the right to terminate
-------- -------
this Agreement pursuant to this clause shall not be available (y) to Parent
if Sub or any affiliate of Sub acquires shares of Common Stock pursuant to
the Offer, or (z) to any party whose failure to fulfill any obligation of
this Agreement has been the cause of, or resulted in, the failure of the
Merger to have occurred on or prior to the aforesaid date; or
(ii) any court of competent jurisdiction or any governmental,
administrative or regulatory authority, agency or body shall have issued an
order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall have become
final and nonappealable; or
(iii) if the stockholders of the Company fail to give any approval
required by applicable law; or
(iv) if as the result of the failure of any of the conditions set
forth in Exhibit A hereto (except for the Minimum Condition), the Offer
shall have terminated or expired in accordance with its terms without Sub
having purchased any shares of Common Stock pursuant to the Offer or
pursuant to the Option Agreement in accordance with its terms; provided,
--------
however, that the right to terminate this Agreement pursuant to this
-------
Section 9.1(c)(v) shall not be available to any party whose failure to
fulfill any of its obligations under this Agreement results in the failure
of any such condition.
(d) By Parent if the Board of Directors of the Company shall have
failed to recommend, or withdrawn, modified or amended in any material
respect its approval or
-39-
recommendations of the Offer or the Merger or shall have resolved to do any
of the foregoing.
Section 9.2 Effect of Termination. In the event of termination of
---------------------
this Agreement by either Parent or the Company, as provided in Section 9.1, this
Agreement shall forthwith become void and there shall be no liability hereunder
on the part of the Company, Parent or Sub or their respective officers or
directors (except as set forth in the last two sentences of Section 7.2 and
except for Section 7.3, which shall survive the termination); provided, however,
-------- -------
that nothing contained in this Section 9.2 shall relieve any party hereto from
any liability for any breach of this Agreement.
Section 9.3 Amendment. This Agreement may be amended by the parties
---------
hereto, by or pursuant to action taken by their respective Boards of Directors,
at any time before or after any approval of the Merger by the Class A Holders of
the Company but, after the purchase of any shares of Common Stock pursuant to
the Offer, no amendment shall be made which decreases the Merger Consideration
or which in any way materially adversely affects the rights of stockholders of
the Company, without the further approval of such stockholders. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto.
Section 9.4 Waiver. At any time prior to the Effective Time, the
------
parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions contained herein which may legally be waived. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
-40-
ARTICLE X
GENERAL PROVISIONS
------------------
Section 10.1 Non-Survival 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.
Section 10.2 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally, sent by
overnight courier or telecopied (with a confirmatory copy sent by overnight
courier) to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(a) if to Parent or Sub, to:
Hans X.X. xxx Xxxxxx
Wolters Kluwer
Xxxxxxxxxxxxxxx 0
0000 XX Xxxxxxxxx
Xxx Xxxxxxxxxxx
Telefax: 31 20 607 04 16
with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Pryor, Cashman, Xxxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
(b) if to the Company, to:
Oakleigh Xxxxxx
CCH Incorporated
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxx Xxx Xxxxx
CCH Incorporated
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
and
-41-
Xxxxxxx xxx Xxxxxx
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
and a copy to:
Xxxxxxx X. Xxxxxxx
Xxxxx, Xxxxx & Xxxxx
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Section 10.3 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 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 10.4 Counterparts. This Agreement may be executed in
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 10.5 Entire Agreement; No Third-Party Beneficiaries. This
----------------------------------------------
Agreement, including the documents and instruments referred to herein, (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (b) except for the provisions of Sections 7.9, 7.10(b)
and 7.11(a), (b)(only with respect to officers) and (d), is not intended to
confer upon any person other than the parties any rights or remedies hereunder.
Section 10.6 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.
-42-
Section 10.7 Assignment. Neither this Agreement nor any of the
----------
rights, interests or obligations hereunder shall be assigned by any of the
parties without the prior written consent of the other parties, except that Sub
may assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly
owned subsidiary of Parent, but no such assignment shall relieve Sub of any of
its obligations hereunder. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.
Section 10.8 Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby are not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions be consummated as originally contemplated to the
fullest extent possible.
Section 10.9 Enforcement of this Agreement. The parties agree that
-----------------------------
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. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
-43-
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized
all as of the date first written above.
WOLTERS KLUWER N.V.
By: /s/ Xxxxx X. van Wel
---------------------
Name:
Title:
Attest: /s/ X.X. xxx Xxxxxx
--------------------
Name:
Title:
WK ACQUISITION SUB, INC.
By: /s/ Xxxxx X. Xxxx
------------------------
Name:
Title:
Attest: /s/ X.X. xxx Xxxxxx
--------------------
Name:
Title:
CCH INCORPORATED
By: /s/ Oakleigh Xxxxxx
--------------------------
Name: Oakleigh Xxxxxx
Title: President and Chief
Executive Officer
Attest: /s/ Xxxxx X. Xxxxxxx
----------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice
President
-44-
EXHIBIT A
Notwithstanding any other provisions of the Offer, and provided that
Sub shall not be obligated to accept for payment any shares of Common Stock
until expiration of all applicable waiting periods under the Improvements Act,
Sub shall not be required to accept for payment, purchase or pay for any shares
of Common Stock tendered, and may terminate or, subject to the terms of the
Agreement, amend the Offer and may delay the acceptance for payment of and
payment for shares of Common Stock, if (i) there shall not have been validly
tendered and not withdrawn immediately prior to the expiration of the Offer such
number of shares of Common Stock which would constitute a majority of the voting
power of the outstanding shares (determined on a fully diluted basis) of the
Class A Common Stock (the "Minimum Condition") and (ii) if at any time on or
after the date hereof and before the time of payment for any such shares of
Common Stock (whether or not any shares of Common Stock have theretofore been
accepted for payment or paid for pursuant to the Offer) any of the following
conditions exist or shall occur and remain in effect:
(a) there shall have been any action taken, or any statute, rule,
regulation, judgment, order or injunction promulgated, entered, enforced,
enacted, issued, by any United States Governmental Entity which (i) prohibits or
limits or seeks to prohibit or materially limit Parent's or Sub's (x) ownership,
or seeks to impose material limitations on the ability of Parent or Sub to
acquire or hold, or exercise full rights of ownership of, any shares of Common
Stock accepted for payment pursuant to the Offer, including, without limitation,
the right to vote such shares of Common Stock or (y) operation of all or a
material portion of the Company's business or assets, or compels Parent to
dispose of or hold separate all or a material portion of the Company's business
or assets as a result of the Offer or the Merger, or (ii) prohibits, or limits
or seeks to prohibit or materially limit, or makes illegal, the acceptance for
payment, purchase or payment for shares of Common Stock or the consummation of
the Offer or the Merger and such statute, rule, regulation, judgment, order or
injunction shall remain in effect for a period of fifteen business days after
the issuance thereof; provided, however, that in order to invoke this condition
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with
respect to any such statute, rule, regulation, judgment, order or injunction
Parent shall have used its reasonable best efforts to prevent such statute,
rule, regulation, judgment, order or injunction or ameliorate the effects
thereof; provided, further, that if any such order or injunction is a temporary
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restraining order or preliminary injunction, Parent may not, for a period of 30
days, by virtue of this condition alone amend or terminate the Offer, but may
only extend the Offer and thereby postpone acceptance for payment or purchase of
shares of Common Stock;
(b) the Agreement shall have been terminated in accordance with its
terms;
(c) the Company shall have breached any of its representations and
warranties set forth in Article IV of the Merger Agreement (other than any
matters that, in the aggregate, would not have a Material Adverse Effect on
the Company);
(d) the Company shall have failed in any material respect to perform
any obligation or covenant required by the Agreement to be performed or
complied with by it;
(e) the Board of Directors of the Company shall have withdrawn or
modified in a manner adverse to Parent or Sub its approval or
recommendation of the Offer, the Merger or this Agreement, or approved or
recommended any Takeover Proposal; or
(f) there shall have occurred and continued to exist for at least
three business days (i) any general suspension of trading in, or limitation
on prices for, securities on a national securities exchange in the United
States or (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or The Netherlands;
which, in the reasonable judgment of Sub, makes it inadvisable to proceed with
the Offer or with such acceptance for payment or payment.
The foregoing conditions may be waived by Sub, in whole or part, at
any time and from time to time, in the sole discretion of Sub. The failure by
Sub at any time to exercise any of the foregoing rights will not be deemed a
waiver of any
right and each right will be deemed an ongoing right which may be asserted at
any time and from time to time.
