AGREEMENT AND PLAN OF MERGER BY AND AMONG DANAHER CORPORATION, AEGEAN ACQUISITION CORP. AND KEITHLEY INSTRUMENTS, INC. Dated as of September 29, 2010
Exhibit 2.1
BY AND AMONG
XXXXXXX CORPORATION,
AEGEAN ACQUISITION CORP.
AND
XXXXXXXX INSTRUMENTS, INC.
Dated as of September 29, 2010
TABLE OF CONTENTS
Page | ||||
ARTICLE I THE MERGER |
1 | |||
Section 1.1. The Merger |
1 | |||
Section 1.2. Closing |
1 | |||
Section 1.3. Effective Time |
2 | |||
Section 1.4. Effects of the Merger |
2 | |||
Section 1.5. Articles of Incorporation and Code of Regulations |
2 | |||
Section 1.6. Directors and Officers of the Surviving Corporation |
2 | |||
ARTICLE II CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES AND PAYMENT |
3 | |||
Section 2.1. Effect on Company Shares |
3 | |||
Section 2.2. Exchange of Certificates |
5 | |||
ARTICLE III REPRESENTATIONS AND WARRANTIES |
8 | |||
Section 3.1. Representations and Warranties of the Company |
8 | |||
Section 3.2. Representations and Warranties of Parent and Merger Sub |
23 | |||
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS |
26 | |||
Section 4.1. Conduct of Business |
26 | |||
Section 4.2. No Solicitation by the Company |
30 | |||
ARTICLE V ADDITIONAL AGREEMENTS |
33 | |||
Section 5.1. Preparation of Proxy Statement; Company Meeting |
33 | |||
Section 5.2. Access to Information; Confidentiality |
34 | |||
Section 5.3. Commercially Reasonable Efforts; Cooperation |
34 | |||
Section 5.4. Indemnification |
36 | |||
Section 5.5. Public Announcements |
38 | |||
Section 5.6. Shareholder Litigation |
38 | |||
Section 5.7. Section 16(b) |
38 | |||
Section 5.8. Employee Benefit Matters |
38 | |||
Section 5.9. Parent Actions |
40 | |||
Section 5.10. Control of Operations |
40 | |||
ARTICLE VI CONDITIONS PRECEDENT |
41 | |||
Section 6.1. Conditions to Each Party’s Obligation to Effect the Merger |
41 | |||
Section 6.2. Conditions to Obligations of Parent and Merger Sub |
41 | |||
Section 6.3. Conditions to Obligations of the Company |
42 | |||
Section 6.4. Frustration of Closing Conditions |
42 | |||
ARTICLE VII TERMINATION |
42 | |||
Section 7.1. Termination |
42 | |||
Section 7.2. Effect of Termination |
44 | |||
Section 7.3. Fees and Expenses |
44 |
i
TABLE OF CONTENTS
(continued)
(continued)
Page | ||||
ARTICLE VIII GENERAL PROVISIONS |
46 | |||
Section 8.1. Nonsurvival of Representations and Warranties; Scope of Representations and Warranties |
46 | |||
Section 8.2. Notices |
46 | |||
Section 8.3. Interpretation and Definitions |
47 | |||
Section 8.4. Counterparts |
53 | |||
Section 8.5. Entire Agreement; No Third-Party Beneficiaries |
53 | |||
Section 8.6. Governing Law |
53 | |||
Section 8.7. Assignment |
53 | |||
Section 8.8. Consent to Jurisdiction; Waiver of Jury Trial |
54 | |||
Section 8.9. Amendment |
54 | |||
Section 8.10. Extension; Waiver |
55 | |||
Section 8.11. Severability |
55 |
ii
INDEX OF DEFINED TERMS
Term | Page | |||
2010 Management Incentive Plans |
40 | |||
2011 Management Incentive Plans |
40 | |||
Acquisition Agreement |
31 | |||
Additional Financial Information |
46 | |||
affiliate |
48 | |||
Agreement |
1 | |||
Antitrust Law |
48 | |||
Board of Directors |
1 | |||
Book-Entry Shares |
6 | |||
Business Day |
48 | |||
Cancelled Shares |
3 | |||
Certificate of Merger |
2 | |||
Certificates |
6 | |||
Class B Common Shares |
3 | |||
Closing |
1 | |||
Closing Date |
1 | |||
Code |
4 | |||
Common Shares |
3 | |||
Company |
1 | |||
Company Adverse Recommendation Change |
31 | |||
Company Articles |
8 | |||
Company Code of Regulations |
8 | |||
Company Disclosure Letter |
8 | |||
Company ESPP |
28 | |||
Company Executive Compensation Agreement |
15 | |||
Company Inbound Agreements |
19 | |||
Company Incentive Compensation Plan |
15 | |||
Company IP |
48 | |||
Company Leased Real Property |
18 | |||
Company Leases |
18 | |||
Company Material Adverse Effect |
48 | |||
Company Material Contract |
21 | |||
Company Meeting |
33 | |||
Company Outbound Agreements |
20 | |||
Company Owned Real Property |
18 | |||
Company Pension Plan |
14 | |||
Company Recommendation |
11 | |||
Company Representatives |
30 | |||
Company SERP |
28 | |||
Company Share Plans |
49 | |||
Company Share-Based Award |
5 | |||
Company Shareholder Approval |
22 | |||
Company Shares |
3 | |||
Company Shares Option |
4 | |||
Company Software Products |
49 | |||
Company Subsidiary |
12 | |||
Company Takeover Proposal |
31 | |||
Company Welfare Plan |
15 | |||
Confidentiality Agreement |
34 | |||
Dissenting Shares |
4 | |||
Effective Time |
2 | |||
Environment |
49 | |||
Environmental Condition |
49 | |||
Environmental Permit |
50 | |||
Environmental, Health and Safety Claim
|
49 | |||
Environmental, Health and Safety Laws
|
49 | |||
ERISA |
14 | |||
ERISA Affiliate |
50 | |||
Exchange Act |
10 | |||
Exchange Fund |
6 | |||
Filed SEC Documents |
50 | |||
GAAP |
11 | |||
Governmental Entity |
10 | |||
Hazardous Substance |
50 | |||
HSR Act |
10 | |||
Indebtedness |
50 | |||
Intellectual Property Rights |
51 | |||
knowledge |
51 | |||
Law |
51 | |||
Liens |
51 | |||
Maximum Premium |
37 | |||
Merger |
1 | |||
Merger Consideration |
3 | |||
Merger Sub |
1 | |||
Notice of Adverse Recommendation |
32 | |||
NYSE |
10 | |||
OGCL |
1 | |||
Ohio Secretary of State |
2 | |||
Option Consideration |
4 | |||
Outside Date |
43 | |||
Parent |
1 | |||
Parent Disclosure Letter |
23 | |||
Parent Material Adverse Effect |
51 | |||
Parent Plan |
39 |
iii
INDEX OF DEFINED TERMS
(continued)
(continued)
Term | Page | |||
Paying Agent |
5 | |||
PCBs |
50 | |||
Permits |
14 | |||
Permitted Liens |
51 | |||
person |
52 | |||
Plans |
52 | |||
Prior Plan |
39 | |||
Proxy Statement |
22 | |||
Registered IP |
52 | |||
Release |
52 | |||
Retained Employee |
39 | |||
Santa Xxxx Property |
52 | |||
SEC |
10 | |||
SEC Documents |
11 | |||
Securities Act |
11 | |||
Share |
3 | |||
Software |
52 | |||
subsidiary |
52 | |||
Successor Welfare Plan |
39 | |||
Superior Proposal |
31 | |||
Surviving Corporation |
1 | |||
Tax Return |
53 | |||
Taxes |
53 | |||
Termination Fee |
45 | |||
Voting Agreement |
1 |
iv
This AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of September 29, 2010, is by
and among Xxxxxxx Corporation, a Delaware corporation (“Parent”), Aegean Acquisition Corp., an
indirect wholly-owned subsidiary of Parent and an Ohio corporation (“Merger Sub”), and Xxxxxxxx
Instruments, Inc., an Ohio corporation (the “Company”).
RECITALS
WHEREAS, the Board of Directors of the Company (the “Board of Directors”) has determined that
this Agreement and the transactions contemplated hereby, including the Merger (as defined below),
are fair and in the best interests of the Company and its shareholders, and declared it advisable,
to enter into this Agreement, and the Board of Directors has, as of the date of this Agreement,
approved this Agreement and recommended its adoption by the shareholders of the Company;
WHEREAS, the Boards of Directors of Parent and Merger Sub have approved this Agreement, and
Parent, as the sole shareholder of Merger Sub, has adopted this Agreement;
WHEREAS, Parent, Merger Sub and the Company desire to make the representations, warranties and
agreements specified in this Agreement in connection with the transactions contemplated hereby; and
WHEREAS, concurrently with the execution and delivery of this Agreement, as a condition and
inducement to Parent’s and Merger Sub’s willingness to enter into this Agreement, Parent and Merger
Sub are entering into a Voting Agreement with Xxxxxxxx Investment Co. Limited Partnership (the
“Voting Agreement”).
NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements
contained in this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions set
forth herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1. The Merger. On the terms and subject to the conditions set forth herein,
and in accordance with the Ohio General Corporation Law (“OGCL”), Merger Sub will be merged with
and into the Company (the “Merger”) at the Effective Time, and the separate corporate existence of
Merger Sub will thereupon cease. Following the Effective Time, the Company will be the surviving
corporation of the Merger (the “Surviving Corporation”).
Section 1.2. Closing. The closing of the Merger (the “Closing”) will take place at
the offices of Xxxxx & Xxxxxxxxx LLP, PNC Center, 0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx,
Xxxx 00000 at 9:00 a.m., local time, on a date to be specified by the parties (the “Closing Date”),
which shall be no later than the second Business Day after the satisfaction or
waiver (to the extent waiver is permitted by applicable Law) of the last to be satisfied or
waived of the conditions set forth in Article VI (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or waiver (to the extent
waiver is permitted by applicable Law) of those conditions) or at such other place, date and time
as the Company and Parent may agree in writing.
Section 1.3. Effective Time. On the terms and subject to the conditions set forth in
this Agreement, on the Closing Date, immediately after the Closing, the parties will (i) cause the
Merger to be consummated by delivering to the Secretary of State of the State of Ohio (the “Ohio
Secretary of State”) a certificate of merger (the “Certificate of Merger”) in such form as is
required by and executed in accordance with Section 1701.81 of the OGCL and (ii) make all other
filings or recordings required under the OGCL in connection with the Merger. The Merger will
become effective when the Certificate of Merger is filed with the Ohio Secretary of State or at
such later date as the Company, Parent and Merger Sub agree and specify in the Certificate of
Merger (the date and time the Merger becomes effective is referred to as the “Effective Time”).
Section 1.4. Effects of the Merger. The Merger will have the effects set forth in
this Agreement and in the applicable provisions of the OGCL. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time, all the assets and property of every
description, and every interest in the assets and property, wherever located, and the rights,
privileges, immunities, powers, franchises and authority of the Company and Merger Sub will vest in
the Surviving Corporation, and all obligations of the Company and Merger Sub will become the
obligations of the Surviving Corporation, all as provided in the OGCL and other applicable Laws.
Section 1.5. Articles of Incorporation and Code of Regulations. The Certificate of
Merger will provide that, at the Effective Time, (a) the Articles of Incorporation of Merger Sub,
as in effect immediately before the Effective Time, will be the Articles of Incorporation of the
Surviving Corporation as of the Effective Time (except that the name of the Surviving Corporation
shall be provided in writing by Parent prior to the Effective Time) and (b) the Code of
Regulations of Merger Sub, as in effect immediately before the Effective Time, will be the Code of
Regulations of the Surviving Corporation as of the Effective Time, in each case, until changed or
amended as provided therein and in accordance with the OGCL.
Section 1.6. Directors and Officers of the Surviving Corporation. The directors of
Merger Sub immediately prior to the Effective Time and the individuals specified by Parent prior to
the Effective Time will be the directors and officers, respectively, of the Surviving Corporation
until the earlier of their death, resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
2
ARTICLE II
CONVERSION OF SHARES;
EXCHANGE OF CERTIFICATES AND PAYMENT
EXCHANGE OF CERTIFICATES AND PAYMENT
Section 2.1. Effect on Company Shares. At the Effective Time, by virtue of the Merger
and without any action on the part of the Company, Merger Sub, Parent or the holders of any
securities of the Company:
(a) Conversion of Company Shares. Subject to Section 2.1(b), Section
2.1(d), Section 2.1(e) and Section 2.1(f), each common share, without par
value, of the Company (the “Common Shares”) and each Class B Common Share, without par value, of
the Company (the “Class B Common Shares”), in each case issued and outstanding immediately prior to
the Effective Time (collectively, the “Company Shares” and each, a “Share”), other than (i) any
Cancelled Shares (as defined, and to the extent provided, in Section 2.1(b)) and (ii) any
Dissenting Shares (as defined, and to the extent provided, in Section 2.1(e)) shall
thereupon be converted automatically into and shall thereafter represent the right to receive
$21.60 in cash, without interest (the “Merger Consideration”). All Company Shares that have been
converted into the right to receive the Merger Consideration as provided in this Section
2.1 shall be automatically cancelled and shall cease to exist, and the holders of certificates
that immediately prior to the Effective Time represented Company Shares and of Book-Entry Shares
shall cease to have any rights with respect to Company Shares other than the right to receive the
Merger Consideration upon surrender of Certificates (as defined below) or Book-Entry Shares (as
defined below) in the manner provided in Section 2.2.
(b) Parent-Owned and Treasury Shares. Each Share that is owned, directly or
indirectly, by Parent or any direct or indirect wholly-owned subsidiary of Parent immediately prior
to the Effective Time or held by the Company or any Company Subsidiary (as hereinafter defined)
immediately prior to the Effective Time (the “Cancelled Shares”) shall, by virtue of the Merger and
without any action on the part of the holder thereof, be cancelled and retired and shall cease to
exist, and no consideration shall be delivered in exchange for such cancellation and retirement.
(c) Conversion of Merger Sub Common Shares. Each common share, no par value per
share, of Merger Sub issued and outstanding immediately prior to the Effective Time will remain
outstanding as a common share of the Surviving Corporation.
(d) Adjustments. If at any time between the date of this Agreement and the Effective
Time, any change in the outstanding shares of capital stock of the Company shall occur as a result
of any reclassification, recapitalization, share split (including a reverse share split) or
combination, exchange or readjustment of shares, or any share dividend or share distribution with a
record date during that period, or any similar transaction or any transaction having the effect of
any of the foregoing, the Merger Consideration will be equitably adjusted to reflect that change.
(e) Dissenting Shareholder Rights. Notwithstanding anything in this Agreement to the
contrary, to the extent required by the OGCL, Company Shares that are issued
3
and outstanding immediately prior to the Effective Time and that are held by any shareholder
who was a record holder of the Company Shares as to which such shareholder seeks relief as of the
date fixed for determination of shareholders entitled to notice of the Company Meeting (as
hereinafter defined) and who shall not have voted in favor of adoption of the Agreement at the
Company Meeting and who files with the Company within ten (10) days after such vote at the Company
Meeting a written demand to be paid the fair cash value for such Company Shares in accordance with
Section 1701.85 of the OGCL (“Dissenting Shares”) will not be converted into the right to receive
the Merger Consideration as provided in Section 2.1(a), unless and until such shareholder
fails to demand payment properly or otherwise loses such shareholder’s rights as a dissenting
shareholder, if any, under the OGCL. If any such shareholder fails to perfect or loses any such
rights as a dissenting shareholder, that shareholder’s Company Shares shall thereupon be deemed to
have been converted as of the Effective Time into only the right to receive at the Effective Time
the Merger Consideration, without interest. From and after the Effective Time, each shareholder
who has asserted rights as a dissenting shareholder as provided in Section 1701.85 of the OGCL
shall be entitled only to such rights as are granted under that section of the OGCL. The Company
shall promptly (but within three (3) Business Days after the Company’s receipt of notice) notify
Parent of each shareholder who asserts rights as a dissenting shareholder, and Parent shall have
the right to participate in and reasonably direct all negotiations and proceedings (subject to the
Company’s right to object to any actions or positions taken by Parent that it deems, in its sole
discretion, unreasonable) with respect thereto. Prior to the Effective Time, the Company shall
not, except with the prior written consent of Parent (which shall not be unreasonably withheld,
conditioned or delayed), make any payment with respect to, or settle or offer to settle, any rights
of a dissenting shareholder asserted under Section 1701.85 of the OGCL, or agree to do or commit to
do any of the foregoing.
(f) Share Options and Other Share-Based Shares Awards.
(i) Each option to purchase Company Shares (each, a “Company Shares Option”) granted
under the Company Share Plans, whether vested or unvested, that is outstanding immediately
prior to the Effective Time shall, as of the Effective Time, become fully vested, cease to
represent a right or award with respect to Company Shares and entitle the holder thereof
to receive from the Surviving Corporation (and Parent shall cause the Surviving
Corporation to pay) at the Effective Time without interest an amount in cash equal to the
product of (x) the total number of Company Shares subject to such Company Shares Option
and (y) the excess, if any, of the amount of the Merger Consideration over the exercise
price per Share subject to such Company Shares Option, with the aggregate amount of such
payment rounded to the nearest cent (the aggregate amount of such cash amounts hereinafter
referred to as the “Option Consideration”), less such amounts as are required to be
withheld or deducted under the United States Internal Revenue Code of 1986, as amended
(the “Code”), or any provision of U.S. state or local or foreign Law relating to Taxes
with respect to the making of such payment.
(ii) At the Effective Time, each right of any kind, contingent or accrued, to receive
Company Shares or benefits measured in whole or in part by the value of a number of
Company Shares granted under the Company Share Plans or Plans (including restricted share
units, deferred share units and performance shares) (other
4
than Company Shares Options) (each, a “Company Share-Based Award”), whether vested or
unvested, which is outstanding immediately prior to the Effective Time shall cease to
represent a right or award with respect to Company Shares, shall become fully vested and
shall entitle the holder thereof to receive from the Surviving Corporation (and Parent
shall cause the Surviving Corporation to pay), at the Effective Time, without interest,
(A) with respect to restricted share units and deferred share units, an amount in cash
equal to the product of the Merger Consideration multiplied by the number of restricted
share units or deferred share units, as applicable, held by such person and (B) with
respect to performance award units, except as provided in a change-in-control agreement or
employment agreement listed in Section 3.1(l) of the Company Disclosure Letter, an
amount in cash equal to the product of the Merger Consideration multiplied by the number
of Common Shares represented by the initial award value under the agreement evidencing
such performance award units, in each case, less such amounts as are required to be
withheld or deducted under the Code or any provision of U.S. state or local or foreign Law
relating to Taxes with respect to the making of such payment.
(iii) The parties agree (A) that, following the Effective Time, no holder of a
Company Shares Option or a Company Share-Based Award or any participant in any Company
Share Plan shall have any right hereunder to acquire any shares of capital stock or other
equity interest (including stock appreciation rights, restricted share units, performance shares, phantom units, deferred share units and dividend equivalents) in the Company, any
Company Subsidiary or the Surviving Corporation, and (B) at the Effective Time, each
Company Shares Option (whether vested or unvested) with an exercise price equal to or in
excess of the Merger Consideration, in each case that is issued and outstanding
immediately prior to the Effective Time, by virtue of the Merger and without the need for
any further action on the part of the holder thereof, shall be cancelled and extinguished
without any conversion thereof or payment therefor and in full satisfaction and discharge
of all rights of the holder held in such Company Shares Option. Prior to the Effective
Time, the Company shall use commercially reasonable efforts to effectuate the actions
contemplated by this Section 2.1(f), including, if necessary, using commercially
reasonable efforts to enter into option termination or cancellation agreements with the
holders of Company Shares Options, without paying any consideration or incurring any debts
or obligations on behalf of the Company or the Surviving Corporation other than the
payments provided in this Section 2.1(f).
Section 2.2. Exchange of Certificates.
(a) Paying Agent. Immediately prior to the Effective Time, Parent shall deposit, or
shall cause to be deposited, with a U.S. bank or trust company that shall be appointed to act as a
paying agent hereunder and approved in advance by the Company (such approval not to be unreasonably
withheld, delayed or conditioned) (and pursuant to an agreement in form and substance reasonably
acceptable to Parent and the Company) (the “Paying Agent”), for the benefit of holders of the
Company Shares, cash in U.S. dollars sufficient to pay the aggregate Merger Consideration in
exchange for all of the Company Shares outstanding immediately prior to the Effective Time (other
than the Cancelled Shares and the Dissenting Shares), payable upon
5
due surrender of the certificates that immediately prior to the Effective Time represented
Company Shares (“Certificates”) (or effective affidavits of loss in lieu thereof) or
non-certificated Company Shares represented by book-entry (“Book-Entry Shares”) pursuant to this
Article II. Any cash deposited with the Paying Agent above shall hereinafter be referred
to as the “Exchange Fund.”
(b) Exchange Procedures.
(i) As soon as reasonably practicable after the Effective Time, (A) the Paying Agent
shall mail to each holder of record of Company Shares whose Company Shares were converted
into the Merger Consideration pursuant to Section 2.1(a), (x) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of loss and
title to Certificates shall pass, only upon delivery of Certificates (or effective
affidavits of loss in lieu thereof) or Book-Entry Shares to the Paying Agent and shall be
in such form and have such other provisions as Parent and the Company may mutually agree),
and (y) instructions for use in effecting the surrender of Certificates (or effective
affidavits of loss in lieu thereof) or Book-Entry Shares in exchange for the Merger
Consideration and (B) the Surviving Corporation shall mail to each holder of a Company
Shares Option or Company Share-Based Award, a check in the amount payable to such holder
pursuant to Section 2.1(f) of this Agreement in respect of such Company Shares
Option or Company Share-Based Award.
(ii) Upon surrender of Certificates (or effective affidavits of loss in lieu thereof)
or Book-Entry Shares to the Paying Agent together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto (if required by
the Paying Agent), and such other documents as may customarily be required by the Paying
Agent, the holder of such Certificates (or effective affidavits of loss in lieu thereof)
or Book-Entry Shares shall be entitled to receive in exchange for such properly
surrendered Certificates (or effective affidavits of loss in lieu thereof) or such
Book-Entry Shares an amount in cash equal to the Merger Consideration that such holder has
the right to receive pursuant to this Article II, and the Certificates and
Book-Entry Shares so surrendered shall forthwith be cancelled. No interest will be paid
or accrued on any amount payable upon due surrender of Certificates (or effective
affidavits in lieu thereof) or Book-Entry Shares or to a holder of a Company Shares Option
or a Company Share-Based Award. In the event of a transfer of ownership of Company Shares
that is not registered in the transfer records of the Company, the relevant Merger
Consideration to be paid upon due surrender of the Certificate or Book-Entry Shares may be
paid to the transferee thereof if the Certificate or Book-Entry Shares formerly
representing such Company Shares is presented to the Paying Agent, accompanied by all
documents required to evidence and effect such transfer and to evidence that any
applicable share transfer Taxes have been paid or are not payable. Until surrendered as
contemplated by this Section 2.2(b), each Certificate and Book-Entry Share shall
be deemed at any time after the Effective Time to represent only the right to receive upon
surrender the Merger Consideration (without interest) as contemplated by this Article
II.
6
(iii) The Paying Agent and the Surviving Corporation are entitled to deduct and
withhold from the consideration otherwise payable under this Agreement to any holder of
Company Shares or holder of Company Shares Options or Company Share-Based Awards such
amounts as are required to be withheld or deducted under the Code or any provision of U.S.
state or local or foreign Tax Law with respect to the making of such payment. Amounts so
withheld or deducted and paid over to the applicable Governmental Entity (as hereinafter
defined) will be treated for all purposes of this Agreement as having been paid to the
person in respect of which such deduction and withholding were made.
(c) Closing of Transfer Books. At the Effective Time, the share transfer books of the
Company will be closed, and there will be no further registration of transfers on the share
transfer books of the Company or the Surviving Corporation of the Company Shares that were
outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates or
Book-Entry Shares are presented to the Surviving Corporation for transfer, they will be cancelled
and exchanged for the relevant Merger Consideration pursuant to this Article II.
(d) Termination of Exchange Fund. Any portion of the Exchange Fund (including the
proceeds of any investments thereof) that remains undistributed to the former holders of Company
Shares on the first anniversary of the Effective Time will be delivered to the Surviving
Corporation upon demand, and any former holders of Company Shares who have not surrendered their
Shares in accordance with this Section 2.2 will thereafter look only to the Surviving
Corporation for payment of their claim for the Merger Consideration, without interest thereon, upon
due surrender of their Company Shares.
(e) No Liability. Notwithstanding anything in this Agreement to the contrary, none of
the Company, Parent, the Surviving Corporation, the Paying Agent or any other person will be liable
to any former holder of Company Shares for any amount properly delivered to a public official
pursuant to any applicable abandoned property, escheat or similar Law.
(f) Investment of Exchange Fund. The Paying Agent shall invest all cash included in
the Exchange Fund as reasonably directed by Parent; provided, however, that any
investment of such cash must be limited to obligations of, or obligations fully guaranteed as to
principal and interest by, the U.S. federal government or an agency or instrumentality thereof,
commercial paper obligations rated A1 or P1 or better by Xxxxx’x Investors Service, Inc. or
Standard & Poor’s Corporation, respectively, or certificates of deposit, bank repurchase agreements
or banker’s acceptances of commercial banks with capital exceeding $5.0 billion (based on the most
recent financial statements of such bank that are then publicly available). Any interest and other
income resulting from such investments will be paid to the Surviving Corporation pursuant to
Section 2.2(d).
(g) Lost Certificates. If any Certificate has been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen
or destroyed and, if required by the Paying Agent or reasonably requested by the Surviving
Corporation, the posting by such person of a bond in a customary amount as indemnity and/or the
providing of an indemnity, for the benefit of or to, as applicable, the Surviving
7
Corporation in a manner reasonably satisfactory to the Surviving Corporation against any claim
that may be made against it with respect to such Certificate (and such affidavit of loss shall not
be deemed effective without the posting of such bond and/or other indemnity if required hereunder),
the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate a check in
the amount of the number of Company Shares represented by such lost, stolen or destroyed
Certificate multiplied by the Merger Consideration.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of the Company. Except as set forth in
the Filed SEC Documents (excluding disclosures in any such SEC Documents under the heading “Risk
Factors” or any disclaimers made in such SEC Documents as to the use of forward-looking or
predictive statements pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995) or in the applicable section or subsection of the disclosure letter delivered
by the Company to Parent prior to the execution of this Agreement (the “Company Disclosure Letter”)
(provided that a matter disclosed in the Company Disclosure Letter with respect to one
representation or warranty shall also be deemed to be disclosed with respect to each other
representation or warranty to the extent that it is reasonably apparent from the text of such
disclosure that such disclosure applies to or qualifies such other representation or warranty), the
Company hereby represents and warrants to Parent and Merger Sub as follows:
(a) Organization and Standing. The Company is a corporation validly existing and in
good standing under the Laws of the State of Ohio and has the requisite corporate authority to
carry on its business as now being conducted. The Company is duly qualified or licensed to do
business in each jurisdiction in which the nature of its business or the ownership, leasing or
operation of its properties makes such qualification or licensing necessary, except for those
jurisdictions where the failure to be so qualified or licensed, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect. The Company has made
available to Parent prior to the execution of this Agreement complete and correct copies of the
Restated Articles of Incorporation of the Company (the “Company Articles”) and the Code of
Regulations of the Company, as amended to date (the “Company Code of Regulations”).
(b) Capital Structure. The authorized capital shares of the Company consist entirely
of (i) 80,000,000 Common Shares and (ii) 9,000,000 Class B Common Shares. At the close of business
on September 28, 2010: (i) 15,021,920 Common Shares and 2,150,502 Class B Common Shares were issued
and outstanding; (ii) 1,380,297 Common Shares and no Class B Common Shares were held by the Company
in its treasury; (iii) 2,529,276 Common Shares were subject to issued and outstanding options to
purchase Common Shares granted under the Company Shares Plans, (iv) Company Share-Based Awards
equivalent to 467,238 Common Shares have been granted (including restricted share units equivalent
to 217,775 Common Shares and performance award units with aggregate initial award values equivalent
to 249,463 Common Shares), and (v) no Common Shares were held by any Company Subsidiary. Since such
date, no additional Common Shares have been issued except for exercises of Company Shares Options
and stock issuances pursuant to Company Share-Based Awards, in each case, in accordance with
8
their terms and as specifically described in Section 3.1(b) of the Company Disclosure
Letter. All outstanding Company Shares are, and all Company Shares that may be issued after the
date hereof will be, when issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to or issued in violation of any preemptive rights or other similar rights and were not
(or in the case of Common Shares that have not yet been issued, will not be) issued in violation of
the Company Articles and the Company Code of Regulations. Except as otherwise provided in this
Section 3.1(b) and except for Common Shares issuable upon the conversion of Class B Common
Shares, there are not as of the date hereof issued, reserved for issuance or outstanding (i) any
capital shares or other voting securities of the Company, (ii) any securities convertible into or
exchangeable or exercisable for capital shares or voting securities of the Company or any Company
Subsidiary, (iii) any warrants, calls, options or other rights to acquire from the Company or any
Company Subsidiary any capital shares, voting securities or securities convertible into or
exchangeable or exercisable for capital shares or voting securities of the Company or any Company
Subsidiary or (iv) restricted shares, restricted share units, stock appreciation rights,
performance shares, contingent value rights, “phantom” stock or similar securities or rights that
are derivative of, or provide economic benefits based, directly or indirectly, on the value or
price of, any capital stock of, or other equity interests in, the Company or any Company
Subsidiary. Except as otherwise provided in this Section 3.1(b) and except for Common
Shares issuable upon the conversion of Class B Common Shares, Common Shares issuable pursuant to
the Company’s 1996 Outside Directors Deferred Stock Plan, the Common Shares issuable pursuant to
Company Share Plans set forth in Section 3.1(b) of the Company Disclosure Letter and
obligations to repurchase securities pursuant to agreements entered into with respect to the
Company Share Plans, there are no outstanding obligations of the Company or any Company Subsidiary
to (i) issue, deliver or sell, or cause to be issued, delivered or sold, any capital shares, voting
securities or securities convertible into or exchangeable or exercisable for capital shares or
voting securities of the Company or any Company Subsidiary, or (ii) repurchase, redeem or otherwise
acquire any such securities. Except for the Voting Agreement, neither the Company nor any Company
Subsidiary is a party to (i) any voting agreement or trust with respect to the voting of any such
securities, or (ii) any other agreements or understandings with respect to the voting of the
capital stock of the Company. Section 3.1(b) of the Company Disclosure Letter sets forth
(i) the number of Company Shares subject to each Company Shares Option and Company Share-Based
Award, (ii) the expiration date of each such Company Shares Option and Company Share-Based Award,
and (iii) the price at which each such Company Shares Option may be exercised. There are no bonds,
debentures, notes or other Indebtedness having voting rights (or convertible into securities having
such rights) of the Company or any Company Subsidiary, whether issued by the Company or any Company
Subsidiary, issued and outstanding.
(c) Authority. The Company has all requisite corporate power and authority to enter
into this Agreement, to perform its obligations hereunder and, subject to receipt of the Company
Shareholder Approval, to consummate the transactions contemplated by this Agreement. The execution
and delivery of this Agreement by the Company, the performance of its obligations hereunder 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 and no other corporate proceedings on the
part of the Company or any Company Subsidiary are necessary to authorize the adoption, execution or
performance of this Agreement or to consummate the transactions contemplated hereby, subject, in
the case of the Merger, to
9
receipt of the Company Shareholder Approval. This Agreement has been duly executed and
delivered by the Company and, assuming the due authorization, execution and delivery hereof by
Parent and Merger Sub, constitutes the valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as the enforcement thereof may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting the
rights of creditors generally and subject to general equity principles.
(d) Non-Contravention. The execution and delivery of this Agreement by the Company,
the performance by the Company of its covenants and obligations hereunder and the consummation of
the Merger do not and will not (i) violate or conflict with any provision of the Company Articles
or the Company Code of Regulations, (ii) conflict with, or result in the breach of or constitute a
default (or an event which with notice or lapse of time or both would become a default) under, or
result in the termination of, or accelerate the performance required by, or result in a right of
termination or acceleration under, any Company Material Contract, (iii) subject to obtaining or
making the authorizations, consents or approvals referred to in Section 3.1(e) and, in the
case of the consummation of the Merger, subject to obtaining the Company Shareholder Approval,
violate or conflict with any Law or order applicable to the Company or any of the Company
Subsidiaries or by which any of their respective properties or assets are bound, or (iv) result in
the creation of any Lien upon any of the properties or assets of the Company or any of the Company
Subsidiaries, except in the case of each of clauses (ii), (iii) and (iv) above, for such
violations, conflicts, defaults, terminations, accelerations or Liens which would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(e) Required Government Approvals. No consent, approval or authorization of, or
filing with, any federal, state or local or foreign government, any court, administrative,
regulatory or other governmental agency, commission or authority or any non-governmental United
States or foreign self-regulatory agency, commission or authority (each, a “Governmental Entity”)
is required by the Company in connection with the execution and delivery of this Agreement by the
Company, the performance by the Company of its obligations hereunder or the consummation by the
Company of the transactions contemplated hereby, except for: (i) the filing with the Securities and
Exchange Commission (the “SEC”) of (A) the Proxy Statement (as hereinafter defined) and (B) such
reports under Section 13(a), 13(d), 15(d) or 16(a) or such other applicable sections of the
Securities Exchange Act of 1934 (the “Exchange Act”), as may be required in connection with this
Agreement and the transactions contemplated hereby, (ii) the filing with the Ohio Secretary of
State of the Certificate of Merger, (iii) the filing of a premerger notification and report form by
the Company under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 (the “HSR Act”) and any
applicable foreign antitrust filings, (iv) notifications to the New York Stock Exchange (the
“NYSE”), and (v) such consents, approvals or authorizations or filings the failure of which to be
made or obtained would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
(f) Company Recommendation. As of the date hereof, at a meeting duly called and held,
the Board of Directors of the Company has unanimously (i) determined and declared that this
Agreement and the Merger are advisable and in the best interests of the Company’s shareholders,
(ii) approved the Merger in accordance with the OGCL, (iii) approved
10
this Agreement and the transactions contemplated hereby, and (iv) resolved (subject to
Section 4.2) to recommend that the Company’s shareholders vote to adopt this Agreement (the
“Company Recommendation”).
(g) SEC Documents and Financial Statements.
(i) The Company has filed or furnished (as applicable) all forms, documents, reports,
statements and certifications, together with any amendments required to be made with
respect thereto, required to be filed or furnished by it with the SEC since September 30,
2009 (as amended through the date hereof, the “SEC Documents”). As of their respective
dates, or, if amended prior to the date hereof, as of the date of the last such amendment
prior to the date hereof, the SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933 (the “Securities Act”) and the Exchange Act, as
the case may be, and the applicable rules and regulations promulgated thereunder, and none
of the SEC Documents contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. As of
the date of this Agreement, there are no outstanding or unresolved comments in comment
letters received from the staff of the SEC.
(ii) The consolidated financial statements (including all related notes and schedules
thereto) of the Company included in the SEC Documents (i) fairly present in all material
respects the consolidated financial position of the Company and the Company Subsidiaries,
as of the respective dates thereof, and the consolidated results of their operations and
their consolidated cash flows and their consolidated changes in shareholders’ equity for
the respective periods indicated (subject, in the case of the unaudited statements, to
normal and recurring non-material year-end audit adjustments and to any other adjustments
described therein, including the notes thereto) and (ii) have been prepared in accordance
with United States generally accepted accounting principles (“GAAP”) (except, in the case
of the unaudited statements, as permitted by the SEC) applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto). Since September
30, 2009, there has been no material change in the Company’s accounting methods or
principles that would be required to be disclosed in the Company’s financial statements in
accordance with GAAP, except as described in the notes to such financial statements. The
Company (i) has implemented and maintains disclosure controls and procedures (as defined in
Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to the
Company, including the Company Subsidiaries, is made known to the chief executive officer
and the chief financial officer of the Company by others within those entities and (ii) has
established and maintains internal controls over financial reporting (as defined in Rule
13a-15(f) of the Exchange Act) to ensure the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with GAAP,
including without limitation such policies and procedures specified in Rule
14a-15(f)(1)-(3) of the Exchange Act. As of the date hereof, the Company has not
identified any existing material weaknesses in the design or operation of the internal
control over financial reporting.
11
(iii) Since September 30, 2009, neither the Company nor, to the knowledge of the
Company, any Company Subsidiary or director, officer or auditor of the Company has received
or otherwise had or obtained knowledge of any material complaint, allegation, assertion or
claim, whether written or oral, regarding the accounting or auditing practices, procedures,
methodologies or methods of the Company or any Company Subsidiary or their respective
internal accounting controls, including any complaint, allegation, assertion or claim that
the Company or any Company Subsidiary has engaged in questionable accounting or auditing
practices.
(h) No Undisclosed Liabilities. The Company and the Company Subsidiaries have no
liabilities that would be required by GAAP to be reflected on a consolidated balance sheet (or in
the notes thereto) of the Company and the Company Subsidiaries, other than (a) liabilities
reflected or otherwise reserved against in the consolidated financial statements of the Company and
the Company Subsidiaries included in the SEC Documents, (b) liabilities arising under this
Agreement or incurred in connection with the transactions contemplated by this Agreement,
(c) liabilities incurred since the date of the consolidated financial statements of the Company and
the Company Subsidiaries included in the SEC Documents in the ordinary course of business
consistent with past practice and (d) liabilities that would not have, individually or in the
aggregate, a Company Material Adverse Effect.
(i) Subsidiaries.
(i) Section 3.1(i) of the Company Disclosure Letter contains a complete and
accurate list of the name, jurisdiction of organization and schedule of shareholders of
each subsidiary of the Company, whether consolidated or unconsolidated (each a “Company
Subsidiary,” and collectively, the “Company Subsidiaries”). Each Company Subsidiary is
validly existing and in good standing (to the extent the concept of “good standing” is
applicable) under the Laws of the jurisdiction of its organization. Each Company
Subsidiary has the requisite corporate, limited liability company, partnership or other
similar power and authority to carry on its business as now being conducted. Each Company
Subsidiary is duly qualified or licensed to do business in each jurisdiction in which the
nature of its business or the ownership, leasing or operation of its properties makes such
qualification or licensing necessary, except for those jurisdictions where the failure to
be so qualified or licensed would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect. None of the Company Subsidiaries is in
violation of its charter, bylaws or other constituent documents except to the extent that
such violation would not reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect.
(ii) All of the outstanding capital stock of, or other equity interests in, each
Company Subsidiary (i) have been duly authorized, validly issued and are fully paid and
nonassessable and not subject to or issued in violation of preemptive rights or other
similar rights, (ii) are owned, directly or indirectly, by the Company, free and clear of
all Liens, and (iii) are free of any other restriction (including any restriction on the
right to vote, sell or otherwise dispose of such capital stock or other ownership
interests) that would restrict or limit the operation by the Surviving Corporation of such
Company Subsidiary’s business as currently conducted.
12
(iii) Except for the capital stock and other equity interests of the Company
Subsidiaries set forth on Section 3.1(i) of the Company Disclosure Letter, the
Company does not own, directly or indirectly, more than five percent (5%) of any capital
stock or other equity securities or interests in any person, or any securities convertible
into or exchangeable or exercisable for capital shares or voting securities of any person.
(j) Absence of Certain Changes or Events. Except for liabilities incurred in
connection with this Agreement and the transactions contemplated hereby, since June 30, 2010,
(i) the Company and the Company Subsidiaries have conducted their operations in all material
respects only in the ordinary course consistent with past practice, (ii) there has not been any
event, circumstance, change, occurrence or state of facts that would reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect and (iii) there has not
been any action taken by the Company or Company Subsidiaries during the period from June 30, 2010
through the date of this Agreement that, if taken on or after the date of this Agreement without
Parent’s consent, would violate the provisions of Section 4.1(a)(ix), (xi) and (xiv).
(k) Compliance with Applicable Laws; Litigation.
(i) The Company and the Company Subsidiaries have been, since September 30, 2009, and
are in compliance with all Laws applicable to the Company and the Company Subsidiaries and
have not received any written notice of non-compliance with respect to any Law, except to
the extent that any non-compliance would not reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect. Since September 30, 2009, neither the
Company nor any Company Subsidiary has conducted any internal investigation with respect to
any actual, potential or alleged material violation of any Law or Company or Company
Subsidiary policy by any director, officer or employee. To the knowledge of the Company,
neither the Company nor any Company Subsidiary (nor any of their respective directors,
officers, employees, agents, representatives or distributors with respect to the Company or
a Company Subsidiary) has been since September 30, 2009 or is the subject of any material
investigation by any Governmental Entity.
(ii) Except as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, none of the Company, any Company Subsidiary
or any of their respective predecessors, nor any director, officer, agent or employee of
the Company or any Company Subsidiary, nor, to the knowledge of the Company, consultants,
agents, representatives or any other person associated with or acting on their behalf, have
directly or indirectly, (A) made, promised, offered, or authorized (1) any unlawful
contributions, gifts, entertainment or other unlawful expenses related to political
activity, directly or indirectly, to any government official, employee or agent, political
party or any official of such party, or political candidate, or (2) any unlawful bribe,
rebate, influence payment, kickback or similar unlawful payment, or (B) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended, or any rules or
regulations thereunder or any similar anti-corruption or anti-bribery Laws applicable to
the Company or any of the Company Subsidiaries in any jurisdiction outside the United
States.
13
(iii) The Company and the Company Subsidiaries hold all licenses, permits, variances,
consents, authorizations, waivers, grants, franchises, concessions, exemptions, orders,
registrations and approvals of Governmental Entities (“Permits”) necessary for the conduct
of their businesses as currently conducted, except for any failure to hold such Permits
that would not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. To the knowledge of the Company, neither the Company nor any
Company Subsidiary has received written notice that any Permit will be terminated or
modified or cannot be renewed in the ordinary course of business, except for any
terminations, modifications or nonrenewals that would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. The execution,
delivery and performance of this Agreement and the consummation of the Merger do not and
will not violate any Permit, or result in any termination, modification or nonrenewal
thereof, except for such violations, terminations, modifications or nonrenewals thereof
that would not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(iv) As of the date of this Agreement, there is no suit, action or proceeding by or
before any Governmental Entity pending or, to the knowledge of the Company, threatened
against the Company challenging or seeking to prohibit the execution, delivery or
performance of this Agreement or any of the transactions contemplated hereby. As of the
date of this Agreement, there is no other suit, action, arbitration, alternative dispute
resolution action, proceeding or, to the Company’s knowledge, investigation by a
Governmental Entity (whether civil, criminal or administrative), involving an amount in
excess of $250,000 or which is otherwise material to the Company, pending or, to the
knowledge of the Company, threatened against the Company or any Company Subsidiary or any
of their properties or assets (or to the Company’s knowledge, any director or officer of
the Company or any of the Company Subsidiaries in such capacity as director or officer).
Neither the Company nor any of the Company Subsidiaries nor any of their respective
properties or assets is subject to any outstanding orders, writs, injunctions or decrees
that would reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
Notwithstanding anything to the contrary in this Section 3.1(k), no
representation or warranty is made in this Section 3.1(k) in respect of the matters
referenced in Section 3.1(g) or in respect of environmental, Tax, employee benefits
or employee relations matters.
(l) Employee Benefit Plans.
(i) Section 3.1(l) of the Company Disclosure Letter sets forth a true and
complete list that identifies (A) each material stock bonus, pension, profit-sharing, stock
ownership, stock purchase, retirement income, or similar employee pension benefit plan
(within the meaning of section 3(2) of the Employee Retirement Income Security Act
(“ERISA”)), which the Company or an ERISA Affiliate sponsors or maintains for the benefit of
current or former employees or to which the Company or such ERISA Affiliate has a funding
obligation (each, a “Company Pension Plan” and collectively, the “Company Pension Plans”);
(B) each material disability income, death benefit,
14
hospitalization, medical insurance, life insurance, vacation, severance, or similar
welfare plan, fund, policy or program (within the meaning of section 3(1) of ERISA), which
the Company or an ERISA Affiliate sponsors or maintains for the benefit of current or former
employees, or to which the Company or such ERISA Affiliate has a funding obligation (each, a
“Company Welfare Plan” and collectively, the “Company Welfare Plans”); (C) each material
deferred compensation, incentive compensation, stock option, equity compensation, or similar
plan, program or policy which the Company or an ERISA Affiliate maintains for the benefit of
any current or former employee or director of the Company or any ERISA Affiliate, under
which the Company or such ERISA Affiliate has a financial obligation (each, a “Company
Incentive Compensation Plan” and collectively, the “Company Incentive Compensation Plans”);
and (D) each change in control agreement, employment agreement, or separation agreement in
effect as of the date of this Agreement with any current or former employee or director of
the Company or any ERISA Affiliate to which the Company or such ERISA Affiliate is a party
or to which the Company or such ERISA Affiliate is bound (each, a “Company Executive
Compensation Agreement” and collectively, the “Company Executive Compensation Agreements”).
(ii) Except as would not have, individually or in the aggregate, a Company Material
Adverse Effect, neither the Company nor any ERISA Affiliate has any liability (including any
contingent liability) with respect to any Company Pension Plan, Company Welfare Plan,
Company Incentive Compensation Plan or Company Executive Compensation Agreement that is not
reflected or otherwise reserved against in the consolidated financial statements of the
Company and the Company Subsidiaries included in the SEC Documents.
(iii) (A) Except as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, each of the Company Pension Plans and Company
Welfare Plans which is subject to ERISA and is currently in effect is being operated and
administered in compliance with ERISA, the Code, and all other applicable Laws (including
those related to governmental reporting and disclosure); (B) each of the Company Pension
Plans intended to be “tax-qualified” within the meaning of Section 401(a) of the Code is so
qualified, and, to the knowledge of the Company, there are no existing circumstances or
events that reasonably could be expected to adversely affect the tax-qualified status of
such Plan, other than non-material administrative errors capable of being resolved under the
Employee Plans Compliance Resolution System maintained by the Internal Revenue Service; (C)
to the knowledge of the Company, neither the Company nor any ERISA Affiliate has any direct
or indirect civil or other material liability to any Company Pension Plan or Company Welfare
Plan capable of being pursued or recovered under Section 409 of ERISA; (D) to the knowledge
of the Company, neither the Company nor any ERISA Affiliate has directly or indirectly
engaged in, or has been party to, any transaction which could reasonably subject the Company
or such ERISA Affiliate to either a material civil penalty capable of assessment under
Sections 502(i) or 502(l) of ERISA or a material Tax imposed under Section 4975 or 4976 of
the Code; and (E) there are no pending or, to the knowledge of the Company, threatened
claims (other than routine claims for benefits or payments, including claims made in respect
of a complete or partial denial of benefits or payments)
15
involving any Company Pension Plan, any Company Welfare Plan, any Company Incentive
Compensation Plan, or any Company Executive Compensation Agreement, which could reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(iv) Neither the execution and delivery of this Agreement nor the consummation of the
transaction(s) contemplated hereby (either alone or in conjunction with any other events)
will (A) materially increase any benefits otherwise payable under any Company Pension Plan
or Company Welfare Plan or result in any acceleration of the time of payment or vesting of
any material amount of benefits under any such plan (except as specifically contemplated
herein), or (B) require the pre-funding of any material benefits or other payments (other
than in the normal course) under any Company Pension Plan, Company Welfare Plan, Company
Incentive Compensation Plan, or Company Executive Compensation Agreement.
(v) No representation or warranty is made by the Company in respect of any Company- or
ERISA Affiliate-related employee benefit plan matters, or any executive compensation
matters, in any Section of this Agreement other than this Section 3.1(l).
(m) Taxes.
(i) Except as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, (a) the Company and the Company Subsidiaries
have filed all Tax Returns required to be filed, and all such returns are correct and
complete; (b) the Company and the Company Subsidiaries have paid all Taxes shown due on any
Tax Return; (c) there are no pending or, to the knowledge of the Company, threatened in
writing audits, examinations, or other proceedings in respect of Taxes relating to the
Company or any Company Subsidiary; and (d) neither the Company nor any Company Subsidiary
has any liability for Taxes of any person (other than the Company and the Company
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any comparable provision of
Law), as a transferee or successor, by contract, or otherwise.
(ii) Neither the Company nor any Company Subsidiary is a party to any agreement or
arrangement relating to the allocation, sharing or indemnification of Taxes.
(iii) Neither the Company nor any Company Subsidiary has waived any statute of
limitations in respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(iv) Except as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, the Company and each Company Subsidiary have
withheld and remitted to the appropriate taxing authority all Taxes required to have been
withheld and remitted in connection with any amounts paid
16
or owing to any employee, independent contractor, creditor, shareholder, or other third
party.
(v) Neither the Company nor any Company Subsidiary has distributed the stock of another
person or has had its stock distributed by another person, in a transaction that was
purported or intended to be governed in whole or in part by Section 355 of the Code.
(vi) Neither the Company nor any Company Subsidiary has participated in any “reportable
transaction” as defined in Section 6707A(c)(i) and Reg. §1.6011-4(b).
(vii) Neither the Company nor any Company Subsidiary has been a United States real
property holding corporation within the meaning of Code §897(c)(2) during the applicable
period specified in Code §897(c)(1)(A)(ii).
(viii) No representation or warranty is made by the Company in respect of Tax matters
in any Section of this Agreement other than this Section 3.1(m).
(n) Environmental Matters.
(i) Except to the extent that noncompliance would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, the Company and the
Company Subsidiaries are and have been for the three years ending on the date hereof in
compliance with all applicable Environmental, Health and Safety Laws and Environmental
Permits.
(ii) Neither the Company nor any Company Subsidiary has received in the last three
years any written material Environmental, Health and Safety Claims and, to the knowledge of
the Company, there are no material Environmental, Health and Safety Claims threatened,
against the Company or any Company Subsidiary.
(iii) No Hazardous Substance has been generated, treated, stored, disposed of, used,
handled or manufactured at currently or previously owned, leased or operated properties in
violation of applicable Environmental, Health and Safety Laws or Environmental Permits as a
result of any activity of the Company or any Company Subsidiary during the time such
properties were owned, leased or operated by the Company or any Company Subsidiary that
would reasonably be expected to have, individually or in the aggregate, a Company Material
Adverse Effect.
(iv) There have been no Releases of any Hazardous Substance by the Company or any
Company Subsidiary in, on, under, from or affecting any currently or previously owned,
leased or operated properties in violation of applicable Environmental, Health and Safety
Laws that would reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
(v) Except as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, neither the Company nor any
17
Company Subsidiary has received from any Governmental Entity any written notice that it
may be a potentially responsible party in respect of, or may otherwise bear liability for,
any actual or threatened Release of any Hazardous Substance at any site or facility that is
listed on the National Priorities List, the Comprehensive Environmental Response,
Compensation and Liability Information System, the National Corrective Action Priority
System or any similar or analogous federal, state or local list.
(vi) No representation or warranty is made by the Company in respect of environmental
matters in any Section of this Agreement other than this Section 3.1(n).
(o) Real Property.
(i) Except as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, the Company or a Company Subsidiary has good
and marketable title to each parcel of, or interest in, real property owned by the Company
or a Company Subsidiary (the “Company Owned Real Property”).
(ii) Except as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, the Company Owned Real Property and all real
property leased by the Company and the Company Subsidiaries (the “Company Leased Real
Property”), a complete and accurate list of which has been disclosed in Section
3.1(o) of the Company Disclosure Letter, constitute all of the real property occupied
or used by the Company and the Company Subsidiaries in connection with the operation of
their respective businesses as currently conducted. Except as would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect, the
Company or a Company Subsidiary has a valid leasehold interest in all Company Leased Real
Property other than the Santa Xxxx Property. Each of the Company and the Company
Subsidiaries has complied in all material respects with the terms of all material leases of
the Company Leased Real Property (the “Company Leases”) to which it is a party and under
which it is in occupancy, and all such Company Leases are in full force and effect;
provided, however, that no representation or warranty is made with respect to the
lease for the Santa Xxxx Property. To the knowledge of the Company, the lessors under the
Company Leases have complied in all material respects with the terms of the Company Leases.
Each of the Company and the Company Entities enjoys peaceful and undisturbed possession
under all such Company Leases (other than the lease for the Santa Xxxx Property), except to
the extent that a failure to do so would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
(p) Intellectual Property.
(i) Except as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, there are no legal disputes, claims, actions
or proceedings, pending or, to the knowledge of the Company, threatened (i) alleging
infringement of any Intellectual Property Rights of any third party by the Company or any of
the Company Subsidiaries, or (ii) challenging the ownership or use of
18
the Company IP. To the knowledge of the Company, none of the Company IP infringes any
Intellectual Property Rights of any person, except as would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect. To the knowledge
of the Company, no third parties are infringing any Company IP, except as would not
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse
Effect. Except as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, neither the Company nor any of the Company
Subsidiaries has made any claims alleging that any third party is infringing any Company IP.
(ii) To the knowledge of the Company, the Company or one of the Company Subsidiaries
owns the right, title and interest in and to, free and clear of any Liens, or has the right
or license to use, all Intellectual Property Rights used in or necessary for the conduct of
the business of the Company and the Company Subsidiaries as currently conducted, except as
would not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. Except pursuant to the first sale doctrine or a license agreement,
reseller agreement or distributor agreement entered into in the ordinary course of business
with a third party, no person, other than the Company and the Company Subsidiaries,
possesses any current or contingent rights to license, sell or otherwise distribute the
Company Software Products to any third party.
(iii) Section 3.1(p) of the Company Disclosure Letter contains a true and
complete list of all Registered IP. Except as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, all fees that are or
have become due with respect to such Registered IP on or before the Closing have been or
will be timely paid prior to Closing. The Company and the Company Subsidiaries have taken
all actions reasonably necessary to maintain the applications and registrations of
Registered IP, including payment of applicable maintenance fees, filing of applicable
statements of use, timely response to office actions and disclosure of any required
information, and all assignments (and licenses where required) of the Registered IP have
been duly recorded with the appropriate Governmental Entities. None of the Registered IP
has been adjudged invalid or unenforceable in whole or part.
(iv) Section 3.1(p) of the Company Disclosure Letter contains a true and
complete list of all material licenses and other agreements pursuant to which (i) the
Company or any Company Subsidiary is granted rights in any third-party Intellectual Property
Rights (excluding any generally available, off-the-shelf, click wrap, shrink wrap,
non-custom or open source software programs licensed by the Company or any of the Company
Subsidiaries) that are (A) sold, bundled or distributed with, or embedded, integrated or
incorporated into, the Company Software Products, (B) used in the development of any Company
Software Product, or (C) used or held for use by the Company or any of the Company
Subsidiaries for any other purpose, including for the internal operations of the Company’s
or any of the Subsidiaries’ respective businesses (collectively, all licenses and
agreements listed in Section 3.1(p)(iv)(i) of the Company Disclosure Letter, the
“Company Inbound Agreements”), or (ii) the Company or any of the Company Subsidiaries has
granted to any person (A) any licenses or rights under any Company IP (other than licenses
granted in the ordinary course of business to customers),
19
(B) any rights to resell or otherwise distribute the Company Software Products
(collectively, all licenses and agreements listed in Section 3.1(p)(iv)(ii) of the
Company Disclosure Letter, the “Company Outbound Agreements”).
(v) Neither the Company nor any of the Company Subsidiaries has disclosed, delivered or
otherwise provided the source code of any Company Software Product or any material part
thereof to a third party pursuant to an escrow arrangement or otherwise. The Company or
one of the Company Subsidiaries, as applicable, is in the possession of the source code and
object code for all of the Company Software Products.
(vi) The Company and the Company Subsidiaries have taken commercially reasonable steps
to protect and preserve their rights in and the confidentiality of the Company IP and to
protect and preserve any material information provided to them by any other person under
obligation of confidentiality. To the knowledge of the Company, the Company and the Company
Subsidiaries have not made any of their material trade secrets or other material
confidential information available to any other person except pursuant to written
agreements, and in the case of the source code to Company Software Products solely pursuant
to a written agreement set forth in Section 3.1(p) of the Company Disclosure Letter,
or other legally binding obligations, requiring such person to maintain the confidentiality
of such information or materials.
(vii) Neither the Company nor any of the Company Subsidiaries has granted any currently
effective exclusive license with respect to, any Company IP, including any Company Software
Products, to any other person.
(q) Labor Agreements and Employee Issues.
(i) Neither the Company nor any Company Subsidiary is a party to, or bound by, any
collective bargaining agreement, contract or other agreement or understanding with, or is
represented by, a labor union or labor organization. Neither the Company nor any Company
Subsidiary (a) is or has been within the last two years subject to a dispute, slowdown,
lockout, strike or work stoppage, and to the knowledge of the Company no such dispute,
slowdown, lockout, strike or work stoppage has been threatened or (b) has committed any
unfair labor practice as defined in the National Labor Relations Act or other applicable
Laws (including any other comparable foreign or domestic authority or workers’ council),
except as would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. To the knowledge of the Company, there are no
organizational efforts (including, without limitation, demands for recognition or
certification) with respect to the formation of a collective bargaining unit presently
being made or threatened involving employees of the Company or any Company Subsidiary.
Neither the Company nor any Company Subsidiary has received notice of (a) any unfair labor
practice charge or complaint pending or threatened before the National Labor Relations
Board or any other Governmental Entity against it, or (b) any charge or complaint with
respect to or relating to it pending before the Equal Employment Opportunity Commission or
any other Governmental Entity responsible for the prevention of unlawful employment
practices,
20
except as would not reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect.
(r) Certain Contracts. Section 3.1(r) of the Company Disclosure Letter sets
forth a true and correct list of each contract, arrangement, lease, license, commitment or
understanding to which the Company or a Company Subsidiary is a party to or is bound (i) that is a
“material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC); (ii)
that contains covenants that limit or restrict the ability of the Company or any Company Subsidiary
(or which, following the consummation of the Merger, could restrict the ability of the Surviving
Corporation or any of its affiliates) to (A) engage in any type of business, (B) compete in any
business or with any person or in any geographic area or distribution or sales channel, or (C)
solicit customers or sell, supply or distribute any service or product; (iii) that would prohibit
or materially delay the consummation of the Merger or any of the transactions contemplated by this
Agreement; (iv) that relates to the incurring of indebtedness for borrowed money by the Company or
any of the Company Subsidiaries in excess of $1,000,000; (v) that provides for any payments that
are conditioned, in whole or in part, on a change of control of the Company or any Company
Subsidiary; (vi) that is material to the Company or any of the Company Subsidiaries, taken as a
whole, pertaining to Intellectual Property Rights (excluding any generally available,
off-the-shelf, click wrap, shrink wrap, non-custom or open source software programs licensed by the
Company or any of the Company Subsidiaries); (vii) entered into since September 30, 2008 with
respect to the acquisition or divestiture of all or any portion of a business or (viii) that was
not entered into in the ordinary course of business and involves or would reasonably be expected to
involve payments by or to the Company or any of the Company Subsidiaries in excess of $250,000
annually or $500,000 in the aggregate over the term of the contract and that is not terminable
within thirty (30) days of the Effective Time without payment by the Company or the Company
Subsidiaries (the agreements, contracts and obligations set forth in the exhibit index of the
Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2009 and the
agreements, contracts and obligations listed in clauses (i) through (viii) being referred to herein
as “Company Material Contract”). Each Company Material Contract is valid and binding on the
Company and any Company Subsidiary that is a party thereto and, to the knowledge of the Company,
each other party thereto and is in full force and effect. There is no default under any Company
Material Contract by the Company or any Company Subsidiary or, to the knowledge of the Company, by
any other party, and no event has occurred that with the lapse of time or the giving of notice or
both would constitute a default thereunder by the Company or any Company Subsidiary, or, to the
knowledge of the Company, by any other party, in each case except as would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect. True,
correct and complete copies of each Company Material Contract have been made available to Parent.
(s) Insurance. Each of the Company and the Company Subsidiaries maintains insurance
policies in such forms and amounts and against such losses and risks as are consistent with
industry practice in the industry within which they operate and that are believed to be adequate to
protect the properties and businesses of the Company and the Company Subsidiaries. Renewals of
insurance policies to be effective October 1, 2010 include terms and conditions that are no less
favorable to the Company in the aggregate than in effect as of such date.
21
(t) Interested Party Transactions. No event, transaction, agreement, arrangement or
understanding has occurred or been entered into since September 30, 2009 that would be required to
be reported by the Company pursuant to Item 404(a) of Regulation S-K promulgated by the SEC under
the Securities Act.
(u) Voting Requirement. The affirmative vote at the Company Meeting of at least a
majority of the votes entitled to be cast by the holders of outstanding Company Shares to approve
this Agreement is the only vote of the holders of any class or series of the Company’s capital
shares necessary to adopt and approve this Agreement and the Merger and the transactions
contemplated hereby (collectively, the “Company Shareholder Approval”).
(v) Proxy Statement; Other Information. None of the information provided by or on
behalf of the Company specifically for inclusion in the Proxy Statement or any other document to be
filed with the SEC or any other Governmental Entity in connection with the transactions
contemplated by this Agreement will (i) at the time of the mailing of the Proxy Statement or any
amendment or supplement thereto, (ii) at the time of the Company Meeting or (iii) at the Effective
Time, 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. The Proxy Statement, as to information
supplied by the Company, will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder. The letter to shareholders, notice of
meeting, proxy statement (as amended or supplemented from time to time) and forms of proxy to be
filed with the SEC and distributed to shareholders in connection with the Merger are collectively
referred to herein as the “Proxy Statement.” Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to the information supplied by Parent or Merger Sub or any
of their respective representatives in writing specifically for inclusion in the Proxy Statement.
(w) Takeover Statutes. The Company has taken all appropriate actions to ensure that
no “fair price,” “business combination,” “moratorium,” “control share acquisition” or other
anti-takeover statute or similar statute or regulation enacted by any state applies to the Merger
or the other transactions contemplated by this Agreement or the Voting Agreement.
(x) Opinion of Financial Advisor. Xxxxxx, Xxxxxxxx & Company, Incorporated has
delivered to the Company’s Board of Directors its written opinion, dated the date hereof, to the
effect that, as of the date hereof and based upon and subject to the matters set forth therein, the
Merger Consideration to be received by holders of Company Shares in connection with the Merger
pursuant to the Merger Agreement is fair to such holders of Company Shares, from a financial point
of view. An executed copy of the opinion has been or will be promptly made available to Parent.
(y) Brokers. Except for Xxxxxx, Xxxxxxxx & Company, Incorporated, no broker,
investment banker, financial advisor or other person is entitled to any broker’s, finder’s,
financial advisor’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. The
Company has previously provided to Parent a copy of the engagement letter with Xxxxxx, Xxxxxxxx &
Company, Incorporated, as amended or modified, and any related agreements.
22
Section 3.2. Representations and Warranties of Parent and Merger Sub. Except as set
forth in the disclosure letter delivered by the Parent to the Company prior to the execution of
this Agreement (the “Parent Disclosure Letter”) (and provided that a matter disclosed in the Parent
Disclosure Letter with respect to one representation or warranty shall also be deemed to be
disclosed with respect to each other representation or warranty to the extent that it is reasonably
apparent from the text of such disclosure that such disclosure applies to or qualifies such other
representation or warranty), Parent and Merger Sub hereby, jointly and severally, represent and
warrant to the Company as follows:
(a) Organization and Standing. Each of Parent and Merger Sub is a legal entity
validly existing and in good standing under the Laws of its jurisdiction of organization and has
the requisite corporate or similar power and authority to carry on its business as now being
conducted. Parent has made available to the Company prior to the execution of this Agreement a
complete and correct copy of the certificate of incorporation and bylaws or other equivalent
organizational documents of Merger Sub, each as amended through the date hereof.
(b) Corporate Authority Relative to this Agreement; No Violation; Non-Contravention.
(i) Each of Parent and Merger Sub has all requisite corporate, limited liability
company, partnership or similar power and authority to enter into this Agreement, to
perform its obligations hereunder and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement, the performance of its
obligations hereunder and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate, limited liability company,
partnership or similar action by Parent and Merger Sub and by Parent, as the sole
stockholder of Merger Sub and no other corporate, limited liability company, partnership or
similar proceedings on the part of Parent or Merger Sub are necessary to authorize the
adoption, execution or performance of this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by Parent and
Merger Sub and, assuming the due authorization, execution and delivery hereof by the
Company, constitutes the valid and binding obligation of Parent and Merger Sub, enforceable
against Parent and Merger Sub in accordance with its terms, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar Laws affecting the rights of creditors generally and subject to general equity
principles.
(ii) No consent, approval or authorization of, or filing with, any Governmental Entity
is required by Parent or Merger Sub in connection with the execution and delivery of this
Agreement by Parent and Merger Sub, the performance by Parent and Merger Sub of their
obligations hereunder or the consummation by Parent and Merger Sub of the transactions
contemplated hereby, except for: (i) such reports under Section 13(a), 13(d), 15(d) or
16(a) or such other applicable sections of the Exchange Act, as may be required in
connection with this Agreement and the transactions contemplated hereby, (ii) the filing
with the Ohio Secretary of State of the Certificate of Merger, (iii) the filing of a
premerger notification and report form by Parent and Merger Sub under the HSR Act and any
applicable foreign antitrust filings, (iv) notifications to
23
the NYSE, and (v) such consents, approvals or authorizations the failure of which to
be made or obtained would not reasonably be expected to have, individually or in the
aggregate, a Parent Material Adverse Effect.
(iii) The execution and delivery of this Agreement by Parent and Merger Sub, the
performance by Parent and Merger Sub of their covenants and obligations hereunder and the
consummation of the transactions contemplated hereby do not and will not (i) violate or
conflict with any provision of the certificate of incorporation or bylaws or other
equivalent organizational document, in each case as amended, of Parent or Merger Sub, (ii)
conflict with, or result in the breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or result in the termination
of, or accelerate the performance required by, or result in a right of termination or
acceleration under, any loan, guarantee of indebtedness or credit agreement, note, bond,
mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise,
right or license binding upon Parent or Merger Sub, (iii) assuming compliance with the
matters referred to in Section 3.2(b)(ii), violate or conflict with any Law or
order applicable to Parent or Merger Sub or by which any of their respective properties or
assets are bound, or (iv) result in the creation of any Lien upon any of the properties or
assets of Parent or Merger Sub, except in the case of each of clauses (ii), (iii) and
(iv) above, for such violations, conflicts, defaults, terminations, accelerations or Liens
which would not reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect.
(c) Litigation. As of the date of this Agreement, there is no suit, action or
proceeding by or before any Governmental Entity pending or, to the knowledge of Parent, threatened,
against Parent or Merger Sub challenging or seeking to prohibit the execution, delivery or
performance of this Agreement or any of the transactions contemplated hereby. As of the date of
this Agreement, there is no other suit, action or proceeding by or before any Governmental Entity
pending or, to the knowledge of Parent, threatened, to which Parent or any of its subsidiaries is a
party or against any of their properties or assets that would reasonably be expected to have a
Parent Material Adverse Effect.
(d) Proxy Statement; Other Information. None of the information provided by Parent or
its subsidiaries to be included in the Proxy Statement will, at the time of the mailing of the
Proxy Statement or any amendment or supplement thereto, or at the time of the Company Meeting,
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. Notwithstanding the foregoing, Parent and Merger Sub
make no representation or warranty with respect to the information supplied by the Company or any
of the Company Representatives that is contained or incorporated by reference in the Proxy
Statement.
(e) Financial Condition. Parent and Merger Sub collectively have and will have at the
Effective Time cash and cash equivalents and/or available amounts under existing credit facilities,
that are sufficient to enable Parent and Merger Sub to consummate the Merger upon the terms
contemplated by this Agreement, and to make all payments contemplated by this Agreement in
connection with the Merger including (a) the Merger Consideration, the
24
consideration payable pursuant to Section 2.1(f) and all of Parent’s obligations under
this Agreement, (b) all fees and expenses related to the foregoing, and (c) to fund the ongoing
operations of the Company and the Company Subsidiaries.
(f) Capitalization of Merger Sub. As of the date of this Agreement, the authorized
capital stock of Merger Sub consists of 1,000 common shares, no par value per share, all of which
are validly issued and outstanding. All of the issued and outstanding capital shares of Merger Sub
are, and at the Effective Time will be, indirectly owned by Parent. Merger Sub has outstanding no
option, warrant, right, or any other agreement pursuant to which any person other than Parent may
acquire any equity security of Merger Sub. Merger Sub has not conducted any business prior to the
date hereof and has, and prior to the Effective Time will have, no assets, liabilities or
obligations of any nature other than those incident to its formation and pursuant to this Agreement
and the Merger and the other transactions contemplated by this Agreement, except as would not
reasonably be expected to have a material adverse effect on the ability of the Merger Sub to timely
consummate the transactions contemplated by this Agreement.
(g) No Vote of Parent Stockholders. No vote of the stockholders of Parent or the
holders of any other securities of Parent (equity or otherwise) is required by any applicable Law,
the certificate of incorporation or bylaws or other equivalent organizational documents of Parent,
in order for Parent and Merger Sub to consummate the transactions contemplated by this Agreement.
(h) Finders or Brokers. Neither Parent nor any of its affiliates has employed any
investment banker, broker or finder in connection with the transactions contemplated by this
Agreement who might be entitled to any fee or any commission in connection with or upon
consummation of the Merger.
(i) Lack of Ownership of Company Shares. Other than the Voting Agreement, (a) neither
Parent, any affiliate of Parent, nor any of Parent’s subsidiaries beneficially owns, directly or
indirectly, any Company Shares or other securities convertible into, exchangeable for or
exercisable for Company Shares; (b) there are no voting trusts or other agreements, arrangements or
understandings to which Parent, any affiliate of Parent or any of Parent’s subsidiaries is a party
with respect to the voting of Company Shares or other equity interests of the Company or any of the
Company Subsidiaries, nor are there any agreements, arrangements or understandings to which Parent,
any affiliate of Parent or any of Parent’s subsidiaries is a party with respect to the acquisition,
divestiture, retention, purchase, sale or tendering of the capital stock or other equity interest
of the Company or any of the Company Subsidiaries; and (c) neither Parent nor Merger Sub has
beneficially owned during the three years ending on the date hereof a number of Company Shares that
would make it an “interested shareholder” (as that term is defined Section 1704.01(C)(8) of the
OGCL) of the Company.
(j) Access. Parent acknowledges that as of the date hereof it and its representatives
have received access to such books and records, facilities, equipment, contracts and other assets
of the Company and the Company Subsidiaries which it and its representatives have desired or
requested to review, and that as of the date hereof it and its representatives have
25
had full opportunity to meet with the senior management of the Company and to discuss the
business and assets of the Company and the Company Subsidiaries.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1. Conduct of Business.
(a) Conduct of Business by the Company. Except (i) as set forth in Section
4.1(a) of the Company Disclosure Letter, (ii) as required by applicable Law, (iii) as
contemplated by this Agreement, (iv) as consented to in writing by Parent (such consent not to be
unreasonably withheld, delayed or conditioned), and (v) for transactions solely between or among
the Company and the wholly-owned Company Subsidiaries, during the period from the date of this
Agreement to the Effective Time, the Company shall, and shall cause the Company Subsidiaries to,
carry on their respective businesses in all material respects in the ordinary course consistent
with past practice and in compliance in all material respects with all applicable Laws and, to the
extent consistent therewith, use commercially reasonable efforts to preserve intact their current
business organizations, keep available the services of their present officers and key employees and
preserve their material Intellectual Property Rights, current rights and goodwill and preserve
business relationships with significant customers, suppliers, distributors and other persons having
business dealings with them; provided, however, that no action by the Company or
any Company Subsidiary with respect to matters specifically permitted by any other provision of
this Section 4.1 shall be deemed a breach of this sentence unless such action would
constitute a breach of such other provision. Without limiting the generality of the foregoing,
except (i) as set forth in Section 4.1(a) of the Company Disclosure Letter, (ii) as
required by applicable Law, (iii) as contemplated by this Agreement, (iv) as consented to in
writing by Parent (such consent not to be unreasonably withheld, delayed or conditioned) and (v)
for transactions solely between or among the Company and the wholly-owned Company Subsidiaries,
during the period from the date of this Agreement to the Effective Time, the Company shall not and
shall not permit any Company Subsidiary to, directly or indirectly:
(i) (A) except for regular quarterly cash dividends on the Company Shares consistent
with past practices (not to exceed $0.0375 per share) and dividends declared as of the date
hereof and not yet paid, declare, set aside, make or pay any dividends on, or make any
other distributions in respect of, any of the Company Shares, its capital stock, or any
equivalent thereof, (B) adjust, recapitalize, purchase, split, combine or reclassify any of
the Company Shares or any of its capital stock or (C) except pursuant to agreements entered
into with respect to the Company Share Plans that are in effect as of the close of business
on the date of this Agreement and previously disclosed to Parent, directly or indirectly,
purchase, redeem or otherwise acquire any Company Shares or any shares of capital stock of
the Company Subsidiaries or any other securities thereof or any rights, warrants or options
to acquire any such shares or other securities (which obligation shall not restrict any
cashless exercises or similar transactions pursuant to an exercise of any Company Shares
Option or other awards issued and outstanding under the Company Share Plans);
26
(ii) issue or authorize the issuance of, grant, deliver, sell, pledge, amend, dispose
of or encumber, any Company Shares, other shares of its capital stock (or any other
securities in respect of, in lieu of, or in substitution for, Company Shares or other
shares of its capital stock), any other voting securities or any securities convertible
into or exchangeable or exercisable for, or any rights, warrants or options to acquire, any
such shares, voting securities or convertible securities, including, without limitation,
stock appreciation rights, phantom stock or similar instruments, or make any changes (by
combination, merger, consolidation, reorganization, liquidation or otherwise) in the
capital structure of the Company or any Company Subsidiary, other than (1) the issuance and
delivery of Company Shares upon the exercise of Company Shares Options under the Company
Share Plans, (2) in connection with Company Share-Based Awards under the Company Share
Plans, or (3) the issuance and delivery of Company Shares pursuant to the Company’s 1996
Outside Directors Deferred Stock Plan, in each case of (1), (2) and (3) as are outstanding
as of the date of this Agreement and in accordance with their present terms or as
contemplated by this Agreement;
(iii) amend its articles of incorporation or code of regulations (or other comparable
organizational documents);
(iv) sell, lease, license, transfer, grant, exchange or swap, mortgage or otherwise
encumber, or subject to any Lien (other than Permitted Liens) or otherwise dispose of any
of its or any Company Subsidiary’s properties or assets, the capital stock of the Company
Subsidiaries, with a value in excess of $250,000 individually or $1,000,000 in the
aggregate other than sales of products and services in the ordinary course of business
consistent with past practice and except (A) pursuant to existing agreements in effect
prior to the execution of this Agreement and listed on Section 4.1(a)(iv) of the
Company Disclosure Letter, or (B) as may be required by applicable Law;
(v) disclose, other than to representatives of Parent, any material trade secret
unless a written non-disclosure agreement is executed by the recipient of such information;
(vi) incur any capital expenditures or enter into any commitments for capital
expenditures, capital additions or capital improvements involving more than an aggregate
amount of $300,000 per fiscal quarter, except in accordance with the capital expenditure
budget and prior fiscal year carryover amounts set forth in Section 4.1(a) of the
Company Disclosure Letter, or pay, incur or otherwise make any commitment to pay or incur
in excess of $750,000 in the aggregate for any information enterprise resource management
systems (including, without limitation, the Company’s planned Oracle update) or take any
further action other than as required under an existing contract;
(vii) incur any net increase in Indebtedness from that existing on the date hereof
other than (A) up to $1,000,000 in the aggregate of additional Indebtedness, (B)
Indebtedness incurred in the ordinary course of business under lines of credit existing on
the date of hereof, (C) letters of credit, surety bonds, guarantees of indebtedness for
27
borrowed money and security time deposits in the ordinary course of business
consistent with past practice and (D) indebtedness relating to the reborrowing of amounts
repaid;
(viii) (A) grant any increase in the compensation or benefits payable or to become
payable by the Company or any Company Subsidiary to any current or former director,
officer, employee or consultant of the Company or any Company Subsidiary, except to the
extent required by the terms of a Plan in effect as of the date of this Agreement, (B)
adopt, enter into, amend or otherwise increase, reprice or accelerate the payment or
vesting of the amounts, benefits or rights payable or accrued or to become payable or
accrued under any Plans, (C) enter into or amend any employment, bonus, severance, change
in control, retention or any similar agreement or any collective bargaining agreement, or
grant any severance, bonus, termination, or retention pay to any officer, director,
consultant or employee of the Company or any Company Subsidiary (other than as required by
the terms of a Plan in effect as of the date of this Agreement) or terminate any Plan, or
(D) pay or award any pension, retirement allowance or other non-equity based incentive
awards, or other employee or director benefit or perquisite not required by a Plan in
effect as of the date of this Agreement, all except as may otherwise be required to comply
with applicable Laws; provided, however, that the Company may terminate, and take any
actions required in connection with termination of, the Company’s 1996 Outside Directors
Deferred Stock Plan, and, provided, further, however, that the
Company shall terminate the Company’s 2005 Employee Stock Purchase and Dividend Company
Reinvestment Plan (the “Company ESPP”) and the Company’s Supplemental Executive Retirement
Plan (the “Company SERP”) as provided for under Section 5.8(f), and,
provided, further, however, that nothing in this clause (viii)
shall prohibit the Company or any Company Subsidiary from taking any action relating to the
hiring, termination or promotion of employees in the ordinary course of business consistent
with past practice or from filling a position included in the capital expenditure budget
set forth in Section 4.1(a) of the Company Disclosure Letter;
(ix) materially change any Tax or financial accounting policies or procedures or any
of its methods affecting its assets, liabilities or business, in each case, in effect on
the date hereof, except as required by GAAP or applicable Law;
(x) (A) acquire by merging or consolidating with, by purchasing any equity interest in
or a portion of the assets of, or by any other manner, in one transaction or a series of
related transactions, any corporation, partnership, association or other business
organization or any interest therein, or division or business thereof, or otherwise acquire
any material amount of operating assets of any other person (other than the purchase of
assets from suppliers or vendors in the ordinary course of business consistent with past
practice); (B) merge or consolidate with any other person; or (C) liquidate, dissolve,
restructure, wind-up or reorganize its business or organize any new subsidiary or
affiliate;
(xi) except in the ordinary course of business and consistent with past practice or
to the extent required by applicable Law, make, change or rescind any material express or
deemed election with respect to Taxes, settle or compromise any material claim or action
relating to Taxes, file or amend any Tax Return or change any
28
of its methods of accounting for or of reporting income or deductions for Tax
purposes in any material respect;
(xii) make any loans, advances or capital contributions to, or investments in, any
other person, except (A) de minimis advances for employees, contractors and consultants in
the ordinary course of business consistent with past practice, (B) trade credit issued in
the ordinary course of business consistent with past practice, (C) investments of excess
cash and cash equivalents in the ordinary course of business consistent with past practice
and (D) as required by existing contracts;
(xiii) except in the ordinary course of business consistent with past practice (other
than with respect to any agreement of the type described in clause (ii) of Section 3.1(r)),
(A) enter into, modify or amend in any material respect or terminate any Company Material
Contract, (B) waive, release, relinquish or assign any Company Material Contract (or any of
the Company’s or any Company Subsidiary’s rights thereunder) or any right or claim that is
material to the Company and the Company Subsidiaries, taken as a whole or (C) cancel or
forgive any Indebtedness owed to the Company or any Company Subsidiary;
(xiv) waive, release, assign, initiate, pay, discharge, settle or compromise any
pending or threatened claim, action, litigation, arbitration or proceeding other than (A)
in the ordinary course of business consistent with past practice, or (B) solely for money
damages not in excess of $200,000 individually or $500,000 in the aggregate; or
(xv) authorize, commit or agree to take any of the foregoing actions.
(b) Conduct of Business by Parent and Merger Sub. Parent covenants and agrees with
the Company, on behalf of itself and its subsidiaries that, between the date hereof and the
Effective Time, Parent shall not, and shall not permit any of its subsidiaries to, take or agree to
take any action (including entering into agreements with respect to acquisitions, mergers and
consolidations or business combinations) that would reasonably be expected to have, individually or
in the aggregate, a Parent Material Adverse Effect. During the period from the date of this
Agreement to the Effective Time, Merger Sub shall not engage in any activities of any nature except
as provided in or contemplated by this Agreement.
(c) Advice of Changes. Each of the Company, Parent and Merger Sub shall promptly
advise the other parties to this Agreement orally and in writing to the extent it has knowledge of
(i) any breach of representation or warranty, covenant or condition by such party that would cause
any of the conditions to Closing to fail to be satisfied or (ii) any change or event having, or
which, insofar as can reasonably be foreseen would reasonably be expected to have, with respect to
the Company, a Company Material Adverse Effect, or with respect to Parent and Merger Sub, a Parent
Material Adverse Effect, or on the satisfaction of the conditions set forth in Article VI
before the Outside Date; provided, however, that no such notification will affect
the representations, warranties, covenants or agreements of the parties (or remedies with respect
thereto) or the conditions to the obligations of the parties under this Agreement and no
29
failure to comply with this Section 4.1(b) shall be taken into account for purposes of
determining whether the conditions to Closing have been satisfied.
Section 4.2. No Solicitation by the Company.
(a) Company Takeover Proposal. The Company shall, and shall cause the Company
Subsidiaries and its and their respective officers, directors, employees, financial advisors,
attorneys, accountants, investment bankers, representatives and agents and other advisors
(collectively, the “Company Representatives”) to, immediately cease and cause to be terminated all
existing discussions and negotiations with any persons conducted heretofore with respect to, or
that could reasonably be expected to lead to, any Company Takeover Proposal, and the Company shall
request all other potential purchasers to promptly return or destroy all copies of all nonpublic
information that the Company, the Company Subsidiaries and the Company Representatives have
distributed on or prior to the date of this Agreement. From the date of this Agreement until the
earlier of the Effective Time and the date of termination of this Agreement, the Company shall not,
nor shall it permit any of the Company Subsidiaries or its and their respective officers, directors
and employees to, and shall use commercially reasonable efforts to cause any of the other Company
Representatives to not, directly or indirectly, (i) solicit, initiate or knowingly encourage
(including by way of furnishing nonpublic information), or take any other action designed to
facilitate, any inquiries or offers or the making of any proposal that constitutes, or could
reasonably be expected to lead to, a Company Takeover Proposal, (ii) enter into any Acquisition
Agreement or enter into any agreement, arrangement or understanding requiring it to abandon,
terminate or fail to consummate the Merger or any other transaction contemplated by this Agreement,
or (iii) enter into, continue or otherwise engage or participate in any way in any discussions or
negotiations regarding, or furnish or disclose to any person (other than a party hereto or its
representatives) any nonpublic information with respect to, or take any other action to knowingly
facilitate or further any inquiries or offers or the making of any proposal that constitutes, or
could reasonably be expected to lead to, any Company Takeover Proposal (other than in response to
an unsolicited inquiry from a person and, in such case, solely to notify such person of the
existence of the provisions of this Section 4.2); provided, however, that,
at any time prior to obtaining the Company Shareholder Approval, in response to an unsolicited,
written Company Takeover Proposal that (x) did not result from a breach of this Section 4.2
and (y) the Board of Directors of the Company determines in good faith (after consultation with
outside counsel and its financial advisor) that such Company Takeover Proposal constitutes or could
reasonably be expected to result in a Superior Proposal, the Company may, subject to compliance
with Section 4.2(c), (A) furnish information with respect to the Company and the Company
Subsidiaries to the person making such Company Takeover Proposal (and its representatives) pursuant
to a customary confidentiality agreement (including a standstill provision) not less restrictive of
such person than the Confidentiality Agreement; provided, however, that the
substance of all such information has previously been provided or made available to Parent or is
provided to Parent prior to or substantially concurrent with the time it is provided to such person
and (B) participate in discussions or negotiations with the person making such Company Takeover
Proposal (and its representatives) regarding such Company Takeover Proposal. The Company shall not
release any third party from, or waive any provision of, any confidentiality or standstill
agreement to which it is a party as of the date hereof, unless the Board of Directors determines in
good faith (after
consultation with outside
30
counsel) that the failure to do so would be inconsistent with its fiduciary duties under
applicable Law.
(b) Definitions. As used herein, (i) “Company Takeover Proposal” means any inquiry,
proposal or offer from any person relating to any (A) direct or indirect acquisition or purchase of
assets or a business that constitutes 15% or more of the net revenues, net income or the assets of
the Company and the Company Subsidiaries, taken as a whole, (B) direct or indirect acquisition or
purchase of 15% or more of any class of equity securities (by vote or value) of the Company or any
of the Company Subsidiaries, (C) tender offer or exchange offer that if consummated would result in
any person beneficially owning 15% or more of the equity securities (by vote or value) of the
Company, or (D) merger, consolidation, business combination, asset purchase, recapitalization or
similar transaction involving the Company, in each case, other than the transactions contemplated
by this Agreement, and (ii) “Superior Proposal” means a bona fide, unsolicited, written Company
Takeover Proposal (except the references therein to “15%” shall be replaced by “50%” and the
references to “vote or value” shall be replaced by “vote and value”) that the Board of Directors
determines in its good faith judgment (after consulting with outside counsel and its financial
advisor), taking into account the financial, regulatory and legal aspects of the proposal and the
timing and likelihood of consummation of such proposal, is more favorable to the Company’s
shareholders (in their capacities as shareholders) than the transactions contemplated by this
Agreement (including any adjustment to the terms and conditions proposed by Parent in response to
such Company Takeover Proposal).
(c) Actions by the Company. Neither the Board of Directors nor any committee thereof
shall (i) (A) withdraw (or qualify or modify in a manner adverse to Parent), or publicly propose to
withdraw (or qualify or modify in a manner adverse to Parent), the approval, recommendation or
declaration of advisability by the Board of Directors or any such committee thereof of this
Agreement or the transactions contemplated by this Agreement (it being understood and agreed that
failing to recommend against or taking a neutral position or no position with respect to acceptance
of a tender offer or exchange offer, or a publicly disclosed merger or other business combination
proposal, constituting a Company Takeover Proposal within ten (10) Business Days after commencement
of such offer, or receipt of such proposal, shall be considered an adverse modification),
(B) recommend, adopt or approve, or propose publicly to recommend, adopt or approve, any Company
Takeover Proposal or (C) fail to include the Company Recommendation in the Proxy Statement (any
action described in this clause (i) being referred to as a “Company Adverse Recommendation Change”)
or (ii) approve or recommend, or propose publicly to approve or recommend, or allow the Company or
any of the Company Subsidiaries to execute or enter into, any letter of intent, memorandum of
understanding, agreement in principle, merger agreement, acquisition agreement, option agreement,
joint venture agreement, partnership agreement or other similar agreement constituting or related
to, or that is intended to or could reasonably be expected to result in, any Company Takeover
Proposal (other than a confidentiality agreement referred to in Section 4.2(a)) (an
“Acquisition Agreement”). Notwithstanding anything in this Agreement to the contrary, if, prior to
obtaining the Company Shareholder Approval, the Board of Directors determines in good faith (after
consulting with outside counsel) that the failure to do so would be inconsistent with its fiduciary
duties under applicable Law, it may, prior to obtaining the Company Shareholder Approval, (A) cause
the Company to terminate this Agreement pursuant
31
to Section 7.1(d)(ii) and cause the Company to enter into an Acquisition Agreement
with respect to a Superior Proposal or (B) make a Company Adverse Recommendation Change, but in the
case of (A) or (B) only if: (i) the Company is not in breach in any material respect of its
obligations pursuant to this Section 4.2, (ii) the Company provides written notice to
Parent (a “Notice of Adverse Recommendation”) advising Parent that the Board of Directors intends
to take such action and specifying the reasons therefor, including, if applicable, the terms and
conditions of any Superior Proposal, the identity of the party making the Superior Proposal and
copies of any written proposal and all correspondence received from the third party relating to
such Superior Proposal that are the basis of the proposed action by the Board of Directors; (ii)
for a period of three (3) Business Days following Parent’s receipt of a Notice of Adverse
Recommendation (or two (2) Business Days after receipt of a new Notice of Adverse Recommendation;
it being understood and agreed that any amendment to the financial terms or other material terms of
such Superior Proposal shall be considered a new Notice of Adverse Recommendation), the Company
negotiates with Parent in good faith to make such adjustments to the terms and conditions of this
Agreement as would enable the Company to proceed with its recommendation of this Agreement and the
Merger and not make such Company Adverse Recommendation Change (it being understood that such
negotiation need not be exclusive); and (iii) if applicable, at the end of such three (3) Business
Day (or two (2) Business Day) period, the Board of Directors continues to believe in good faith
that the Company Takeover Proposal constitutes a Superior Proposal (taking into account any
amendments to this Agreement that Parent shall have agreed to make prior to the end of such
period).
(d) Notice of Company Takeover Proposal. The Company shall promptly (but in any event
within 24 hours) notify Parent and Merger Sub of (i) the receipt, directly or indirectly, of a
Company Takeover Proposal or any request for discussions or negotiations relating to a possible
Company Takeover Proposal or (ii) any request for non-public information relating to the Company or
any of the Company Subsidiaries other than requests for information in the ordinary course of
business and unrelated to a Company Takeover Proposal. Such notice shall be made orally and
confirmed in writing, and shall indicate the identity of the person or group making such Company
Takeover Proposal or request and the material terms and conditions thereof (including, if
applicable, copies of any written requests, proposals or offers, including proposed agreements) and
thereafter the Company shall keep Parent reasonably informed of the status of such Company Takeover
Proposal and any material changes to the terms thereof.
(e) Rule 14e-2(a), Rule 14d-9 and Other Applicable Law. Nothing contained in this
Section 4.2 shall prohibit the Company or its Board of Directors from (i) taking and
disclosing to its shareholders a position contemplated by Rule 14e-2(a) or Rule 14d-9 promulgated
under the Exchange Act, including any “stop-look-and-listen” communication to the Company’s
shareholders pursuant to Rule 14d-9(f) under the Exchange Act or (ii) making any disclosure to the
shareholders of the Company if, in the good faith judgment of the Board of Directors (after
consultation with outside counsel), the failure to make such disclosure would be inconsistent with
its obligations under applicable Law; provided, however, that clause (ii) shall not
be deemed to permit the Board of Directors to make a Company Adverse Recommendation Change or take
any of the actions referred to in 4.2(c) except to the extent permitted by Section 4.2(c).
32
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1. Preparation of Proxy Statement; Company Meeting.
(a) The Company shall, as soon as reasonably practicable following the date hereof (but in any
event within fifteen (15) days after the date hereof), prepare and file with the SEC in preliminary
form as required by the Exchange Act and the rules and regulations promulgated thereunder the Proxy
Statement, which shall, subject to Section 4.2, include the Company Recommendation, and
shall respond to any comments by the SEC staff in respect of the Proxy Statement as promptly as
reasonably practicable. Parent and Merger Sub shall provide to the Company such information as the
Company may reasonably request for inclusion in the Proxy Statement. The Company shall notify
Parent promptly 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 shall supply Parent with copies of all correspondence between the Company or any of the Company
Representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to the
Proxy Statement. The Company shall use commercially reasonable efforts to cause the Proxy
Statement to be mailed to the Company’s shareholders as promptly as reasonably practicable after
filing with the SEC. The Company shall afford Parent reasonable opportunity to comment on the
Proxy Statement. If at any time prior to receipt of the Company Shareholder Approval there shall
occur any event or any information should be known that should, upon the advice of the Company’s
outside counsel, be set forth in an amendment or supplement to the Proxy Statement so that the
Proxy Statement 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 are made, not misleading, the Company shall promptly
prepare, file with the SEC and mail to its shareholders such an amendment or supplement.
Notwithstanding anything to the contrary herein, prior to filing or mailing the Proxy Statement or
any other SEC filing required in connection with the transactions contemplated hereby (or, in each
case, any amendment or supplement thereto) or responding to any comments of the SEC with respect
thereto, the Company shall provide Parent a reasonable opportunity to review and comment on such
document or response and shall consider in good faith comments reasonably proposed by Parent.
Notwithstanding the foregoing, following a Company Adverse Recommendation Change effected in
accordance with Section 4.2, the Company shall have no obligation to notify Parent of any
matters to the extent that the Board of Directors determines in good faith, after consultation with
the Company’s outside counsel, that to do so would be reasonably likely to be inconsistent with the
directors’ exercise of their fiduciary obligations to the Company’s shareholders under applicable
Law.
(b) Subject to the other provisions of this Agreement, as promptly as reasonably practicable
after the date hereof, the Company, acting through its Board of Directors, shall take all action
necessary in accordance with applicable Law and the Company Articles and the Code of Regulations to
duly call, give notice of, convene and hold a meeting of its shareholders as promptly as reasonably
practicable following the mailing of the Proxy Statement (but in any event within thirty (30) days
of mailing the Proxy Statement) for the purpose of obtaining the Company Shareholder Approval (the
“Company Meeting”). Subject to making a
33
Company Adverse Recommendation Change pursuant to Section 4.2(c), (i) the Board of
Directors shall recommend to its shareholders the adoption of this Agreement and the approval of
the Merger and the transactions contemplated hereby and shall include such recommendation in the
Proxy Statement and (ii) use commercially reasonable efforts to solicit from its shareholders
proxies in favor of the adoption of this Agreement and approval of the Merger and the transactions
contemplated by this Agreement.
Section 5.2. Access to Information; Confidentiality. To the extent permitted by
applicable Law and subject to the confidentiality agreement, dated July 7, 2010, between the
Company and Tektronix, Inc. (the “Confidentiality Agreement”), the Company shall, and shall cause
the Company Subsidiaries to, afford to Parent and Parent’s representatives reasonable access,
during normal business hours during the period prior to the earlier of the Effective Time and the
date of termination of this Agreement, to all of the Company’s and each Company Subsidiary’s
properties, books, contracts, commitments, personnel and records and all other information
concerning their business, properties and personnel as Parent may reasonably request. Parent shall
hold, and shall cause its affiliates and Parent’s representatives to hold, any nonpublic
information in accordance with the terms of the Confidentiality Agreement. Notwithstanding the
foregoing, neither the Company nor any Company Subsidiary shall be obligated to provide any such
access or information to the extent that doing so (i) would be reasonably likely to cause a waiver
of an attorney-client privilege or loss of attorney work product protection (unless Parent enters
into a joint defense agreement that protects such privilege), (ii) would constitute a violation of
any applicable Law or (iii) would violate any agreement with a third-party to which the Company or
any Company Subsidiary is a party. Neither Parent nor any of its representatives shall be
permitted to perform any onsite procedure (including any onsite environmental study) with respect
to any property of the Company or any of the Company Subsidiaries.
Section 5.3. Commercially Reasonable Efforts; Cooperation.
(a) Commercially Reasonable Efforts. Upon the terms and subject to the conditions set
forth in this Agreement, including Section 5.3(c), each of the parties agrees to use
commercially reasonable 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, as soon as reasonably practicable, the Merger and
the other transactions contemplated by this Agreement and to obtain satisfaction of the conditions
precedent to the Merger, including (i) obtaining all necessary actions or nonactions, waivers,
clearances, consents and approvals from Governmental Entities and making all necessary
registrations and filings and taking all steps necessary to obtain an approval or waiver from, or
to avoid an action or proceeding by, any Governmental Entity, (ii) obtaining all necessary
consents, approvals or waivers from third parties; provided, however, that neither
the Company nor any of the Company Subsidiaries shall make any material payment or commitment to a
third party in connection with obtaining such consents, approval or waivers without the prior
written consent of Parent (not to be unreasonably conditioned, withheld or delayed), (iii)
defending any lawsuits or other legal proceedings, whether judicial or administrative, challenging
this Agreement or the consummation of the Merger and the other transactions contemplated by this
Agreement, and (iv) the execution and delivery of any additional
34
instruments reasonably necessary to consummate the transactions contemplated by, and to fully
carry out the purposes of, this Agreement.
(b) No Takeover Statutes Apply. In connection with and without limiting the
foregoing, the Company, Parent and Merger Sub shall (i) take all action reasonably necessary to
ensure that no Takeover Statute or similar Law is or becomes applicable to the Merger, this
Agreement or any of the other transactions contemplated hereby and (ii) if any Takeover Statute or
similar Law becomes applicable to the Merger, this Agreement or any of the other transactions
contemplated hereby, take all action necessary and within their power to ensure that the Merger and
the other transactions contemplated hereby may be consummated as promptly as practicable on the
terms contemplated by this Agreement and otherwise to minimize the effect of such Law on the Merger
and the other transactions contemplated by this Agreement.
(c) Other Government Matters. Subject to the terms and conditions herein provided and
without limiting the foregoing, the Company and Parent shall (i) promptly, but in no event later
than fifteen (15) Business Days after the date of this Agreement, make or cause their respective
ultimate parent entities (as that term is defined in the HSR Act rules) to make their respective
filings and thereafter make any other required submissions under the HSR Act; (ii) use commercially
reasonable efforts to cooperate with each other in (x) determining whether any filings are required
to be made with, or consents, permits, authorizations, waivers or approvals are required to be
obtained from, any third parties or other Governmental Entities in connection with the execution
and delivery of this Agreement and the consummation of the transactions contemplated hereby and
(y) timely making all such filings and timely seeking all such consents, permits, authorizations or
approvals; (iii) use commercially reasonable efforts to take, or cause to be taken, all other
actions and do, or cause to be done, all other things necessary, proper or advisable to consummate
and make effective the transactions contemplated hereby, including taking all such further action
as reasonably may be necessary to resolve such objections, if any, as the United States Federal
Trade Commission, the Antitrust Division of the United States Department of Justice, state
antitrust enforcement authorities or competition authorities of any other nation or other
jurisdiction or any other person may assert under Antitrust Law with respect to the transactions
contemplated hereby, and to take commercially reasonable steps to avoid or eliminate each and every
impediment under any Law that may be asserted by any Governmental Entity with respect to the Merger
so as to enable the Closing to occur as soon as reasonably possible (and in any event no later than
the Outside Date), provided, however, that notwithstanding any other provision of
this Agreement, Parent shall not be required to, and the Company shall not, without Parent’s prior
written consent, (x) agree to the sale, divestiture or disposition of any assets or businesses of
Parent or its subsidiaries or affiliates or of the Company or the Company Subsidiaries or
(y) otherwise take or commit to take actions that after the Closing Date would limit the freedom of
Parent or its subsidiaries’ (including the Surviving Corporation’s) or affiliates’ freedom of
action with respect to, or its ability to retain, one or more of its or its subsidiaries’
(including the Surviving Corporation’s) businesses, product lines or assets; and (iv) subject to
applicable legal limitations and the instructions of any Governmental Entity, keep each other
apprised of the status of matters relating to the completion of the transactions contemplated
thereby, including promptly furnishing the other with copies of notices or other communications
received by the Company or Parent, as the case may be, or any of their respective subsidiaries,
from any third party or Governmental Entity with respect to such transactions. The Company and
Parent shall permit counsel for the other party reasonable
35
opportunity to review in advance, and consider in good faith the views of the other party in
connection with any proposed written communication to any third person or Governmental Entity with
respect thereto. Each of the Company and Parent agrees not to participate in any substantive
meeting or discussion, either in person or by telephone, with any Governmental Entity in connection
with the proposed transactions unless it consults with the other party in advance and, to the
extent not prohibited by such Governmental Entity, gives the other party the opportunity to attend
and participate. Any competitively sensitive information that is disclosed pursuant to this
Section 5.3(c) will be limited to each of Parent’s and the Company’s respective counsel
pursuant to a separate customary confidentiality agreement. Neither the Company nor Parent shall,
and they shall cause their respective subsidiaries not to, acquire or agree to acquire any assets,
business, securities, person or subdivision thereof, if the entering into of a definitive agreement
relating to or the consummation of such acquisition would reasonably be expected to materially
delay or materially increase the risk of not obtaining the applicable action, nonaction, waiver,
clearance, consent or approval with respect to the transactions contemplated by this Agreement
under any Antitrust Laws.
(d) In furtherance and not in limitation of the agreements of the parties contained in this
Section 5.3, if any administrative or judicial action or proceeding, including any
proceeding by a private party, is instituted (or threatened to be instituted) challenging any
transaction contemplated by this Agreement as violative of any Antitrust Law, each of the Company
and Parent shall cooperate in all respects with each other and shall use their respective
commercially reasonable efforts to contest and resist any such action or proceeding and to have
vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether
temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement; provided, however,
that, notwithstanding any other provision of this Agreement, such result does not require the sale,
divestiture or disposition of any assets or businesses of Parent or its subsidiaries or affiliates
or of the Company or the Company Subsidiaries or otherwise require Parent to take or commit to take
actions that after the Effective Time would limit the freedom of Parent or its subsidiaries’
(including the Surviving Corporation’s) or affiliates’ freedom of action with respect to, or its
ability to retain, one or more of its or its subsidiaries’ (including the Surviving Corporation’s)
businesses, product lines or assets. Notwithstanding the foregoing or any other provision of this
Agreement, nothing in this Section 5.3 shall limit a party’s right to terminate this
Agreement pursuant to Section 7.1(b) so long as such party has, prior to such termination,
complied with its obligations under this Section 5.3.
Section 5.4. Indemnification.
(a) Obligations Assumed by Surviving Corporation. Merger Sub and the Surviving
Corporation shall, and Parent shall cause the Surviving Corporation to, honor all obligations of
indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the
Effective Time (including any matters arising in connection with the transactions contemplated by
this Agreement) in favor of the current or former directors, officers or employees of the Company
and the Company Subsidiaries as provided in their respective articles of incorporation, code of
regulations (or comparable organizational documents) or in any agreement set forth in the Company
Disclosure Letter or filed as an exhibit to the SEC Documents between the Company or any Company
Subsidiary, on the one hand, and any current
36
or former director, officer or employee of the Company or any Company Subsidiary, on the other
hand, immediately prior to the Effective Time, and all such obligations will survive the Merger and
will continue in full force and effect in accordance with their terms and such rights will not be
amended or otherwise modified for a period of six (6) years after the Effective Time in any manner
that would adversely affect the rights of individuals who on or prior to the Effective Time were
directors, officers, employees or agents of the Company or any Company Subsidiary, unless such
modification is required by Law. If any claim for indemnification is asserted or made prior to the
Effective Time or within such six (6) year period, all rights to indemnification in respect of such
claim shall continue until the final disposition of such claim.
(b) Successors and Assigns of Surviving Corporation. If the Surviving Corporation or
any of its successors or assigns (i) consolidates with or merges into any other person and is not
the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers
or conveys all or substantially all of its properties and assets to any person, then, and in each
such case, Parent and the Surviving Corporation shall make proper provision so that the successors
and assigns of the Surviving Corporation will assume fully the obligations set forth in this
Section 5.4.
(c) Continuing Coverage. From the Effective Time and for a period of six (6) years
thereafter, Parent and the Surviving Corporation shall maintain in effect directors’ and officers’
liability insurance covering acts or omissions occurring at or prior to the Effective Time with
respect to those persons who are currently covered by the Company’s directors’ and officers’
liability insurance policy (a copy of which has been made available or delivered to Parent) on
terms with respect to such coverage and amount no less favorable than those of such current
insurance coverage; provided, however, that in no event will Parent or the
Surviving Corporation be required to expend in any one year an amount in excess of 300% of the
annual premiums currently paid by the Company for such insurance (the “Maximum Premium”); and
provided, further, that, if the annual premiums for such insurance coverage exceed
the Maximum Premium, Parent and the Surviving Corporation will be obligated to obtain a policy with
the greatest coverage available for a cost not exceeding such amount; and provided,
further, however, that at Parent’s option (and at Parent’s expense) in lieu of the
foregoing insurance coverage, the Company shall purchase prior to the Effective Time six (6) year
“tail” insurance coverage that provides coverage identical in all material respects to the coverage
described above. Notwithstanding anything herein to the contrary, if five (5) Business Days prior
to the Effective Time, Parent has not completed the actions contemplated by the last proviso of the
immediately preceding sentence, the Company may, with prior notice to Parent, purchase six (6) year
“tail” insurance coverage that provides coverage identical in all material respects to the coverage
described above, provided that the Company does not pay in excess of the Maximum Premium.
(d) Intended Beneficiaries. The provisions of this Section 5.4 are (i)
intended to be for the benefit of, and will be enforceable by, each person referred to therein and
his or her heirs and his or her representatives and (ii) in addition to, and not in substitution
for, any other rights to indemnification or contribution that any such person may have by contract
or otherwise. The provisions of this Section 5.4 shall survive the consummation of the
Merger and expressly are intended to benefit each such person. Parent shall pay all reasonable
expenses, including reasonable attorneys’ fees and fees and disbursements of experts and witnesses,
that may be
37
incurred by any indemnified party in enforcing the indemnity and other obligations provided in
this Section 5.4.
(e) Survival. The provisions of this Section 5.4 shall survive the
consummation of the Merger.
Section 5.5. Public Announcements. Parent and the Company shall consult with each
other before holding any press conferences, analyst calls or other meetings or discussions and
before issuing any press release or other public announcement or statement with respect to the
transactions contemplated by this Agreement, including the Merger. The parties will provide each
other the opportunity to review and comment upon any press release or other public announcement or
statement with respect to the transactions contemplated by this Agreement, including the Merger,
and shall not issue any such press release or other public announcement or statement prior to such
consultation, except as may be required by applicable Law, court process or by obligations pursuant
to any listing agreement with any national securities exchange, including the NYSE. The parties
agree that the initial press release or releases to be issued with respect to the transactions
contemplated by this Agreement shall be mutually agreed upon prior to the issuance thereof.
Section 5.6. Shareholder Litigation. The parties to this Agreement shall cooperate
and consult with one another, to the fullest extent possible, subject to entering into a customary
joint defense agreement, in connection with any shareholder litigation against any of them or any
of their respective directors or officers with respect to the transactions contemplated by this
Agreement. In furtherance of and without in any way limiting the foregoing, each of the parties
shall upon the terms and subject to the conditions contained in this Agreement use its respective
commercially reasonable efforts to prevail in such litigation so as to permit the consummation of
the transactions contemplated by this Agreement in the manner contemplated by this Agreement;
provided that the Company shall not, and shall not permit any of the Company Subsidiaries
nor any of the Company Representatives to, compromise, settle, come to a settlement arrangement
regarding any such action or proceeding or consent thereto unless Parent shall otherwise consent in
writing (such consent not to be unreasonably conditioned, withheld or delayed). Without limiting
the foregoing, the Company shall give consideration to Parent’s advice with respect to such
litigation.
Section 5.7. Section 16(b). The Company shall take all steps reasonably necessary to
cause the transactions contemplated hereby and any other dispositions of equity securities of the
Company (including derivative securities) in connection with the transactions contemplated by this
Agreement by each individual who is a director or officer of the Company to be exempt under Rule
16b-3 under the Exchange Act.
Section 5.8. Employee Benefit Matters.
(a) Compensation and Benefits; Severance. From and after the Effective Time, the
Surviving Corporation shall honor and shall cause each Company Subsidiary to honor all of the
obligations of the Company and any Company Subsidiary arising under or in connection with each of
the Company Pension Plans, Company Welfare Plans, Company Incentive Compensation Plans and Company
Executive Compensation Agreements, in
38
accordance with their terms and as in effect immediately before the Effective Time and as
disclosed in Section 3.1(l) of the Company Disclosure Letter (without giving effect to any
amendments thereto which are executed, adopted or made effective after the Effective Time, except
where consented to in writing by the affected party). For the period commencing at the Effective
Time and ending on December 31, 2011, Parent shall cause the Surviving Corporation and each Company
Subsidiary to provide to those individuals employed by the Surviving Corporation or by one or more
of the Company Subsidiaries as of the Effective Time (each, a “Retained Employee” and collectively,
the “Retained Employees”) base pay, annual incentive opportunity for participants in the management
incentive plans described in Section 5.8(d) and employee benefits (but excluding
equity-based compensation) which are substantially comparable in the aggregate to the base pay,
annual management incentive plan opportunities (but excluding equity-based compensation) and
employee benefits being provided by the Company and the Company Subsidiaries, as applicable,
immediately prior to the Effective Time. Any Retained Employee whose employment is terminated
involuntarily other than for cause on or after the Effective Time but on or prior to December 31,
2011 shall be entitled to severance benefits comparable to the severance benefits such Retained
Employee would have received from the Company or any Company Subsidiary (as applicable) immediately
prior to the Effective Time.
(b) Service Credit. In the event any Retained Employee becomes covered by, or
otherwise commences participation in any employee benefit plan (within the meaning of Section 3(3)
of ERISA) sponsored or maintained by Parent or any subsidiary of Parent (each, a “Parent Plan”)
following the Effective Time, Parent and the Surviving Corporation shall ensure that such Retained
Employee receives hours of service credit for any and all employment service credited to such
Retained Employee by the Company and any applicable Company Subsidiary prior to the Effective Time
under any Company Pension Plan or Company Welfare Plan in which such Retained Employee was a
participant, for both eligibility and vesting purposes under such Parent Plan, subject to the
following exceptions: (i) such recognition of service credit shall not cause or result in any
duplication of any of the benefits payable to such Retained Employee with respect to the same
period of service or (ii) such recognition of service credit is prohibited under applicable Law or
the terms of the applicable insured Parent Plan.
(c) Welfare Benefits. In the event a Retained Employee or such Retained Employee’s
eligible dependent(s) becomes covered by any group accident and sickness, dental, vision or similar
group health plan sponsored or maintained by Parent or any of its affiliates (a “Successor Welfare
Plan”) other than the Company Welfare Plans in which such Retained Employee or such dependents
participated (or from which they benefited) immediately prior to the Effective Time (a “Prior
Plan”), Parent and the Surviving Corporation shall ensure that (i) any such Successor Welfare Plan
either shall not have, or shall not enforce against such Retained Employee or such dependents, any
waiting periods, any pre-existing condition limitations or exclusions, or any underwriting
requirements (whether imposed individually, or as a group), or any active-at-work requirements or
conditions; and (ii) any expenses incurred by such Retained Employee or such dependents prior to
the Effective Time, which were recognized as satisfying (in whole or in part) any deductible or
co-insurance obligations such Retained Employee or dependent had under the terms of such Prior Plan
prior to the Effective Time, shall be taken into account under such Successor Welfare Plan for
purposes of satisfying such Retained Employee’s or such dependent’s deductible or co-insurance
obligations under such Successor Welfare Plan;
39
provided, that the foregoing shall not apply with respect to the commencement of a new
plan year with respect to either the Successor Welfare Plan or Prior Plan.
(d) Annual Management Incentive Plans. The Company shall be permitted to pay any
amounts earned under the Company’s annual management incentive plans for fiscal year 2010
(i.e., the fiscal year ending September 30, 2010) (the “2010 Management Incentive Plans”).
Parent and Merger Sub agree that, if such amounts have not been paid prior to the Effective Time,
the Surviving Corporation shall honor the 2010 Management Incentive Plans, and that all payments
earned under the 2010 Management Incentive Plans shall be made in a manner consistent with the
Company’s past practice. In addition, Parent and Merger Sub agree that Surviving Corporation shall
honor the Company’s annual management incentive plans for fiscal year 2011 (i.e., the
fiscal year ending September 30, 2011) (the “2011 Management Incentive Plans”) for the period prior
to the Effective Time, including by paying the pro rata portion (based on the number of days
elapsed in such fiscal quarter prior to the Closing) of any payment earned with respect to the
fiscal quarter in which the Closing occurs, and that all payments earned under the 2011 Management
Incentive Plans for such period will be paid promptly after the Effective Time in accordance with
the Company’s past practice.
(e) No Third-Party Beneficiaries. Nothing in this Section 5.8 shall (i)
confer any rights upon any individual, including any current or former employee or director of the
Company or any Company Subsidiary, other than the signatories hereto and their respective
successors and permitted assigns; (ii) constitute or create an employment agreement or otherwise
contravene any employment-at-will relationship; (iii) constitute or be treated as an amendment,
modification or adoption of any Plan, (iv) prevent the amendment or termination of any Plan or
interfere with the right or obligation of Parent or its affiliates to make such changes to the
foregoing as are necessary to conform with applicable Law, or (v) limit the right of Parent, the
Surviving Corporation, the Company or any of their respective affiliates to terminate the
employment of any employee at any time.
(f) Employee Stock Purchase Plan and SERP. The Company shall take all action to
terminate the Company ESPP and the Company SERP no later than the Effective Time.
Section 5.9. Parent Actions. Parent agrees to take all action necessary to cause
Merger Sub to perform all of Merger Sub’s, and the Surviving Corporation to perform all of the
Surviving Corporation’s, agreements, covenants and obligations under this Agreement and to
consummate the Merger on the terms and subject to the conditions set forth in this Agreement.
Parent shall be liable for any breach of any representation, warranty, covenant or agreement of
Merger Sub in this Agreement.
Section 5.10. Control of Operations. Nothing contained in this Agreement shall give
Parent, directly or indirectly, the right to control or direct the Company’s operations prior to
the Effective Time. Prior to the Effective Time, the Company shall exercise, consistent with the
terms and conditions of this Agreement, complete control and supervision over its operations.
Notwithstanding the foregoing, Parent shall be provided a reasonable opportunity to review, if
practicable, all material communications with the Company’s and the Company Subsidiaries’ employees
relating to the Merger and the other transactions contemplated hereby prior to the Effective Time.
40
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1. Conditions to Each Party’s Obligation to Effect the Merger. The
obligation of each party to effect the Merger is subject to the satisfaction or waiver at or prior
to the Closing Date of the following conditions:
(a) Shareholder Approval. The Company Shareholder Approval shall have been obtained.
(b) Governmental and Regulatory Approvals. All consents, approvals and actions of,
filings with and notices to any Governmental Entity required to consummate the Merger and the other
transactions contemplated hereby, the failure of which to be made or obtained would be reasonably
expected to have, individually or in the aggregate, a Company Material Adverse Effect, shall have
been made or obtained.
(c) No Injunctions or Restraints. No judgment, order, preliminary or permanent
injunction, decree or Law entered, enacted, promulgated, enforced or issued by any court or other
Governmental Entity of competent jurisdiction shall be in effect preventing or prohibiting the
consummation of the Merger or having the effect of making consummation of the Merger illegal.
(d) Antitrust. The waiting period (including any extension thereof) applicable to the
consummation of the Merger under the HSR Act shall have expired or been terminated and any foreign
approvals, consents and clearances shall have been received.
Section 6.2. Conditions to Obligations of Parent and Merger Sub. The obligation of
Parent and Merger Sub to effect the Merger is further subject to satisfaction or waiver of the
following conditions:
(a) Representations and Warranties. (i) The representations and warranties of the
Company contained in Section 3.1(b) shall be true and correct in all material respects as
of the date of this Agreement and as of the Closing Date as though made on and as of the Closing
Date, and (ii) all other representations and warranties of the Company set forth herein shall be
true and correct in all respects (without giving effect to any materiality or Company Material
Adverse Effect qualifications contained therein) as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date (except to the extent expressly made as
of an earlier date, in which case as of such date), except where the failure of such other
representations and warranties to be so true and correct (without giving effect to any materiality
or Company Material Adverse Effect qualifications contained therein) would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) Performance of Obligations of the Company. The Company shall have performed in
all material respects all of its obligations required to be performed by it under this Agreement at
or prior to the Closing Date.
41
(c) Officer’s Certificate. The Company shall have furnished Parent with a certificate
dated the Closing Date and signed on its behalf by an executive officer to the effect that the
conditions set forth in Section 6.2(a) and Section 6.2(b) have been satisfied.
Section 6.3. Conditions to Obligations of the Company. The obligation of the Company
to effect the Merger is further subject to satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations and warranties of Parent and
Merger Sub set forth herein shall be true and correct in all respects (without giving effect to any
materiality or Parent Material Adverse Effect qualifications contained therein) as of the date of
this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to
the extent expressly made as of an earlier date, in which case as of such date), except where the
failure of such other representations and warranties to be so true and correct (without giving
effect to any materiality or Parent Material Adverse Effect qualifications contained therein) would
not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse
Effect.
(b) Performance of Obligations of Parent and Merger Sub. Each of Parent and Merger
Sub shall have performed in all material respects all obligations required to be performed by it
under this Agreement at or prior to the Closing Date.
(c) Officer’s Certificate. Each of Parent and Merger Sub shall have furnished the
Company with a certificate dated the Closing Date signed on its behalf by an executive officer to
the effect that the conditions set forth in Section 6.3(a) and Section 6.3(b) have
been satisfied.
Section 6.4. Frustration of Closing Conditions. None of Parent, Merger Sub or the
Company may rely on the failure of any condition set forth in Section 6.1, Section
6.2 or Section 6.3, as the case may be, to be satisfied as a grounds for termination
under Article VII if such failure was caused by such party’s failure to comply with any of
terms of this Agreement.
ARTICLE VII
TERMINATION
Section 7.1. Termination.
(a) Termination by Mutual Consent. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the Effective Time, whether
before or after the Company Shareholder Approval, by mutual written consent of Parent, Merger Sub
and the Company (with any termination by Parent also being an effective termination by Merger Sub).
(b) Termination by Parent or the Company. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the Effective Time, whether
before or after the Company Shareholder Approval, by either Parent or
42
the Company (with any termination by Parent also being an effective termination by Merger
Sub):
(i) if the Merger has not been consummated by March 31, 2011, or such later date, if
any, as Parent and the Company agree upon in writing (the “Outside Date”);
provided, however, that the right to terminate this Agreement pursuant to
this Section 7.1(b)(i) is not available to any party whose breach in any material
respect of any provision of this Agreement has been the cause of, or resulted in, the
failure of the Merger to be consummated by such time;
(ii) if any Governmental Entity shall have enacted, issued, promulgated, enforced or
entered any order, injunction, decree, ruling or other Law having the effect of
permanently restraining, enjoining or otherwise prohibiting the consummation of the
Merger, which order, injunction, decree, ruling or other Law shall have become final and
non-appealable; provided, however, that the party seeking to terminate
this Agreement pursuant to this Section 7.1(b)(ii) shall have used its
commercially reasonable efforts (subject to Section 5.3(c)) to have such
injunction lifted; or
(iii) if the Company Meeting (including any adjournment or postponement thereof) has
concluded, the Company’s shareholders have voted, and the Company Shareholder Approval was
not obtained.
(c) Termination by Parent. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Effective Time, whether before or
after the Company Shareholder Approval, by written notice of Parent:
(i) (A) if the Company has breached or failed to perform any of its covenants or
other agreements contained in this Agreement to be complied with by the Company such that
the closing condition set forth in Section 6.2(b) would not be satisfied or (B)
there exists a breach of any representation or warranty of the Company contained in this
Agreement such that the closing condition set forth in Section 6.2(a) would not be
satisfied and, in the case of either (A) or (B), such breach or failure to perform (1) is
not cured within thirty (30) days after receipt of written notice thereof or (2) is
incapable of being cured by the Company by the Outside Date; or
(ii) if the Board of Directors or any committee thereof has made a Company Adverse
Recommendation Change; provided, however, that Parent’s and Merger Sub’s
right to terminate this Agreement pursuant to this Section 7.1(c)(ii) in respect
of a Company Adverse Recommendation Change will expire ten (10) Business Days after the
last date upon which such Company Adverse Recommendation Change is made.
(d) Termination by the Company. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Effective Time, whether before or
after the Company Shareholder Approval, by written notice of the Company:
43
(i) (A) if either Parent or Merger Sub has breached or failed to perform any of its
covenants or other agreements contained in this Agreement to be complied with by Parent or
Merger Sub such that the closing condition set forth in Section 6.3(b) would not
be satisfied, or (B) there exists a breach of any representation or warranty of Parent or
Merger Sub contained in this Agreement such that the closing condition set forth in
Section 6.3(a) would not be satisfied and, in the case of either (A) or (B), such
breach or failure to perform (1) is not cured within thirty (30) days after receipt of
written notice thereof or (2) is incapable of being cured by Parent by the Outside Date;
(ii) if the Board of Directors shall have approved, and the Company shall
concurrently with such termination enter into an Acquisition Agreement providing for the
implementation of the transactions contemplated by, a Superior Proposal in accordance with
Section 4.2(c); provided, however, that the Company has not
breached Section 4.2 in any material respect or breached the provisions of
Section 5.1(b) (other than immaterial breaches thereof); provided,
further, however, that such termination shall not be effective until such
time as payment of the Termination Fee required by Section 7.3(b) shall have been
paid; or
(iii) if (A) the conditions set forth in Section 6.1 and Section 6.2
are satisfied (or, upon an immediate Closing, would be satisfied as of such Closing), (B)
the Company shall have notified the Parent in writing of the satisfaction of such
conditions and that it stands ready, willing and able to consummate the Merger at such
time and (C) Parent shall have failed to consummate such Merger within two Business Days
of the later of (A) or (B).
Section 7.2. Effect of Termination. In the event of any termination of this Agreement
pursuant to Section 7.1, this Agreement shall terminate (except for the Confidentiality
Agreement and the provisions of this Section 7.2, Section 7.3 and Section
8.2 through Section 8.11, each of which shall survive the termination of this Agreement
and remain in full force and effect), and there shall be no other liability on the part of the
Company or Parent to the other except as provided in the Confidentiality Agreement.
Notwithstanding the foregoing, to the extent that any termination of this Agreement results from
the material and intentional breach by a party of any representation or warranty set forth in this
Agreement or from the material and intentional breach by a party of any covenant set forth in this
Agreement, then such party shall be liable for any damages incurred or suffered by the other party
as a result of such breach.
Section 7.3. Fees and Expenses.
(a) Division of Fees and Expenses. Except as otherwise expressly provided in this
Agreement, all fees and expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated hereby will be paid by the party incurring such fees or expenses, whether
or not the Merger is consummated. Notwithstanding the foregoing, the Company will bear and pay all
of the costs and expenses incurred in connection with the printing and mailing of the Proxy
Statement, all of the SEC filing fees in respect of the Proxy Statement
44
and all of the fees of the proxy solicitor (which shall be retained by the Company in
consultation with Parent) in connection with the solicitation of proxies from the Company’s
shareholders.
(b) Termination Fee. If (i) any person makes a Company Takeover Proposal after the
date of this Agreement, this Agreement is terminated pursuant to Section 7.1(b)(i),
Section 7.1(b)(iii) or Section 7.1(c)(i) and within twelve (12) months of the date
of such termination the Company enters into an agreement providing for, or consummates, any Company
Takeover Proposal with such person, (ii) this Agreement is terminated by the Company pursuant to
Section 7.1(d)(ii) or (iii) this Agreement is terminated pursuant to Section
7.1(c)(ii), then the Company shall pay to Parent a fee of $10,000,000 (the “Termination Fee”),
which amount shall be payable by wire transfer of same day funds, in the case of the foregoing
clause (i), on the date of entering into or the consummation of, as applicable, such Company
Takeover Proposal, and in the case of clause (ii), on the date of termination of this Agreement,
and in the case of clause (iii) within two (2) Business Days of such termination. For purposes of
this Section 7.3(b), the term “Company Takeover Proposal” shall have the meaning assigned
to such term in Section 4.2(b), except that all references to 15% therein shall be deemed
to be references to 50%.
(c) Exclusivity. Except as provided in Section 7.2 or for specific
performance as provided in Section 8.8(a), the Termination Fee payable by the Company
pursuant to Section 7.3(b) constitutes Parent and Merger Sub’s exclusive remedy for or in
connection with any event or circumstance with respect to which such fee is so paid, and none of
Parent, Merger Sub or any of their affiliates may seek (and Parent and Merger Sub will cause their
affiliates not to seek) to obtain any recovery, judgment, or damages of any kind, including
consequential, indirect, or punitive damages, against the Company or any of the Company
Subsidiaries or any of the Company Representatives in connection with this Agreement or the
transactions contemplated hereby. The parties confirm that each event or circumstance giving rise
to Parent and Merger Sub’s right to a fee under Section 7.3(b) would cause significant
damage to Parent and Merger Sub that would be inherently difficult to quantify and prove, and that
the Termination Fee provided for hereunder is intended to provide fair compensation in response to
that damage, is not intended to be punitive, and is reasonable in amount in relation to the
circumstances under which it would become payable. Notwithstanding any provision in this Agreement
to the contrary, in no event shall the Company be required to pay the Termination Fee on more than
one occasion. Any payment made pursuant to this Section 7.3 shall be net of any amounts
that may be required to be deducted or withheld therefrom under the Code or under any provision of
state, local or foreign Tax Law. If the Company fails to pay in a timely manner the Termination
Fee due to Parent pursuant to this Section 7.3 and, in order to obtain such payment, Parent
commences a legal proceeding that results in a final, non-appealable judgment against the Company
for the Termination Fee, the Company shall pay the out-of-pocket costs and expenses (including
reasonable legal fees and expenses of outside counsel) incurred by Parent in connection with such
proceeding, together with interest on all such unpaid amounts at the prime lending rate prevailing
during such period as published in The Wall Street Journal, calculated on a daily basis from the
date such amounts were required to be paid until the date of actual payment.
45
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1. Nonsurvival of Representations and Warranties; Scope of Representations and
Warranties.
(a) None of the representations, warranties, covenants and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement will survive the Effective Time, except each of
the covenants and agreements contained in this Agreement that by its terms contemplates
performance, in whole or in part, after the Effective Time, including Article II and
Article VIII and Section 5.4, will survive the Merger.
(b) Except as and to the extent expressly set forth in Section 3.1, the Company makes
no, and disclaims any, representations or warranties whatsoever, whether express or implied, and
Parent and Merger Sub confirm, acknowledge and agree that they are not relying upon any such
representation or warranty not expressly set forth in this Agreement. The Company disclaims and
shall have no liability or responsibility for any other statement or information made or
communicated (orally or in writing) to Merger Sub, Parent, any of their affiliates or any
stockholder, officer, director, employee, representative, consultant, attorney, agent, lender or
other advisor of Merger Sub, Parent or their affiliates (including any opinion, any implied
warranty or any representation as to the accuracy or completeness of any information regarding the
Company, information or advice which may have been provided to any such person by any Company
Representative or any other person or contained in the files or records of the Company), wherever
and however made, including any documents, projections, forecasts or other material made available
to Parent in certain “data rooms” or management presentations in expectation of the transactions
contemplated by this Agreement. As part of its investigation of the Company, Parent has been given
financial information, cost estimates, forecasts, projections and other oral or written information
and materials with respect to the Company (the “Additional Financial Information”) by the Company
or a Company Representative. None of the Company or any of its officers, directors, employees,
affiliates, representatives or agents makes any representations or warranties with respect to the
Additional Financial Information, except for any specific representations and warranties set forth
in Section 3.1 of this Agreement.
Section 8.2. Notices. Except for notices that are specifically required by the terms
of this Agreement to be delivered orally, all notices, requests, claims, demands and other
communications under this Agreement must be in writing and will be deemed given (a) when delivered,
if delivered personally, (b) when sent, if sent by facsimile (which is promptly confirmed by
telephone or electronic mail) during normal business hours, or (c) one (1) Business Day after
sending, if sent by a nationally recognized overnight courier service (providing proof of delivery)
to the parties at the following addresses (or at such other address for a party as is specified by
like notice):
46
if to Parent or Merger Sub, to:
Xxxxxxx Corporation
0000 Xxxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx XX 00000-0000
Facsimile No.: (000) 000-0000
Attention: Chief Counsel, Mergers & Acquisitions
0000 Xxxxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx XX 00000-0000
Facsimile No.: (000) 000-0000
Attention: Chief Counsel, Mergers & Acquisitions
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Coco, Esq.
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Coco, Esq.
Xxxxxx X. Xxxxxxxxx, Esq.
if to the Company, to:
Xxxxxxxx Instruments, Inc.
00000 Xxxxxx Xxxx
Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Chairman of the Board, President
00000 Xxxxxx Xxxx
Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Chairman of the Board, President
and Chief Executive Officer
with a copy (which shall not constitute notice) to:
Xxxxx & Xxxxxxxxx LLP
PNC Center
0000 Xxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
PNC Center
0000 Xxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx, Esq.
Section 8.3. Interpretation and Definitions. When a reference is made in this
Agreement to an Article or Section, such reference is to an Article or Section of this Agreement
unless otherwise indicated. The table of contents, table of defined terms and headings contained
in this Agreement are for reference purposes only and do not affect in any way the meaning or
interpretation of this Agreement. Except as otherwise provided herein, all references to “dollars”
or “$” shall be deemed references to the lawful money of the United States of America. Whenever
the words “include,” “includes” or “including” are used in this Agreement, they will be deemed to
be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and
words of similar import when used in this Agreement will refer to this Agreement as a whole and not
to any particular provision of this Agreement. All terms defined in this Agreement will have the
defined meanings when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in
47
this Agreement are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term. Any statute defined or
referred to herein means such statute as from time to time amended, modified or supplemented,
including by succession of comparable successor statutes. References to “this Agreement” include
any schedules, exhibits or other attachments hereto. The parties hereto have participated jointly
in the negotiating and drafting of this Agreement and, if an ambiguity or question of intent
arises, this Agreement shall be construed as jointly drafted by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provision of this Agreement. For purposes of this Agreement:
(a) “affiliate” of any person means another person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control with, such first
person, with “control” meaning the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a person, whether through the ownership of
voting securities, by contract or otherwise;
(b) “Antitrust Law” means the Xxxxxxx Act, the Xxxxxxx Act, the HSR Act, the Federal Trade
Commission Act, and all other Laws (domestic or foreign) that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization or restraint of trade
or lessening of competition through merger or acquisition;
(c) “Business Day” means any day other than Saturday, Sunday or any day on which banking and
savings and loan institutions in the State of Ohio are authorized or required by Law to be closed;
(d) “Company IP” means all Intellectual Property Rights owned by the Company or any of the
Company Subsidiaries;
(e) “Company Material Adverse Effect” means any event, change, circumstance or effect that (i)
is materially adverse to the business, financial condition or results of operations of the Company
and the Company Subsidiaries, taken as a whole, or (ii) prevents or materially delays or materially
impairs the ability of the Company to perform its obligations hereunder and to consummate the
Merger and the other transactions contemplated by this Agreement; provided,
however, that in the case of clause (i) only, events, changes, circumstances or effects
shall not constitute or be considered in determining a Company Material Adverse Effect to the
extent: (A) generally affecting the electronic test and measurement industry in the United States
or elsewhere or the economy or the financial or securities markets in the United States or
elsewhere, including regulatory, social or political conditions or developments (including any
outbreak or escalation of hostilities or acts of war, whether or not pursuant to the declaration of
a national emergency or war, or acts of terrorism) or changes in interest rates, (B) directly or
indirectly resulting from (1) except for breaches of Section 3.1(d), the announcement or the
existence of, or taking actions required by, this Agreement or the announcement of the transactions
contemplated by this Agreement, (2) changes in applicable Law or GAAP or accounting standards,
(3) changes in the market price or trading volume of the Company Shares, (4) changes in any analyst
recommendations, any financial strength rating or any other similar recommendations or ratings as
to the Company or the Company Subsidiaries (including, in and of itself, any failure to meet
analyst projections), (5) the loss by the Company or any of the
48
Company Subsidiaries of any of its customers, suppliers or employees as a result of the
announcement of the transactions contemplated by this Agreement, or (6) the failure, in and of
itself, of the Company to meet any expected or projected financial or operating performance target,
whether internal or published, for any period ending on or after the date of this Agreement as well
as any change, in and of itself, by the Company in any expected or projected financial or operating
performance target as compared with any target prior to the date of this Agreement;
provided that any of the underlying causes of such change or failure in subclauses (3), (4)
or (6) above shall not be excluded from the determination of a Company Material Adverse Effect by
virtue of this clause; and further provided that, notwithstanding the foregoing,
any matter described in clause (A) above shall not be excluded from the determination of a Company
Material Adverse Effect to the extent that such matter disproportionately affects the Company and
the Company Subsidiaries, taken as a whole, as compared to other persons engaged in the electronic
test and measurement industry.
(f) “Company Share Plans” means the 1992 Stock Option Plan, 2002 Stock Incentive Plan, as
amended, 2009 Stock Incentive Plan, 1996 Outside Directors Deferred Stock Plan and the 1997
Directors’ Stock Option Plan;
(g) “Company Software Products” means all material Software products developed and owned by
the Company or any Company Subsidiary that are (i) offered for license by the Company or any of the
Company Subsidiaries or (ii) used in the conduct of their respective businesses;
(h) “Environment” means soil, surface waters, ground water, land, stream sediment, surface and
subsurface strata, ambient air, indoor air or indoor air quality, including any material or
substance used in the physical structure of any building or improvement;
(i) “Environmental Condition” means any contamination, damage, injury or other condition
related to Hazardous Substances and includes any present or former Hazardous Substance treatment,
storage, disposal or recycling units, underground storage tanks, wastewater treatment or management
systems, wetlands, sumps, lagoons, impoundments, landfills, ponds, incinerators, xxxxx,
asbestos-containing materials, or PCB-containing articles;
(j) “Environmental, Health and Safety Claim” means any written claim, demand, suit, action,
proceeding, order, investigation or any other written notice to the Company or any Company
Subsidiary by any person alleging any potential liability (including potential liability for
investigatory costs, risk assessment costs, cleanup costs, removal costs, remedial costs, operation
and maintenance costs, governmental response costs, natural resource damages, or penalties) arising
out of, based on, or resulting from (i) alleged noncompliance with any Environmental, Health and
Safety Law or Environmental Permit, (ii) alleged injury or damage arising from exposure to
Hazardous Substances, or (iii) the presence, Release or threatened Release into the Environment of
any Hazardous Substance at or from any location, whether or not owned, leased, operated or
otherwise used by the Company or any Company Subsidiary;
(k) “Environmental, Health and Safety Laws” means all Laws relating to (i) pollution or
protection of the Environment, (ii) emissions, discharges, Releases or threatened Releases of
Hazardous Substances, (iii) threats to human health or ecological resources arising
49
from exposure to Hazardous Substances or (iv) the manufacture, generation, processing,
distribution, use, sale, treatment, receipt, storage, disposal, transport or handling of Hazardous
Substances, and includes the Comprehensive Environmental Response, Compensation and Liability Act,
the Resource Conversation and Recovery Act, the Clean Air Act, the Clean Water Act, the Water
Pollution Control Act, the Toxic Substances Control Act and any similar foreign, state or local
Laws;
(l) “Environmental Permit” means all Permits and timely-submitted applications for Permits
required under applicable Environmental, Health and Safety Laws;
(m) “ERISA Affiliate” means those Company Subsidiaries which are members of a “controlled
group” which includes the Company (within the meaning of Section 414(b) of the Code and related
regulations) or which are “under common control” in a group of corporate and non-corporate
enterprises which includes the Company (within the meaning of Section 414(c) of the Code and
related regulations);
(n) “Filed SEC Documents” means the Company’s Annual Report on Form 10-K for the fiscal year
ended September 30, 2008, the Company’s Annual Report on Form 10-K for the fiscal year ended
September 30, 2009, the Company’s Quarterly Report on Form 10-Q for the quarterly period ended
December 31, 2009, the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March
31, 2010, the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010,
the Company’s Current Reports on Form 8-K filed on November 19, 2009, November 20, 2009, December
9, 2009, December 14, 2009, February 19, 2010 and August 13, 2010, the Company’s Definitive Notice
and Proxy Statement for the Company’s Annual Meeting held in 2009 and the Company’s Definitive
Notice and Proxy Statement for the Company’s Annual Meeting held in 2010.
(o) “Hazardous Substance” means (i) chemicals, pollutants, contaminants, hazardous wastes,
toxic substances, toxic mold, radiation and radioactive materials, (ii) any substance that is or
contains asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls (“PCBs”), petroleum
or petroleum-derived substances or wastes, leaded paints, radon gas or related materials, (iii) any
substance that requires removal or remediation under any applicable Environmental, Health and
Safety Law, or is defined, listed or identified as a “hazardous waste” or “hazardous substance”
thereunder, or (iv) any substance that is regulated under any applicable Environmental, Health and
Safety Law;
(p) “Indebtedness” means, with respect to any person, all obligations (including all
obligations in respect of principal, accrued interest, penalties, prepayment penalties, fees and
premiums) of such person (i) for borrowed money (including overdraft facilities), (ii) evidenced by
notes, bonds, debentures or similar instruments, (iii) in respect of letters of credit and bankers’
acceptances, (iv) under interest rate or currency swap or other derivative or hedging instruments
and transactions (valued at the termination value thereof), (v) all obligations of such person
under any sale and lease back transaction, agreement to repurchase securities sold or other similar
financing transaction and (vi) in the nature of guarantees of the obligations described in clauses
(i) through (v) above of any other person.
50
(q) “Intellectual Property Rights” means all worldwide (i) inventions, whether or not
patentable; (ii) patents and patent applications; (iii) trademarks, service marks, trademark and
service xxxx registrations and applications, trade dress, logos, slogans and trade names, whether
or not registered, and all goodwill associated therewith; (iv) copyrights, copyrightable works,
copyright registrations and applications, rights in databases and related rights, whether or not
registered; (v) mask works; (vi) Software; (vii) Internet domain names and Internet websites and
the content thereof, (viii) trade secrets, confidential, technical and business information, and
know-how; (ix) all rights to any of the foregoing provided by bilateral or international treaties
or conventions; (x) all other intellectual property or proprietary rights; and (xii) all rights to
xxx or recover and retain damages and costs and attorneys’ fees for past, present and future
infringement or misappropriation of any of the foregoing;
(r) “knowledge” means (i) with respect to the Company, the actual knowledge, after reasonable
inquiry, of the Chairman, President and Chief Executive Officer, the Executive Vice President and
Chief Operating Officer and the Vice President and Chief Financial Officer of the Company and
(ii) with respect to Parent and Merger Sub, the actual knowledge, after reasonable inquiry, of the
executive officers of Parent;
(s) “Law” means any foreign, federal, state or local law, statute, code, ordinance,
regulation, rule, principle of common law or other legally enforceable obligation imposed by a
court or other Governmental Entity;
(t) “Liens” means any and all pledges, claims, liens, options, charges, easements,
restrictions, covenants, conditions, encroachments, encumbrances and security interests;
(u) “Parent Material Adverse Effect” means any event, circumstance, change, occurrence or
state of facts that prevents or materially delays or materially impairs the ability of Parent or
Merger Sub to consummate the Merger and the other transactions contemplated by this Agreement;
(v) “Permitted Liens” means (i) statutory Liens securing payments not yet due and payable,
(ii) such imperfections or irregularities of title, claims, liens, charges, security interests,
easements, covenants and other restrictions or encumbrances as would not reasonably be expected to
materially impair property or assets to which they relate, (iii) mortgages, or deeds of trust,
security interests or other encumbrances on title related to indebtedness reflected on the
consolidated financial statements of the Company set forth in Section 8.3(v) of the Company
Disclosure Letter, (iv) Liens for Taxes not yet due and payable or that are being contested in good
faith by appropriate proceedings, (v) mechanics’, materialmen’s or other Liens arising by operation
of law, related to an underlying obligation that is not overdue or that secure a liquidated amount
that is being contested in good faith and by appropriate proceedings and for which adequate
reserves have been maintained in accordance with GAAP, (vi) pledges or deposits to secure
obligations under workers’ compensation Laws or similar legislation or to secure public or
statutory obligations, and (vii) pledges and deposits to secure the performance of bids, trade
contracts, leases, surety and appeal bonds, performance bonds and other obligations of a similar
nature, in each case in the ordinary course of business;
51
(w) “person” means an individual, corporation, partnership, limited liability company, joint
venture, association, trust, unincorporated organization or other legal entity (including its
permitted successors and assigns);
(x) “Plans” means the Company Pension Plans, the Company Welfare Plans, the Company Incentive
Compensation Plans and the Company Executive Compensation Agreements.
(y) “Registered IP” means all material U.S., international and foreign (i) patents and patent
applications (including provisional applications and design patents and applications) and all
reexaminations, reissues, divisions, divisionals, renewals, extensions, counterparts, continuations
and continuations-in-part thereof, and all patents, applications, documents and filings claiming
priority thereto or serving as a basis for priority thereof; (ii) registered trademarks, service
marks, intent-to-use applications, or other registrations or applications related to trademarks or
service marks; (iii) registered copyrights and applications for copyright registration; and (iv)
domain name registrations. Notwithstanding the foregoing, Registered IP does not mean any patent,
patent application, trademark, or trademark application that was intentionally abandoned by the
Company or any of the Company Subsidiaries in the reasonable business judgment of the Company or
such Company Subsidiary;
(z) “Release” means any releasing, disposing, discharging, injecting, spilling, leaking,
pumping, dumping, emitting, escaping, emptying, migration, placing or the like, or otherwise
entering into the Environment;
(aa) “Santa Xxxx Property” means the real property leased pursuant to the Lease, dated January
9, 2004, as amended, between the Company and CA-Oak Valley Business Center Limited Partnership, as
assigned to Agilent Technologies, Inc.;
(bb) “Software” shall mean any and all (i) computer programs, including any and all software
implementations of algorithms, models and
methodologies, whether in source code or object code, (ii) databases and compilations,
including any and all data and collections of data, whether machine readable or otherwise,
(iii) descriptions, schematics, flow-charts and other work product used to design, plan, organize
and develop any of the foregoing and (iv) all documentation, including user documentation, user
manuals, specifications and training materials, relating to any of the foregoing;
(cc) “subsidiary” of any person means (i) a corporation more than fifty percent (50%) of the
combined voting power of the outstanding voting stock of which is owned, directly or indirectly, by
such person or by one of more other subsidiaries of such person or by such person and one or more
other subsidiaries thereof, (ii) a partnership of which such person, or one or more other
subsidiaries of such person or such person and one or more other subsidiaries thereof, directly or
indirectly, is the general partner and has the power to direct the policies, management and affairs
of such partnership, (iii) a limited liability company of which such person or one or more other
subsidiaries of such person or such person and one or more other subsidiaries thereof, directly or
indirectly, is the managing member and has the power to direct the policies, management and affairs
of such company or (iv) any other person (other than a corporation, partnership or limited liability company) in which such person, or one or more other
52
subsidiaries of such person or such
person and one or more other subsidiaries thereof, directly or indirectly, has at least a majority
ownership and power to direct the policies, management and affairs thereof;
(dd) “Taxes” includes all federal, state, local or foreign net and gross income, alternative
or add-on minimum, environmental, gross receipts, ad valorem, value added, goods
and services, capital stock, profits, license, single business, employment, severance, stamp,
unemployment, customs, property, sales, excise, use, occupation, service, transfer, payroll,
franchise, withholding and other taxes or similar governmental duties, charges, fees, levies or
other assessments, including any interest, penalties or additions with respect thereto; and
(ee) “Tax Return” means any return, report, statement or information required to be filed with
any Governmental Entity with respect to Taxes, including any supplement thereto or amendment
thereof.
Section 8.4. Counterparts. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same agreement and will become effective
when one or more counterparts have been signed by each of the parties and delivered (by telecopy,
email or otherwise) to the other parties.
Section 8.5. Entire Agreement; No Third-Party Beneficiaries. This Agreement,
including the Company Disclosure Letter and the Parent Disclosure Letter, and the Confidentiality
Agreement, (a) constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the subject matter of this
Agreement and the Confidentiality Agreement and (b) except for the provisions of Section
5.4, are not intended to confer upon any person other than the parties hereto any rights or
remedies, other than the right of the Company shareholders to receive the Merger Consideration
after the Closing (a claim with respect to which may not be made unless and until the Effective
Time shall have occurred).
Section 8.6. Governing Law. This Agreement and any disputes or controversies arising
out of or relating to this Agreement or the transactions contemplated hereby (whether in contract,
tort or otherwise) shall be governed by, and construed in accordance with, the Laws of the State of
Ohio, regardless of the Laws that might otherwise govern under applicable principles of conflict of
laws thereof.
Section 8.7. Assignment. Neither this Agreement nor any of the rights, interests or
obligations under this Agreement may be assigned, in whole or in part, by operation of Law or
otherwise by any of the parties hereto without the prior written consent of the other parties,
except that Parent and/or Merger Sub may assign its rights hereunder to a direct or indirect wholly
owned subsidiary of Parent (provided that no such assignment shall relieve Parent or Merger Sub
from any obligation or liability under this Agreement). Any assignment in violation of this
Section 8.7 will be void and of no effect. Subject to the preceding two sentences, this
Agreement is binding upon, inures to the benefit of, and is enforceable by, the parties and their
respective successors and permitted assigns.
53
Section 8.8. Consent to Jurisdiction; Waiver of Jury Trial.
(a) The parties agree that irreparable damage would occur if 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 of this
Agreement exclusively in the Court of Common Pleas in Cuyahoga County, Ohio, or if (but only if)
that court does not have subject matter jurisdiction over such action or proceeding, in the United
States District Court for the Northern District of Ohio. In addition, each of the parties hereto
irrevocably agrees that any legal action or proceeding with respect to this Agreement and the
rights and obligations arising hereunder, or for recognition and enforcement of any judgment in
respect of this Agreement and the rights and obligations arising hereunder brought by the other
party hereto or its successors or assigns, shall be brought and determined exclusively in the Court
of Common Pleas in Cuyahoga County, Ohio, or if (but only if) that court does not have subject
matter jurisdiction over such action or proceeding, in the United States District Court for the
Northern District of Ohio. Each of the parties hereto hereby irrevocably submits with regard to
any such action or proceeding for itself and in respect of its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not
bring any action relating to this Agreement or any of the transactions contemplated by this
Agreement in any court other than the aforesaid courts. Each of the parties hereto hereby
irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason other than the
failure to serve in accordance with this Section 8.8, (b) any claim that it or its property
is exempt or immune from jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted
by the applicable law, any claim that (i) the suit, action or proceeding in such court is brought
in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or
(iii) this Agreement, or the subject matter of this Agreement, may not be enforced
in or by such courts. Each of the parties, to the fullest extent permitted by Law, consents
to service of process being made through the notice procedures set forth in Section 8.2.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT
OR ANY OF THE AGREEMENTS DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THEREBY.
Section 8.9. Amendment. This Agreement may be amended by the parties at any time
before or after the Company Shareholder Approval; provided, however, that, after
such approval, no amendment that by Law requires further approval by the Company shareholders may
be made without such further approval. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties.
54
Section 8.10. Extension; Waiver. At any time prior to the Effective Time, the
Company, on one hand, and Parent and Merger Sub, on the other hand, may (a) extend the time for the
performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies
in the representations and warranties of the other party contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the proviso of Section 8.9,
waive compliance by the other parties with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver will be valid only
if set forth in an instrument in writing signed on behalf of such party. The failure of any party
to this Agreement to assert any of its rights under this Agreement or otherwise will not constitute
a waiver of such rights, nor shall any single or partial exercise by any party to this Agreement of
any of its rights under this Agreement preclude any other or further exercise of such rights or any
other rights under this Agreement.
Section 8.11. 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 will nevertheless remain in full force and effect.
Upon any determination that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the fullest extent permitted by
applicable Law.
(Signatures are on the following page.)
55
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their
respective officers thereunto duly authorized, all as of the date first written above.
XXXXXXX CORPORATION | ||||||||
By: | /s/ Xxxxxx X. Xxxxxx | |||||||
Name: | Xxxxxx X. Xxxxxx | |||||||
Title: | Senior Vice President — Corporate Development | |||||||
AEGEAN ACQUISITION CORP. | ||||||||
By: | /s/ Xxxxxx X. Xxxxxx | |||||||
Name: | Xxxxxx X. Xxxxxx | |||||||
Title: | Vice President | |||||||
XXXXXXXX INSTRUMENTS, INC. | ||||||||
By: | /s/ Xxxxxx X. Xxxxxxxx | |||||||
Name: Xxxxxx X. Xxxxxxxx | ||||||||
Title: Chairman, President and Chief Executive Officer |
56