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Exhibit (d)(1)
AGREEMENT AND PLAN OF MERGER
dated as of
April 26, 2001
among
COMPAQ COMPUTER CORPORATION,
PROXICOM, INC.
and
PFC ACQUISITION CORP.
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TABLE OF CONTENTS
Page
ARTICLE 1
THE OFFER
SECTION 1.01. The Offer 1
SECTION 1.02. Company Action 2
SECTION 1.03. Directors 3
ARTICLE 2
THE MERGER
SECTION 2.01. The Merger 4
SECTION 2.02. Conversion of Shares 5
SECTION 2.03. Surrender and Payment 5
SECTION 2.04. Dissenting Shares 7
SECTION 2.05. Stock Options 7
SECTION 2.06. Employee Stock Purchase Plan 8
SECTION 2.07. Adjustments 9
SECTION 2.08. Withholding Rights 9
SECTION 2.09. Lost Certificates 9
ARTICLE 3
THE SURVIVING CORPORATION
SECTION 3.01. Certificate of Incorporation 9
SECTION 3.02. Bylaws 9
SECTION 3.03. Directors and Officers 10
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. Corporate Existence and Power 10
SECTION 4.02. Corporate Authorization 10
SECTION 4.03. Governmental Authorization 11
SECTION 4.04. Non-Contravention 11
SECTION 4.05. Capitalization 11
SECTION 4.06. Subsidiaries 12
SECTION 4.07. SEC Filings 13
SECTION 4.08. Financial Statements 13
SECTION 4.09. Disclosure Documents 14
SECTION 4.10. Absence of Certain Changes 14
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Page
SECTION 4.11. No Undisclosed Material Liabilities 16
SECTION 4.12. Litigation 16
SECTION 4.13. Taxes 17
SECTION 4.14. ERISA 18
SECTION 4.15. Compliance with Laws 20
SECTION 4.16. Finders' Fees 20
SECTION 4.17. Patents and Other Proprietary Rights 21
SECTION 4.18. Environmental Matters 22
SECTION 4.19. Antitakeover Provisions 23
SECTION 4.20. Rights Agreement or Plan 23
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT
SECTION 5.01. Corporate Existence and Power 23
SECTION 5.02. Corporate Authorization 23
SECTION 5.03. Governmental Authorization 23
SECTION 5.04. Non-Contravention 24
SECTION 5.05. Disclosure Documents 24
SECTION 5.06. Finders' Fees 25
SECTION 5.07. Financing 25
ARTICLE 6
COVENANTS OF THE COMPANY
SECTION 6.01. Conduct of the Company 25
SECTION 6.02. Stockholder Meeting; Proxy Material 26
SECTION 6.03. Access to Information 27
SECTION 6.04. Other Offers 27
SECTION 6.05. Section 16 Matters 29
SECTION 6.06. Notice of Certain Events 29
ARTICLE 7
COVENANTS OF PARENT
SECTION 7.01. Obligations of Merger Subsidiary 30
SECTION 7.02. Director and Officer Liability 30
SECTION 7.03. Employees 31
SECTION 7.04. Notice of Certain Events 32
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ARTICLE 8
COVENANTS OF PARENT AND THE COMPANY
SECTION 8.01. Reasonable Best Efforts 32
SECTION 8.02. Certain Filings 33
SECTION 8.03. Public Announcements 33
SECTION 8.04. Merger Without Meeting of Stockholders 33
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of Each Party 33
ARTICLE 10
TERMINATION
SECTION 10.01. Termination 34
SECTION 10.02. Effect of Termination 36
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices 36
SECTION 11.02. Survival 37
SECTION 11.03. Amendments; No Waivers 37
SECTION 11.04. Fees and Expenses 37
SECTION 11.05. Successors and Assigns 38
SECTION 11.06. Governing Law 39
SECTION 11.07. Jurisdiction 39
SECTION 11.08. WAIVER OF JURY TRIAL 39
SECTION 11.09. Counterparts; Effectiveness; Third Party Beneficiaries 39
SECTION 11.10. Entire Agreement 39
SECTION 11.11. Severability 39
SECTION 11.12. Specific Performance 40
SECTION 11.13. Definitions 40
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of April 26, 2001 among Compaq
Computer Corporation, a Delaware corporation ("PARENT"), Proxicom, Inc., a
Delaware corporation (the "COMPANY"), and PFC Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Parent ("MERGER SUBSIDIARY").
The parties hereto agree as follows:
ARTICLE 1
THE OFFER
SECTION 1.01. The Offer. (a) Provided that nothing shall have occurred
that, had the Offer referred to below been commenced, would give rise to a right
to terminate the Offer pursuant to any of the conditions set forth in Annex I
hereto, within five business days after the date hereof, Merger Subsidiary shall
commence an offer (the "OFFER") to purchase all of the outstanding shares of
common stock, par value $0.01 per share, of the Company (the "COMPANY STOCK") at
a price of $5.75 per share, net to the seller in cash. The Offer shall be
subject to the condition that there shall be validly tendered in accordance with
the terms of the Offer, prior to the expiration date of the Offer and not
withdrawn, a number of shares of Company Stock that, together with the shares of
Company Stock then owned by Parent and its Affiliates, represents at least a
majority of the shares of Company Stock outstanding on a fully-diluted basis
(the "MINIMUM CONDITION") and to the other conditions set forth in Annex I
hereto. Merger Subsidiary expressly reserves the right to waive any of the
conditions to the Offer and to make any change in the terms of or conditions to
the Offer; provided that, without the prior written consent of the Company, (i)
the Minimum Condition may not be waived and (ii) no change may be made that
changes the form of consideration to be paid, decreases the price per share of
Company Stock or the number of shares of Company Stock sought in the Offer or
imposes conditions to the Offer in addition to those set forth in Annex I. If
any of the conditions to the Offer is not satisfied or waived on any scheduled
expiration date of the Offer, Merger Subsidiary shall extend the Offer from time
to time until such conditions are satisfied or waived; provided that Merger
Subsidiary shall not be required to extend the Offer beyond August 1, 2001. Any
individual extension of the Offer pursuant to the preceding sentence shall not
exceed 10 business days. If at the expiration of the Offer all of the conditions
to the Offer have been satisfied or
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waived, Merger Subsidiary may (and if the number of shares of Company Stock
validly tendered and not withdrawn pursuant to the Offer equals 80% or more, but
less than 90% of the outstanding shares of Company Stock, shall) extend the
Offer pursuant to an amendment to the Offer providing for a "subsequent offering
period" not to exceed 20 business days to the extent permitted under, and in
compliance with, Rule 14d-11 under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"). Subject to the foregoing and applicable law and
upon the terms and subject to the conditions of the Offer, Merger Subsidiary
shall, and Parent shall cause it to, accept for payment, as promptly as
permitted under applicable securities laws, and pay for, as promptly as
practicable after the date on which Merger Subsidiary first accepts shares for
payment pursuant to the Offer (the "ACCEPTANCE DATE"), all shares of Company
Stock validly tendered and not withdrawn pursuant to the Offer.
(b) As soon as practicable on the date of commencement of the Offer,
Parent and Merger Subsidiary shall file with the Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule TO (the "SCHEDULE
TO") with respect to the Offer (such Schedule TO and such documents included
therein pursuant to which the Offer will be made, together with any supplements
or amendments thereto, the "OFFER DOCUMENTS"). Parent, Merger Subsidiary and the
Company each agrees promptly to correct any information provided by it for use
in the Offer Documents if and to the extent that such information shall have
become false or misleading in any material respect. Parent and Merger Subsidiary
agree to take all steps necessary to cause the Schedule TO as so corrected to be
filed with the SEC and the other Offer Documents as so corrected to be
disseminated to holders of shares of Company Stock, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given an opportunity to review and comment on the Offer
Documents prior to their being filed with the SEC or disseminated to the holders
of shares of Company Stock.
SECTION 1.02. Company Action. (a) The Company hereby consents to the
Offer and represents that its Board of Directors, at a meeting duly called and
held has (i) determined that this Agreement and the transactions contemplated
hereby, including the Offer and the Merger, are fair to and in the best
interests of the Company's stockholders, (ii) approved and adopted this
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, in accordance with the requirements of the Delaware General Corporation
Law (the "DELAWARE LAW") and (iii) subject to Section 6.04(b), resolved to
recommend acceptance of the Offer and adoption of this Agreement by its
stockholders. The Company further represents that Xxxxxxx, Xxxxx & Co. has
delivered to the Board of Directors of the Company its oral opinion (to be
subsequently confirmed in writing) to the effect that, as of the date of this
Agreement, the consideration to
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be received by the holders of shares of Company Stock pursuant to the terms of
the Offer and the Merger is fair to such holders from a financial point of view.
The Company will promptly furnish Parent with a list of its stockholders,
mailing labels and any available listing or computer file containing the names
and addresses of all record holders of shares of Company Stock and lists of
securities positions of shares of Company Stock held in stock depositories, in
each case true and correct as of the most recent practicable date, and will
provide to Parent such additional information (including updated lists of
stockholders, mailing labels and lists of securities positions) and such other
assistance as Parent may reasonably request in connection with the Offer.
(b) As soon as practicable on the day that the Offer is commenced, the
Company shall file with the SEC and disseminate to holders of shares of Company
Stock, in each case as and to the extent required by applicable federal
securities laws, a Solicitation/Recommendation Statement on Schedule 14D-9
(together with any amendments or supplements thereto, the "SCHEDULE 14D-9")
that, subject to Section 6.04(b), shall reflect the recommendations of the Board
of Directors of the Company referred to above. Each of the Company, Parent and
Merger Subsidiary agrees promptly to correct any information provided by it for
use in the Schedule 14D-9 if and to the extent that it shall have become false
or misleading in any material respect. The Company agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC
and to be disseminated to holders of shares of Company Stock, in each case as
and to the extent required by applicable federal securities laws. Parent and its
counsel shall be given an opportunity to review and comment on the Schedule
14D-9 prior to its being filed with the SEC.
SECTION 1.03. Directors. (a) Effective upon the acceptance for payment
of any shares of Company Stock pursuant to the Offer, Parent shall be entitled
to designate the number of directors, rounded up to the next whole number, on
the Board of Directors of the Company that equals the product of (i) the total
number of directors on the Board of Directors of the Company (giving effect to
the election of any additional directors pursuant to this Section) and (ii) the
percentage that the number of shares of Company Stock beneficially owned by
Parent and its Affiliates (including shares of Company Stock accepted for
payment) bears to the total number of shares of Company Stock outstanding, and
the Company shall take all action necessary to cause Parent's designees to be
elected or appointed to the Board of Directors of the Company, including
increasing the number of directors, and seeking and accepting resignations of
incumbent directors. At such time, subject to applicable law and applicable
stock exchange regulations, the Company will also use its reasonable best
efforts to cause individuals designated by Parent to constitute the number of
members, rounded up to the next whole number, on (i) each committee of the Board
and (ii)
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each board of directors of each Subsidiary of the Company (and each committee
thereof) that represents the same percentage as such individuals represent on
the Board of Directors of the Company.
(b) The Company's obligations to appoint Parent's designees to the
Board of Directors of the Company shall be subject to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly
take all actions, and shall include in the Schedule 14D-9 such information with
respect to the Company and its officers and directors, as Section 14(f) and Rule
14f-1 require in order to fulfill its obligations under this Section. Parent
shall supply to the Company in writing and be solely responsible for any
information with respect to itself and its nominees, officers, directors and
affiliates required by Section 14(f) and Rule 14f-1.
(c) Following the election or appointment of Parent's designees
pursuant to Section 1.03(a) and until the Effective Time, the approval of a
majority of the directors of the Company then in office who were not designated
by Parent shall be required to authorize (and such authorization shall
constitute the authorization of the Board of Directors of the Company and no
other action on the part of the Company, including any action by any other
director of the Company, shall be required to authorize) any amendment or
termination of this Agreement, any waiver of compliance with any of the
agreements or conditions contained herein for the benefit of the Company or any
action as to which the consent or agreement of the Company is required
hereunder. Following the election or appointment of Parent's designees pursuant
to Section 1.03(a) and until the Effective Time, the Company shall use its
reasonable best efforts to ensure that at least one of the directors of the
Company not designated by Parent shall remain a member of the Board of Directors
of the Company.
ARTICLE 2
THE MERGER
SECTION 2.01. The Merger. (a) At the Effective Time, Merger Subsidiary
shall be merged (the "MERGER") into the Company in accordance with the Delaware
Law, whereupon the separate existence of Merger Subsidiary shall cease, and the
Company shall be the surviving corporation (the "SURVIVING CORPORATION").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company and
Merger Subsidiary will file a certificate of merger with the Delaware Secretary
of State
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and make all other filings or recordings required by the Delaware Law in
connection with the Merger. The Merger shall become effective at the close of
business on the day on which the certificate of merger is duly filed with the
Delaware Secretary of State or at such later time as the Company and Parent may
agree and specify in the certificate of merger (the "EFFECTIVE TIME").
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, powers, privileges and franchises and be subject to all
of the obligations, liabilities, restrictions and disabilities of the Company
and Merger Subsidiary, all as provided under the Delaware Law.
SECTION 2.02. Conversion of Shares. At the Effective Time:
(a) except as otherwise provided in Section 2.02(b) or Section 2.04,
each share of Company Stock outstanding immediately prior to the Effective Time
shall be converted into the right to receive $5.75 in cash, or such higher price
as is paid in the Offer, without interest (the "MERGER CONSIDERATION");
(b) each share of Company Stock held by the Company as treasury stock
or owned by Parent or any of its Subsidiaries immediately prior to the Effective
Time shall be canceled, and no payment shall be made with respect thereto; and
(c) each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and become one
share of common stock of the Surviving Corporation with the same rights, powers
and privileges as the shares so converted and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
SECTION 2.03. Surrender and Payment. (a) Prior to the Effective Time,
Parent shall appoint an agent (the "EXCHANGE AGENT") for the purpose of
exchanging certificates representing shares of Company Stock (the
"CERTIFICATES") for the Merger Consideration. Parent will make available to the
Exchange Agent, as needed, the Merger Consideration to be paid in respect of the
shares of Company Stock. Promptly after the Effective Time, Parent will send, or
will cause the Exchange Agent to send, to each holder of shares of Company Stock
at the Effective Time a letter of transmittal and instructions (which shall
specify that the delivery shall be effected, and risk of loss and title shall
pass, only upon proper delivery of the Certificates to the Exchange Agent) for
use in such exchange.
(b) Each holder of shares of Company Stock that have been converted
into the right to receive the Merger Consideration will be entitled to receive,
upon
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surrender to the Exchange Agent of a Certificate, together with a properly
completed letter of transmittal, the Merger Consideration payable for each share
of Company Stock represented by such Certificate. Until so surrendered, each
such Certificate shall represent after the Effective Time for all purposes only
the right to receive such Merger Consideration.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the Person in whose name the surrendered Certificate is
registered, it shall be a condition to such payment that the Certificate so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the Person requesting such payment shall pay to the Exchange
Agent any transfer or other taxes required as a result of such payment to a
Person other than the registered holder of such Certificate or establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
payable.
(d) After the Effective Time, there shall be no further registration of
transfers of shares of Company Stock. If, after the Effective Time, Certificates
are presented to the Surviving Corporation, they shall be canceled and exchanged
for the Merger Consideration provided for, and in accordance with the procedures
set forth, in this Article 2.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) (and any interest or other income
earned thereon) that remains unclaimed by the holders of shares of Company Stock
six months after the Effective Time shall be returned to Parent, upon demand,
and any such holder who has not exchanged shares of Company Stock for the Merger
Consideration in accordance with this Section 2.03 prior to that time shall
thereafter look only to Parent for payment of the Merger Consideration in
respect of such shares of Company Stock without any interest thereon.
Notwithstanding the foregoing, Parent shall not be liable to any holder of
shares of Company Stock for any amount paid to a public official pursuant to
applicable abandoned property, escheat or similar laws. Any amounts remaining
unclaimed by holders of shares of Company Stock two years after the Effective
Time (or such earlier date immediately prior to such time when the amounts would
otherwise escheat to or become property of any governmental authority) shall
become, to the extent permitted by applicable law, the property of Parent free
and clear of any claims or interest of any Person previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) to pay for shares of Company Stock
for which appraisal rights have been perfected shall be returned to Parent, upon
demand.
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SECTION 2.04. Dissenting Shares. Notwithstanding Section 2.02, shares
of Company Stock outstanding immediately prior to the Effective Time and held by
a holder who has not voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such shares of Company Stock in
accordance with the Delaware Law shall not be converted into a right to receive
the Merger Consideration, unless such holder fails to perfect, withdraws or
otherwise loses its right to appraisal. If, after the Effective Time, such
holder fails to perfect, withdraws or loses its right to appraisal, such shares
of Company Stock shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger Consideration. The Company
shall give Parent prompt notice of any demands received by the Company for
appraisal of shares of Company Stock, and Parent shall have the right to
participate in all negotiations and proceedings with respect to such demands.
Except with the prior written consent of Parent, the Company shall not make any
payment with respect to, or settle or offer to settle, any such demands.
SECTION 2.05. Stock Options. (a) Except as provided in Section 2.05(b)
or 2.06, the terms of each outstanding option to purchase shares of Company
Stock under any compensatory stock option plan or arrangement of the Company (a
"COMPANY STOCK OPTION"), whether or not exercisable or vested, shall be adjusted
as necessary to provide that, at the Effective Time, each Company Stock Option
outstanding immediately prior to the Effective Time shall be deemed to
constitute an option (an "ADJUSTED OPTION") to acquire, on the same terms and
conditions as were applicable under such Company Stock Option (including
exercisability and vesting), a number of shares of common stock, par value $0.01
per share, of Parent (the "PARENT STOCK"), rounded up to the nearest whole
number, equal to the product of the Exchange Ratio and the number of shares of
Company Stock that the holder of such Company Stock Option could have purchased
(assuming full vesting thereof) had such holder exercised such Company Stock
Option in full immediately prior to the Effective Time, at an exercise price per
share of Parent Stock equal to the aggregate exercise price under such Company
Stock Option divided by the number of shares of Parent Stock subject to such
Adjusted Stock Option, rounded up to the nearest whole cent; provided that, for
any Company Stock Option to which Section 421 of the Code applies by reason of
its qualification under any of Sections 422 through 424 of the Code, the
exercise price, the number of shares of Parent Stock purchasable pursuant to
such Adjusted Option and the terms and conditions of exercise of such Adjusted
Option shall be determined in order to comply with Section 424 of the Code. The
"EXCHANGE RATIO" shall be a number (rounded to the nearest ten-thousandth)
determined by dividing $5.75, or such higher price as is paid in the Offer, by
the Market Price per share of Parent Stock. The "MARKET PRICE" per share of
Parent Stock shall be the average of the high and low sales prices of
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Parent Stock on the New York Stock Exchange on the day on which the Effective
Time occurs.
(b) At or immediately prior to the Effective Time, each Company Stock
Option held by a non-employee director or former director of the Company,
whether or not exercisable or vested, shall be canceled, and the Company shall
pay each such holder at or promptly after the Effective Time for each such
Company Stock Option an amount in cash determined by multiplying the excess, if
any, of $5.75 per share of Company Stock, or such higher price as is paid in the
Offer, over the applicable exercise price of such Company Stock Option by the
number of shares of Company Stock subject thereto (assuming full vesting
thereof) had such holder exercised such Company Stock Option in full immediately
prior to the Effective Time.
(c) Prior to the Effective Time, the Company shall use its reasonable
best efforts to obtain any consents from holders of Company Stock Options and
shall make any amendments to the terms of the plans or arrangements pursuant to
which the Company Stock Options were granted that are necessary to give effect
to the transactions contemplated by this Section 2.05.
(d) Parent shall take such actions as are necessary for the assumption
of the Company Stock Options pursuant to this Section 2.05, including the
reservation, issuance and listing of Parent Stock as is necessary to effectuate
the transactions contemplated by this Section 2.05. Parent shall prepare and
file with the SEC a registration statement on an appropriate form, or a
post-effective amendment to a registration statement previously filed under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), with respect to the
shares of Parent Stock subject to the Adjusted Options and, where applicable,
shall use its best efforts to have such registration statement declared
effective as soon as practicable following the Effective Time and to maintain
the effectiveness of such registration statement covering such Adjusted Options
(and to maintain the current status of the prospectus contained therein) for so
long as any of such Adjusted Options remain outstanding.
SECTION 2.06. Employee Stock Purchase Plan. Each outstanding option to
purchase shares of Company Stock under the Company's Employee Stock Purchase
Plan (the "COMPANY ESPP") shall be treated in accordance with the provisions of
the Company ESPP (including Section 19 thereof). Prior to the Acceptance Date,
the Company shall give any required notice to participants of the Company ESPP
in accordance with the provisions thereof. As of the Acceptance Date, the
Company ESPP shall be terminated in accordance with the provisions thereof.
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SECTION 2.07. Adjustments. If, during the period between the date of
this Agreement and the Effective Time, any change in the outstanding shares of
Company Stock shall occur, including by reason of any reclassification,
recapitalization, stock split or combination, exchange or readjustment of shares
of Company Stock, or stock dividend thereon with a record date during such
period, the cash payable pursuant to the Offer and the Merger and the Exchange
Ratio shall be appropriately adjusted.
SECTION 2.08. Withholding Rights. Each of the Surviving Corporation and
Parent shall be entitled to deduct and withhold from the consideration otherwise
payable to any Person pursuant to this Article 2 such amounts as it is required
to deduct and withhold with respect to the making of such payment under any
provision of federal, state, local or foreign tax law. If the Surviving
Corporation or Parent, as the case may be, so deducts and withholds amounts,
such amounts shall be treated for all purposes of this Agreement as having been
paid to the holder of the shares of Company Stock in respect of which the
Surviving Corporation or Parent, as the case may be, made such deduction and
withholding.
SECTION 2.09. Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will pay, in exchange for such lost, stolen or destroyed
Certificate, the Merger Consideration to be paid in respect of the shares of
Company Stock represented by such Certificate, as contemplated by this Article
2.
ARTICLE 3
THE SURVIVING CORPORATION
SECTION 3.01. Certificate of Incorporation. The certificate of
incorporation of the Company in effect immediately prior to the Effective Time
shall be the certificate of incorporation of the Surviving Corporation from and
after the Effective Time until amended in accordance with applicable law.
SECTION 3.02. Bylaws. The bylaws of Merger Subsidiary in effect
immediately prior to the Effective Time shall be the bylaws of the Surviving
Corporation from and after the Effective Time until amended in accordance with
applicable law.
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SECTION 3.03. Directors and Officers. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, (a) the directors of Merger Subsidiary immediately prior to
the Effective Time shall be the directors of the Surviving Corporation and (b)
the officers of the Company immediately prior to the Effective Time shall be the
officers of the Surviving Corporation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule delivered by the Company
to Parent prior to the execution of this Agreement (the "COMPANY DISCLOSURE
SCHEDULE"), the Company represents and warrants to Parent that:
SECTION 4.01. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except for such licenses, authorizations, consents
and approvals the failure of which to have or obtain would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. The
Company is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification necessary,
except for those jurisdictions where the failure to be so qualified or in good
standing would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. The Company has heretofore made available to
Parent true and complete copies of the Company's certificate of incorporation
and bylaws as currently in effect.
SECTION 4.02. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the corporate powers of the
Company and, except as set forth in the following sentence, have been duly
authorized by all necessary corporate action. The affirmative vote of the
holders of a majority of the shares of Company Stock in favor of adoption of
this Agreement is the only vote of the holders of the Company's capital stock
necessary to approve the transactions contemplated by this Agreement. This
Agreement constitutes a valid and binding agreement of the Company.
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SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated by this Agreement require no action by or in
respect of, or filing with, any governmental body, agency, official or authority
other than (a) the filing of a certificate of merger with respect to the Merger
with the Delaware Secretary of State; (b) compliance with any applicable
requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR ACT"); (c) compliance with any applicable requirements of the
Exchange Act; (d) compliance with the rules and regulations of The Nasdaq Stock
Market, Inc. (the "NASDAQ STOCK MARKET"); (e) filings or consents under the
competition laws of Germany; and (f) any other filings, approvals or
authorizations which, if not made or obtained, would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement.
SECTION 4.04. Non-Contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby do not and will not (a) contravene or
conflict with the certificate of incorporation or bylaws of the Company, (b)
assuming compliance with the matters referred to in Section 4.03, contravene or
conflict with or constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to the Company
or any of its Subsidiaries, (c) constitute a default under or give rise to any
right of termination, cancellation or acceleration of any right or obligation of
the Company or any of its Subsidiaries or to a loss of any benefit to which the
Company or any of its Subsidiaries is entitled under any provision of any
agreement, contract or other instrument binding upon the Company or any of its
Subsidiaries or any license, franchise, permit or other similar authorization
held by the Company or any of its Subsidiaries or (d) result in the creation or
imposition of any Lien on any asset of the Company or any of its Subsidiaries,
except in the case of clauses (b) - (d) above, for such matters as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. For purposes of this Agreement, "LIEN" means, with respect to
any asset, any mortgage, lien, pledge, charge, security interest or encumbrance
of any kind in respect of such asset.
SECTION 4.05. Capitalization. The authorized capital stock of the
Company consists of 200,000,000 shares of Company Stock and 10,000,000 shares of
preferred stock, par value $0.01 per share ("PREFERRED STOCK"). As of April 10,
2001, there were outstanding (i) 56,985,969 shares of Company Stock, (ii) no
shares of Preferred Stock and (iii) other than stock options outstanding under
the Company ESPP, stock options to purchase an aggregate of 17,610,910
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shares of Company Stock (of which options to purchase an aggregate of 4,934,300
shares of Company Stock are currently exercisable) at a weighted average
exercise price of $20.15 per share. All outstanding shares of capital stock of
the Company have been duly authorized and validly issued and are fully paid and
nonassessable. All shares of Company Stock issuable upon exercise of outstanding
Company Stock Options have been duly authorized and will have been validly
issued and will be fully paid and nonassessable. Except as set forth in this
Section and except for changes since April 10, 2001 resulting from the exercise
of Company Stock Options outstanding on such date, there are outstanding (a) no
shares of capital stock or other voting securities of the Company, (b) no
securities of the Company convertible into or exchangeable for shares of capital
stock or voting securities of the Company and (c) no options or other rights to
acquire from the Company, and no obligation of the Company to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of the Company (the items in clauses (a), (b)
and (c) being referred to collectively as the "COMPANY SECURITIES"). There are
no outstanding obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any Company Securities, except in
connection with the cashless exercise of Company Stock Options outstanding on
April 10, 2001.
SECTION 4.06. Subsidiaries. (a) Each of the Company's Subsidiaries is a
corporation or other entity duly incorporated or organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation or
organization and has all corporate or other powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted, except for those licenses, authorizations, consents
and approvals the absence of which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each of the Company's
Subsidiaries is duly qualified to do business and is in good standing in each
jurisdiction where the character of the property owned or leased by it or the
nature of its activities makes such qualification necessary, except for those
jurisdictions where the failure to be so qualified or in good standing would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(b) All of the outstanding capital stock of, or other voting securities
or ownership interests in, each of the Company's Subsidiaries, is owned by the
Company, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to vote,
sell or otherwise dispose of such stock or other securities or ownership
interests). There are no outstanding (i) securities of the Company or any of its
Subsidiaries convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any of the Company's
Subsidiaries and (ii) options or other rights to acquire from the Company or any
of its Subsidiaries or
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other obligation of the Company or any of its Subsidiaries to issue, any capital
stock, voting securities or other ownership interests in, or any securities
convertible into or exchangeable for any capital stock, voting securities or
ownership interests in, any of the Company's Subsidiaries (the items in clauses
(i) and (ii) being referred to collectively as the "SUBSIDIARY SECURITIES").
There are no outstanding obligations of the Company or any of its Subsidiaries
to repurchase, redeem or otherwise acquire any outstanding Subsidiary
Securities.
SECTION 4.07. SEC Filings. (a) The Company has made available to Parent
(i) the Company's annual reports on Form 10-K for its fiscal years ended
December 31, 1999 and 2000, (ii) its proxy or information statements relating to
meetings of, or actions taken without a meeting by, the stockholders of the
Company held since December 31, 2000 and (iii) all of its other reports,
statements, schedules and registration statements filed with the SEC since
December 31, 2000 (the documents referred to in this Section 4.07(a) being
referred to collectively as the "COMPANY SEC FILINGS").
(b) As of its filing date, each such report or statement filed pursuant
to the Exchange Act did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading.
(c) Each such registration statement, as amended or supplemented, if
applicable, filed pursuant to the Securities Act as of the date such statement
or amendment became effective did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
SECTION 4.08. Financial Statements. The audited consolidated financial
statements of the Company included in its annual reports on Form 10-K referred
to in Section 4.07 fairly present in all material respects, in conformity with
United States generally accepted accounting principles applied on a consistent
basis ("GAAP") (except as may be indicated in the notes thereto), the
consolidated financial position of the Company and its consolidated subsidiaries
as of the respective dates thereof and their consolidated results of operations
and cash flows for the respective periods set forth therein. For purposes of
this Agreement, "BALANCE SHEET" means the consolidated balance sheet of the
Company as of December 31, 2000 set forth in the Company's annual report on Form
10-K for the fiscal year ended December 31, 2000 (the "COMPANY 10-K") and
"BALANCE SHEET DATE" means December 31, 2000.
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SECTION 4.09. Disclosure Documents. (a) Each document required to be
filed by the Company with the SEC or required to be distributed or otherwise
disseminated to the Company's stockholders in connection with the transactions
contemplated by this Agreement (the "COMPANY DISCLOSURE DOCUMENTS"), including
the Schedule 14D-9 and the proxy or information statement of the Company (the
"PROXY STATEMENT"), if any, to be filed with the SEC in connection with the
Merger, and any amendments or supplements thereto, when filed, distributed or
disseminated, as applicable, will comply as to form in all material respects
with the applicable requirements of the Exchange Act.
(b) (i) The Proxy Statement, as supplemented or amended, if applicable,
at the time such Proxy Statement or any amendment or supplement thereto is first
mailed to stockholders of the Company and at the time such stockholders vote on
adoption of this Agreement, and (ii) any Company Disclosure Document (other than
the Proxy Statement), at the time of the filing of such Company Disclosure
Document or any supplement or amendment thereto and at the time of any
distribution or dissemination thereof, will not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading. The representations and warranties contained in this
Section 4.09(b) will not apply to statements or omissions included in the
Company Disclosure Documents based upon information furnished to the Company by
Parent specifically for use therein.
(c) The information with respect to the Company or any of its
Subsidiaries that the Company furnishes to Parent specifically for use in the
Offer Documents, at the time of the filing thereof, at the time of any
distribution or dissemination thereof and at the time of the consummation of the
Offer, will not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
SECTION 4.10. Absence of Certain Changes. Since the Balance Sheet Date,
except as contemplated by this Agreement or as set forth in the Company SEC
Filings made prior to the date hereof, the Company and its Subsidiaries have
conducted their business in all material respects only in the ordinary course
and there has not been:
(a) any event, occurrence or development or state of circumstances or
facts which, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect;
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(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of the Company, or any
repurchase, redemption or other acquisition by the Company or any of its
Subsidiaries of any outstanding shares of capital stock or other securities of
the Company or any of its Subsidiaries other than in connection with the
cashless exercise of a Company Stock Option outstanding on April 10, 2001;
(c) any amendment of the certificate of incorporation or the bylaws of
the Company or any of its Subsidiaries;
(d) any incurrence, assumption or guarantee by the Company or any of
its Subsidiaries of any indebtedness for borrowed money outside of the ordinary
course of business;
(e) any creation or assumption by the Company or any of its
Subsidiaries of any material Lien on any material asset outside of the ordinary
course of business;
(f) any making of any loan, advance or capital contributions to or
investment in any Person by the Company or any of its Subsidiaries other than
loans, advances or capital contributions to or investments in wholly-owned
Subsidiaries of the Company outside of the ordinary course of business;
(g) any material damage, destruction or other casualty loss (whether or
not covered by insurance) affecting the business or assets of the Company or any
of its Subsidiaries which would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect;
(h) any transaction made, or any contract or agreement entered into, by
the Company or any of its Subsidiaries relating to its business or assets
(including the acquisition or disposition of any assets) or any relinquishment
by the Company or any of its Subsidiaries of any contract or other right, in
either case material to the Company and its Subsidiaries taken as a whole, other
than transactions in the ordinary course of business and those contemplated by
this Agreement;
(i) any change in any method of accounting or accounting practice by
the Company or any of its Subsidiaries, except for any such change required by
reason of a concurrent change in GAAP or in Regulation S-X promulgated under the
Exchange Act;
(j) any material Tax election made or changed, any annual Tax
accounting period changed, any method of Tax accounting adopted or changed,
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any material amended Tax Returns or claims for material Tax refunds filed, any
material closing agreement entered into, any material Tax claim, audit or
assessment settled, or any right to claim a material Tax refund, offset or other
reduction in Tax liability surrendered, in each case by the Company or any of
its Subsidiaries; or
(k) except as required by contracts entered into prior to the date
hereof or by law, any (i) grant of any severance, termination or retention pay
to any employee, director or independent contractor of the Company or any of its
Subsidiaries, (ii) increase in benefits payable under any existing severance or
termination pay policies or agreements of the Company or any of its
Subsidiaries, (iii) entering into of any employment, deferred compensation or
other similar agreement (or any amendment to any such existing agreement) with
any employee, director or, except in the ordinary course of business,
independent contractor of the Company or any of its Subsidiaries or (iv)
increase in compensation, bonus or other benefits payable to employees,
directors or independent contractors of the Company or any of its Subsidiaries,
other than any such increases payable to employees (other than directors or
officers) or independent contractors in the ordinary course of business.
SECTION 4.11. No Undisclosed Material Liabilities. There are no
material liabilities or obligations of the Company or any of its Subsidiaries
that would be required to be set forth in a balance sheet (or in the notes
thereto) prepared in accordance with GAAP, other than:
(a) liabilities or obligations disclosed or provided for in the Balance
Sheet or in the Company SEC Filings made prior to the date hereof;
(b) liabilities or obligations incurred since the Balance Sheet Date
which would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; and
(c) liabilities or obligations in connection with this Agreement.
SECTION 4.12. Litigation. Except as set forth in the Company SEC
Filings made prior to the date hereof, there is no action, suit, investigation
or proceeding pending, or to the knowledge of the Company threatened, against or
affecting the Company or any of its Subsidiaries or any of their respective
properties or any of their respective officers or directors in their capacity as
officers or directors of the Company before any court or arbitrator or before or
by any governmental body, agency or official which would, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect or that in
any
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manner challenges or seeks to prevent, enjoin, alter or materially delay
consummation of the transactions contemplated by this Agreement.
SECTION 4.13. Taxes. Except as set forth on the Company Balance Sheet
(including the notes thereto) and except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect:
(a) all Tax Returns required by applicable law to be filed
with any Taxing Authority by, or on behalf of, the Company or any of
its Subsidiaries have been filed when due in accordance with all
applicable laws, and all such Tax Returns are, or will be at the time
of filing, true and complete in all material respects;
(b) the Company and each of its Subsidiaries has paid (or has
had paid on its behalf) or has withheld and remitted to the appropriate
Taxing Authority, or, where payment is not yet due, has established (or
has had established on its behalf and for its sole benefit and
recourse) in accordance with GAAP an adequate accrual for all Taxes of
the Company or such Subsidiary, as the case may be, through the end of
the last period for which the Company and its Subsidiaries ordinarily
record items on their respective books;
(c) the income and franchise Tax Returns of Company and its
Subsidiaries through the Tax year ended December 31, 1996 have been
examined or are Returns with respect to which the applicable period for
assessment under applicable law, after giving effect to extensions or
waivers, has expired;
(d) there is no claim, audit, action, suit, proceeding or
investigation now pending or threatened in writing against or with
respect to Company or its Subsidiaries in respect of any Tax or Tax
asset;
(e) during the five-year period ending on the date hereof,
neither the Company nor any of its Subsidiaries was a distributing
corporation or a controlled corporation in a transaction intended to be
governed by Section 355 of the Code; and
(f) "TAX" means (i) any tax or other like assessment or charge
of any kind whatsoever (including, but not limited to, withholding on
amounts paid to or by any Person), together with any interest, penalty,
addition to tax or additional amount imposed by any governmental
authority (a "TAXING AUTHORITY") responsible for the imposition of any
such tax (domestic or foreign), and any liability for any of the
foregoing
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as transferee, (ii) in the case of the Company or any of its
Subsidiaries, liability for the payment of any amount of the type
described in clause (i) as a result of being or having been before the
Effective Date a member of an affiliated, consolidated, combined or
unitary group (other than a group of which the Company was the common
parent), or a party to any agreement or arrangement, as a result of
which liability of the Company or any of its Subsidiaries to a Taxing
Authority is determined or taken into account with reference to the
activities of any Person other than the Company and its Subsidiaries,
and (iii) liability of the Company or any of its Subsidiaries for the
payment of any amount as a result of being party to any Tax sharing
agreement (other than such an agreement exclusively between the Company
and its Subsidiaries) or with respect to the payment of any amount
imposed on any person of the type described in (i) or (ii) as a result
of any existing agreement or arrangement (including, but not limited
to, an indemnification agreement or arrangement). "TAX RETURN" shall
mean any report, return, document, declaration or other information or
filing required to be supplied to any Taxing Authority with respect to
Taxes, including information returns, any documents with respect to or
accompanying payments of estimated Taxes, or with respect to or
accompanying requests for the extension of time in which to file any
such report, return, document, declaration or other information.
SECTION 4.14. ERISA. (a) Prior to the date hereof, the Company has made
available to Parent a list identifying each material "employee benefit plan", as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and each material plan or arrangement (written or oral)
providing for compensation, bonuses, profit-sharing, stock option or other
stock-related rights or other forms of incentive or deferred compensation,
vacation benefits, insurance coverage (including any self-insured arrangements),
health, medical, dental or vision benefits, disability benefits, workers'
compensation, supplemental unemployment benefits, severance benefits and
post-employment or retirement benefits (including compensation, pension, health,
medical or life insurance benefits), in each case which is maintained,
administered or contributed to by the Company or any ERISA Affiliate thereof and
covers any employee, director or independent contractor or former employee,
director or independent contractor of the Company or any ERISA Affiliate thereof
or under which the Company or any ERISA Affiliate thereof has any liability with
respect to current or former employees, directors or independent contractors of
the Company or any ERISA Affiliate thereof. Copies of such plans (and, if
applicable, related trust agreements) and all amendments thereto and written
interpretations thereof have been made available to Parent prior to the date
hereof together with the most recent annual report (Form 5500 including, if
applicable, Schedule B thereto) prepared in connection with any such plan. Such
plans are referred to collectively
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as the "EMPLOYEE PLANS". For purposes of this Section, an "ERISA AFFILIATE" of
any Person means any other Person which, together with such Person, would be
treated as a single employer under Section 414 of the Code. At no time has the
Company or any Person who from time to time is or was an ERISA Affiliate of the
Company ever maintained an employee benefit plan that is subject to Title IV of
ERISA. Schedule 4.14 lists each employment, retention, consulting, severance or
similar contract that the Company or any of its Subsidiaries has with any (x)
officer or director of the Company or any of its Subsidiaries, (y) other
employee of the Company or any of its Subsidiaries whose total compensation, on
an annualized basis for the fiscal year ended December 31, 2000, was $85,000 or
more or (z) consultant to the Company or any of its Subsidiaries who was or is a
director, officer or other employee of the Company or any of its Subsidiaries.
(b) Nothing done or omitted to be done and no transaction or holding of
any asset under or in connection with any Employee Plan has made or could
reasonably be expected to make the Company or any of its Subsidiaries or any
officer or director of the Company or any of its Subsidiaries subject to any
liability under Title I of ERISA or liable for any Tax pursuant to Section 4975
of the Code, except where such liability would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(c) Each Employee Plan which is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the IRS
that has not been revoked and no circumstances exist that could adversely affect
such qualified status during the period from the date of the determination
letter to date, and each trust forming a part thereof satisfies the IRS
requirements for exemption from tax pursuant to Section 501(a) of the Code. The
Company has made available to Parent copies of the most recent Internal Revenue
Service determination letters with respect to each such Employee Plan. Each
Employee Plan has been maintained in material compliance with its terms and with
the requirements prescribed by any and all applicable statutes, orders, rules
and regulations, including, without limitation, ERISA, the Code and any
applicable foreign law, except where failure to so comply would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(d) No employee of the Company or any of its Subsidiaries will become
entitled to any retirement, severance, retention or similar benefit or enhanced
or accelerated benefit solely as a result of the transactions contemplated
hereby. Without limiting the generality of the foregoing, no amount required to
be paid or payable to or with respect to any employee of the Company or any of
its Subsidiaries in connection with the transactions contemplated hereby (either
solely as a result thereof or as a result of such transactions in conjunction
with any
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other event) will, to the knowledge of the Company or any of its Subsidiaries,
be an "excess parachute payment" within the meaning of Section 280G of the Code.
(e) No Employee Plan provides post-retirement health, medical, dental,
vision, life or other insurance benefits for retired employees of the Company or
its ERISA Affiliates except such benefits as are required under the health care
continuation coverage requirements of Section 4980B of the Code or any similar
state law provision.
(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by the Company or any of its ERISA
Affiliates relating to, or change in participation or coverage under, any
Employee Plan which would increase materially the expense of maintaining such
Employee Plan above the level of the expense incurred in respect thereof for the
twelve months ended on the Balance Sheet Date.
(g) Neither the Company nor any of its Subsidiaries is a party to or
subject to any union contract or works council or is currently negotiating any
new employment contract or arrangement with any employee, director or, except in
the ordinary course of business, independent contractor.
(h) Except as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect, (i) each of the Company and its
Subsidiaries is, and at all times has been, in compliance with all applicable
statutes, orders, rules and regulations with respect to employment and
employment practices, terms and conditions of employment and wages and hours,
and has not and is not engaged in any unfair labor practice; (ii) no unfair
labor practice complaint against the Company or any of its Subsidiaries is
pending before the National Labor Relations Board; and (iii) there has not been
any labor strike, dispute, slowdown or stoppage or, to the Company's knowledge,
threatened against or involving the Company or any of its Subsidiaries.
SECTION 4.15. Compliance with Laws. Except as set forth in the Company
SEC Filings made prior to the date hereof, each of the Company and its
Subsidiaries is and has been in compliance with all applicable laws, rules,
regulations, judgments, injunctions, orders or decrees, except where failure to
so comply would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
SECTION 4.16. Finders' Fees. Except for Xxxxxxx, Xxxxx & Co., there is
no investment banker, broker, finder or other intermediary which has been
retained by, or is authorized to act on behalf of, the Company or any of its
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Subsidiaries who might be entitled to any fee or commission upon consummation of
the transactions contemplated by this Agreement.
SECTION 4.17. Patents and Other Proprietary Rights. The Company and its
Subsidiaries have rights to use, whether through ownership, licensing or
otherwise, all patents, trademarks, service marks, trade names, copyrights,
trade secrets and other proprietary rights and processes of which the Company is
aware that are material to its business as now conducted (collectively the
"INTELLECTUAL PROPERTY RIGHTS"). Except for such matters as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, (a) the Company and its Subsidiaries have not assigned,
hypothecated or otherwise encumbered any of the Intellectual Property Rights and
(b) none of the licenses included in the Intellectual Property Rights purport to
grant sole or exclusive licenses to another Person, including, without
limitation, sole or exclusive licenses limited to specific fields of use. The
Company has no knowledge of any infringement by any other party of any of the
Intellectual Property Rights, and the Company and its Subsidiaries have not, to
the Company's knowledge, entered into any agreement to indemnify any other party
against any charge of infringement of any Intellectual Property Rights. The
Company and its Subsidiaries have not knowingly violated or infringed, and are
not knowingly violating or infringing, any intellectual property right of any
other Person, and the Company and its Subsidiaries have not received any written
communication alleging that the Company or any of its Subsidiaries has violated
or infringed, or is violating or infringing, the intellectual property right of
any other Person. Neither the Company nor any of its Subsidiaries has been sued
for infringing any intellectual property right of any other Person. None of the
Intellectual Property Rights or other know-how relating to the business of the
Company and its Subsidiaries, the value of which to the Company is contingent
upon maintenance of the confidentiality thereof has been disclosed by the
Company or any of its Affiliates to any Person other than those Persons who are
bound to hold such information in confidence pursuant to confidentiality
agreements or by operation of law, except insofar as such disclosures would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries are party to any
contract that restricts or otherwise limits the ability of the Company or such
Subsidiary to perform services for any other Person except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each employee of the Company and its Subsidiaries is a party to
an agreement substantially similar to the "Proxicom Employee Nonsolicitation and
Confidentiality Agreement" made available to Parent prior to the date hereof
except as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
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SECTION 4.18. Environmental Matters. (a) Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or as set forth in the Company SEC Filings made prior to the date
hereof:
(i) no notice, notification, demand, request for information,
citation, summons, complaint or order has been received by, or, to the
knowledge of the Company, is pending or threatened by any Person
against, the Company or any of its Subsidiaries nor has any penalty
been assessed against the Company or any of its Subsidiaries with
respect to any (A) alleged violation of any Environmental Law or
liability thereunder, (B) alleged failure to have any permit,
certificate, license, approval, registration or authorization required
under any Environmental Law ("ENVIRONMENTAL PERMITS"), (C) generation,
treatment, storage, recycling, transportation or disposal of any
Hazardous Substance or (D) discharge, emission or release of any
Hazardous Substance;
(ii) the Company has been and is in compliance with all
Environmental Laws and all Environmental Permits; and
(iii) there are no Environmental Liabilities.
(b) Neither the Company nor any of its Subsidiaries owns, leases or
operates or has owned, leased or operated any real property, or conducts or has
conducted any operations, in New Jersey or Connecticut.
(c) For purposes of this Section 4.18, the following terms shall have
the meanings set forth below:
"COMPANY" and "SUBSIDIARY" shall include any business or business
entity (including a corporation) which is, in whole or in part, a
predecessor of the Company or any of its Subsidiaries.
"ENVIRONMENTAL LAWS" means any federal, state, local or foreign law,
treaty, judicial decision, regulation, rule, judgment, order, decree,
injunction, permit, governmental restriction or requirement or any
agreement with any governmental agency or authority or third party
relating to human health, the environment or pollutants, contaminants,
chemicals, toxins, hazardous substances or wastes.
"ENVIRONMENTAL LIABILITIES" means any and all liabilities or
obligations of or relating to the Company and any of its Subsidiaries
of any kind whatsoever, whether accrued, contingent, absolute,
determined,
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determinable or otherwise, which (i) arise under or relate to matters
covered by Environmental Laws and (ii) relate to actions occurring or
conditions existing on or prior to the Effective Time.
"HAZARDOUS SUBSTANCE" means any toxic, radioactive, corrosive or
otherwise hazardous substance, including petroleum, its derivatives,
by-products and other hydrocarbons, or any substance having any
constituent elements displaying any of the foregoing characteristics,
which in any event is regulated under Environmental Laws.
SECTION 4.19. Antitakeover Provisions. The Board of Directors of the
Company has taken all action necessary to render Section 203 of the Delaware
Law inapplicable to the transactions contemplated by this Agreement.
SECTION 4.20. Rights Agreement or Plan. As of the date hereof, the
Company is not a party to, and has no obligations under, any rights agreement or
similar stockholder rights plan.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company that:
SECTION 5.01. Corporate Existence and Power. Each of Parent and Merger
Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has all corporate powers
and all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted. Since the date of its
incorporation, Merger Subsidiary has not engaged in any activities other than in
connection with or as contemplated by this Agreement.
SECTION 5.02. Corporate Authorization. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions contemplated
hereby are within the corporate powers of Parent and Merger Subsidiary and have
been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and binding agreement of each of Parent and Merger
Subsidiary.
SECTION 5.03. Governmental Authorization. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement and the
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consummation by Parent and Merger Subsidiary of the transactions contemplated by
this Agreement require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than (a) the filing of a
certificate of merger with respect to the Merger with the Delaware Secretary of
State; (b) compliance with any applicable requirements of the HSR Act; (c)
compliance with any applicable requirements of the Exchange Act; (d) compliance
with the rules and regulations of the Nasdaq Stock Market; (e) filings or
consents under the competition laws of Germany; and (f) any other filings,
approvals or authorizations which, if not made or obtained, would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on Parent and its Subsidiaries, taken as a whole, or materially
impair the ability of Parent to consummate the transactions contemplated by this
Agreement.
SECTION 5.04. Non-Contravention. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement and the
consummation by Parent and Merger Subsidiary of the transactions contemplated
hereby do not and will not (a) contravene or conflict with the certificate of
incorporation or bylaws of Parent or Merger Subsidiary, (b) assuming compliance
with the matters referred to in Section 5.03, contravene or conflict with or
constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to Parent or Merger
Subsidiary or (c) constitute a default under or give rise to any right of
termination, cancellation or acceleration of any right or obligation of Parent
or Merger Subsidiary or to a loss of any benefit to which Parent or Merger
Subsidiary is entitled under any provision of any agreement, contract or other
instrument binding upon Parent or Merger Subsidiary, except, in the case of (b)
and (c), for such matters as would not materially adversely affect the ability
of Parent and Merger Subsidiary to consummate the transactions contemplated by
this Agreement.
SECTION 5.05. Disclosure Documents. (a) The information with respect to
Parent and any of its Subsidiaries that Parent furnishes to the Company
specifically for use in any Company Disclosure Document will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading (i) in the case of the Proxy
Statement, as supplemented or amended, if applicable, at the time such Proxy
Statement or any amendment or supplement thereto is first mailed to stockholders
of the Company and at the time such stockholders vote on adoption of this
Agreement, and (ii) in the case of any Company Disclosure Document other than
the Proxy Statement, at the time of the filing of such Company Disclosure
Document or any supplement or amendment thereto and at the time of any
distribution or dissemination thereof.
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(b) The Offer Documents, when filed, distributed or disseminated, as
applicable, will comply as to form in all material respects with the applicable
requirements of the Exchange Act and, at the time of the filing thereof, at the
time of any distribution or dissemination thereof and at the time of
consummation of the Offer, will not contain any untrue statement of a material
fact or omit to state any material fact necessary to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading; provided that this representation and warranty will not apply to
statements or omissions included in the Offer Documents based upon information
furnished to Parent or Merger Subsidiary by the Company specifically for use
therein.
SECTION 5.06. Finders' Fees. Except for Credit Suisse First Boston
Corporation, whose fees will be paid by Parent, there is no investment banker,
broker, finder or other intermediary which has been retained by, or is
authorized to act on behalf of, Parent or any of its Subsidiaries who might be
entitled to any fee or commission upon consummation of the transactions
contemplated by this Agreement.
SECTION 5.07. Financing. Parent has sufficient cash, available lines of
credit or other sources of immediately available funds to enable it to
consummate the Offer and the Merger and to pay all fees and expenses incurred by
Parent in connection with the Offer and the Merger.
ARTICLE 6
COVENANTS OF THE COMPANY
SECTION 6.01. Conduct of the Company. From the date hereof until the
Effective Time, the Company and its Subsidiaries shall conduct their business in
all material respects only in the ordinary course (provided that any significant
restructuring shall not be considered ordinary course) and shall use their
reasonable best efforts to preserve substantially intact their business
organizations and relationships with third parties with which the Company and
its Subsidiaries have significant business relations and to keep available the
services of their present officers and employees as a group. Without limiting
the generality of the foregoing, from the date hereof until the Effective Time,
except as expressly contemplated by this Agreement or as disclosed in the
Company Disclosure Schedule or unless Parent shall consent in writing:
(a) the Company will not adopt or propose any change to its
certificate of incorporation or bylaws;
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(b) the Company will not adopt a stockholder rights plan or any other
similar plan that would apply to the transactions contemplated by this
Agreement;
(c) the Company will not, and will not permit any of its Subsidiaries
to, merge, consolidate or enter into any strategic alliance with any
other Person or acquire a material amount of assets of any other
Person;
(d) the Company will not, and will not permit any of its Subsidiaries
to, sell, lease, license or otherwise dispose of any material assets,
securities or property except pursuant to existing contracts or
commitments or in the ordinary course of business;
(e) the Company will not, and will not permit any of its Subsidiaries
to, settle or compromise any suit or claim or threatened suit or claim
relating to the transactions contemplated hereby; and
(f) the Company will not, and will not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.
SECTION 6.02. Stockholder Meeting; Proxy Material. (a) The Company
shall (i) as promptly as practicable after consummation of the Offer duly call,
give notice of, convene and hold a meeting of its stockholders (the "COMPANY
STOCKHOLDER MEETING") for the purpose of voting on the adoption of this
Agreement, unless Delaware law does not require a vote of stockholders of the
Company for consummation of the Merger, and (ii) take all lawful action to
solicit the approval of its stockholders in favor of adoption of this Agreement.
(b) In connection with the Company Stockholder Meeting, the Company
shall (i) promptly prepare and file with the SEC the Proxy Statement and all
other proxy materials for the Company Stockholder Meeting, (ii) mail to its
stockholders the Proxy Statement and all other proxy materials for the Company
Stockholder Meeting a sufficient time prior to the Company Stockholder Meeting
as is necessary to comply with applicable law and (iii) otherwise comply in all
material respects with all legal requirements applicable to the Company
Stockholder Meeting.
(c) At the Company Stockholder Meeting, Parent shall, and shall cause
each of its Subsidiaries to, vote in favor of adoption of this Agreement all
shares of Company Stock owned by it, including all shares of Company Stock
purchased pursuant to the Offer.
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SECTION 6.03. Access to Information. From the date hereof until the
Effective Time, and subject to applicable law and the Confidentiality Agreement
dated as of February 13, 2001 between the Company and Parent (the
"CONFIDENTIALITY AGREEMENT"), upon reasonable notice, the Company will give the
officers, employees, accountants, counsel, financial advisors and other
representatives of Parent reasonable access during normal business hours to the
offices, properties, books and records of the Company and its Subsidiaries and
such financial and operating data and other information as such Persons may
reasonably request and will instruct the officers, employees, accountants,
counsel, financial advisors and other representatives of the Company to
cooperate with Parent in its investigation of the business of the Company and
its Subsidiaries; provided that no investigation pursuant to this Section 6.03,
shall affect any representation or warranty given by the Company to Parent
hereunder.
SECTION 6.04. Other Offers. (a) From the date hereof until the
termination hereof, the Company and its Subsidiaries shall not, and the Company
shall use its reasonable best efforts to cause the officers, directors, key
employees, financial advisors or other agents or representatives of the Company
and its Subsidiaries not to, directly or indirectly, (i) take any action to
solicit, initiate, facilitate or encourage the making of any Acquisition
Proposal or any inquiry with respect thereto, (ii) disclose any nonpublic
information relating to the Company or any of its Subsidiaries to, or afford
access to the properties, books or records of the Company or any of its
Subsidiaries to, any Person that has made or is known to it to be considering
making an Acquisition Proposal or (iii) engage in any negotiations with any
Person with respect to any Acquisition Proposal. Notwithstanding anything to the
contrary in this Agreement, prior to the Acceptance Date, the Company may (A)
furnish such information and provide such access to a Person who has made an
unsolicited, bona fide Acquisition Proposal and (B) engage in negotiations with
such Person concerning such Acquisition Proposal, if and only if, in the case of
each of (A) and (B) above, (i) the Board of Directors of the Company determines
in good faith by a majority vote, after receipt of the advice of its financial
advisor and outside legal counsel, that such Acquisition Proposal is reasonably
likely to result in a Superior Proposal, (ii) the Company complies with all of
its obligations under Section 6.04(c) in respect of such Acquisition Proposal
and (iii) as a condition of such Person obtaining such non-public information or
access (in the case of (A) above) the Company receives from the Person making
such Acquisition Proposal an executed confidentiality agreement the material
terms of which are no less favorable to the Company than those contained in the
Confidentiality Agreement; provided that such confidentiality agreement need not
contain any standstill provisions.
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(b) Notwithstanding anything to the contrary in this Agreement, the
Board of Directors of the Company shall recommend, and may not withdraw or,
subject to the next sentence, modify or change, in a manner adverse to Parent,
its approval or recommendation of, the Offer, the Merger or this Agreement
unless prior to the Acceptance Date the Board of Directors of the Company
determines in good faith by a majority vote that an Acquisition Proposal
constitutes a Superior Proposal. Nothing in this Agreement shall prevent the
Board of Directors of the Company from making any disclosure to its stockholders
if required by applicable law; provided that disclosures under this sentence
shall not be a basis, in themselves, for the Company to terminate this Agreement
pursuant to Section 10.01(h).
(c) The Company shall promptly (and in no event later than 12 hours
after receipt of the relevant Acquisition Proposal) notify (which notice shall
be provided orally and in writing, shall identify the Person making the relevant
Acquisition Proposal and shall set forth the material terms thereof) Parent
after the Company has received any Acquisition Proposal or any request for
nonpublic information relating to the Company or any of its Subsidiaries, or for
access to the properties, books or records of the Company or any of its
Subsidiaries, by any Person that the Company has knowledge may be considering
making, or has made, an Acquisition Proposal. The Company will keep Parent
informed of the status and material terms of (including all changes to the
status and material terms of) any such Acquisition Proposal or request.
(d) The Company (x) shall, and shall cause its Subsidiaries to, and
shall use its reasonable best efforts to cause its officers, directors, key
employees, consultants, financial advisors and other agents or representatives
to, cease immediately and cause to be terminated all activities, discussions or
negotiations, if any, with any Persons conducted prior to the date of this
Agreement with respect to any Acquisition Proposal and (y) shall promptly
request each Person, if any, that has executed a confidentiality agreement
within the 12 months prior to the date of this Agreement in connection with such
Person's consideration of any Acquisition Proposal to return or destroy all
confidential information heretofore furnished to such Person by or on behalf of
the Company or any of its Subsidiaries.
(e) For purposes of this Agreement, "ACQUISITION PROPOSAL" means any
offer or proposal with respect to a merger, reorganization, share exchange,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving, or any purchase or sale of all or any
significant portion of the assets or 10% or more of the outstanding equity
securities of, the Company or any of its Subsidiaries, other than the
transactions contemplated by this Agreement. For purposes of this Agreement,
"SUPERIOR PROPOSAL" means
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any unsolicited, bona fide, written Acquisition Proposal which the Board of
Directors of the Company concludes in good faith (after receipt of the advice of
its financial advisor and outside legal counsel), taking into account all legal,
financial, regulatory, fiduciary and other aspects of the proposal and the
Person making such proposal, (i) would, if consummated, result in a transaction
that is more favorable to the Company's stockholders (in their capacities as
stockholders), from a financial point of view, than the transactions
contemplated by this Agreement and (ii) is reasonably capable of being completed
(provided that for purposes of this definition the term Acquisition Proposal
shall have the meaning assigned to such term above except that the reference to
"10%" in the definition of "Acquisition Proposal" shall be deemed to be a
reference to "50%" and "Acquisition Proposal" shall only be deemed to refer to a
transaction involving the Company, or with respect to assets (including the
shares of any Subsidiary of the Company) of the Company and its Subsidiaries,
taken as a whole, and not any of its Subsidiaries alone).
(f) The Company shall use its reasonable best efforts promptly to
inform its Subsidiaries and its officers, directors, key employees, financial
advisors and other agents or representatives of the obligations undertaken in
this Section 6.04.
SECTION 6.05. Section 16 Matters. Prior to the Effective Time, the
Company shall take all such steps as may be required to cause any dispositions
of Company Stock in the Merger by each individual who is subject to the
reporting requirements under Section 16(a) of the Exchange Act with respect to
the Company to be exempt under Rule 16b-3 promulgated under the Exchange Act.
SECTION 6.06. Notice of Certain Events. The Company shall promptly
notify Parent of:
(a) any notice or other written communication from any Person alleging
that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement, the failure to
obtain which consent, if required, would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect or
materially impair the ability of the Company to consummate the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement;
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or
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involving or otherwise affecting the Company or any of its Subsidiaries
that, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to Section 4.12 or that relate
to the consummation of the transactions contemplated by this Agreement;
and
(d) any occurrence, or failure to occur, of any event, which
occurrence or failure to occur would be likely to cause either (i) any
representation or warranty made by the Company in this Agreement to be
untrue or inaccurate at the Acceptance Date such that the condition set
forth in clause (ii)(a) of Annex I would not be satisfied or (ii) a
Material Adverse Effect.
ARTICLE 7
COVENANTS OF PARENT
SECTION 7.01. Obligations of Merger Subsidiary. Parent shall take all
actions necessary to cause Merger Subsidiary to perform its obligations under
this Agreement and to consummate the Offer and the Merger on the terms and
conditions set forth in this Agreement.
SECTION 7.02. Director and Officer Liability. For six years after the
Effective Time, Parent shall indemnify, defend and hold harmless, and provide
advancement of expenses to, the present and former officers and directors of the
Company in respect of acts or omissions occurring prior to the Effective Time to
the fullest extent permitted or provided under the Company's certificate of
incorporation and bylaws in effect on the date hereof; provided that such
indemnification shall be subject to any limitation imposed from time to time
under applicable law. For six years after the Effective Time, Parent shall cause
the Surviving Corporation to use its best efforts to provide officers' and
directors' liability insurance in respect of acts or omissions occurring prior
to the Effective Time covering each such Person currently covered by the
Company's officers' and directors' liability insurance policy on terms with
respect to coverage and amount no less favorable than those of such policy in
effect on the date hereof; provided that in satisfying its obligation under this
Section, Parent shall not be obligated to cause the Surviving Corporation to pay
premiums in excess of 200% of the amount per annum the Company paid in the
twelve months ended December 31, 2000, which amount has been disclosed to
Parent; and provided, further, that if the annual premiums of such insurance
exceed such amount, the Surviving Corporation shall be obligated to obtain a
policy with the greatest coverage available for a cost not exceeding such
amount. The obligations of Parent under this Section 7.02 shall not be
terminated or modified in such a
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manner as to adversely affect any indemnitee to whom this Section 7.02 applies
without the consent of such affected indemnitee (it being expressly agreed that
the indemnitees to whom this Section 7.02 applies shall be third-party
beneficiaries of this Section 7.02).
SECTION 7.03. Employees. (a) For a period of at least one year after
the Effective Time, Parent shall, or shall cause the Surviving Corporation to,
maintain employee base salary amounts for the employees of the Company and its
Subsidiaries (the "COMPANY EMPLOYEES") that are at least equal to amounts that
they are currently receiving with the Company and its Subsidiaries; after such
year, employee base salary amounts for Company Employees shall be, in the
reasonable judgment of Parent, no less favorable to them than the base salary
amounts provided to similarly situated employees of Parent. For a period of at
least one year after the Effective Time, Parent shall, or shall cause the
Surviving Corporation to, maintain employee bonus opportunities for Company
Employees that are at least equal to opportunities to which they were entitled
with respect to the fiscal year ended December 31, 2000; after such year,
employee bonus opportunities for Company Employees shall be, in the reasonable
judgment of Parent, no less favorable to them than the bonus opportunity
provided to similarly situated employees of Parent. Notwithstanding the
foregoing two sentences, if there is an across-the-board reduction in the base
salaries or bonus opportunities of all or substantially all of the employees of
Parent or the professional services business of Parent, then the base salaries
or bonus opportunities of Company Employees may also be reduced as a part of
that reduction effort. Until Company Employees receive benefits under benefits
arrangements provided to similarly situated employees of Parent ("PARENT
PLANS"), Parent shall, or shall cause the Surviving Corporation, to maintain the
Employee Plans for the benefit of Company Employees. Parent shall, or shall
cause the Surviving Corporation to, give each Company Employee full credit in
respect of his or her employment with the Company or its Subsidiaries prior to
the Effective Time for purposes of eligibility, vesting, level of benefits and
service, other than benefit accrual under any defined benefit plans, under any
applicable Employee Plan (in accordance with the terms of such Employee Plan) or
Parent Plan (to the extent that the applicable Employee Plan gave such credit);
provided, however that solely to the extent necessary to avoid duplication of
benefits, amounts payable under the Parent Plans may be reduced by amounts
payable under the applicable Company Plans with respect to the same periods of
service.
(b) From and after the Effective Time, Parent shall, or shall cause
the Surviving Corporation to, (i) cause any pre-existing conditions or
limitations and eligibility waiting periods (only to the extent such limitations
or waiting periods did not apply to the Company Employees under the Employee
Plans) under any group health plans of Parent or the Surviving Corporation to be
waived with
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respect to the Company Employees and their eligible dependents and (ii) give
each Company Employee credit for the plan year in which the Effective Time
occurs toward applicable deductibles and annual out-of-pocket limits for
expenses incurred prior to the Effective Time.
(c) From and after the Effective Time, Parent shall, or shall cause
the Surviving Corporation, to honor, in accordance with their terms, all benefit
obligations to current and former employees and any contractual rights of such
current and former employees pursuant to any agreements (excluding any such
rights pursuant to agreements that such current and former employees terminate,
or agree to terminate, either before or after the date hereof).
SECTION 7.04. Notice of Certain Events. Parent shall promptly notify
the Company of:
(a) any notice or other written communication from any Person alleging
that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement, the failure to
obtain which consent, if required, would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect or
materially impair the ability of Parent to consummate the transactions
contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or
involving or otherwise affecting Parent that relate to the consummation
of the transactions contemplated by this Agreement.
ARTICLE 8
COVENANTS OF PARENT AND THE COMPANY
SECTION 8.01. Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, each party will use its reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement as soon as
practicable after the date of this Agreement. Neither Parent nor the Company
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shall, nor shall either of them permit any of their respective Subsidiaries to,
take any action or omit to take any action for the purpose of preventing,
delaying or impeding the consummation of the transactions contemplated by this
Agreement.
SECTION 8.02. Certain Filings. The Company and Parent shall cooperate
with one another (a) in connection with the preparation of the Offer Documents
and the Company Disclosure Documents, (b) in determining whether any action by
or in respect of, or filing with, any governmental body, agency or official, or
authority is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts, in connection
with the consummation of the transactions contemplated by this Agreement and (c)
in seeking timely to take any such actions, make any such filings and obtain any
such consents, approvals or waivers.
SECTION 8.03. Public Announcements. Parent and the Company will consult
with each other before issuing any press release or making any public statement
with respect to this Agreement and the transactions contemplated hereby and,
except as may be required by applicable law or any listing agreement with any
national securities exchange or automated quotation system, will not issue any
such press release or make any such public statement prior to such consultation.
SECTION 8.04. Merger Without Meeting of Stockholders. If Parent, Merger
Subsidiary or any other Subsidiary of Parent shall acquire at least 90% of the
outstanding shares of Company Stock pursuant to the Offer or otherwise, the
parties hereto agree to take all necessary and appropriate action to cause the
Merger to be effective as soon as practicable after the acceptance for payment
and purchase of shares of Company Stock pursuant to the Offer without a meeting
of stockholders of the Company in accordance with the Delaware Law.
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to the Obligations of Each Party. The
respective obligations of the Company, Parent and Merger Subsidiary to
consummate the Merger are subject to the satisfaction of the following
conditions:
(a) if required by Delaware Law, this Agreement shall have been
adopted by the Company's stockholders in accordance with such Law;
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(b) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the
Merger; and
(c) Merger Subsidiary shall have purchased shares of Company Stock
pursuant to the Offer.
ARTICLE 10
TERMINATION
SECTION 10.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(a) by mutual written consent of each of the Company and
Parent;
(b) by either Parent or the Company, if the Offer shall not have been
consummated by August 1, 2001 (the "TERMINATION DATE"); provided that
the right to terminate this Agreement pursuant to this Section 10.01(b)
shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the primary cause of, or
resulted in, the failure of the Offer to be consummated on or before
such date;
(c) by either Parent or the Company, if after the date hereof a court
of competent jurisdiction or governmental entity shall have issued an
order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, and such order, decree, ruling or other action shall
have become final and nonappealable; provided, however, that the right
to terminate this Agreement under this Section 10.01(c) shall not be
available to any party whose failure to comply with Section 8.02 has
been the primary cause of such action;
(d) prior to the Acceptance Date, by either Parent or the Company, if
any Person or group (as defined in Section 13(d)(3) under the Exchange
Act) (other than Parent, Merger Subsidiary or any of their respective
Affiliates) shall have become the beneficial owner (as defined in Rule
13d-3 promulgated under the Exchange Act) of at least a majority of the
outstanding shares of Company Stock;
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(e) prior to the Acceptance Date, by (i) Parent, if the Company shall
have breached any of the representations, warranties, covenants and
agreements contained in this Agreement such that the conditions
specified in clause (ii)(a) or (b) of Annex I are not capable of being
satisfied on or prior to the Termination Date or (ii) the Company, if
Parent shall have breached any of its covenants or agreements contained
herein required to be performed by it prior to the Acceptance Date or
any of its representations and warranties contained in this Agreement,
which breach would reasonably be expected to materially impair the
ability of Parent to consummate the transactions contemplated by this
Agreement;
(f) prior to the Acceptance Date, by Parent, if the Board of Directors
of the Company shall have failed to recommend or withdrawn, or
materially modified or changed in a manner adverse to Parent, its
approval or recommendation of the Offer, the Merger or this Agreement;
(g) prior to the Acceptance Date, by Parent, if the Company shall have
breached in any material respect the obligations imposed upon it by
Section 6.04 and, to the extent such breach is capable of being cured,
such breach shall not have been cured within 72 hours' notice of such
breach by Parent to the Company; or
(h) prior to the Acceptance Date, by the Company, if the Board of
Directors of the Company has provided written notice to Parent that the
Company intends to enter into a binding written agreement for a
Superior Proposal (with such termination becoming effective upon the
Company entering into such binding written agreement); provided,
however, that (i) the Company shall have complied with Section 6.04 in
all material respects; (ii) the Company shall have (A) notified Parent
in writing of its receipt of such Superior Proposal, (B) further
notified Parent in such writing that the Company intends to enter into
a binding agreement with respect to such Superior Proposal subject to
clause (iii) below and (C) attached the most current written version of
such Superior Proposal (or a summary containing all the material terms
and conditions of such Superior Proposal) to such notice, (iii) Parent
does not make, within three Business Days after receipt of the
Company's written notice pursuant to clause (ii) above, an offer that
the Board of Directors of the Company shall have concluded in good
faith (following consultation with its financial advisor and outside
legal counsel) is as favorable to the stockholders of the Company as
such Superior Proposal and (iv) the Company pays the termination fee
contemplated by Section 11.04(b) concurrently with entering into such
binding written agreement.
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The party desiring to terminate this Agreement pursuant to Sections 10.01(b)-(h)
shall give written notice of such termination to the other party in accordance
with Section 11.01.
SECTION 10.02. Effect of Termination. In the event of termination of
this Agreement as provided in Section 10.01, this Agreement shall forthwith
become void and there shall be no liability on the part of any of the parties
hereto or their respective officers or directors, except (a) as set forth in
Section 11.04 and (b) that nothing herein shall relieve any party from liability
for any willful breach hereof. The covenants and agreements set forth in Article
11 shall survive any termination of this Agreement.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopy or similar
writing) and shall be given,
if to Parent or Merger Subsidiary to:
Compaq Computer Corporation
20555 S.H. 249 MS 110810
Xxxxxxx, Xxxxx 00000-0000
Att: Xxxxxx X. Xxxxxxx, Esq.,
Senior Vice President and General Counsel
Fax: (000) 000-0000
with a copy to: Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att: Xxxxxxxxxxx Xxxxx, Esq.
Fax: (000) 000-0000
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if to the Company, to: Proxicom, Inc.
00000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Att: Xxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
with a copy to: Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att: Xxxxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective (a) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and the
appropriate telecopy confirmation is received or (b) if given by any other
means, when delivered at the address specified in this Section.
SECTION 11.02. Survival. The representations, warranties, covenants and
agreements contained herein shall not survive the Effective Time except that the
covenants and agreements that by their terms are to be performed or complied
with in whole or in part after the Effective Time shall survive the Effective
Time.
SECTION 11.03. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Company, Parent and Merger Subsidiary or in the case of a waiver, by the
party against whom the waiver is to be effective; provided, however, that after
stockholder approval of this Agreement at the Company Stockholder Meeting (if
applicable), no amendment shall be made which by law requires further approval
by the stockholders of the Company without such further approval.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 11.04. Fees and Expenses. (a) Except as otherwise provided in
this Section, all costs and expenses incurred in connection with this Agreement
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and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses.
(b) The Company agrees to pay Parent a fee in immediately available
funds equal to $10,000,000 if:
(i) this Agreement is terminated pursuant to Section 10.01(d),
(g) or (h); or
(ii) (A) this Agreement shall have been terminated pursuant to Section
10.01(b) or (f), (B) at any time after the date of this Agreement and
before such termination an Acquisition Proposal shall have been
publicly announced or otherwise become communicated to the Board of
Directors or stockholders of the Company and (C) within twelve months
of such termination the Company recommends, enters into a definitive
agreement with respect to, or consummates, any Business Combination
Proposal. For purposes of this Section 11.04, "BUSINESS COMBINATION
PROPOSAL" shall have the meaning assigned to the term "Acquisition
Proposal", except that the reference to "10%" in such definition shall
be deemed to be a reference to "50%" and shall only be deemed to refer
to a transaction involving the Company, or with respect to assets
(including the shares of any Subsidiary of the Company), of the Company
and its Subsidiaries, taken as a whole, and not any of its Subsidiaries
alone.
(c) Any termination fee payable to Parent pursuant to Section
11.04(b)(i) shall be payable in cash no later than one Business Day following
the date of such termination (except that any termination fee payable upon
termination pursuant to Section 10.01(h) shall be payable as set forth in such
Section). Any termination fee payable to Parent pursuant to Section 11.04(b)(ii)
shall be payable in cash on the date the Company recommends, enters into an
agreement with respect to or consummates a Business Combination Proposal.
SECTION 11.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto, except that Merger Subsidiary
may transfer or assign, in whole, its rights under this Agreement to another
wholly owned Subsidiary of Parent, but no such transfer will relieve Merger
Subsidiary of any of its obligations hereunder.
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SECTION 11.06. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware, without
regard to the conflict of laws rules thereof.
SECTION 11.07. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby shall be brought
exclusively in any federal or state court located in the State of Delaware, and
each of the parties hereby consents to the jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
form. Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 11.01 shall be deemed effective service of
process on such party.
SECTION 11.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 11.09. Counterparts; Effectiveness; Third Party Beneficiaries.
This Agreement may be signed in any number of counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument. This Agreement shall become effective when each
party hereto shall have received counterparts hereof signed by all of the other
parties hereto. Except for Section 7.02 hereof, no provision of this Agreement
is intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder.
SECTION 11.10. Entire Agreement. This Agreement and the Confidentiality
Agreement constitute the entire agreement among Parent, Merger Subsidiary and
the Company with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among Parent, Merger
Subsidiary and the Company with respect to the subject matter hereof.
SECTION 11.11. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other
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authority to be invalid, void, unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. Upon
such a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby may be consummated as originally contemplated to the fullest extent
possible.
SECTION 11.12. Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof in
any federal or state court located in the State of Delaware, in addition to any
other remedy to which they are entitled at law or in equity.
SECTION 11.13. Definitions. (a) For purposes of this Agreement:
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banks in New York, New York are permitted or required to close.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, assets, financial condition or results of operations of the Company
and its Subsidiaries, taken as a whole, except for any such effect reasonably
attributable to (x) general economic conditions in the countries in which the
Company and its Subsidiaries operate (including prevailing interest rate and
stock market levels) or (y) general conditions in the e-integration business
conducted by Sapient Corporation, DiamondCluster International, Inc., Digitas
Inc. and Answerthink, Inc.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at any time directly or indirectly owned by such Person.
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(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
---- -------
Acceptance Date 1.01
Acquisition Proposal 6.04
Adjusted Option 2.05
Balance Sheet 4.08
Balance Sheet Date 4.08
Business Combination Proposal 11.04
Certificates 2.03
Code 1.03
Company Preamble
Company 10-K 4.08
Company Disclosure Documents 4.09
Company Disclosure Schedule Article 4
Company Employees 7.03
Company ESPP 2.06
Company SEC Filings 4.07
Company Securities 4.05
Company Stock 1.01
Company Stock Option 2.05
Company Stockholder Meeting 6.02
Confidentiality Agreement 6.03
Delaware Law 1.02
Effective Time 2.01
Employee Plans 4.14
Environmental Laws 4.18
Environmental Liabilities 4.18
Environmental Permits 4.18
ERISA 4.14
ERISA Affiliate 4.14
Exchange Act 1.01
Exchange Agent 2.03
Exchange Ratio 2.05
GAAP 4.08
Hazardous Substance 4.18
HSR Act 4.03
Intellectual Property Rights 4.17
Lien 4.04
Market Price 2.05
Merger 2.01
Merger Consideration 2.02
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Merger Subsidiary Preamble
Minimum Condition 1.01
Nasdaq Stock Market 4.03
Offer 1.01
Offer Documents 1.01
Parent Preamble
Parent Plans 7.03
Parent Stock 2.05
Preferred Stock 4.05
Proxy Statement 4.09
Schedule 14D-9 1.02
Schedule TO 1.01
SEC 1.01
Securities Act 2.05
Subsidiary Securities 4.06
Superior Proposal 6.04
Surviving Corporation 2.01
Tax 4.13
Tax Return 4.13
Taxing Authority 4.13
Termination Date 10.01
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
COMPAQ COMPUTER CORPORATION
By: /s/ Xxxx Xxxx
-------------------------------------------
Name: Xxxx Xxxx
Title: Vice President and General
Manager, Professional Services
PROXICOM, INC.
By: /s/ Xxxx Xxxxxxxxx
-------------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Chief Executive Officer and
Chairman of the Board
PFC ACQUISITION CORP.
By: /s/ Xxxx Xxxx
-------------------------------------------
Name: Xxxx Xxxx
Title: President
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ANNEX I
Notwithstanding any other provision of the Offer, Merger Subsidiary shall not be
required to accept for payment or pay for any shares of Company Stock, and may,
subject to Articles 1 and 10 of this Agreement, terminate the Offer, if
(i) prior to the initial acceptance of shares of Company Stock pursuant
to the Offer, (A) the Minimum Condition shall not have been satisfied, (B) the
applicable waiting period under the HSR Act shall not have expired or been
terminated or the anticompetition regulations applicable to the Offer and the
Merger under German law shall not have been complied with or (C) all consents,
approvals or other actions by any governmental authority required in connection
with the consummation of the Offer and the Merger shall not have been obtained
and no Person (other than any governmental authority) whose consent is or may be
required in connection with the transactions contemplated by this Agreement as
set forth in the Company Disclosure Schedule shall have given notice or
otherwise indicated to the Company or Parent that such Person will not grant the
consent, except for such matters as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect or
(ii) at any time on or after the date of this Agreement and prior to
the initial acceptance of shares of Company Stock pursuant to the Offer, any of
the following conditions shall exist:
(a) (x) the representations and warranties of the Company
contained in Section 4.05, 4.07 or 4.08 of this Agreement shall not be
true and correct in all material respects immediately prior to the
initial acceptance of the shares of Company Stock pursuant to the Offer
as though made on or as of such time (except for those representations
and warranties that address matters only as of a particular date which
need only be true and accurate as of such date) or (y) the other
representations and warranties of the Company contained in this
Agreement (disregarding all qualifications as to materiality or
Material Adverse Effect set forth in each of such other representations
and warranties) shall not be true and correct immediately prior to the
initial acceptance of the shares of Company Stock pursuant to the Offer
as though made on or as of such time (except for those representations
and warranties that address matters only as of a particular date which
need only be true and accurate as of such date) except, in the case of
clause (y) only, where the failure of such representations and
warranties to be true and correct would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
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(b) the Company shall have failed to perform in all material
respects any of its obligations under this Agreement required to be
performed prior to the initial acceptance of the shares of Company
Stock pursuant to the Offer; or
(c) this Agreement shall have been terminated in accordance
with its terms.
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