Exhibit 2.2
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
CCPC ACQUISITION CORP.,
and
GENERAL HOUSEWARES CORP.
August 2, 1999
TABLE OF CONTENTS
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RECITALS
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING............................................................1
1.1 The Merger............................................................1
1.2 Effective Time........................................................2
1.3 Closing...............................................................2
1.4 Right to Revise Structure of Merger...................................2
ARTICLE II
SURVIVING CORPORATION..........................................................................3
2.1 Certificate of Incorporation..........................................3
2.2 By-Laws...............................................................3
2.3 Directors.............................................................3
2.4 Officers..............................................................3
ARTICLE III
MERGER CONSIDERATION; CONVERSION OR CANCELLATION
OF SHARES IN THE MERGER...............................................................3
3.1 Share Consideration for the
Merger; Conversion or Cancella-
tion of Shares in the Merger........................................3
3.2 Stockholders' Meeting.................................................4
3.3 Dissenting Shares.....................................................5
3.4 Payment for Shares in the Merger......................................6
3.5 Transfer of Shares After the
Effective Time......................................................7
3.6 Stock Options.........................................................8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................................................9
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4.1 Corporate Organization and
Qualification.......................................................9
4.2 Capitalization.......................................................9
4.3 Authority Relative to This
Agreement..........................................................11
4.4 Consents and Approvals; No
Violation..........................................................12
4.5 SEC Reports; Financial
Statements.........................................................13
4.6 Absence of Certain Changes or
Events.............................................................14
4.7 Litigation; Compliance..............................................14
4.8 Proxy Statement; Offer
Documents..........................................................15
4.9 Taxes...............................................................15
4.10 Employee Benefit Plans; Labor
Matters............................................................16
4.11 Environmental Laws and
Regulations.....................................................18
4.12 Intellectual Property...............................................19
4.13 Year 2000 Compliance................................................20
4.14 Contracts...........................................................20
4.15 Insurance...........................................................20
4.16 Brokers and Finders.................................................21
4.17 Opinion of Financial Advisors.......................................21
4.18 Customers and Distributors..........................................21
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND
NEWCO.....................................................................21
5.1 Corporate Organization and
Qualification......................................................21
5.2 Authority Relative to This
Agreement..........................................................22
5.3 Consents and Approvals; No
Violation..........................................................22
5.4 Parent Financial Condition..........................................23
5.5 Proxy Statement.....................................................23
5.6 Financing...........................................................24
5.7 Interim Operations of Newco.........................................24
5.8 Brokers and Finders.................................................24
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ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS...........................................................24
6.1 Conduct of Business of the
Company............................................................24
6.2 Acquisition Proposals................................................29
6.3 Reasonable Efforts...................................................30
6.4 Access to Information................................................31
6.5 Publicity............................................................32
6.6 Indemnification of Directors and
Officers...........................................................32
6.7 Employees............................................................33
6.8 Certain Financing Matters............................................33
6.9 Notification of Certain Matters......................................34
6.10 Rights Agreement....................................................34
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER......................................................34
7.1 Condition to Each Party's Obliga-
tions to Effect the Merger.........................................34
7.2 Conditions to the Company's Obligations
to Effect the Merger...............................................35
7.3 Conditions to the Parent's and Newco's
Obligations to Effect the Merger...................................35
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER................................................................36
8.1 Termination by Mutual Consent........................................36
8.2 Termination by Either Parent
or the Company.....................................................36
8.3 Termination by Parent................................................37
8.4 Termination by the Company...........................................37
8.5 Effect of Termination................................................38
8.6 Extension; Waiver....................................................39
ARTICLE IX
MISCELLANEOUS AND GENERAL.....................................................................40
9.1 Payment of Expenses..................................................40
9.2 Survival of Representations
and Warranties; Survival of
Confidentiality....................................................40
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9.3 Modification or Amendment............................................40
9.4 Waiver of Conditions.................................................40
9.5 Counterparts; Facsimile..............................................40
9.6 Governing Law........................................................41
9.7 Notices..............................................................41
9.8 Entire Agreement; Assignment.........................................42
9.9 Parties in Interest..................................................42
9.10 Certain Definitions.................................................43
9.11 Obligation of Parent................................................43
9.12 Validity............................................................43
9.13 Captions............................................................44
9.14 Interpretation......................................................44
9.15 Severability........................................................44
9.16 Specific Performance................................................44
v
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of
August 2, 1999, by and among CCPC Acquisition Corp, a Delaware corporation
("PARENT"), and General Housewares Corp., a Delaware corporation (the
"COMPANY").
RECITALS
WHEREAS, the Board of Directors of the Company, including all
of the disinterested directors of the Company, has, subject to the conditions of
this Agreement, unanimously declared and determined that the Merger (as defined
below) is advisable, fair to and in the best interests of the stockholders of
the Company and approved and adopted this Agreement and the transactions
contemplated hereby; and
WHEREAS, promptly following the execution of this Agreement by
Parent and the Company, Parent will form a wholly-owned subsidiary corporation
under the laws of the State of Delaware ("Newco") which will become a party to
this Agreement;
WHEREAS, Parent, Newco (upon its execution hereof) and the
Company desire to make certain representations, warranties, covenants and
agreements in connec tion with the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements set forth herein,
Parent, Newco (upon its execution hereof) and the Company hereby agree as
follows:
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING
1.1 THE MERGER. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.2), the Company and
Newco shall consum mate a merger (the "MERGER") in which (a) Newco shall be
merged with and into the Company and the separate corporate existence of Newco
shall thereupon cease, (b) the Company shall be the successor or surviving
corporation in the Merger and shall continue to be governed by the laws of the
State of Delaware, and (c) the separate corporate existence of the Company with
all its rights, privileges, immunities,
powers, franchises, debts, liabilities and duties shall continue unaffected by
the Merger. The corporation surviving the Merger is sometimes hereinafter
referred to as the "SURVIVING CORPORATION." The Merger shall have the effects
set forth in the General Corporation Law of the State of Delaware (the "DGCL").
1.2 EFFECTIVE TIME. Parent, Newco and the Company will cause
an appropriate Certificate of Merger (the "CERTIFICATE OF MERGER") to be
executed and filed on the date of the Closing (as defined in Section 1.3) (or on
such other date as Parent and the Company may agree) with the Secretary of State
of the State of Delaware as provided in the DGCL. The Merger shall become
effective on the date and time on which the Certificate of Merger has been duly
filed with Secretary of State of the State of Delaware or such time as is agreed
upon by the parties and specified in the Certificate of Merger, and such time is
hereinafter referred to as the "EFFECTIVE TIME."
1.3 CLOSING. The closing of the Merger (the "CLOSING") shall
take place (a) at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m. on the second business day following
the date on which the last of the conditions set forth in Article VII hereof
shall be fulfilled or waived in accordance with this Agreement or (b) at such
other place, time and date as Parent and the Company may agree.
1.4 RIGHT TO REVISE STRUCTURE OF MERGER. At Parent's election,
the Merger may alternatively be structured so that the Company is merged with
and into another direct or indirect wholly-owned subsidiary of Parent, or
another direct or indirect wholly-owned subsidiary of Parent is merged with and
into the Company; PROVIDED, HOWEVER, that no such change shall (i) alter or
change the amount or kind of the consideration to be issued to the Company's
stockholders in the Merger as set forth in Article III hereof or the treatment
of the holders of the Options, (ii) materially impede or delay consummation of
the Merger, (iii) release Parent from any of its obligations hereunder or (iv)
adversely affect the rights of the Company and its shareholders hereunder. In
the event of such an election, the Company agrees to execute such appropriate
documentation as may be reasonably requested by Parent to reflect such election.
ARTICLE II
SURVIVING CORPORATION
2.1 CERTIFICATE OF INCORPORATION. The Certificate of
Incorporation of the Company, as in effect immediately prior to the Effective
Time, shall upon the Effective Time be amended and restated in full to read as
set forth in Exhibit A, and as so amended and restated shall be the Certificate
of Incorporation of the Surviving Corporation.
2.2 BY-LAWS. The By-Laws of Newco, as in effect immediately
prior to the Effective Time, shall be the By-Laws of the Surviving Corporation.
2.3 DIRECTORS. The directors of Newco at the Effective Time
shall, from and after the Effective Time, be the initial directors of the
Surviving Corporation until their successors have been duly elected or appointed
and qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Certificate of Incorporation and By-Laws.
2.4 OFFICERS. The officers of the Company at the Effective
Time shall, from and after the Effective Time, be the initial officers of the
Surviving Corporation until their successors have been duly elected or appointed
and qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Certificate of Incorporation and By-Laws.
ARTICLE III
MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF
SHARES IN THE MERGER
3.1 SHARE CONSIDERATION FOR THE MERGER; CONVERSION OR
CANCELLATION OF SHARES IN THE MERGER. At the Effective Time, by virtue of the
Merger and without any action on the part of Parent, Newco, the Company, the
Surviving Corporation or the holders of any capital stock thereof:
(a) Each share of common stock, par value $0.331/3
per share of the Company ("SHARES") issued and outstanding immediately prior to
the Effective Time (other than Shares owned by Parent, Newco or any direct or
indirect wholly owned subsidiary of Parent (collectively, "PARENT COMPANIES") or
any of the Company's direct or indirect wholly owned subsidiaries or held in the
treasury of the Company and other than any Dissenting Shares (as hereinafter
defined in Section 3.3)) shall, by virtue of the Merger and without any action
on the part of Newco, the Company or the
holder thereof, be cancelled and extinguished and converted into the right to
receive, pursuant to Section 3.4, $28.75 in cash (the "MERGER CONSIDERATION"),
payable to the holder thereof, without interest thereon, less any required
withholding of taxes, upon the surrender of the certificate formerly
representing such Share.
(b) At the Effective Time, each Share issued and
outstanding and owned by any of the Parent Companies or any of the Company's
direct or indirect wholly owned subsidiaries or held in the treasury of the
Company immediately prior to the Effective Time shall cease to be outstanding,
be cancelled and retired without payment of any consideration therefor and cease
to exist.
(c) At the Effective Time, each share of capital
stock of Newco issued and outstanding immediately prior to the Effective Time
shall be converted into one validly issued, fully paid and nonassessable
identical share of capital stock of the Surviving Corporation.
3.2 STOCKHOLDERS' MEETING. The Company, acting through the
Board of Directors, shall:
(i) duly call, give notice of,
convene and hold a special meeting of its stockholders (the "Stockholder
Meeting"), to be held as soon as practicable after the date hereof, for the
purpose of considering and taking action upon this Agreement;
(ii) include in the Proxy Statement
(as herein after defined in Section 4.8) (x) the opinion of the Company
Financial Advisor referred to in Section 4.17 and (y) the recommendation of the
Board of Directors that stockholders of the Company vote in favor of the
approval and adoption of this Agreement unless, in the opinion of the Board of
Directors after consultation with its counsel, the inclusion of such
recommendation would be inconsistent with its fiduciary duties to the Company's
stockholders under applicable law; and
(iii) obtain and furnish the
information required to be included by it in the Proxy Statement and, after
consultation with Parent and Newco, file the Proxy Statement confidentially with
the SEC, respond promptly to any comments made by the SEC with respect to the
Proxy Statement and any preliminary version thereof, PROVIDED, HOWEVER, that
all such filings and responses shall be subject to
Parent's prior consent, not to bunreasonably withheld and cause the Proxy
Statement to be mailed to its stockholders at the earliest practicable time
following the date hereof.
At such meeting, Parent, Newco and their affiliates will vote
all Shares owned by them in favor of approval and adoption of this Agreement and
the transactions contemplated hereby.
Subject to its right to terminate this Agreement in accordance
with its terms, the Company shall be required to take the actions specified in
Section 3.2(i) and (iii), and satisfy all its other obligations under this
Agreement, whether or not the Board of Directors of the Company withdraws or
makes an adverse change in its recommendation that stockholders of the Comapnay
vote in favor of the approval and adoption of this Agreement after the date
hereof.
3.3 DISSENTING SHARES.
(a) Notwithstanding anything in this Agreement to the
contrary, Shares that are issued and outstanding immediately prior to the
Effective Time and which are held by stockholders who have not voted in favor of
or consented to the Merger and who shall have delivered a written demand for
appraisal of such Shares in the time and manner provided in Section 262 of the
DGCL and shall not have failed to perfect or shall not have effectively
withdrawn or lost their rights to appraisal and payment under the DGCL (the
"DISSENTING SHARES") shall not be converted into the right to receive the Merger
Consideration, but shall be entitled to receive the consideration as shall be
determined pursuant to Section 262 of the DGCL; PROVIDED, HOWEVER, that if such
holder shall have failed to perfect or shall have effectively withdrawn or lost
his, her or its right to appraisal and payment under the DGCL, such holder's
Shares shall thereupon be deemed to have been converted, at the Effective Time,
into the right to receive the Merger Consideration, without any interest
thereon, less any required withholding taxes.
(b) The Company shall give Parent (i) prompt notice and copies
of any demands for appraisal pursuant to Section 262 of the DGCL received by the
Company, withdrawals of such demands, and any other instruments served or sent
pursuant to the DGCL and received by the Company and (ii) the opportunity to
direct all negotiations and proceedings with respect to demands for appraisal
under the DGCL. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to any such demands for appraisal or offer
to settle or settle any such demands.
3.4 PAYMENT FOR SHARES IN THE MERGER. The manner of making
payment for Shares in the Merger shall be as follows:
(a) At the Effective Time, Parent shall make
available to First Chicago Trust Company of New York (the "EXCHANGE AGENT"), or
such other exchange agent selected by Parent and reasonably acceptable to the
Company for the benefit of the holders of Shares, the funds necessary to make
the payments contemplated by Section 3.1 (the "EXCHANGE FUND"). Such funds may
be invested by the Exchange Agent as directed by Parent, PROVIDED that such
investments shall be in obligations of or guaranteed by the United States of
America, in commercial paper obligations rated A-1 or P-1 or better by Xxxxx'x
Investors Service, Inc. or Standard & Poor's Rating Services, respectively, or
in deposit accounts, certificates of deposit, bank repurchase or reverse
repurchase agreements or banker's acceptances of, or Eurodollar time deposits
purchased from, commercial banks with capital exceeding $500 million. Any net
profit resulting from, or interest or income produced by, such investments will
be payable to the Surviving Corporation or Parent, as Parent directs. The
Exchange Agent shall, pursuant to irrevocable instructions, deliver the Merger
Consideration out of the Exchange Fund. The Exchange Fund shall not be used for
any other purpose.
(b) As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record (other
than holders of certificates for Shares referred to in Section 3.1(c)) of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares (the "CERTIFICATES") (i) a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent) and (ii) instructions for use in effecting
the surrender of the Certificates for payment therefor. Upon surrender of
Certificates for cancellation to the Exchange Agent, together with such letter
of transmittal duly executed and any other required documents, the holder of
such Certificates shall be entitled to receive for each of the Shares
represented by such Certificates the Merger Consideration, without any interest
thereon, less any required withholding of taxes, and the Certificates so
surrendered shall forthwith be cancelled. Until so surrendered, such
Certificates shall upon and following the Effective Time represent solely the
right to receive the Merger Consideration with respect to each of the Shares
represented thereby. If payment is to be made to a person other than the person
in whose name a Certificate so surrendered is registered, it shall be a
condition
of payment that the Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and that the person requesting such
payment shall pay to the Exchange Agent any transfer or other taxes required by
reason of the payment to a person other than the registered holder of the
Certificate surrendered, or shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable. Until surrendered in
accordance with the provisions of this Section 3.4(b), each Certificate (other
than Certificates representing Shares held in the Company's treasury or by
Newco, or by Parent or any other direct or indirect wholly-owned subsidiary of
the Company or Parent) shall upon and following the Effective Time represent for
all purposes only the right to receive, for each Share represented thereby, the
Merger Consideration.
(c) Any portion of the Exchange Fund made available
to the Exchange Agent which remains unclaimed by the former stockholders of the
Company for one year after the Effective Time shall be delivered to the
Surviving Corporation, upon demand of the Surviving Corporation, and any former
stockholders of the Company shall thereafter look only to the Surviving
Corporation for payment of their claim for the Merger Consideration for the
Shares. If any Certificates shall not have been surrendered immediately prior
to the date on which any Merger Consideration in respect of such certificate
would escheat to or become the property of any governmental entity, any such
Merger Consideration shall, to the extent permitted by applicable law, become
the property of the Surviving Corporation, free and clear of all claims or
interest of any person previously entitled thereto. Notwithstanding the
foregoing, none of the Surviving Corporation, Parent or the Exchange Agent shall
be liable to any holder of a Certificate for Merger Consideration delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law.
3.5 TRANSFER OF SHARES AFTER THE EFFECTIVE TIME. No transfers
of Shares shall be made on the stock transfer books of the Company after the
close of business on the day of the Effective Time. From and after the Effective
Time, the holders of Certificates evidencing ownership of Shares outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such Shares except as otherwise provided for herein or by applicable
law. All cash paid upon the surrender for exchange of the Certificates in
accordance with the terms of this Article shall be deemed to have been in full
satisfaction of all rights pertaining to the Shares theretofore represented by
such Certificates.
3.6 STOCK OPTIONS.
(a) Immediately prior to the Effective Time, each
option ("OPTION") which has been granted under the 1993 or 1997 Key Employees
Incentive Plans or any predecessor plans thereto (together, the "OPTION PLANS")
and is outstanding at the Effective Time, whether or not then exercisable, shall
be (or, if not previously vested and exercisable, shall become) vested and
exercisable and such Options immediately thereafter shall be canceled by the
Company, and each holder of a canceled Option shall be entitled to receive at
the Effective Time or as soon as practicable thereafter from the Company in
consideration for the cancellation of such Option an amount in cash equal to the
product of (i) the number of Shares previously subject to such Option and (ii)
the excess, if any, of the Merger Consideration over the exercise price per
share of Shares previously subject to such Option, less any applicable
withholding taxes.
(b) The Company shall (i) take all actions necessary and
appropriate so that all stock or other equity based plans maintained with
respect to the Shares, including, without limitation, the plans listed in
Section 4.10(a) hereof ("OPTION PLANS"), shall terminate as of the Effective
Time and that any other Company Plan (as hereinafter defined in Section 4.10)
(including the Company Employee Stock Purchase Plan) providing for the issuance,
transfer or grant of any capital stock of the Company or any interest in respect
of any capital stock of the Company shall be amended to provide that no further
issuances, transfer or grants shall be permitted as of the Effective Time, and
(ii) provide that, following the Effective Time, no holder of an Option or any
participant in any Option Plan shall have any right thereunder to acquire any
capital stock of the Company, Parent or the Surviving Corporation. Prior to the
Effective Time, the Company shall use reasonable best efforts to (x) obtain all
necessary consents from, and provide (in a form acceptable to Parent) any
required notices to, holders of Options and (y) amend the terms of the
applicable Option Plan and the Company Employee Stock Purchase Plan, in each
case as is necessary to give effect to the provision of this paragraph (b).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Newco
that:
4.1 CORPORATE ORGANIZATION AND QUALIFICATION. Each of the
Company and its subsidiaries (as hereinafter defined in Section 9.10) is a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation and is qualified and in good
standing as a foreign corporation in each jurisdiction where the properties
owned, leased or operated or the business conducted by it require such
qualification, except where failure to so qualify or be in good standing would
not have a Material Adverse Effect (as hereinafter defined in Section 9.10).
Each of the Company and its subsidiaries has all requisite power and authority
(corporate or other wise) to own, lease and operate its properties and to carry
on its business as it is now being conducted except where failure to have such
power and authority would not have a Material Adverse Effect. The Company has
heretofore made available to Parent complete and correct copies of its Restated
Certificate of Incorporation and By-Laws.
4.2 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
(i) 10,000,000 Shares of which, as of June 30, 1999, 4,030,412 Shares were
issued and outstanding and 277,760 Shares were held in the treasury of the
Company and (ii) 1,000,000 shares of preferred stock, par value $1.00 per share,
none of which is issued or outstanding and 40,000 shares of which are designated
as Series A Junior Participating Preferred Stock. All of the outstanding shares
of capital stock of the Company have been duly authorized, validly issued and
are fully paid and nonassessable and were not issued in violation of, and are
not entitled to, preemptive rights. As of June 30, 1999, 198,439 Shares were
reserved for issuance upon exercise of outstanding options pursuant to the
Option Plans (with an average exercise price of $11.87 for all such options),
all of which Shares are issuable at an exercise price less than the Merger
Consideration. No Shares have been issued (including from treasury) since
June 30, 1999 except for any issued pursuant to the options described above or
up to 5,000 Shares in the aggregate issued under the Employee Stock Purchase
Plan. Except as set forth above, no shares of capital stock or other equity
securities of the Company are issued, reserved for issuance or outstanding. None
of the subsidiaries of the Company owns any of the capital stock of the Company.
Except as set forth on Schedule 4.2, as of the date hereof all outstanding
shares of capital stock of the Company's subsidiaries are owned of record and
beneficially by the Company or a direct or indirect wholly owned subsidiary of
the Company, free and clear of all liens, charges, encumbrances, claims and
options of any nature. Except as set forth above and on Schedule 4.2 and except
for the Rights, there are not as of the date hereof any outstanding or
authorized options, warrants, calls, rights (including preemptive rights),
commitments, understandings, or any other agreements of any character which the
Company or any of its subsidiaries is a party to, or may be bound by, requiring
it to issue, transfer, sell, purchase, redeem, make any payment in respect of or
acquire any shares of capital stock or any securities or rights convertible
into, exchangeable for, or evidencing the right to subscribe for, any shares of
capital stock of the Company or any of its subsidiaries.
(b) As of June 30, 1999, the outstanding aggregate
indebtedness of the Company and its subsidiaries for borrowed money did not
exceed $25 million. There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of the Company having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which stockholders of the Company may vote.
(c) Except as set forth on Schedule 4.2(c), there are no
voting trusts or other agreements to which the Company or any of its
subsidiaries is a party with respect to the voting of the capital stock of the
Company or any of its subsidiaries.
(d) Schedule 4.2(d) sets forth, as of the date hereof, to the
knowledge of the Company: each person or group (within the meaning of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT")) (i) who has beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act) of more than 5% of the outstanding Company Common Stock; and
the number of Shares that such person or group has asserted are beneficially
owned by it, or (ii) who has made any filing under the HSR Act with respect to
the Company or the Shares since January 1, 1998.
4.3 AUTHORITY RELATIVE TO THIS AGREEMENT.
(a) The Company has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement and the consummation by the
Company of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of the Company and no other corporate
proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated
hereby (other than, with respect to the Merger, the approval and adoption of
this Agreement by the stockholders of the Company, including Newco, in
accordance with Section 251 of the DGCL). This Agreement has been duly and
validly executed and delivered by the Company and, assuming this Agreement
constitutes the valid and binding agreement of Parent and Newco, constitutes
the valid and binding agreement of the Company, enforce able against the
Company in accordance with its terms, except that the enforcement hereof may
be limited by (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law).
(b) The Board of Directors of the Company, at a
meeting duly called and held, has by unanimous vote of the entire Board of
Directors (i) declared and determined that this Agreement and the transactions
contemplated hereby, including the Merger, are advisable, fair to and in the
best interests of the stockholders of the Company and has taken all corporate
action required to be taken by the Board of Directors for the consummation of
the Merger and the other transactions contemplated herein, including but not
limited to all actions required to render the provisions of Section 203 of the
DGCL restricting business combinations with "interested stockholders"
inapplicable to such transactions, (ii) approved this Agreement and the Merger
and the other transactions contemplated hereby and (iii) recommended that the
stockholders of the Company approve and adopt this Agreement and the Merger.
(c) The Company has amended the Rights Agreement,
dated as of November 10, 1998, by and between the Company and First Chicago
Trust Company of New York, as amended by the Amendment dated as of June 24, 1999
(the "RIGHTS AGREEMENT"), to ensure that (i) neither a "Distribution Date" nor a
"Stock Acquisition Date" will occur (and no such event has occurred prior to the
date hereof); (ii) none of Parent, Newco or any of their "Affiliates" or
"Associates" will be deemed to be an "Acquiring Person" (as defined in the
Rights Agreement); (iii) no provisions of Section 11 or Section 13 of the Rights
Agreement will be triggered, by reason of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby and (iv)
the Rights will expire immediately prior to the Effective Time.
(d) The affirmative vote of a majority of the voting
power of the outstanding Shares in favor of the approval and adoption of this
Agreement (the "COMPANY STOCKHOLDER APPROVAL") is the only vote of the holders
of any class or series of the Company's or its subsidiaries' securities
necessary to approve this Agreement, the Merger and the other transactions
contemplated hereby.
4.4 CONSENTS AND APPROVALS; NO VIOLATION. Neither the
execution and delivery of this Agreement nor the performance by the Company (and
its subsidiaries) of its obligations herein nor the consummation by the Company
of the transactions contem plated hereby will (a) conflict with or result in any
breach of any provision of the respective Certificate of Incorporation or
By-Laws of the Company or any of its subsidiaries; (b) require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority or any other person or entity, except (i)
in connection with the applicable requirements of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improve ments Act of 1976, as amended (the "HSR ACT"), (ii) pursuant
to the applicable require ments of the Exchange Act, (iii) the filing of the
Certificate of Merger pursuant to the DGCL and appropriate documents with the
relevant authorities of other states in which the Company or any of its
subsidiaries is authorized to do business, (iv) required filings with and
notifications to the New York Stock Exchange (the "NYSE") or, (v) as may be
required by any applicable state securities or "blue sky" laws or state takeover
laws; (c) except as set forth in Schedule 4.4(c), result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, modification, cancellation or
acceleration or lien or other charge or encum brance) under, or give rise to any
purchase or put right or other imposition of any obliga tion or loss of any
benefit under, any of the terms, conditions or provisions of any note, permit,
concession, franchise, license, agreement or other instrument or obligation to
which the Company or any of its subsidiaries or any of their assets may be bound
(any of the foregoing, a "CONTRACT"), or (d) assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in this
Section 4.4 are duly and timely obtained or made and, with respect to the
Merger, the approval of this Agreement by the Company's stockholders has been
obtained, violate any order, writ, injunction, decree, law, statute, rule or
regulation applicable to the Company or any of its subsidiaries or to any of
their respective assets, except in the case of clauses (b), (c) and (d), as
would not, individually or in the aggregate, have a Material Adverse Effect.
4.5 SEC REPORTS; FINANCIAL STATEMENTS.
(a) Except as set forth in Schedule 4.5(a), the
Company has filed all forms, reports and documents required to be filed by it
with the
SEC since January 1, 1998 pursuant to the federal securities laws and the SEC
rules and regulations thereunder, all of which, including in each case all
exhibits and schedules thereto and documents incorporated by reference therein
(collectively, the "COMPANY SEC REPORTS") as of their respective dates, complied
in all material respects with all applicable requirements of the Securities Act
of 1933, as amended (the "SECURITIES ACT") and the Exchange Act. None of the
Company SEC Reports, including, without limitation, any financial statements or
schedules included therein, as of their respective dates, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. None of the
Company's subsidiaries has been required to file any reports, schedules, forms,
statements or other documents with the SEC.
(b) The consolidated balance sheets and the related
consolidated statements of operations, comprehensive income (loss),
stockholders' equity and cash flows (including the related notes thereto) of the
Company included in the Company SEC Reports, as of their respective dates,
complied in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, were
prepared in accordance with generally accepted accounting principles ("GAAP")
applied on a basis consistent with prior periods (except as otherwise noted
therein), and present fairly, in all material respects, the consolidated
financial position of the Company and its consolidated subsidiaries as of their
respective dates, and the xxxxxxx dated results of their operations and their
cash flows for the periods presented therein (subject, in the case of the
unaudited interim financial statements, to normal year-end adjustments which
would not, individually or in the aggregate, have a Material Adverse Effect).
(c) Except as set forth in the Company's financial
statements included in the Company SEC Reports filed since January 1, 1999 and
prior to the date hereof (the "CURRENT SEC REPORTS"), and except as incurred in
the ordinary course of business since the date of such financial statements or
disclosed on Schedule 4.5(c), neither the Company nor any of its subsidiaries
has any liabilities or obligations that would be required to be set forth on a
balance sheet prepared in accordance with GAAP other than those which,
individually or in the aggregate, would not have a Material Adverse Effect.
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
specifically disclosed in the Current SEC Reports, as set forth with reasonable
specificity in the schedules to this Agreement or as specifically contemplated
by this Agreement, since March 31, 1999, (i) the Company has conducted its
business in all material respects only in the ordinary course consistent with
past practice, (ii) there has not been any condition, event or occurrence which,
individually or in the aggregate, has had or would reasonably be expected to
have a Material Adverse Effect and (iii) no actions have been taken, which if
taken after the date hereof, would constitute a material breach of the
provisions of Section 6.1.
4.7 LITIGATION; COMPLIANCE.
(a) Except as set forth on Schedule 4.7, the Current
SEC Reports accurately disclose in all material respects all actions, claims,
suits, proceedings and governmental investigations pending or, to the knowledge
of the Company, threatened, which (i) are required to be disclosed therein by
the Exchange Act or (ii) individually or in the aggregate are reasonably likely
to have a Material Adverse Effect. No judgment, decree, injunction, rule or
order of any governmental entity or arbitrator is outstanding against the
Company that, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect.
(b) The conduct of the business of each of the
Company and its subsidiaries complies, and during the past three years has
complied, with all laws, statutes, rules, regulations, orders, writs,
injunctions, and decrees applicable thereto, except for failures so to comply,
if any, that, individually or in the aggregate, would not have a Material
Adverse Effect.
(c) Except for any of the following that would not,
individually or in the aggregate, have a Material Adverse Effect: (i) each of
the Company and its subsid iaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exemptions, consents,
certificates, approvals and orders from governmental entities (collectively, the
"COMPANY PERMITS"), that are necessary to own, lease and operate the properties
of the Company and its subsidiaries and to carry on their business as owned,
leased, operated or carried on as of the date of this Agreement; (ii) the
Company Permits are in full force and effect; and (iii) there is no action,
proceeding or investigation pending or, to the knowledge of the Company,
threatened regarding suspen sion or cancellation of any of the Company Permits.
4.8 PROXY STATEMENT; OFFER DOCUMENTS. Any proxy or similar
materials distributed to the Company's stockholders in connection with the
Merger, including any amendments or supplements thereto and any
information incorporated by reference therein (the "Proxy Statement") will
comply in all material respects with applicable federal securities laws, and
the Proxy Statement will not, at the time that it or any amendment or
supplement thereto is mailed to the Company's stockholders, at the time of
the Stockholders Meeting or at the Effective Time, contain any untrue
statement of material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading or necessary
to correct any statement in any earlier communication with respect to the
solicitation of proxies for the Stockholders Meeting which has become false
or misleading except that no representation is made by the Company with
respect to information supplied by Newco or Parent in writing for inclusion
in the Proxy Statement.
4.9 TAXES. Except as set forth on Schedule 4.9, the Company
and its subsidiaries have filed when due or will cause to be filed when due, all
Federal, state, local and foreign Tax Returns, declarations, statements,
reports, schedules, forms and information returns and any amendments thereto
that any of them is required to file ("TAX RETURNS") other than those Tax
Returns the failure of which to file would not have a Material Adverse Effect
and have paid all taxes shown on those returns. All such Tax Returns are, or
will be at the time of filing, true, complete and correct in all respects except
as would not have a Material Adverse Effect. The Company and its subsidiaries
have paid (or have had paid on their behalf), or where payment is not yet due,
have established (or have established on their behalf and for their sole benefit
and recourse), or will establish or cause to be established on or before the
Effective Time, an adequate accrual for the payment of, all material Taxes (as
hereinafter defined in Section 9.10) (other than deferred Taxes reflecting
differences between the book and tax bases in assets and liabilities) with
respect to any period (or portion thereof) ending prior to or as of the
Effective Time. Except as set forth in Schedule 4.9, no audits or other
administrative proceedings or court proceedings are presently pending with
regard to any Taxes or Tax Return of the Company or its subsidiaries as to which
any taxing authority has asserted in writing any claim, other than claims,
which, individually or in the aggregate, would not have a Material Adverse
Effect. Except as set forth on Schedule 4.9, neither the Company nor its
subsidiaries have received any written notice of deficiency or assessment from
any taxing authority with respect to Taxes, which have not been fully paid or
finally settled. Neither the Company nor any of its subsidiaries has any
liability for any Taxes of any person under Treasury Regulation section 1.1502-6
(or any comparable state, local or foreign law),
as a trans feree or successor, by contract or otherwise, except as would not
result in a Material Adverse Effect. Except as disclosed in the Schedules
hereto, neither the Company nor its subsidiaries is required to make any
payments to directors, officers or employees, including as a result of the
transactions contemplated by this Agreement, which would be subject to Section
162(m) of the Code.
4.10 EMPLOYEE BENEFIT PLANS; LABOR MATTERS.
(a) Schedule 4.10(a) contains a true and complete
list of each "EMPLOYEE BENEFIT PLAN" (within the meaning of section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
including, without limitation, multiemployer plans within the meaning of ERISA
section 3(37)), stock purchase, stock option, severance, employment,
change-in-control, fringe benefit, collective bargaining, bonus, incentive,
deferred compensation and all other employee benefit plans, agreements, programs
or policies, whether or not subject to ERISA (including any funding mechanism
therefor now in effect or required in the future as a result of the transactions
contemplated by this Agreement or otherwise), oral or written under which any
employee or former employee of the Company or its subsidiaries has any present
or future right to material benefits or under which the Company or its
subsidiaries has any material present or future liability. All such plans,
agreements, programs, policies and arrangements shall be collectively referred
to as the "COMPANY PLANS". With respect to the Company Plans, except as set
forth in Schedule 4.10(b) or the Current SEC Reports: (i) each Company Plan
intended to be qualified under Section 401(a) of the Internal Revenue Code of
1986, as amended (the "Code"), has received a favorable determination letter
from the Internal Revenue Service (the "IRS") that it is so qualified and
nothing has occurred since the date of such letter that is reasonably likely to
affect the qualified status of such Company Plan; (ii) each Company Plan has
been operated in all material respects in accordance with its terms and the
requirements of applicable law; (iii) neither the Company nor any of its
subsidiaries has incurred any direct or indirect liability under, arising out of
or by operation of Title IV of ERISA, in connection with the termination of, or
withdrawal from, any Company Plan or other retirement plan or arrangement and no
fact or event exists that is reasonably likely to give rise to any liability,
except as would not, individually or in the aggregate, have a Material Adverse
Effect. Except as set forth in Schedule 4.10(b) or the Current SEC Reports, the
aggregate accumulated benefit obligations of each Company Plan subject to Title
IV of ERISA (as of the date of the most recent actuarial valuation prepared for
such Company Plan) do not exceed the fair market value of the assets of such
Company Plan (as of the date of such valuation).
(b) With respect to each Company Plan, the Company
has made or will make available to Parent a current, accurate and complete copy
(or, to the extent no such copy exists, an accurate description) thereof and, to
the extent applicable: (i) the most recent determination letter, if applicable;
(ii) any summary plan description by the Company or its subsidiaries to their
employees concerning the extent of the benefits provided under a Company Plan;
and (iii) for the most recent year, if applicable, (A) the Form 5500 and
attached schedules and (B) actuarial valuation reports.
(c) With respect to any Company Plan, except as would
not have a Material Adverse Effect, (i) no actions, suits or claims (other than
routine claims for benefits in the ordinary course) are pending or, to the
knowledge of the Company, threatened and (ii) no written or, to the knowledge of
the Company, oral communication has been received by the Company from any
governmental entity in respect of any Company Plan subject to Title IV of ERISA
concerning the funded status of any such plan or any transfer of assets and
liabilities from any such plan in connection with the transactions contemplated
herein.
(d) Except as set forth in Schedule 4.10(d), no
Company Plan exists that provides for the payments to any present or former
employee of the Company or its subsidiaries of any amount of money or other
property or accelerates or provides any other rights or benefits to any present
or former employee of the Company or its subsidiaries, as a result of the
transactions contemplated by this Agreement, whether or not such payment would
constitute a parachute payment within the meaning of Code section 280G.
(e) Neither the Company nor any of its subsidiaries
is a party to any collective bargaining or other labor union contracts or is the
subject of any proceeding asserting that it or any subsidiary has committed an
unfair labor practice. There is no pending or, to the knowledge of the Company,
threatened labor dispute, strike or work stoppage against the Company or any of
its subsidiaries which would interfere with the respective business activities
of the Company or its subsidiaries. There is no action, suit, complaint, charge,
arbitration, inquiry, proceeding, grievance or investigation by or before any
court, government agency, administrative agency or commission brought by or on
behalf of any employee, prospective employee, former employee, retiree or other
representative of the Company's employees pending or, to the knowledge of the
Company,
threatened against the Company or any of its subsidiaries other than any which
would not, individually or in the aggregate, have a Material Adverse Effect.
Neither the Company nor any of its subsidiaries is a party to or otherwise bound
by, any consent, decree, or citation by any government entity relating to
employees or employment practices.
(f) Except as set forth on Schedule 4.10(f), neither the
Company nor any of its subsidiaries sponsor, maintain or contribute to any
Company Plan that provides post-retirement medical or life insurance benefits to
any present or former employee of the Company or its subsidiaries.
4.11 ENVIRONMENTAL LAWS AND REGULATIONS. Except as publicly
disclosed by the Company in the Current SEC Reports or as set forth in
Schedule 4.11, (i) the Company and each of its subsidiaries is, and has been
for the past three years, in material compliance with all applicable federal,
state, local and foreign statutes, laws, regulations, orders, judgments and
decrees relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) (collectively,
"Environmental Laws"), except for non-compliance that in the aggregate would
not have a Material Adverse Effect and (ii) neither the Company nor any of
its subsidiaries has received written notice of, or, to the knowledge of the
Company, is the subject of, any action, cause of action, claim,
investigation, demand or notice by any person or entity alleging liability or
investigatory or remedial obligations under or non-compliance with any
Environmental Law (an "Environmental Claim") which, in the aggregate, is
reasonably likely to have a Material Adverse Effect. Materials or substances
that are regulated or that could result in liability under Environmental
Laws, including without limitation asbestos, polychlorinated biphenyls and
petroleum and petroleum products, have not been generated, transported,
treated, stored, disposed of, arranged to be disposed of, or released by the
Company or any of its subsidiaries at, on, from or under any of the
properties or facilities currently owned, leased or otherwise used by the
Company or its subsidiaries in violation of, or in a manner or to a location
that is reasonably likely to give rise to liability under, Environmental Laws
that would, in the aggregate, have a Material Adverse Effect.
4.12 INTELLECTUAL PROPERTY.
(a) Schedule 4.12(a) sets forth (i) all Intellectual
Property material to the business of the Company and its subsidiaries as
currently conducted that is owned, held or used by the Company or its
subsidiaries ("COMPANY IP") and issued by or registered or filed with, or which
has been submitted to, any governmental entity and (ii) each and every material
license, sublicense, consent-to-use agreement and other agreement concerning
Company IP to which the Company and/or any of its subsidiaries is a party ("IP
LICENSES").
(b) Except as disclosed on Schedule 4.12(b) or as
would not, individually or in the aggregate, have a Material Adverse Effect: (i)
the patents and trademark and copyright registrations owned by the Company or
its subsidiaries are, to the knowledge of the Company, valid, enforceable,
unexpired and not abandoned, the Company and/or its subsidiaries owns or has the
right to use all the Company IP, free of encumbrances, and, to the knowledge of
the Company, such Intellectual Property does not infringe upon or otherwise
impair the Intellectual Property of, and is not being infringed upon or impaired
by, any third party; (ii) no judgment, decree, injunction, rule or order has
been rendered or, to the knowledge of the Company, is threatened by any
governmental entity which would limit, cancel or question the validity of (or
the Company's or any subsidiary's right to own or use) any Company IP; (iii) no
action, suit or proceeding is pending, or to the knowledge of the Company,
threatened that seeks to limit, cancel or question the validity of (or the
Company's or any subsidiary's right to own or use) any Company IP; (iv) the
Company has made all filings and executed all agreements reasonably necessary
to maintain its interests in the Company IP; (v) no party to an IP License is in
breach or default thereunder; and (vi) the transactions contemplated by this
Agreement do not impair or limit the rights of the Company or any of its
subsidiaries under any IP License, or cause any payment to be due or accelerated
thereunder.
For the purposes of this Section 4.12, "INTELLECTUAL PROPERTY"
shall means all U.S., state and foreign intellectual property, including without
limitation all (i) inventions, discoveries, processes, designs and related
improvements and know-how, whether or not patented or patentable; (ii)
copyrights and works of authorship in any media, including computer programs,
software, databases, Internet site content and related items, advertising and
promotional materials (including graphics, and text), designs, proprietary or
copyrightable elements of pictorial, graphic or sculptural works, and all other
authors' rights; (iii) trademarks, service marks, trade names, brand names,
corporate names, domain names, logos, trade dress and all elements thereof, the
goodwill of any business symbolized thereby, and all common-law rights relating
thereto; (iv) trade secrets and other proprietary information; (v) all
registrations, applications, recordings, and licenses or other agreements
related to the foregoing; and (vi) all rights to obtain renewals, extensions,
continuations, continuations-in-part, reissues, divisions
or similar legal protections related to the foregoing.
4.13 YEAR 2000 COMPLIANCE. To the knowledge of the Company,
except as would not, individually or in the aggregate, have a Material Adverse
Effect, all computer hardware, software, databases, systems and other computer
equipment owned, held, and/or used by the Company or any of its subsidiaries,
can be used prior to, during and after the calendar year 2000 A.D., and will
operate during each such time period, either on a stand-alone basis, or by
interacting or interoperating with third-party software, without error relating
to the processing, calculating, comparing, sequencing or other use of date data.
4.14 CONTRACTS. Except as set forth on Schedule 4.14, neither
the Company nor any of its subsidiaries is, or has received any notice or has
any knowledge that any other party is, or would with the passage of time or the
giving of notice or both be, in default in any respect under any Contract to
which it or any of its subsidiaries is a party or by which it or any such
subsidiary is bound, except for those defaults which would not, individually or
in the aggregate, have a Material Adverse Effect. Except as set forth in
Schedule 4.14 or as disclosed in the Current SEC Reports, neither the Company
nor any of its subsidiaries is subject to or bound by (i) any Contract required
to be disclosed pursuant to Items 404 or 601 of Regulation S-K of the SEC,
including any Contracts entered into since the respective dates of the Current
SEC Reports, or (ii) any exclusive dealing arrangement or other Contract
containing covenants which limit the ability of the Company or any subsidiary to
compete in any significant line of business as presently conducted by it or
which materially restrict the geographic area in which, or method by which, the
Company or any subsidiary may carry on its business as presently conducted by
it.
4.15 INSURANCE. The Company and its subsidiaries are insured
with reputable insurers against such risks and in such amounts as the management
of the Company reasonably has determined to be appropriate or as required by
law. All of the insurance policies, binders, or bonds maintained by the Company
or its subsidiaries are in full force and effect; the Company and its
subsidiaries are not in default thereunder; and all claims thereunder have been
filed in due and timely fashion, in each instance except for cases which would
not, individually or in the aggregate, have a Material Adverse Effect.
4.16 BROKERS AND FINDERS. Except for the fees and expenses
payable to Xxxxxxxxxxx Xxxxxxx & Co., Inc., which fees and expenses are
reflected in its agreement with the Company, true and complete copies of which
have been furnished to Parent, the Company has not employed any investment
banker, broker, finder, consultant or intermediary in connection with the
transactions contemplated by this Agreement which would be entitled to any
investment banking, brokerage, finder's or similar fee or commission in
connection with this Agreement or the transactions contemplated hereby.
4.17 OPINION OF FINANCIAL ADVISORS. The Company has received
the opinion of Xxxxxxxxxxx Xxxxxxx & Co., Inc., dated as of the date hereof, to
the effect that, as of such date, the cash consideration to be received by the
stockholders of the Company in the Merger is fair to such stockholders from a
financial point of view, a copy of which opinion has been provided to Parent.
4.18 CUSTOMERS AND DISTRIBUTORS. Schedule 4.18 sets forth a
list of the ten largest customers and distributors of the Company and its
subsidiaries (based on 1998 annual revenues for those businesses currently
operated by the Company). Since April 1, 1999 and prior to the date hereof,
except as would not, individually or in the aggregate, have a Material Adverse
Effect, none of such customers or distributors has terminated or materially
reduced its purchases or orders of the Company's and its subsidiaries' products,
nor has any such customer or distributor specifically indicated that it intends
to do so.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT
AND NEWCO
Each of Parent and Newco (upon its execution hereof) represent
and warrant jointly and severally to the Company that:
5.1 CORPORATE ORGANIZATION AND QUALIFICATION. Parent is and
Newco upon its execution hereof will be, a corporation duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation.
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Parent has, and upon
its execution hereof, Newco will have, the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement and the consummation by Parent
of the transactions contemplated hereby have been, and upon its
execution hereof, by Newco of the transactions contemplated hereby will have
been, duly and validly authorized by the respective Boards of Directors of
Parent and Newco and immediately following the execution of this Agreement by
Newco it will be adopted by Parent as sole stockholder of Newco, and no other
corporate proceedings on the part of Parent are, or upon execution hereof by
Newco will on the part of Newco be, necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by Parent, and upon its execution hereof,
will have been duly and validly executed and delivered by Newco and, assuming
this Agreement constitutes the valid and binding agreement of the Company,
constitutes valid and binding agreement of Parent, and upon its execution
hereof, will constitute valid and binding agreement of Newco, enforceable
against each of them in accordance with its terms, except that the enforcement
hereof may be limited by (a) bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
5.3 CONSENTS AND APPROVALS; NO VIOLATION. Neither the
execution and delivery of this Agreement by Parent or Newco nor the performance
by Parent and Newco of their obligations herein or the consummation by Parent
and Newco of the transactions contemplated hereby will (a) conflict with or
result in any breach of any provision of the Certificate of Incorporation or the
By-Laws, respectively, of Parent or Newco; (b) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority or any other person or entity, except (i) in connection
with the applicable requirements of the HSR Act, (ii) pursuant to the applicable
requirements of the Exchange Act, (iii) the filing of the Certificate of Merger
pursuant to the DGCL and appropriate documents with the relevant authorities of
other states in which Parent is authorized to do business, (iv) required filings
with and notifications to the NYSE, and (v) as may be required by any
applicable state securities or "blue sky" laws or state takeover laws, (v) such
filings, consents, approvals, orders, registrations, declarations and filings as
may be required under the laws of any foreign country in which Parent or any of
its subsidiaries conducts any business or owns any assets, (vi) such filings and
consents as may be required under any environmental, health or safety law or
regulation pertaining to any notification, disclosure or required approval
triggered by the Merger or the transactions contemplated by this Agreement or
(vii) where the failure to obtain such consent, approval, authorization or
permit, or to make such filing or notifica tion, would not in the aggregate have
a Material Adverse Effect or adversely affect the consummation of the
transactions contemplated hereby; (c) except as set forth in Schedule 5.3(c),
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
modification, cancellation or acceleration or lien or other charge or
encumbrance) under any Contract; or (d) assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in this
Section 5.3 are duly and timely obtained or made, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Parent or any of
its subsidiaries or to any of their respective assets, except in the case of
clauses (b), (c) and (d), as would not, individually or in the aggregate, have a
Material Adverse Effect.
5.4 PARENT FINANCIAL CONDITION. The only material asset of
Parent is its ownership of approximately 89.5% of the outstanding common stock
of CCPC Holding Company, Inc., a Delaware corporation (formerly known as Corning
Consumer Products Company) ("CCPC"). The consolidated balance sheets and the
related consolidated statements of operations, stockholders equity and cash
flows (including the related notes thereto) of CCPC included in the reports and
documents filed by CCPC with the SEC since January 1, 1999 and prior to the date
hereof, as of their respective dates, complied in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, were prepared in accordance with generally
accepted accounting principles applied on a basis consistent with prior periods
(except as otherwise noted therein), and present fairly, in all material
respects, the consolidated financial position of CCPC and its consolidated
subsidiaries as of their respective dates, and the consolidated results of their
operations and their cash flows for the periods presented therein (subject, in
the case of the unaudited interim financial statements, to normal year-end
adjustments).
5.5 PROXY STATEMENT. None of the information supplied by
Parent or Newco in writing for inclusion in the Proxy Statement will, at the
respective times that the Proxy Statement or any amendments or supplements
thereto are filed with the SEC and are first published or sent or given to
holders of Shares, and in the case of the Proxy Statement, at the time that it
or any amendment or supplement thereto is mailed to the Company's stockholders,
at the time of the Stockholders' Meeting or at the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
5.6 FINANCING. Xxxxxx, Inc. has, and as of closing date,
Parent will have, sufficient funds available to purchase all of the Shares
outstanding on a fully diluted basis and to pay all fees and expenses related to
the transactions contemplated by this Agreement.
5.7 INTERIM OPERATIONS OF NEWCO. Newco will be formed solely
for the purpose of engaging in the transactions contemplated hereby and will not
engage in any business activities or conduct any operations other than in
connection with the transactions contemplated hereby.
5.8 BROKERS AND FINDERS. Except for Xxxxxxx, Sachs & Co. (the
fees and expenses of which will be paid by Parent), Parent has not employed any
investment banker, broker, finder, consultant or intermediary in connection with
the transactions contemplated by this Agreement which would be entitled to any
investment banking, brokerage, finder's or similar fee or commission in
connection with this Agreement or the transactions contemplated hereby.
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS
6.1 CONDUCT OF BUSINESS OF THE COMPANY.
(a) The Company agrees that during the period from
the date of this Agreement to the Effective Time (unless the other party shall
otherwise agree in writing and except as otherwise contemplated by this
Agreement), the Company will, and will cause each of its subsidiaries to,
conduct its operations according to its ordinary and usual course of business
consistent with past practice and, to the extent consistent therewith, with no
less diligence and effort than would be applied in the absence of this
Agreement, seek to preserve intact its current business organizations, keep
available the service of its current officers and employees and preserve its
relationships with distributors, customers, suppliers and others having business
dealings with it to the end that goodwill and ongoing businesses shall not be
impaired in any material respect prior to, at, or following the Effective Time.
Without limiting the generality of the foregoing, and except as otherwise
expressly permitted in this Agreement or as set forth in Schedule 6.1(a), prior
to the Effective Time, neither the Company nor any of its subsidiaries will,
without the prior written consent of Parent:
(i) except for shares to be issued
or delivered under outstanding option agreements and restricted stock awards
pursuant to the Option Plans, or pursuant to the Comapny's Employee Stock
Purchase Plan, issue, deliver, sell, dispose of, pledge or otherwise encumber,
or authorize or propose the issuance, sale, disposition or pledge or other
encumbrance of or redeem, purchase or otherwise acquire, (A) any additional
shares of capital stock of any class (including the Shares) or other ownership
or equity investment, or any securities or rights convertible into, exchangeable
for, or evidencing the right to subscribe for any shares of capital stock, or
other ownership or equity investment or any rights, warrants, options, calls,
commitments or any other agreements of any character to purchase or acquire any
shares of capital stock or other ownership or equity investment or any
securities or rights convertible into, exchangable for, or evidencing the right
to subscribe for, any shares of capital stock or other ownership or equity
investment, or (B) any other securities in respect of, in lieu of, or in
substitution for, Shares outstanding on the date hereof;
(ii) split, combine, subdivide or
reclassify any Shares or declare, set aside for payment or pay any dividend, or
make any other actual, constructive or deemed distribution in respect of any
Shares or otherwise make any payments to stockholders in thier capacity as such,
other than the declaration and payments of regular annual cash dividends in
accordance with past dividend policy not in excess of $0.32 per share per year
pro rated to reflectthe earliest anticipated Effective Time and except for
dividends by a wholly owned subsidiary of the Company;
(iii) adopt a plan of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or any of its
subsidiaries not constituting an inactive subsidiary (other than the Merger);
(iv) adopt any amendments to its
Certificate of Incorporation or By-Laws or alter through merger, liquidation,
reorganization, restructuring or in any other fashion the corporate structure
or ownership od any subsidiary not constituting an inactive subsidiary of the
Company;
(v) make any material acquisition,
by means of merger, consolidation or otherwise, or material disposition, of
assets or securities;
(vi) other than in the ordinary
course of business consistent with past practice, incur any indebtedness for
borrowed money or guarantee or otherwise become liable in respect of any such
indebtedness (provided that any indebtedness incurred after the date hereof
shall be prepayable at any time at the option of the Company without premium or
penalty) or make any loans, advances or capital contributions to, or investments
in, any other person, other than to the Company or any wholly owned subsidiary
of the Company;
(vii) except as may be required as a
result of a change in law or in generally accepted accounting principles, change
any of the accounting practices or principles used by it;
(viii) except as required by law or
the applicable taxing authority, make or change in any material respect any
material Tax election, make or change in any material respect any method of
accounting with respect to Taxes, file any amended Tax Return, or settle or
compromise any proceeding with respect to any material Tax liability;
(ix) pay, discharge or satisfy any
material claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfac tion (A) in the ordinary course of business and consistent with past
practice of liabilities reflected or reserved against in the financial
statements of the Company or incurred in the ordinary course of business and
consistent with past practice and (B) to the extent required to be paid,
discharged or satisfied pursuant to the terms of any contract in existence on
the date hereof;
(x) settle or offer to settle any
claims, complaints or lawsuits including (w) Xxxxxx Xxxxxxxxx v. Xxxx X. Xxxxxx,
et al., filed June, 1999, in The Court of Chancery of the State of Delaware in
and for New Castle County, C.A. No. 17192NC, (x) The Xxxxx Family Limited
Partnership of California v. General Housewares Corp., et al., filed June, 1999,
in The Court of Chancery of the State of Delaware in and for Xxx Xxxxxx Xxxxxx,
X.X. Xx. 00000XX and (y) Great Neck Capital Appreciation Investment Partnership
v. Xxxx X. Xxxxxx, et al., filed June, 1999, in The Court of the Chancery of the
State of Delaware in and for New Castle County, C.A. No. 17196NC, and (z)
Xxxxxx Xxxxx, et. al. v. Xxxx Xxxxxx, et. al, filed July 2,
1999, in County Vigo, State of Indiana, C.A. No. 84D01-9907-CP-1104, and any and
all suits relating to the same underlying claims, other than settle ments of
claims, complaints or proceedings not specified above in the ordinary course of
business and consistent with past practice or not otherwise material to the
Company and its subsidiaries taken as a whole;
(xi) authorize any single or related
group of capital expenditures in excess of $200,000 (or $850,000 in the case of
capital expenditures relating to Oxo tooling) or capital expenditures which are,
in the aggregate, in excess of $1,200,000 for the Company and its subsidiaries
taken as a whole;
(xii) amend or modify in any
material respect or terminate any material existing IP License, execute any new
material IP License, sell, license or otherwise dispose of, in whole or in part,
any Company IP, and/or subject any Company IP to any material Encumbrance;
(xiii) grant any material increases
in the compensation of any of its directors, officers or key employees, which
increases, for each such individual, shall not exceed ten percent (10%) of each
such individual's annual rate of compensation;
(xiv) pay or agree to pay any
pension, retirement allowance or other employee benefit not required by any of
the existing benefit, severance, termination, pension or employment plans,
agreements or arrangements as in effect on the date hereof to any employee
director or officer, whether past or present;
(xv) engage in any material
transaction with, or enter into any agreement, arrangement, or understanding
with, directly or indirectly, any of the Company's affiliates, other than the
Company or its wholly-owned subsidiaries, including, without limitation, any
transactions, agreements, arrangements, or understandings with any affiliate
or other person covered under Item 404 of Regulation S-K under the Securities
Act that would be required to be disclosed under such Item 404;
(xvi) enter into any new or
materially amend
any existing employment or serverance or termination agreement with any
employee, director or officer;
(xvii) except as may be required to
comply with applicable law, become obligated under any new pension plan, welfare
plan, multiemployer plan, employee benefit plan, serverance plan, benefit
arrangement, or similar plan or arrangement, which was not in existence on the
date hereof, or amend any such plan or arrangement in existence on the date
hereof if such amendment would have the effect of enhancing any benefits
thereunder;
(xviii) take or agree to take in
writing or otherwise, any action which would make any of the representations or
warranties of the Company contained in this Agreement untrue and incorrect in
any respect that would cause the condition in Section 7.2(a) not to be
satisfied;
(xix) authorize, recommend, propse
or annoince an intention to do any of the foregoing, or enter into any contract,
agreement, commitment or arrangement to do any of the foregoing.
6.2 ACQUISITION PROPOSALS.
(a) The Company shall not, and it shall cause its
subsidiaries, and their respective directors, officers, employees, financial and
other advisors, agents, representatives, affiliates and others working on its
behalf or at its direction (collectively, "COMPANY REPRESENTATIVES") not to,
initiate, solicit, encourage or facilitate offers, inquiries or proposals with
respect to, or furnish any information relating to or participate in any
negotiations or discussions concerning, any merger, reorganization, share
exchange, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its
subsidiaries, or any purchase or sale of more than 25% of the assets (including
stock of subsidiaries) of the Company and its subsidiaries, taken as a whole, or
any purchase or sale of, or tender or exchange offer for, more than 25% of the
equity securities of the Company or any of its subsidiaries (an "ACQUISITION
PROPOSAL"), other than the transactions to be effected pursuant to this
Agreement.
(b) Notwithstanding Section 6.2(a), the Board of
Directors of the Company may, directly or indirectly through Company
Representatives: (x) furnish information concerning the Company and its
subsidiaries to any person with respect to an unsolicited Acquisition Proposal
pursuant to an appropriate confidentiality agreement with terms not
substantially less favorable in the aggregate to the Company than those
contained in the Confidentiality Agreement (as hereinafter defined in Section
6.4) and (y)
negotiate and participate in discussions and negotiations with such person
concerning an Acquisition Proposal, if in either case (x) or (y), such person
has submitted a Superior Proposal (as defined below) to the Company. In
addition, nothing herein shall restrict the Company Board of Directors from, to
the extent required, complying with its disclosure obligations under Federal
securities laws, including Rule 14d-9 and Rule 14e-2 promulgated under the
Exchange Act with regard to an Acquisition Proposal, subject to any rights of
Parent to terminate this Agreement and receive payment of any fee due under
Article VIII as a result thereof. Neither the Company nor any subsidiary of the
Company will waive any provision of any confidentiality or standstill or similar
agreement to which it is a party without the prior written consent of Parent;
provided that if specifically requested by an entity or group, the Company may
waive the provisions of any "standstill" agreements between the Company and any
entity or group to the extent necessary to permit such entity or group to submit
an Acquisition Proposal that the Board of Directors believes, in its good faith
judgment based on information contained in such specific request, is reasonably
likely to result in a Superior Proposal.
(c) The Company shall notify Parent promptly (and in
any event within one business day) of any inquiries, proposals or offers
received by, information requested from, or discussions or negotiations sought
to be initiated or continued with, it or any Company Representative with respect
to an Acquisition Proposal, indicating in each such notice the name of such
person and the material terms, conditions and other aspects of any such
inquiries, proposals, offers, requests, discussions or negotiations, including a
copy of any written Acquisition Proposal, and shall promptly (and in any event
within one business day) inform Parent of any material developments with respect
thereto. The Company agrees immediately to cease and to cause to be terminated
any activities, discussions or negotiations conducted on or prior to the date of
this Agreement with any parties other than Parent with respect to any of the
foregoing.
(d) For purposes of this Agreement, a "SUPERIOR
PROPOSAL" means a bona fide written Acquisition Proposal made by a third party
after the date hereof for which all necessary financing is committed in full or
reasonably likely to be obtained and which, if accepted, is reasonably likely to
be consummated and taking into account all legal, financial and regulatory
aspects of the proposal and the person making such proposal, including the
relative expected consummation date, is financially superior to the holders of
Company Common Stock than the Merger.
6.3 REASONABLE EFFORTS.
(a) Subject to the terms and conditions herein provided,
each of the parties hereto shall use all reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including using its
reasonable efforts to obtain all necessary or appropriate waivers, consents and
approvals, to effect all necessary registrations, filings and submissions
(including, but not limited to, (i) filings under the HSR Act and any other
submissions requested by the Federal Trade Commission or Department of Justice
and (ii) such filings, consents, approvals, orders, registrations and
declarations as may be required under the laws of any foreign country in which
the Company or any of its subsidiaries conducts any business or owns any assets)
and to lift any injunction or other legal bar to the Merger (and, in such case,
to proceed with the Merger as expeditiously as possible, subject to the other
terms and conditions hereof).
(b) Each of the parties hereto will keep the other
party apprised of the status of matters relating to the completion of the
transactions contemplated hereby. Subject to applicable laws relating to the
exchange of information, each of the Company and Parent shall have the right
to review in advance, and will consult with the other with respect to, all
information relating to the other party and each of their respective
subsidiaries, which appears in any waivers, consents, approvals, orders,
registrations, filings, submissions or declarations made with or written
materials submitted to any third party or government entity in connection
with the transactions contemplated by this Agreement. In exercising the
foregoing right, each of the parties hereto agrees to act reasonably and as
promptly as practicable.
(c) Notwithstanding the foregoing, the Company shall
not be obligated to use its reasonable efforts or take any action pursuant to
this Section 6.3 if in the opinion of the Board of Directors after consultation
with its counsel such actions would be inconsistent with its fiduciary duties to
the Company's stockholders under applicable law.
6.4 ACCESS TO INFORMATION. Upon reasonable notice, the
Company shall (and shall cause each of its subsidiaries to) afford to
officers, employees, counsel, accoun tants and other authorized
representatives of Parent ("REPRESENTATIVES"), in order to evaluate the
transactions contemplated by this Agreement, reasonable access, during normal
business hours and upon reasonable notice throughout the period prior to the
Effective Time, to its personnel, properties, books and records and, during
such period, shall (and shall cause each of its subsidiaries to) furnish
promptly to such Representatives all information concerning its business,
properties and personnel as may reasonably be requested, including,
without limitation, a copy of each report, schedule, registration statement and
other document filed by it or its subsidiaries pursuant to the requirements of
federal or state securities laws. Between the date of this Agreement and the
Effective Time, the Company shall provide Parent at the end of each month with
monthly financial statements in the form and at the time any such statements are
customarily provided for internal reporting purposes, it being understood that
such financial statements are for informational purposes only and no
representation is made with respect thereto. Parent agrees that it will not, and
will cause its Representatives not to, use any information obtained pursuant to
this Section 6.4 for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement. The Confidentiality Agreement,
dated June 15, 1999 (the "CONFIDENTIALITY AGREEMENT"), by and between the
Company and Parent shall apply with respect to information furnished by the
Company, its subsidiaries and the Company's officers, employees, counsel,
accountants and other authorized representatives hereunder. No investigation
pursuant to this Section 6.4 or otherwise shall affect any representations or
warranties of the parties herein or the conditions to the obligations of the
parties hereto.
6.5 PUBLICITY. The parties will consult with each other and
will mutually agree upon any press releases or public announcements pertaining
to the Merger or the other transactions contemplated hereby and shall not issue
any such press releases or make any such public announcements prior to such
consultation and agreement, except as may be required by applicable law or by
obligations pursuant to any listing agreement with any national securities
exchange, in which case the party proposing to issue such press release or make
such public announcement shall use its reasonable efforts to consult in good
faith with and obtain the approval of the other party before issuing any such
press releases or making any such public announcements.
6.6 INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) The Certificate of Incorporation and By-Laws of
the Surviving Corporation shall contain the provisions with respect to
indemnification set forth in the Restated Certificate of Incorporation and
By-Laws of the Company on the date of this Agreement, which provisions
thereafter shall not be amended, repealed or otherwise modified in any manner
that would adversely affect the rights thereunder of individuals who at any time
prior to the Effective Time were directors or officers of the Company in respect
of actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the transactions contemplated by
this Agreement), unless such modification is required by law.
(b) Parent shall cause to be maintained in effect
for the Indemnified Parties (as defined below) for not less than six years
the current policies of directors' and officers' liability insurance and
fiduciary liability insurance maintained by the Company and the Company's
subsidiaries with respect to matters occurring at or prior to the Effective
Time (including, without limitation, the transactions contemplated by this
Agree ment); PROVIDED, that Parent may substitute therefor policies of
substantially the same coverage containing terms and conditions which are no
less advantageous, in any material respect, to the Company's present or
former directors, officers, employees, agents or other individuals otherwise
covered by such insurance policies prior to the Effective Time (the
"Indemnified Parties") and PROVIDED, FURTHER, that in no event shall Parent
be required to expend in any one year an amount in excess of 150% of the
annual premiums currently paid by the Company for such insurance as set forth
on Schedule 6.6(b), although it shall be obligated to obtain a policy with
the greatest coverage available for a cost not exceed ing such amount.
(c) This Section 6.6 is intended to benefit the
Indemnified Parties and shall be binding on all successors and assigns of
Parent, Newco, the Company and the Surviving Corporation. Parent hereby
guarantees the performance by the Surviving Corporation of the indemnification
and other obligations pursuant to this Section 6.6 and the Certificate of
Incorporation and By-laws of the Surviving Corporation.
6.7 EMPLOYEES.
(a) For a period commencing at the Effective Time
and ending on December 31, 2000, Parent shall, or shall cause the Surviving
Corporation to, provide employee benefit plans, programs, arrangements and
policies (other than those related to equity securities of the Company) for the
benefit of employees of the Company and its subsidiaries that in the aggregate
are no less favorable to such employees than the Company Plans. All service
credited to each employee by the Company through the Effective Time shall be
recognized by Parent for all purposes, including for purposes of eligibility,
vesting and benefit accruals under any employee benefit plan provided by Parent
for the benefit of the employees.
(b) INDIVIDUAL AGREEMENTS. Parent shall cause the
Surviving Corporation to honor and assume the employment agreements, executive
termination agreements and individual benefit arrangements listed on Schedule
6.7(b), all as in effect at the Effective Time.
6.8 CERTAIN FINANCING MATTERS. The Company agrees to provide,
and
will cause its subsidiaries and its and their respective officers, employees
and advisors to provide, all necessary cooperation reasonably requested in
connection with the arrange ment of any financing to be consummated
contemporaneous with or at or after the Merger, including without limitation any
financing to be provided to the Company or any of its subsidiaries by the
Parent; provided, that the Company will not be required to incur any
out-of-pocket expenses or make any binding commitments with respect thereto
until after the consummation of the Merger.
6.9 NOTIFICATION OF CERTAIN MATTERS. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the Company, of
(a) the occurrence or non-occurrence of any event which causes any
representation or warranty of the Company or Parent and Newco, as the case may
be, contained in this Agreement to be untrue or inaccurate in any material
respect at or prior to the Effective Time and (b) any failure or inability of
the Company or Parent, as the case may be, to comply with or satisfy in all
material respects any covenant, condition or agreement to be complied with or
satisfied by it hereunder; PROVIDED, HOWEVER, that the delivery of any notice
pursuant to this Section 6.9 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
6.10 RIGHTS AGREEMENT. The Company shall not amend, modify or
waive any provision of the Rights Agreement, and shall not take any action to
redeem the Rights or render the Rights inapplicable to any transaction other
than the transactions to be effected pursuant to this Agreement, which is
reasonably likely to reduce the likelihood of or delay the consummation of the
Merger, or result in any increase in the costs or decrease in the benefits to
Parent of the Merger, or affect the capitalization of Parent or any of its
affiliates after the Merger.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger are
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) STOCKHOLDER APPROVAL. This Agreement shall have
been duly adopted by the stockholders of the Company in accordance with
applicable law.
(b) INJUNCTION. There shall not be in effect any law,
statute,
rule, regulation, executive order, decree, ruling or injunction or other order
of a court or governmental or regulatory agency of competent jurisdiction
prohibiting or making illegal the transactions contemplated herein.
(c) The applicable waiting period under the HSR Act
shall have expired or been terminated.
7.2 CONDITIONS TO THE COMPANY'S OBLIGATIONS TO EFFECT THE
MERGER. The obligations of the Company to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of the following additional
conditions:
(a) The representations and warranties of Parent
and Newco contained in this Agreement shall be true and correct (in all material
respects, in the case of representations and warranties not already qualified as
to materiality by their terms) at and as of the Effective Time as though made on
and as of such date (except (i) for changes specifically permitted by this
Agreement and (ii) that those representations and warranties which address
matters only as of a particular date shall remain true and correct as of such
date), and the Company shall have received a certificate of the President or a
Vice President of Parent to the foregoing effect.
(b) Parent and Newco shall have performed and
complied with in all material respects their obligations under this Agreement to
be performed or complied with on or prior to the Effective Time, and the Company
shall have received a certificate of the President or a Vice President of Parent
to the foregoing effect.
7.3 CONDITIONS TO THE PARENT'S AND NEWCO'S OBLIGATIONS TO
EFFECT THE MERGER. The obligations of Parent and Newco to effect the Merger are
subject to the satisfaction at or prior to the Effective Time of the following
additional conditions:
(a) The representations and warranties of the
Company contained in this Agreement shall be true and correct (in all material
respects, in the case of representations and warranties not already qualified
as to materiality by their terms) at and as of the Effective Time as though made
on and as of such date (except (i) for changes specifically permitted by this
Agreement and (ii) that those representations and warranties which address
matters only as of a particular date shall remain true and correct as of such
date), and the Parent shall have received a certificate of the Chief Executive
Officer of the Company to the foregoing effect.
(b) The Company shall have performed and complied
with in all material respects its obligations under this Agreement to be
performed or complied with on or prior to the Effective Time, and Parent shall
have received a certificate of the Chief Executive Officer of the Company to the
foregoing effect.
(c) GOVERNMENTAL FILINGS AND CONSENTS. All
governmental consents, orders and approvals legally required for the
consummation of the Merger and the transactions contemplated hereby shall have
been obtained and be in effect at the Effective Time (including, but not limited
to, such approvals and consents as may be required under the laws of any foreign
country in which the Company or any of its subsidiaries conducts any business or
owns any assets), except where the failure to obtain any such consent would not
reasonably be expected to have a Material Adverse Effect on the Company or a
material adverse effect on the financial condition, business, results of
operations, assets or liabilities of Parent and its subsidiaries, taken as a
whole.
(d) There shall not be any action or proceeding
brought or threatened by any governmental entity seeking any executive order,
decree, ruling or injunction or other order of a court of governmental or
regulatory entity of competent jurisdiction which would have the effect of
prohibiting or making illegal any of the transactions contemplated herein.
(e) RIGHTS AGREEMENT. No Distribution Date or Stock
Acquisition Date (each as defined in the Rights Agreement) shall have occurred.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
8.1 TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the Effective
Time, by the mutual written consent of Parent and the Company.
8.2 TERMINATION BY EITHER PARENT OR THE COMPANY. This
Agreement may be terminated and the Merger may be abandoned by Parent or the
Company if (i) any court of competent jurisdiction in the United States or some
other governmental body or regulatory authority shall have issued an order,
decree or ruling or taken any other action permanently restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or other action
shall have become final and nonappealable or (ii) the Company Stockholder
Approval shall not have been received at the Stockholders Meeting duly called
and held, or (iii) the Effective Time shall not have occurred on or before
November 30, 1999 (the
"TERMINATION DATE"), PROVIDED, HOWEVER, that the right to terminate this
Agreement under this Section 8.2(iii) shall not be available to any party whose
failure to fulfill any obligations under this Agreement has been the primary
cause of the failure of the Effective Time to occur on or before the Termination
Date until ten business days after such failure has been cured.
8.3 TERMINATION BY PARENT. This Agreement may be terminated by
Parent prior to the Effective Time, if (i) the Company shall have failed to
perform in any material respect any of its material obligations under this
Agreement to be performed at or prior to such date of termination, which failure
to perform is not cured, or is incapable of being cured, within 30 days after
the receipt by the Company of written notice of such failure, (ii) any
representation or warranty of the Company contained in this Agreement shall not
be true and correct (except for changes permitted by this Agreement and those
representa tions which address matters only as of a particular date shall remain
true and correct as of such date), except, in any case, such failures to be true
and correct as would not, individually or in the aggregate, result in a failure
of the condition set forth in Section 7.3(a); PROVIDED, that such failure to be
true and correct is not cured, or is incapable of being cured, within 30 days
after the receipt by the Company of written notice of such failure, or (iii) the
Board of Directors of the Company withdraws or materially modifies or changes
its recommendation of this Agreement or the Merger in a manner adverse to Parent
or Newco or fails to reconfirm such recommendation if so requested by Parent,
within 10 business days following such request, or approves or recommends
another Acquisition Proposal.
8.4 TERMINATION BY THE COMPANY. This Agreement may be
terminated by the Company and the Merger may be abandoned at any time prior to
the Effective Time if (i) Newco or Parent shall have failed to perform in any
material respect any of their material obligations under this Agreement to be
performed at or prior to such date of termination, which failure to perform is
not cured, or is incapable of being cured, within 30 days after the receipt by
Parent of written notice of such failure, (ii) any representation or warranty of
the Company contained in this Agreement shall not be true and correct (except
for changes permitted by this Agreement and those representations which address
matters only as of a particular date shall remain true and correct as of such
date), except, in any case, such failures to be true and correct would not,
individually or in the aggregate, result in a failure of the condition set forth
in Section 7.2(a); PROVIDED, that such failure to be true and correct is not
cured, or is incapable of being cured, within 30 days after the receipt by
Parent of written notice of such failure or (iii) prior to the Company
Stockholder Approval, upon five business days' prior irrevocable written notice
to Parent, in order
to accept an unsolicited Superior Proposal for which all necessary financing is
committed; PROVIDED, HOWEVER, that (A) such notice shall include a copy of any
proposed or definitive documentation relating to such Superior Proposal
(including all financing documentation), and shall otherwise specify all
material terms, conditions and other information with respect thereto, and (B)
prior to any such termination, the Company shall, if requested by Parent in
connection with any revised proposal Parent might make, negotiate in good faith
for such five business day period with Parent, and such third party proposal
remains a Superior Proposal after taking into account any revised proposal by
Parent during such five business day period; and PROVIDED, FURTHER, that it
shall be a condition to termination pursuant to this Section 8.4 (iii) that the
Company shall have made the payment of the fee to Parent required by Section
8.5(b).
8.5 EFFECT OF TERMINATION.
(a) In the event of the termination and abandonment
of this Agreement pursuant to Article VIII, this Agreement shall forthwith
become void and have no effect, without any liability on the part of any party
hereto or its affiliates, directors, officers or stockholders, other than the
provisions of this Section 8.5 and the provisions of Section 9.1 and the last
two sentences of Section 6.4. Nothing contained in this Section 8.5 shall
relieve any party from liability for any breach of this Agreement.
(b) If:
(i) this Agreement is terminated by
the Company pursuant to Section 8.4(iii) hereof or by Parent pursuant to Section
8.3(iii) hereof, or
(ii) (A) this Agreement is
terminated pursuant to Section 8.2(ii) or 8.3(i) and (B) a Third Party made a
proposal publicly or to the Company or expressed any interest publicly or to
the Company with respect ot any Third Party Acquisition and (C) within twelve
months after any such termination, either (1) the Company enters into an
agreement with respect to any Third Party Acquisition, which is later
consummated or (2) any Third Party Acquisition occurs; then the Company shall
pay to Parent, within one business day following the consummation of such
Third Party Acquisition, or no later than concurrently with any termination
contem plated by Section 8.4(iii) above or within one business day after a
termination contemplated by Section 8.3(iii), a fee, in cash and in
immediately available funds, of $4.25 million (the "TERMINATION FEE");
PROVIDED, HOWEVER, that
the Company in no event shall be obligated to pay more than one Termination Fee
with respect to all such agreements and occurrences and such termination.
"THIRD PARTY" means any person other than Parent, Newco or any
affiliate thereof.
"THIRD PARTY ACQUISITION" means any transaction contemplated
by the definition of "Acquisition Proposal" which, together with any related
transactions, would result in (i) the acquisition by any person of beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of more than
50% of the Company Common Stock, (ii) the holders of Shares immediately prior to
such transaction(s) acquiring or holding securities in respect of such Shares
with less than 50% of the voting powerof the capital stock of the ultimate
parent entity immediately following comsummation of such transaction(s), or
(iii) the sale or other disposition of more than 50% of the assets (including
stock of subsidiaries) of the Company and its subsidiaries, taken as a whole.
The Company acknowledges that the provisions contained in this Section 8.5(b)
are an integral part of the transactions contemplated by this Agreement, and
that, without these provisions, Parent and Newco would not enter into this
Agreement.
8.6 EXTENSION; WAIVER. At any time prior to the Effective
Time, each of Parent, Newco and the Company may (i) extend the time for the
performance of any of the obligations or other acts of the other party, (ii)
waive any inaccuracies in the representations and warranties of the other party
contained herein or in any document, certificate or writing delivered pursuant
hereto or (iii) waive compliance by the other party with any of the agreements
or conditions contained herein. Any agreement on the part of either party hereto
to any such extension or waiver shall be valid only if set forth in any
instrument in writing signed on behalf of such party. The failure or delay of
either party hereto to assert any of its rights hereunder shall not constitute a
waiver of such rights.
ARTICLE IX
MISCELLANEOUS AND GENERAL
9.1 PAYMENT OF EXPENSES. Whether or not the Merger shall be
consummated, each party hereto shall pay its own expenses incident to preparing
for, entering into and carrying out this Agreement and the consummation of the
transactions contemplated hereby, provided that the Surviving Corporation shall
pay, with funds of the Company and not with funds provided by any of Parent
Companies, any and all property or transfer taxes imposed on the Surviving
Corporation or any Gains Taxes.
9.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; SURVIVAL OF
CONFIDENTIAL ITY. The representations and warranties made herein shall not
survive beyond the Effective Time. This Section 9.2 shall not limit any covenant
or agreement of the parties hereto which by its terms contemplates performance
after the Effective Time. The Confidentiality Agreement shall survive any
termination of this Agreement, and the provisions of such Confidentiality
Agreement shall apply to all information and material delivered by any party
hereunder.
9.3 MODIFICATION OR AMENDMENT. Subject to the applicable
provisions of the DGCL, at any time prior to the Effective Time, the parties
hereto may modify or amend this Agreement, by written agreement executed and
delivered by duly authorized officers of the respective parties; PROVIDED,
HOWEVER, that after approval of this Agreement by the stockholders of the
Company, no amendment shall be made which by law requires prior approval of the
stockholders of the Company unless such approval has been obtained.
9.4 WAIVER OF CONDITIONS. The conditions to each of the
parties' obligations to consummate the Merger are for the sole benefit of such
party and may be waived by such party in whole or in part to the extent
permitted by applicable law.
9.5 COUNTERPARTS; FACSIMILE. For the convenience of the
parties hereto, this Agreement may be executed in any number of counterparts,
each such counterpart being deemed to be an original instrument, and all such
counterparts shall together constitute the same agreement. This Agreement may be
executed by facsimile signatures of the parties hereto.
9.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
9.7 NOTICES. Any notice, request, instruction or other
document to be given hereunder by any party to the other parties shall be in
writing and delivered person ally or sent by registered or certified mail,
postage prepaid, or by facsimile transmission (with a confirming copy sent by
overnight courier), as follows:
(a) If to the Company, to
Xxxxxxx X. Xxxxx, Esq.
General Housewares Corp.
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
with a copy to:
Xxxxx X. Xxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx
& Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
(b) If to Parent or Newco, to
Xxxxxxx X. Xxxxxxx
CCPC Acquisition Corp.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopies
with a copy to:
Xxxxxxx X. Xxxxx, Xx.
Xxxxxx, Inc.
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxx 00000-0000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopies)
and a copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
or to such other persons or addresses as may be designated in writing by the
party to receive such notice.
9.8 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement and the
Confidential ity Agreement constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all other prior
agreements and understandings, both written and oral, among the parties or any
of them with respect to the subject matter hereof. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties, except that Newco may assign, in its
sole discretion, any or all of its rights, interests and obligations hereunder
to Parent or to any affiliate of Parent; PROVIDED, HOWEVER, that no such
assignment shall relieve Parent from any of its obligations hereunder. Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
9.9 PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and their respective
successors and assigns. Nothing in this Agreement, express or implied, other
than the right to receive the consider ation payable in the Merger pursuant to
Article III hereof is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement; PROVIDED, HOWEVER, that the provisions of Section 6.6 shall inure to
the benefit of and be enforceable by the Indemnified Parties.
9.10 CERTAIN DEFINITIONS. As used herein:
(a) "MATERIAL ADVERSE EFFECT" shall mean (x) with
respect to the Company, any adverse change in the financial condition, business,
results of operations, assets or liabilities of the Company or any of its
subsidiaries, which is material to the Company and its subsidiaries, taken as a
whole, or excluding any changes or effects resulting from general changes in
economic conditions and (y) with respect to the Company or Parent, any change,
circumstance or event that would prevent, or materially hinder or delay the
consummation of the transactions contemplated by this Agreement by such party
and its subsidiaries. Whenever a statement herein is qualified by, or includes a
reference to, whether any facts, events
or circumstances have a Material Adverse Effect, all such facts, events or
circumstances so referenced shall be considered both individually and in the
aggregate, whether or not so expressly indicated in such statement.
(b) "SUBSIDIARY" shall mean, when used with reference
to any entity, any corporation a majority of the outstanding voting securities
of which are owned directly or indirectly by such former entity.
(c) "TAXES" shall mean all Federal, state, local and
foreign taxes, customs, duties or similar fees and other assessments of a
similar nature, (whether imposed directly or through withholding), including any
interest, additions to tax, or penalties applicable thereto.
9.11 OBLIGATION OF PARENT. Whenever this Agreement requires
Newco to take any action, such requirement shall be deemed to include an
undertaking on the part of Parent to cause Newco to take such action and a
guarantee of the performance thereof.
9.12 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, each of which shall remain in full force
and effect.
9.13 CAPTIONS. The Article, Section and paragraph captions
herein are for convenience of reference only, do not constitute part of this
Agreement and shall not be deemed to limit or otherwise affect any of the
provisions hereof.
9.14 INTERPRETATION. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. Whenever the words "INCLUDE", "INCLUDES" or
"INCLUDING" are used in this Agreement they shall be deemed to be followed by
the words "WITHOUT LIMITATION". As used in this Agreement, the term "BUSINESS
DAY" shall mean any day other than a Saturday, a Sunday, or a day on which
banking institutions in New York, New York are authorized or obligated by law or
executive order to close. As used in this Agreement, the term "AFFILIATE(S)"
shall have the meaning set forth in Rule 12b-2 of the Exchange Act. As used in
this Agreement, the term "PERSON" means an individual, corporation, partnership,
limited liability company, association, trust, unincorporated organization,
other entity or group (as defined in Section 13(d)(3) of the Exchange Act).
9.15 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated hereby may be consummated as
originally contemplated to the fullest extent possible.
9.16 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to the remedy of specific performance of the terms hereof without the
posting of any bond or security, in addition to any other remedy at law or
equity.
IN WITNESS WHEREOF, the parties hereto have caused this Agree
ment to be executed by their respective duly authorized officers as of the date
first above written.
GENERAL HOUSEWARES CORP.
By:/s/ Xxxx Xxxxxx
-------------------------------------
Name: Xxxx Xxxxxx
Title: President and CEO
CCPC ACQUISITION CORP.
By:/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Xxxxxx, Inc., a New Jersey corporation, hereby guarantees the obligations of
Parent and Newco under Article III of the attached Agreement and Plan of Merger,
dated as of August 2, 1999, between CCPC Acquisition Corp. and General
Housewares Corp. (as such terms are defined therein).
Dated as of August 2, 1999
XXXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-------------------------------------
Name:Xxxxxxx X. Xxxxx, Xx.
Title: Senior Vice President
