EXHIBIT 2.2
EXECUTION COPY
-----------------------------------
AGREEMENT AND PLAN OF MERGER
AMONG
GENERAL DYNAMICS CORPORATION,
XXXX ACQUISITION CORPORATION
AND
GULFSTREAM AEROSPACE CORPORATION
-----------------------------------
MAY 16, 1999
TABLE OF CONTENTS
Page
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ARTICLE 1 THE MERGER................................................1
Section 1.1 The Merger...........................................1
Section 1.2 The Closing..........................................1
Section 1.3 Effective Time.......................................2
Section 1.4 Effects of the Merger................................2
Section 1.5 Certificate of Incorporation and Bylaws..............2
Section 1.6 Directors............................................2
Section 1.7 Officers.............................................2
Section 1.8 Conversion of Company Common Stock...................2
Section 1.9 Stock Options........................................3
Section 1.10 Conversion of Acquisition Corporation Common Stock...5
ARTICLE 2 STOCKHOLDER APPROVAL......................................5
Section 2.1 Company Actions......................................5
Section 2.2 Parent Corporation Actions...........................6
Section 2.3 Cooperation..........................................6
ARTICLE 3 EXCHANGE OF CERTIFICATES..................................7
Section 3.1 Exchange of Certificates.............................7
Section 3.2 Exchange Agent; Exchange Procedures..................7
Section 3.3 Transfer Books.......................................8
Section 3.4 Termination of Exchange Fund.........................8
Section 3.5 Lost Certificates....................................8
Section 3.6 No Rights as Stockholder.............................8
Section 3.7 Withholding..........................................9
Section 3.8 Escheat..............................................9
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............9
Section 4.1 Organization.........................................9
Section 4.2 Authorization of Transaction; Enforceability.........9
Section 4.3 Noncontravention; Consents..........................10
Section 4.4 Capitalization......................................11
Section 4.5 Company Reports; Joint Proxy Statement..............11
Section 4.6 No Undisclosed Liabilities..........................12
Section 4.7 Absence of Material Adverse Change..................12
Section 4.8 Litigation and Legal Compliance.....................13
Section 4.9 Contract Matters....................................13
Section 4.10 Tax Matters.........................................13
Section 4.11 Employee Benefit Matters............................14
Section 4.12 Environmental Matters...............................17
Section 4.13 Title...............................................18
Section 4.14 Intellectual Property Matters.......................19
Section 4.15 Year 2000 Compliance Matters........................19
Section 4.16 Labor Matters.......................................20
Section 4.17 State Takeover Laws.................................20
Section 4.18 Parent Common Stock Ownership.......................20
Section 4.19 Accounting and Tax Matters..........................20
Section 4.20 Brokers' Fees.......................................20
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE
PARENT CORPORATION.......................................21
Section 5.1 Organization........................................21
Section 5.2 Authorization of Transaction; Enforceability........21
Section 5.3 Noncontravention; Consents..........................22
Section 5.4 Capitalization......................................22
Section 5.5 Parent Corporation Reports; Joint Proxy
and Registration Statements.........................23
Section 5.6 No Undisclosed Liabilities..........................24
Section 5.7 Absence of Material Adverse Change..................25
Section 5.8 Litigation and Legal Compliance.....................25
Section 5.9 Contract Matters....................................25
Section 5.10 Tax Matters.........................................25
Section 5.11 Employee Benefit Matters............................26
Section 5.12 Environmental Matters...............................29
Section 5.13 Title...............................................29
Section 5.14 Intellectual Property Matters.......................29
Section 5.15 Year 2000 Compliance Matters........................30
Section 5.16 Labor Matters.......................................30
Section 5.17 Company Common Stock Ownership......................30
Section 5.18 Accounting and Tax Matters..........................31
ARTICLE 6 COVENANTS................................................31
Section 6.1 General.............................................31
Section 6.2 Notices and Consents................................31
Section 6.3 Interim Conduct of the Company......................31
Section 6.4 Interim Conduct of the Parent Corporation...........33
Section 6.5 Preservation of Organization........................33
Section 6.6 Full Access.........................................34
Section 6.7 Notice of Developments..............................34
Section 6.8 Acquisition Proposals...............................34
Section 6.9 Indemnification.....................................36
Section 6.10 Public Announcements................................38
Section 6.11 Preservation of Programs and Agreements............38
Section 6.12 Actions Regarding Antitakeover Statutes.............38
Section 6.13 Standstill Provisions...............................39
Section 6.14 Defense of Orders and Injunctions...................39
Section 6.15 Affiliate Letters...................................39
Section 6.16 Preservation of Accounting and Tax Treatment........39
Section 6.17 Accountant's Comfort Letters........................39
Section 6.18 Registration Agreement..............................40
Section 6.19 New York Stock Exchange Quotation...................40
Section 6.20 Publishing Financial Results........................40
Section 6.21 Employee Benefit Matters............................40
Section 6.22 Directors of the Surviving Corporation..............41
ARTICLE 7 CONDITIONS TO THE CONSUMMATION OF THE MERGER.............41
Section 7.1 Conditions to the Obligations of Each Party.........41
Section 7.2 Conditions to the Obligation of the Company.........42
Section 7.3 Conditions to the Obligation of the Parent
Corporation and the Acquisition Corporation......43
ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER........................44
Section 8.1 Termination.........................................44
Section 8.2 Effect of Termination...............................45
Section 8.3 Termination Fee.....................................45
ARTICLE 9 MISCELLANEOUS............................................46
Section 9.1 Nonsurvival of Representations......................46
Section 9.2 Remedies............................................47
Section 9.3 Successors and Assigns..............................47
Section 9.4 Amendment...........................................47
Section 9.5 Extension and Waiver................................47
Section 9.6 Severability........................................47
Section 9.7 Counterparts........................................47
Section 9.8 Descriptive Headings................................47
Section 9.9 Notices.............................................47
Section 9.10 No Third Party Beneficiaries........................49
Section 9.11 Entire Agreement....................................49
Section 9.12 Construction........................................49
Section 9.13 Submission to Jurisdiction..........................49
Section 9.14 Governing Law.......................................49
Exhibits
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Exhibit A-1 - Form of Company Affiliate Letter
Exhibit A-2 - Form of Parent Corporation Affiliate Letter
Exhibit B-1 - Form of Company Tax Representations
Exhibit B-2 - Form of Parent Corporation Tax Representations
TABLE OF DEFINED TERMS
Acquisition Corporation Preamble
Acquisition Proposal Section 6.8(g)
Applicable Period Section 6.8(b)
Average Stock Price Section 8.1(f)
Certificate Section 3.1(a)
Charter Amendment Section 2.2(a)
Closing Section 1.2
Closing Date Section 1.2
Code Section 4.10(f)
Company Preamble
Company Common Stock Section 1.8(a)
Company Disclosure Letter Section 4
Company Form 10-Q Section 4
Company Material Adverse Effect Section 4.1
Company Plans Section 4.11(a)
Company SEC Documents Section 4.5(a)
Company Stockholder Approval Section 2.1(a)
Company Stockholders Meeting Section 2.1(a)
Confidentiality Agreement Section 6.6
Continuing Employees Section 6.21(a)
Daily Per Share Price Section 8.1(f)
Delaware Act Section 1.1
Effective Time Section 1.3
Employee Pension Benefit Plan Section 4.11(a)
Employee Welfare Benefit Plan Section 4.11(a)
Environmental Law Section 4.12(b)
ERISA Section 4.11(a)
Exchange Agent Section 3.1
Exchange Fund Section 3.2(a)
Hazardous Materials Section 4.12(c)
HSR Act Section 4.3
Indemnified Parties Section 6.9(a)
Intellectual Property Section 4.14(b)
Joint Proxy Statement Section 2.1(b)
Lien Section 4.3
Merger Section 1.1
Merger Consideration Section 1.8(c)
Multiemployer Plan Section 4.11(a)
Parent Common Stock Section 1.8(a)
Parent Corporation Preamble
Parent Corporation Disclosure Letter Section 5
Parent Corporation Form 10-Q Section 5
Parent Corporation Material Adverse Effect Section 5.1
Parent Corporation Plans Section 5.11(a)
Parent Corporation Stockholder Approval Section 2.2(a)
Parent Corporation Stockholders Meeting Section 2.2(a)
Permitted Liens Section 4.13
Registration Statement Section 2.2(b)
SEC Section 2.1(b)
Securities Act Section 2.1(b)
Securities Exchange Act Section 1.9(d)
Standstill Provisions Section 6.8(e)
Stock Options Section 1.9(a)
Stock Plans Section 1.9(a)
Subsidiary Section 1.8(d)
Superior Acquisition Proposal Section 6.8(h)
Surviving Corporation Section 1.1
Taxes Section 4.10(a)
Tax Returns Section 4.10(a)
Termination Fee Section 8.3(a)
Third Party Acquisition Section 8.3(b)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of May 16, 1999 among
General Dynamics Corporation, a Delaware corporation (the "Parent
Corporation"), Xxxx Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of the Parent Corporation (the "Acquisition
Corporation"), and Gulfstream Aerospace Corporation, a Delaware corporation
(the "Company").
The Boards of Directors of the Parent Corporation and the Company
have each determined that a business combination between the Parent
Corporation and the Company is desirable and in the best interests of the
Parent Corporation and the Company and their respective stockholders. The
Boards of Directors of the Parent Corporation and the Company accordingly
have each duly adopted resolutions approving this Agreement and the
transactions contemplated hereby.
It is intended that the merger provided for in this Agreement
will qualify as a reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended, and that for financial
accounting purposes the merger will be accounted for as a pooling of
interests.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and for other good and valuable consideration, the value,
receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
ARTICLE 1
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, at the Effective Time (as defined
in Section 1.3) the Acquisition Corporation will be merged (the "Merger")
with and into the Company in accordance with the provisions of the Delaware
General Corporation Law (the "Delaware Act"). Following the Merger, the
Company will continue as the surviving corporation (the "Surviving
Corporation") and the separate corporate existence of the Acquisition
Corporation will cease.
Section 1.2 The Closing. Upon the terms and subject to the
conditions set forth in this Agreement, the consummation of the Merger and
the other transactions contemplated by this Agreement (the "Closing") will
take place at the offices of Jenner & Block, 000 00xx Xxxxxx, X.X.,
Xxxxxxxxxx, X.X. 00000, at 10:00 a.m., local time, on the first business
day following the satisfaction or waiver of the conditions set forth in
Article 7 (other than those conditions that by their nature are to be
satisfied at the Closing, but subject to the satisfaction or, where
permitted, waiver of those conditions), or at such other date, time or
place as the Parent Corporation and the Company may agree. The date upon
which the Closing occurs is referred to in this Agreement as the "Closing
Date."
Section 1.3 Effective Time. The Merger will be consummated by the
filing of a certificate of merger with the Secretary of State of the State
of Delaware in accordance with Section 251(c) of the Delaware Act. The time
the Merger becomes effective in accordance with Sections 103 and 251 of the
Delaware Act is referred to in this Agreement as the "Effective Time."
Section 1.4 Effects of the Merger. The Merger will have the
effects set forth in the Delaware Act. Without limiting the generality of
the foregoing, as of the Effective Time, all properties, rights,
privileges, powers and franchises of the Company and the Acquisition
Corporation will vest in the Surviving Corporation and all debts,
liabilities and duties of the Company and the Acquisition Corporation will
become debts, liabilities and duties of the Surviving Corporation.
Section 1.5 Certificate of Incorporation and Bylaws. At the
Effective Time, the Certificate of Incorporation and Bylaws of the
Acquisition Corporation in the respective forms delivered by the Parent
Corporation to the Company prior to the date of this Agreement will be
amended and restated to change the name of the Acquisition Corporation to
"Gulfstream Aerospace Corporation" or such other name as the Parent
Corporation may determine. The Certificate of Incorporation and Bylaws of
the Acquisition Corporation, as so amended and restated, will be the
Certificate of Incorporation and Bylaws of the Surviving Corporation.
Section 1.6 Directors. Subject to the provisions of Section 6.22,
the directors of the Acquisition Corporation at the Effective Time will be
the initial directors of the Surviving Corporation and will hold office
from the Effective Time until their respective successors are duly elected
or appointed and qualified in the manner provided in the Certificate of
Incorporation and Bylaws of the Surviving Corporation or as otherwise
provided by law.
Section 1.7 Officers. The officers of the Company at the
Effective Time will be the initial officers of the Surviving Corporation
and will hold office from the Effective Time until their respective
successors are duly elected or appointed and qualified in the manner
provided in the Certificate of Incorporation and Bylaws of the Surviving
Corporation or as otherwise provided by law.
Section 1.8 Conversion of Company Common Stock.
(a) Subject to the provisions of Section 1.8(b), each share
of the Company's Common Stock, par value $.01 per share (the "Company
Common Stock"), issued and outstanding immediately prior to the
Effective Time (other than shares of Company Common Stock held in the
treasury of the Company, held by any Subsidiary (as defined in Section
1.8(d)) of the Company or held by the Parent Corporation or any
Subsidiary of the Parent Corporation) will, by virtue of the Merger
and without any action on the part of the holder thereof, be canceled
and converted into the right to receive, upon the surrender of the
certificate formerly representing such share, one share of the Parent
Corporation's Common Stock, par value $1.00 per share (the "Parent
Common Stock"). In the event that, subsequent to the date of this
Agreement but prior to the Effective Time, the outstanding shares of
Parent Common Stock or Company Common Stock are changed into a
different number of shares or a different class as a result of a stock
split, reverse stock split, stock dividend, subdivision,
reclassification, combination, exchange, recapitalization or similar
transaction, the number of shares of Parent Common Stock into which
each share of Company Common Stock will be converted as a result of
the Merger will be adjusted appropriately and provisions will be made
for appropriate payments of cash in lieu of the issuance of fractional
shares of Parent Common Stock.
(b) Each share of Company Common Stock held in the treasury
of the Company, held by any Subsidiary of the Company or held by the
Parent Corporation or any Subsidiary of the Parent Corporation
immediately prior to the Effective Time will, by virtue of the Merger
and without any action on the part of the holder thereof, be canceled
and retired and will cease to exist. For purposes of this Section
1.8(b), shares of Company Common Stock owned beneficially or held of
record by any plan, program or arrangement sponsored or maintained for
the benefit of any current or former employee of the Company, the
Parent Corporation or any of their respective Subsidiaries will not be
deemed to be held by the Company, the Parent Corporation or any such
Subsidiary, regardless of whether the Company, the Parent Corporation
or any such Subsidiary has the power, directly or indirectly, to vote
or control the disposition of such shares.
(c) The shares of Parent Common Stock to be issued upon the
conversion of shares of Company Common Stock pursuant to Section
1.8(a) and any cash to be paid in lieu of fractional shares of Parent
Common Stock pursuant to Section 1.8(a) are referred to in this
Agreement collectively as the "Merger Consideration."
(d) The term "Subsidiary" as used in this Agreement means
any corporation, partnership, limited liability company or other
business entity 50 percent or more of the outstanding voting equity
securities of which are owned, directly or indirectly, by the Company
or the Parent Corporation, as applicable.
Section 1.9 Stock Options.
(a) The Parent Corporation and the Company will take all
necessary actions to cause each option to purchase shares of
Company Common Stock (a "Stock Option") granted under any stock
option plan, program, agreement or arrangement of the Company or
any of its Subsidiaries (collectively, the "Stock Plans") which
is outstanding and unexercised immediately prior to the Effective
Time to be converted at the Effective Time into an option to
purchase the same number of shares of Parent Common Stock that
could have been obtained upon the exercise of such Stock Option
immediately prior to the Effective Time and the conversion and
exchange of the shares of Company Common Stock issued upon such
exercise for shares of Parent Common Stock as provided in Section
1.8(a). The exercise price per share applicable to each such
converted stock option will be the same as was applicable to such
Stock Option immediately prior to the Effective Time (subject to
adjustment pursuant to the last sentence of Section 1.8(a)). Upon
and following the conversion of the Stock Options pursuant to
this Section 1.9(a), each converted stock option will be subject
to the same terms and conditions as in effect immediately prior
to the Effective Time; provided that (i) if a form of agreement
evidencing the Stock Option provides for acceleration of vesting
of the Stock Option upon the Merger, the converted stock option
will be so vested following the Merger and (ii) consistent with
the forms of stockholder's agreements in use by the Company prior
to the date hereof, upon exercise of any converted stock option,
there will be no obligation that the holder thereof execute a
stockholder's agreement.
(b) The Company and the Parent Corporation acknowledge that,
consistent with the terms of such stockholder's agreements, any
stockholder's agreement entered into prior to the Effective Time
by reason of the exercise of a Stock Option or otherwise will
cease to be of any force or effect upon and following the
Effective Time.
(c) The Parent Corporation will take all corporate action
necessary to reserve for issuance a sufficient number of shares
of Parent Common Stock for delivery upon exercise of all of the
Stock Options converted into options to purchase Parent Common
Stock pursuant to Section 1.9(a). Not later than one day
following the Effective Time, the Parent Corporation will file a
registration statement on Form S-8 (or any successor or other
appropriate form) with respect to the shares of Parent Common
Stock subject to the converted stock options and will deliver
prospectuses to the holders of such stock options. Following the
Effective Time, the Parent Corporation will use all reasonable
efforts to maintain the effectiveness of the foregoing
registration statement (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as any
of the converted stock options remain outstanding and
unexercised.
(d) At the Effective Time, the Parent Corporation will
assume the obligations of the Company under the Stock Plans as in
effect at the Effective Time. No additional Stock Options will be
granted pursuant to the Stock Plans after the Effective Time.
(e) The Board of Directors or Compensation Committee of the
Company and the Parent Corporation will each grant all approvals
and take all other actions required pursuant to Rules 16b-3(d)
and 16b-3(e) under the Securities Exchange Act of 1934, as
amended (together with the rules and regulations of the SEC
thereunder, the "Securities Exchange Act"), to cause the
disposition in the Merger of Company Common Stock and Stock
Options and the acquisition in the Merger of Parent Common Stock
and options to acquire Parent Common Stock to be exempt from the
provisions of Section 16(b) of the Securities Exchange Act.
Section 1.10 Conversion of Acquisition Corporation Common Stock.
Each share of the Common Stock, par value $1.00 per share, of the
Acquisition Corporation issued and outstanding immediately prior to the
Effective Time will, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into one share of the Common
Stock, par value $1.00 per share, of the Surviving Corporation.
ARTICLE 2
STOCKHOLDER APPROVAL
Section 2.1 Company Actions. The Company, acting through its
Board of Directors, in accordance with applicable law, its Certificate of
Incorporation and Bylaws and the rules of the New York Stock Exchange,
will:
(a) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Company Stockholders Meeting"),
to be held as soon as practicable after the date of this
Agreement, for the purpose of submitting this Agreement for
adoption and approval by the holders of a majority of the
outstanding shares of Company Common Stock (the "Company
Stockholder Approval");
(b) cooperate with the Parent Corporation in preparing and
filing with the Securities and Exchange Commission (the "SEC") as
promptly as practicable after the date of this Agreement a Joint
Proxy Statement/Prospectus and related materials (the "Joint
Proxy Statement") with respect to the Company Stockholders
Meeting satisfying the requirements of the Securities Act of
1933, as amended (together with the rules and regulations of the
SEC thereunder, the "Securities Act"), and the Securities
Exchange Act, respond promptly to any comments raised by the SEC
with respect to the preliminary version of the Joint Proxy
Statement, and cause the definitive version of the Joint Proxy
Statement to be mailed to its stockholders as soon as it is
legally permitted to do so;
(c) subject to the provisions of Section 6.8, include in the
Joint Proxy Statement (i) the recommendation of the Board of
Directors of the Company that the stockholders of the Company
vote in favor of the adoption and approval of this Agreement and
the transactions contemplated hereby and (ii) the written opinion
dated as of the date of this Agreement of Xxxxxxx Xxxxx & Co.,
financial advisor to the Board of Directors of the Company, to
the effect that as of the date of this Agreement the Merger
Consideration is fair to the stockholders of the Company, other
than the Parent Corporation and its affiliates, from a financial
point of view; and
(d) provide the Parent Corporation with the information
concerning the Company required to be included in the Joint Proxy
Statement and the Registration Statement (as defined in Section
2.2(b)).
Section 2.2 Parent Corporation Actions. The Parent Corporation,
acting through its Board of Directors, in accordance with applicable law,
its Certificate of Incorporation and Bylaws and the rules of the New York
Stock Exchange, will:
(a) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Parent Corporation Stockholders
Meeting"), to be held as soon as practicable after the date of
this Agreement, for the purpose of submitting for the approval of
the holders of a majority of the outstanding shares of Parent
Common Stock (the "Parent Corporation Stockholder Approval") the
proposals adopted by the Board of Directors of the Parent
Corporation to (i) amend and restate the Certificate of
Incorporation of the Parent Corporation to increase the number of
shares of Parent Common Stock the Parent Corporation is
authorized to issue to 300,000,000 shares (the "Charter
Amendment") and (ii) issue shares of Parent Common Stock pursuant
to the Merger;
(b) file with the SEC as promptly as practicable after the
date of this Agreement a Registration Statement on Form S-4
(which will include the Joint Proxy Statement) complying in all
material respects with the Securities Act and the Securities
Exchange Act registering the issuance of the Parent Common Stock
proposed to be issued by the Parent Corporation pursuant to the
Merger (the "Registration Statement"), respond promptly to any
comments raised by the SEC with respect to the preliminary
version of the Joint Proxy Statement or the Registration
Statement, use its best efforts to cause the Registration
Statement to be declared effective by the SEC as promptly as
practicable and cause the definitive version of the Joint Proxy
Statement to be mailed to its stockholders as soon as it is
legally permitted to do so;
(c) provide the Company with the information concerning the
Parent Corporation and the Acquisition Corporation required to be
included in the Joint Proxy Statement; and
(d) include in the Joint Proxy Statement (i) the
recommendation of the Board of Directors of the Parent
Corporation that the stockholders of the Parent Corporation vote
in favor of the Charter Amendment and the issuance of shares of
Parent Common Stock pursuant to the Merger and (ii) the written
opinion dated as of May 13, 1999 of Bear Xxxxxxx & Co., financial
advisor to the Board of Directors of the Parent Corporation, to
the effect that the Merger is fair, from a financial point of
view, to the Parent Corporation and its stockholders.
Section 2.3 Cooperation. Each party will promptly advise the
other of its receipt of, and will promptly furnish the other party with
copies of, all comments received from the SEC with respect to the
Registration Statement and the Joint Proxy Statement and will consult with
the other party in responding to such comments.
ARTICLE 3
EXCHANGE OF CERTIFICATES
Section 3.1 Exchange of Certificates. From and after the
Effective Time, each holder of a certificate that immediately prior to the
Effective Time represented outstanding shares of Company Common Stock (a
"Certificate") will be entitled to receive in exchange therefor, upon
surrender thereof to an exchange agent to be designated by the parties (the
"Exchange Agent"), the Merger Consideration into which the shares of
Company Common Stock evidenced by such Certificate were converted pursuant
to the Merger. No interest will be payable on the Merger Consideration to
be paid to any holder of a Certificate irrespective of the time at which
such Certificate is surrendered for exchange. Certificates surrendered for
exchange by any holder that is an "affiliate" of the Company for purposes
of Rule 145(c) under the Securities Act will not be exchanged until the
Parent Corporation has received a letter from such holder as provided in
Section 6.15.
Section 3.2 Exchange Agent; Exchange Procedures.
(a) As soon as reasonably practicable following the
Effective Time, the Parent Corporation will deposit, or cause to
be deposited, with the Exchange Agent, in trust for the benefit
of holders of Certificates, certificates representing the Merger
Consideration and the amount of any dividends or distributions
payable in accordance with the provisions of Section 3.2(b) (the
"Exchange Fund").
(b) As soon as reasonably practicable after the Effective
Time, the Parent Corporation will instruct the Exchange Agent to
mail to each record holder of a Certificate (i) a letter of
transmittal (which will specify that delivery will be effected,
and risk of loss and title to such Certificates will pass, only
upon delivery of the Certificate to the Exchange Agent and will
be in such form and have such other provisions as the Parent
Corporation will reasonably specify) and (ii) instructions for
use in effecting the surrender of Certificates for certificates
representing shares of Parent Common Stock. Commencing
immediately after the Effective Time, upon the surrender to the
Exchange Agent of such Certificate or Certificates, together with
a duly executed and completed letter of transmittal and all other
documents and other materials required by the Exchange Agent to
be delivered in connection therewith, the holder will be entitled
to receive a certificate or certificates representing the number
of shares of Parent Common Stock into which the Certificate or
Certificates so surrendered have been converted in accordance
with the provisions of Section 1.8. Unless and until any
Certificate or Certificates are so surrendered, no dividend or
other distribution, if any, payable to the holders of record of
shares of Parent Common Stock as of any date subsequent to the
Effective Time will be paid to the holders of such Certificate or
Certificates in respect of the shares of Parent Common Stock into
which such Certificates are convertible. Upon the surrender of
any Certificate or Certificates, the record holder of the
certificate or certificates representing shares of Parent Common
Stock issued in exchange therefor will be entitled to receive (i)
at the time of surrender, the amount of any dividends or other
distributions (net of any applicable tax withholdings) having a
record date after the Effective Time and a payment date prior to
the surrender date, payable in respect of such shares of Parent
Common Stock and (ii) at the appropriate payment date, the amount
of dividends or other distributions (net of any applicable tax
withholdings) having a record date after the Effective Time and a
payment date subsequent to the date of such surrender, payable in
respect of such shares of Parent Common Stock.
Section 3.3 Transfer Books. The stock transfer books of the
Company will be closed at the Effective Time and no transfer of any shares
of Company Common Stock will thereafter be recorded on any of the stock
transfer books. In the event of a transfer of ownership of any Company
Common Stock prior to the Effective Time that is not registered in the
stock transfer records of the Company at the Effective Time, a certificate
or certificates representing the number of shares of Parent Common Stock
into which such Company Common Stock has been converted in the Merger will
be issued to the transferee together with a cash payment in respect of
dividends and distributions, if any, in accordance with the provisions of
Section 3.2(b), only if the Certificate is surrendered as provided in
Section 3.1, accompanied by all documents required to evidence and effect
such transfer and by evidence of payment of any applicable stock transfer
taxes.
Section 3.4 Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed one year after the Effective Time
will be delivered to the Parent Corporation upon demand, and each holder of
Company Common Stock who has not theretofore surrendered Certificates in
accordance with the provisions of this Article 3 will thereafter look only
to the Parent Corporation for satisfaction of such holder's claims for
shares of Parent Common Stock and any dividends or distributions payable in
accordance with the provisions of Section 3.2(b).
Section 3.5 Lost Certificates. If any Certificate has been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond
in such reasonable amount as the Surviving Corporation may direct as
indemnity against any claim that may be made against it with respect to
such Certificate, the Exchange Agent will deliver in exchange for such
lost, stolen or destroyed certificate the shares of Parent Common Stock
issuable pursuant to Section 1.8, and unpaid dividends and distributions,
if any, on shares of Parent Common Stock deliverable in respect thereof,
pursuant to this Agreement.
Section 3.6 No Rights as Stockholder. From and after the
Effective Time, the holders of Certificates will cease to have any rights
as a stockholder of the Surviving Corporation except as otherwise provided
in this Agreement or by applicable law and the Parent Corporation will be
entitled to treat each Certificate that has not yet been surrendered for
exchange solely as evidence of the right to receive the Merger
Consideration into which the shares of Company Common Stock evidenced by
such Certificate have been converted pursuant to the Merger and the right
to receive dividends and distributions, if any, in accordance with the
provisions of Section 3.2(b).
Section 3.7 Withholding. The Parent Corporation will be entitled
to deduct and withhold from the Merger Consideration otherwise payable to
any former holder of Company Common Stock all amounts required by law to be
deducted or withheld therefrom.
Section 3.8 Escheat. Neither the Parent Corporation, the
Acquisition Corporation nor the Company will be liable to any former holder
of Company Common Stock for any portion of the Merger Consideration
delivered to any public official pursuant to any applicable abandoned
property, escheat or similar law. In the event any Certificate has not been
surrendered for exchange prior to the sixth anniversary of the Closing
Date, or prior to such earlier date as of which such Certificate or the
Merger Consideration payable upon the surrender thereof would otherwise
escheat to or become the property of any governmental entity, then the
Merger Consideration otherwise payable upon the surrender of such
Certificate will, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all rights,
interests and adverse claims of any person.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent Corporation and
the Acquisition Corporation that except as disclosed in the reports,
schedules, forms, statements and other documents filed by the Company with
the SEC and publicly available prior to the date of this Agreement, as
disclosed in the draft of the Quarterly Statement on Form 10-Q for the
Company's fiscal quarter ended March 31, 1999 (the "Company Form 10-Q")
delivered to the Parent Corporation prior to the date of this Agreement or
as disclosed in the letter dated as of the date of this Agreement from the
Company to the Parent Corporation (the "Company Disclosure Letter"):
Section 4.1 Organization. The Company and each of its
Subsidiaries is a corporation duly organized and validly existing under the
laws of the jurisdiction of its incorporation and has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as presently being conducted. The Company and each of its
Subsidiaries is in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to conduct business as a foreign
corporation in each other jurisdiction where such qualification is
required, except where the failure to be so qualified and in good standing
would not have a material adverse effect on the business, financial
condition, operations or results of operations of the Company and its
Subsidiaries taken as a whole or the ability of the Company to consummate
the Merger and to perform its obligations under this Agreement (a "Company
Material Adverse Effect"). The Company has delivered to the Parent
Corporation correct and complete copies of its charter and bylaws, as
presently in effect, and will make available to the Parent Corporation
after the date of this Agreement correct and complete copies of the charter
and bylaws, as presently in effect, of each of its Subsidiaries.
Section 4.2 Authorization of Transaction; Enforceability. Subject
to obtaining the Company Stockholder Approval, the Company has full
corporate power and authority and has taken all requisite corporate action
to enable it to execute and deliver this Agreement, to consummate the
Merger and the other transactions contemplated hereby and to perform its
obligations hereunder. The Board of Directors of the Company, at a meeting
thereof duly called and held, has duly adopted resolutions by the requisite
majority vote approving this Agreement, the Merger and the other
transactions contemplated hereby, determining that the terms and conditions
of this Agreement, the Merger and the other transactions contemplated
hereby are fair to and in the best interests of the Company and its
stockholders and recommending that the Company's stockholders adopt and
approve this Agreement. The foregoing resolutions of the Board of Directors
of the Company have not been modified, supplemented or rescinded and remain
in full force and effect as of the date of this Agreement. In connection
with its adoption of the foregoing resolutions, the Board of Directors of
the Company received the written opinion of Xxxxxxx Xxxxx & Co., financial
advisor to the Board of Directors of the Company, dated as of the date of
this Agreement to the effect that, as of such date, the Merger
Consideration is fair to the stockholders of the Company, other than the
Parent Corporation and its affiliates, from a financial point of view. The
foregoing opinion has not been modified, supplemented or rescinded prior to
the date of this Agreement. The Company will deliver to the Parent
Corporation promptly after the date of this Agreement correct and complete
copies of the foregoing resolutions and opinion. This Agreement constitutes
the valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms and conditions.
Section 4.3 Noncontravention; Consents. Except for (a) certain
filings and approvals necessary to comply with the applicable requirements
of the Securities Act, the Securities Exchange Act and the "blue sky" laws
and regulations of various states, (b) certain filings and approvals
necessary to comply with the requirements of the New York Stock Exchange
with respect to the delisting of the Company Common Stock, (c) the filing
of a Notification and Report Form and related material with the Federal
Trade Commission and the Antitrust Division of the United States Department
of Justice under the Xxxx-Xxxxx-Xxxxxx Act of 1976, as amended (the "HSR
Act"), (d) certain filings and approvals which may be necessary to comply
with the rules and regulations of the Federal Aviation Administration and
(e) the filing of a certificate of merger pursuant to the Delaware Act,
neither the execution and delivery of this Agreement by the Company, nor
the consummation by the Company of the transactions contemplated hereby,
will constitute a violation of, be in conflict with, constitute or create
(with or without notice or lapse of time or both) a default under, give
rise to any right of termination, cancellation, amendment or acceleration
with respect to, or result in the creation or imposition of any lien,
encumbrance, security interest or other claim (a "Lien") upon any property
of the Company or any of its Subsidiaries pursuant to (i) the charter or
bylaws of the Company or any of its Subsidiaries, (ii) any constitutional
provision, law, rule, regulation, permit, order, writ, injunction, judgment
or decree to which the Company or any of its Subsidiaries is subject or
(iii) any agreement or commitment to which the Company or any of its
Subsidiaries is a party or by which the Company, any of its Subsidiaries or
any of their respective properties is bound or subject, except, in the case
of clauses (ii) and (iii) above, for such matters which, individually or in
the aggregate, would not have a Company Material Adverse Effect.
Section 4.4 Capitalization.
(a) As of the date of this Agreement, the authorized capital
stock of the Company consists of 300,000,000 shares of Company
Common Stock. As of May 2, 1999, 71,607,043 shares of Company
Common Stock were issued and outstanding, 18,212,231 shares were
held by the Company as treasury shares and 4,715,946 shares were
reserved for issuance upon the exercise of outstanding Stock
Options. All of the issued and outstanding shares of capital
stock of the Company have been duly authorized and are validly
issued, fully paid and nonassessable.
(b) Other than Stock Options to acquire an aggregate of
4,715,946 shares of Company Common Stock granted by the Company
to current and former directors, officers, employees and advisors
of the Company and its Subsidiaries pursuant to the Stock Plans,
there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange
rights or other contracts or commitments that could require the
Company or any of its Subsidiaries to issue, sell or otherwise
cause to become outstanding any of its capital stock. There are
no outstanding stock appreciation, phantom stock, profit
participation or similar rights with respect to the Company or
any of its Subsidiaries.
(c) Neither the Company nor any of its Subsidiaries is a
party to any voting trust, proxy or other agreement or
understanding with respect to the voting of any capital stock of
the Company or any of its Subsidiaries.
(d) The Board of Directors of the Company has not declared
any dividend or distribution with respect to the Company Common
Stock the record or payment date for which is on or after the
date of this Agreement.
(e) All of the outstanding shares of the capital stock of
each of the Company's Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by the Company or one
of its Subsidiaries, free and clear of any Lien. Except for its
Subsidiaries set forth in the Company Disclosure Letter, the
Company does not control directly or indirectly or have any
direct or indirect equity participation in any corporation,
partnership, limited liability company, joint venture or other
entity.
Section 4.5 Company Reports; Joint Proxy Statement.
(a) The Company has since October 9, 1996 filed all reports,
forms, statements and other documents (collectively, together
with all financial statements included or incorporated by
reference therein and the Company Form 10-Q, the "Company SEC
Documents") required to be filed by the Company with the SEC
pursuant to the provisions of the Securities Act or the
Securities Exchange Act. Each of the Company SEC Documents, as of
its filing date, complied in all material respects with the
applicable requirements of the Securities Act and the Securities
Exchange Act. None of the Company SEC Documents, as of their
respective filing 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. No Subsidiary of the Company is required to
file any reports, forms, statements or other documents pursuant
to the Securities Act or the Securities Exchange Act.
(b) Each of the consolidated financial statements (including
related notes) included in the Company SEC Documents presented
fairly in all material respects the consolidated financial
condition, cash flows and results of operations of the Company
and its Subsidiaries for the respective periods or as of the
respective dates set forth therein. Each of the financial
statements (including related notes) included in the Company SEC
Documents has been prepared in accordance with United States
generally accepted accounting principles, consistently applied
during the periods involved, except (i) as noted therein, (ii) to
the extent required by changes in United States generally
accepted accounting principles or (iii) in the case of unaudited
interim financial statements, normal recurring year-end audit
adjustments.
(c) The Company has delivered to the Parent Corporation
correct and complete copies of any proposed or contemplated
amendments or modifications to the Company SEC Documents
(including any exhibit documents included therein) that have not
yet been filed by the Company with the SEC. The Company has
delivered to the Parent Corporation a correct and complete copy
of the most recent draft of the Company Form 10-Q.
(d) The Joint Proxy Statement will comply in all material
respects with the applicable requirements of the Securities
Exchange Act and will not, at the time the definitive Joint Proxy
Statement is filed with the SEC and mailed to the stockholders of
the Company, 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. No
representation or warranty is made herein by the Company with
respect to any information supplied by the Parent Corporation for
inclusion in the Joint Proxy Statement. For purposes of this
Section 4.5(d), all information included in the Joint Proxy
Statement concerning or related to the Parent Corporation and its
Subsidiaries, including the Acquisition Corporation, will be
deemed to have been supplied by the Parent Corporation.
Section 4.6 No Undisclosed Liabilities. The Company and its
Subsidiaries have no liabilities or obligations (whether absolute or
contingent, liquidated or unliquidated, or due or to become due) except for
(a) liabilities and obligations reflected in the Company SEC Documents and
(b) other liabilities and obligations which, individually or in the
aggregate, would not have a Company Material Adverse Effect.
Section 4.7 Absence of Material Adverse Change. Since December
31, 1998, there has not occurred any event, change, effect or development
which, individually or in the aggregate, would have a Company Material
Adverse Effect.
Section 4.8 Litigation and Legal Compliance.
(a) The Company Disclosure Letter sets forth each instance
in which the Company or any of its Subsidiaries is (i) subject to
any material unsatisfied judgment order, decree, stipulation,
injunction or charge or (ii) a party to or, to the Company's
knowledge, threatened to be made a party to any material charge,
complaint, action, suit, proceeding, hearing or, to the Company's
knowledge, investigation of or in any court or quasi-judicial or
administrative agency of any federal, state, local or foreign
jurisdiction, except for judgments, orders, decrees,
stipulations, injunctions, charges, complaints, actions, suits,
proceedings, hearings and investigations which, individually or
in the aggregate, would not have a Company Material Adverse
Effect. There are no judicial or administrative actions,
proceedings or, to the Company's knowledge, investigations
pending or, to the Company's knowledge, threatened that question
the validity of this Agreement or any action taken or to be taken
by the Company in connection with this Agreement which would have
a Company Material Adverse Effect.
(b) Except for instances of noncompliance which,
individually or in the aggregate, would not have a Company
Material Adverse Effect, the Company and its Subsidiaries have
complied with each constitutional provision, law, rule,
regulation, permit, order, writ, injunction, judgment or decree
to which the Company or any of its Subsidiaries is subject.
Section 4.9 Contract Matters.
(a) Neither the Company nor any of its Subsidiaries is in
default or violation of (and no event has occurred which with
notice or the lapse of time or both would constitute a default or
violation) of any term, condition or provision of any note,
mortgage, indenture, loan agreement, other evidence of
indebtedness, guarantee, license, lease, agreement or other
contract, instrument or contractual obligation to which the
Company or any of its Subsidiaries is a party or by which any of
their respective assets is bound or subject, except for defaults
and violations which, individually or in the aggregate, would not
have a Company Material Adverse Effect.
Section 4.10 Tax Matters.
(a) The Company and each of its Subsidiaries have timely
filed all required returns, declarations, reports, claims for
refund or information returns and statements, including any
schedule or attachment thereto (collectively "Tax Returns"),
relating to any federal, state, local or foreign net income,
gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, lease, service, service use,
withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property, windfall profits, customs, duties
or other tax, fee, assessment or charge, including any interest,
penalty or addition thereto and including any liability for the
taxes of any other person or entity under Treasury Regulation
Section 1.1502-6 (or any similar state, local or foreign law,
rule or regulation), and any liability in respect of any tax as a
transferee or successor, by law, contract or otherwise
(collectively "Taxes"), and all such Tax Returns are accurate and
complete in all respects, except to the extent any such failure
to file or any such inaccuracy in any filed Tax Return,
individually or in the aggregate, would not have a Company
Material Adverse Effect. All Taxes owed by the Company or any of
its Subsidiaries (whether or not shown on any Tax Return) have
been paid or adequately reserved for in accordance with generally
accepted accounting principles in the financial statements of the
Company, except to the extent any such failure to pay or reserve,
individually or in the aggregate, would not have a Company
Material Adverse Effect.
(b) The most recent financial statements contained in the
Company SEC Documents reflect adequate reserves in accordance
with generally accepted accounting principles for all Taxes
payable by the Company and its Subsidiaries for all Tax periods
and portions thereof through the date of such financial
statements, except to the extent that any failure to so reserve,
individually or in the aggregate, would not have a Company
Material Adverse Effect. No deficiency with respect to Taxes has
been proposed, asserted or assessed against the Company or any of
its Subsidiaries and no requests for waivers of the time to
assess any such Taxes are pending, except to the extent any such
deficiency or request for waiver, individually or in the
aggregate, would not have a Company Material Adverse Effect.
(c) None of the federal income Tax Returns of the Company or
any of its Subsidiaries consolidated in such Tax Returns have
been examined by and settled with the Internal Revenue Service.
(d) Except for Liens for current Taxes not yet due and
payable or which are being contested in good faith, there is no
Lien affecting any of the assets or properties of the Company or
any of its Subsidiaries that arose in connection with any failure
or alleged failure to pay any Tax, except for Liens which,
individually or in the aggregate, would not have a Company
Material Adverse Effect.
(e) Neither the Company nor any of its Subsidiaries is a
party to any Tax allocation or Tax sharing agreement.
(f) Neither the Company nor any of its Subsidiaries has made
any payments, is obligated to make any payments or is a party to
any agreement that under any circumstances could obligate it to
make any payments that will not be fully deductible under
Sections 280G or 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). -----
Section 4.11 Employee Benefit Matters.
(a) The Company Disclosure Letter lists each plan, program
or arrangement constituting a material employee welfare benefit
plan (an "Employee Welfare Benefit Plan") as defined in Section
3(1) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or a material employee pension benefit plan
(an "Employee Pension Benefit Plan") as defined in Section 3(2)
of ERISA, and each other material employee benefit plan, program
or arrangement or employment practice maintained by the Company
or any of its Subsidiaries with respect to any of its current or
former employees or to which the Company or any of the Company
Subsidiaries contributes or is required to contribute with
respect to any of its current or former employees (collectively,
the "Company Plans"). With respect to each Company Plan:
(i) such Company Plan (and each related trust,
insurance contract or fund) has been administered in a
manner consistent in all respects with its written terms and
complies in form and operation with the applicable
requirements of ERISA, the Code and other applicable laws,
except for failures of administration or compliance that
would not have a Company Material Adverse Effect;
(ii) all required reports and descriptions (including
Form 5500 Annual Reports, Summary Annual Reports, PBGC-1's
and Summary Plan Descriptions) have been filed or
distributed appropriately with respect to such Company Plan,
except for failures of filing or distribution that would not
have a Company Material Adverse Effect;
(iii) the requirements of Part 6 of Subtitle B of
Title I of ERISA and Section 4980B of the Code have been met
with respect to each such Company Plan which is an Employee
Welfare Benefit Plan, except for failures that would not
have a Company Material Adverse Effect;
(iv) all material contributions, premiums or other
payments (including all employer contributions and employee
salary reduction contributions) that are due have been paid
to each such Company Plan;
(v) each such Company Plan which is an Employee
Pension Benefit Plan intended to be a "qualified plan" under
Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service and
no event has occurred which could reasonably be expected to
cause the loss or denial of such qualification under Section
401(a) of the Code;
(vi) the Company has made available or prior to the
Closing Date will make available to the Parent Corporation,
upon its request, correct and complete copies of the plan
documents and summary plan descriptions, the most recent
determination letter received from the Internal Revenue
Service, the most recent Form 5500 Annual Report, the most
recent actuarial report, the most recent audited financial
statements, and all related trust agreements, insurance
contracts and other funding agreements that implement such
Company Plan (but excluding the failure to make available
any such document which is not material). The valuation
summaries provided by the Company to the Parent Corporation
reasonably represent the assets and liabilities attributable
to Company Plans calculated in accordance with the Company's
past practices, but excluding any failure that would not
have a Company Material Adverse Effect;
(vii) no Company Plan which is an Employee Pension
Benefit Plan has been amended in any manner which would
require the posting of security under Section 401(a)(29) of
the Code or Section 307 of ERISA; and
(viii) neither the Company nor any of its Subsidiaries
has communicated to any employee (excluding internal
memoranda to management) any plan or commitment, whether or
not legally binding, to create any additional material
employee benefit plan or to materially modify or change any
Company Plan affecting any employee or terminated employee
of the Company or any of its Subsidiaries, but excluding any
such action that does not materially increase the liability
of the Company or its Subsidiaries.
(b) With respect to each Employee Welfare Benefit Plan or
Employee Pension Benefit Plan that the Company or any of its
Subsidiaries maintains or ever has maintained, or to which any of
them contributes, ever has contributed or ever has been required
to contribute:
(i) no such Employee Pension Benefit Plan (other than
any Multiemployer Plan) has been completely or partially
terminated (other than any termination that would not have a
Company Material Adverse Effect), no reportable event (as
defined in Section 4043 of ERISA) as to which notices would
be required to be filed with the Pension Benefit Guaranty
Corporation has occurred but has not yet been so reported
(but excluding any failure to report which would not have a
Company Material Adverse Effect), and no proceeding by the
Pension Benefit Guaranty Corporation to terminate such
Employee Pension Benefit Plan (other than any Multiemployer
Plan) has been instituted; and
(ii) there have been no non-exempt prohibited
transactions (as defined in Section 406 of ERISA and Section
4975 of the Code) with respect to such plan, no fiduciary
has any liability for breach of fiduciary duty or any other
failure to act or comply in connection with the
administration or investment of the assets of such plan, and
no action, suit, proceeding, hearing or, to the Company's
knowledge, investigation with respect to the administration
or the investment of the assets of such plan (other than
routine claims for benefits) is pending or, to the Company's
knowledge, threatened, but excluding, from each of the
foregoing, events or circumstances that would not have a
Company Material Adverse Effect.
(c) Neither the Company nor any of its Subsidiaries
contributes to or has any liability (including withdrawal
liability) under any Multiemployer Plan, which liability would
have a Company Material Adverse Effect. None of the transactions
contemplated by this Agreement will trigger any withdrawal or
termination liability under any Multiemployer Plan set forth in
the Company Disclosure Letter, which liability would have a
Company Material Adverse Effect.
(d) Other than pursuant to a Company Plan, neither the
Company nor any of its Subsidiaries has any obligation to provide
medical, health, life insurance or other welfare benefits for
current or future retired or terminated employees, their spouses
or their dependents (other than in accordance with Section 4980B
of the Code), except for obligations that would not have a
Company Material Adverse Effect.
(e) No Company Plan contains any provision that would
prohibit the transactions contemplated by this Agreement, would
give rise to any severance, termination or other payments as a
result of the transactions contemplated by this Agreement (alone
or together with the occurrence of any other event), or would
cause any payment, acceleration or increase in benefits provided
by any Company Plan as a result of the transactions contemplated
by this Agreement (alone or together with the occurrence of any
other event), but excluding from this paragraph (e) any payment,
acceleration or increase which is not material.
(f) Any individual who is classified as a non-employee for
purposes of receiving benefits (such as an independent
contractor, leased employee, consultant or special consultant)
regardless of treatment for other purposes, is not
unintentionally eligible to participate in any Company Plan,
except where such treatment would not have a Company Material
Adverse Effect.
Section 4.12 Environmental Matters.
(a) With respect to the current and former operations and
properties of the Company and its Subsidiaries, and in each case
except for matters which, individually or in the aggregate, would
not have a Company Material Adverse Effect, (i) the Company and
its Subsidiaries have complied in all respects with all
Environmental Laws (as defined in Section 4.12(b)) in connection
with the ownership, use, maintenance and operation of all real
property owned or leased by them and otherwise in connection with
their operations, (ii) neither the Company nor any of its
Subsidiaries has any liability, whether contingent or otherwise,
under any Environmental Law, (iii) no notices of any violation or
alleged violation of, non-compliance or alleged noncompliance
with or any liability under, any Environmental Law have been
received by the Company or any of its Subsidiaries since January
1, 1994, (iv) there are no administrative, civil or criminal
writs, injunctions, decrees, orders or judgments outstanding or
any administrative, civil or criminal actions, suits, claims,
proceedings or, to the Company's knowledge, investigations
pending or, to the Company's knowledge, threatened, relating to
compliance with or liability under any Environmental Law
affecting the Company or any of its Subsidiaries and (v) to the
knowledge of the Company, no material changes or alterations in
the practices or operations of the Company or any of its
Subsidiaries as presently conducted are anticipated to be
required in the future in order to permit the Company and its
Subsidiaries to continue to comply in all material respects with
all applicable Environmental Laws.
(b) The term "Environmental Law" as used in this Agreement
means any law, rule, regulation, permit, order, writ, injunction,
judgment or decree with respect to the preservation of the
environment or the promotion of worker health and safety,
including any law, rule, regulation, permit, order, writ,
injunction, judgment or decree relating to Hazardous Materials
(as defined in Section 4.12(c)), drinking water, surface water,
groundwater, wetlands, landfills, open dumps, storage tanks,
underground storage tanks, solid waste, waste water, storm water
run-off, noises, odors, air emissions, waste emissions or xxxxx.
Without limiting the generality of the foregoing, the term will
encompass each of the following statutes and the regulations
promulgated thereunder, and any similar applicable state, local
or foreign law, rule or regulation, each as amended (i) the
Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, (ii) the Solid Waste Disposal Act, (iii) the
Hazardous Materials Transportation Act, (iv) the Toxic Substances
Control Act, (v) the Clean Water Act, (vi) the Clean Air Act,
(vii) the Safe Drinking Water Act, (viii) the National
Environmental Policy Act of 1969, (ix) the Superfund Amendments
and Reauthorization Act of 1986, (x) Title III of the Superfund
Amendments and Reauthorization Act, (xi) the Federal Insecticide,
Fungicide and Rodenticide Act and (xii) the provisions of the
Occupational Safety and Health Act of 1970 relating to the
handling of and exposure to Hazardous Materials and similar
substances.
(c) The term "Hazardous Materials" as used in this Agreement
means each and every element, compound, chemical mixture,
contaminant, pollutant, material, waste or other substance that
is defined, determined or identified as hazardous or toxic under
any Environmental Law or the spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, storing, escaping,
leaching, dumping, discarding, burying, abandoning or disposing
into the environment of which is prohibited under any
Environmental Law. Without limiting the generality of the
foregoing, the term will include (i) "hazardous substances" as
defined in the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, the Superfund Amendments
and Reauthorization Act of 1986, or Title III of the Superfund
Amendments and Reauthorization Act and regulations promulgated
thereunder, each as amended, (ii) "hazardous waste" as defined in
the Solid Waste Disposal Act and regulations promulgated
thereunder, each as amended, (iii) "hazardous materials" as
defined in the Hazardous Materials Transportation Act and the
regulations promulgated thereunder, each as amended, (iv)
"chemical substance or mixture" as defined in the Toxic
Substances Control Act and regulation promulgated thereunder,
each as amended, (v) petroleum and petroleum products and
byproducts and (vi) asbestos.
Section 4.13 Title. The Company and its Subsidiaries now
have and at the Effective Time will have good and, in the case of real
property, marketable title to all the properties and assets purported to
be owned by them, free and clear of all Liens except (a) Liens for
current Taxes or assessments not delinquent, (b) builder, mechanic,
warehousemen, materialmen, contractor, workmen, repairmen, carrier or
other similar Liens arising and continuing in the ordinary course of
business for obligations that are not delinquent, (c) the rights, if
any, of vendors having possession of tooling of the Company and its
Subsidiaries, (d) liens arising from the receipt by the Company and its
Subsidiaries of progress payments by the United States government, (e)
Liens securing rental payments under capital lease arrangements and (f)
other Liens which, individually or in the aggregate, would not have a
Company Material Adverse Effect (collectively, "Permitted Liens").
Section 4.14 Intellectual Property Matters.
(a) The Company and its Subsidiaries own or have the right
to use pursuant to valid license, sublicense, agreement or
permission all items of Intellectual Property (as defined in
Section 4.14(b)) necessary for their operations as presently
conducted and as presently proposed to be conducted, except where
the failure to have such rights, individually or in the
aggregate, would not have a Company Material Adverse Effect.
Neither the Company nor any of its Subsidiaries has received any
charge, complaint, claim, demand or notice alleging any
interference, infringement, misappropriation or violation of the
Intellectual Property rights of any third party, except for
interferences, infringements, misappropriations and violations
which, individually or in the aggregate, would not have a Company
Material Adverse Effect. To the Company's knowledge, no third
party has interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property
rights of the Company or any of its Subsidiaries, except for
misappropriations and violations which, individually or in the
aggregate, would not have a Company Material Adverse Effect.
(b) The term "Intellectual Property" as used in this
Agreement means, collectively, patents, patent disclosures,
trademarks, service marks, trade dress, logos, trade names,
copyrights and mask works, and all registrations, applications,
reissuances, continuations, continuations-in-part, revisions,
extensions, reexaminations and associated good will with respect
to each of the foregoing, computer software (including source and
object codes), computer programs, computer data bases and related
documentation and materials, data, documentation, trade secrets,
confidential business information (including ideas, formulas,
compositions, inventions, know-how, manufacturing and production
processes and techniques, research and development information,
drawings, designs, plans, proposals and technical data,
financial, marketing and business data and pricing and cost
information) and other intellectual property rights (in whatever
form or medium).
Section 4.15 Year 2000 Compliance Matters. Except for
matters which, individually and in the aggregate, would not have a
Company Material Adverse Effect, all computer systems and computer
software used by the Company and its Subsidiaries and all computer
systems and computer software incorporated in products manufactured by
the Company and its Subsidiaries (a) recognize, or are being adapted so
that, prior to December 31, 1999, they will recognize, the advent of the
year 2000 without any material adverse change in operation associated
with such recognition, (b) can correctly recognize and manipulate, or
are being adapted so that, prior to December 31, 1999, they can
recognize and manipulate, date information relating to dates prior to,
on and after January 1, 2000 and (c) to the Company's knowledge, can
suitably interact with other year 2000 compliant computer systems and
computer software in a way that does not compromise their ability to
correctly recognize the advent of the year 2000 or to recognize and
manipulate date information relating to dates prior to, on or after
January 1, 2000. The costs of the adaptations to computer systems and
computer software being made by the Company and its Subsidiaries in
order to achieve year 2000 compliance are not presently expected to have
a Company Material Adverse Effect.
Section 4.16 Labor Matters. There are no controversies
pending or, to the Company's knowledge, threatened between the Company
or any of its Subsidiaries and any of their current or former employees
or any labor or other collective bargaining unit representing any such
employee that could reasonably be expected to result in a material labor
strike, dispute, slow-down or work stoppage or otherwise which,
individually or in the aggregate, would have a Company Material Adverse
Effect. The Company is not aware of any organizational effort presently
being made or threatened by or on behalf of any labor union with respect
to employees of the Company or any of its Subsidiaries. To the Company's
knowledge, as of the date of this Agreement no executive, key employee
or group of employees of the Company or any of its Subsidiaries has any
plan to terminate employment with the Company and its Subsidiaries,
which termination would have a Company Material Adverse Effect.
Section 4.17 State Takeover Laws. The resolutions adopted by
the Board of Directors of the Company approving this Agreement are
sufficient to cause the provisions of Section 203 of the Delaware Act to
be inapplicable to this Agreement, the Merger and the other transactions
contemplated hereby. To the Company's knowledge, no other fair price,
moratorium, control share acquisition or other form of antitakeover
statute, rule or regulation of any state or jurisdiction applies or
purports to apply to this Agreement, the Merger or the other
transactions contemplated hereby.
Section 4.18 Parent Common Stock Ownership. Neither the
Company nor any of its Subsidiaries owns any shares of Parent Common
Stock or any securities exercisable or exchangeable for or convertible
into shares of Parent Common Stock.
Section 4.19 Accounting and Tax Matters. Neither the Company
nor any of its Subsidiaries has taken or agreed to take any action that
would prevent accounting for the Merger in accordance with the pooling
of interests method of accounting under the requirements of XXX Xx. 00
or prevent the Merger from constituting a reorganization within the
meaning of Section 368(a) of the Code.
Section 4.20 Brokers' Fees. Except for the fees and expenses
payable by the Company to Xxxxxxx Xxxxx & Co. and Xxxxxxx Sachs & Co.,
neither the Company nor any of its Subsidiaries has any liability or
obligation to pay any fees or commissions to any financial advisor,
broker, finder or agent with respect to the transactions contemplated by
this Agreement. The Company has delivered to the Parent Corporation a
correct and complete copy of the engagement letter between the Company
and Xxxxxxx Xxxxx & Co. relating to the transactions contemplated by
this Agreement. The Company Disclosure Letter sets forth the fees
payable to Xxxxxxx Xxxxx & Co. and Xxxxxxx Sachs & Co. in connection
with this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PARENT CORPORATION
The Parent Corporation represents and warrants to the
Company that except as disclosed in the reports, schedules, forms,
statements and other documents filed by the Parent Corporation with the
SEC and publicly available prior to the date of this Agreement, as
disclosed in the draft of the Quarterly Statement on Form 10-Q for the
Parent Corporation's fiscal quarter ended March 31, 1999 (the "Parent
Corporation Form 10-Q") delivered to the Parent Corporation prior to the
date of this Agreement or as disclosed in the letter dated as of the
date of this Agreement from the Parent Corporation to the Company (the
"Parent Corporation Disclosure Letter"):
Section 5.1 Organization. The Parent Corporation and each of
its Subsidiaries is a corporation duly organized and validly existing
under the laws of the jurisdiction of its incorporation and has all
requisite power and authority to own, lease and operate its properties
and to carry on its business as presently being conducted. The Parent
Corporation and each of its Subsidiaries is in good standing under the
laws of the jurisdiction of its incorporation and is duly qualified to
conduct business as a foreign corporation in each other jurisdiction
where such qualification is required, except where the failure to be so
qualified and in good standing would not have a material adverse effect
on the business, financial condition, operations or results of
operations of the Parent Corporation and its Subsidiaries taken as a
whole or the ability of the Parent Corporation to consummate the Merger
and to perform its obligations under this Agreement (a "Parent
Corporation Material Adverse Effect"). The Parent Corporation has
delivered to the Company correct and complete copies of its charter and
bylaws, as presently in effect, and will make available to the Company
after the date of this Agreement correct and complete copies of the
charter and bylaws, as presently in effect, of each of its Subsidiaries.
Section 5.2 Authorization of Transaction; Enforceability.
Subject to obtaining the Parent Corporation Stockholder Approval, each
of the Parent Corporation and the Acquisition Corporation has full
corporate power and authority and has taken all requisite corporate
action to enable it to execute and deliver this Agreement, to consummate
the Merger and the other transactions contemplated hereby and to perform
its obligations hereunder. The Parent Corporation has executed a written
consent in lieu of a special meeting of the sole stockholder of the
Acquisition Corporation in accordance with Section 228 of the Delaware
Act adopting and approving this Agreement. The Board of Directors of the
Parent Corporation, at a meeting thereof duly called and held, has duly
adopted resolutions by the requisite majority vote approving this
Agreement, the Merger and the other transactions contemplated hereby,
determining that the terms and conditions of this Agreement, the Merger
and the other transactions contemplated hereby are fair to and in the
best interests of the Parent Corporation and its stockholders, approving
and setting forth the Charter Amendment and declaring its advisability,
and recommending that the Parent Corporation's stockholders approve and
adopt the Charter Amendment and the issuance of the Parent Common Stock
in the Merger. The foregoing resolutions of the Board of Directors of
the Company have not been modified, supplemented or rescinded and remain
in full force and effect as of the date of this Agreement. In connection
with its adoption of the foregoing resolutions, the Board of Directors
of the Parent Corporation received the written opinion of Bear Xxxxxxx &
Co. Inc., financial advisor to the Board of Directors of the Parent
Corporation, that the Merger is fair, from a financial point of view, to
the Parent Corporation and its stockholders. The foregoing opinion has
not been modified, supplemented or rescinded prior to the date of this
Agreement. The Parent Corporation will deliver to the Company promptly
after the date of this Agreement correct and complete copies of the
foregoing resolutions and opinion. This Agreement constitutes the valid
and legally binding obligation of each of the Parent Corporation and the
Acquisition Corporation, enforceable against the Parent Corporation and
the Acquisition Corporation in accordance with its terms and conditions.
Section 5.3 Noncontravention; Consents. Except for (a)
certain filings and approvals necessary to comply with the applicable
requirements of the Securities Act, the Securities Exchange Act and the
"blue sky" laws and regulations of various states, (b) the approval by
the New York Stock Exchange of the listing, upon official notice of
issuance, of the shares of Parent Common Stock proposed to be issued
pursuant to the Merger, (c) the filing of a Notification and Report Form
and related material with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the HSR Act,
(d) certain filings and approvals which may be necessary to comply with
the rules and regulations of the Federal Aviation Administration and (e)
the filing of a certificate of merger pursuant to the Delaware Act,
neither the execution and delivery of this Agreement by the Parent
Corporation or the Acquisition Corporation, nor the consummation by the
Parent Corporation or the Acquisition Corporation of the transactions
contemplated hereby, will constitute a violation of, be in conflict
with, constitute or create (with or without notice or lapse of time or
both) a default under, give rise to any right of termination,
cancellation, amendment or acceleration with respect to, or result in
the creation or imposition of any Lien upon any property of the Parent
Corporation or any of its Subsidiaries pursuant to (i) the charter or
bylaws of the Parent Corporation or any of its Subsidiaries, (ii) any
constitutional provision, law, rule, regulation, permit, order, writ,
injunction, judgment or decree to which the Parent Corporation or any of
its Subsidiaries is subject or (iii) any agreement or commitment to
which the Parent Corporation or any of its Subsidiaries is a party or by
which the Parent Corporation, any of its Subsidiaries or any of their
respective properties is bound or subject, except, in the case of
clauses (ii) and (iii) above, for such matters which, individually or in
the aggregate, would not have a Parent Corporation Material Adverse
Effect.
Section 5.4 Capitalization.
(a) As of the date of this Agreement, the authorized capital
stock of the Parent Corporation consists of 250,000,000 shares
divided into 200,000,000 shares of Parent Common Stock and
50,000,000 shares of Preferred Stock, par value $1.00 per share.
As of May 11, 1999, 127,569,456 shares of Parent Common Stock
were issued and outstanding, 41,205,216 shares were held by the
Parent Corporation as treasury shares and 4,926,641 shares were
reserved for issuance upon the exercise of options or other
rights to purchase or otherwise acquire shares of Parent Common
Stock granted by the Parent Corporation to current and former
directors, officers and employees of the Parent Corporation and
its Subsidiaries. No shares of the Parent Corporation's Preferred
Stock are issued or outstanding. All of the issued and
outstanding shares of capital stock of the Parent Corporation
have been duly authorized and are validly issued, fully paid and
nonassessable.
(b) Other than options and other rights to purchase or
otherwise acquire an aggregate of 4,926,641 shares of Parent
Common Stock granted by the Parent Corporation to current and
former directors, officers and employees of the Parent
Corporation and its Subsidiaries pursuant to various stock
option, restricted stock and similar plans, programs and
arrangements of the Parent Corporation and its Subsidiaries,
there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange
rights or other contracts or commitments that could require the
Parent Corporation or any of its Subsidiaries to issue, sell or
otherwise cause to become outstanding any of its capital stock.
There are no outstanding stock appreciation, phantom stock,
profit participation or similar rights with respect to the Parent
Corporation or any of its Subsidiaries.
(c) Neither the Parent Corporation nor any of its
Subsidiaries is a party to any voting trust, proxy or other
agreement or understanding with respect to the voting of any
capital stock of the Parent Corporation or any of its
Subsidiaries.
(d) All of the outstanding shares of the capital stock of
each of the Parent Corporation's Subsidiaries have been validly
issued, are fully paid and nonassessable and are owned by the
Parent Corporation or one of its Subsidiaries, free and clear of
any Lien. Except for its Subsidiaries set forth in the Parent
Corporation Disclosure Letter, the Company does not control
directly or indirectly or have any direct or indirect equity
participation in any corporation, partnership, limited liability
company, joint venture or other entity. The Acquisition
Corporation has been formed solely for purposes of the
transactions contemplated by this Agreement and has not conducted
any business or engaged in any activities prior to the date of
this Agreement.
Section 5.5 Parent Corporation Reports; Joint Proxy and
Registration Statements.
(a) The Parent Corporation has since January 1, 1994 filed
all reports, forms, statements and other documents (collectively,
together with all financial statements included or incorporated
by reference therein and the Parent Corporation Form 10-Q, the
"Parent Corporation SEC Documents") required to be filed by the
Parent Corporation with the SEC pursuant to the provisions of the
Securities Act or the Securities Exchange Act. Each of the Parent
Corporation SEC Documents, as of its filing date, complied in all
material respects with the applicable requirements of the
Securities Act and the Securities Exchange Act. None of the
Parent Corporation SEC Documents, as of their respective filing
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. No
Subsidiary of the Parent Corporation is required to file any
reports, forms, statements or other documents pursuant to the
Securities Act of the Securities Exchange Act.
(b) Each of the consolidated financial statements (including
related notes) included in the Parent Corporation SEC Documents
presented fairly in all material respects the consolidated
financial condition, cash flows and results of operations of the
Parent Corporation and its Subsidiaries for the respective
periods or as of the respective dates set forth therein. Each of
the financial statements (including related notes) included in
the Parent Corporation SEC Documents has been prepared in
accordance with United States generally accepted accounting
principles, consistently applied during the periods involved,
except (i) as noted therein, (ii) to the extent required by
changes in United States generally accepted accounting principles
or (iii) in the case of unaudited interim financial statements,
normal recurring year-end audit adjustments.
(c) The Parent Corporation has delivered to the Company
correct and complete copies of any proposed or contemplated
amendments or modifications to the Parent Corporation SEC
Documents (including any exhibit documents included therein) that
have not yet been filed by the Parent Corporation with the SEC.
The Parent Corporation has delivered to the Company a correct and
complete copy of the most recent draft of the Parent Corporation
Form 10-Q.
(d) The Joint Proxy Statement and the Registration Statement
will comply in all material respects with the applicable
requirements of the Securities Act and the Securities Exchange
Act and will not, at the time the definitive Joint Proxy
Statement is filed with the SEC and mailed to the stockholders of
the Parent Corporation and at the time the Registration Statement
is declared effective by the SEC, 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. No representation or warranty is made
herein by the Parent Corporation with respect to any information
supplied by the Company for inclusion in the Joint Proxy
Statement or the Registration Statement. For purposes of this
Section 5.5(d), all information included in the Joint Proxy
Statement and the Registration Statement concerning or related to
the Company and its Subsidiaries will be deemed to have been
supplied by the Company.
Section 5.6 No Undisclosed Liabilities. The Parent
Corporation and its Subsidiaries have no liabilities or obligations
(whether absolute or contingent, liquidated or unliquidated, or due or
to become due) except for (a) liabilities and obligations reflected in
the Parent Corporation SEC Documents and (b)other liabilities and
obligations which, individually or in the aggregate, would not have a
Parent Corporation Material Adverse Effect.
Section 5.7 Absence of Material Adverse Change. Since
December 31, 1998, there has not occurred any event, change, effect or
development which, individually or in the aggregate, would have a Parent
Corporation Material Adverse Effect.
Section 5.8 Litigation and Legal Compliance.
(a) The Parent Corporation Disclosure Letter sets forth each
instance in which the Parent Corporation or any of its
Subsidiaries is (i) subject to any material unsatisfied judgment
order, decree, stipulation, injunction or charge or (ii) a party
to or, to the Parent Corporation's knowledge, threatened to be
made a party to any material charge, complaint, action, suit,
proceeding, hearing or, to the Parent Corporation's knowledge,
investigation of or in any court or quasi-judicial or
administrative agency of any federal, state, local or foreign
jurisdiction, except for judgments, orders, decrees,
stipulations, injunctions, charges, complaints, actions, suits,
proceedings, hearings and investigations which, individually or
in the aggregate, would not have a Parent Corporation Material
Adverse Effect. There are no judicial or administrative actions,
proceedings or, to the Parent Corporation's knowledge,
investigations pending or, to the Parent Corporation's knowledge,
threatened that question the validity of this Agreement or any
action taken or to be taken by the Parent Corporation in
connection with this Agreement which would have a Parent
Corporation Material Adverse Effect.
(b) Except for instances of noncompliance which,
individually or in the aggregate, would not have a Parent
Corporation Material Adverse Effect, the Parent Corporation and
its Subsidiaries have complied with each constitutional
provision, law, rule, regulation, permit, order, writ,
injunction, judgment or decree to which the Parent Corporation or
any of its Subsidiaries is subject.
Section 5.9 Contract Matters.
(a) Neither the Parent Corporation nor any of its
Subsidiaries is in default or violation of (and no event has
occurred which with notice or the lapse of time or both would
constitute a default or violation) of any term, condition or
provision of any note, mortgage, indenture, loan agreement, other
evidence of indebtedness, guarantee, license, lease, agreement or
other contract, instrument or contractual obligation to which the
Parent Corporation or any of its Subsidiaries is a party or by
which any of their respective assets is bound or subject, except
for defaults and violations which, individually or in the
aggregate, would not have a Parent Corporation Material Adverse
Effect.
Section 5.10 Tax Matters.
(a) The Parent Corporation and each of its Subsidiaries have
timely filed all required Tax Returns and all such Tax Returns
are accurate and complete in all respects, except to the extent
any such failure to file or any such inaccuracy in any filed Tax
Return, individually or in the aggregate, would not have a Parent
Corporation Material Adverse Effect. All Taxes owed by the Parent
Corporation or any of its Subsidiaries (whether or not shown on
any Tax Return) have been paid or adequately reserved for in
accordance with generally accepted accounting principles in the
financial statements of the Parent Corporation, except to the
extent any such failure to pay or reserve, individually or in the
aggregate, would not have a Parent Corporation Material Adverse
Effect.
(b) The most recent financial statements contained in the
Parent Corporation SEC Documents reflect adequate reserves in
accordance with generally accepted accounting principles for all
Taxes payable by the Parent Corporation and its Subsidiaries for
all Tax periods and portions thereof through the date of such
financial statements, except to the extent that any failure to so
reserve, individually or in the aggregate, would not have a
Parent Corporation Material Adverse Effect. No deficiency with
respect to Taxes has been proposed, asserted or assessed against
the Parent Corporation or any of its Subsidiaries and no requests
for waivers of the time to assess any such Taxes are pending,
except to the extent any such deficiency or request for waiver,
individually or in the aggregate, would not have a Parent
Corporation Material Adverse Effect.
(c) The federal income Tax Returns of the Parent Corporation
and each of its Subsidiaries consolidated in such Tax Returns
have been examined by and settled with the Internal Revenue
Service for all Tax years through 1989.
(d) Except for Liens for current Taxes not yet due and
payable or which are being contested in good faith, there is no
Lien affecting any of the assets or properties of the Parent
Corporation or any of its Subsidiaries that arose in connection
with any failure or alleged failure to pay any Tax, except for
Liens which, individually or in the aggregate, would not have a
Parent Corporation Material Adverse Effect.
(e) Neither the Parent Corporation nor any of its
Subsidiaries is a party to any Tax allocation or Tax sharing
agreement.
Section 5.11 Employee Benefit Matters.
(a) The Parent Corporation Disclosure Letter lists each
plan, program or arrangement constituting a material Employee
Welfare Benefit Plan or a material Employee Pension Benefit Plan
and each other material employee benefit plan, program or
arrangement or employment practice maintained by the Parent
Corporation or any of its Subsidiaries with respect to any of its
current or former employees or to which the Parent Corporation or
any of the Parent Corporation Subsidiaries contributes or is
required to contribute with respect to any of its current or
former employees (collectively, the "Parent Corporation Plans").
With respect to each Parent Corporation Plan:
(i) such Parent Corporation Plan (and each related
trust, insurance contract or fund) has been administered in
a manner consistent in all respects with its written terms
and complies in form and operation with the applicable
requirements of ERISA, the Code and other applicable laws,
except for failures of administration or compliance that
would not have a Parent Corporation Material Adverse Effect;
(ii) all required reports and descriptions (including
Form 5500 Annual Reports, Summary Annual Reports, PBGC-1's
and Summary Plan Descriptions) have been filed or
distributed appropriately with respect to such Parent
Corporation Plan, except for failures of filing or
distribution that would not have a Parent Corporation
Material Adverse Effect;
(iii) the requirements of Part 6 of Subtitle B of Title
I of ERISA and Section 4980B of the Code have been met with
respect to each such Parent Corporation Plan which is an
Employee Welfare Benefit Plan, except for failures that
would not have a Parent Corporation Material Adverse Effect;
(iv) all material contributions, premiums or other
payments (including all employer contributions and employee
salary reduction contributions) that are due have been paid
to each such Parent Corporation Plan;
(v) each such Parent Corporation Plan which is an
Employee Pension Benefit Plan intended to be a "qualified
plan" under Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue
Service and no event has occurred which could reasonably be
expected to cause the loss or denial of such qualification
under Section 401(a) of the Code;
(vi) the Parent Corporation has made available or prior
to the Closing Date will make available to the Company, upon
its request, correct and complete copies of the plan
documents and summary plan descriptions, the most recent
determination letter received from the Internal Revenue
Service, the most recent Form 5500 Annual Report, the most
recent actuarial report, the most recent audited financial
statements, and all related trust agreements, insurance
contracts and other funding agreements that implement such
Parent Corporation Plan (but excluding the failure to make
available any such document which is not material). The
valuation summaries provided by the Parent Corporation to
the Company reasonably represent the assets and liabilities
attributable to the Parent Corporation Plans calculated in
accordance with the Parent Corporation's past practices, but
excluding any failure that would not have a Parent
Corporation Material Adverse Effect;
(vii) no Parent Corporation Plan which is an Employee
Pension Benefit Plan has been amended in any manner which
would require the posting of security under Section
401(a)(29) of the Code or Section 307 of ERISA; and
(viii) neither the Parent Corporation nor any of its
Subsidiaries has communicated to any employee (excluding
internal memoranda to management) any plan or commitment,
whether or not legally binding, to create any additional
material employee benefit plan or to materially modify or
change any Parent Corporation Plan affecting any employee or
terminated employee of the Parent Corporation or any of its
Subsidiaries, but excluding any such action that does not
materially increase the liability of the Parent Corporation
or its Subsidiaries.
(b) With respect to each Employee Welfare Benefit Plan or
Employee Pension Benefit Plan that the Parent Corporation or any
of its Subsidiaries maintains or ever has maintained, or to which
any of them contributes, ever has contributed or ever has been
required to contribute:
(i) no such Employee Pension Benefit Plan (other
than any Multiemployer Plan) has been completely or
partially terminated (other than any termination that
would not have a Parent Corporation Material Adverse
Effect, no reportable event (as defined in Section 4043
of ERISA) as to which notices would be required to be
filed with the Pension Benefit Guaranty Corporation has
occurred but has not yet been so reported (excluding
any such failure to report which would not have a
Parent Corporation Material Adverse Effect), and no
proceeding by the Pension Benefit Guaranty Corporation
to terminate such Employee Pension Benefit Plan (other
than any Multiemployer Plan) has been instituted; and
(ii) there have been no non-exempt prohibited
transactions (as defined in Section 406 of ERISA and
Section 4975 of the Code) with respect to such plan, no
fiduciary has any liability for breach of fiduciary
duty or any other failure to act or comply in
connection with the administration or investment of the
assets of such plan, and no action, suit, proceeding,
hearing or, to the Parent Corporation's knowledge,
investigation with respect to the administration or the
investment of the assets of such plan (other than
routine claims for benefits) is pending or, to the
Parent Corporation's knowledge, threatened, but
excluding, from each of the foregoing, events or
circumstances that would not have a Parent Corporation
Material Adverse Effect.
(c) None of the transactions contemplated by this Agreement
will trigger any withdrawal or termination liability under any
Multiemployer Plan set forth in the Parent Corporation Disclosure
Letter, which liability would have a Parent Corporation Material
Adverse Effect.
(d) Other than pursuant to a Parent Corporation Plan,
neither the Parent Corporation nor any of its Subsidiaries has
any obligation to provide medical, health, life insurance or
other welfare benefits for current or future retired or
terminated employees, their spouses or their dependents (other
than in accordance with Section 4980B of the Code), except for
obligations that would not have a Parent Corporation Material
Adverse Effect.
(e) No Parent Corporation Plan contains any provision that
would prohibit the transactions contemplated by this Agreement,
would give rise to any severance, termination or other payments
as a result of the transactions contemplated by this Agreement
(alone or together with the occurrence of any other event), or
would cause any payment, acceleration or increase in benefits
provided by any Parent Corporation Plan as a result of the
transactions contemplated by this Agreement (alone or together
with the occurrence of any other event), but excluding from this
paragraph (e) any payment, acceleration or increase which is not
material.
(f) Any individual who is classified as a non-employee for
purposes of receiving benefits (such as an independent
contractor, leased employee, consultant or special consultant)
regardless of treatment for other purposes, is not
unintentionally eligible to participate in any Parent Corporation
Plan, except where such treatment would not have a Parent
Corporation Material Adverse Effect.
Section 5.12 Environmental Matters. With respect to the
current and former operations and properties of the Parent Corporation
and its Subsidiaries, and in each case except for matters which,
individually or in the aggregate, would not have a Parent Corporation
Material Adverse Effect, (a) the Parent Corporation and its Subsidiaries
have complied in all respects with all Environmental Laws in connection
with the ownership, use, maintenance and operation of all real property
owned or leased by them and otherwise in connection with their
operations, (b) neither the Parent Corporation nor any of its
Subsidiaries has any liability, whether contingent or otherwise, under
any Environmental Law, (c) no notices of any violation or alleged
violation of, non-compliance or alleged noncompliance with or any
liability under, any Environmental Law have been received by the Parent
Corporation or any of its Subsidiaries since January 1, 1994, (d) there
are no administrative, civil or criminal writs, injunctions, decrees,
orders or judgments outstanding or any administrative, civil or criminal
actions, suits, claims, proceedings or, to the Parent Corporation's
knowledge, investigations pending or, to the Parent Corporation's
knowledge, threatened, relating to compliance with or liability under
any Environmental Law affecting the Parent Corporation or any of its
Subsidiaries and (e) to the knowledge of the Parent Corporation, no
material changes or alterations in the practices or operations of the
Parent Corporation or any of its Subsidiaries as presently conducted are
anticipated to be required in the future in order to permit the Parent
Corporation and its Subsidiaries to continue to comply in all material
respects with all applicable Environmental Laws.
Section 5.13 Title. The Parent Corporation and its
Subsidiaries now have and at the Effective Time will have good and, in
the case of real property, marketable title to all the properties and
assets purported to be owned by them, free and clear of all Liens except
Permitted Liens.
Section 5.14 Intellectual Property Matters. The Parent
Corporation and its Subsidiaries own or have the right to use pursuant
to valid license, sublicense, agreement or permission all items of
Intellectual Property necessary for their operations as presently
conducted and as presently proposed to be conducted, except where the
failure to have such rights, individually or in the aggregate, would not
have a Parent Corporation Material Adverse Effect. Neither the Parent
Corporation nor any of its Subsidiaries has received any charge,
complaint, claim, demand or notice alleging any interference,
infringement, misappropriation or violation of the Intellectual Property
rights of any third party, except for interferences, infringements,
misappropriations and violations which, individually or in the
aggregate, would not have a Parent Corporation Material Adverse Effect.
To the Parent Corporation's knowledge, no third party has interfered
with, infringed upon, misappropriated or otherwise come into conflict
with any Intellectual Property rights of the Parent Corporation or any
of its Subsidiaries, except for misappropriations and violations which,
individually or in the aggregate, would not have a Parent Corporation
Material Adverse Effect..
Section 5.15 Year 2000 Compliance Matters. Except for
matters which, individually and in the aggregate, would not have a
Parent Corporation Material Adverse Effect, all computer systems and
computer software used by the Parent Corporation and its Subsidiaries
and all computer systems and computer software incorporated in products
manufactured by the Parent Corporation and its Subsidiaries (a)
recognize, or are being adapted so that, prior to December 31, 1999,
they will recognize, the advent of the year 2000 without any material
adverse change in operation associated with such recognition, (b) can
correctly recognize and manipulate, or are being adapted so that, prior
to December 31, 1999, they can recognize and manipulate, date
information relating to dates prior to, on and after January 1, 2000 and
(c) to the Parent Corporation's knowledge, can suitably interact with
other year 2000 compliant computer systems and computer software in a
way that does not compromise their ability to correctly recognize the
advent of the year 2000 or to recognize and manipulate date information
relating to dates prior to, on or after January 1, 2000. The costs of
the adaptations to computer systems and computer software being made by
the Parent Corporation and its Subsidiaries in order to achieve year
2000 compliance are not presently expected to have a Parent Corporation
Material Adverse Effect.
Section 5.16 Labor Matters. There are no controversies
pending or, to the Parent Corporation's knowledge, threatened between
the Parent Corporation or any of its Subsidiaries and any of their
current or former employees or any labor or other collective bargaining
unit representing any such employee that could reasonably be expected to
result in a material labor strike, dispute, slow-down or work stoppage
or otherwise which, individually or in the aggregate, would have a
Parent Corporation Material Adverse Effect. The Parent Corporation is
not aware of any organizational effort presently being made or
threatened by or on behalf of any labor union with respect to employees
of the Parent Corporation or any of its Subsidiaries. To the Parent
Corporation's knowledge, as of the date of this Agreement no executive,
key employee or group of employees of the Parent Corporation or any of
its Subsidiaries has any plan to terminate employment with the Parent
Corporation and its Subsidiaries, which termination would have a Parent
Corporation Material Adverse Effect.
Section 5.17 Company Common Stock Ownership. Neither the
Parent Corporation nor any of its Subsidiaries owns any shares of
Company Common Stock or any securities exercisable or exchangeable for
or convertible into shares of Company Common Stock.
Section 5.18 Accounting and Tax Matters. Neither the Parent
Corporation nor any of its Subsidiaries has taken or agreed to take any
action that would prevent accounting for the Merger in accordance with
the pooling of interests method of accounting under the requirements of
XXX Xx. 00 or prevent the Merger from constituting a reorganization
within the meaning of Section 368(a) of the Code.
ARTICLE 6
COVENANTS
Section 6.1 General. Each of the parties will use its
respective best efforts to take all action and to do all things
necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement.
Section 6.2 Notices and Consents. Each of the parties prior
to the Closing Date will give all notices to third parties and
governmental entities and will use its respective best efforts to obtain
all third party and governmental consents and approvals that are
required in connection with the transactions contemplated by this
Agreement. Within five business days following the execution and
delivery of this Agreement, each of the parties will file a Notification
and Report Form and related material with the Federal Trade Commission
and the Antitrust Division of the United States Department of Justice
under the HSR Act, will use its respective best efforts to obtain early
termination of the applicable waiting period and will make all further
filings pursuant thereto that may be necessary, proper or advisable. The
foregoing will not be deemed to require the Parent Corporation to enter
into any agreement, consent decree or other commitment requiring the
Parent Corporation or any of its Subsidiaries to divest or hold separate
any assets (including any assets of the Company or any of its
Subsidiaries) or to take any other action that would have a Parent
Corporation Material Adverse Effect.
Section 6.3 Interim Conduct of the Company. Except as
expressly contemplated by this Agreement, as set forth in the Company
Disclosure Letter, as required by law or by the terms of any contract in
effect on the date of this Agreement or as the Parent Corporation may
approve, which approval will not be unreasonably withheld, from and
after the date of this Agreement through the Closing Date, the Company
will, and will cause each of its Subsidiaries to, conduct its operations
in accordance with its ordinary course of business, consistent with past
practice, and in accordance with such covenant will not, and will not
cause or permit any of its Subsidiaries to:
(a) amend its charter or bylaws or file any certificate of
designation or similar instrument with respect to any shares of
its authorized but unissued capital stock;
(b) authorize or effect any stock split or combination or
reclassification of shares of its capital stock;
(c) declare or pay any dividend or distribution with respect
to its capital stock (other than dividends payable by a
Subsidiary of the Company to the Company or another Subsidiary),
issue or authorize the issuance of any shares of its capital
stock (other than in connection with the exercise of currently
outstanding Stock Options and any other Stock Options issued in
accordance with this Agreement) or any other securities
exercisable or exchangeable for or convertible into shares of its
capital stock, or repurchase, redeem or otherwise acquire for
value any shares of its capital stock or any other securities
exercisable or exchangeable for or convertible into shares of its
capital stock;
(d) merge or consolidate with any entity;
(e) sell, lease or otherwise dispose of any of its capital
assets, including any shares of the capital stock of any of its
Subsidiaries, other than sales, leases or other dispositions of
machinery, equipment, tools, vehicles and other operating assets
no longer required in its operations made in the ordinary course
of business, consistent with past practice;
(f) liquidate, dissolve or effect any recapitalization or
reorganization in any form;
(g) acquire any interest in any business (whether by
purchase of assets, purchase of stock, merger or otherwise) or
enter into any joint venture;
(h) create, incur, assume or suffer to exist any
indebtedness for borrowed money (including capital lease
obligations), other than indebtedness existing as of the date of
this Agreement, borrowings under existing credit lines in the
ordinary course of business, consistent with past practice, and
intercompany indebtedness among the Company and its Subsidiaries
arising in the ordinary course of business, consistent with past
practice;
(i) create, incur, assume or suffer to exist any Lien (other
than Permitted Liens) affecting any of its material assets or
properties;
(j) except as required as the result of changes in United
States generally accepted accounting principles, change any of
the accounting principles or practices used by it or revalue in
any material respect any of its assets or properties, other than
write-downs of inventory or accounts receivable in the ordinary
course of business, consistent with past practice;
(k) except as required under the terms of any collective
bargaining agreement in effect as of the date of this Agreement,
grant any general or uniform increase in the rates of pay of its
employees or grant any general or uniform increase in the
benefits under any bonus or pension plan or other contract or
commitment;
(l) except for any increase required under the terms of any
collective bargaining agreement or consulting or employment
agreement in effect on the date of this Agreement, increase the
compensation payable or to become payable to officers and
salaried employees with a base salary in excess of $75,000 per
year or increase any bonus, insurance, pension or other benefit
plan, payment or arrangement made to, for or with any such
officers or salaried employees;
(m) enter into any material contract or commitment or engage
in any material transaction with any affiliated person or entity
(other than the Company or its Subsidiaries) or enter into any
material contract or commitment or engage in any material
transaction with any unaffiliated person or entity which, to the
Company's knowledge, is reasonably likely to result in a material
financial loss to the Company and its Subsidiaries taken as a
whole;
(n) make any material Tax election or settle or compromise
any material Tax liability;
(o) pay, discharge or satisfy any claims, liabilities or
obligations other than the payment, discharge and satisfaction in
the ordinary course of business of liabilities reflected or
reserved for in the consolidated financial statements of the
Company or otherwise incurred in the ordinary course of business,
consistent with past practice;
(p) settle or compromise any material pending or threatened
suit, action or proceeding; or
(q) commit to do any of the foregoing.
Section 6.4 Interim Conduct of the Parent Corporation.
Except as the Company may approve, which approval will not be
unreasonably withheld, from and after the date of this Agreement through
the Closing Date, the Parent Corporation will not declare or pay any
dividend or distribution with respect to its capital stock (other than
the declaration and payment of regular quarterly cash dividends in
amounts consistent with past practice).
Section 6.5 Preservation of Organization. Subject to
compliance with the provisions of Section 6.3, the Company will, and
will cause each of its Subsidiaries to, use its best efforts to preserve
its business organization intact in all material respects, to keep
available to the Company and its Subsidiaries after the Closing Date the
present officers and employees of the Company and its Subsidiaries as a
group and to preserve the present relationships of the Company and its
Subsidiaries with suppliers and customers and others having business
relations with the Company and its Subsidiaries, in each case so that
there will not be a Company Material Adverse Effect.
Section 6.6 Full Access. Each party will, and will cause its
Subsidiaries and its and their representatives to, afford the other
party and the representatives of the other party reasonable access, upon
reasonable notice at all reasonable times to all premises, properties,
books, records, contracts and documents of or pertaining to such party
and its Subsidiaries. Without limiting the generality of the foregoing,
the Company acknowledges and agrees that the Parent Corporation and its
representatives and agents may, with prior notice to the Company and
subject to the prior approval of the Company (which will not be
unreasonably withheld or delayed), conduct customary environmental
assessments of the real property and facilities owned or leased by the
Company and its Subsidiaries. Notwithstanding the foregoing, neither
party will be required to provide access or to disclose information
where such access or disclosure would contravene any law or contract or
would result in the waiver of any legal privilege or work-product
protection. Any information disclosed will be subject to the provisions
of the Confidentiality Agreement between the Company and the Parent
Corporation (the "Confidentiality Agreement").
Section 6.7 Notice of Developments. Each party will give
prompt written notice to the other party of any material development
affecting such party or any of its Subsidiaries. Each party will give
prompt written notice to the other of any material development affecting
the ability of the parties to consummate the transactions contemplated
by this Agreement. No such written notice of a material development will
be deemed to have amended any of the disclosures set forth in the
Company Disclosure Letter or the Parent Disclosure Letter, to have
qualified the representations and warranties contained herein and to
have cured any misrepresentation or breach of warranty that otherwise
might have existed hereunder by reason of such material development.
Section 6.8 Acquisition Proposals.
(a) The Company and each of its Subsidiaries, and each of
their respective directors, officers, employees, agents and
representatives, will immediately cease any discussions or
negotiations presently being conducted with respect to any
Acquisition Proposal (as defined in Section 6.8(g)). The Company
and its Subsidiaries will not and will use their best efforts to
cause their respective directors, officers, employees, agents and
representatives not to (i) initiate or solicit, directly or
indirectly, any inquiries with respect to, or the making of, any
Acquisition Proposal or (ii) except as expressly permitted in
accordance with Section 6.8(b), engage in any negotiations or
discussions with, furnish any information or data to or enter
into any letter of intent, agreement in principle, acquisition
agreement or similar agreement with any party relating to any
Acquisition Proposal. The Company will be responsible for any
breach of the provisions of this Section 6.8 by any director,
officer, employee, agent or representative of the Company or any
of its Subsidiaries.
(b) Notwithstanding the provisions of Section 6.8(a) but
subject to the other provisions of this Section 6.8, the Company
may engage in discussions or negotiations with, furnish
information and data to, withdraw, modify or amend its
recommendation and approval of the Merger and enter into a letter
of intent, agreement in principle, acquisition agreement or
similar agreement with any party that submits an Acquisition
Proposal to the Company after the date of this Agreement and on
or prior to June 30, 1999 (the "Applicable Period") which the
Board of Directors of the Company by majority vote determines in
its good faith judgment could reasonably be expected to result in
a Superior Acquisition Proposal (as defined in Section 6.8(h)).
(c) Nothing in this Section 6.8 will prevent the Board of
Directors of the Company from taking, and disclosing to the
Company's stockholders, a position contemplated by Rules 14d-9
and 14e-2 promulgated under the Securities Exchange Act with
respect to any publicly announced unsolicited tender offer or
otherwise from making any disclosure to its stockholders if, in
its good faith judgment based on the opinion of outside legal
counsel, failure to so disclose would be inconsistent with its
obligations under applicable law; provided that the Board of
Directors will not recommend that the stockholders of the Company
tender their shares of Company Common Stock in connection with
any such tender offer unless (i) such tender offer is determined
to be a Superior Acquisition Proposal in accordance with the
provisions of Section 6.8(h) and (ii) the Company has provided
the Parent Corporation with not less than five business days
prior written notice of any such action.
(d) The Company will within 24 hours after its receipt of
any Acquisition Proposal provide the Parent Corporation with a
copy of such Acquisition Proposal or, in connection with any
non-written Acquisition Proposal, a written statement setting
forth in reasonable detail the terms and conditions of such
Acquisition Proposal, including the identity of the acquiring
party. The Company will promptly inform the Parent Corporation of
the status and content of any discussions or negotiations
involving any Acquisition Proposal. In connection with any
determination by the Board of Directors of the Company that an
Acquisition Proposal is a Superior Acquisition Proposal, the
Company will within 24 hours after the making of such
determination provide the Parent Corporation with a written
summary in reasonable detail of the reasons for such
determination.
(e) In no event will the Company provide any non-public
information regarding the Company or any of its Subsidiaries to
any party making an Acquisition Proposal unless such party enters
into a written confidentiality agreement containing
confidentiality provisions substantially similar to those
contained in the Confidentiality Agreement. In the event the
Company enters into any confidentiality agreement with a party
pursuant to the provisions of this Section 6.8(e) that does not
include terms and conditions that are substantially similar to
those contained in the sixth paragraph of the Confidentiality
Agreement (the "Standstill Provisions"), then the Parent
Corporation and its Subsidiaries will be released from their
obligations under the Standstill Provisions to the same extent as
such party.
(f) The Company will not enter into any letter of intent,
agreement in principle, acquisition agreement or similar
agreement with respect to any Superior Acquisition Proposal
unless (i) the Company has provided the Parent Corporation with
not less than five business days prior written notice of such
action and (ii) such action is taken by the Company concurrently
with or after the termination of this Agreement in accordance
with the provisions of Section 8.1(e).
(g) The term "Acquisition Proposal" as used in this
Agreement means any bona fide proposal, whether or not in
writing, made by a party to acquire beneficial ownership (as
defined under Rule 13(d) promulgated under the Securities
Exchange Act) of all or a material portion of the assets of, or
any material equity interest in, the Company and Subsidiaries
taken as a whole pursuant to a merger, consolidation or other
business combination, sale of shares of capital stock, sale of
assets, tender or exchange offer or similar transaction involving
the Company or any of its Subsidiaries, including any single or
multi-step transaction or series of related transactions that is
structured to permit such party to acquire such beneficial
ownership.
(h) The term "Superior Acquisition Proposal" as used in this
Agreement means an unsolicited written Acquisition Proposal that
the Board of Directors of the Company by majority vote determines
in its good faith judgment after consulting with the Company's
outside financial and legal advisors (i) is reasonably capable of
being completed, taking into account all legal, financial,
regulatory and other aspects of such proposal, and (ii) presents
to the Company and its stockholders more favorable financial and
other terms, taken as a whole, than the Merger.
(i) No action taken in respect of an Acquisition Proposal or
a Superior Acquisition Proposal which is permitted by the
provisions of this Section 6.8, including any withdrawal,
modification or amendment of the recommendation and approval of
the Merger by the Board of Directors of the Company and the
public announcement thereof permitted by the provisions of this
Section 6.8, will constitute a breach of any other provision of
this Agreement.
Section 6.9 Indemnification.
(a) From and after the Closing Date, the Parent Corporation
will cause the Surviving Corporation to indemnify, defend and
hold harmless each person who is now, or has been at any time
prior to the Effective Time, an officer or director of the
Company or any of its present or former Subsidiaries or corporate
parents (collectively, the "Indemnified Parties") from and
against all losses, claims, damages and expenses (including
reasonable attorney's fees and expenses) arising out of or
relating to actions or omissions, or alleged actions or
omissions, occurring at or prior to the Effective Time to the
fullest extent permitted from time to time by the Delaware Act or
any other applicable laws as presently or hereafter in effect.
(b) Any determination required to be made with respect to
whether any Indemnified Party may be entitled to indemnification
will, if requested by such Indemnified Party, be made by
independent legal counsel selected by the Indemnified Party and
reasonably satisfactory to the Surviving Corporation.
(c) For a period of six years after the Closing Date, the
Parent Corporation will cause to be maintained in effect the
policies of directors and officers liability insurance and
fiduciary liability insurance currently maintained by the Company
with respect to claims arising from or relating to actions or
omissions, or alleged actions or omissions, occurring on or prior
to the Closing Date. The Parent Corporation may at its discretion
substitute for such policies currently maintained by the Company
directors and officers liability insurance and fiduciary
liability insurance policies with reputable and financially sound
carriers providing for no less favorable coverage.
Notwithstanding the provisions of this Section 6.9(c), the Parent
Corporation will not be obligated to make annual premium payments
with respect to such policies of insurance to the extent such
premiums exceed 200 percent of the annual premiums paid by the
Company as of the date of this Agreement. If the annual premium
costs necessary to maintain such insurance coverage exceed the
foregoing amount, the Parent Corporation will maintain the most
advantageous policies of directors and officers liability
insurance and fiduciary liability insurance obtainable for an
annual premium equal to the foregoing amount.
(d) To the fullest extent permitted from time to time under
the law of the State of Delaware, the Parent Corporation will
cause the Surviving Corporation to pay on an as-incurred basis
the reasonable fees and expenses of each Indemnified Party
(including reasonable fees and expenses of counsel) in advance of
the final disposition of any action, suit, proceeding or
investigation that is the subject of the right to
indemnification, subject to reimbursement in the event such
Indemnified Party is not entitled to indemnification.
(e) The certificate of incorporation and bylaws of the
Surviving Corporation will contain the same provisions providing
for exculpation of director and officer liability and
indemnification on the same basis as set forth in the certificate
of incorporation and bylaws of the Company in effect on the date
of this Agreement. For a period of six years after the Closing
Date, the Parent Corporation will cause the Surviving Corporation
to maintain in effect such provisions in the certificate of
incorporation and bylaws of the Surviving Corporation providing
for exculpation of director and officer liability and
indemnification to the fullest extent permitted from time to time
under the law of the State of Delaware, which provisions will not
be amended, except as required by applicable law or except to
make changes permitted by applicable law that would enlarge the
scope of the Indemnified Parties' indemnification rights
thereunder. The foregoing will not be deemed to restrict the
right of the Surviving Corporation to modify the provisions of
its certificate of incorporation or bylaws relating to
exculpation of director and officer liability or indemnification
with respect to events or occurrences after the Closing Date so
long as such modifications do not adversely affect the rights of
the Indemnified Parties hereunder.
(f) In the event of any action, suit, investigation or
proceeding, the Indemnified Party will be entitled to control the
defense thereof with counsel of its own choosing reasonably
acceptable to the Parent Corporation, and the Parent Corporation
and the Surviving Corporation will cooperate in the defense
thereof; provided that neither the Parent Corporation nor the
Surviving Corporation will be liable for the fees of more than
one counsel for all Indemnified Parties, other than local
counsel, unless the use of a single counsel would present
conflict of interest issues which would make it impracticable for
all Indemnified Parties to be represented by a single counsel,
and provided further that neither the Parent Corporation nor the
Surviving Corporation will be liable for any settlement effected
without its written consent (which consent will not be
unreasonably withheld).
(g) The rights of each Indemnified Party hereunder will be
in addition to any other rights such Indemnified Party may have
under the certificate of incorporation or bylaws of the Surviving
Corporation or any of their respective Subsidiaries, under the
law of the State of Delaware or otherwise. Notwithstanding
anything to the contrary contained in this Agreement or
otherwise, the provisions of this Section 6.9 will survive the
consummation of the Merger, and each Indemnified Party will, for
all purposes, be a third party beneficiary of the covenants and
agreements contained in this Section 6.9 and, accordingly, will
be treated as a party to this Agreement for purposes of the
rights and remedies relating to enforcement of such covenants and
agreements and will be entitled to enforce any such rights and
exercise any such remedies directly against the Parent
Corporation and the Surviving Corporation. The Parent Corporation
will cause the Surviving Corporation to pay all reasonable
expenses, including reasonable attorneys' fees, that may be
incurred by an Indemnified Party in enforcing the indemnity and
other obligations provided for in this Section 6.9.
Section 6.10 Public Announcements. The initial press release
announcing the transactions contemplated by this Agreement will be a
joint press release. Thereafter, the Parent Corporation and the Company
will consult with one another before issuing any press releases or
otherwise making any public announcements with respect to the
transactions contemplated by this Agreement and, except as may be
required by applicable law or by the rules and regulations of the New
York Stock Exchange, will not issue any such press release or make any
such announcement prior to such consultation.
Section 6.11 Preservation of Programs and Agreements. From
and after the date of this Agreement through the Closing Date, neither
party nor any of its Subsidiaries will enter into any agreement which
such party knows or has reason to know is reasonably likely to cause a
major customer of the other party or any of its Subsidiaries to
terminate any material program or agreement.
Section 6.12 Actions Regarding Antitakeover Statutes. If any
fair price, moratorium, control share acquisition or other form of
antitakeover statute, rule or regulation is or becomes applicable to the
transactions contemplated by this Agreement, the Board of Directors of
the Company will grant such approvals and take such other actions as may
be required so that the transactions contemplated hereby may be
consummated as promptly as practicable on the terms and conditions set
forth in this Agreement.
Section 6.13 Standstill Provisions. The restrictions on the
Parent Corporation and the Acquisition Corporation contained in the
Standstill Provisions are hereby waived by the Company to the extent
reasonably required to permit the Parent Corporation and the Acquisition
Corporation to comply with their obligations or enforce their rights
under this Agreement.
Section 6.14 Defense of Orders and Injunctions. In the event
either party becomes subject to any order or injunction of a court of
competent jurisdiction which prohibits the consummation of the
transactions contemplated by this Agreement, each party will use its
best efforts to overturn or lift such order or injunction. The foregoing
will not be deemed to require the Parent Corporation to enter into any
agreement, consent decree or other commitment requiring the Parent
Corporation or any of its Subsidiaries to divest or hold separate any
assets or to take any other action that would have a Parent Corporation
Material Adverse Effect.
Section 6.15 Affiliate Letters. Promptly following the date
of this Agreement, the Company will deliver to the Parent Corporation a
list of the names and addresses of those persons who were, or will be,
in the Company's reasonable judgment, "affiliates" of the Company within
the meaning of Rule 145(c) under the Securities Act as of the record
date for the Company Stockholders Meeting. The Company will use its best
efforts to deliver to the Parent Corporation a letter, in substantially
the form of Exhibit A-1 attached to this Agreement, from each person
identified in the foregoing list. Promptly following the date of this
Agreement, the Parent Corporation will deliver to the Company a list of
the names and addresses of those persons who were or will be, in the
Parent Corporation's reasonable judgment, "affiliates" of the Parent
Corporation within the meaning of Rule 145(c) under the Securities Act
as of the record date for the Parent Corporation Stockholders Meeting.
The Parent Corporation will use its best efforts to deliver to the
Company a letter, in substantially the form of Exhibit A-2 attached to
this Agreement, from each person identified in the foregoing list. The
Parent Corporation will be entitled to place appropriate legends on the
certificates evidencing the Parent Common Stock held by or issued to
persons delivering such letters and to issue stop transfer instructions
to the transfer agent for the Parent Common Stock consistent with the
terms of such letters.
Section 6.16 Preservation of Accounting and Tax Treatment.
From and after the date of this Agreement (a) the Parent Corporation and
the Company and their respective Subsidiaries will use their best
efforts to cause the Merger to be accounted for as a pooling of
interests in accordance with XXX Xx. 00 and to constitute a
reorganization within the meaning of Section 368(a) of the Code and (b)
neither the Parent Corporation nor the Company, nor any of their
respective Subsidiaries, will knowingly take or omit to take any action
that would prevent the accounting for the Merger in accordance with the
pooling of interests method of accounting under the requirements of XXX
Xx. 00 or prevent the Merger from constituting a reorganization within
the meaning of Section 368(a) of the Code.
Section 6.17 Accountant's Comfort Letters. Each party will
use its best efforts to cause to be delivered to the other party two
letters from its independent public accountants, one dated a date within
two business days before the date on which the Registration Statement
becomes effective and one dated the Closing Date, in form and substance
reasonably satisfactory to the recipient and customary in scope and
substance for comfort letters delivered by independent accountants in
connection with registration statements similar to the Registration
Statement.
Section 6.18 Registration Agreement. On or prior to the
Closing Date, the Parent Corporation will enter into an agreement, in
the form of the Registration Agreement attached to the Company
Disclosure Letter, with certain stockholders of the Company to provide
such stockholders with registration rights with respect to the Parent
Common Stock to be received in the Merger and will have complied with
the provisions thereof referring to actions to be taken prior to the
date of such Registration Agreement.
Section 6.19 New York Stock Exchange Quotation. The Parent
Corporation will use its best efforts to cause the Parent Common Stock
issuable in the Merger or otherwise pursuant to the terms of this
Agreement to be approved for listing on the New York Stock Exchange,
subject to official notice of issuance, as promptly as practicable after
the date of this Agreement and in any event prior to the Closing Date.
Section 6.20 Publishing Financial Results. The Parent
Corporation will prepare and publicly release, as soon as practicable
and in any event within 10 business days following the end of the first
accounting month ending at least 30 days after the Closing Date, a
report filed with the SEC on Form 8-K or any other public filing,
statement or announcement which includes the combined financial results
(including combined sales and net income) of the Parent Corporation and
the Company for a period of at least 30 days of combined operations of
the Parent Corporation and the Company following the Closing Date.
Section 6.21 Employee Benefit Matters.
(a) Subject to the provisions of any collective bargaining
agreement to which the Company or any of its Subsidiaries is a
party as of the date of this Agreement, until (or in respect of
the period ending on) December 31, 2000, the Parent Corporation
will cause to be maintained for the employees of the Company and
its Subsidiaries as of the Closing Date (collectively, the
"Continuing Employees") salary levels not less than the salary
levels provided by the Company and its Subsidiaries as of the
Closing Date and benefits and benefit levels (including cash
incentive compensation benefits and benefit levels) which are
substantially comparable to the benefits and benefit levels
provided by the Company and its Subsidiaries through the Company
Plans as of the Closing Date. The foregoing covenant will not
apply to any equity-based compensation plan or arrangement.
(b) The Continuing Employees will be credited with their
years of service with the Company and its Subsidiaries for
purposes of determining eligibility and vesting (but not benefit
accrual) under any employee benefit plans, programs, arrangements
and employment practices of the Parent Corporation and its
Subsidiaries in which the Continuing Employees participate
following the Closing Date. To the extent that any such employee
benefit plan, program, arrangement or employment practice in
which a Continuing Employee participates following the Closing
Date provides medical, dental, vision or other welfare benefits,
the Parent Corporation will cause all pre-existing condition
exclusions, waiting periods and actively at work requirements
thereunder to be waived for such Continuing Employee and his or
her covered dependents and the Parent Corporation will cause any
eligible expenses incurred by such Continuing Employee on or
before the Closing Date to be taken into account thereunder for
purposes of satisfying any deductible, coinsurance and maximum
out-of-pocket requirements applicable to such Continuing Employee
and his or her covered dependents for the applicable plan year.
(c) The Company agrees that an independent trustee, either a
bank or a trust company, will act with respect to the Merger on
behalf of each Company Plan (and its participants) that holds
Company Common Stock in accordance with the terms and conditions
of such Plan.
Section 6.22 Directors of the Surviving Corporation. Until
at least the first anniversary of the Closing Date, the Parent
Corporation will, and will cause the Surviving Corporation to, take all
actions necessary to cause Xxxxxxxx X. Xxxxxxxxx to be elected as a
director and the non-executive Chairman of the Board of Directors of the
Surviving Corporation and to cause Xxxxxx X. Xxxxxxx to be elected as a
member of the Board of Directors of the Surviving Corporation effective
as of the Effective Time. Notwithstanding that they will be directors of
the Surviving Corporation and not directors of the Parent Corporation,
the foregoing individuals will be entitled as directors of the Surviving
Corporation after the Effective Time to exculpation, indemnification and
reimbursement of expenses pursuant to terms and conditions identical to
the terms and conditions applicable to the directors of the Parent
Corporation included in the Certificate of Incorporation and Bylaws of
the Parent Corporation and will be entitled to coverage under the
directors and officers liability and fiduciary liability insurance
policies and any indemnification agreements maintained or entered into
by the Parent Corporation on the same terms as applicable to the
directors of the Parent Corporation.
ARTICLE 7
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Section 7.1 Conditions to the Obligations of Each Party. The
respective obligation of each party to effect the Merger is subject to
the satisfaction at or prior to the Closing Date of each of the
following conditions:
(a) the Company will have obtained the Company Stockholder
Approval;
(b) the Parent Corporation will have obtained the Parent
Corporation Stockholder Approval;
(c) the Registration Statement will have been declared
effective in accordance with the provisions of the Securities
Act, and no stop order suspending such effectiveness will have
been issued and remain in effect, and the Parent Corporation will
have received all state securities law authorizations necessary
to issue the Parent Common Stock pursuant to the Merger;
(d) the Parent Common Stock to be issued to the stockholders
of the Company pursuant to the Merger will have been approved for
listing on the New York Stock Exchange, subject only to official
notice of issuance;
(e) all applicable waiting periods under the HSR Act will
have terminated or expired;
(f) all other consents, authorizations, orders and approvals
of or filings with any governmental commission, board or other
regulatory authority (other than in its capacity as a customer of
the Company or its Subsidiaries) required in connection with the
consummation of the transactions contemplated by this Agreement
will have been obtained or made, except where the failure to
obtain or make such consents, authorizations, orders, approvals
or filings would not, from and after the Closing Date,
individually or in the aggregate have a Company Material Adverse
Effect; and
(g) neither party will be subject to any order or injunction
of a court of competent jurisdiction in the United States which
prohibits the consummation of the transactions contemplated by
this Agreement.
Section 7.2 Conditions to the Obligation of the Company. The
obligation of the Company to effect the Merger is subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions:
(a) the representations and warranties of the Parent
Corporation set forth in Section 5 will be true and correct in
all material respects at and as of the Closing Date as though
then made, except as contemplated by this Agreement and except
that any representation or warranty made as of a date other than
the date of this Agreement will continue on the Closing Date to
be true and correct in all material respects as of the specified
date;
(b) each of the Parent Corporation and the Acquisition
Corporation will have in all material respects performed and
complied with all of its obligations under this Agreement
required to be performed by it at or prior to the Closing Date;
(c) the Company will have received a written opinion, dated
as of the Closing Date, from Deloitte & Touche LLP, the Company's
independent public accountants, to the effect that they concur
with the Company's conclusion that no conditions exist that would
preclude the Company's ability to be a party to a business
combination with the Parent Corporation to be accounted for using
the pooling of interests method of accounting in accordance with
the requirements of XXX Xx. 00; and
(d) the Company will have received a written opinion, dated
as of the Closing Date, from Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx, counsel to the Company, to the effect that the Merger
will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code.
In rendering the foregoing opinion, counsel will be permitted to
rely upon and assume the accuracy of representations provided by
the parties in substantially the forms attached as Exhibits B-1
and B-2 to this Agreement.
The Parent Corporation and the Acquisition Corporation will
furnish the Company with a customary bring down certificate with respect
to the satisfaction of the conditions set forth in Sections 7.2(a) and
(b).
Section 7.3 Conditions to the Obligation of the Parent
Corporation and the Acquisition Corporation. The obligation of the
Parent Corporation and the Acquisition Corporation to effect the Merger
is subject to the satisfaction at or prior to the Closing Date of each
of the following conditions:
(a) the representations and warranties of the Company set
forth in Section 4 will be true and correct in all material
respects at and as of the Closing Date as though then made,
except as contemplated by this Agreement and except that any
representation or warranty made as of a date other than the date
of this Agreement will continue on the Closing Date to be true
and correct in all material respects as of the specified date;
(b) the Company will have in all material respects performed
and complied with all of its obligations under this Agreement
required to be performed by it at or prior to the Closing Date;
(c) the Parent Corporation will have received a written
opinion, dated as of the Closing Date, from Xxxxxx Xxxxxxxx LLP,
the Parent Corporation's independent public accountants, to the
effect that the business combination between the Parent
Corporation and the Company contemplated by this Agreement should
be treated as a "pooling of interests" in conformity with
generally accepted accounting principles as described in XXX Xx.
00; and
(d) the Parent Corporation will have received a written
opinion, dated as of the Closing Date, from Jenner & Block,
counsel to the Parent Corporation, to the effect that the Merger
will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code.
In rendering the foregoing opinion, counsel will be permitted to
rely upon and assume the accuracy of representations provided by
the parties in substantially the forms attached as Exhibits B-1
and B-2 to this Agreement.
The Company will furnish the Parent Corporation with a
customary bring down certificate with respect to the satisfaction of the
conditions set forth in Sections 7.3(a) and (b).
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding the receipt of the Company Stockholder Approval or the
Parent Corporation Stockholder Approval):
(a) with the written consent of the Parent Corporation and
the Company;
(b) by the Parent Corporation or the Company if any court of
competent jurisdiction or other governmental agency has issued a
final order, decree or ruling or taken any other final action
restraining, enjoining or otherwise prohibiting the consummation
of the Merger, and such order, decree, ruling or other action is
or has become nonappealable;
(c) by the Parent Corporation if (i) the Company has
materially breached any of its representations or warranties set
forth in this Agreement and such breach is not cured within 45
days after the date written notice of such breach is given by the
Parent Corporation to the Company, (ii) the Company has
materially breached any of its covenants or agreements contained
in this Agreement and such breach is not cured within 45 days
after the date written notice of such breach is given by the
Parent Corporation to the Company, (iii) the Board of Directors
of the Company has withdrawn or amended in any manner adverse to
the Parent Corporation and the Acquisition Corporation its
recommendation and approval of the Merger, (iv) the Company
Stockholder Approval has not been obtained at a meeting duly
called for such purpose or (v) the Merger has not been
consummated on or before December 31, 1999 (unless the failure of
the Merger to have been consummated results primarily from the
Parent Corporation or the Acquisition Corporation breaching any
representation, warranty, covenant or agreement contained in this
Agreement);
(d) by the Company if (i) the Parent Corporation has
materially breached any of its representations or warranties set
forth in this Agreement and such breach is not cured within 45
days after the date written notice of such breach is given by the
Company to the Parent Corporation, (ii) the Parent Corporation or
the Acquisition Corporation has materially breached any of its
covenants or agreements contained in this Agreement and such
breach is not cured within 45 days after the date written notice
of such breach is given by the Company to the Parent Corporation,
(iii) the Parent Stockholder Approval has not been obtained at a
meeting duly called for such purpose or (iv) the Merger has not
been consummated on or before December 31, 1999 (unless the
failure of the Merger to have been consummated results primarily
from the Company breaching any representation, warranty, covenant
or agreement contained in this Agreement); or
(e) by the Company if a party has made a Superior
Acquisition Proposal and the Company enters into any letter of
intent, agreement in principle, acquisition agreement or other
agreement with respect to such Superior Acquisition Proposal in
accordance with the provisions of Section 6.8; provided that
termination of this Agreement pursuant to this Section 8.1(e)
will not become effective until the payment by the Company to the
Parent Corporation of the termination fee provided in Section
8.3.
(f) by the Parent Corporation or the Company prior to the
third trading day preceding the Company Stockholders Meeting if
the Average Stock Price of the Parent Common Stock is less than
$63 per share. The "Average Stock Price" means the average of the
Daily Per Share Prices (as hereinafter defined) for the fifteen
consecutive trading days ending on the fifth trading day prior to
the Company Stockholders Meeting. The "Daily Per Share Price" for
any trading day means the weighted average of the per share
selling prices (as reported on the New York Stock Exchange
Composite Transaction Tape) for that day.
Section 8.2 Effect of Termination. In the event of the
termination and abandonment of this Agreement pursuant to Section 8.1,
this Agreement will forthwith become void and will be deemed to have
terminated without liability to any party (except for any liability of
any party then in wilful breach of any covenant or agreement); provided
that the provisions of the Confidentiality Agreement and Section 8.3 of
this Agreement will continue in full force and effect notwithstanding
such termination and abandonment.
Section 8.3 Termination Fee.
(a) If (i) the Parent Corporation terminates this Agreement
pursuant to the provisions of Section 8.1(c)(iii) or Section
8.1(c)(iv) and the Company enters into an agreement with respect
to a Third Party Acquisition (as defined in Section 8.3(b)), or a
Third Party Acquisition occurs within 12 months after the date of
such termination, and such agreement was entered into, or such
Third Party Acquisition was publicly announced, concurrently with
or prior to the date of the termination of this Agreement or (ii)
the Company terminates this Agreement pursuant to the provisions
of Section 8.1(e), then, in each case, the Company will pay to
the Parent Corporation, within one business day following the
occurrence of such event (in the case of a termination under
clause (i) above) or the delivery of notice of such termination
(in the case of a termination under clause (ii) above), a
termination fee equal to $150 million (the "Termination Fee"),
payable by wire transfer of immediately available funds to an
account designated by the Parent Corporation.
(b) The term "Third Party Acquisition" as used in this
Agreement means (i) the acquisition of the Company by merger or
otherwise by any person (including for purposes of this Section
8.3(b) any "person" or "group" as defined in Section 13(d)(3) of
the Securities Exchange Act) or entity other than the Parent
Corporation or the Acquisition Corporation, (ii) the acquisition
by any person or entity other than the Parent Corporation or the
Acquisition Corporation of more than 50 percent of the
consolidated assets (determined based on book or fair market
value) of the Company and its Subsidiaries, (iii) the acquisition
by any person or entity other than the Parent Corporation or the
Acquisition Corporation of more than 50 percent of the
outstanding shares of Company Common Stock, (iv) the adoption by
the Company of any plan of liquidation or the declaration by the
Company of any extraordinary dividend or distribution (including
any distribution of any shares of the capital stock of any
material Subsidiary) of cash or property constituting more than
50 percent of the consolidated assets (determined based on book
or fair market value) of the Company and its Subsidiaries or (v)
the purchase by the Company or any of its Subsidiaries of more
than 50 percent of the outstanding shares of Company Common
Stock.
(c) Except as specifically provided in this Section 8.3,
each party will bear its own expenses incurred in connection with
the transactions contemplated by this Agreement, whether or not
such transactions are consummated.
(d) In the event of any breach of the covenants set forth in
Section 6.8, nothing contained in this Section 8.3 will prevent
the Parent Corporation or the Acquisition Corporation from
challenging, by injunction or otherwise, the termination or
attempted termination of this Agreement pursuant to the
provisions of Section 8.1(e), but acceptance by the Parent
Corporation of the payment of the Termination Fee will constitute
a full and complete waiver by the Parent Corporation of all of
its rights under this Section 8.3(d) or otherwise.
(e) The Company acknowledges that the agreements regarding
the payment of fees contained in this Section 8.3 are an integral
part of the transactions contemplated by this Agreement and that,
in the absence of such agreements, the Parent Corporation and the
Acquisition Subsidiary would not have entered into this
Agreement. The Company accordingly agrees that in the event the
Company fails to pay the Termination Fee promptly, the Company
will in addition to the payment of such amount also pay to the
Parent Corporation all of the reasonable costs and expenses
(including reasonable attorneys' fees and expenses) incurred by
the Parent Corporation in the enforcement of its rights under
this Section 8.3, together with interest on such amount at a rate
of 10 percent per annum from the date upon which such payment was
due, to and including the date of payment. Provided that the
Company was not in breach of the provisions of Section 6.8,
payment of the Termination Fee will constitute full and complete
satisfaction, and will constitute the Parent Corporation's sole
and exclusive remedy for any loss, liability, damage or claim
arising out of or in connection with any such termination of this
Agreement or the facts and circumstances resulting in or related
to this Agreement.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Nonsurvival of Representations. The
representations and warranties contained in this Agreement will not
survive the Merger or the termination of this Agreement.
Section 9.2 Remedies. The parties agree that irreparable
damage would occur in the event that the provisions of this Agreement
were not performed in accordance with their specific terms. It is
accordingly agreed that the parties will be entitled to specific
performance of the terms of this Agreement, without posting a bond or
other security, this being in addition to any other remedy to which they
are entitled at law or in equity.
Section 9.3 Successors and Assigns. No party hereto may
assign or delegate any of such party's rights or obligations under or in
connection with this Agreement without the written consent of the other
party hereto. Except as otherwise expressly provided herein, all
covenants and agreements contained in this Agreement by or on behalf of
any of the parties hereto or thereto will be binding upon and
enforceable against the respective successors and assigns of such party
and will be enforceable by and will inure to the benefit of the
respective successors and permitted assigns of such party.
Section 9.4 Amendment. This Agreement may be amended by the
execution and delivery of an written instrument by or on behalf of the
Parent Corporation, the Acquisition Corporation and the Company at any
time before or after the Company Stockholder Approval and the Parent
Corporation Stockholder Approval; provided that after the date of the
Company Stockholder Approval, no amendment to this Agreement will be
made without the approval of stockholders of the Company to the extent
such approval is required under the Delaware Act.
Section 9.5 Extension and Waiver. At any time prior to the
Effective Time, the parties may extend the time for performance of or
waive compliance with any of the covenants or agreements of the other
parties to this Agreement and may waive any breach of the
representations or warranties of such other parties. No agreement
extending or waiving any provision of this Agreement will be valid or
binding unless it is in writing and is executed and delivered by or on
behalf of the party against which it is sought to be enforced.
Section 9.6 Severability. Whenever possible, each provision
of this Agreement will be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Agreement
is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
Section 9.7 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, any one of which need not
contain the signatures of more than one party, but all such counterparts
taken together will constitute one and the same Agreement.
Section 9.8 Descriptive Headings. The descriptive headings
of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
Section 9.9 Notices. All notices, demands or other
communications to be given or delivered under or by reason of the
provisions of this Agreement will be in writing and will be deemed to
have been given when delivered personally to the recipient or when sent
to the recipient by telecopy (receipt confirmed), one business day after
the date when sent to the recipient by reputable express courier service
(charges prepaid) or three business days after the date when mailed to
the recipient by certified or registered mail, return receipt requested
and postage prepaid. Such notices, demands and other communications will
be sent to the Parent Corporation and the Company at the addresses
indicated below:
If to the Parent
Corporation: General Dynamics Corporation
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Senior Vice President and
General Counsel
Facsimile No: (000) 000-0000
With a copy (which
will not constitute
notice) to: Jenner & Block
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile No: (000) 000-0000
If to the Company: Gulfstream Aerospace Corporation
000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: Xxx Xxxxxx, Esq.
Senior Vice President and
General Counsel
Facsimile No: (000) 000-0000
With a copy (which
will not constitute
notice) to: Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx, P.C.
Xxxxx Xxxxxxx, Esq.
Facsimile No: (000) 000-0000
or to such other address or to the attention of such other party as the
recipient party has specified by prior written notice to the sending party.
Section 9.10 No Third Party Beneficiaries. This Agreement will
not confer any rights or remedies upon any person or entity other than the
Parent Corporation, the Acquisition Corporation and the Company and their
respective successors and permitted assigns, except that the respective
beneficiaries of the provisions of Sections 1.9, 6.9, 6.18, 6.20 and 6.22
will, for all purposes, be third party beneficiaries of the covenants and
agreements contained therein and, accordingly, will be treated as a party
to this Agreement for purposes of the rights and remedies relating to
enforcement of such covenants and agreements and will be entitled to
enforce any such rights and exercise any such remedies directly against the
Parent Corporation and the Surviving Corporation.
Section 9.11 Entire Agreement. This Agreement (including the
Confidentiality Agreement and the other documents referred to herein)
constitutes the entire agreement among the parties and supersedes any prior
understandings, agreements or representations by or among the parties,
written or oral, that may have related in any way to the subject matter
hereof.
Section 9.12 Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their
mutual intent and no rule of strict construction will be applied against
any party. The use of the word "including" in this Agreement means
"including without limitation" and is intended by the parties to be by way
of example rather than limitation.
Section 9.13 Submission to Jurisdiction. Each of the parties to
this Agreement submits to the jurisdiction of any state or federal court
sitting in Wilmington, Delaware, in any action or proceeding arising out of
or relating to this Agreement, agrees that all claims in respect of the
action or proceeding may be heard and determined in any such court, and
agrees not to bring any action or proceeding arising out of or relating to
this Agreement in any other court. Each of the parties to this Agreement
waives any defense of inconvenient forum to the maintenance of any action
or proceeding so brought and waives any bond, surety or other security that
might be required of any other party with respect thereto.
Section 9.14 GOVERNING LAW. ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE
SCHEDULES HERETO WILL BE GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF
CONFLICTS, OF THE STATE OF DELAWARE.
* * * * *
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement on the date first written above.
GENERAL DYNAMICS CORPORATION
By/s/ Xxxxxxxx X. Xxxxxxxx
----------------------------------
Xxxxxxxx X. Xxxxxxxx
Chairman and Chief Executive
Officer
XXXX ACQUISITION CORPORATION
By /s/Xxxxx X. Xxxxxx
----------------------------------
Xxxxx X. Xxxxxx
President
GULFSTREAM AEROSPACE CORPORATION
By /s/Xxxxxxxx X. Xxxxxxxxx
----------------------------------
Xxxxxxxx X. Xxxxxxxxx
Chairman and Chief Executive
Officer
EXHIBIT A-1
FORM OF COMPANY AFFILIATE LETTER
--------------------------------
General Dynamics Corporation
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
Ladies and Gentlemen:
General Dynamics Corporation, a Delaware corporation, Xxxx
Acquisition Corporation, a Delaware corporation, and Gulfstream Aerospace
Corporation, a Delaware corporation, are parties to an Agreement and Plan
of Merger dated as of May 16, 1999 (the "Merger Agreement"). All
capitalized terms used but not defined in this letter will have the
respective meanings give such terms in the Merger Agreement.
The undersigned, a record holder and beneficial owner of shares
of Company Common Stock, is entitled to receive shares of Parent Common
Stock in connection with the Merger. The undersigned acknowledges that the
undersigned may be deemed an "affiliate" of the Company within the meaning
of Rule 145 ("Rule 145") promulgated under the Securities Act or Accounting
Series Releases 130 and 135, as amended, of the SEC (the "Releases").
Nothing contained in this letter, however, is intended or should be
construed as an admission that the undersigned is an affiliate of the
Company or as a waiver of any rights that the undersigned may have to
object to any claim that the undersigned is such an affiliate on or after
the date of this letter.
If in fact the undersigned were an affiliate of the Company under
the Securities Act, the undersigned's ability to sell, assign or transfer
the Parent Common Stock received by the undersigned pursuant to the Merger
may be restricted unless such transaction is registered under the
Securities Act or an exemption from such registration is available. The
undersigned (i) understands that such exemptions are limited and that,
except as provided for in the Merger Agreement and the registration
agreement referred to in the Merger Agreement, the Parent Corporation is
not under any obligation to effect any such registration and (ii) has
obtained advice of counsel to the extent the undersigned has felt necessary
as to the nature and conditions of such exemptions, including information
with respect to the applicability to the sale of such securities of Rules
144 and 145(d) promulgated under the Securities Act.
The undersigned agrees with the Parent Corporation that the
undersigned will not sell, assign or transfer any shares of Parent Common
Stock received by the undersigned in exchange for shares of Company Common
Stock pursuant to the Merger except (i) pursuant to an effective
registration statement under the Securities Act, (ii) in conformity with
Rule 145 promulgated under the Securities Act or (iii) in a transaction
that, in the opinion of counsel reasonably satisfactory to Parent or as
described in a "no-action" or interpretive letter from the staff of the
SEC, is not required to be registered under the Securities Act.
The undersigned further agrees with Parent Corporation that,
until after such time as a report including results covering at least 30
days of combined operations of the Company and the Parent Corporation has
been published by the Parent Corporation or the Merger Agreement has been
terminated in accordance with its terms, the undersigned will not reduce
its risk (within the meaning of the Releases) with respect to (i) any
shares of Company Common Stock held by it or (ii) any shares of Parent
Common Stock received by it in the Merger. The Parent Corporation will
promptly notify the undersigned when such report has been published by the
Parent Corporation.
The Parent Corporation will prepare and publicly release, as soon
as practicable and in any event within 10 business days following the end
of the first accounting month ending at least 30 days after the Closing
Date, a report filed with the SEC on Form 8-K or any other public filing,
statement or announcement which includes the combined financial results
(including combined sales and net income) of the Parent Corporation and the
Company for a period of at least 30 days of combined operations of the
Parent Corporation and the Company following the Closing Date.
In the event of a sale or other disposition pursuant to Rule 145
of Parent Common Stock received by the undersigned in the Merger, the
undersigned will supply the Parent Corporation with evidence of its
compliance with Rule 145 by delivering to the Parent Corporation a letter
in the form of Annex I hereto. The undersigned understands that the Parent
Corporation may instruct its transfer agent to withhold the transfer of any
Parent Common Stock disposed of by the undersigned, but that upon receipt
of such evidence of compliance the transfer agent will effectuate the
transfer of the Parent Common Stock sold as indicated in the letter.
The undersigned acknowledges and agrees that the Parent Common
Stock issued to the undersigned will all be in certificated form and that
appropriate legends will be placed on certificates representing Parent
Common Stock received by the undersigned in the Merger or held by a
transferee thereof, which legends will be removed by delivery of substitute
certificates upon receipt of an opinion in form and substance reasonably
satisfactory to the Parent Corporation or a "no action" or interpretive
letter from the staff of the SEC to the effect that such legends are no
longer required for purposes of the Securities Act or upon the receipt of
the letters referred to in the preceding paragraph.
The Parent Corporation covenants that for so long and to the
extent necessary to permit the undersigned to sell the shares of Parent
Common Stock pursuant to Rule 145 and, to the extent applicable, Rule 144
under the Securities Act, the Parent Corporation will (i) use its best
efforts to file, on a timely basis, all reports and data required to be
filed by it with the SEC pursuant to Section 13 of the Securities Exchange
Act and to furnish to the undersigned upon request a written statement as
to whether the Parent Corporation has complied with such reporting
requirements during the 12 months preceding any proposed sale of shares of
Parent Common Stock by the undersigned under Rule 145 and (ii) otherwise
take such action as may be reasonably available to permit the sale or other
disposition of the Parent Common Stock by the undersigned under Rule 145 in
accordance with the terms thereof..
The undersigned acknowledges that the undersigned has carefully
read this letter and understands the requirements hereof and the
limitations imposed upon the distribution, sale, transfer or other
disposition of Parent Common Stock and that the receipt by the Parent
Corporation of this letter is a material inducement and a condition to the
Parent Corporation's obligation to consummate the Merger.
Very truly yours,
Dated:
ANNEX I
TO EXHIBIT A-1
--------------
General Dynamics Corporation
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
Ladies and Gentlemen:
On ___________, the undersigned sold the shares of the Common
Stock, par value $1.00 per share , of General Dynamics Corporation (the
"Parent Corporation") described below (the "Shares"). The Shares were
received by the undersigned in connection with the merger of Xxxx
Acquisition Corporation, a subsidiary of the Parent Corporation, with and
into Gulfstream Aerospace Corporation.
Based upon the most recent report or statement filed by the
Parent Corporation with the Securities and Exchange Commission, the Shares
sold by the undersigned were within the prescribed limitations set forth in
Rule 144(e) promulgated under the Securities Act of 1933, as amended (the
"Securities Act").
The undersigned hereby represents that the Shares were sold in
"brokers' transactions" within the meaning of Section 4(4) of the
Securities Act or in transactions directly with a "market maker" as that
term is defined in Section 3(a)(38) of the Securities Exchange Act of 1934,
as amended. The undersigned further represents that the undersigned has not
solicited or arranged for the solicitation of orders to buy the Shares, and
that the undersigned has not made any payment in connection with the offer
or sale of the Shares to any person other than to the broker who executed
the order in respect of such sale.
Very truly yours,
Dated:
EXHIBIT A-2
FORM OF PARENT CORPORATION AFFILIATE LETTER
Gulfstream Aerospace Corporation
000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000-0000
General Dynamics Corporation
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
Ladies and Gentlemen:
General Dynamics Corporation, a Delaware corporation, Xxxx
Acquisition Corporation, a Delaware corporation, and Gulfstream Aerospace
Corporation, a Delaware corporation, are parties to an Agreement and Plan
of Merger dated as of May 16 , 1999 (the "Merger Agreement"). All
capitalized terms used but not defined in this letter will have the
respective meanings give such terms in the Merger Agreement.
The undersigned is the record holder and beneficial owner of
shares of Parent Common Stock. The undersigned acknowledges that the
undersigned may be deemed an "affiliate" of the Parent Corporation within
the meaning of Accounting Series Releases 130 and 135, as amended, of the
SEC (the "Releases"). Nothing contained in this letter, however, is
intended or should be construed as an admission that the undersigned is an
affiliate of the Parent Corporation or as a waiver of any rights that the
undersigned may have to object to any claim that the undersigned is such an
affiliate on or after the date of this letter.
The undersigned agrees with Parent Corporation that, until after
such time as a report including results covering at least 30 days of
combined operations of the Company and the Parent Corporation has been
published by the Parent Corporation or the Merger Agreement has been
terminated in accordance with its terms, the undersigned will not reduce
its risk (within the meaning of the Releases) with respect to any shares of
Parent Common Stock held of record or owned beneficially by the
undersigned. The Parent Corporation will promptly notify the undersigned
when such report has been published by the Parent Corporation.
The undersigned acknowledges that the undersigned has carefully
read this letter and understands the requirements hereof and the
limitations imposed upon the distribution, sale, transfer or other
disposition of Parent Common Stock and that the receipt by the Parent
Corporation of this letter is a material inducement and a condition to the
Company's obligation to consummate the Merger.
Very truly yours,
Dated:
