EXHIBIT 2.3
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AGREEMENT AND PLAN OF REORGANIZATION
DATED AS OF APRIL 10, 1998
BY AND AMONG
OEI INTERNATIONAL, INC.,
PS&S ACQUISITION, INC.,
XXXXXX, XXXXXXXXXX AND XXXXXX, INC.
AND
ITS STOCKHOLDERS
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "AGREEMENT") is made as
of April 10, 1998, among OEI International, Inc., a Delaware corporation
("OEI"), PS&S Acquisition, Inc., a New Jersey corporation and a wholly owned
subsidiary of OEI ("NEWCO"), Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc., a New Jersey
corporation (the "COMPANY"), and the persons listed on the signature pages of
this Agreement under the caption "STOCKHOLDERS" (collectively, the
"STOCKHOLDERS," and each of them, individually, a "STOCKHOLDER").
PRELIMINARY STATEMENTS
The parties to this Agreement wish to effect a business combination
pursuant to which:
(i) Newco will merge into the Company (the "MERGER") on
the terms and subject to the conditions of this Agreement;
(ii) OEI, VIA mergers involving other OEI subsidiaries,
will acquire the stock of all or some of the entities other than
the Company identified in the accompanying Addendum I (each an
"OTHER FOUNDING COMPANY" and, collectively with the Company, the
"FOUNDING COMPANIES") under agreements similar to this Agreement
entered into among the Other Founding Companies, their
stockholders, OEI and other subsidiaries of OEI (collectively,
the "OTHER AGREEMENTS"); and
(iii) OEI will effect a public offering of shares of its
common stock.
The respective boards of directors of OEI, Newco and the Company have
approved and adopted this Agreement to effect a transaction involving a transfer
of the nature described in Section 351 of the Code.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and undertakings contained in this Agreement, the
parties to this Agreement agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms have the meanings assigned to them below in this Section 1.01:
"AAA RELATED INDEBTEDNESS" means all indebtedness of the Company
incurred to fund distributions to the Stockholders made during the
period from January 1, 1998 to the IPO Closing Date from the Company's
Accumulated Adjustment Account.
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"ACCUMULATED ADJUSTMENT ACCOUNT" means the accumulated adjustment
account maintained by the Company under Section 1368(e)(1) of the Code
and representing the undistributed retained earnings of the Company on
which the Stockholders have paid U.S. federal income taxes.
"AGREEMENT" means this Agreement, including the Disclosure
Statement relating to this Agreement and all attached Schedules,
Addendum, Annexes and Exhibits, as each of them may be amended, modified
or supplemented from time to time under their provisions or the
provisions of this Agreement.
"BUSINESS CORPORATION ACT" means the New Jersey Business
Corporation Act.
"CEILING AMOUNT" means $11,304,750.
"CLOSING" has the meaning specified in Section 7.01(a).
"CLOSING MEMORANDUM" means the form of closing memorandum to be
prepared by OEI for the Closing, in which there shall be included the
forms of certificates of officers, the opinions of counsel and certain
other documents to be delivered at the Closing as provided in Article
VII.
"COMPANY COMMON STOCK" means the common stock, no par value of
the Company.
"COUNSEL FOR OEI AND NEWCO" means Xxxxxx & Xxxxxx, L.L.P.
"COUNSEL FOR THE COMPANY AND THE STOCKHOLDERS" means Xxxx Xxxxxx
Xxxxx Xxxxxxxxx Xxxxxxxxx & Xxxx, X.X.
"CURRENT BALANCE SHEET" means the audited balance sheet of the
Company at December 31, 1997, which is included in the Initial Financial
Statements.
"CURRENT BALANCE SHEET DATE" means December 31, 1997.
"CURRENT DATE" means any day during the 20-day period ending on
the date of the Closing.
"DISCLOSURE STATEMENT" means the written statement executed by
the Company for identification purposes and delivered to OEI prior to
the execution and delivery of this Agreement, in which either (a)
exceptions are taken to each of certain of the representations and
warranties made by the Company, the Stockholders and the Other
Stockholders in this Agreement or (b) it is confirmed that no exception
is taken to that representation and warranty.
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"INITIAL FINANCIAL STATEMENTS" means the audited consolidated
balance sheets of the Company at December 31, 1997 and 1996 and the
related audited statements of income, stockholders' equity and cash
flows for each of the Company's three fiscal years in the three-year
period ended December 31, 1997, together with the related audit report
of Xxxxxx Xxxxxxxx LLP.
"LEASE MODIFICATION AGREEMENTS" means the Lease Modification
Agreements in substantially the form of Exhibit 1.01-A attached hereto
pursuant to which the leases described in paragraphs 1, 2 and 3 of
Schedule 4.11 are to be amended.
"LIMITATION PERIOD" has the meaning specified in Section
11.17(c).
"MAJORITY STOCKHOLDERS" means any Stockholder or combination of
Stockholders who at the date of this Agreement own shares of Company
Common Stock representing more than two-thirds of the total number of
shares of Company Common Stock outstanding at the date of this
Agreement.
"MERGER CONSIDERATION" has the meaning specified in Section 2.04.
"NEW EMPLOYMENT AGREEMENTS" means the Employment Agreements dated
as of April 10, 1998, but to be effective as of the Closing, between the
Company and Xxxxxxx Xxxxxx, Xx., Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx
and Xxxxxxx Xxxxxx, respectively.
"NEWCO" means PS&S Acquisition, Inc., a New Jersey corporation.
"OEI" means OEI International, Inc., a Delaware corporation.
"OEI ACQUISITION CANDIDATE" means any Entity engaged in the
Practice of Engineering and which shall have been called on by any of
the Company, OEI or a Subsidiary of the Company or OEI in connection
with the possible acquisition by any of them of that Entity or with
respect to which any of them has made an acquisition analysis.
"PARTIES" means the parties to this Agreement.
"PC STOCKHOLDERS" has the meaning specified in Section 11.16.
"PRO RATA SHARE" means for each Stockholder the fraction
expressed as a percentage and set forth in Schedule 2.04, (a) the
numerator of which is the number of shares of outstanding Company Common
Stock owned by that Stockholder, as set forth in Schedule 2.04, and (b)
the denominator of which is the total number of shares of outstanding
Company Common Stock owned by all Stockholders, as set forth in Schedule
2.04.
"PS&S PC" means Xxxxxx, Xxxxxxxxxx & Xxxxxx Engineering, P.C., a
New Jersey professional corporation.
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"RESPONSIBLE OFFICER" means any of Xxxxxxx Xxxxxx, Xx., Xxxxxxx
X. Xxxxxx or Xxxxxx X. Xxxxxxx.
"RESTRICTED STOCKHOLDER" has the meaning specified in Section
10.01.
"SCHEDULED AGREEMENTS" means the agreements described in Schedule
4.11.
"SHAREHOLDERS AGREEMENT" means the Shareholders Agreement dated
August 3, 1992, among the Company and the Stockholders.
"SURVIVING CORPORATION" means the Company, which is to be
designated in the Certificate of Merger as the surviving corporation of
the Merger.
"TERRITORY" has the meaning specified in Section 10.01(a).
"THRESHOLD AMOUNT" means $301,500.
"TRANSFERORS' AGREEMENT" means the Transferors' Agreement and
Plan of Transfer entered into as of April 10, 1998, among OEI, the
Stockholders and the other Persons party thereto.
"TRANSFER TAXES" has the meaning specified in Section 11.07.
"UNIFORM PROVISIONS" means the Uniform Provisions for the
Acquisition of Founding Companies attached as Annex 1 to this Agreement.
Section 1.02. KNOWLEDGE DEFINED. When a representation and warranty in
Article IV is made to the "KNOWLEDGE" of the Company or the Company and the
Stockholders, it means receipt of notice by, or actual knowledge of (i) any
Responsible Officer or (ii) any Stockholder, but no representation or warranty
made by the Company and the Stockholders in Article IV may be qualified or
limited by reference to "KNOWLEDGE" unless due inquiry has actually been made of
the Company by the Responsible Officers and the Stockholders.
Section 1.03. DEFINITIONS IN UNIFORM PROVISIONS. Capitalized terms used
in this Agreement but not defined in this Section 1.01 have the meanings
assigned to them in the Preliminary Statements or in Article I of the Uniform
Provisions (the text of which is by this reference incorporated in this
Agreement), as the case may be. The parties hereto acknowledge that the
definition of the term "DAMAGE" in Article I of the Uniform Provisions is not
intended to entitle any OEI Indemnified Party to recover from the Stockholders
exemplary, punitive or treble damages, unless such damages have been incurred by
such OEI Indemnified Party as a result of a Third Party Claim against such OEI
Indemnified Party.
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ARTICLE II
THE MERGER AND RELATED MATTERS
Section 2.01. CERTIFICATE OF MERGER. On the terms and subject to the
conditions of this Agreement, the Company will cause a Certificate of Merger to
be duly executed and delivered on or promptly after the date of the Closing to
the Secretary of State of the State of New Jersey.
Section 2.02. THE EFFECTIVE TIME. The effective time of the Merger (the
"EFFECTIVE TIME") will be the time on the IPO Closing Date which the Certificate
of Merger specifies or, if the Certificate of Merger does not specify another
time, 8:00 a.m., eastern time, on the IPO Closing Date.
Section 2.03. CERTAIN EFFECTS OF THE MERGER. At and as of the Effective
Time, (a) Newco will be merged with and into the Company in accordance with the
provisions of the Business Corporation Act, (b) Newco will cease to exist as a
separate legal entity, (c) the certificate or articles of incorporation of the
Company will be amended to change its authorized capital stock to 1,000 shares,
par value $1.00 per share, of Common Stock, (d) the Company will be the
Surviving Corporation and, as such, will, all with the effect provided by the
Business Corporation Act, (i) possess all the properties and rights, and be
subject to all the restrictions and duties, of the Company and Newco and (ii) be
governed by the laws of the State of New Jersey, (e) the Charter Documents of
the Company then in effect (after giving effect to the amendment of the
Company's certificate or articles of incorporation specified in clause (c) of
this sentence) will become and thereafter remain (until changed in accordance
with (i) applicable law, in the case of the certificate or articles of
incorporation or (ii) their terms, in the case of the bylaws) the Charter
Documents of the Surviving Corporation, (f) the initial board of directors of
the Surviving Corporation will be the Persons named in Schedule 2.03, who will
hold the office of director of the Surviving Corporation subject to the
provisions of the applicable laws of the State of New Jersey and the Charter
Documents of the Surviving Corporation, and (g) the officers of the Surviving
Corporation immediately following the Merger will be as set forth in Schedule
2.03, and each of the Persons so designated in Schedule 2.03 will serve in each
office specified for that Person in Schedule 2.03, subject to the provisions of
the Charter Documents of the Surviving Corporation, until his or her successor
is duly elected to, and, if necessary, qualified for, that office.
Section 2.04. EFFECT OF THE MERGER ON CAPITAL STOCK. As of the Effective
Time, as a result of the Merger and without any action on the part of any holder
thereof:
(a) the shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time will (i) be converted into the
right to receive, without interest, on surrender of the certificate
evidencing those shares, the amount of cash and the number of whole and
fractional shares of OEI Common Stock set forth or determined as
provided in Schedule 2.04 (the "MERGER CONSIDERATION"), (ii) cease to be
outstanding and to exist, and (iii) be canceled and retired;
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(b) each share of Company Common Stock held in the treasury of
the Company or by any Company Subsidiary will (i) cease to be
outstanding and to exist and (ii) be canceled and retired; and
(c) each share of Newco Common Stock issued and outstanding
immediately prior to the Effective Time will be converted into one share
of Common Stock, par value $1.00 per share, of the Surviving
Corporation, and the shares of Common Stock of the Surviving Corporation
issued on such conversion will constitute all the issued and outstanding
shares of Capital Stock of the Surviving Corporation.
Each holder of a certificate representing shares of Company Common Stock
immediately prior to the Effective Time will, as of the Effective Time and
thereafter, cease to have any rights respecting those shares other than the
right to receive, without interest, the Merger Consideration and the additional
cash, if any, owing with respect to those shares as provided in Section 2.06.
Section 2.05. DELIVERY, EXCHANGE AND PAYMENT.
(a) At or after the Effective Time: (i) each Stockholder, as the
holder of certificates representing shares of Company Common Stock,
will, on surrender of his certificates to OEI (or any agent which may be
appointed by OEI for purposes of this Section 2.05), receive, and OEI
will pay and issue to each Stockholder, in each case subject to the
provisions of Section 2.06, the Merger Consideration; and (ii) until any
certificate representing Company Common Stock has been surrendered and
replaced pursuant to this Section 2.05, that certificate will, for all
purposes, be deemed to evidence ownership of the number of whole shares
of OEI Common Stock included in the Merger Consideration payable in
respect of that certificate pursuant to Section 2.04. All shares of OEI
Common Stock issuable in the Merger will be deemed for all purposes to
have been issued by OEI at the Effective Time. All cash included in the
Merger Consideration shall be paid by OEI's company checks, certified or
official bank checks, or wire transfers, at OEI's option. In the case of
wire transfers, the transfers shall be to accounts designated by the
respective Stockholders at least five Business Days before the IPO
Closing Date.
(b) Each Stockholder will deliver to OEI (or any agent that may
be appointed by OEI for purposes of this Section 2.05), on or before the
IPO Closing Date, the certificates representing Company Common Stock
owned by the Stockholder, as the case may be, duly endorsed in blank by
him, or accompanied by stock powers duly executed by him in blank, and
with all necessary transfer tax and other revenue stamps, acquired at
his expense, affixed and canceled. In the event this Agreement is
terminated pursuant to Article XII prior to the Effective Time, OEI or
its agent will return all such certificates and other documents to the
Stockholders. Each Stockholder shall cure any deficiencies in the
endorsement of the certificates or other documents of conveyance
respecting, or in the stock powers accompanying, the certificates
representing Company Common Stock delivered by him.
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(c) No dividends (or interest) or other distributions declared or
earned after the Effective Time with respect to OEI Common Stock and
payable to the holders of record thereof after the Effective Time will
be paid to the holder of any unsurrendered certificates representing
shares of Company Common Stock for which shares of OEI Common Stock have
been issued in the Merger until the unsurrendered certificates are
surrendered as provided herein, but (i) on such surrender, OEI will
cause to be paid, to the Person in whose name the certificates
representing such shares of OEI Common Stock shall then be issued, the
amount of dividends or other distributions previously paid with respect
to such whole shares of OEI Common Stock with a record date, or which
have accrued, subsequent to the Effective Time, but prior to surrender,
and the amount of any cash payable to such Person for and in lieu of
fractional shares pursuant to Section 2.06 and (ii) at the appropriate
payment date or as soon as practicable thereafter, OEI will cause to be
paid to that Person the amount of dividends or other distributions with
a record date, or which have been accrued, subsequent to the Effective
Time, but which are not payable until a date subsequent to surrender,
which are payable with respect to such number of whole shares of OEI
Common Stock, subject in all cases to any applicable escheat laws. No
interest will be payable with respect to the payment of such dividends
or other distributions (or cash for and in lieu of fractional shares) on
surrender of outstanding certificates.
Section 2.06. FRACTIONAL SHARES. Notwithstanding any other provision of
this Article II, no fractional shares of OEI Common Stock will be issued, and
any Stockholder otherwise entitled to receive a fractional share of OEI Common
Stock but for this Section 2.06 will instead be entitled to receive a cash
payment for and in lieu thereof in the amount (rounded to the nearest whole
cent) equal to that Person's fractional interest in a share of OEI Common Stock
multiplied by $12.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER
Section 3.01. BY EACH STOCKHOLDER. Each Stockholder, severally as to
himself or herself only, represents and warrants to OEI that all the following
representations and warranties in this Article III are true and correct:
(a) (i) the Stockholder will be acquiring any shares of OEI
Common Stock to be issued to him pursuant to Section 2.04 solely for the
Stockholder's account, for investment purposes only and with no current
intention or plan to distribute, sell or otherwise dispose of any of
those shares in connection with any distribution; (ii) the Stockholder
is not a party to any agreement or other arrangement for the disposition
of any shares of OEI Common Stock other than this Agreement, the
Transferors' Agreement and the Registration Rights Agreement; (iii)
unless otherwise specified on Schedule 3.01, the Stockholder is an
"accredited investor" as defined in Securities Act Rule 501 (a); (iv)
the Stockholder (A) is able to bear the economic risk of an investment
in any OEI Common Stock to be acquired by him pursuant to this
Agreement, (B) can afford to sustain a total loss of that investment,
(C) has such knowledge and experience in financial and business matters
that he is capable
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of evaluating the merits and risks of the proposed investment in any OEI
Common Stock, the Stockholder is to receive as Merger Consideration, (D)
has had an adequate opportunity to ask questions and receive answers
from the officers of OEI concerning any and all matters relating to the
transactions contemplated by this Agreement, including the background
and experience of the current and proposed officers and directors of
OEI, the plans for the operations of the business of OEI, the business,
operations and financial condition of the Other Founding Companies and
any plans of OEI for additional acquisitions, and (E) has asked all
questions of the nature described in preceding clause (D), and all those
questions have been answered to his satisfaction; and
(b) the representations and warranties contained in Article III
of the Uniform Provisions (the text of which Article hereby is
incorporated herein by this reference) are true and correct, and the
agreements set forth therein are hereby agreed to.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND THE STOCKHOLDERS
Section 4.01. BY THE COMPANY AND EACH STOCKHOLDER. The Company and each
Stockholder jointly and severally represent and warrant to, and agree with, OEI
that all the following representations and warranties in this Article IV are
true and correct:
(a) the Organization State of the Company is the State of New
Jersey, and the Company (i) is a corporation duly organized, validly
existing and in good standing under the laws of that State and (ii) has
the corporate power and authority under those laws and its Charter
Documents to own or lease and to operate its properties and to carry on
its business as now conducted;
(b) the authorized Capital Stock of the Company is comprised of
50,000 shares of Company Common Stock, of which 26,243 shares have been
issued and are now outstanding and no shares are held by the Company as
treasury shares, and no outstanding Derivative Securities of the Company
exist;
(c) the Company (i) has made, and there is now in effect, an
election with the IRS to be taxed as a Subchapter S corporation within
the meaning of Section 1361 of the Code, (ii) owns no assets the
disposition of which would cause the Company to have a net recognized
built-in gain within the meaning of Section 1374 of the Code, (iii) has
had no item of income that has not been taken into account by the
Company and that would be treated as a recognized built-in gain under
Section 1374(d)(5) of the Code, and (iv) will not be liable for any
federal, state, city or local Taxes as a result of the Merger (other
than Taxes, if any, for which the Company may be liable solely as a
result of the conversion from the cash method to the accrual method of
accounting for income tax purposes);
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(d) except to the extent modified or supplemented under the
provisions of paragraph (e) of this Section 4.01, the representations
and warranties contained in Article IV of the Uniform Provisions (the
text of which Article hereby is incorporated herein by this reference)
are true and correct, and the agreements set forth therein are agreed
to; and
(e) for purposes of the representation and warranty made in
Section 4.16, the term "PRESENT LIABILITIES" shall not be construed to
include any liability of the Company which may arise after the date of
this Agreement, but which may be based on a negligent act or omission by
the Company which occurred on or before the date of this Agreement, if
neither the Company nor any Stockholder has knowledge that the negligent
act or omission has occurred.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF OEI AND NEWCO
Section 5.01. BY OEI AND NEWCO. OEI and Newco jointly and severally
represent and warrant to the Company and each Stockholder that all the following
representations and warranties in this Article V are true and correct: (a) Newco
is a corporation duly organized, validly existing and in good standing under the
laws of the State of New Jersey, (b) no Derivative Securities of Newco are
outstanding, (c) Newco has been organized for the sole purpose of participating
in the Merger and has not, and will not, engage in any activities other than
those necessary to effectuate the Merger, and (d) the representations and
warranties contained in Article V of the Uniform Provisions (the text of which
Article hereby is incorporated herein by this reference) are true and correct.
ARTICLE VI
COVENANTS EXTENDING TO THE EFFECTIVE TIME
Section 6.01. OF EACH PARTY. Until the Effective Time, subject to the
waiver provisions of Section 11.05, each Party will comply with each covenant
for which provision is made in Article VI of the Uniform Provisions (the text of
which Article VI is hereby incorporated herein by this reference) to be
performed or observed by that Party.
ARTICLE VII
THE CLOSING AND CONDITIONS TO CLOSING AND CONSUMMATION
Section 7.01. THE CLOSING AND CERTAIN CONDITIONS.
(a) THE CLOSING. On or before the IPO Pricing Date, the Parties
will take all actions necessary to (i) effect the Merger on the IPO
Closing Date (including, as permitted by the Business Corporation Act,
(A) the execution of a Certificate of Merger meeting the requirements of
the Business Corporation Act and providing that the Merger will become
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effective on the IPO Closing Date and (B) the filing of the Certificate
of Merger with the Secretary of State of the State of New Jersey), (ii)
verify the existence and ownership of the certificates evidencing the
Company Common Stock to be exchanged for the Merger Consideration
pursuant to Section 2.05, and (iii) satisfy the document delivery
requirements to which the obligations of the Parties to effect the
Merger and the other transactions contemplated hereby are conditioned by
the provisions of this Article VII (all those actions collectively being
the "CLOSING"). The Closing will take place at the offices of Xxxxxx &
Xxxxxx, L.L.P., 000 Xxxxxxxxx, Xxxxxxx, Xxxxx at 10:00 a.m., Houston
time, or at such later time on the IPO Pricing Date as OEI shall specify
by written notice to any Responsible Officer. The actions taken at the
Closing will not include the completion of either the Merger or the
delivery of the Company Common Stock or the Merger Consideration
pursuant to Section 2.05. Instead, on the IPO Closing Date, the
Certificate of Merger will become effective pursuant to Section 2.02,
and all transactions contemplated by this Agreement to be closed or
completed on or before the IPO Closing Date, including the surrender of
the Company Common Stock in exchange for the Merger Consideration will
be closed or completed, as the case may be. During the period from the
Closing to the IPO Closing Date, this Agreement may be terminated by the
parties only pursuant to Section 12.01 (b)(i).
(b) CERTAIN CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND THE
STOCKHOLDERS. The obligations of the Company and the Stockholders with
respect to the actions to be taken by them at or before the Closing are
subject to the satisfaction on or before the date of the Closing, or
waiver by them pursuant to Section 11.05, of all the conditions set
forth in Sections 7.02(a) and 7.03. The obligations of the Stockholders
with respect to the actions to be taken on the IPO Closing Date are
subject to the satisfaction on that date of the following conditions:
(i) the Transferors' Agreement and each of the New Employment Agreements
then shall be in full force and effect; and (ii) all the conditions set
forth in Sections 7.02(b) and 7.03.
(c) CERTAIN CONDITIONS TO THE OBLIGATIONS OF OEI AND NEWCO. The
obligations of OEI and Newco with respect to actions to be taken by them
at or before the Closing are subject to the satisfaction on or before
the date of the Closing, or waiver by them pursuant to Section 11.05, of
the following conditions: (i) the Company shall have delivered to OEI a
copy of the articles or certificate of incorporation, as amended to the
date of the Closing and certified by the Secretary of State of the State
of New Jersey as of a Current Date, of the Company; and (ii) all the
conditions set forth in Sections 7.02(a) and 7.04(a).
(d) CERTAIN CONDITIONS TO BE MET BY IPO CLOSING DATE. The
obligations of OEI and Newco with respect to the actions to be taken on
the IPO Closing Date are subject to the satisfaction on that date of the
following conditions: (i) the Transferors' Agreement and each of the New
Employment Agreements then shall be in full force and effect; (ii) the
Lease Modification Agreements shall have been executed and delivered by
the lessor parties thereto; and (iii) all the conditions set forth in
Sections 7.02(b) and 7.04(b).
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(e) INCORPORATION OF ARTICLE VII OF UNIFORM PROVISIONS. The text
of Article VII of the Uniform Provisions hereby is incorporated herein
by this reference.
ARTICLE VIII
COVENANTS FOLLOWING THE EFFECTIVE TIME
Section 8.01. OF EACH PARTY OTHER THAN THE COMPANY. From and after the
Effective Time, subject to the waiver provisions of Section 11.05, each Party
(other than the Company) will comply with each covenant for which provision is
made in Article VIII of the Uniform Provisions (the text of which Article hereby
is incorporated herein by this reference) to be performed or observed by that
Party.
ARTICLE IX
INDEMNIFICATION
Section 9.01. INDEMNIFICATION RIGHTS AND OBLIGATIONS. The text of
Article IX of the Uniform Provisions hereby is incorporated herein by this
reference.
ARTICLE X
LIMITATIONS ON COMPETITION
Section 10.01. PROHIBITED ACTIVITIES. Each Stockholder identified on
Schedule 10.01 (each a "Restricted Stockholder") and, in the case of paragraphs
(b) and (d) below of this Section 10.01, each Stockholder, severally agrees that
he will not during the period beginning on the date hereof and ending on the
third anniversary of the date hereof, directly or indirectly, for any reason,
for his own account or on behalf of or together with any other Person:
(a) engage as an officer, director or in any other managerial
capacity or as an owner, co-owner or other investor of or in, whether as
an employee, independent contractor, consultant or advisor, in any
business engaged in the Practice of Engineering in competition with the
Company, any Company Subsidiary or OEI or any Subsidiary of OEI (OEI and
its Subsidiaries collectively being called "OEI" for purposes of this
Article X) within any territory surrounding any office or facility (each
a "facility") in which any of the Company or the Company Subsidiaries
was engaged in business on the date hereof or immediately prior to the
Effective Time (for purposes of this Article X, the territory
surrounding a facility shall be: (i) the city, town or village in which
the facility is located, (ii) the county or parish in which the facility
is located, (iii) the counties or parishes contiguous to the county or
parish in which the facility is located, and (iv) the area located
within 100 miles of the facility, all of such locations being herein
collectively called the "TERRITORY");
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(b) call on any natural Person who is at that time employed by
the Company, any Company Subsidiary or OEI with the purpose or intent of
attracting that person from the employ of the Company, any Company
Subsidiary or OEI, provided that a Stockholder may call on and hire any
of his Immediate Family Members;
(c) call on any Person that at that time is, or at any time
within one year prior to that time was, a customer of the Company, any
Company Subsidiary or OEI within the Territory, (i) for the purpose of
soliciting or selling any product or service in competition with the
Company, any Company Subsidiary or OEI within the Territory and (ii)
with the knowledge of the customer relationship; or
(d) call on any OEI Acquisition Candidate, with the knowledge of
that Person's status as an OEI Acquisition Candidate, for the purpose of
acquiring that Person or arranging the acquisition of that Person by any
Person other than OEI.
Notwithstanding the foregoing, any Restricted Stockholder may own and hold as a
passive investment up to 1% of a class of the outstanding Capital Stock of a
competing Entity if that class of Capital Stock is publicly traded.
Section 10.02. DAMAGES. Because of the difficulty of measuring economic
losses to OEI as a result of any breach by a Restricted Stockholder or any other
Stockholder of his covenants in Section 10.01, and because of the immediate and
irreparable damage that could be caused to OEI for which it would have no other
adequate remedy, each Restricted Stockholder (and, in the case of paragraphs (b)
and (d) of Section 10.01, each Stockholder) agrees that OEI may enforce the
provisions of Section 10.01 by injunctions and restraining orders against the
Restricted Stockholder or Stockholder, as the case may be, if he breaches any of
those provisions.
Section 10.03. REASONABLE RESTRAINT. The Parties each agree that
Sections 10.01 and 10.02 impose a reasonable restraint on the Restricted
Stockholder or Stockholders, as the case may be, in light of the activities and
business of OEI on the date hereof, the current business plans of OEI and the
investment by each Stockholder in OEI as a result of the Merger.
Section 10.04. SEVERABILITY; REFORMATION. The covenants in this Article
X are severable and separate. The unenforceability of any specific covenant in
this Article X is not intended by any Party to, and shall not, affect the
provisions of any other covenant in this Article X. If any court of competent
jurisdiction determines that the scope, time or territorial restrictions set
forth in Section 10.01 are unreasonable as applied to any Restricted Stockholder
or Stockholder, as the case may be, the Parties, including the Restricted
Stockholder or Stockholder in question, acknowledge their mutual intention and
agreement that those restrictions be enforced to the fullest extent the court
deems reasonable, and thereby shall be reformed to that extent as applied to
that Restricted Stockholder or Stockholder, as the case may be, and any other
Restricted Stockholder or Stockholder, as the case may be, similarly situated.
12
Section 10.05. INDEPENDENT COVENANT. All the covenants in this Article X
are intended by each Party to, and shall, be construed as an agreement
independent of any other provision in this Agreement, and the existence of any
claim or cause of action of any Restricted Stockholder or Stockholder against
OEI, whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by OEI of any covenant in this Article X. It is
specifically agreed that the period specified in Section 10.01 shall be computed
in the case of each Restricted Stockholder and Stockholder by excluding from
that computation any time during which the Restricted Stockholder or Stockholder
is in violation of any provision of Section 10.01. The covenants contained in
this Article X shall not be affected by any breach of any other provision of
this Agreement by any Party.
Section 10.06. MATERIALITY. The Company and each Stockholder, severally
and not jointly with any other Person, hereby agree that this Article X is a
material and substantial part of the transactions contemplated by this
Agreement.
ARTICLE XI
GENERAL PROVISIONS
Section 11.01. TREATMENT OF CONFIDENTIAL INFORMATION. Each Party will
comply with each covenant for which provision is made in Section 11.01 of the
Uniform Provisions (the text of which Section hereby is incorporated herein by
this reference) to be performed or observed by that Party.
Section 11.02. RESTRICTIONS ON TRANSFERS OF OEI COMMON STOCK.
(a) During the two-year period ending on the second anniversary
of the IPO Closing Date (the "RESTRICTED PERIOD"), no Stockholder
voluntarily will: (i) sell, assign, exchange, transfer, encumber,
pledge, distribute, appoint or otherwise dispose of (A) any shares of
OEI Common Stock received by any Stockholder in the Merger or (B) any
interest in (including any option to buy or sell) any such shares of OEI
Common Stock, in whole or in part, and OEI will have no obligation to,
and shall not, treat any such attempted transfer as effective for any
purpose; or (ii) engage in any transaction, whether or not with respect
to any shares of OEI Common Stock or any interest therein, the intent or
effect of which is to reduce the risk of owning the shares of OEI Common
Stock acquired pursuant to Section 2.04 (including, for example engaging
in put, call, short-sale, straddle or similar market transactions);
PROVIDED, HOWEVER, that this Section 11.02 shall not restrict any
transfer of OEI Common Stock acquired by a Stockholder pursuant to
Section 2.04 to any of that Stockholder's Related Persons who agree in
writing to be bound by the provisions of Section 11.01 and this Section
11.02. The certificates evidencing the OEI Common Stock delivered to
each Stockholder pursuant to Section 2.05 will bear a legend
substantially in the form set forth below and containing such other
information as OEI may deem necessary or appropriate:
13
EXCEPT PURSUANT TO THE TERMS OF THE AGREEMENT AND PLAN OF
REORGANIZATION AMONG THE ISSUER, THE HOLDER OF THIS CERTIFICATE
AND THE OTHER PARTIES THERETO, THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE VOLUNTARILY SOLD, ASSIGNED, EXCHANGED,
TRANSFERRED, ENCUMBERED, PLEDGED, DISTRIBUTED, APPOINTED OR
OTHERWISE DISPOSED OF, AND THE ISSUER SHALL NOT BE REQUIRED TO
GIVE EFFECT TO ANY ATTEMPTED VOLUNTARY SALE, ASSIGNMENT,
EXCHANGE, TRANSFER, ENCUMBRANCE, PLEDGE, DISTRIBUTION,
APPOINTMENT OR OTHER DISPOSITION OF ANY OF THOSE SHARES, DURING
THE TWO-YEAR PERIOD ENDING ON [DATE THAT IS THE SECOND
ANNIVERSARY OF THE IPO CLOSING DATE] (THE "RESTRICTED PERIOD").
ON THE WRITTEN REQUEST OF THE HOLDER OF THIS CERTIFICATE, THE
ISSUER AGREES TO REMOVE THIS RESTRICTIVE LEGEND (AND ANY STOP
ORDER PLACED WITH THE TRANSFER AGENT) AFTER THE EXPIRATION OF THE
RESTRICTED PERIOD.
(b) Each Stockholder, severally and not jointly with any other
Person, (i) acknowledges that the shares of OEI Common Stock to be
delivered to him pursuant to Section 2.04 (A), if any, have not been
and, except pursuant to the Registration Rights Agreement, if
applicable, will not be registered under the Securities Act and
therefore may not be resold by him without compliance with the
Securities Act and (B) will, as a result of their restrictions on
transferability which are imposed by this Agreement during the
Restricted Period, have a value materially less at the Effective Time
than the value of then freely tradeable shares of OEI Common Stock, and
(ii) covenants that none of the shares of OEI Common Stock issued to him
pursuant to Section 2.04 will be offered, sold, assigned, pledged,
hypothecated, transferred or otherwise disposed of except after full
compliance with all the applicable provisions of the Securities Act and
the rules and regulations of the SEC and applicable state securities
laws and regulations. All certificates evidencing shares of OEI Common
Stock issued pursuant to Section 2.04 will bear the following legend in
addition to the legend prescribed by Section 11.02(a):
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY ONLY BE SOLD OR
OTHERWISE TRANSFERRED IF THE HOLDER HEREOF COMPLIES WITH THAT ACT
AND OTHER APPLICABLE SECURITIES LAWS.
In addition, certificates evidencing any shares of OEI Common Stock
issued to each Stockholder pursuant to Section 2.04 will bear any legend
required by (i) the securities or blue sky laws of the state in which
that Stockholder resides or (ii) the Underwriter in connection with any
agreement of that Stockholder with the Underwriter to the effect set
forth in Section 11.02(a).
Section 11.03. BROKERS AND AGENTS. The Stockholders jointly and
severally represent and warrant to OEI that the Company has not directly or
indirectly employed or become obligated to pay any broker or similar agent in
connection with the transactions contemplated hereby and agree, without regard
to the Threshold Amount limitations set forth in Article IX, to indemnify OEI
against
14
all Damage Claims arising out of claims for any and all fees and commissions of
brokers or similar agents employed or promised payment by the Company.
Section 11.04. ASSIGNMENT; NO THIRD PARTY BENEFICIARIES. This Agreement
and the rights of its Parties may not be assigned (except by operation of law)
and shall be binding on and inure to the benefit of the Parties, the successors
of OEI, and the heirs and legal representatives of the Stockholders (and, in the
case of any trust, the successor trustees of the trust). Neither this Agreement
nor any other Transaction Document is intended, or shall be construed, deemed or
interpreted, to confer on any Person not a party hereto or thereto any rights or
remedies hereunder or thereunder, except as provided in Section 6.05(b) or
11.14, in Article IX, or as otherwise provided expressly herein or therein.
Section 11.05. ENTIRE AGREEMENT; AMENDMENT; WAIVERS. This Agreement and
the documents delivered pursuant to it constitute the entire agreement and
understanding among the Parties and supersede all prior agreements and
understandings, both written and oral, relating to the subject matter of this
Agreement. This Agreement may be amended, modified or supplemented, and any
right hereunder may be waived, if, but only if, the amendment, modification,
supplement or waiver is in writing and signed by the Majority Stockholders, the
Company and OEI. The waiver of any of the terms and conditions of this Agreement
shall not be construed or interpreted as, or deemed to be, a waiver of any of
its other term or conditions.
Section 11.06. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which will be an original, but all of which together will
constitute one and the same instrument.
Section 11.07. EXPENSES. Whether or not the transactions contemplated
hereby are consummated, (a) OEI will pay the fees, expenses and disbursements of
OEI and Newco and their Representatives which are incurred in connection with
the subject matter of this Agreement and any amendments to this Agreement
including all costs and expenses incurred in the performance of and compliance
with all conditions to be performed by OEI and Newco under this Agreement,
including the costs of preparing the Registration Statement, (b) the Company may
pay any fees, expenses and disbursements of Counsel for the Company and the
Stockholders incurred in connection with the subject matter of this Agreement
and the Registration Statement on or before the IPO Closing Date, up to a
maximum of $40,000 in the aggregate for all such fees, expenses and
disbursements incurred after January 16, 1998, and (c) the Stockholders will pay
from personal funds, and not from funds of the Company or any Company
Subsidiary, (i) all sales, use, transfer and other similar taxes and fees
(collectively, "TRANSFER TAXES") incurred in connection with the transactions
contemplated hereby, and (ii) the fees, expenses and disbursements in excess of
$40,000 in the aggregate of Counsel for the Company and the Stockholders
incurred in connection with the subject matter of this Agreement and the
Registration Statement after January 13, 1998, and on or before the IPO Closing
Date. The Stockholders will file all necessary documentation and Returns with
respect to all Transfer Taxes. In addition, each Stockholder acknowledges that
he, and not the Company, OEI or the Surviving Corporation, will pay all Taxes
due upon receipt of the consideration payable to the Stockholder pursuant to
Article II.
15
Section 11.08. NOTICES. All notices required or permitted hereunder
shall be in writing, and shall be deemed to be delivered and received (a) if
personally delivered or if delivered by telex, telegram, facsimile or courier
service, when actually received by the Party to whom notice is sent or (b) if
delivered by mail (whether actually received or not), at the close of business
on the third Business Day next following the day when placed in the mail,
postage prepaid, certified or registered, addressed to the appropriate Party or
Parties, at the address of such Party set forth below (or at such other address
as such party may designate by written notice to all other Parties in accordance
herewith):
(i) if to OEI or Newco, addressed to it at:
OEI International, Inc.
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn.: Xxxxxxx X. Xxxxxx,
Chief Executive Officer
Telecopy No.: (000) 000-0000
with copies (which shall not constitute notice for purposes of
this Agreement) to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Xx.
Telecopy No.: (000) 000-0000
(ii) if to the Stockholders, addressed to them at their
respective addresses set forth in Schedule 2.04; and
(iii) if to the Company, addressed to it at:
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
00X Xxxxxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx Xxxxxx, Xx.
Telecopy No.: (000) 000-0000
16
with copies (which shall not constitute notice for purposes of
this Agreement) to:
Xxxx Xxxxxx Xxxxx Xxxxxxxxx Xxxxxxxxx & Xxxx, X.X.
000 Xxxx X. Xxxxxxx Xxxxxxx, XX 1000
Short Hills, New Jersey 07078-0999
Attn: Xxxx X. Xxxxxx or
Xxxxxx X. Xxxxxxxxxxx
Telecopy No.: (000) 000-0000
SECTION 11.09. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE, WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE CONFLICTS OF LAW PROVISIONS THEREOF: PROVIDED, HOWEVER, THAT: (A) ARTICLE X
AND THE RIGHTS AND OBLIGATIONS THEREUNDER OF THE PARTIES WILL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF
NEW JERSEY WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF AND (B)
MATTERS PERTAINING SOLELY TO THE LEGALITY AND EFFECTUATION OF THE MERGER SHALL
BE GOVERNED BY THE BUSINESS CORPORATION ACT.
Section 11.10. EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise
provided herein, no delay or omission in the exercise of any right, power or
remedy accruing to any Party as a result of any breach or default hereunder by
any other Party shall impair any such right, power or remedy, nor shall it be
construed, deemed or interpreted as a waiver of or acquiescence in any such
breach or default, or of any similar breach or default occurring later; nor
shall any waiver of any single breach or default be construed, deemed or
interpreted as a waiver of any other breach or default hereunder occurring
before or after that waiver.
Section 11.11. TIME. Time is of the essence in the performance of this
Agreement in all respects.
Section 11.12. REFORMATION AND SEVERABILITY. If any provision of this
Agreement is invalid, illegal or unenforceable, that provision shall, to the
extent possible, be modified in such manner as to be valid, legal and
enforceable but so as to most nearly retain the intent of the Parties as
expressed herein, and if such a modification is not possible, that provision
shall be severed from this Agreement, and in either case the validity, legality
and enforceability of the remaining provisions of this Agreement shall not in
any way be affected or impaired thereby.
Section 11.13. REMEDIES CUMULATIVE. Except as otherwise provided in
Section 9.06, no right, remedy or election given by any term of this Agreement
shall be deemed exclusive, but each shall be cumulative with all other rights,
remedies and elections available at law or in equity.
Section 11.14. RESPECTING THE IPO. Each of the Company and the
Stockholders acknowledges and agrees that: (a) no firm commitment, binding
agreement or promise or other assurance of any kind, whether express or implied,
oral or written, exists at the date hereof that the Registration Statement will
become effective or that the IPO will occur at a particular price or within
17
a particular range of prices or occur at all; (b) neither OEI or any of its
Representatives nor any prospective underwriters in the IPO will have any
liability to the Company, the Stockholders or any of their respective Affiliates
or associates for any failure of (i) the Registration Statement to become
effective (provided, however, that OEI will use its reasonable best efforts to
cause the Registration Statement to become effective prior to October 31, 1998)
or (ii) the IPO to occur at a particular price or within a particular range of
prices or to occur at all; and (c) the decision of Stockholders to enter into
this Agreement, or to vote in favor of or consent to the Merger, has been or
will be made independent of, and without reliance on, any statements, opinions
or other communications of, or due diligence investigations that have been or
will be made or performed by, any prospective underwriter relative to OEI or the
IPO. The Underwriter shall have no obligation to any of the Company or the
Stockholders with respect to any disclosure contained in the Registration
Statement.
Section 11.15. CONSENTS.
(a) The Stockholders, as the owners and holders of all the
Capital Stock of the Company, hereby consent to and approve the Merger
and the plan of merger contemplated by this Agreement pursuant to
Sections 14A:10-3 and 14A:5-6 of the Business Corporation Act.
(b) OEI hereby consents to and approves the Merger and the plan
of merger contemplated by this Agreement pursuant to Sections 14A:10-3
and 14A:5-6 of the Business Corporation Act.
Section 11.16. PS&S PC. The Company has delivered to OEI copies of (i)
the Services Agreement dated effective as of March 5, 1993, between the Company
and PS&S PC and (ii) the Shareholders Agreement dated April 9, 1998, among PS&S
PC and its shareholders and each such document is in full force and effect on
the date hereof.
Section 11.17. SUSPENSION AND TERMINATION OF SHAREHOLDERS AGREEMENT. The
outstanding shares of the Company Common Stock are subject to the Shareholders
Agreement which provides, INTER ALIA, options to purchase and to sell shares of
the Company Common Stock upon the occurrence of certain events specified
therein. The Company and the Stockholders agree that:
(a) at the Effective Time, the Shareholders Agreement shall be
terminated without any further action on the part of any party thereto;
(b) the execution and delivery of this Agreement by the Company
and the Stockholders shall not be affected by, or constitute a breach of
or default under, the Shareholders Agreement;
(c) if at the date hereof there has began to run, or if after the
date hereof and prior to the Effective Time there shall begin to run,
any period of time (herein called a "LIMITATION PERIOD") within which
any party bound by or entitled to the benefits of, or whose
18
shares of the Company Common Stock are subject to, the Shareholders
Agreement must, under the terms of Sections 5, 8, 9, 10 or 11 of the
Shareholders Agreement, give any notice, offer such shares for sale,
accept any offer to purchase any such shares, purchase shares, make any
election or take any other action in order to preserve or maintain any
right or benefit of such party, then such Limitation Period shall cease
to run and shall be tolled as of the date of this Agreement, or, in the
case of any Limitation Period beginning after the date hereof, shall not
begin to run, unless and until such Limitation Period shall be resumed
and reinstated as provided in the following Section 11.17 (e);
(d) so long as any Limitation Period is tolled pursuant to
Section 11.17(c), no party to the Shareholders Agreement may exercise
any right or option such party would otherwise have but for the
provisions of this Section 11.17; and
(e) if this Agreement is terminated pursuant to Article XII, then
as of the close of business on the date this Agreement is so terminated,
the provisions of this Section 11.17 shall terminate and any Limitation
Period shall resume and be reinstated or shall commence, as the case may
be, ten days following such termination, and promptly thereafter, the
Company shall notify each of the parties to the Shareholders Agreement
that the provisions of this Section 11.17 have terminated.
By their execution and delivery of this Agreement, pursuant to Section 28 of the
Shareholders Agreement, the Company and the Stockholders (who hold 100% of the
shares of Capital Stock subject to the Shareholders Agreement) hereby amend the
Shareholders Agreement as set forth in this Section 11.17.
Section 11.18. ERRORS AND OMISSIONS INSURANCE. Until the third
anniversary of the IPO Closing Date, the Company will maintain professional
liability insurance coverage on a claims made basis covering prior acts with per
claim and aggregate limits of at least $7 million. Such per claim and aggregate
limits are inclusive of all primary and umbrella coverages for professional
liability.
ARTICLE XII
TERMINATION
Section 12.01. TERMINATION OF THIS AGREEMENT.
(a) This Agreement may be terminated at any time prior to the
Closing solely:
(i) by the mutual written consent of OEI and the Company;
(ii) by the Majority Stockholders or the Company, on the
one hand, or by OEI, on the other hand, if the transactions
contemplated by this Agreement to take place at the Closing shall
not have been consummated by October 31, 1998, unless
19
the failure of such transactions to be consummated results from
the willful failure of the Party (or in the case of the
Stockholders and the Company, any of them) seeking to terminate
this Agreement to perform or adhere to any agreement required
hereby to be performed or adhered to by that Party prior to or at
the Closing or thereafter on the IPO Closing Date;
(iii) by the Majority Stockholders or the Company, on the
one hand, or by OEI, on the other hand, if a material breach or
default shall be made by the other Party (or in the case of the
Stockholders and the Company, any of them) in the observance or
in the due and timely performance of any of the covenants,
agreements or conditions contained herein; or
(iv) by OEI if it is entitled to do so as provided in
Section 6.07;
(b) This Agreement may be terminated after the Closing solely:
(i) by OEI or the Company if the Underwriting Agreement
is terminated pursuant to its terms after the Closing and prior
to the consummation of the IPO; or
(ii) automatically and without action on the part of any
party hereto if the IPO is not consummated within 15 Business
Days after the date of the Closing.
(c) If this Agreement is terminated pursuant to this Section
12.01, the Merger will be deemed for all purposes to have been abandoned
and of no force or effect. If this Agreement is terminated pursuant to
this Section 12.01 after the Certificate of Merger has been filed with
the Secretary of State of the State of New Jersey, but before the IPO
has been consummated, OEI will take all actions that Counsel for the
Company and the Stockholders advises OEI are required by the applicable
laws of the State of New Jersey to rescind the Merger.
Section 12.02. LIABILITIES IN EVENT OF TERMINATION. If this Agreement is
terminated pursuant to Section 12.01, there shall be no liability or obligation
on the part of any Party except (a) as provided in Section 11.07, (b) to the
extent that such liability is based on the breach of that Party of any of its or
his representations, warranties or covenants set forth in of this Agreement.
20
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
OEI INTERNATIONAL, INC.
By: /s/ XXXXXXX X. XXXXXX
Xxxxxxx X. Xxxxxx, Chief Executive Officer
PS&S ACQUISITION, INC.
By: /s/ XXXXXXX X. XXXXXX
Xxxxxxx X. Xxxxxx, President
XXXXXX, XXXXXXXXXX AND XXXXXX, INC.
By: XXXXXXX XXXXXX, XX.
Xxxxxxx Xxxxxx, Xx. President
STOCKHOLDERS:
/s/ XXXXXXX XXXXXX, XX.
Xxxxxxx Xxxxxx, Xx.
/s/ XXXX XXXXXX
Xxxx Xxxxxx
/s/ XXXXXXX X. XXXXXX
Xxxxxxx X. Xxxxxx
/s/ XXXXXX X. XXXXXXX
Xxxxxx X. Xxxxxxx
21
/s/ XXXXX X. XXXXX
Xxxxx X. Xxxxx
/s/ XXXXX X. XXXXXXXXXXX
Xxxxx X. Xxxxxxxxxxx
/s/ XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
/s/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx
/s/ XXXXXX XXXXXXXX
Xxxxxx Xxxxxxxx
/s/ XXXX X. XXXXXXX
Xxxx X. Xxxxxxx
/s/ XXXX XXXXXXX
Xxxx Xxxxxxx
22
ADDENDUM 1
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
PS&S Acquisition, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Addendum which are defined in the
captioned Agreement to which this is an Addendum are used herein as therein
defined.
(2) The Founding Companies are:
Chemical & Industrial Engineering, Inc.
Xxxxxx Engineering, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
Petrocon Engineering, Inc.
W-Industries, Inc.
SCHEDULE 2.03
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
PS&S Acquisition, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 2.03 are used
herein as therein defined.
(2) The directors of the Surviving Corporation immediately after the
Effective Time are as follows:
Xxxxxxx Xxxxxx, Xx.
Xxxx X. Xxxxx
Xxxx Xxxxx
(3) The officers of the Surviving Corporation immediately following the
Effective Time are as follows:
President Xxxxxxx Xxxxxx, Xx.
Executive Vice President, Secretary Xxxxxxx Xxxxxx
and Treasurer
Senior Vice President Xxxxxx X. Xxxxxxx
Senior Vice President Xxxxxxx Xxxxxx
Senior Vice President Xxxxxxx X. Xxxxxxx
Vice President Xxxxx X. Xxxxx
Vice President Xxxxx X. Xxxxxxxxxxx
Vice President Xxxxxx Xxxxxxxx
Vice President Xxxx X. Xxxxxxx
Vice President Xxxx Xxxxxxx
Vice President Xxxxx Xxxxx
Vice President Xxxxxxx Xxxxxxx
Vice President Xxxxxx Xxxxxxx
Vice President Xxxxxxx Xxxxx
Vice President Xxxx X. Xxxxx
Vice President Xxxx Xxxxx
Vice President Xxxxxx Xxxxxx
Assistant Secretary Xxxxxx X. Xxxxxxx
SCHEDULE 2.04
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
PS&S Acquisition, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 2.04 are used
herein as therein defined.
(2) The name and address of each Stockholder are as follows:
NAME ADDRESS
STOCKHOLDERS:
Xxxxxxx Xxxxxx, Xx. 0 Xxxxx Xxxxx
Xxxxxx, XX 00000
Xxxx Xxxxxx 0 Xxxxx Xxxxx
Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxx 00 Xxxxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
Xxxxxx X. Xxxxxxx 000 Xxxxxx Xxxxxx Xxx.
Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxx 000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxxxxxx 0000 Xxxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Xxxxxxx Xxxxxx 000 Xxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000
Xxxxxxx X. Xxxxxxx 000 Xxxxxxxxxx Xxxx
Xxx Xxxxxxxxxx, XX 00000
Xxxxxx Xxxxxxxx 00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxxx, Xxx Xxxxxx 00000
Xxxx X. Xxxxxxx 0 Xxxxx Xxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Xxxx Xxxxxxx 00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
(3) The aggregate Merger Consideration shall be comprised of (i) cash in
an amount equal to the difference between $4,521,905 and the amount, if any, by
which the amount of the 1998 AAA Distributions (as defined in Schedule 6.04)
exceeds 45% of the amount in the Accumulated Adjustment Account in respect of
earnings of the Company during the period commencing January 1, 1998, and ending
on the Closing Date (the "Cash Consideration") and (ii) 879,258 shares (the
"Merger Shares") of OEI Common Stock.
(4) Each of Xxxxxx Xxxxxxxx, Xxxx X. Xxxxxxx and Xxxx Xxxxxxx (the
"GROUP II STOCKHOLDERS") will receive an amount of cash equal to the product
obtained by multiplying (i) the Pro Rata Share of such Group II Stockholder
times (ii) the sum of (a) the Cash Consideration plus (b) the product obtained
by multiplying the number of Merger Shares by the IPO Price. Group II
Stockholders will not receive any of the Merger Shares.
(5) Each Stockholder who is not a Group II Stockholder (the "GROUP I
STOCKHOLDERS") will receive a portion of the Cash Consideration remaining after
payment of the cash to be paid to the Group II Stockholders pursuant to the
preceding paragraph and a portion of the Merger Shares equal to the amount of
such remaining Cash Consideration or the Merger Shares, as the case may be,
multiplied by a fraction the numerator of which is the Pro Rata Share of such
Group I Stockholder and the denominator of which is the aggregate Pro Rata
Shares of all the Group I Stockholders.
(6) Set forth below are the number of shares of pre-merger Company
Common Stock owned by each Stockholder and the Pro Rata Share of each
Stockholder:
SHARES OF PRE-MERGER PRO RATA
NAME COMPANY COMMON STOCK SHARES
---- -------------------- ------
Xxxxxxx Xxxxxx, Xx. 1 0.0038%
Xxxx Xxxxxx 9,999 38.1016%
Xxxxxxx X. Xxxxxx 10,000 38.1054%
Xxxxxx X. Xxxxxxx 3834 14.6096%
Xxxxx X. Xxxxx 709 2.7017%
Xxxxx X. Xxxxxxxxxxx 300 1.1432%
Xxxxxxx Xxxxxx 600 2.2863%
Xxxxxx Xxxxxxxx 100 0.3811%
Xxxxxxx X. Xxxxxxx 500 1.9053%
Xxxx X. Xxxxxxx 100 0.3811%
Xxxx Xxxxxxx 100 0.3811%
TOTAL 26,243 100.0000%
SCHEDULE 3.01
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
PS&S Acquisition, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 3.01 are used
herein as therein defined.
(2) Each Stockholder who will receive share of OEI Common Stock in
connection with the Merger is an "accredited investor" as defined in Securities
Act Rule 501(a) except for the following:
Xxxxx X. Xxxxxxxxxxx
Xxxxxxx Xxxxxx
SCHEDULE 3.02
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
PS&S Acquisition, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 3.02 are used
herein as therein defined.
(2) The following table sets forth the ownership of the Company's
Capital Stock:
NAME CLASS NUMBER OF SHARES OWNED
---- ----- ----------------------
STOCKHOLDERS:
Xxxxxxx Xxxxxx, Xx. Common 1
Xxxx Xxxxxx Common 9,999
Xxxxxxx X. Xxxxxx Common 10,000
Xxxxxx X. Xxxxxxx Common 3,834
Xxxxx X. Xxxxx Common 709
Xxxxx X. Xxxxxxxxxxx Common 300
Xxxxxxx Xxxxxx Common 600
Xxxxxxx X. Xxxxxxx Common 500
Xxxxxx Xxxxxxxx Common 100
Xxxx X. Xxxxxxx Common 100
Xxxx Xxxxxxx Common 100
(3) No exception is taken to the representations and warranties made in
Section 3.02 of the captioned Agreement.
SCHEDULE 3.07
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
PS&S Acquisition, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 3.07 are used
herein as therein defined.
(2) The Stockholder is, alone or with one or more other Persons, the
controlling Affiliate of the following Entity, business or trade (other than the
Company and the Company Subsidiaries, if the Stockholder is an Affiliate of the
Company) that is (a) engaged in any line of business which is the same as or
similar to any line of business in which the Company or any Company Subsidiary
is engaged or (b) is, or has within the three year period ending on the date of
the captioned Agreement, engaged in any transaction with the Company or any
Company Subsidiary except for (i) transactions in the ordinary course of
business of the Company or that Company Subsidiary and (ii) any single
transaction (or series of related transactions) involving property or services
having a value, or the payment of money, of less than $10,000:
1. PS&S PC has engaged in transactions with the Company of the
nature and to the extend described in FOOTNOTE 10 of the Initial
Financial Statements.
2. The Company has leased its office space in Warren, New Jersey
from the related party lessors identified in Schedule 4.11 under
the Lease Agreements described in Schedule 4.11. For each of the
last two years, the rentals paid under such Lease Agreements have
been:
1997 $1,626,449
1996 $1,592,100
3. The Company has leased equipment from PSF Leasing Company. Rental
paid during 1997 and 1996 were $231,597 and $228,930,
respectively. The Company has agreed to purchase the equipment
leased from PSF Leasing Company in exchange for the assumption by
the Company of indebtedness in the principal amount , as of
December 31, 1997, of approximately $370,000. Since December 31,
1997, such indebtedness has been reduced by regular monthly
payments of installments of principal and interest.
4. Marcrisart Media Inc., a corporation owned by the wife of Xxxxxxx
X. Xxxxxx, has provided advertising and promotional services to
the Company. Services by Marcrisart Media Inc. totaled $101,082,
$58,722 and $39, 898 in 1997, 1996 and 1995, respectively.
5. Willant Corporation, a construction company owned by Xxxx Xxxxxx,
Xxxxxxx X. Xxxxxx and the son of Xxxxxxx Xxxxxx, Xx., has
subleased approximately 425 square feet of office space from the
Company for monthly rental of approximately $657.
SCHEDULE 4.11
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
PS&S Acquisition, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 4.11 are used
herein as therein defined.
(2) The following Related Party Agreements will be permitted to continue
in effect past the date of the Closing in accordance with their terms, subject
to the following provisions of this Schedule:
1. The Lease dated as of May 1, 1983, as amended, between the
Company and Mountain Boulevard Associates I, an Affiliate of one or more
of the Stockholders, pursuant to which the Company leases the first
floor, second floor and basement of the building located at 00X Xxxxxxxx
Xxxxxxxxx Xxxxxxxxx, Xxxxxx, Xxx Xxxxxx.
2. The Lease Agreement dated January 12, 1981, as amended,
between the Company and Mountain Boulevard Associates II, an Affiliate
of one or more of the Stockholders, pursuant to which the Company leases
the entire building located at 00 Xxxxxxxx Xxxxxxxxx Xxxxxxxxx, Xxxxxx,
Xxx Xxxxxx.
3. The Lease Agreement dated December 29, 1986, as amended,
between the Company and Mountain Boulevard Associates III, an Affiliate
of one or more of the Stockholders, pursuant to which the Company leases
the entire building located at 00X Xxxxxxxx Xxxxxxxxx Xxxxxxxxx, Xxxxxx,
Xxx Xxxxxx.
4. The New Employment Agreements.
5. The sublease with Willant Corporation described in paragraph 5
of Schedule 3.07.
Each of the Lease Agreements referred to in paragraphs 1, 2 and 3
above will be amended, effective as of the IPO Closing Date, by one of
the Lease Modification Agreements to provide that the terms of such
Lease Agreement will expire ten years after the date of the Closing.
SCHEDULE 6.03
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
PS&S Acquisition, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 6.03 are used
herein as therein defined.
(2) The Company may take the following actions between the date of the
captioned Agreement and the Effective Time:
(i) the Company may incur AAA Indebtedness;
(ii) the Company may purchase from PSF Leasing Co. the
equipment presently leased by the Company from PSF
Leasing Co. for a purchase price not to exceed the
indebtedness of PSF Leasing Co. incurred to purchase, and
secured by, such equipment, in exchange for the Company's
assumption of such indebtedness; and
(iii) the Company may engage in the transactions described in
paragraphs (iii) and (iv) of Schedule 6.04.
SCHEDULE 6.04
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
PS&S Acquisition, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 6.04 are used
herein as therein defined.
(2) The Company and the Company Subsidiaries may make the following
Restricted Payments prior to the Effective Time:
(i) the Company may distribute to the Stockholders such
amounts as shall represent the excess of (x) the balance
in the Company's Accumulated Adjustment Account at
December 31, 1997 accumulated in respect of earnings of
the Company for all taxable periods ended on or before
that date over (y) all amounts distributed to the
Stockholders on or after January 1, 1998, and before the
date of the captioned Agreement, in respect of earnings
of the Company for all taxable periods ended on or
before December 31, 1997 (all amounts previously or
hereafter so distributed under this clause (i) being
referred to as the "1997 AAA DISTRIBUTIONS");
(ii) the Company may distribute to the Stockholders such
amounts as shall represent the excess of (i) all amounts
which accumulated in the Company's Accumulated
Adjustment Account after December 31, 1997 in respect of
earnings of the Company for all taxable periods
beginning on or after January 1, 1998 over (2) all
amounts distributed to the Stockholders on or after
January 1, 1998 and before the date of the captioned
Agreement in respect of earnings of the Company for all
taxable periods beginning on or after January 1, 1998
(all amounts previously or hereafter so distributed
under this clause (ii) being referred to as the "1998
AAA DISTRIBUTIONS");
(iii) prior to the Closing, the Company will redeem from each
Stockholder on a pro rata basis approximately 17% of the
shares of Company Common Stock owned by such Stockholder
in exchange for a pro rata interest (a) in life
insurance policies on the lives of the Stockholders and
(b) loans to shareholders which are secured by the cash
surrender values of the "split
dollar" life insurance policies owned by the
Stockholders (or trusts established by them), and the
aggregate book value (as of December 31, 1997) of the
items in clauses (a) and (b) was $1,698,299 and (c)
Stockholder Notes in the aggregate principal amount (as
of December 31, 1997) of $379,926;
(iv) the Company may pay bonuses to Xxxxxxx Xxxxxxx
representing the forgiveness of a portion of Stockholder
Note issued by him to the Company in the amount of
$1,150; and
(v) the Company may deviate from the restrictions set forth
in clauses (l) and (m) of Section 6.04 with the consent
of OEI.
SCHEDULE 6.11
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
PS&S Acquisition, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 6.11 are used
herein as therein defined.
(2) The Company will make all arrangements and take all such actions as
are necessary and satisfactory to OEI to dispose, prior to the Effective Time,
of the following assets in the manner indicated below:
(a) Prior to the Closing, the Company shall be permitted to
transfer to the Stockholders (i) the life insurance policies owned by
the Company and insuring the lives of the Stockholders and (ii) the
loans to the Stockholders which are secured by the cash surrender values
of the "split dollar" life insurance policies owned by the Stockholders
(or trusts established by them) on the basis set forth in Schedule 6.04.
(b) Prior to the Closing, the Company may transfer the vehicles
identified below to the employees designated below in exchange for the
assumption by the employee of the lease or note referred to below:
NAME DESCRIPTION OF AUTO LEASE OR NOTE
Xxxxxxx X. Xxxxxxx 1997 Mercedes E420 Note to PNC Bank in the
approximate principal amount
of $32,000
Xxxxx X. Xxxxx 1996 Cadillac El Dorado Note to PNC Bank in the
approximate principal amount
of $21,000
Xxxx Xxxxxxx 1995 Mercedes E420 Lease expiring December 2001
with lease payments of $788.81
per month
Xxxxxxx Xxxxxxxx 1996 Acura 3.5RL Lease expiring December
1999 with lease payments of
$668 per month
(c) Prior to the Closing, the Company may make the transfers
contemplated by paragraphs (i), (ii), (iii) and (iv) of Schedule 6.04.
SCHEDULE 8.05
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
PS&S Acquisition, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 8.05 are used
herein as therein defined.
(2) At the Effective Time (and notwithstanding Section 8.05 to the
contrary), OEI will cause the following Stockholder Guarantees to be terminated:
(i) any Stockholder Guarantees of AAA Indebtedness;
(ii) any Stockholder Guarantees of indebtedness of PSF Leasing
Company in the principal amount (as of December 31, 1997)
of approximately $370,000 incurred pursuant to the Loan
Agreement dated July 31, 1997, between PSF Leasing
Company and Summit Bank which is to be assumed by the
Company as more fully described in paragraph 3 of
Schedule 3.07; and
(iii) any Stockholder Guarantees of indebtedness of the Company
incurred pursuant to the Amended and Restated Security
Agreement dated July 31, 1997, between the Company and
Summit Bank (which as of December 31, 1997 was in the
principal amount of approximately $950,000).
SCHEDULE 10.01
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
PS&S Acquisition, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 10.01 are
used herein as therein defined.
(2) Each of the Stockholders identified below is a Restricted
Stockholder and subject to all the restrictions set forth in Section 10.01 of
the captioned Agreement.
None
