EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
by and among
CERTAINTEED CORPORATION,
BI EXPANSION II CORP.
and
BIRD CORPORATION
Dated as of January 12, 1998
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TABLE OF CONTENTS
Page
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ARTICLE I
The Offer and the Merger
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SECTION 1.01. The Offer................................... 1
SECTION 1.02. Company Actions............................. 3
SECTION 1.03. Surviving Corporation....................... 4
SECTION 1.04. Articles of Organization.................... 5
SECTION 1.05. By-Laws..................................... 5
SECTION 1.06. Directors................................... 5
SECTION 1.07. Officers.................................... 5
SECTION 1.08. Effective Date.............................. 5
SECTION 1.09. Additional Actions.......................... 5
SECTION 1.10. Company Common Stock, Preferred Stock and
Preference Stock............................ 6
SECTION 1.11. Conversion of Acquisition Sub Common Stock.. 7
SECTION 1.12. Dissenting Shares........................... 7
SECTION 1.13. Surrender of Shares......................... 8
SECTION 1.14. Certain Benefit Plans....................... 9
ARTICLE II
Representations and Warranties of the Company
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SECTION 2.01. Corporate Organization..................... 10
SECTION 2.02. Capitalization of the Company.............. 11
SECTION 2.03. Subsidiaries............................... 12
SECTION 2.04. Authorization.............................. 12
SECTION 2.05. Absence of Conflicts; Consents............. 13
SECTION 2.06. Compliance with Laws....................... 14
SECTION 2.07. Financial Statements....................... 15
SECTION 2.08. Absence of Material Changes................ 16
SECTION 2.09. Litigation................................. 16
SECTION 2.10. Patents and Trademarks..................... 17
SECTION 2.11. Material Contracts; Permits................ 17
Contents, p. 2
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SECTION 2.12. Title to Properties and Related Matters.. 19
SECTION 2.13. Taxes.................................... 20
SECTION 2.14. Labor Agreements......................... 24
SECTION 2.15. Benefit Plans............................ 24
SECTION 2.16. Labor Disputes; Unfair Labor Practices... 28
SECTION 2.17. Product Warranties....................... 28
SECTION 2.18. Environmental Matters.................... 29
SECTION 2.19. Insurance................................ 31
SECTION 2.20. SEC Filings.............................. 31
SECTION 2.21. Brokers and Finders...................... 32
SECTION 2.22. Antitakeover............................. 32
SECTION 2.23. Opinion of Financial Advisor............. 32
SECTION 2.24. Asbestos Claims.......................... 32
SECTION 2.25. Revolving Credit and Security Agreement.. 33
ARTICLE III
Representations and Warranties of Parent
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SECTION 3.01. Corporate Organization................... 33
SECTION 3.02. Authorization............................ 33
SECTION 3.03. Absence of Conflicts; Consents........... 34
SECTION 3.04. Litigation............................... 35
SECTION 3.05. Brokers and Finders...................... 35
ARTICLE IV
Representations and Warranties of Acquisition Sub
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SECTION 4.01. Corporate Organization................... 35
SECTION 4.02. Authorization............................ 35
SECTION 4.03. Absence of Conflicts; Consents........... 36
SECTION 4.04. Litigation............................... 37
SECTION 4.05. Capitalization........................... 37
SECTION 4.06. Brokers and Finders...................... 37
Contents, p.3
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ARTICLE V
Covenants
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SECTION 5.01. Access and Information................................... 37
SECTION 5.02. Proxy Statement.......................................... 38
SECTION 5.03. Stockholders' Meeting.................................... 39
SECTION 5.04. Supplemental Information................................. 39
SECTION 5.05. Further Assurances....................................... 39
SECTION 5.06. Conduct of Company Business Prior to the Effective Date.. 39
SECTION 5.07. Consents................................................. 42
SECTION 5.08. Filings.................................................. 43
SECTION 5.09. Filing of Articles of Merger............................. 43
SECTION 5.10. Interim Financial Statements............................. 43
SECTION 5.11. Public Announcements..................................... 44
SECTION 5.12. No Solicitation.......................................... 44
SECTION 5.13. Validity of Representations.............................. 46
SECTION 5.14. Employees; Benefits...................................... 46
SECTION 5.15. Indemnification and Insurance............................ 46
SECTION 5.16. Redemption of 5% Stock................................... 48
SECTION 5.17. Material Contracts....................................... 48
SECTION 5.18. Tax Matters.............................................. 48
SECTION 5.19. Dividend Payments........................................ 48
SECTION 5.20. Satisfaction of Conditions............................... 48
SECTION 5.21. Directors................................................ 49
ARTICLE VI
Conditions to the Obligations of Parent
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and Acquisition Sub
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SECTION 6.01. Representations and Warranties True...................... 50
SECTION 6.02. Company's Performance.................................... 50
SECTION 6.03. Authorization of Merger.................................. 50
SECTION 6.04. Absence of Litigation.................................... 51
SECTION 6.05. Directors................................................ 51
SECTION 6.06. Dissenting Shares........................................ 51
SECTION 6.07. Options.................................................. 52
SECTION 6.08. Certificates............................................. 52
Contents, p.4
Page
ARTICLE VII ----
Conditions to the Obligations of the Company
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SECTION 7.01. Representations and Warranties True..................... 52
SECTION 7.02. Parent's and Acquisition Sub's Performance.............. 52
SECTION 7.03. Authorization of Merger................................. 52
SECTION 7.04. Absence of Litigation................................... 53
SECTION 7.05. Certificates............................................ 53
ARTICLE VIII
Closing
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SECTION 8.01. Time and Place.......................................... 53
SECTION 8.02. Deliveries at the Closing............................... 54
ARTICLE IX
Termination and Abandonment of the Merger
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SECTION 9.01. Termination............................................. 54
SECTION 9.02. Effect of Termination................................... 56
SECTION 9.03. Procedure for Termination and Amendment................. 56
ARTICLE X
Miscellaneous
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SECTION 10.01. Expenses; Alternate Transaction Fee..................... 57
SECTION 10.02. Non-Survival of Representations and Warranties.......... 58
SECTION 10.03. Headings................................................ 59
SECTION 10.04. Notices................................................. 59
SECTION 10.05. Assignment.............................................. 60
SECTION 10.06. Complete Agreement...................................... 60
SECTION 10.07. Amendments and Waivers.................................. 60
Contents, p.5
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SECTION 10.08. Counterparts.................................... 61
SECTION 10.09. Governing Law................................... 61
SECTION 10.10. Accounting Terms................................ 61
SECTION 10.11. Parties......................................... 61
Exhibits
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EXHIBIT A Conditions to the Offer
EXHIBIT B Articles of Merger
Schedules
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SCHEDULE 2.01 Foreign Jurisdictions
SCHEDULE 2.02 Capitalization
SCHEDULE 2.03 Subsidiaries
SCHEDULE 2.05 Conflicts, Consents, Approvals and Authorizations
SCHEDULE 2.07 Company Financial Statements
SCHEDULE 2.08 Absence of Material Changes
SCHEDULE 2.09 Litigation
SCHEDULE 2.10 Patents and Trademarks
SCHEDULE 2.11 Material Contracts
SCHEDULE 2.12 Real Property
SCHEDULE 2.13 Taxes
SCHEDULE 2.14 Labor Agreements
SCHEDULE 2.15 Benefit Plans
SCHEDULE 2.17 Product Warranties
SCHEDULE 2.18 Environmental Matters
SCHEDULE 2.19 Insurance
SCHEDULE 2.20 SEC Filings
SCHEDULE 5.06 Conduct of Business
INDEX OF DEFINITIONS
Definition Section
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"Acquisition Sub"........................ Introduction
"Acquisition Sub Common Stock"........... Section 1.11
"Alternate Transaction Fee".............. Section 10.01(b)
"Antitrust Division"..................... Section 2.05 (e)
"Applicable Laws"........................ Section 2.05 (d)
"Articles of Merger"..................... Section 1.08
"Balance Sheet".......................... Section 2.07(a)
"Balance Sheet Date"..................... Section 2.07(a)
"Benefit Plans".......................... Section 2.15(i)
"CERCLA"................................. Section 2.18
"Certificates"........................... Section 1.13(b)
"Closing"................................ Section 8.01
"Closing Date"........................... Section 8.01
"Code"................................... Section 2.13(a)
"Commonly Controlled Entity"............. Section 2.15(i)
"Company"................................ Introduction
"Common Stock Offer Price"............... Introduction
"Company Common Stock"................... Section 1.10(a)(i)
"Company Estimates"...................... Section 2.18(g)
"Company Financial Statements"........... Section 2.07(a)
"Company Pension Plan"................... Section 2.15(iii)
"Company Property"....................... Section 2.12(a)
"Company Willful Misrepresentation"...... Section 9.02(b)
"Consummation of the Offer".............. Section 5.02(e)
"Continuing Directors"................... Section 5.21
"Conversion Rights"...................... Section 2.02(c)
"Covered Taxes".......................... Section 2.13(c)
"Defined Benefit Plan"................... Section 2.15(vi)
"Designated Director".................... Section 5.21
"Director Option Plan"................... Section 1.14(a)(i)
"Dissenting Consideration"............... Section 1.12
"Dissenting Shares"...................... Section 1.12
"D&O Insurance".......................... Section 5.15(a)
"Effective Date"......................... Section 1.08
"Effective Time"......................... Section 1.08
"Eligible Option"........................ Section 1.14(a)(i)
"Environmental Laws"..................... Section 2.18
"ERISA".................................. Section 2.15(i)
Definitions, p.2
Definition Section
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"Exchange Act"........................... Section 1.01(b)
"Expenses"............................... Section 10.01(b)
"5% Stock"............................... Section 1.10(b)
"5% Stock Consideration"................. Section 1.10(b)
"French parcel".......................... Section 2.04(d)
"FTC".................................... Section 2.05(e)
"GAAP"................................... Section 2.07(a)
"Governmental Authority"................. Section 2.05(d)
"Hazardous Materials".................... Section 2.18
"HSR Act"................................ Section 2.05(e)
"Inactive Subsidiary".................... Section 2.03(a)
"Indemnified Parties".................... Section 5.15(a)
"Ineligible Option"...................... Section 1.14(a)(ii)
"Information Statement".................. Section 2.20(b)
"Judgment"............................... Section 2.05(d)
"Leased Real Property"................... Section 2.12(a)
"Legal Action"........................... Section 2.09
"Lien"................................... Section 2.05(b)
"LTIP"................................... Section 1.14(b)
"Material Adverse Effect"................ Section 2.01
"Material Contracts"..................... Section 2.11
"Maximum Premium"........................ Section 5.15(a)
"MBCL"................................... Section 1.03
"XxXxxxxxx Xxxxx"........................ Section 3.05
"Merger"................................. Introduction
"MICP"................................... Section 2.15(xi)
"1982 Stock Option Plan"................. Section 1.14(a)(i)
"1992 Stock Option Plan"................. Section 1.14(a)(i)
"Notice of Qualified Takeover Proposal".. Section 5.12(b)
"Offer".................................. Introduction
"Offer Document"......................... Section 1.01(b)
"Options"................................ Section 1.14(a)(i)
"Owned Real Property".................... Section 2.12(a)
"Parent"................................. Introduction
"Parent Willful Misrepresentation"....... Section 9.02(c)
"Paying Agent"........................... Section 1.13
"PBGC"................................... Section 2.15(v)
"Pension Plan"........................... Section 2.15(i)
Definitions, p.3
Definition Section
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"Permits"................................ Section 2.06
"Permitted Liens"........................ Section 2.12(b)
"Person"................................. Section 2.05(c)
"Preference Stock"....................... Section 1.10(c)
"Preference Stock Consideration"......... Section 1.10(c)
"Preference Stock Offer Price"........... Introduction
"Proxy Statement"........................ Section 5.02(a)
"qualified takeover proposal"............ Section 5.12(a)
"Release"................................ Section 2.18
"Return" or "Returns".................... Section 2.13(a)
"Revolving Credit Agreement"............. Section 2.25
"Savings Plan"........................... Section 1.14(c)
"Schedule 14D-9"......................... Section 1.02(b)
"SEC".................................... Section 1.01(a)
"SEC Documents".......................... Section 2.20(a)
"Securities Act"......................... Section 2.20(a)
"Special Meeting"........................ Section 5.03(a)
"Subsidiary"............................. Section 2.01
"Surviving Corporation".................. Section 1.03
"Surviving Corporation Common Stock"..... Section 1.11
"takeover proposal"...................... Section 5.12(a)
"Tax" or "Taxes"......................... Section 2.13(a)
"Taxing Authority"....................... Section 2.13(a)
"Total Merger Consideration"............. Section 1.10(a)(i)
"Transmittal Letter"..................... Section 1.13(b)
"Welfare Plan"........................... Section 2.15(i)
This AGREEMENT AND PLAN OF MERGER dated as of January 12,
1998, is entered into by and among CERTAINTEED CORPORATION, a
Delaware corporation ("Parent"), BI EXPANSION II CORP., a
Massachusetts corporation ("Acquisition Sub"), and BIRD
CORPORATION, a Massachusetts corporation (the "Company").
WHEREAS the respective Boards of Directors of Parent, Acquisition Sub
and the Company have approved the making by Acquisition Sub of a tender offer
from time to time (the "Offer") to purchase all outstanding shares of Company
Common Stock (as defined below) at a price per share equal to the Total Merger
Consideration (as defined below) (the "Common Stock Offer Price") and all
outstanding shares of Preference Stock (as defined below) at a price per share
equal to $20, which amount shall not be adjusted for any accrued and unpaid
dividends thereon as of, or any dividends paid prior to, the date of the
expiration of the Offer (the "Preference Stock Offer Price") along with the
merger of Acquisition Sub with and into the Company (the "Merger"), upon the
terms and subject to the conditions set forth herein, as a result of which the
Company will become a wholly owned subsidiary of Parent and the stockholders of
the Company (other than stockholders who perfect appraisal rights) will be
entitled to receive the consideration provided in this Agreement.
NOW, THEREFORE, in consideration of the mutual benefits to be derived
from this Agreement and of the representations, warranties, covenants and
agreements hereinafter contained, Parent, Acquisition Sub and the Company agree
as follows:
ARTICLE I
The Offer and the Merger
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SECTION 1.01. The Offer. (a) Subject to the provisions of this
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Agreement, as promptly as practicable, but in no event later than five business
days after the public announcement of the Offer, Acquisition Sub shall commence
the Offer. The obligation of Acquisition Sub to commence the Offer and accept
for payment, and pay for, any shares of Company Common Stock or Preference Stock
tendered pursuant to the Offer shall be subject to the conditions set forth in
Exhibit A (any of which may be waived in whole or in part by Acquisition Sub in
its sole discretion) and to the terms and conditions of this Agreement.
Acquisition Sub expressly reserves the right to modify the
2
terms of the Offer, except that, without the consent of the Company, Acquisition
Sub shall not (i) reduce the number of shares of Company Common Stock or
Preference Stock to be purchased in the Offer, (ii) reduce the Common Stock
Offer Price or the Preference Stock Offer Price, (iii) modify or add to the
conditions set forth in Exhibit A, (iv) except as provided in the next sentence,
extend the Offer, (v) change the form of consideration payable in the Offer or
(vi) amend any other term of the Offer in a manner adverse in any material
respect to the holders of Company Common Stock or Preference Stock.
Notwithstanding the foregoing, Acquisition Sub may, without the consent of the
Company, (i) extend the Offer beyond any scheduled expiration date (the initial
scheduled expiration date being 20 business days following commencement of the
Offer) for a period not to exceed 20 business days, if at any scheduled
expiration date of the Offer, any of the conditions to Acquisition Sub's
obligation to accept for payment, and pay for, shares of Company Common Stock or
Preference Stock shall not be satisfied or waived, until such time as such
conditions are satisfied or waived, (ii) extend the Offer for any period
required by any rule, regulation, interpretation or position of the Securities
and Exchange Commission (the "SEC") or the staff thereof applicable to the Offer
and (iii) terminate the Offer without prejudice to any of its and Parent's
rights under this Agreement, including to proceed with the Merger in accordance
with, and subject to the terms and conditions of, this Agreement. Subject to
the terms and conditions of the Offer and this Agreement, Acquisition Sub shall
accept for payment, and pay for, all shares of Company Common Stock and
Preference Stock validly tendered and not withdrawn pursuant to the Offer that
Acquisition Sub becomes obligated to accept for payment, and pay for, pursuant
to the Offer as soon as practicable after expiration of the Offer, subject to
compliance with Rule 14e-1(c) under the Exchange Act (as defined below).
(b) On the date of commencement of the Offer, Parent and Acquisition
Sub shall file with the SEC a Tender Offer Statement on Schedule 14D-1 with
respect to the Offer, which shall contain an offer to purchase and a related
letter of transmittal and summary advertisement (such Schedule 14D-1 and the
documents included therein pursuant to which the Offer will be made, together
with any supplements or amendments thereto, the "Offer Documents"). Parent and
Acquisition Sub agree that the Offer Documents shall comply as to form in all
material respects with the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the "Exchange Act") and, on the
date first published, sent or given to the Company's stockholders, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by Parent or Acquisition Sub
with respect to information regarding the Company or its subsidiaries or
provided by the Company for inclusion or incorporation by reference in the Offer
Documents. Each of Parent,
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Acquisition Sub and the Company agrees promptly to correct any information
provided by it for use in the Offer Documents if and to the extent that such
information shall have become false or misleading in any material respect, and
each of Parent and Acquisition Sub further agrees to take all steps necessary to
amend or supplement the Offer Documents and to cause the Offer Documents as so
amended or supplemented to be filed with the SEC and to be disseminated to the
Company's stockholders, in each case as and to the extent required by applicable
Federal securities laws. The Company and its counsel shall be given a
reasonable opportunity to review and comment upon the Offer Documents and all
amendments and supplements thereto prior to their filing with the SEC or
dissemination to stockholders of the Company. Parent and Acquisition Sub agree
to provide the Company and its counsel any comments or requests for additional
information Parent, Acquisition Sub or their counsel may receive from the SEC or
its staff with respect to the Offer Documents promptly after the receipt of such
comments and shall provide the Company and its counsel an opportunity to
participate, including by way of discussion with the SEC or its staff, in the
response of Parent and/or Acquisition Sub to such comments.
(c) Parent shall provide or cause to be provided to Acquisition Sub
on a timely basis the funds necessary to accept for payment, and pay for, any
shares of Company Common Stock and Preference Stock that Acquisition Sub accepts
for payment, and becomes obligated to pay for, pursuant to the Offer.
SECTION 1.02. Company Actions. (a) The Company hereby approves of
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and consents to the Offer and represents that the Board of Directors of the
Company, at a meeting duly called and held, adopted resolutions approving this
Agreement, the Offer, the Merger and the transactions contemplated hereby,
determining that the terms of the Offer and the Merger are fair to, and in the
best interests of, the Company's stockholders and recommending that the
Company's stockholders approve and adopt this Agreement, accept the Offer and
tender their shares pursuant to the Offer and/or vote their shares of Company
Common Stock and Preference Stock in favor of the Merger.
(b) Not later than the date the Offer Documents are filed with the
SEC, the Company shall file with the SEC a Solicitation/Recommendation Statement
on Schedule 14D-9 (which shall include the information required by Section 14(f)
of the Exchange Act and Rule l4f-1 promulgated thereunder with respect to the
persons to be named directors of the Company pursuant to Section 5.21) with
respect to the Offer (such Schedule 14D-9, as amended from time to time, the
"Schedule 14D-9") containing the recommendation described in Section 1.02(a) and
shall mail the Schedule 14D-9 to the stockholders of the Company. The Schedule
14D-9 shall comply as to form in all material respects with the Exchange Act and
the rules and regulations promulgated thereunder and, on the date filed with the
SEC and on the date first published, sent or
4
given to the Company's stockholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information provided by
Parent or Acquisition Sub for inclusion or incorporation by reference in the
Schedule 14D-9. Each of the Company, Parent and Acquisition Sub agrees promptly
to correct any information provided by it for use in the Schedule 14D-9 if and
to the extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so
amended or supplemented to be filed with the SEC and disseminated to the
Company's stockholders, in each case as and to the extent required by applicable
Federal securities laws. Parent and its counsel shall be given a reasonable
opportunity to review and comment upon the Schedule 14D-9 and all amendments and
supplements thereto prior to their filing with the SEC or dissemination to
stockholders of the Company. The Company agrees to provide Parent and its
counsel in writing with any comments or requests for additional information the
Company or its counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments and shall provide
Parent and its counsel an opportunity to participate, including by way of
discussions with the SEC or its staff, in the response of the Company to such
comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to furnish Acquisition Sub promptly with mailing labels
containing the names and addresses of the record holders of Company Common Stock
and of the record holders of Preference Stock as of a recent date and of those
persons becoming record holders subsequent to such date, together with copies of
all lists of stockholders, security position listings and computer files and all
other information in the Company's possession or control regarding the
beneficial owners of Company Common Stock and the beneficial owners of
Preference Stock, and shall furnish to Acquisition Sub such information and
assistance (including updated lists of stockholders, security position listings
and computer files) as Parent may request in communicating the Offer to holders
of Company Common Stock and Preference Stock.
SECTION 1.03. Surviving Corporation. In accordance with the
----------------------
provisions of this Agreement and the Massachusetts Business Corporation Law, as
amended (the "MBCL"), at the Effective Date (as defined in Section 1.08),
Acquisition Sub shall be merged with and into the Company, and the Company shall
be the surviving corporation in the Merger (hereinafter sometimes called the
"Surviving Corporation"). At the Effective Date, the separate existence of
Acquisition Sub shall cease.
5
SECTION 1.04. Articles of Organization. (a) The Articles of
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Organization of the Company as amended pursuant to the Articles of Merger (as
defined in Section 1.08), shall be the Articles of Organization of the Surviving
Corporation.
(b) The purposes of the Surviving Corporation shall be as set forth
in the Articles of Organization of Acquisition Sub as in effect on the date
hereof until such time as such purposes may be amended as provided in the
Articles of Organization of the Surviving Corporation and by applicable law.
SECTION 1.05. By-Laws. The By-Laws of Acquisition Sub as in effect
--------
at the Effective Date shall be the By-Laws of the Surviving Corporation, until
thereafter amended or repealed as provided by law.
SECTION 1.06. Directors. The directors of Acquisition Sub at the
----------
Effective Date shall, from and after the Effective Date, be the directors of the
Surviving Corporation and shall hold office from the Effective Date until their
respective successors are duly elected or appointed and qualified in the manner
provided in the Articles of Organization and By-Laws of the Surviving
Corporation, or as otherwise provided by law.
SECTION 1.07. Officers. The officers of Acquisition Sub at the
---------
Effective Date shall, from and after the Effective Date, be the officers of the
Surviving Corporation and shall hold office from the Effective Date until their
respective successors are duly elected or appointed and qualified in the manner
provided in the Articles of Organization and By-Laws of the Surviving
Corporation, or as otherwise provided by law.
SECTION 1.08. Effective Date. The Merger shall become effective at
---------------
the time of filing of articles of merger (substantially in the form set forth in
Exhibit B annexed hereto) with the Secretary of State of the Commonwealth of
Massachusetts in accordance with the provisions of Section 78 of the MBCL (the
"Articles of Merger"). The Articles of Merger shall be filed with the Secretary
of State of the Commonwealth of Massachusetts on the Closing Date. The date and
time when the Merger becomes effective shall be herein referred to as the
"Effective Date" and the "Effective Time", respectively.
SECTION 1.09. Additional Actions. If, at any time after the
-------------------
Effective Date, the Surviving Corporation determines that any deeds, bills of
sale, assignments, assurances or any other acts or things are necessary or
desirable (a) to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation, its right, title or interest in, to or under any of the
rights, properties or assets of the Company or its Subsidiaries
6
acquired or to be acquired by reason of, or as a result of, the Merger, or (b)
otherwise to carry out the purposes of this Agreement, the Surviving Corporation
and its proper officers and directors shall be authorized to execute and
deliver, in the name and on behalf of the Company and its Subsidiaries, all such
deeds, bills of sale, assignments and assurances and to do, in the name and on
behalf of the Company and its Subsidiaries, all such other acts and things
necessary or desirable to vest, perfect or confirm any and all right, title or
interest in, to or under such rights, properties or assets in the Surviving
Corporation or otherwise to carry out the purposes of this Agreement.
SECTION 1.10. Company Common Stock, Preferred Stock and Preference
----------------------------------------------------
Stock. (a) Company Common Stock. (i) Each share of Common Stock of the
------ ---------------------
Company, par value $1 per share (the "Company Common Stock") actually issued and
outstanding at the Effective Date (except for Dissenting Shares, as defined in
Section 1.12) shall, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into the right to receive $5.50 (the "Total
Merger Consideration").
(ii) Each share of Company Common Stock held directly by Parent or
Acquisition Sub or in the Company's treasury at the Effective Date shall, by
virtue of the Merger, be canceled without payment of any consideration therefor
and without any conversion thereof.
(b) 5% Cumulative Preferred Stock. Each share of the Company's 5%
------------------------------
Cumulative Preferred Stock, par value $100 per share (the "5% Stock"), actually
issued and outstanding at the Effective Date, shall remain issued and
outstanding after the Merger and shall be called for redemption and retirement
as soon as practicable following the Merger (except for Dissenting Shares, as
defined in Section 1.12), in accordance with the terms of Section 5.16(a), at a
price equal to $110, plus all accrued and unpaid dividends thereon as of the
date of redemption and retirement (the "5% Stock Consideration"), in accordance
with the terms of the 5% Stock.
(c) $1.85 Cumulative Convertible Preference Stock. (i) Each share
----------------------------------------------
of the Company's $1.85 Cumulative Convertible Preference Stock, par value $1 per
share (the "Preference Stock"), actually issued and outstanding at the Effective
Date (except for Dissenting Shares, as defined in Section 1.12) shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into the right to receive $20, which amount shall not be adjusted for
any accrued and unpaid dividends thereon as of, or any dividends paid prior to,
the Effective Date (the "Preference Stock Consideration").
(ii) Each share of Preference Stock held directly by Parent or
Acquisition Sub or in the Company's treasury at the Effective Date shall, by
virtue of the Merger, be
7
canceled without payment of any consideration therefor and without any
conversion thereof.
SECTION 1.11. Conversion of Acquisition Sub Common Stock. All issued
-------------------------------------------
and outstanding shares of Common Stock, par value $1 per share, of Acquisition
Sub (the "Acquisition Sub Common Stock") at the Effective Date shall, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into and exchangeable for, in the aggregate, 100 fully paid and
nonassessable shares of Common Stock, par value $1 per share, of the Surviving
Corporation (the "Surviving Corporation Common Stock"), which shall constitute
all the issued and outstanding shares of Surviving Corporation Common Stock.
From and after the Effective Date, each outstanding certificate theretofore
representing shares of Acquisition Sub Common Stock shall be deemed for all
purposes to evidence ownership of, and to represent the number of shares of,
Surviving Corporation Common Stock into which such shares of Acquisition Sub
Common Stock shall have been converted.
SECTION 1.12. Dissenting Shares. Notwithstanding anything in this
------------------
Agreement to the contrary, shares of Company Common Stock, 5% Stock and
Preference Stock issued and outstanding on the Effective Date which are held of
record by stockholders who shall not have voted such shares in favor of the
Merger, if applicable, and who shall have properly exercised rights to demand
payment of the fair value of such shares in accordance with Sections 86 through
98, inclusive, of the MBCL ("Dissenting Shares") shall not be converted into the
right to receive the consideration specified in Section 1.10(a), 1.10(b), or
1.10(c), respectively, but the holders thereof instead shall be entitled to
payment of the fair value of such shares in accordance with the provisions of
Sections 86 to 92, inclusive, of the MBCL (the "Dissenting Consideration");
provided, however, that (i) if such a holder fails to file a notice of election
-------- -------
to dissent in accordance with Section 86 of the MBCL or, after filing such
notice of election, subsequently delivers an effective written withdrawal of
such notice or fails to establish his entitlement to appraisal rights as
provided in Sections 87 through 98, inclusive, of the MBCL, if he or she be so
required, or (ii) if a court shall determine that such holder is not entitled to
receive payment for his shares or such holder shall otherwise lose his or her
appraisal rights, then in either of such cases, each share of Company Common
Stock, 5% Stock or Preference Stock, respectively, held of record by such holder
or holders shall automatically be converted into and represent only the right to
receive the Total Merger Consideration, the 5% Stock Consideration or the
Preference Stock Consideration, respectively, upon the surrender of the
certificate or certificates representing such Dissenting Shares. The Company
shall give Parent prompt notice of any demands received by the Company for
payment of the fair value of such shares, and Parent shall have the right to
participate in all the negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written consent of
Parent, make
8
any payment (except to the extent that any such payment is made pursuant to a
court order) with respect to, or settle or offer to settle, any such demands.
SECTION 1.13. Surrender of Shares. (a) At and after the Effective
--------------------
Date, Parent shall make available on a timely basis, by transferring to
ChaseMellon Shareholder Services, Inc. (the "Paying Agent") for the benefit of
former stockholders of the Company, such funds as and when necessary to make the
payments provided for in Section 1.10 herein with respect to the outstanding
shares of Company Common Stock and Preference Stock. The Paying Agent shall
agree to hold such funds in trust for the benefit of the former stockholders of
the Company and deliver such funds in accordance with the terms hereof and the
terms of a Paying Agency Agreement to be entered into by and between the Paying
Agent and Parent.
(b) Prior to or at the Effective Date, the Paying Agent shall mail or
cause to be mailed to each record holder of an outstanding certificate or
certificates which, immediately prior to the Effective Date, represented shares
of Company Common Stock or Preference Stock (the "Certificates"), a form letter
of transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent) (the "Transmittal Letter") and instructions
for use in effecting the surrender of the Certificates for payment therefor.
Upon surrender to the Paying Agent of a Certificate, together with such
Transmittal Letter duly executed, the holder of such Certificate shall be
entitled to receive in exchange for each share of Company Common Stock or
Preference Stock represented by such Certificate, the Total Merger Consideration
or Preference Stock Consideration, respectively, and such Certificate shall
forthwith be canceled upon receipt by the holder of such Certificate of the
Total Merger Consideration or Preference Stock Consideration, respectively. No
interest will be paid or accrued on the Total Merger Consideration or Preference
Stock Consideration payable upon the surrender of such Certificates.
(c) If payment is to be made to a person other than the person in
whose name the Certificate surrendered in exchange therefor is registered, it
shall be a condition of payment of the Total Merger Consideration or Preference
Stock Consideration, as the case may be, that the Certificate so surrendered be
properly endorsed or accompanied by appropriate stock powers, in either case
signed exactly as the name of the record holder appears on such Certificate, and
is otherwise in proper form for transfer, and that the Person requesting such
payment shall pay any transfer or other taxes required by law as a result of
such payment to a Person other than the record holder of the Certificate
surrendered, or shall establish to Parent's satisfaction that such tax has been
paid or is not applicable.
9
(d) After the Effective Date, there shall be no further transfers on
the stock transfer books of the Surviving Corporation of the shares of Company
Common Stock or Preference Stock which are outstanding at the Effective Date.
If, after the Effective Date, Certificates are presented to the Surviving
Corporation or the Paying Agent for transfer, they shall be canceled and there
shall be issued to the transferee in exchange for each share of Company Common
Stock the Total Merger Consideration and in exchange for each share of
Preference Stock the Preference Stock Consideration in accordance with Section
1.10 hereof.
(e) The consideration payable upon the surrender for exchange of
Certificates in accordance with the terms of this Article I shall be deemed to
have been paid in full satisfaction of all rights pertaining to the shares of
Company Common Stock or Preference Stock theretofore represented by such
Certificates, and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the shares of Company
Common Stock or Preference Stock which were outstanding immediately prior to the
Effective Date.
(f) None of Parent, Acquisition Sub, the Company or the Paying Agent
shall be liable to any person in respect of any cash delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any Certificates shall not have been surrendered prior to seven years after
the Effective Date (or immediately prior to such earlier date on which any
payment pursuant to this Article I would otherwise escheat to or become the
property of any Governmental Authority), the payment in respect of such
Certificate shall, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
SECTION 1.14. Certain Benefit Plans. (a) (i) With respect to
----------------------
unexpired options ("Options"), whether or not exercisable at the Effective Date,
including stock appreciation rights relating thereto, outstanding on the
Effective Date which have been issued pursuant to the Company's 1982 Stock
Option Plan, as amended (the "1982 Stock Option Plan"), the Company's 1992 Stock
Option Plan, as amended (the "1992 Stock Option Plan"), or the Company's 1992
Non-Employee Directors Stock Option Plan, as amended (the "Director Option
Plan"), each such Option with an exercise price less than the Total Merger
Consideration (an "Eligible Option") shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted into the right to
receive, for each share of Company Common Stock subject thereto, a cash payment
without interest equal to the Total Merger Consideration, less the per share
exercise price of each such Option. Such Options shall be canceled upon such
cash payment following the Merger.
10
(ii) Any Option with an exercise price equal to or greater than the
Total Merger Consideration (an "Ineligible Option") shall be canceled upon the
Effective Date without payment of any consideration.
(iii) The Company shall use its best efforts to amend each
outstanding Option issued under the 1982 Stock Option Plan, the 1992 Stock
Option Plan and the Director Option Plan to effect the transactions contemplated
by this Agreement, including the cancellation of the Options in connection with
the Merger in accordance with this Section 1.14.
(b) There are no shares of Company Common Stock held in escrow
pursuant to the Company's former Long Term Incentive Compensation Plan (the
"LTIP"), and the LTIP has been terminated.
(c) Each share of Company Common Stock issued by the Company but not
yet vested pursuant to the Company's Employees' Savings and Profit Sharing Plan
(the "Savings Plan") shall, in connection with the Merger, become vested in the
Person to whose account such share of Company Common Stock was issued and
converted into the right to receive the Total Merger Consideration as provided
in Section 1.10(a).
(d) Immediately following the Effective Date, the Company's 1982
Stock Option Plan, 1992 Stock Option Plan and Director Option Plan shall be
terminated and no further stock awards or stock options shall be granted
thereunder from and after the date of this Agreement.
ARTICLE II
Representations and Warranties of the Company
---------------------------------------------
The Company hereby represents and warrants to Parent and Acquisition
Sub as follows with respect to the Company and its Subsidiaries:
SECTION 2.01. Corporate Organization. The Company is a corporation
-----------------------
duly incorporated, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts with all requisite corporate power and authority
to own, operate and lease its properties and to carry on its business as now
being conducted. The Company is qualified to do business and is in good standing
in each jurisdiction set forth in Schedule 2.01, which are the only
jurisdictions in which such qualification is necessary except where failure to
be qualified could not reasonably be expected to have a Material Adverse Effect.
For purposes of this Agreement, a "Material Adverse Effect" is
11
(a) a material adverse effect on the business, assets, properties, condition
(financial or other) or results of operations of the Company and its
Subsidiaries taken as a whole or the Surviving Corporation and its Subsidiaries
taken as a whole or (b) a material adverse effect on the ability of the Company
to carry out the transactions contemplated by this Agreement without significant
unanticipated delay or expense. For purposes of this Agreement, a "Subsidiary"
of any Person is any corporation of which a majority of all outstanding shares
of capital stock (the holders of which are ordinarily and generally entitled to
vote in the election of a majority of the members of the board of directors
thereof) is owned, directly or indirectly, by such Person and/or other
Subsidiaries of such Person. The Company has delivered to Parent complete and
correct copies of its Articles of Organization and By-Laws, as amended to the
date hereof.
SECTION 2.02. Capitalization of the Company. (a) The authorized
------------------------------
capital stock of the Company consists of 15,000,000 shares of Company Common
Stock, 15,000 shares of 5% Stock and 1,500,000 shares of Preference Stock. As
of December 31, 1997, 4,159,985 shares of Company Common Stock, 5,795 shares of
5% Stock and 814,300 shares of Preference Stock were issued and are outstanding,
and 275,112 shares of Company Common Stock were held in the Company's treasury.
All issued and outstanding shares of Company Common Stock, 5% Stock and
Preference Stock are duly and validly issued and outstanding, fully paid and
nonassessable. As of the date hereof, the aggregate amount of accrued and
unpaid dividends on the 5% Stock is zero and on the Preference Stock is
$1,881,033.
(b) As of the date hereof, there are outstanding unexercised,
unexpired Options to purchase 497,200 shares of Company Common Stock, in each
case with the exercise or "strike" price and other terms as set forth on
Schedule 2.02 hereto.
(c) Except as set forth in this Section 2.02 or on Schedule 2.02
hereto, there are no other shares of capital stock of the Company, or securities
convertible into or exchangeable or exercisable for shares of capital stock of
the Company or any of its Subsidiaries, outstanding, and there are no
outstanding options, warrants, rights, contracts, commitments, understandings,
arrangements or claims of any character by which the Company or any Subsidiary
is or may become bound to issue, transfer, sell, repurchase or otherwise acquire
or retire any shares of capital stock or other ownership interest of the Company
or any Subsidiary, or any securities convertible into or exchangeable or
exercisable for any such shares or other ownership interest (all of the
foregoing being called "Conversion Rights") and, except as set forth in Section
2.02(a) and as reserved for issuance upon exercise of the Options described in
Section 2.02(b) or the other Conversion Rights described in Schedule 2.02, no
shares of capital stock of the Company are reserved for issuance. There are no
voting trusts or other agreements or understandings to which the Company is a
party with respect to the voting of the capital
12
stock of the Company or any Subsidiary. Following consummation of the Merger no
holder or beneficiary of any Conversion Rights shall be entitled to receive any
securities of the Surviving Corporation or any other consideration not expressly
contemplated by this Agreement.
SECTION 2.03. Subsidiaries. (a) Schedule 2.03 hereto sets forth
-------------
each Subsidiary and the jurisdiction of incorporation of such Subsidiary.
Schedule 2.03 also sets forth each inactive Subsidiary (an "Inactive
Subsidiary") of the Company. No Inactive Subsidiary has any assets or
liabilities valued in excess of $5,000 or any business operations or real
property nor has any Inactive Subsidiary conducted any business during the two-
year period prior to the date of this Agreement. Except as disclosed on
Schedule 2.03 hereto, all of the outstanding shares of capital stock and other
ownership interest of the Company's Subsidiaries are owned, directly or
indirectly, by the Company. Except as disclosed on Schedule 2.03, none of the
shares or other ownership interests of the Subsidiaries owned or held by the
Company, directly or indirectly, is subject to any pledge, Lien (as defined
below) or claim of any kind.
(b) Each Subsidiary (excluding each Inactive Subsidiary) is duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of incorporation of each such Subsidiary, with all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business as now being conducted. Each Subsidiary (excluding each
Inactive Subsidiary) is also qualified to do business and is in good standing in
each jurisdiction in which such qualification is necessary, except where failure
to be so qualified would not have a Material Adverse Effect. The Company has
delivered to Parent complete and correct copies of the respective articles or
certificates of incorporation or organization or By-Laws, as amended to the date
hereof, of each of its Subsidiaries.
(c) Except for its Subsidiaries, the Company does not directly or
indirectly own any capital stock of or other equity interest in any corporation,
partnership or other person and neither the Company nor any of its Subsidiaries
is a member of or participant in any partnership, joint venture or similar
person.
SECTION 2.04. Authorization. (a) The Company has requisite
--------------
corporate power and authority to execute and deliver this Agreement, and subject
to the approval by the stockholders of the Company, to execute, deliver and file
the Articles of Merger and, subject to the satisfaction of the conditions set
forth herein and therein, to consummate the transactions contemplated hereby and
thereby.
(b) This Agreement, the Offer, the Merger and the other transactions
contemplated hereby have been approved by the Board of Directors of the Company
and,
13
except for the approval of the Merger by the stockholders of the Company, no
other corporate proceeding on the part of the Company is necessary to authorize
this Agreement, the Offer, the Merger or the other transactions contemplated
hereby or to consummate the Offer, the Merger and the other transactions
contemplated hereby. The affirmative vote of the holders of (i) two-thirds of
the outstanding shares of Company Common Stock and (ii) two-thirds of the
outstanding shares of the Preference Stock, approving the Merger are the only
votes of the holders of any class or series of the Company's capital stock
necessary to approve any of the transactions contemplated by this Agreement.
(c) This Agreement has been duly and validly executed and delivered
by the Company and is a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, and the Articles of Merger
when executed and delivered pursuant hereto will be a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, except in each case as such enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws in
effect now or hereafter in effect relating to creditors' rights generally, and
by equitable principles (whether considered in a proceeding at law or in
equity).
(d) The transfer of the Company's granule crushing equipment to the
Company's Wrentham and Franklin, MA quarry (at least with respect to the "French
parcel" of such quarry) and its operation at such location will not conflict
with, constitute a default under, result in the termination or in a right of
termination of, or violate or be in conflict with, provide a basis for increased
rights under, or result in a breach of any term or provision of, any term or
provision of any Material Contract.
SECTION 2.05. Absence of Conflicts; Consents. Except as set forth in
-------------------------------
Schedule 2.05, neither the execution and delivery by the Company of this
Agreement and the Articles of Merger nor the consummation by the Company of the
transactions contemplated hereby and thereby will:
(a) assuming the approvals set forth in Section 2.04(b) have been
obtained, conflict with or result in a breach of any provision of the
respective articles or certificate of incorporation or organization or By-
Laws of the Company or any Subsidiary;
(b) to the knowledge of the Company, result in the creation of any
lien, mortgage, agreement, right of way, charge, option, security interest,
claim, restriction, easement, covenant, lease or encumbrance ("Lien") upon
any of the properties of the Company or any of its Subsidiaries;
14
(c) with or without giving of notice or the passage of time, or both,
violate, or conflict with, or constitute a default under, or result in the
termination or in a right of termination of, violate or be in conflict
with, result in a breach of any term or provision of, or constitute a
default under, or accelerate or permit the acceleration of the performance
required by, or give any other natural person, corporation, trust,
association, company, partnership, joint venture or other entity or any
government, governmental agency, instrumentality or political subdivision
("Person") a basis for increased rights or termination or nonperformance
under, or require any consent, authorization or approval under, any term or
provision of any material Lien or any Material Contract to which the
Company or any Subsidiary is a party or by which any of them are or their
respective properties are subject or bound;
(d) subject to the approval of the Merger by the Company's
stockholders, to the knowledge of the Company, violate any provision of,
or, except as set forth in Section 2.05(e), require any consent,
authorization or approval under, any statute, law, ordinance, or
administrative rule or regulation, Permit, order or license (collectively,
but excluding Environmental Laws, "Applicable Laws") of any governmental
agency, body or instrumentality (whether Federal, state, local or foreign)
("Governmental Authority"), or any judicial, administrative or arbitration
order, award, judgment, writ, injunction or decree (collectively,
"Judgment") in each case applicable to the Company or any Subsidiary; or
(e) require any consent, approval or authorization of, or declaration,
filing or registration with, any Governmental Authority, to be made or
obtained by or on behalf of the Company except (i) as required by the
Exchange Act, (ii) the filing of the Articles of Merger and other
appropriate merger documents, if any, as required by the MBCL, or in
connection with the maintenance of qualification to do business in other
jurisdictions, such other jurisdictions, and (iii) filings with the Federal
Trade Commission ("FTC") and with the Antitrust Division of the U.S.
Department of Justice (the "Antitrust Division") pursuant to Title II of
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, and the rules and
regulations thereunder (the "HSR Act").
SECTION 2.06. Compliance with Laws. Neither the Company nor any
---------------------
Subsidiary has been or is presently in violation of any provision of their
respective certificates or articles of organization or incorporation or By-Laws,
or of any Applicable Law or Judgment that would have a Material Adverse Effect.
Except where the failure thereof would not cause a Material Adverse Effect, the
Company and its Subsidiaries possess, and are in compliance in all material
respects with the terms and provisions of all licenses, permits, certificates,
authorizations, rights and other approvals of
15
Governmental Authorities ("Permits") necessary for the operation of the business
of the Company and its Subsidiaries. Except as set forth in Schedule 2.09 or
2.18, neither the Company nor any Subsidiary has been given written notice by
any Governmental Authority of, or to the knowledge of Company, is under
investigation by any Governmental Authority with respect to, any violation of
any Applicable Law, Judgment or Permit. This Section 2.06 does not relate to
environmental representations and warranties, which matters are exclusively the
subject of Section 2.18.
SECTION 2.07. Financial Statements. (a) Set forth on Schedule 2.07
---------------------
are the Forms 10-K and 10-Q filed with the SEC for the year ended December 31,
1996, and the period ended September 30, 1997, respectively, including the
consolidated balance sheets of Company and its Subsidiaries as at December 31,
1995, December 31, 1996, and September 30, 1997, and the related consolidated
statements of income, stockholders' equity and cash flows for the respective
years or, in the case of September 30, 1997, the nine month period, then ended,
including the notes thereto, and, other than in respect of the statements as at
and for the period ended September 30, 1997, the report thereon of Price
Waterhouse, independent certified public accountants ( the "Company Financial
Statements"). The Company Financial Statements present fairly in all material
respects the consolidated financial position and the results of operations of
the Company and its Subsidiaries as of the dates and for the periods indicated
in the Company Financial Statements, in each case in conformity with generally
accepted accounting principles ("GAAP"), consistently applied during such
periods other than, in the case of the statements as at and for the period ended
September 30, 1997, for the absence of required footnote disclosure and
customary year-end adjustments. Except as expressly contemplated or permitted
by this Agreement or disclosed in the Schedules hereto, to the knowledge of the
Company, the Company and its Subsidiaries do not have any material liabilities
of any nature (whether accrued, absolute, contingent, unasserted or otherwise)
except (1) as disclosed, reflected or reserved against in the balance sheet (the
"Balance Sheet") dated September 30, 1997 (the "Balance Sheet Date"), included
in the Company Financial Statements, and (2) as incurred in the ordinary course
of business consistent with past practice and not in violation of this
Agreement.
(b) The inventory of the Company and its Subsidiaries, whether
reflected on the Balance Sheet or subsequently acquired, is, and will be as of
the Effective Date, generally of a quality and quantity usable and saleable,
consistent in all material respects with past practice, in the ordinary course
of business. The inventory of the Company and its Subsidiaries is reflected on
the Balance Sheet and in their respective accounting records in accordance with
GAAP applied on a basis consistent with past practice.
(c) All accounts receivable of the Company and its Subsidiaries,
whether reflected on the Balance Sheet or subsequently created, have arisen from
bona fide
16
transactions in the ordinary course of business. To the knowledge of the
Company, all accounts receivable reflected on the Balance Sheet are good and
collectible at the aggregate recorded amounts thereof, net of any applicable
reserves for doubtful accounts reflected on the Balance Sheet and all accounts
receivable created since the Balance Sheet Date are and will be as of the
Effective Date good and collectible at the aggregate recorded amounts thereof,
net of any applicable reserves for doubtful accounts reflected on the Balance
Sheet or subsequently created consistent with past practice and experience.
SECTION 2.08. Absence of Material Changes. Except as set forth in
----------------------------
Schedule 2.08 or as permitted by Section 5.06 or set forth in Schedule 5.06 or
as expressly contemplated or permitted by this Agreement, since the Balance
Sheet Date, each of the Company and its Subsidiaries has conducted its business
in the ordinary course, and there has not been (and it is not reasonably
expected there will be) (i) any event, change or circumstance causing, or
reasonably anticipated to cause in the future, any Material Adverse Effect,
except as otherwise disclosed to Parent in writing prior to the date of this
Agreement, (ii) any declaration, setting aside or payment of any dividend
(whether in cash, stock or property) with respect to any of the Company's
capital stock, other than the minimum required dividends declared on the 5%
Stock or the Preference Stock, (iii) (x) any granting by the Company or any of
its Subsidiaries to any executive officer or director of the Company or any of
its Subsidiaries of any increase in compensation, except as was required under
employment agreements in effect as of the Balance Sheet Date, (y) any granting
by the Company or any of its Subsidiaries to any such executive officer or
director of any increase in severance or termination pay, except as was required
under employment, severance or termination agreements in effect as of the
Balance Sheet Date or (z) any entry by the Company or any of its Subsidiaries
into any employment, severance or termination agreement with any such executive
officer or director, (iv) any damage, destruction or loss, whether or not
covered by insurance, that has or could have a Material Adverse Effect, (v) any
change in accounting methods, principles or practices by the Company materially
affecting its assets, liabilities or business, except insofar as may have been
required by a change in GAAP or (vi) any other action that would be prohibited
by Section 5.06 on and after the date of this Agreement. As of the date hereof,
the Company's reserves for potential liabilities have not been materially
reduced since the Balance Sheet Date and the Company believes that such reserves
are sufficient to cover the Company's liabilities.
SECTION 2.09. Litigation. Except as set forth in Schedule 2.09 and
-----------
other than routine warranty claims against the Company that do not in the
aggregate exceed in any material respect the level of such claims experienced
historically by the Company in the ordinary course, neither the Company nor any
Subsidiary is engaged in, and there is not to the knowledge of the Company
pending, nor has the Company or any
17
Subsidiary received written notice of, any legal action, suit, investigation,
inquiry or proceeding by any Governmental Authority or other Person ("Legal
Action").
SECTION 2.10. Patents and Trademarks. To the knowledge of the
-----------------------
Company, the Company and its Subsidiaries own all patents, trademarks, service
marks, trade names, copyrights, trade secrets, information, proprietary rights
and processes necessary for their business as now conducted without any conflict
with or infringement of the rights of others. Except as set forth in Schedule
2.10, there are no outstanding options, licenses or agreements of any kind
relating to the foregoing, nor is the Company nor any Subsidiary bound by or a
party to any material options, licenses or agreements of any kind with respect
to the patents, trademarks, service marks, trade names, copyrights, trade
secrets, information, proprietary rights and processes of any other Person.
Except as set forth in Schedule 2.10 or relating to any matter that has been
resolved or that the Company reasonably believes has been abandoned, none of the
Company nor any Subsidiary has received any written communications alleging that
the Company or any Subsidiary has violated any of the patents, trademarks,
service marks, trade names, copyrights or trade secrets or other proprietary
rights of any other Person.
SECTION 2.11. Material Contracts; Permits. Schedule 2.11(a) sets
----------------------------
forth a complete and accurate list of any of the following to which the Company
or any Subsidiary is a party or by which Company or any Subsidiary is bound
(collectively, "Material Contracts"):
(a) all deeds, indentures, leases, subleases or other instruments by
which an ownership, leasehold or other interest in real property is held by
the Company or any Subsidiary;
(b) all contracts, commitments or agreements, including contracts or
licenses pertaining to the payment of royalties (but excluding customer
purchase orders, purchase orders for raw materials and warranties), to the
extent such agreements include provisions that do or could involve payments
or commitments (whether fixed or contingent) to or from the Company or any
Subsidiary (i) for an amount (or potential amount) in excess of $200,000 or
(ii) have a term longer than twelve (12) months in duration (except for
such contracts, commitments or agreements terminable by the Company or the
appropriate Subsidiary of the Company without penalty upon notice of 90
days or less);
(c) all written management, compensation or employment contracts or
contracts entered into with any executive officer or director of the
Company or any Subsidiary;
18
(d) all contracts or agreements under which the Company or any
Subsidiary has any outstanding indebtedness, obligation or liability for
borrowed money or the deferred purchase price of property or has the right
or obligation to incur any such indebtedness, obligation or liability, in
each case in an amount greater than $200,000;
(e) all bonds or agreements of guarantee or indemnification in which
the Company or any Subsidiary acts as surety, guarantor or indemnitor with
respect to any obligation (fixed or contingent) in an amount or potential
amount greater than $200,000;
(f) all secrecy, noncompete or other agreements which (i) restrict the
right of the Company or any Subsidiary to engage in any business reasonably
related to its present activities or (ii) would restrict the right of
Parent to engage in any business after the consummation of the transactions
contemplated by this Agreement;
(g) all current bank accounts that contain balances and safe deposit
arrangements;
(h) all agreements relating to preemptive or other preferential rights
relating to capital stock, restrictions on the disposition of capital stock
and registration rights;
(i) all partnership and joint venture agreements;
(j) all agreements relating to material business acquisitions or
dispositions during the last five years, including any separate tax or
indemnification agreements; and
(k) all material customer and supply agreements and all material sales
representative, marketing, agency or distributorship agreements, to the
extent such agreements include provisions that do or could involve payments
or commitments (whether fixed or contingent) to or from the Company or any
Subsidiary (i) for an amount in excess of $200,000 or (ii) have a term
(including renewals that do not require the Company's or a Subsidiary's
consent) longer than twelve months in duration (except for such contracts,
commitments or agreements terminable by the Company or the appropriate
Subsidiary of the Company without penalty upon notice of 90 days or less).
19
Except as set forth on Schedule 2.11(a), (i) neither the Company nor
any Subsidiary is in default under the terms of any Material Contract, which
default permits the other party to adversely alter or terminate any rights of
the Company or any Subsidiary or accelerate the obligations of the Company or
any Subsidiary under such Material Contract or to collect damages, (ii) to the
knowledge of the Company, no other party thereto is in default under the terms
of any Material Contract and (iii) each Material Contract is in full force and
effect.
In order for the Company or any Subsidiary to perform its payment
obligations noted under each of the Material Contracts set forth on Schedule
2.11 (b), the only required payment will be the payment of the outstanding
principal amount (and accrued interest thereon) owed by the Company under each
such Material Contract which as of the date of this Agreement is set forth on
Schedule 2.11 (b) for each such Material Contract, without the payment of any
premium or penalty, other than accrued interest or default interest. Upon the
making of such payment under each such Material Contract, the Company will have
no further obligation or liability under any such Material Contract, except for
immaterial expenses relating to the termination of such Material Contracts.
SECTION 2.12. Title to Properties and Related Matters. (a) Schedule
----------------------------------------
2.12(a) sets forth all of the real property owned by the Company and each
Subsidiary (the "Owned Real Property"). Schedule 2.12(b) sets forth all of the
real property and interests in real property leased by the Company and each
Subsidiary (the "Leased Real Property", and together with the Owned Real
Property, the "Company Property"). Each of the Company or its Subsidiaries, as
the case may be, has good and marketable fee title to the Owned Real Property,
subject only to Permitted Liens (as defined in Section 2.12(b) below). Each of
the Company or its Subsidiaries, as the case may be, has a valid and existing
leasehold interest in all Leased Real Property, subject only to Permitted Liens
(as defined in Section 2.12(b) below).
(b) All Company Property and personal properties owned by the Company
or any Subsidiary are owned free and clear of all Liens (other than mortgages
securing the Company's existing credit facility described in Schedule 2.11 (b))
or leased free and clear of all Liens, except for (A) Liens for taxes and
assessments or governmental charges or levies which are not at the time of
Closing due or payable, (B) Liens in respect of pledges or deposits under
workers' compensation laws or similar legislation, carriers', warehousemen's,
mechanics', laborers' and materialmen's and similar Liens, which have been
incurred in the ordinary course of business, so long as the obligations secured
by such Liens are not then delinquent, (C) Liens incidental to the conduct of
the business of the Company and its Subsidiaries (other than arising out of
claims of infringement) which were not incurred in connection with the borrowing
of
20
money or the obtaining of advances or credits and which do not individually or
in the aggregate materially detract from the value or materially impair the use
and operation of the Company Property to which it relates or the value and
operation of the business of the Company as presently conducted, (D) covenants,
conditions, restrictions, easements and other similar matters of record existing
as of the Effective Date which do not, individually or in the aggregate, impair
the use and operation of the Company Property to which it relates in the
business of the Company as presently conducted and (E) Liens set forth on
Schedule 2.18 arising pursuant to Environmental Laws (the liens described in the
foregoing clauses (A), (B), (C), (D) and (E) being "Permitted Liens") and (ii)
the Owned Real Property and personal properties owned by the Company or any
Subsidiary are not subject to any Liens, building or use restrictions,
exceptions, variances, reservations or limitations of any nature whatsoever
which interfere with or are violated by the existence of the improvements
thereon or the current use and operation of each such Owned Real Property or
personal properties, respectively, to which it relates in the business of the
Company as currently conducted.
SECTION 2.13. Taxes. (a) For purposes of this Agreement, (A)
------
"Tax"or "Taxes" shall mean all Federal, state, provincial, county, local,
--- -----
municipal, foreign and other taxes, assessments, duties or similar charges of
any kind whatsoever, including all corporate franchise, income, sales (including
bulk sales), use, ad valorem, intangibles, receipts, value added, profits,
license, withholding, payroll, employment, excise, premium, real property,
personal property, customs, net worth, estimated, capital gains, transfer,
stamp, documentary, social security, alternative minimum, accumulated earnings,
goods and services, recapture, recording, severance, environmental (including
but not limited to, taxes under Section 59A of the Code), occupation and other
taxes, and including any interest, penalties and additions imposed with respect
to such amounts; (B) "Code" shall mean the Internal Revenue Code of 1986, as
----
amended, and reference to any Section of the Code shall refer to that Section in
effect at the date hereof; (C) "Taxing Authority" shall mean any domestic,
----------------
foreign, federal, national, state, provincial, county or municipal or other
local government, any subdivision, agency, commission or authority thereof, or
any quasi-governmental body exercising any taxing authority or any other
authority exercising Tax regulatory authority; and (D) "Return"or "Returns"
------ -------
shall mean all returns, declarations of estimated tax payments, reports,
estimates, information returns and statements, including any related or
supporting information filed with respect to any of the foregoing, maintained,
filed or to be filed with any Taxing Authority in connection with the
determination, assessment, collection or administration of any Taxes.
(b) Except as set forth on Schedule 2.13, the Company and each of the
Subsidiaries has timely filed or will timely file, as the case may be, with the
appropriate Taxing Authority all Returns required to be filed on or prior to the
date hereof or the
21
Closing Date, as the case may be, and each such Return was or will be, as the
case may be, complete and correct in all material respects at the time of
filing.
(c) Except as set forth on Schedule 2.13, all Taxes (including Taxes
for which no Returns are required to be filed and including payroll and wage
withholding Taxes) of the Company and any of the Subsidiaries or for which the
Company or any of the Subsidiaries is or could otherwise be held liable, or
which are or could otherwise become chargeable as an encumbrance upon any
property or assets of the Company or any of the Subsidiaries ("Covered Taxes"),
have been duly and timely paid. The amount of "accrued Taxes" shown on the
Balance Sheet adequately reflects the liability for unpaid Taxes (including
deferred Taxes) of Company and the Subsidiaries as of the Balance Sheet Date.
(d) Except as set forth on Schedule 2.13, the Company has made
available for inspection by Parent (A) complete and correct copies of all
Returns of the Company and each of the Subsidiaries, with respect to Federal,
state, provincial, county, local, municipal, foreign and other income, profits,
corporate franchise, receipts, sales, excise, property, net worth and all other
material Taxes, that are or have been required to be filed (except as noted in
(b) above) for taxable periods ending with or within the last five calendar
years and for such longer period as Parent has requested not to exceed the
period of the relevant statute of limitations and (B) complete and correct
copies of all ruling requests, private letter rulings, revenue agent reports,
information document requests and responses thereto, notices of proposed
deficiencies, deficiency notices, applications for changes in method of
accounting, protests, petitions, closing agreements, settlement agreements, and
any similar documents submitted by, received by or agreed to by or on behalf of
the Company or any of the Subsidiaries and relating to material Covered Taxes.
(e) Except as set forth on Schedule 2.13, no liens for Taxes exist
with respect to any of the assets or properties of any of the Subsidiaries or
Company. The Returns of the Company and each of the Subsidiaries with respect
to Federal income Taxes have been examined by the Internal Revenue Service, or
the statute of limitations with respect to the relevant Tax liability has
expired, for all taxable periods through and including the year ended December
31, 1982. All Returns with respect to state, county, local, municipal,
provincial, foreign and other income, profits, corporate franchise, receipts,
sales, excise, property, net worth, and capital Taxes, and with respect to all
other material Taxes, have been examined by the appropriate Taxing Authority, or
the statute of limitations with respect to the relevant Tax liability has
expired, for all taxable periods through and including the taxable period listed
with respect to each such jurisdiction. Except as set forth on Schedule 2.13,
each deficiency resulting from any audit or examination relating to Covered
Taxes by any Taxing Authority has been paid
22
and no material issues were raised in writing by the relevant Taxing Authority
during any such audit or examination that might apply to taxable periods other
than the taxable period to which such audit or examination related. Except as
set forth on Schedule 2.13, (A) no Returns with respect to Federal income Taxes
are currently under audit or examination by the Internal Revenue Service and any
other Taxing Authority, (B) no audit or examination relating to Covered Taxes is
currently being conducted by the Internal Revenue Service or any other Taxing
Authority and (C) neither the Internal Revenue Service nor any other Taxing
Authority has given notice in writing that it will commence any such audit or
examination.
(f) Except as set forth in Schedule 2.13, no Taxing Authority is now
asserting (in writing), or, to the knowledge of the Company or any of the
Subsidiaries, threatening to assert (in writing), any deficiency or claim for
Covered Taxes or any adjustment to any item of income, gain, deduction, loss,
credit, or tax basis entering into the computation of Covered Taxes and there is
no reasonable basis for any such assertion.
(g) Except as set forth in Schedule 2.13, (A) no person has made with
respect to the Company or any of the Subsidiaries, or with respect to any
property held by the Company or any of the Subsidiaries, any consent under
Section 341 of the Code, (B) no property of Company or any of the Subsidiaries
constitutes "tax-exempt use property" (as defined in Section 168(h) of the
Code), (C) neither the Company nor any of the Subsidiaries is a party to any
lease made pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954,
as amended and in effect prior to the date of enactment of the Tax Equity and
Fiscal Responsibility Act of 1982 and (D) none of the assets of Company or any
of the Subsidiaries is subject to a lease under Section 7701(h) of the Code or
under any predecessor.
(h) There is no agreement or other document extending, or having the
effect of extending, the period of assessment or collection of any Covered Taxes
and no unrevoked power of attorney with respect to any Covered Taxes has been
executed or filed with the Internal Revenue Service or any other Taxing
Authority.
(i) The Company has never been a member of any affiliated,
consolidated, combined, unitary or aggregate group for purposes of filing
Returns or paying Taxes at any time.
(j) Except as set forth in Schedule 2.13, none of the Company or any
of the Subsidiaries is a party to or is bound by any Tax sharing agreements
(whether formal or informal) with any of its affiliates, or with any Taxing
Authority.
23
(k) None of the Company or any of the Subsidiaries will be required
to include in a taxable period on or after the Closing Date taxable income
attributable to income that economically accrued in a taxable period ending on
or before the Closing Date, including, without limitation, as a result of the
installment method of accounting, the completed contract method of accounting or
the cash method of accounting.
(1) Except as set forth on Schedule 2.13, none of the Company or any
of the Subsidiaries will be required in a taxable period beginning on or after
the Closing Date to include any amount in income pursuant to Section 481 of the
Code (or any comparable provisions of state, local or foreign law), by reason of
a change in accounting methods or otherwise, as a result of actions taken prior
to the Closing Date.
(m) Schedule 2.13 lists each state, county, local, municipal or
foreign jurisdiction in which Company or any of the Subsidiaries files, has
filed, is required to file or has been required to file a Return or is or has
been liable for Tax on a "nexus" basis for the current and preceding five years.
(n) The Company is not, and has not been during the five-year period
ending on the date hereof or the Closing Date, as the case may be, a "United
States real property holding corporation" within the meaning of Section 897 of
the Code.
(o) Schedule 2.13 provides true and correct descriptions of the
following: items for which amounts for taxes have been reserved on the Balance
Sheet in excess of reserves necessary to currently pay its operating tax
liabilities. The Company has a consolidated net operating loss carryover for
regular Federal income tax purposes as of December 31, 1996, of approximately
$42 million. The Company has no material net operating loss carryovers in
states other than Massachusetts (in which it has a net operating loss carryover
of $58 million as of December 31, 1996). The Company has tax credit carry
forwards as of December 31, 1996, of approximately $1.1 million for regular
Federal income tax purposes, and no tax credit carryforwards for state tax
purposes. In addition, the Company had approximately $1.1 million of minimum
tax carryovers.
(p) Schedule 2.13 sets forth the Company's best estimates, made in
good faith, of the excess loss accounts for the Company and its Subsidiaries as
of December 31, 1996. The Company estimates in good faith that neither it nor
its Subsidiaries had positive balances in any deferred intercompany gain
accounts as of December 31, 1996.
(q) The schedules of the Company's best estimates, made in good
faith, of the temporary and permanent differences as of December 31, 1996,
previously submitted to the Company are true, correct and complete in all
material respects.
24
(r) None of the Company, any of the Subsidiaries or any other
affiliate of the Company has made any election under Section 13261(g)(2) or
Section 13261(g)(3) of the Revenue Reconciliation Act of 1993.
(s) None of the Company, any of the Subsidiaries or any other
affiliate of the Company has available any foreign tax credits.
SECTION 2.14. Labor Agreements. Except as identified on Schedule
-----------------
2.14, neither the Company nor any Subsidiary is a party to any union, collective
bargaining, works council or similar agreement or arrangement.
SECTION 2.15. Benefit Plans. (i) Schedule 2.15 is a list of each
--------------
"employee pension benefit plan" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) (hereinafter a
"Pension Plan"), "employee welfare benefit plan" (as defined in Section 3(l) of
ERISA, hereinafter a "Welfare Plan"), and each other plan, arrangement or policy
relating to stock options, stock purchases, compensation, deferred compensation,
severance, fringe benefits or other employee benefits, in each case maintained
or contributed to, or required to be maintained or contributed to, by the
Company and its Subsidiaries or any other person or entity that, together with
the Company, is treated as a single employer under Section 414(b), (c), (m) or
(o) of the Code (each a "Commonly Controlled Entity") for the benefit of any
present or former employees of the Company or any of its Subsidiaries (all the
foregoing being herein called "Benefit Plans"). The Company has made available
to Parent true, complete and correct copies of (1) each Benefit Plan, (2) the
most recent annual report on Form 5500 as filed with the Internal Revenue
Service with respect to each applicable Benefit Plan, (3) the most recent
summary plan description (or similar document) with respect to each applicable
Benefit Plan and (4) each trust agreement and insurance or annuity contract
relating to any Benefit Plan.
(ii) Except as disclosed in Schedule 2.15, to the knowledge of the
Company, each Benefit Plan has been administered in all material respects in
accordance with its terms. Except as disclosed in Schedule 2.15, to the
knowledge of the Company, the Company, its Subsidiaries and all the Benefit
Plans are in compliance in all material respects with the applicable provisions
of ERISA, the Code, and all other Applicable Laws. Except as disclosed in
Schedule 2.15, to the knowledge of the Company, there are no investigations by
any governmental agency, termination proceedings or other claims (except claims
for benefits payable in the normal operation of the Benefit Plans), suits or
proceedings against or involving any Benefit Plan or asserting any rights to or
claims for benefits under any Benefit Plan that could give rise to a Material
Adverse Effect, and to the knowledge of the Company, there are not any facts
that could give rise to a Material Adverse Effect in the event of any such
investigation, claim, suit or proceeding.
25
(iii) Except as disclosed on Schedule 2.15, to the knowledge of the
Company: (1) all contributions to the Benefit Plans required to be made by the
Company or any of its Subsidiaries in accordance with the terms of the Benefit
Plans, any applicable collective bargaining agreement and, when applicable,
Section 302 of ERISA or Section 412 of the Code, have been timely made, (2)
there has been no application for or waiver of the minimum funding standards
imposed by Section 412 of the Code with respect to any Benefit Plan that is a
Pension Plan, excluding any Pension Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA (hereinafter a "Company Pension Plan")
and (3) no Company Pension Plan had an "accumulated funding deficiency" within
the meaning of Section 412(a) of the Code as of the end of the most recently
completed plan year. All such contributions to the Benefit Plans for any period
ending before the Balance Sheet Date are properly accrued and reflected in the
Balance Sheet and such contributions since such Balance Sheet Date will be
reflected on subsequent balance sheets.
(iv) Except as disclosed on Schedule 2.15, to the knowledge of the
Company, (1) each Company Pension Plan that is intended to be a tax-qualified
plan has been the subject of a determination letter from the Internal Revenue
Service to the effect that such Company Pension Plan and each related trust is
qualified and exempt from Federal income taxes under Sections 401(a) and 501(a),
respectively, of the Code, (2) no such determination letter has been revoked,
and revocation has not been threatened, (3) no event has occurred and no
circumstances exist that would adversely affect the tax-qualification of such
Company Pension Plan and (4) such Company Pension Plan has not been amended
since the effective date of its most recent determination letter in any respect
that might adversely affect its qualification, materially increase its cost or
require security under Section 307 of ERISA. The Company has made available to
Parent a copy of the most recent determination letter received with respect to
each Company Pension Plan for which such a letter has been issued, as well as a
copy of any pending application for a determination letter. The Company has
also provided to Parent a list of all Company Pension Plan amendments as to
which a favorable determination letter has not yet been received.
(v) Schedule 2.15 discloses whether: (1) to the knowledge of the
Company, any non-exempt "prohibited transaction" (as defined in Section 4975 of
the Code or Section 406 of ERISA) has occurred that involves the assets of any
Benefit Plan; (2) to the knowledge of the Company, any Company Pension Plan has
been terminated or has been the subject of a "reportable event" (as defined in
Section 4043 of ERISA and the regulations thereunder) for which the 30-day
notice requirement has not been waived by the Pension Benefit Guaranty
Corporation ("PBGC"); and (3) to the knowledge of the Company, the Company, any
of its Subsidiaries or any trustee, administrator or other fiduciary of any
Benefit Plan has engaged in any transaction or acted in a manner that
26
could, or has failed to act so as to, subject the Company, any such Subsidiary
or any trustee, administrator or other fiduciary to any material liability for
breach of fiduciary duty under ERISA or any other applicable law.
(vi) Except as disclosed on Schedule 2.15, to the knowledge of the
Company, as of the most recent valuation date for each Company Pension Plan that
is a "defined benefit pension plan" (as defined in Section 3(35) of ERISA
(hereinafter a "Defined Benefit Plan")), there was not any amount of "unfunded
benefit liabilities" (as defined in Section 4001(a)(18) of ERISA) under such
Defined Benefit Plan, and the Company is not aware of any facts or circumstances
that would materially change the funded status of any such Defined Benefit Plan.
The Company has made available to Parent the most recent actuarial report or
valuation with respect to each Defined Benefit Plan.
(vii) Except as disclosed on Schedule 2.15, to the knowledge of the
Company, no Commonly Controlled Entity has incurred any liability to a Pension
Plan (other than for contributions not yet due) or to the PBGC (other than for
the payment of premiums not yet due) that, when aggregated with other such
liabilities, would result in a Material Adverse Effect to the Company, which
liability has not been fully paid as of the date hereof if due and payable.
(viii) No Commonly Controlled Entity has (a) engaged in a transaction
described in Section 4069 of ERISA that could subject the Company to a material
liability at any time after the date hereof or (b) acted in a manner that could,
or failed to act so as to, result in material fines, penalties, taxes or related
charges under (x) Section 502(c), (i) or (1) of ERISA, (y) Section 4071 of ERISA
or (z) Chapter 43 of the Code.
(ix) Except as disclosed in Schedule 2.15, to the knowledge of the
Company, no Commonly Controlled Entity has announced an intention to withdraw,
but has not yet completed withdrawal, from a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA). Except as disclosed on Schedule 2.15, to the
knowledge of the Company, no action has been taken, and no circumstances exist,
that could result in either a partial or complete withdrawal from such a
multiemployer plan by any Commonly Controlled Entity. Schedule 2.15 also lists
for each Benefit Plan that is a multiemployer plan (excluding the multiemployer
plan in respect of the Company's former New York Building Products, Inc.
operations) the Company's best estimate, based upon the information supplied to
it by each multiemployer plan, of the amount of withdrawal liability that would
be incurred if each Commonly Controlled Entity were to make a complete
withdrawal from each such plan as of the dates specified in Schedule 2.15.
Schedule 2.15 also lists for each Benefit Plan that is a multiemployer
27
plan (excluding the multiemployer plans in respect of the Company's former New
York Building Products, Inc., and Bardstown operations) the Company's best
estimate, based upon the information supplied to it by each multiemployer plan,
of the amount of "unfunded vested benefits" (within the meaning of Section 4211
of ERISA) as of the dates specified in Schedule 2.15. As of the most recent
valuation date for the multiemployer plan in respect of the Company's former New
York Building Products Inc. operations, to the knowledge of the Company, based
upon the information supplied to it by such multiemployer plan, there was not
any amount of "unfunded vested benefits" under such plan.
(x) The list of Welfare Plans in Schedule 2.15 discloses whether each
Welfare Plan is (i) unfunded, (ii) funded through a "welfare benefit fund", as
such term is defined in Section 419(e) of the Code, or other funding mechanism
or (iii) insured. Except as disclosed on Schedule 2.15, to the knowledge of the
Company, apart from the written provisions of the Welfare Plans disclosed to
Parent, there are no understandings, agreements or undertakings, written or
oral, that would prevent any such Welfare Plan from being amended or terminated
at any time after the Closing Date. The Company and its Subsidiaries comply
with the applicable requirements of Section 4980B(f) of the Code with respect to
each Benefit Plan that is a group health plan, as such term is defined in
Section 5000(b)(1) of the Code.
(xi) Except as provided in Section 1.14 with respect to the 1982
Stock Option Plan, the 1992 Stock Option Plan, the Director Option Plan, the
1998 Incentive Compensation Program (the "MICP") and the Savings Plan, and as
provided in the employment and severance agreements listed in Schedules 2.11 (a)
and 2.15, no employee of the Company or any of its Subsidiaries will be entitled
to any additional material benefits or any acceleration of the time of payment
or vesting of any material benefits under any Benefit Plan as a result of the
transactions contemplated by this Agreement.
(xii) During the period beginning on January 1, 1995, and ending on
the date of this Agreement, there has been no change (a) in any actuarial or
other assumption used to calculate funding obligations with respect to any
Company Pension Plan or (b) in the manner in which contributions to any Company
Pension Plan are made or the basis on which such contributions are determined.
(xiii) Except as disclosed on Schedule 2.15, to the knowledge of the
Company and based upon its best estimate, any amount that could be received
(whether in cash or property or the vesting of property) as a result of any of
the transactions contemplated by this Agreement by any employee, officer or
director of the Company or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury
28
Regulation Section 1.280G-1) under any employment, severance or termination
agreement, other compensation arrangement or Benefit Plan currently in effect
would not be characterized as an "excess parachute payment" (as such term is
defined in Section 280G(B)(1) of the Code). Schedule 2.15 sets forth (i) the
Company's best estimate of the maximum amount that could be paid to each
executive officer of Company as a result of the transactions contemplated by
this Agreement under all employment, severance and termination agreements, other
compensation arrangements and Benefit Plans currently in effect and (ii) the
Company's best estimate of the "base amount" (as such term is defined in Section
280(b)(3) of the Code) for each such executive officer calculated as of the date
of this Agreement.
SECTION 2.16. Labor Disputes; Unfair Labor Practices. (a) There is
---------------------------------------
neither pending nor, to the knowledge of the Company, threatened any labor
dispute which could materially adversely affect the facility that is the subject
of such dispute, or any strike or work stoppage involving the Company or any
Subsidiary.
(b) There is not now pending or, to the knowledge of the Company,
threatened any charge or complaint against the Company or any Subsidiary by the
National Labor Relations Board, any state or local labor or employment agency or
any representative thereof.
SECTION 2.17. Product Warranties. (a) The standard forms of product
-------------------
warranties and guarantees used by the Company and each Subsidiary during the
past five (5) years are attached as Schedule 2.17 hereto. Neither the Company
nor any Subsidiary has authorized any product warranty or guaranty during such
period of time other than pursuant to such forms.
(b) Other than as set forth on Schedule 2.17 or relating to any
matter that has been resolved or that the Company reasonably believes has been
abandoned, as of date of this Agreement, the Company has not received written
notice of any product warranty or similar claims with an actual or alleged
liability to the Company or any Subsidiary other than routine warranty claims
against the Company that do not in the aggregate exceed in any material respect
the level of such claims historically experienced by the Company in the ordinary
course. The Company does not believe that the Assurance of Discontinuance dated
November 1995 between the Commonwealth of Massachusetts and Bird, Inc. will
result in an increase in liability for claims under product warranties over the
level historically experienced by the Company in the ordinary course.
29
(c) The class action litigation captioned Xxxxxxxx et. al. v. Bird
------------------------
Incorporated, Mass. Superior Ct, C.A. No. 96-00788, in respect of certain
------------
company shingle products is being defended by the Company's insurers with
reservation of rights.
(d) Since the Balance Sheet Date, the Company has not modified its
policies or practices with respect to settlement of warranty claims.
SECTION 2.18. Environmental Matters. Except as disclosed in Schedule
----------------------
2.18, with respect to the business and operations of the Company and its
Subsidiaries (which terms for purposes of this Section 2.18 shall be deemed to
include all predecessors and former Subsidiaries) and to the Owned Real Property
and Leased Real Property:
(a) No Hazardous Material has been used, possessed, Released,
generated, manufactured or treated, on or under such Owned Real Property or
Leased Real Property, as the case may be, by the Company or any Subsidiary in
material violation of any Environmental Law.
(b) The Company and each Subsidiary, as the case may be, has through
the date hereof (i) secured and maintained compliance with all permits,
certificates, licenses, approvals, registrations or authorizations required for
the conduct of their respective businesses under Environmental Laws and (ii)
maintained such Owned Real Property or Leased Real Property and conducted their
respective business thereon in accordance in all material respects with all
Environmental Laws.
(c) No written notice, written request for information pursuant to
common law, law or regulation, citation, summons, complaint or order has been
received by the Company or any Subsidiary, and no penalty has been assessed and,
to the knowledge of the Company, no investigation or review is pending or
threatened by any Governmental Authority or other Person, with respect to the
business and operations of the Company and its Subsidiaries or to such Owned
Real Property or Leased Real Property, as the case may be, other than relating
to any matter that has been resolved or that the Company reasonably believes has
been abandoned, regarding (i) any alleged violation by the Company or any
Subsidiary of any Environmental Laws, (ii) any alleged failure by the Company or
any Subsidiary to have any environmental permit, certificate, license, approval,
registration or authorization required under any Environmental Law, or (iii) any
use, possession, spill, Release, threatened Release, storage, generation,
manufacture, treatment, deposit, discharge, transportation or disposal by or on
behalf of the Company or any Subsidiary of any Hazardous Material.
30
(d) Neither the Company nor any Subsidiary has entered into or agreed
to any court decree or order nor are any of them subject to any judgment, decree
or order relating to compliance with any Environmental Law or to investigation
or cleanup under any Environmental Law.
(e) There are no aboveground or underground storage tanks on any such
Owned Real Property or Leased Real Property.
(f) Neither the Company nor any Subsidiary has received any written
notice of non-compliance with any applicable statutes, laws, ordinances, rules,
orders and regulations of any Governmental Authority that relate to occupational
health and safety, other than relating to any matter that has been resolved or
that the Company reasonably believes has been abandoned.
(g) The investigation, remediation, cleanup and other costs of the
Company relating to compliance with any Environmental Law will not exceed an
amount equal to $2.2 million (the "Company Estimates"). The Company has used
its best efforts in preparing the Company Estimates consistent with all
recognized best engineering practices.
As used in this Agreement, the term "Environmental Laws" means any and
all applicable treaties, laws, regulations, enforceable requirements, binding
determinations, orders, decrees, judgments, injunctions, permits, approvals,
authorizations, licenses or variances, promulgated or entered into by any
Governmental Authority, relating to the environment, conservation, preservation
or reclamation of natural resources, or to the management, Release or threatened
Release of Hazardous Materials, including without limitation the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. (S)(S) 9601 et seq. ("CERCLA"), the Federal Water Pollution Control Act,
-- ----
as amended, 33 U.S.C. (S)(S) 1251 et seq., Clean Air Act of 1970, as amended, 42
-- ----
U.S.C. (S)(S) 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C.
-- ----
(S)(S) 2601 et seq., the Occupational Safety and Health Act of 1970, as amended,
-- ----
29 U.S.C. (S)(S) 651 et seq., the Emergency Planning and Community Right-to-Know
-- ----
Act of 1986, 42 U.S.C. (S)(S) 11001 et seq., the Safe Drinking Water Act of
-- ----
1974, as amended, 42 U.S.C. (S)(S) 300(f) et seq., the Hazardous Materials
-- ----
Transportation Act, 49 U.S.C. (S)(S) 1801 et seq., and any similar or
-- ----
implementing state or local law, and all amendments or regulations promulgated
thereunder.
As used in this Agreement, the term "Hazardous Materials" means all
explosive or regulated radioactive materials or substances, hazardous or toxic
substances, wastes or chemicals, petroleum (including crude oil or any fraction
thereof) or petroleum distillates, asbestos or asbestos containing materials,
including materials listed in
31
49 C.F.R. (S) 172.101 and materials defined as hazardous substances pursuant to
Section 101(14) of the CERCLA.
As used in this Agreement, the term "Release" means any spilling,
emitting, leaking, pumping, pouring, emptying, injecting, depositing, disposing,
discharging, dispersing, leaching, emanating or migrating of any Hazardous
Materials in, into, onto, or though the environment (including ambient air,
surface water, groundwater, soils, land surface, subsurface strata, workplace or
structure).
SECTION 2.19. Insurance. The Company and each Subsidiary has been
----------
and is insured by financially sound and reputable insurers unaffiliated with the
Company with respect to its and their properties and the conduct of its and
their business in such amounts and against such risks as are consistent with
industry practice. The insurance coverage provided by such policies of
insurance will be continued through the Effective Date and will not terminate or
lapse by reason of the transactions contemplated by this Agreement. The Company
has provided to Parent copies of such policies of insurance. Except as set forth
in Schedule 2.19, neither the Company nor any Subsidiary has been denied
insurance coverage by any carrier in the last three years.
SECTION 2.20. SEC Filings. (a) Schedule 2.20 sets forth all of the
------------
documents filed since January 1, 1995, through the date of this Agreement by the
Company with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "Securities Act"), or the Exchange Act. The documents listed in
Schedule 2.20 (the "SEC Documents") are all the documents the Company was
required to file under the Securities Act or the Exchange Act since January 1,
1995, and at the time they were filed and when supplemented or amended, the SEC
Documents complied with the requirements of the Securities Act and the Exchange
Act, as applicable, and at such time, none of the SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in the SEC
Documents, at the time they were filed and when supplemented or amended,
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with GAAP (except, in the case of
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods therein indicated (subject, in the case of unaudited statements,
to normal year-end audit adjustments).
32
(b) None of the information supplied or to be supplied by the Company
for inclusion or incorporation by reference in (i) the Offer Documents or (ii)
the information to be filed by the Company in connection with the Offer pursuant
to Section 14(f) of the Exchange Act and Rule l4f-1 promulgated thereunder (the
"Information Statement"), will, at the respective times the Offer Documents and
the Information Statement are filed with the SEC and first published, sent or
given to holders of shares of Company Common Stock or Preference Stock, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Information Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder.
SECTION 2.21. Brokers and Finders. The Company has not employed any
--------------------
broker or finder or incurred any liability for any brokerage fees, commissions,
finders' fees or similar fees or expenses in connection with this Agreement or
the Merger contemplated herein except for Xxxxxx Brothers Inc. The Company has
delivered to Parent a copy of its engagement letter with Xxxxxx Brothers Inc.
The estimated investment banking and legal fees and expenses incurred and to be
incurred by the Company in connection with this Agreement and the Merger
contemplated by this Agreement have been disclosed to Parent in writing on the
date hereof.
SECTION 2.22. Antitakeover. The Company has taken or will take prior
-------------
to Closing all action necessary to approve the Offer and the Merger such that
the approval (along with the stockholder approval required pursuant to Section
6.03) is sufficient to render entirely inapplicable to the Offer and the Merger
or Parent or Acquisition Sub the provisions of Chapter 110C, 110D, 110E and 110F
of the Massachusetts General Laws. No other antitakeover or similar statute or
regulation applies or purports to apply to the transactions contemplated by this
Agreement.
SECTION 2.23. Opinion of Financial Advisor. The Company has received
-----------------------------
the opinion of Xxxxxx Brothers Inc. to the effect that the consideration to be
received in the Offer and the Merger by the Company's stockholders is fair to
the Company's stockholders from a financial point of view, a copy of which
opinion has been delivered to Parent.
SECTION 2.24. Asbestos Claims. The Agreement of Settlement dated
----------------
March 8, 1993, between Employers Insurance of Wausau and the Company with
respect to insurance coverage for the Company's exposure for future asbestos
expenses and liabilities is in full force and effect, and the Company believes
it has defenses to any payment Employers Insurance of Wausau may assert it is
due under such agreement.
33
SECTION 2.25. Revolving Credit and Security Agreement. The Revolving
----------------------------------------
Credit and Security Agreement (the "Revolving Credit Agreement") between the
Company and Fleet National Bank, dated as of July 8, 1997, may be terminated by
the Company at any time without any premium or penalty, except as set forth in
paragraph 2.17 of the Revolving Credit Agreement.
ARTICLE III
Representations and Warranties of Parent
----------------------------------------
Parent hereby represents and warrants to the Company as follows:
SECTION 3.01. Corporate Organization. Parent is a corporation duly
-----------------------
incorporated, validly existing and in good standing under the laws of Delaware
with all requisite power and authority to own, operate and lease its properties
and to carry on its business as now being conducted. Parent is qualified to do
business and is in good standing in each jurisdiction in which such
qualification is necessary, except where failure to be qualified would not
reasonably be expected to have a material adverse effect on the ability of
Parent to carry out the transactions contemplated hereby without significant
unanticipated delay.
SECTION 3.02. Authorization. (a) Parent has requisite corporate
--------------
power and authority to execute and deliver this Agreement and, subject to the
satisfaction of the conditions set forth herein and therein, to consummate the
transactions contemplated hereby and thereby.
(b) This Agreement has been approved by the Board of Directors of
Parent and upon such approval no other corporate proceeding on the part of
Parent is necessary to authorize this Agreement or to consummate the
transactions contemplated hereby.
(c) This Agreement has been duly and validly executed and delivered
by Parent and is a valid and binding agreement of Parent, enforceable against
Parent in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws in effect now or hereafter in effect relating to
creditors' rights generally and by equitable principles (whether considered in a
proceeding at law or in equity).
34
SECTION 3.03. Absence of Conflicts; Consents. Neither the execution
-------------------------------
and delivery by Parent of this Agreement nor the consummation by Parent of the
transactions contemplated hereby will:
(a) conflict with or result in a breach of any provision of the
certificate of incorporation or By-laws of Parent which would have a
material adverse effect on the ability of Parent to carry out the
transactions contemplated hereby without significant unanticipated delay;
(b) result in the creation of any Lien upon any of the properties of
Parent which would have a material adverse effect on the ability of Parent
to carry out the transactions contemplated hereby without significant
unanticipated delay;
(c) with or without giving of notice or the passage of time, or both,
violate, or conflict with, or constitute a default under, or result in the
termination or in a right of termination of, violate or be in conflict
with, result in a breach of any term or provision of, or constitute a
default under, or accelerate or permit the acceleration of the performance
required by, or give any other Person a basis for accelerated or increased
rights or termination or nonperformance under, or require any consent,
authorization or approval under, any term or provision of any Lien, lease,
license or other agreement or instrument to which Parent or any of its
Subsidiaries is a party or by which it or they are bound, except to the
extent that such circumstance would not have a material adverse effect on
the ability of Parent to carry out the transactions contemplated hereby
without significant unanticipated delay;
(d) subject to the approval of the Merger by the Company's
stockholders, to the knowledge of Parent, violate any provision of, or
require any consent, authorization or approval under, any Applicable Laws
of any Governmental Authority, or any Judgment applicable to Parent or any
of its Subsidiaries, except to the extent that such circumstance would not
have a material adverse effect on the ability of Parent to carry out the
transactions contemplated hereby without significant unanticipated delay;
or
(e) require any consent, approval or authorization of, or declaration,
filing or registration with, any Governmental Authority, to be made or
obtained by or on behalf of Parent except (i) as required by the Exchange
Act, (ii) the filing of the Articles of Merger and other appropriate
merger documents, if any, as required by the laws of the Commonwealth of
Massachusetts or, in connection with the maintenance of qualification to do
business in other jurisdictions, such
35
other jurisdictions and (iii) filings with the FTC and with the Antitrust
Division under the HSR Act.
SECTION 3.04. Litigation. Neither Parent nor any of its Subsidiaries
-----------
is engaged in, and there is not, to the knowledge of Parent, pending, nor has
Parent or any of its Subsidiaries received any written notice of, any Legal
Action which would prevent Parent from consummating the transactions
contemplated hereby.
SECTION 3.05. Brokers and Finders. Parent has not employed any broker
--------------------
or finder or incurred any liability for any brokerage fees, commissions,
finders' fees or similar fees or expenses in connection with this Agreement or
the transactions contemplated hereby except for XxXxxxxxx Xxxxx Securities Co.,
L.P. ("XxXxxxxxx Xxxxx"). In the event that the Company shall be obligated to
pay Parent's Expenses pursuant to Article X, Parent will deliver to the Company
a copy of its engagement letter with XxXxxxxxx Xxxxx.
ARTICLE IV
Representations and Warranties of Acquisition Sub
-------------------------------------------------
Acquisition Sub hereby represents and warrants to the Company as
follows:
SECTION 4.01. Corporate Organization. Acquisition Sub is a
-----------------------
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has not engaged in any operations
or incurred any obligations other than incident to its organization and the
performance of this Agreement.
SECTION 4.02. Authorization. (a) Acquisition Sub has all requisite
--------------
corporate power and authority, if necessary, to execute, deliver and file the
Articles of Merger and to execute and deliver this Agreement and, subject to the
satisfaction of the conditions set forth herein, to consummate the transactions
contemplated hereby. This Agreement has been approved by the Board of Directors
of Acquisition Sub, and no other corporate proceeding on the part of Acquisition
Sub is necessary to authorize this Agreement or to consummate the transactions
contemplated hereby without significant unanticipated delay.
(b) The Agreement has been duly and validly executed and delivered by
Acquisition Sub and is a valid and binding agreement of Acquisition Sub,
enforceable
36
against Acquisition Sub in accordance with its terms, except in each case as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or similar laws in effect now or hereafter in
effect relating to creditors' rights generally and by equitable principles
(whether considered in a proceeding at law or in equity).
SECTION 4.03. Absence of Conflicts; Consents. Neither the execution
-------------------------------
and delivery by Acquisition Sub of this Agreement nor the consummation by
Acquisition Sub of the transactions contemplated hereby will:
(a) conflict with or result in a breach of any provision of the
Articles of Organization or By-laws of Acquisition Sub which would have a
material adverse effect on the ability of Acquisition Sub to carry out the
transactions contemplated hereby without significant unanticipated delay;
(b) result in the creation of any Lien upon any of the properties of
Acquisition Sub which would have a material adverse effect on the ability
of Acquisition Sub to carry out the transactions contemplated hereby
without significant unanticipated delay;
(c) with or without giving of notice or the passage of time, or both,
violate, or conflict with, or constitute a default under, or result in the
termination or in a right of termination of, violate or be in conflict
with, result in a breach of any term or provision of, or constitute a
default under, or accelerate or permit the acceleration of the performance
required by, or give any other Person a basis for accelerated or increased
rights or termination or nonperformance under, or require any consent,
authorization or approval under, any term or provision of any Lien, lease,
license or other agreement or instrument to which Acquisition Sub or any of
its Subsidiaries is a party or by which it or they are bound, unless such
circumstance would not have a material adverse effect on the ability of
Acquisition Sub to carry out the transactions contemplated hereby without
significant unanticipated delay;
(d) subject to the approval of the Merger by the Company's
stockholders, to the knowledge of Acquisition Sub, violate any provision
of, or require any consent, authorization or approval under, any Applicable
Laws of any Governmental Authority, or any Judgment applicable to
Acquisition Sub or any of its Subsidiaries, except to the extent that such
circumstance would not have a material adverse effect on the ability of
Acquisition Sub to carry out the transactions contemplated hereby without
significant unanticipated delay; or
37
(e) require any consent, approval or authorization of, or declaration,
filing or registration with, any Governmental Authority, to be made or
obtained by or on behalf of Acquisition Sub except (i) as required by the
Exchange Act, (ii) the filing of the Articles of Merger and other
appropriate merger documents, if any, as required by the laws of the
Commonwealth of Massachusetts or, in connection with the maintenance of
qualification to do business in other jurisdictions, such other
jurisdictions and (iii) filings with the FTC and with the Antitrust
Division under the HSR Act.
SECTION 4.04. Litigation. Neither Acquisition Sub nor any of its
-----------
Subsidiaries is engaged in, and there is not, to the knowledge of Acquisition
Sub, pending, nor has Acquisition Sub received any written notice of, any Legal
Action which would prevent Acquisition Sub from consummating the transactions
contemplated hereby.
SECTION 4.05. Capitalization. The authorized capital stock of
---------------
Acquisition Sub consists of 200,000 shares of Common Stock, $1 par value, of
which 100 shares are issued and outstanding. All issued and outstanding shares
of Acquisition Sub Common Stock have been validly issued and are fully paid,
nonassessable and free of preemptive rights and all of such shares are owned,
beneficially and of record, by Parent. There are no outstanding securities
convertible into or exchangeable or exercisable for shares of capital stock of
Acquisition Sub.
SECTION 4.06. Brokers and Finders. Acquisition Sub has not employed
--------------------
any broker or finder or incurred any liability for any brokerage fees,
commissions, finders' fees or similar fees or expenses in connection with this
Agreement or the transactions contemplated hereby.
ARTICLE V
Covenants
---------
SECTION 5.01. Access and Information. From the date hereof until the
-----------------------
Effective Date or, if earlier, the date of termination of this Agreement
pursuant to Section 9.01, the Company shall, and shall cause its Subsidiaries
to, afford to Parent and to Parent's officers, employees, accountants, counsel
and other authorized representatives full access, upon reasonable notice to the
Company, to their plants, properties, books and records during normal business
hours for the purpose of making such investigations as Parent shall reasonably
desire in connection with the transactions contemplated hereby, at its expense
(except as otherwise contemplated by Section 10.01), and the Company shall
38
use its reasonable efforts to cause its and its Subsidiaries' representatives to
furnish promptly to Parent such additional financial and operating data and
other information regarding the business and properties of the Company and its
Subsidiaries as Parent may from time to time reasonably request for such
purpose. In addition, the Company shall afford to Parent and to Parent's
officers, employees, accountants, counsel and other authorized representatives
the right to speak directly with the lenders of the Company and its Subsidiaries
in the presence of representatives of the Company selected by the President of
the Company, including without limitation, Fleet National Bank.
SECTION 5.02. Proxy Statement. (a) The Company shall prepare and
----------------
file with the SEC, as soon as reasonably practicable, the proxy statement to be
distributed to the Company's stockholders in connection with the Special Meeting
referred to in Section 5.03 (the "Proxy Statement"), and the Company shall use
all reasonable efforts to have such Proxy Statement cleared by the SEC. The
Proxy Statement shall comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied or
required to be supplied by Parent or Acquisition Sub for inclusion or
incorporation by reference in the Proxy Statement.
(b) Parent shall cooperate with the Company in preparing the Proxy
Statement and making any filings required to be made pursuant to this Section
5.02, and the Company shall consult with Parent in that regard and keep Parent
fully informed of its progress with respect thereto and provide to Parent copies
of the Proxy Statement and all such filings for review and approval prior to the
finalization thereof.
(c) Parent and the Company shall furnish to each other, and each
other's counsel, all such information as may be required and requested in
connection with the preparation of the Proxy Statement and the filing of the
Proxy Statement with the SEC, and each represents and warrants to the other that
no written information furnished as provided for in this Section 5.02(c) which
has been prepared by the responsible party will contain any untrue statement of
a material fact or omit to state a material fact required to be stated in order
to make any information so furnished, in light of the circumstances under which
it is so furnished, not misleading.
(d) Parent and the Company shall each promptly notify the other if at
any time before the Effective Date it becomes aware that the Proxy Statement
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading. In such event, the Company shall prepare a supplement or amendment
to the Proxy Statement which corrects such
39
misstatements or omissions and shall cause the same to be filed with the SEC and
distributed to the stockholders of the Company in accordance with the Exchange
Act.
(e) Upon the acceptance of any shares of Company Common Stock and
Preference Stock (if any) by Acquisition Sub pursuant to the Offer (the
"Consummation of the Offer"), Parent shall cause Acquisition Sub to vote all its
shares of Company Common Stock and Preference Stock in favor of the Merger.
SECTION 5.03. Stockholders' Meeting. (a) The Company shall call a
----------------------
special meeting of its stockholders ("Special Meeting") to consider and vote
upon the matters necessary for the consummation of the transactions contemplated
by this Agreement and shall recommend to its stockholders a vote "FOR" the
Merger; provided, however, that nothing contained in this Section 5.03(a) or any
-------- -------
other provision of this Agreement shall prohibit the Company or its Board of
Directors, or the representatives of either of them, from recommending to the
stockholders of the Company against, or withdrawing, modifying or changing its
recommendation to the stockholders with respect to, the Merger, if permitted by
Section 5.12 hereof.
(b) The date of the Special Meeting shall be determined jointly by
Parent and the Company, but shall occur as soon as practicable following the
SEC's approval of the Proxy Statement and related proxy materials.
SECTION 5.04. Supplemental Information. From time to time prior to
-------------------------
the Effective Date, the Company shall promptly advise Parent of any inaccuracy
of which it has knowledge in any Schedules which it has delivered pursuant to
this Agreement if any matter arises hereafter which, if existing or occurring at
the date of this Agreement, would have been required to be set forth or
described in any such Schedule. Such updating shall not cure any breach or
misrepresentation or failure of any closing condition that may exist based on
the Schedules originally delivered with this Agreement.
SECTION 5.05. Further Assurances. Consistent with the terms and
-------------------
conditions hereof, each party hereto shall execute and deliver such instruments
and take such other action as the other parties hereto may reasonably require in
order to carry out this Agreement and the transactions contemplated hereby.
SECTION 5.06. Conduct of Company Business Prior to the Effective
--------------------------------------------------
Date. (a) Except as set forth on Schedule 5.06 or any other Schedule hereto
-----
with reference to this Section 5.06 or otherwise consented to or approved by an
authorized officer of Parent or as expressly contemplated or permitted by this
Agreement, the Company agrees that prior to the Effective Date (or, if earlier,
when a majority of the
40
members of the Board of Directors of the Company are designees of Acquisition
Sub in accordance with Section 5.21) the business of the Company and its
Subsidiaries shall be conducted in the ordinary course consistent with past
practice and:
(i) no change shall be made in the respective articles or certificate
of organization or incorporation or By-Laws of the Company or any of its
Subsidiaries;
(ii) no change shall be made in the number of shares of the Company's
authorized, issued or outstanding capital stock; nor shall any Conversion
Rights be granted, made, redeemed or amended; nor shall the Company or any
Subsidiary issue, deliver, pledge or sell any such shares, securities or
obligations (except deliveries or pledges in favor of the Company's senior
lenders); provided, however, that the Company shall be permitted to issue
-------- -------
shares or other securities as contemplated by the Savings Plan as in effect
on the date hereof and shall be permitted to issue shares of Common Stock
in connection with the due exercise of Options under the 1982 Stock Option
Plan, the 1992 Stock Option Plan, the Director Option Plan or any other
right or convertible security outstanding as of the date of this Agreement
in accordance with the existing terms thereof;
(iii) no dividend shall be declared or paid or other distribution
(whether in cash, stock, property or any combination thereof) or payment
declared or made in respect of the Company Common Stock, 5% Stock,
Preference Stock or any other outstanding capital stock of the Company, nor
shall the Company or any Subsidiary (y) purchase, acquire or redeem any
shares of Company Common Stock, 5% Stock or Preference Stock or (z) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock;
(iv) neither the Company nor any Subsidiary shall enter into any
Material Contract, or except in the ordinary course of business consistent
with past practice any other agreement, commitment or instrument;
(v) the Company shall use and shall cause each Subsidiary to use its
and their respective reasonable efforts to preserve its and their business
organization intact, to keep available the services of its and their
officers and present key employees and to preserve its and their properties
and the goodwill of its and their suppliers, customers and others with whom
business relationships exist;
(vi) the Company shall not take, agree to take or permit any
Subsidiary to take any action or do or permit to be done anything in the
conduct of its business
41
or that of any Subsidiary which would be contrary to or in breach of any of
the terms or provisions of this Agreement or which would cause any of the
representations of the Company contained herein to be or become untrue in
any material respect;
(vii) neither the Company nor any of its Subsidiaries shall adopt or
amend in any material respect or terminate any Benefit Plan, except as
required by law, or change any actuarial or other assumption used to
calculate funding obligations with respect to any Company Pension Plan
(except to the extent that failure to make such change would result in
noncompliance with GAAP, ERISA or the Code), or change the manner in which
contributions to any Company Pension Plan are made or the basis on which
such contributions are determined, except as required by Applicable Law;
(viii) the Company shall not acquire or agree to acquire (x) by
merging or consolidating with, or by purchasing a substantial portion of
the assets of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business organization or
division thereof or (y) any assets that are material, individually or in
the aggregate, to the Company and its Subsidiaries taken as a whole, except
purchases of inventory, raw materials, supplies and similar materials in
the ordinary course of business consistent with past practice and capital
expenditures complying with clause (xi);
(ix) the Company shall not sell, lease, license, mortgage or otherwise
encumber or subject to any Lien (except in favor of the Company's senior
lenders or Permitted Liens) or otherwise dispose of any of its material
properties or assets, except bona fide sales of inventory in the ordinary
course of business consistent with past practice;
(x) the Company shall not (x) incur any indebtedness for borrowed
money or guarantee any such indebtedness of another person, issue or sell
any debt securities or warrants or other rights to acquire any debt
securities of the Company or any of its Subsidiaries, guarantee any debt
securities of another person, enter into any "keep well" or other agreement
to maintain any financial statement condition of another person or enter
into any arrangement having the economic effect of any of the foregoing,
except for short-term borrowings incurred in the ordinary course of
business consistent with past practice and routine endorsements in the
process of collection, or (y) make any loans, advances or capital
contributions to, or investments in, any other person, other than to the
Company or any direct or indirect wholly owned Subsidiary of the Company or
routine travel and similar advances to employees;
42
(xi) the Company shall not make or agree to make any new capital
expenditure or expenditures which, individually, is in excess of $100,000
or, in the aggregate, are in excess of $250,000;
(xii) the Company shall not make any tax election or settle or
compromise any income tax liability; provided that Parent shall not
--------
unreasonably withhold any consent or approval of any such tax election,
settlement or compromise;
(xiii) the Company shall not pay, discharge or satisfy any material
claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business consistent with past
practice or in accordance with their terms, of liabilities that are
reflected or reserved against in, the Balance Sheet or incurred since the
date of the Balance Sheet in the ordinary course of business consistent
with past practice, or waive the benefits of, or agree to modify in any
manner, any confidentiality, standstill or similar agreement to which the
Company or any of its Subsidiaries is a party, except as permitted by
Section 5.12; and
(xiv) the Company shall not authorize any of, or commit or agree to
take any of, the foregoing actions.
(b) Without the prior consent of an authorized officer of Parent,
which consent shall not be unreasonably withheld, the Company shall not make
any election fixing the interest rate or rates payable under the Revolving
Credit Agreement for a term that could reasonably be expected to extend beyond
the Effective Date.
(c) Parent shall respond within a reasonable period of time to any
request for consent or approval required under Section 5.06.
(d) Advice of Changes. The Company shall promptly advise Parent
-------------------
orally and in writing of any change or event of which the Company has knowledge
having, or which, insofar as can reasonably be foreseen, would have, a Material
Adverse Effect.
SECTION 5.07. Consents. Each of the Company, Parent and Acquisition
---------
Sub shall, and shall cause each of their Subsidiaries to, use its and their
reasonable efforts to obtain prior to the Effective Date all approvals,
authorizations and consents of all third Persons identified on Schedule 2.05 and
all Permits which are necessary for (i) the consummation of the Offer, the
Merger and the other transactions contemplated hereby, (ii) the ownership or
leasing and operation by the Surviving Corporation and each of its
43
Subsidiaries of all the properties and assets of the Company and its
Subsidiaries and (iii) the conduct by the Surviving Corporation and each of its
Subsidiaries of the business of the Company and its Subsidiaries as conducted by
such entities on the date hereof.
SECTION 5.08. Filings. The Company, Parent and Acquisition Sub shall
--------
use their reasonable efforts to respond as promptly as practicable to all
inquiries received from the FTC or the Antitrust Division for additional
information or documentation in connection with all notices, reports or other
documentation filed by Parent and the Company under the HSR Act. The Company,
Parent and Acquisition Sub shall take such reasonable action as may be necessary
under state and Federal securities laws applicable to or necessary for, and will
file all documents and notifications with the SEC and other Governmental
Authorities reasonably necessary for, the consummation of the Offer, the Merger
and the transactions contemplated hereby. Each party shall furnish the other
and the other's counsel with all information reasonably requested by such other
party pertaining to it and its subsidiaries and affiliates as may be required in
order to enable such other party to take all such actions as required by this
Section 5.08. Nothing in this Agreement shall require Parent to dispose of, or
make any change in, any portion of its or the Company's assets or business or to
pay any material amount or incur any other material burden in order to obtain
any consent, approval or authorization or satisfy any condition in connection
with the Closing.
SECTION 5.09. Filing of Articles of Merger. Subject to the terms and
-----------------------------
conditions of this Agreement, as soon as practicable following the approval of
the Merger by the stockholders of the Company contemplated by Section 5.03
hereof, the Company, Parent and Acquisition Sub will cause the Articles of
Merger to be filed with the Secretary of State of the Commonwealth of
Massachusetts.
SECTION 5.10. Interim Financial Statements. Until the Effective Date
-----------------------------
or, if earlier, the date of termination of this Agreement pursuant to Section
9.01, as soon as practicable but in no event later than 30 days after the end of
each month beginning with October 1997, the Company shall deliver to Parent
unaudited consolidated financial information for such month and the
corresponding month of the preceding year as prepared by the Company's
management for its own internal purposes. Until the Effective Date or, if
earlier, the date of termination of this Agreement pursuant to Section 9.01, the
Company shall deliver to Parent (a) its Form 10-K for the year ended December
31, 1997 prior to March 31, 1998 (but not later than the business day prior to
the date of filing of such Form 10-K with the SEC) and (b) its Form 10-Q for
each quarter within 45 days after the end of such quarter after the date of this
Agreement (but not later than the business day prior to the date of filing of
such Form 10-Q with the SEC). The financial statements contained therein shall
present fairly in all material respects the Company's consolidated financial
condition, results of operations and
44
changes in financial position (on a consolidated basis) as at the date or for
the periods indicated in accordance with GAAP consistently applied, except as
otherwise indicated in such statements and except as to format and footnote
disclosure shall be prepared in conformity with the requirements of Rule 10-01
of Regulation S-X under the Exchange Act and Item 303 of Regulation S-K.
SECTION 5.11. Public Announcements. (a) The parties agree that the
---------------------
initial press release to be issued with respect to the transactions contemplated
by this Agreement shall be in the form heretofore agreed to by the parties.
Thereafter, unless required by Applicable Law or by the rules of any applicable
self-regulatory organizations, the Company, Parent and Acquisition Sub shall
not, and shall each cause their respective officers, employees and other
authorized representatives not to, prior to the Effective Date, issue any press
release or make any other public disclosure or announcement or otherwise make
any disclosure to any third Person (other than by way of the Offer Documents,
the Schedule 14D-9 and the Proxy Statement referred to in Section 5.02)
concerning the transactions contemplated by this Agreement or the terms and
provisions hereof.
(b) Should any press release or other public disclosure be required
to be made, then the party required to make such release or disclosure shall not
make such release or disclosure without first using its reasonable efforts to
obtain the prior written consent of the other parties hereto as to both the
timing and content of such press release or public disclosure, which consent
shall not be unreasonably withheld.
SECTION 5.12. No Solicitation. (a) The Company shall not, nor shall
----------------
it permit any of its Subsidiaries or affiliates to, nor shall it authorize or
permit any officer, director or employee of, or any investment banker, attorney
or other advisor or representative of, the Company or any of its Subsidiaries
to, (i) solicit or initiate, or knowingly encourage the submission of, any
takeover proposal, (ii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to any takeover
proposal (except for (1) non-confidential information, or (2) filings with the
SEC); provided, however, that prior to the earlier of (x) the Consummation of
-------- -------
the Offer or (y) the Special Meeting, to the extent required by the fiduciary
obligations of the Board of Directors of the Company, as determined in good
faith by the Board of Directors based on the advice of counsel, the Company may,
(A) in response to an unsolicited request therefor, furnish information with
respect to the Company (pursuant to a confidentiality agreement at least as
restrictive as the Confidentiality Agreement dated April 13, 1994 between the
Company and Saint-Gobain Corporation, as amended (as determined by the Company's
counsel)) to any person who has indicated to the Company that it is interested
in pursuing a qualified takeover proposal and discuss such information (but not
the terms of any possible takeover proposal) with such person and (B) upon
receipt by the Company of a qualified takeover proposal, following the delivery
to Parent of the notice required pursuant to Section 5.12(c), participate in
45
discussions or negotiations regarding such qualified takeover proposal. Without
limiting the foregoing, it is understood that any violation of the restrictions
set forth in the preceding sentence by any officer of the Company or any of its
Subsidiaries or any investment banker, attorney or other advisor or
representative of the Company or any of its Subsidiaries, shall be deemed to be
a breach of this Section 5.12 by the Company. For purposes of this Agreement,
"takeover proposal" means any proposal for a merger or other business
combination (regardless of legal form) involving the Company or any Subsidiary
or any proposal or offer to acquire in any manner, directly or indirectly, a
substantial portion of the assets or business of the Company or a substantial
equity interest in, or any substantial amount of voting securities of, the
Company or any Subsidiary, or any other transaction outside the ordinary course
of business and not otherwise specifically permitted by the terms of this
Agreement the consummation of which would impede or prevent the consummation of
the Merger pursuant to the terms of this Agreement; and "qualified takeover
proposal" means a takeover proposal having terms which the Board of Directors of
the Company determines (based on, among other things, the advice of a financial
advisor of nationally recognized reputation and after giving due consideration
to the Stockholder Agreement dated the date hereof among Parent, Acquisition Sub
and the persons identified on Schedule A thereto) in its good faith reasonable
judgment to be more favorable to the holders of Company Common Stock than the
Total Merger Consideration and holders of Preference Stock than the Preference
Stock Consideration and likely to be fully financed and consummated.
(b) Neither the Board of Directors of the Company nor any committee
thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Parent or Acquisition Sub, the approval or recommendation by
such Board of Directors or any such committee of this Agreement, the Offer or
the Merger, (ii) approve or recommend, or propose to approve or recommend, any
takeover proposal or (iii) enter into any agreement with respect to any takeover
proposal. Notwithstanding the foregoing, in the event the Board of Directors of
the Company receives a qualified takeover proposal, the Board of Directors or
any committee thereof or the Company may (subject to the limitations contained
in this Section) withdraw or modify its approval or recommendation of this
Agreement, the Offer or the Merger at any time after 48 hours following Parent's
receipt of written notice (a "Notice of Qualified Takeover Proposal") advising
Parent that the Board of Directors has received a qualified takeover proposal,
specifying the material terms and conditions of such qualified takeover proposal
and identifying the person making such qualified takeover proposal. The Company
may take any of the foregoing actions pursuant to the preceding sentence only
until the earlier of (x) the Consummation of the Offer or (y) the approval of
the Merger at the Special Meeting. Nothing contained herein shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a) following Parent's receipt of a Notice of Qualified Takeover
Proposal provided that the Company does not
46
withdraw or modify its position with respect to the Merger or approve or
recommend a takeover proposal.
(c) In addition to the obligations of the Company set forth in
paragraph (b) of this Section, the Company shall promptly advise Parent orally
and in writing of any request for information or of any takeover proposal, or
any inquiry with respect to any takeover proposal, the material terms and
conditions of such request, takeover proposal or inquiry, and the identity of
the person making any such takeover proposal or inquiry. The Company shall keep
Parent fully informed of the status and details of any such request, takeover
proposal or inquiry.
SECTION 5.13. Validity of Representations. Parent, Acquisition Sub
----------------------------
and the Company shall each take such action as is reasonably necessary to render
their respective representations and warranties accurate on and as of the
Effective Date. Without limiting the foregoing, the Company shall take any
action required by Parent to ensure the accuracy of Section 2.22 if Parent
determines that would be desirable.
SECTION 5.14. Employees; Benefits. Parent and Acquisition Sub shall
--------------------
honor (i) all employment, severance or similar contractual arrangements in
accordance with their terms in existence on the date of this Agreement and
disclosed prior to the date of this Agreement to Parent and (ii) all legally
imposed obligations relating to employment matters. After the Closing Date,
Parent and Acquisition Sub shall comply with enforceable Applicable Law,
including without limitation the Worker Adjustment and Retraining Notification
Act, 29 U.S.C. (S) 2101 et seq. It is the current intention of Parent and
-- ----
Acquisition Sub to cause the Surviving Corporation to provide benefits to
employees of the Company and its Subsidiaries that are no less favorable in the
aggregate to such employees than those in effect on the date of this Agreement;
provided, however, that the foregoing shall not limit or restrict the right of
-------- -------
the Surviving Corporation or its Subsidiaries to terminate the employment of
such employees or subsequently to modify the benefits or other terms of
employment of such employees, to the extent permitted by enforceable Applicable
Law.
SECTION 5.15. Indemnification and Insurance. (a) Parent and
------------------------------
Acquisition Sub hereby agree that all rights to indemnification now existing in
favor of the directors or officers of the Company and its Subsidiaries (the
"Indemnified Parties") as currently provided in their respective certificates or
articles of incorporation or organization and By-Laws or in any agreements,
contracts or arrangements with the Company or any of its Subsidiaries in effect
on the date hereof and previously furnished to Parent and to the extent not in
violation of applicable state law, shall survive the Merger and shall continue
in full force and effect for a period of five years from the Effective Date;
provided that, in the event any claim or claims are asserted or made
--------
47
within such five year period, all rights to indemnification in respect of any
such claim or claims shall continue until the disposition of any and all such
claims. Without limiting the foregoing, to the extent currently provided in the
certificates or articles of incorporation or organization and By-Laws of the
Company and its Subsidiaries and Massachusetts law, or agreements, contracts or
arrangements disclosed to Parent with the Company or any of the Subsidiaries, in
the event that any Indemnified Party becomes involved in any capacity in any
action, proceeding or investigation in connection with any matter, including the
transaction contemplated by this Agreement, occurring prior to, and including,
the Effective Date, or otherwise relating to or arising out of such matters,
Parent or the Surviving Corporation shall periodically advance to such
Indemnified Party his or her legal and other expenses (including the costs of
any investigation and preparation incurred in connection therewith). Parent
shall use all reasonable efforts to maintain in effect, or shall cause the
Surviving Corporation to use all reasonable efforts to maintain in effect, for
two years after the Effective Date, directors' and officers' liability insurance
("D&O Insurance") covering those persons covered by the Company's directors' and
officers' liability insurance on the date of this Agreement or the Effective
Date and which is substantially equivalent in terms of coverage and amount as
the Company has in effect on the Effective Date so long as such insurance is
available and the annual premium therefor would not be in excess of $166,000
(the "Maximum Premium"). If the existing D&O Insurance expires, is terminated
or cancelled during such two-year period, Parent will use all reasonable efforts
to cause to be obtained as much D&O Insurance as can be obtained for the
remainder of such period for an annualized premium not in excess of the Maximum
Premium, on terms and conditions no less advantageous than the existing D&O
Insurance.
(b) Any Indemnified Party wishing to claim indemnification hereunder,
upon learning of any such Legal Action, shall promptly notify Parent and the
Surviving Corporation with respect thereto, but the failure to so notify shall
not relieve Parent or the Surviving Corporation of any liability it may have to
such Indemnified Party hereunder except to the extent that Parent and the
Surviving Corporation are materially prejudiced thereby.
(c) Parent and the Surviving Corporation shall periodically, as
requested, advance to such Indemnified Party his, her or its legal and other
expenses (including the cost of investigation and preparation incurred in
connection therewith) to the extent such Indemnified Party is indemnified
pursuant to the terms of this Section 5.15, unless it is ultimately determined
by a court of competent jurisdiction that such Indemnified Party is not entitled
to indemnification hereunder.
48
(d) Parent and the Surviving Corporation shall be subrogated to any
rights any Indemnified Party may have with respect to any amounts paid to or on
behalf of such Indemnified Party by Parent and the Surviving Corporation
hereunder.
SECTION 5.16. Redemption of 5% Stock. (a) In connection with the
-----------------------
Merger, the Company, Parent and Acquisition Sub hereby agree that the 5% Stock
shall be redeemed and retired, as soon as practicable following the Effective
Date for the 5% Stock Consideration in accordance with the Surviving
Corporation's Articles of Organization.
(b) Prior to the date specified in the call notice for the redemption
and retirement of the 5% Stock, the Surviving Corporation shall cause to be
deposited with an appropriate trust company or bank, for the credit of the
holders of the 5% Stock, sufficient funds to be paid to such holders for
redemption and retirement of all of such shares of 5% Stock as provided for
herein and in the Surviving Corporation's Articles of Organization.
SECTION 5.17. Material Contracts. The Company shall not enter into
-------------------
any material modification or amendment concerning any Material Contract listed
on Schedule 2.11(a) or 2.11(b) without the consent of Parent, which consent
shall not be unreasonably withheld. Immediately after the Closing, Parent shall
cause the Surviving Corporation to pay the outstanding principal amount (and
accrued interest thereon) owed by the Company under each Material Contract set
forth on Schedule 2.11(b).
SECTION 5.18. Tax Matters. Promptly after the request of Parent and
------------
in any event no later than three months from the date of such request, the
Company shall provide to Parent true, complete and correct (in all material
respects) copies of (a) a schedule setting forth the deferred intercompany gain
account, and the excess loss account of each of its Subsidiaries, and (b) a
schedule setting forth the Federal income tax basis for the stock of each of the
Subsidiaries except those Subsidiaries for which such information cannot be
obtained after due inquiry.
SECTION 5.19. Dividend Payments. The Company shall not declare or
------------------
pay or set apart for payment any accumulated dividends on the Preference Stock
or 5% Stock.
SECTION 5.20. Satisfaction of Conditions. The Company, Parent and
---------------------------
Acquisition Sub shall each take all reasonable actions that may be required to
satisfy the conditions set forth in Article VI and Article VII hereof,
respectively.
49
SECTION 5.21. Directors. Subject to compliance with applicable law
----------
(including Section 14(f) of the Exchange Act), upon the acquisition by
Acquisition Sub of at least a majority of the outstanding Common Stock pursuant
to the Offer, Acquisition Sub shall be entitled to designate at least a majority
of the members of the Board of Directors of the Company, and the Company and its
Board of Directors shall, at such time, take any and all such action (including
to increase the size of the Board of Directors or to use its best efforts to
cause directors to resign) needed to cause a sufficient number of Acquisition
Sub's designees to be appointed to the Company's Board of Directors that such
designees shall constitute such majority (any director so designated by
Acquisition Sub, a "Designated Director"). It is understood that immediately
after the acquisition by Acquisition Sub of at least a majority of the
outstanding Common Stock pursuant to the Offer (x) the Company's Board of
Directors shall consist of seven members, (y) the initial designees of
Acquisition Sub to the Company's Board of Directors are expected to be Xxxxxx X.
Xxxxx, Gianpaolo Caccini, Xxxxx X. Xxxxxxx and Xxxxxxxx X. Xxxxxxx and (z) the
remaining members of the Company's Board of Directors are expected to be Xxxxxxx
X. Xxxxxxx, Xx., Xxxxxxx X. Xxxxxx and Xxxxx Xxxxxxx. In the event that, after
the acquisition by Acquisition Sub of at least a majority of the outstanding
Common Stock pursuant to the Offer and prior to the Effective Time, the number
of members of the Board of Directors increases (including pursuant to the
provisions of the Preference Stock and the 5% Stock), the Company and its Board
of Directors shall, at such time, take any and all such additional action
(including to increase the size of the Board of Directors, to use its best
efforts to cause additional directors to resign and to appoint additional
designees of Acquisition Sub) needed to cause a sufficient number of Acquisition
Sub's designees to be appointed to the Board of Directors that such designees
shall then constitute at least a majority of the members of the Board of
Directors. The parties hereto shall use their respective best efforts to cause
at least three members of the Company's Board of Directors at all times prior to
the Effective Time to be Continuing Directors. "Continuing Director" means (a)
any member of the Company's Board of Directors on the date of this Agreement,
(b) any member of the Company's Board of Directors who is not an employee or
director or affiliate of, and not a Designated Director or other nominee of,
Acquisition Sub or Parent or their respective Subsidiaries, and (c) any
successor of a Continuing Director who is (i) not an employee or director or
affiliate of, and not a Designated Director or other nominee of, Acquisition Sub
or Parent or their respective Subsidiaries and (ii) recommended to succeed such
Continuing Director by at least a majority of the then Continuing Directors.
50
ARTICLE VI
Conditions to the Obligations of Parent
---------------------------------------
and Acquisition Sub
-------------------
Each and every obligation of Parent and Acquisition Sub under this
Agreement shall be subject to the satisfaction, on or prior to the Closing Date,
of each of the following conditions, each of which may be waived by Parent and
Acquisition Sub except as otherwise provided by law, provided that, upon the
--------
Consummation of the Offer, each of the following conditions (other than the
conditions set forth in Section 6.03(b) and (d) and 6.04(b)) shall be deemed
waived by Parent and Acquisition Sub:
SECTION 6.01. Representations and Warranties True. The
------------------------------------
representations and warranties of the Company contained in this Agreement
(without regard to any information provided under Section 5.04) that are
qualified as to materiality shall be true and correct, and the representations
that are not so qualified shall be true and correct in all material respects, in
each case on and as of the date hereof and on and as of the Effective Date, and
between the date hereof and the Effective Date there shall not have been any
event or change in circumstance causing or reasonably anticipated to cause in
the future any Material Adverse Effect.
SECTION 6.02. Company's Performance. Each of the obligations of the
----------------------
Company to be performed by it on or before the Closing Date pursuant to the
terms of this Agreement shall have been duly performed or complied with in all
material respects by the Closing.
SECTION 6.03. Authorization of Merger. (a) All corporate action
------------------------
necessary by the Company to authorize the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
(including the Offer and the Merger) shall have been duly and validly taken, and
the Company and Acquisition Sub shall have full right and power to merge on the
terms provided herein.
(b) The holders of the Company Common Stock and of the Preference
Stock shall have duly approved the Merger at the Special Meeting called for that
purpose (other than if such approval shall not have occurred solely due to the
breach by Parent or Acquisition Sub of Section 5.02(e)).
(c) All consents, approvals and authorizations from third Persons and
Governmental Authorities identified on Schedule 2.05 and Schedule 2. 11(b)
required to consummate the transactions contemplated by this Agreement shall
have been obtained.
51
(d) All applicable waiting periods under the HSR Act shall have
expired or been terminated.
SECTION 6.04. Absence of Litigation. (a) There shall not be pending
----------------------
or threatened any suit, action or proceeding by any Governmental Authority (i)
challenging the acquisition by Parent or Acquisition Sub of any shares of
Company Common Stock or Preference Stock, seeking to restrain or prohibit the
consummation of the Merger or any of the other transactions contemplated by this
Agreement or seeking to obtain from the Company, Parent or Acquisition Sub any
damages related to the Merger or the other transactions contemplated hereby that
are material in relation to the Company and its Subsidiaries taken as a whole,
(ii) seeking to prohibit or limit the ownership or operation by the Company,
Parent or any of their respective Subsidiaries of any material portion of the
business or assets of the Company, Parent or any of their respective
Subsidiaries, or to compel the Company, Parent or any of their respective
Subsidiaries to dispose of or hold separate any material portion of the business
or assets of the Company, Parent or any of their respective Subsidiaries, as a
result of the Merger or any of the other transactions contemplated by this
Agreement, (iii) seeking to impose limitations on the ability of Parent or
Acquisition Sub to acquire or hold, or exercise full rights of ownership of, any
shares of Surviving Corporation Common Stock, (iv) seeking to prohibit Parent or
any of its Subsidiaries from effectively controlling in any material respect the
business or operations of the Company or its Subsidiaries or of Parent and its
Subsidiaries or (v) which otherwise is reasonably likely to have a Material
Adverse Effect.
(b) No statute, rule, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction or other order or legal
restraint or prohibition enacted, entered, promulgated, enforced, issued or
deemed applicable to the Merger or the transactions contemplated thereby, or any
other action shall be taken by any Governmental Authority or court, in each case
preventing the consummation of the Merger or the transactions contemplated
thereby, shall be in effect.
SECTION 6.05. Directors. All directors of the Company whose
----------
resignation is requested by Parent at least five days before the Closing Date
will have submitted their resignations as directors effective as of the Closing
Date.
SECTION 6.06. Dissenting Shares. No more than ten percent of the
------------------
issued and outstanding shares of any class of equity securities of the Company
entitled to dissenters rights as of the Closing Date shall be Dissenting Shares
entitled to receive the Dissenting Consideration as provided in Section 1.12
hereof.
52
SECTION 6.07. Options. Each outstanding Option issued under the 1982
--------
Stock Option Plan, the 1992 Stock Option Plan and the Director Option Plan shall
have been amended as contemplated by Section 1.14.
SECTION 6.08. Certificates. The Company shall have furnished Parent
-------------
with such certificates of its officers and others to evidence compliance with
the conditions set forth in this Article VI as may be reasonably requested by
Parent. The form and substance of all opinions, certificates and other
documents hereunder shall be satisfactory in all reasonable respects to Parent
and its counsel.
ARTICLE VII
Conditions to the Obligations of the Company
--------------------------------------------
Each and every obligation of Company under this Agreement shall be
subject to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, each of which may be waived by the Company except as
otherwise provided by law, provided that, upon the Consummation of the Offer,
--------
each of the following conditions (other than the conditions set forth in
Sections 7.03 and 7.04) shall be deemed waived by the Company:
SECTION 7.01. Representations and Warranties True. The
------------------------------------
representations and warranties of Parent and Acquisition Sub contained in this
Agreement that are qualified as to materiality shall be true and correct, and
the representations that are not so qualified shall be true and correct in all
material respects, in each case on and as of the date hereof and on and as of
the Effective Date.
SECTION 7.02. Parent's and Acquisition Sub's Performance. Each of
-------------------------------------------
the obligations of Parent and Acquisition Sub to be performed by them on or
before the Closing Date pursuant to the terms hereof shall have been duly
performed and complied with in all material respects by the Closing.
SECTION 7.03. Authorization of Merger. (a) All corporate action
------------------------
necessary by Acquisition Sub and Parent to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby shall have been duly and validly taken, and Acquisition Sub
shall have full right and power to merge on the terms provided herein. The
Company's stockholders shall have approved the Merger at the Special Meeting
called for that purpose.
53
(b) All consents, approvals and authorizations from third Persons and
Governmental Authorities identified on Schedule 2.05 required to consummate the
transactions contemplated by this Agreement shall have been obtained.
(c) All applicable waiting periods under the HSR Act shall have
expired or been terminated.
SECTION 7.04. Absence of Litigation. No Judgment shall have been
----------------------
entered by a Governmental Authority with proper jurisdiction and not revised
prohibiting the Merger, and no Legal Action shall have been instituted by any
Governmental Authority challenging the Merger which if successful would prohibit
the consummation of the Merger.
SECTION 7.05. Certificates. Parent and Acquisition Sub shall have
-------------
furnished Company with such certificates of their respective officers and others
to evidence compliance with the conditions set forth in this Article VII as may
be reasonably requested by Company. The form and substance of all certificates
and other documents hereunder shall be satisfactory in all reasonable respects
to Company and its counsel.
ARTICLE VIII
Closing
-------
SECTION 8.01. Time and Place. Subject to the provisions of Articles
---------------
VI, VII and IX hereof, the closing (the "Closing") of the Merger shall take
place at the offices of Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 at 9:30 a.m., local time, on a date (the "Closing Date") which is
to be:
(a) as soon as practicable after the latest to occur of the date by
which the stockholders of the Company shall have approved the Merger
pursuant to Section 5.03, the date of expiration or termination of any
waiting period, including any extensions thereof, which may be applicable
to the Merger under the provisions of the HSR Act, or the date of
satisfaction of all other conditions to the Closing set forth herein the
satisfaction of which is not waived other than conditions that, by their
terms, are to be satisfied on the Closing Date; or
(b) such other place, at such other time, or on such other date as
Parent, Acquisition Sub and the Company may mutually agree upon for the
Closing to take place.
54
The Closing Date shall be the Effective Date.
SECTION 8.02. Deliveries at the Closing. Subject to the provisions
--------------------------
of Articles VI, VII and IX hereof, at the Closing:
(a) If the Consummation of the Offer shall not have occurred, there
shall be delivered to Parent, Acquisition Sub and the Company the
certificates and other documents and instruments required to be delivered
under Articles VI and VII hereof.
(b) Parent, Acquisition Sub and Company shall cause the Articles of
Merger to be filed in accordance with the provisions of the MBCL and shall
take any and all other lawful actions and do any and all other lawful
things necessary to effect the Merger and to cause the Merger to become
effective.
ARTICLE IX
Termination and Abandonment of the Merger
-----------------------------------------
SECTION 9.01. Termination. (a) Unless the Consummation of the Offer
------------
shall have occurred and Designated Directors shall constitute at least a
majority of the members of the Board of Directors of the Company, this Agreement
shall be terminated, and the Merger abandoned, if the stockholders of the
Company fail to approve the Merger as contemplated by Section 5.03 hereof.
(b) Notwithstanding approval of this Agreement and the transactions
contemplated hereby by the stockholders of the Company or by the sole
stockholder of Acquisition Sub, this Agreement may be terminated, and the Offer
and the Merger abandoned, at any time prior to the Effective Date:
(i) by the mutual consent of Parent, Acquisition Sub and the Company;
or
(ii) unless the Consummation of the Offer shall have occurred and
Designated Directors shall constitute at least a majority of the members of
the Board of Directors of the Company, by Parent, Acquisition Sub or the
Company at any time after June 30, 1998; or
(iii) by Parent or Acquisition Sub, (A) if the Offer terminates
without any shares being accepted for payment due to (x) failure of the
Minimum Condition or (y) any of the other conditions set forth in Exhibit A
hereto (other than solely
55
paragraph (c) thereto) shall have become impossible to fulfill and shall
not have been waived, (B) if any of the conditions set forth in Article VI
hereof shall become impossible to fulfill and shall not have been waived or
deemed waived in accordance with the terms of this Agreement (it being
understood that with respect to Section 6.04(b) any condition therein
relating to an order, injunction or judicial decree shall be deemed not to
have become impossible to fulfill until such order, injunction or decree
shall have become final and non-appealable) or (C) if the Board of
Directors pursuant to Section 5.12(b) withdraws or modifies its approval or
recommendation of this Agreement, the Offer or the Merger; or
(iv) by the Company, if any of the conditions set forth in Article VII
hereof shall become impossible to fulfill, and shall not have been waived
in accordance with the terms of this Agreement; or
(v) unless the Consummation of the Offer shall have occurred and
Designated Directors shall constitute at least a majority of the members of
the Board of Directors of the Company, by Parent or Acquisition Sub if the
Company fails to perform in any material respect any of its obligations
hereunder or breaches in any material respect any provision hereof, and the
Company has failed to perform such obligation or cure such breach, within
10 days of its receipt of written notice thereof from Parent or Acquisition
Sub, and such failure to perform shall not have been waived in accordance
with the terms of this Agreement;
(vi) by the Company if Parent or Acquisition Sub fails to perform in
any material respect any of its obligations hereunder or breaches in any
material respect any provision hereof, and Parent and Acquisition Sub have
failed to perform such obligation or cure such breach, within 10 days of
its receipt of written notice thereof from the Company, and such failure to
perform shall not have been waived in accordance with the terms of this
Agreement;
(vii) by the Company if (A) the Board of Directors pursuant to Section
5.12(b) withdraws or modifies its approval or recommendation of this
Agreement, the Offer or the Merger and (B) the Company pays Parent all
Expenses and the Alternate Transaction Fee in cash, in each case as
provided in Section 10.01(b); or
(viii) by the Company if Acquisition Sub (A) shall have failed to
commence the Offer within the time required under the Exchange Act or (B)
shall have failed to pay for any Company Common Stock or Preference Stock
accepted for payment pursuant to the Offer and, in the case of clause (B),
Acquisition Sub
56
shall have failed to make such payment within three business days of
receipt of written notice thereof from the Company.
SECTION 9.02. Effect of Termination. (a) In the event of the
----------------------
termination and abandonment of this Agreement and the Merger:
(i) this Agreement shall become void and have no effect, without any
liability on the part of any party or its directors, officers or
stockholders, except as provided in Article X hereof; provided that, except
-------- ----
as provided in Sections 9.02(b) and 9.02(c), each party shall have the
right to bring suit against any other party for any breach of this
Agreement; and
(ii) upon written request, each party will redeliver all documents,
work papers and other material and all copies thereof of any other party
relating to the transactions contemplated hereby, whether so obtained
before or after the execution hereof, to the party furnishing the same and,
at the request of any other party, will destroy any analyses, compilations,
studies or other documents prepared using such furnished information.
(b) Notwithstanding any provisions to the contrary herein, the sole
remedy of Parent or Acquisition Sub for a breach by the Company of any
representation or warranty set forth in Article II of this Agreement shall be
the termination of this Agreement (if permitted by Section 9.01) unless such
breach was made with the actual knowledge of the President of the Company or the
Vice President and General Counsel of the Company, after due inquiry of other
managerial employees of the Company who would be reasonably expected to have
knowledge as to the matter represented (a "Company Willful Misrepresentation").
(c) Notwithstanding any provisions to the contrary herein, the sole
remedy of the Company for a breach by Parent or Acquisition Sub of any
representation or warranty set forth in Article III or IV, respectively, of this
Agreement shall be the termination of this Agreement (if permitted by Section
9.01) unless such breach was made with the actual knowledge of the President or
Executive Vice President of Parent, after due inquiry of other managerial
employees of Parent who would be reasonably expected to have knowledge as to the
matter represented (a "Parent Willful Misrepresentation").
SECTION 9.03. Procedure for Termination and Amendment. A termination
----------------------------------------
of this Agreement pursuant to Section 9.01 or an amendment of this Agreement in
accordance with Section 10.07 shall, in order to be effective, require in the
case of the Company action by its Board of Directors or the duly authorized
designee of
57
its Board of Directors. In the event that Acquisition Sub's designees are
appointed or elected to the Board of Directors of the Company as provided in
Section 5.21, after the Consummation of the Offer and prior to the Effective
Time, the affirmative vote of at least a majority of the Continuing Directors
shall be required for the Company to agree to amend, waive compliance with or
terminate this Agreement.
ARTICLE X
Miscellaneous
-------------
SECTION 10.01. Expenses; Alternate Transaction Fee. (a) Except as
------------------------------------
provided by Section 10.01(b), (c) or (d) each of the parties hereto shall bear
its own costs, fees and expenses in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, fees, commissions and expenses (including, without limitation, all
filing, printing, copying, mailing, telephone, transportation and delivery
charges) payable to brokers, finders, investment bankers, consultants, exchange
or transfer agents, attorneys, accountants and other professionals, whether or
not the Consummation of the Offer occurs or the Merger is consummated.
(b) If the Board of Directors of the Company pursuant to Section
5.12(b) wishes to withdraw or adversely modify its approval or recommendation of
this Agreement, the Offer or the Merger, prior to exercising its rights under
Section 5.12(b), the Company shall pay in same day funds to Parent: (i) its
Expenses incurred to date and thereafter shall pay in same day funds to Parent
within one business day after demand therefor all subsequently incurred
Expenses, provided that the Company shall not be obligated hereunder to pay any
--------
such Expenses to the extent they exceed an aggregate of $1 million and (ii) an
alternative transaction fee of $1.5 million (the "Alternate Transaction Fee").
For purposes of Sections 10.01(b) and (c), "Expenses" shall mean all out-of-
pocket fees and expenses (including without limitation all travel expenses and
all fees and expenses of counsel, investment banking firms, accountants, experts
and consultants to Parent or Acquisition Sub) incurred or paid by or on behalf
of Parent or Acquisition Sub after January 1, 1996, in connection with or
leading to this Agreement, the transactions contemplated hereby, and performing
or securing the performance of the obligations of the parties hereunder,
including, without limitation, such fees and expenses related to preparation and
negotiation of documentation and conducting due diligence. Parent shall within
36 hours after request therefor advise the Company of an estimate of its
Expenses if the Company wishes to exercise its rights under Section 5.12(b).
58
(c) In the event a takeover proposal from a party other than Parent
or one of its affiliates is received by the Company or publicly disclosed prior
to the expiration of the Offer (or in the case of clauses (B) and (C), prior to
the Special Meeting) or, if earlier, termination of this Agreement, and (A) at
the scheduled expiration date of the Offer a sufficient number of shares of
Company Common Stock and Preference Stock shall not have been tendered to
satisfy the Minimum Condition, (B) at the Special Meeting the required approval
of the Merger by the Company's stockholders is not obtained, or (C) this
Agreement is terminated (other than by the Company pursuant to Section 9.01(vi))
prior to a vote on the Merger at the Special Meeting, unless the Consummation of
the Offer shall have occurred the Company shall pay in same day funds to Parent
within two business days after the earlier of such expiration date, Special
Meeting or termination of this Agreement (i) all Expenses incurred to date and
thereafter will pay in same day funds to Parent within one business day after
demand therefor all subsequently incurred Expenses, provided, that the Company
--------
shall not be obligated hereunder to pay any such Expenses to the extent they
exceed an aggregate of $1 million, and (ii) the Alternate Transaction Fee.
(d) In the event this Agreement is terminated, the Offer is terminated
or the Merger does not occur (i) solely due to a breach by Parent or Acquisition
Sub of any of its covenants or obligations hereunder or due to a Parent Willful
Misrepresentation or (ii) solely due to a breach by the Company of any of its
covenants or obligations hereunder or due to a Company Willful
Misrepresentation, then in the case of a termination pursuant to clause (i)
above, Parent and Acquisition Sub shall promptly pay to the Company, and in the
case of termination pursuant to clause (ii) above, the Company shall promptly
pay to Parent and Acquisition Sub, in same day funds all Expenses incurred to
date (after giving credit for any reimbursement already made under Section
10.01(b) or (c)) and thereafter shall pay in same day funds within one business
day after demand therefor all subsequently incurred Expenses. For purposes of
this paragraph 10.01(d) "Expenses" shall mean all out-of-pocket fees and
expenses (including without limitation all travel expenses and all fees and
expenses of counsel, investment banking firms, accountants, experts and
consultants to Parent or the Company, as the case may be) incurred or paid by or
on behalf of Parent, Acquisition Sub or the Company, as the case may be, after
January 1, 1996, in connection with or leading to this Agreement, the
transactions contemplated hereby, and performing or securing performance of the
obligations of the parties hereunder, including, without limitation, such fees
and expenses related to preparation and negotiation of documentation and
conducting due diligence. This Section shall not limit damages that would
otherwise be recoverable for breaches hereunder.
SECTION 10.02. Non-Survival of Representations and Warranties. The
-----------------------------------------------
respective representations and warranties, obligations, covenants and agreements
of the
59
Company, Parent and Acquisition Sub contained herein or in any Schedule,
certificate or letter delivered pursuant hereto (other than those contained in
Section 10.01 hereof and those which by their terms extend beyond the Effective
Date or termination of this Agreement) shall expire with, and be terminated and
extinguished by the effectiveness of the Merger and shall not survive the
Effective Date or, if earlier, the date of termination of this Agreement
pursuant to Article IX hereof.
SECTION 10.03. Headings. The descriptive headings of the several
---------
Articles and Sections of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement and shall not in any manner affect the
meaning or interpretation of the terms of this Agreement.
SECTION 10.04. Notices. (a) Any notices or other communications
--------
required or permitted hereunder shall be addressed as follows:
If to Parent or Acquisition Sub to:
CertainTeed Corporation
000 X. Xxxxxxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx
Executive Vice President
Tel: (000) 000-0000
Fax: (000) 000-0000
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
If to the Company to:
Bird Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxx
President
Tel: (000) 000-0000
Fax: (000) 000-0000
60
Copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Warner & Xxxxxxxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
or such other address as shall be furnished in writing by either party in
accordance with this Section 10.04, and any such notice or communication shall
be deemed to have been given as of the date so mailed.
(b) Notices or other communications shall be deemed given (i) if
delivered personally, upon delivery, (ii) if delivered by registered or
certified mail (return receipt requested), upon the earlier of actual delivery
or three business days after being mailed, (iii) if delivered by overnight
courier or similar service, upon delivery, or (iv) if given by fax, upon
confirmation of transmission by fax; provided that if such notice or other
communications would be otherwise deemed given on a day which is not a business
day, the delivery shall be deemed given the first business day following such
day.
SECTION 10.05. Assignment. This Agreement and all of the provisions
-----------
hereof shall be binding upon and to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests, or obligations hereunder shall be assigned by any of
the parties hereto, either in whole or in part, without the prior written
consent of the other parties hereto.
SECTION 10.06. Complete Agreement. This Agreement, including the
-------------------
Schedules, exhibits and other writings referred to herein or delivered pursuant
hereto, contains the entire understanding among the parties with respect to the
Offer, the Merger and the related transactions and supersedes all prior
arrangements or understandings with respect thereto, except for the
Confidentiality Agreement. There are no restrictions, agreements, promises,
warranties, covenants or undertakings other than those expressly set forth
herein.
SECTION 10.07. Amendments and Waivers. (a) Subject to the
-----------------------
provisions contained in Articles VI and VII hereof and subject to Section 9.03,
at any time prior to the Effective Date if authorized by their respective Boards
of Directors and to the extent permitted by law, the parties hereto may, by
written agreement, modify, amend, or supplement any term or provision of this
Agreement. Any written instrument
61
or agreement referred to in this paragraph shall be validly and sufficiently
authorized for the purposes of this Agreement if signed on behalf of the
Company, Parent and Acquisition Sub by a person authorized to sign this
Agreement on their behalf.
(b) This Agreement may be amended at any time only by a written
instrument executed by the Company, Parent and Acquisition Sub. No delay on the
part of any party hereto in exercising any right hereunder shall operate as a
waiver of such right, nor shall any waiver, express or implied, by any party
hereto of any right hereunder or of any failure to provide and perform hereunder
or breach hereof by either party hereto constitute or be deemed to constitute a
waiver of any other failure to provide and perform hereunder or breach hereof by
any party hereto whether of a similar or dissimilar nature thereto.
SECTION 10.08. Counterparts. This Agreement may be executed in two
-------------
or more counterparts, all of which shall be considered one and the same
agreement and each of which shall be deemed an original.
SECTION 10.09. Governing Law. EXCEPT AS TO THE PROVISIONS OF
--------------
SECTIONS 1.03 THROUGH 1.14 (WHICH SHALL BE GOVERNED BY THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS), THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAWS RULES) AS
TO ALL MATTERS, INCLUDING, BUT NOT LIMITED TO, MATTERS OF VALIDITY,
CONSTRUCTION, EFFECT AND PERFORMANCE.
SECTION 10.10. Accounting Terms. All accounting terms used herein
-----------------
that are not expressly defined in this Agreement shall have the meanings given
to them in accordance with GAAP.
SECTION 10.11. Parties. Nothing in this Agreement is intended to
--------
confer any rights or remedies under or by reason of this Agreement on any
persons or entities other than the parties hereto and their respective
successors and permitted assigns in accordance with Section 10.05 hereof, except
for the provisions of Section 5.15. Without limiting the foregoing, no third
Person shall be a beneficiary of any provision of this Agreement, except for the
provisions of Section 5.15.
62
IN WITNESS WHEREOF, each of Parent, Acquisition Sub and the Company
has executed this Agreement, or has caused this Agreement to be executed on its
behalf by a representative duly authorized, all as of the day and year first
above written.
BIRD CORPORATION,
by /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
[Seal]
by /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
by /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Treasurer
CERTAINTEED CORPORATION,
by /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
BI EXPANSION II CORP.,
by /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
[Seal]
63
by /s/ Xxxx X. Xxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Assistant Treasurer
EXHIBIT A
Conditions to the Offer
-----------------------
Notwithstanding any other term of the Offer or this Agreement,
Acquisition Sub shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, to pay for any shares of Company
Common Stock or Preference Stock tendered pursuant to the Offer unless, (i)
there shall have been validly tendered and not withdrawn prior to the expiration
of the Offer such number of shares of Company Common Stock that would constitute
at least 66-2/3% of the outstanding shares (determined on a fully diluted basis)
of Company Common Stock, (ii) there shall have been validly tendered and not
withdrawn prior to the expiration of the Offer such number of shares of
Preference Stock that would constitute at least 66-2/3 % of the outstanding
shares of Preference Stock (clauses (i) and (ii) together being the "Minimum
Condition"), (iii) any waiting period under the HSR Act applicable to the
purchase of shares of Company Common Stock and Preference Stock pursuant to the
Offer shall have expired or been terminated and (iv) all consents, approvals,
orders or authorizations of, or registrations, declarations or filings with, any
Governmental Authority required or necessary in connection with the Offer, the
Merger and this Agreement and the transactions contemplated by this Agreement
shall have been obtained and shall be in full force and effect. Furthermore,
notwithstanding any other term of the Offer or this Agreement, Acquisition Sub
shall not be required to accept for payment or, subject as aforesaid, to pay for
any shares of Company Common Stock or Preference Stock not theretofore accepted
for payment or paid for, and may terminate the Offer if, at any time on or after
the date of this Agreement and before the Consummation of the Offer, any of the
following conditions exist:
(a) The representations and warranties of the Company contained in
this Agreement (without regard to any information provided under Section 5.04)
that are qualified as to materiality shall not be true and correct, and the
representations that are not so qualified shall not be true and correct in all
material respects, in each case on and as of the date hereof and on and as of
the date of the scheduled expiration of the Offer.
(b) Any of the obligations of the Company to be performed by it on or
before the date of the scheduled expiration of the Offer pursuant to the terms
of this Agreement shall not have been duly performed or complied with in all
material respects by that date.
(c) Since the Balance Sheet Date, there shall have occurred (or it
shall be reasonably expected that there will be) any event, change or
circumstance causing, or reasonably anticipated to cause in the future, any
Material Adverse Effect.
A-1
(d) Any consents, approvals and authorizations from third Persons and
Governmental Authorities identified on Schedule 2.05 and Schedule 2.11(b)
required to consummate the transactions contemplated by this Agreement shall not
have been obtained.
(e) There shall be pending or threatened any suit, action or
proceeding by any Governmental Authority (i) challenging the acquisition by
Parent or Acquisition Sub of any shares of Company Common Stock or Preference
Stock, seeking to restrain or prohibit the consummation of the Offer, the Merger
or any of the other transactions contemplated by this Agreement or seeking to
obtain from the Company, Parent or Acquisition Sub any damages related to the
Offer, the Merger or the other transactions contemplated hereby that are
material in relation to the Company and its Subsidiaries taken as a whole, (ii)
seeking to prohibit or limit the ownership or operation by the Company, Parent
or any of their respective Subsidiaries of any material portion of the business
or assets of the Company, Parent or any of their respective Subsidiaries, or to
compel the Company, Parent or any of their respective Subsidiaries to dispose of
or hold separate any material portion of the business or assets of the Company,
Parent or any of their respective Subsidiaries, as a result of the Offer, the
Merger or any of the other transactions contemplated by this Agreement, (iii)
seeking to impose limitations on the ability of Parent or Acquisition Sub to
acquire or hold, or exercise full rights of ownership of, any shares of
Surviving Corporation Common Stock, (iv) seeking to prohibit Parent or any of
its Subsidiaries from effectively controlling in any material respect the
business or operations of the Company or its Subsidiaries or of Parent and its
Subsidiaries or (v) which otherwise is reasonably likely to have a Material
Adverse Effect.
(f) There shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to the
Offer or the Merger, or any other action shall be taken by any Governmental
Authority or court, other than the application to the Offer or the Merger of
applicable waiting periods under the HSR Act, that is reasonably likely to
result, directly or indirectly, in any of the consequences referred to in
clauses (i) through (v) of paragraph (e) above.
(g) The Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Parent its approval or
recommendation of the Offer, the Merger or this Agreement or resolved to take
any of such actions.
(h) The Agreement shall have been terminated in accordance with its
terms.
A-2
The foregoing conditions are for the sole benefit of Acquisition Sub
and Parent and may, subject to the terms of the Agreement, be waived by
Acquisition Sub and Parent in whole or in part at any time and from time to time
in their sole discretion. The failure by Parent or Acquisition Sub at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
A-3
FEDERAL IDENTIFICATION FEDERAL IDENTIFICATION
Exhibit B NO. 00-0000000 NO. 04-30282903
--------- ---------------------- ----------------------
-------- THE COMMONWEALTH OF MASSACHUSETTS
Examiner XXXXXXX XXXXXXX XXXXXX
Secretary of the Commonwealth
Xxx Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000
ARTICLES OF *CONSOLIDATION / *MERGER
(GENERAL LAWS, CHAPTER 156B, SECTION 78)
*Consolidation / *merger of BI Expansion II Corp. and
--------------------------------------
Bird Corporation
--------------------------------------
--------------------------------------
--------------------------------------
,
--------------------------------------
the constituent corporations, into
Bird Corporation ,
--------------------------------------
*a new corporation / *one of the
constituent corporations.
The undersigned officers of each of the constituent corporations certify under
the penalties of perjury as follows:
1. An agreement of *consolidation / *merger has been duly adopted in compliance
with the requirements of General Laws, Chapter 156B, Section 78, and will be
kept as provided by Subsection (d) thereof. The *resulting / *surviving
corporation will furnish a copy of said agreement to any of its stockholders, or
to any person who was a stockholder of any constituent corporation, upon written
request and without charge.
2. The effective date of the *consolidation / *merger determined pursuant to
the agreement of *consolidation / *merger shall be the date approved and filed
by the Secretary of the Commonwealth. If a later effective date is desired,
specify such date which shall not be more than thirty days after the date of
filing:
3. (FOR A MERGER)
**The following amendments to the Articles of Organization of the surviving
corporation have been effected pursuant to the agreement of merger:
See Attachment 3A
C
P
M
R.A.
--------------
P.C.
*Delete the inapplicable word. **If there are no provisions state "None".
NOTE: IF THE SPACE PROVIDED UNDER ANY ARTICLE OR ITEM ON THIS FORM IS
INSUFFICIENT, ADDITIONS SHALL BE SET FORTH ON SEPARATE 8 1/2 X 11 SHEETS OF
PAPER WITH A LEFT MARGIN OF AT LEAST 1 INCH. ADDITIONS TO MORE THAN ONE ARTICLE
MAY BE MADE ON A SINGLE SHEET AS LONG AS EACH ARTICLE REQUIRING EACH ADDITION IS
CLEARLY INDICATED.
ATTACHMENT 3A
Article II of the Articles of Organization of Bird Corporation has been replaced
in its entirety by the following amendment:
The purpose of the corporation is to engage in the following business
activities:
To acquire, hold for investment, or sell securities of corporations and any
other type of real or personal property and to engage in and carry on any other
business or activity permitted to be conducted by a corporation organized under
Chapter 156B of Massachusetts General Laws.
In addition, each share of the corporation's Convertible Preference Stock (as
such term is defined in the Articles of Organization of Bird Corporation)
actually issued and outstanding at the effective date of the Merger (except for
shares as to which the holder thereof shall have exercised dissenters' rights
under Massachusetts General Laws) is, by virtue of the Merger and without any
action on the part of the holder thereof, being converted into the right to
receive $20, which amount shall not be adjusted for any accrued and unpaid
dividends thereon as of, or any dividends paid prior to, the effective date of
the Merger.
(FOR A CONSOLIDATION)
(a) The purpose of the resulting corporation is to engage in the following
business activities:
N/A
(b) State the total number of shares and the par value, if any, of each class of
stock which the resulting corporation is authorized to issue.
N/A
-----------------------------------------------------------------------
WITHOUT PAR VALUE WITH PAR VALUE
-----------------------------------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
-----------------------------------------------------------------------
Common: Common:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
Preferred: Preferred:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
**(c) If more than one class of stock is authorized, state a distinguishing
designation for each class and provide a description of the preferences, voting
powers, qualifications, and special or relative rights or privileges of each
class and of each series then established.
N/A
**(d) The restrictions, if any, on the transfer of stock contained in the
agreement of consolidation are:
N/A
**(e) Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or for
limiting, defining, or regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:
N/A
** If there are no provisions state "None".
4. The information contained in Item 4 is not a permanent part of the Articles
of Organization of the *resulting / *surviving corporation.
(a) The street address of the *resulting / *surviving corporation in
Massachusetts is: (post office boxes are not acceptable) c/o CT Corporation
System, 0 Xxxxxx Xxxxxx, Xxxxxx, XX 00000
(b) The name, residential address, and post office address of each director and
officer of the *resulting / *surviving corporation is:
NAME RESIDENTIAL ADDRESS POST OFFICE ADDRESS
-------------------------------------------------------------------------------
President: Xxxxxxxx X. Xxxxxxx 0000 Xxxxxx Xxxx Xxxx
Xxxxx, XX 00000
-------------------------------------------------------------------------------
Treasurer: Xxxxx X. Xxxxxxx, Xx. 00 Xxxxxx Xxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
-------------------------------------------------------------------------------
Clerk: Xxxx X. Xxxxxx 000 Xxxxx Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
-------------------------------------------------------------------------------
Directors:
-------------------------------------------------------------------------------
Xxxxxx X. Xxxxx 00 XxXxxxxx Xxxx Xxxx
Xxxxxx Xxxx, XX 00000
-------------------------------------------------------------------------------
Gianpaolo Caccini 0000 Xxxxxxxxx Xxx Xxxx
Xxxxxxxxx, XX 00000
-------------------------------------------------------------------------------
Xxxxxxxx X. Xxxxxxx 0000 Xxxxxx Xxxx Xxxx
Xxxxx, XX 00000
-------------------------------------------------------------------------------
(c) The fiscal year (i.e. tax year) of the *resulting/ *surviving corporation
shall end on the last day of the month of:
December
(d) The name and business address of the resident agent, if any, of the
*resulting / *surviving corporation is: CT Corporation System, 0 Xxxxxx
Xxxxxx, Xxxxxx, XX 00000
The undersigned officers of the several constituent corporations listed above
further state under the penalties of perjury as to their respective corporations
that the agreement of *consolidation / *merger has been duly executed on behalf
of such corporation and duly approved by the stockholders of such corporation in
the manner required by General Laws, Chapter 156B, Section 78.
, *President / *Vice President,
-------------------------------------------------
, *Clerk / *Assistant Clerk,
-------------------------------------------------
of Bird Corporation .
-----------------------------------------------------------------------------
(Name of constituent corporation)
,*President / *Vice President,
-------------------------------------------------
, *Clerk / *Assistant Clerk,
-------------------------------------------------
of BI Expansion II Corp. .
---------------------------------------------------------------------------
(Name of constituent corporation)
*Delete the inapplicable words.
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF *CONSOLIDATION / *MERGER
(GENERAL LAWS, CHAPTER 156B, SECTION 78)
=============================================
I hereby approve the within Articles of *Consolidation / *Merger and,
the filing fee in the amount of $ ________________ , having been paid,
said articles are deemed to have been filed with me this ____________ day
of __________________________, 19 _______.
Effective date:______________________________________________________
XXXXXXX XXXXXXX XXXXXX
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF THE DOCUMENT TO BE SENT TO:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
Telephone:___________________________________________________________
