--------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
Among
CONSOL INC.,
CONSOL COMMONWEALTH INC.
and
ROCHESTER & PITTSBURGH COAL COMPANY
Dated as of May 28, 1998
--------------------------------------------------------------------------------
TABLE OF CONTENTS
ARTICLE I
THE MERGER
Page
----
1.01 The Merger............................................................1
1.02 Closing...............................................................2
1.03 Effective Time........................................................2
1.04 Articles of Incorporation and By-laws of the Surviving Corporation....2
1.05 Directors.............................................................2
1.06 Officers..............................................................2
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.01 Capital Stock of Merger Sub...........................................3
2.02 Cancellation of Treasury Stock and Parent Owned Stock.................3
2.03 Conversion of Company Common Stock....................................3
2.04 Shares of Dissenting Shareholders.....................................3
2.05 Exchange of Certificates..............................................4
2.06 Stock Transfer Books..................................................6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.01 Organization..........................................................6
3.02 Capitalization........................................................7
3.03 Authority.............................................................7
3.04 Noncontravention; Filings and Consents................................8
3.05 Company SEC Documents; Financial Statements...........................9
3.06 Information Supplied..................................................9
3.07 Absence of Certain Changes or Events..................................9
3.08 Litigation...........................................................10
3.09 Tax Matters..........................................................10
3.10 Compliance with Applicable Laws......................................11
3.11 Voting Requirements..................................................11
3.12 Opinion of Financial Advisor.........................................12
3.13 Brokers..............................................................12
3.14 Disclosure...........................................................12
3.15 CERCLA Notice........................................................12
3.16 Environmental Matters................................................12
i
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Page
----
4.01 Organization.........................................................12
4.02 Capitalization of Merger Sub.........................................13
4.03 Authority............................................................13
4.04 Noncontravention; Filings and Consents...............................13
4.05 Information Supplied.................................................14
4.06 Brokers..............................................................14
4.07 Disclosure...........................................................14
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.01 Conduct of Business of the Company...................................15
5.02 Conduct of Business of Parent........................................17
5.03 Other Actions........................................................18
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Company Shareholders' Meeting........................................18
6.02 Proxy Statement......................................................18
6.03 Information; Confidentiality.........................................19
6.04 Approvals and Consents; HSR Filings..................................19
6.05 Company Benefit Plans................................................20
6.06 Fees and Expenses....................................................21
6.07 Notification.........................................................22
6.08 Obligations of Merger Sub............................................22
6.09 Public Announcements.................................................22
ARTICLE VII
CONDITIONS TO THE MERGER
7.01 Conditions to the Obligations of Each Party..........................22
7.02 Conditions to the Obligations of Parent and Merger Sub...............23
7.03 Conditions to the Obligations of the Company.........................23
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 Termination..........................................................24
8.02 Effect of Termination................................................25
ii
Page
----
8.03 Amendment............................................................25
8.04 Extension; Waiver....................................................25
ARTICLE IX
GENERAL PROVISIONS
9.01 Nonsurvival of Representations.......................................26
9.02 Exclusive Remedy.....................................................26
9.03 Notices..............................................................26
9.04 Definitions..........................................................27
9.05 Interpretation.......................................................28
9.06 Counterparts.........................................................28
9.07 Entire Agreement; Third-Party Beneficiaries..........................29
9.08 Assignment...........................................................29
9.09 Governing Law........................................................29
9.10 Enforcement..........................................................29
SCHEDULES
3.01 Subsidiaries
3.02 Pledged Shares
3.04 Consents
3.07 Certain Changes or Events
3.08 Litigation
3.09 Tax Matters
5.01(f) Properties for Sale
5.01(i) Discharge of Liabilities
5.01(l) Capital Expenditures
iii
AGREEMENT AND PLAN OF MERGER, dated as of May 28, 1998 among CONSOL
Inc., a Delaware corporation ("Parent"), CONSOL Commonwealth Inc., a
Pennsylvania corporation, a direct or indirect wholly owned subsidiary of Parent
("Merger Sub"), both of 0000 Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 and
Rochester & Pittsburgh Coal Company, a Pennsylvania corporation (the "Company")
of 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000.
WITNESSETH:
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and
the Company have approved the acquisition of the Company by Parent upon the
terms and subject to the conditions set forth in this Agreement and Plan of
Merger (this "Agreement");
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and
the Company have approved the merger of Merger Sub with and into the Company
(the "Merger") upon the terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding share of common stock, no par
value, of the Company ("Company Common Stock"), other than shares owned directly
or indirectly by Parent or by the Company, will be converted into the right to
receive cash; and
WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe certain conditions to the Merger;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Merger Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
1.01 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Pennsylvania Business
Corporation Law of 1988, as amended (the "PBCL"), Merger Sub shall be merged
with and into the Company at the Effective Time (as defined in Section 1.03) of
this Agreement. Following the Merger, the separate corporate existence of Merger
Sub shall cease, and the Company shall continue as the surviving corporation
(the "Surviving Corporation") and shall succeed to and assume all the rights,
assets, liabilities and obligations of Merger Sub in accordance with the PBCL.
1
1.02 Closing. The closing of the Merger (the "Closing") shall take
place at 10:00 a.m. on a date to be specified by the parties which shall be no
later than the second business day after the satisfaction or waiver of the
conditions set forth in Article VII (the "Closing Date") at the offices of
Duane, Morris & Heckscher LLP, 0000 Xxx Xxxxxxx Xxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000, unless another date or place is agreed to in writing by the
parties hereto.
1.03 Effective Time. On the Closing Date, or as soon as practicable
thereafter, the parties shall execute and file in the offices of the Corporation
Bureau of the Commonwealth of Pennsylvania appropriate articles of merger or
other appropriate documents (in any such case, the "Articles of Merger")
executed in accordance with the relevant provisions of the PBCL and shall make
all other filings or recordings required under the PBCL. The "Effective Time" or
"Effective Date" shall be the date of filing the Articles of Merger, or the
effective date specified therein, whichever is later.
1.04 Articles of Incorporation and By-laws of the Surviving
Corporation.
(a) The Articles of Incorporation of Merger Sub as in effect
immediately prior to the Effective Time shall become the Articles of
Incorporation of the Surviving Corporation after the Effective Time, and
thereafter may be amended as provided therein and as permitted by law and this
Agreement.
(b) The By-laws of Merger Sub as in effect immediately prior
to the Effective Time shall become the By-laws of the Surviving Corporation
after the Effective Time, and thereafter may be amended as provided therein and
as permitted by law and this Agreement.
1.05 Directors. The directors of Merger Sub immediately prior to the
Effective Time shall become the directors of the Surviving Corporation on the
Effective Time, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
1.06 Officers. The officers of Merger Sub immediately prior to the
Effective Time shall become the officers of the Surviving Corporation on the
Effective Time, until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
2.01 Capital Stock of Merger Sub. As of the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any shares of
Company
2
Common Stock or any shares of capital stock of Merger Sub, each share of common
stock, par value $.01 per share, of Merger Sub issued and outstanding
immediately prior to the Effective Time shall be converted into and become one
fully paid and nonassessable share of common stock, par value $.01 per share, of
the Surviving Corporation.
2.02 Cancellation of Treasury Stock and Parent Owned Stock. As of the
Effective Time, by virtue of the Merger and without any action on the part of
the holder of any shares of Company Common Stock or any shares of capital stock
of Merger Sub, each share of Company Common Stock issued and held immediately
prior to the Effective Time in the Company's treasury or by any of the Company's
direct or indirect wholly owned subsidiaries and each share of Company Common
Stock that is owned by Parent, Merger Sub or any other subsidiary of Parent
shall automatically be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor.
2.03 Conversion of Company Common Stock.
(a) As of the Effective Time, by virtue of the Merger and
without any action on the part of the holder of any shares of Company Common
Stock or any shares of capital stock of Merger Sub, subject to the provisions of
Section 2.04 with respect to dissenters' rights, if any, each share of Company
Common Stock issued and outstanding immediately prior to the Effective Time
other than (x) Dissenting Shares (as defined in Section 2.04) and (y) shares to
be canceled in accordance with Section 2.02 ("Canceled Shares") shall be
converted into the right to receive in cash from Parent, without interest, an
amount equal to $43.50 (the "Merger Consideration").
(b) As of the Effective Time, all such shares of Company
Common Stock shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of a certificate
representing any such shares of Company Common Stock shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration.
2.04 Shares of Dissenting Shareholders. Notwithstanding anything in
this Agreement to the contrary, any shares of Company Common Stock that are
issued and outstanding as of the Effective Time and that are held by a
shareholder who has exercised and has not failed to perfect or effectively
withdrawn or lost his right (to the extent such right is available by law) to
demand and to receive the "fair value" of such shares (the "Dissenting Shares")
under the PBCL shall not be converted into the right to receive the Merger
Consideration unless and until the holder shall have failed to perfect, or shall
have effectively withdrawn or lost, his right to dissent from the Merger under
the PBCL and to receive such consideration as may be determined to be due with
respect to such Dissenting Shares pursuant to and subject to the requirements of
the PBCL. If any such holder shall have so failed to perfect or have effectively
withdrawn or lost such right, each share of such holder's Company Common Stock
shall thereupon be deemed to have been converted into and to have become, as of
the Effective Time, the right to receive, without any interest thereon, the
Merger Consideration. The Company shall give Parent
3
(i) prompt notice of any notice or demand for appraisal or payment for shares of
Company Common Stock received by the Company and (ii) the opportunity to
participate in and direct all negotiations and proceedings with respect to any
such demands or notices. The Company shall not, without the prior written
consent of Parent, make any payment with respect to, or settle, offer to settle
or otherwise negotiate, any such demands.
2.05 Exchange of Certificates.
(a) Exchange Agent. From and after the Effective Time, Parent
shall make available to a bank or trust company designated by Parent and
satisfactory to the Company (the "Exchange Agent") cash for the benefit of the
holders of shares of Company Common Stock (other than Dissenting Shares and
Canceled Shares) in the amount required to be exchanged for shares of Company
Common Stock in the Merger pursuant to Section 2.03 (such cash hereinafter
referred to as the "Exchange Fund"). The Exchange Agent shall, pursuant to
irrevocable instructions, deliver the cash pursuant to Section 2.03 out of the
Exchange Fund. Except as contemplated by Section 2.05(g), the Exchange Fund
shall not be used for any other purpose.
(b) Exchange Procedures. As promptly as practicable after the
Effective Time, Parent shall cause the Exchange Agent to mail to each holder of
a certificate or certificates (to the extent such certificates have not already
been submitted to the Exchange Agent) which immediately prior to the Effective
Time represented outstanding shares of Company Common Stock other than
Dissenting Shares and Canceled Shares (the "Certificates") (i) a letter of
transmittal which shall be in customary form and shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon proper delivery of the Certificates to the Exchange Agent and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for cash.
(c) Exchange of Certificates. Upon surrender to the Exchange
Agent of a Certificate for cancellation, together with such letter of
transmittal, duly executed and completed in accordance with the instructions
thereto, and such other documents as may be reasonably required pursuant to such
instructions, the holder of such Certificate shall be entitled to receive in
exchange therefor a check in the amount equal to the cash which such holder has
the right to receive pursuant to the provisions of this Article II and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of shares of Company Common Stock which is not registered
in the transfer records of the Company, the Merger Consideration may be issued
to a transferee if the Certificate representing such shares of Company Common
Stock is presented to the Exchange Agent, accompanied by all documents required
to evidence and effect such transfer and evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this Section
2.05, each Certificate shall be deemed at all times after the Effective Time to
represent only the right to receive upon such surrender the Merger Consideration
with respect to the shares of Company Common Stock formerly represented thereby.
4
(d) No Further Rights in Company Common Stock. All cash paid
upon conversion of the shares of Company Common Stock in accordance with the
terms hereof shall be deemed to have been issued in full satisfaction of all
rights pertaining to such shares of Company Common Stock.
(e) Termination of Exchange Fund. To the extent permitted by
applicable law, any portion of the Exchange Fund which remains undistributed to
the holders of Company Common Stock on the second anniversary of the Effective
Time shall be delivered to Parent, upon demand, and any holders of Company
Common Stock who have not theretofore complied with this Article II shall
thereafter look only to Parent for the Merger Consideration. Any portion of the
Exchange Fund remaining unclaimed by holders of shares of Company Common Stock
as of a date which is immediately prior to such time as such amounts would
otherwise escheat to or become property of any government entity shall, to the
extent permitted by applicable law, become the property of Parent free and clear
of any claims or interest of any person previously entitled thereto.
(f) No Liability. None of the Exchange Agent, Parent nor the
Surviving Corporation shall be liable to any holder of shares of Company Common
Stock for any cash delivered to a public official pursuant to any abandoned
property, escheat or similar law.
(g) Withholding Rights. The Exchange Agent shall be entitled
to deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of shares of Company Common Stock such amounts as it is
required to deduct and withhold with respect to the making of such payment under
the Internal Revenue Code of 1986, as amended (the "Code") or any provision of
state or local tax law. To the extent that amounts are so withheld by the
Surviving Corporation or Parent, as the case may be, such withheld amounts shall
be treated for all purposes of this Agreement as having been paid to the holder
of the shares of Company Common Stock in respect of which such deduction and
withholding was made by the Surviving Corporation or Parent, as the case may be.
(h) Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration.
(i) Further Assurances. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or things are
necessary or desirable 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 either of the Merger Sub or the
5
Company acquired or to be acquired by the Surviving Corporation as a result of,
or in connection with, the Merger or otherwise to carry out this Agreement, the
officers of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of each of the Merger Sub and the Company or
otherwise, all such deeds, bills of sale, assignments and assurances and to take
and do, in such names and on such behalves or otherwise, all such other actions
and things as may be necessary or desirable to vest, perfect or confirm any and
all right, title and interest in, to and under such rights, properties or assets
in the Surviving Corporation or otherwise to carry out the purposes of this
Agreement.
2.06 Stock Transfer Books. At the Effective Time, the stock transfer
books of the Company shall be closed and there shall be no further registration
of transfers of shares of Company Common Stock thereafter on the records of the
Company. From and after the Effective Time, the holders of Certificates
representing shares of Company Common Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such shares of
Company Common Stock, except as otherwise provided herein or by law. On or after
the Effective Time, any Certificates presented to the Exchange Agent or Parent
for any reason shall be converted into cash as provided herein.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger Sub
as follows:
3.01 Organization. Each of the Company and its subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority and all necessary government approvals to own, lease and operate
its properties and to carry on its business as now being conducted, except where
the failure to be so organized, existing and in good standing or to have such
power, authority and governmental approvals would not have a material adverse
effect. The Company and each of its subsidiaries is duly qualified or licensed
to do business and in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification or licensing necessary, except where the failure to be
so duly qualified or licensed and in good standing would not have a material
adverse effect. The Company has made available to Parent complete and correct
copies of its Restated Articles of Incorporation, as amended, and By-laws and
the articles of incorporation and by-laws or other comparable charter or
organizational documents of its subsidiaries, in each case as amended to the
date of this Agreement. All the outstanding shares of capital stock of each
material subsidiary of the Company are owned by the Company or by another wholly
owned subsidiary of the Company, and, except as set forth in the Company SEC
Documents (as hereafter defined), free and clear of all liens and are duly
6
authorized, validly issued, fully paid and nonassessable. A list of all
subsidiaries of the Company is attached hereto as Schedule 3.01.
3.02 Capitalization. The authorized capital stock of the Company
consists of 5,000,000 shares of Company Common Stock. As of the date of this
Agreement, (i) 3,440,984 shares of Company Common Stock were issued and
outstanding and (ii) 548,137 shares of Company Common Stock were held in the
treasury of the Company. All the outstanding shares of Company Common Stock are
duly authorized, validly issued, fully paid and nonassessable and free of any
pre-emptive rights in respect thereof. As of the date hereof, no bonds,
debentures, notes or other indebtedness of the Company convertible into voting
securities of the Company are issued or outstanding and, except as set forth
above, (i) no shares of capital stock or other voting securities of the Company
are outstanding, (ii) no equity equivalents, interests in the ownership or
earnings of the Company or other similar rights are outstanding and (iii) there
are no existing options, warrants, calls, subscriptions or other rights or
agreements or commitments relating to the capital stock of the Company or any of
its subsidiaries or obligating the Company or any of its subsidiaries to issue,
transfer or sell any shares of capital stock or other equity interest in the
Company or any of its subsidiaries or obligating the Company or any of its
subsidiaries to grant, extend or enter into any such option, warrant, call,
subscription or other right, agreement or commitment. As of the date of this
Agreement, there are no outstanding contractual obligations of the Company or
any of its subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its subsidiaries, except for the pledge
of shares of capital stock of certain of the Company's subsidiaries listed on
Schedule 3.02 hereto.
3.03 Authority. The Company has the requisite corporate power and
authority to execute and deliver this Agreement and, subject to the requisite
approval of this Agreement by the holders of the outstanding shares of Company
Common Stock, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Company, subject to the requisite
approval of this Agreement by the holders of the outstanding shares of Company
Common Stock. This Agreement has been duly executed and delivered by the Company
and, assuming this Agreement constitutes the valid and binding obligation of
Parent and Merger Sub, constitutes the valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
and similar laws, now or hereafter in effect, affecting creditors' rights and
remedies and to general principles of equity.
3.04 Noncontravention; Filings and Consents.
(a) Except as set forth in Schedule 3.04 hereto, the execution
and delivery of this Agreement by the Company do not, and the consummation of
the transactions contemplated by this Agreement and compliance with the
provisions of this Agreement
7
will not, conflict with, or result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation, or acceleration of any obligation or to loss of a
material benefit under, or result in the creation of any lien upon any of the
properties or assets of the Company or any of its subsidiaries under (i) the
Restated Articles of Incorporation, as amended, or By-laws of the Company or the
comparable charter or organizational documents of any of its subsidiaries, (ii)
any loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license applicable to
the Company or any of its subsidiaries or their respective properties or assets
or (iii) subject to the governmental filings and other matters referred to in
paragraph (b) below, any judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to the Company or any of its subsidiaries or their
respective properties or assets, other than, in the case of clauses (ii) and
(iii), any such conflicts, violations, defaults, rights or liens that
individually or in the aggregate would not (x) impair in any material respect
the ability of the Company to perform its obligations under this Agreement or
(y) prevent or impede, in any material respect, the consummation of the
transactions contemplated by this Agreement.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any federal, state or local government
or any court, administrative or regulatory agency or commission or other
governmental authority or agency (a "Governmental Entity") is required by the
Company or any of its subsidiaries in connection with the execution and
delivery of this Agreement by the Company or the consummation by the Company of
the transactions contemplated by this Agreement, except for (i) the filing of a
premerger notification and report form by the Company under the Xxxx-
Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
(ii) the filing with the Securities and Exchange Commission (the "SEC") of (x)
the Proxy Statement (as defined in Section 6.02) and (y) such reports under
Section 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as may be required in connection with this Agreement and the transactions
contemplated by this Agreement, (iii) the filing of the Articles of Merger with
the Corporation Bureau of the Commonwealth of Pennsylvania and the Certificate
of Merger with the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which the Company is
qualified to do business, (iv) such as may be required by any applicable state
securities or "blue sky" laws, (v) notice of consummation of the Merger to the
Pennsylvania Department of Environmental Protection (the "DEP") and (vi) such
other consents, approvals, orders, authorizations, registrations, declarations
and filings the failure of which to be obtained or made would not, individually
or in the aggregate, (x) impair in any material respect the ability of the
Company to perform its obligations under this Agreement or (y) prevent or
impede, in any material respect, the consummation of the transactions
contemplated by this Agreement.
3.05 Company SEC Documents; Financial Statements. The Company has
filed all required reports, proxy statements, forms, and other documents,
including any amendments thereto, with the SEC since December 31, 1994 and prior
to the date of this
8
Agreement (the "Company SEC Documents"). As of their respective dates, (i) the
Company SEC Documents complied, and all similar documents filed prior to the
Closing Date will comply, in all material respects with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act,
as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Company SEC Documents and (ii) none of the Company
SEC Documents contained, nor will any similar document filed after the date of
this Agreement contain, any untrue statement of a material fact or omitted, or
will omit, to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the Company SEC Documents (including any similar documents filed
after the date of this Agreement): (i) comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, (ii) have been prepared in
accordance with generally accepted accounting principles (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 (iii) fairly present 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 then
ended. Neither the Company nor any of its subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
required by generally accepted accounting principles to be set forth on a
consolidated balance sheet or financial statement of the Company and its
subsidiaries or in the notes thereto which have not been so noted or disclosed
to Parent.
3.06 Information Supplied. None of the information to be supplied by
the Company expressly for inclusion or incorporation by reference in the Proxy
Statement will, (i) on the date the Proxy Statement (as hereafter defined) is
first mailed to the shareholders of the Company and (ii) at the time of the
Company Shareholders' Meeting (as hereafter defined), 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 Proxy Statement
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder.
3.07 Absence of Certain Changes or Events. Except as disclosed in the
Company SEC Documents or in Schedule 3.07 hereto or as contemplated by this
Agreement, since February 28, 1998, the Company and its subsidiaries have
conducted their respective businesses only in the ordinary course, and there has
not been (i) any material adverse change in the Company, (ii) any declaration,
setting aside or payment of any dividend or other distribution with respect to,
or repurchase or redemption of, the Company's capital stock other than the
dividends on the shares of Company Common Stock not in excess of the amount of
dividends declared, paid or set aside in the comparable year-earlier period,
(iii) any split, combination or reclassification of any of the Company's capital
stock or any issuance or the authorization of any issuance of any other
securities
9
in respect of, in lieu of or in substitution for shares of its capital stock,
(iv) (A) any granting by the Company or any of its subsidiaries to any officer
of the Company or any of its subsidiaries of any increase in compensation,
except in the ordinary course of business consistent with past practice, (B) any
granting by the Company or any of its subsidiaries to any such officer any
increase in severance or termination pay, except as part of a standard
employment package to any person promoted or hired, (C) except termination
arrangements in the ordinary course of business consistent with past practice
with employees other than any executive officer of the Company, any entry by the
Company or any of its subsidiaries into any employment, severance or termination
agreement with any such officer or (D) any material modification to any existing
Company Benefit Plans (as hereafter defined) other than such modifications
required by law, except as listed on Schedule 3.07 hereto, (v) any damage,
destruction or loss, whether or not covered by insurance, that has or reasonably
would be expected to have a material adverse effect on the Company or (vi) 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 generally accepted accounting principles. Since
September 30, 1996, the Company's dividends to shareholders have not been in
excess of $.15 per share of Company Common Stock per quarter.
3.08 Litigation. Except as set forth on Schedule 3.08 hereto, there
are no suits, actions or proceedings pending or, to the knowledge of the
Company, threatened against the Company or any of its subsidiaries that would
reasonably be expected to have, individually or in the aggregate, a material
adverse effect. Except as set forth on Schedule 3.08 hereto, neither the
Company nor any of its subsidiaries is subject to any outstanding order, writ,
injunction or decree that would reasonably be expected to have a material
adverse effect.
3.09 Tax Matters.
(a) Except as set forth on Schedule 3.09 hereto, each of the
Company and each of its subsidiaries has (i) filed, or caused to be filed, with
the appropriate taxing authorities all Tax Returns required to be filed on or
before the date hereof, and such Tax Returns are true, correct and complete in
all material respects and (ii) paid, or caused to be paid, all Taxes shown to be
due and payable on such Tax Returns or established adequate reserves in
accordance with generally accepted accounting principles for the payment of all
such Taxes.
(b) Except as set forth on Schedule 3.09 hereto, neither the
Company nor any of its subsidiaries has (i) received any notice of deficiency or
assessment from any taxing authorities with respect to liability for Taxes that
have not been fully paid or finally settled or (ii) granted any requests,
agreements, consents or waivers to extend the statutory period of limitations
applicable to the assessment of any Taxes.
10
(c) Except as set forth on Schedule 3.09 hereto, no taxing
authority is now asserting, or to the knowledge of the Company is threatening to
assert, any deficiency or assessment for additional Taxes of the Company or any
of its subsidiaries.
(d) No payment which will, or may, be made to any employee,
director, officer or agent of the Company or any of its subsidiaries will
constitute an "excess parachute payment" within the meaning of Section 280G of
the Code.
For purposes of this Agreement, "Taxes" means all federal, state,
foreign and local taxes, levies and other assessments, including, without
limitation, all income, sales, use, transfer, profits, capital gains,
withholding, payroll, severance and reclamation, black lung, real property and
personal property and any other taxes, assessments and similar charges in the
nature of a tax (including interest and penalties attributable thereto) imposed
by any governmental authority; "Tax Returns" means any return, report,
information return or other document (including relating or supporting
information) relating to Taxes.
3.10 Compliance with Applicable Laws. Except as disclosed in the
Company SEC Documents, to the knowledge of the Company, since January 1, 1996
neither the Company nor any of its subsidiaries has violated or failed to comply
with any statute, law, permit, regulation, rule, judgment, decree or order of
any Governmental Entity applicable to its business or operations, except for
violations and failures to comply that would not, individually or in the
aggregate, reasonably be expected to result in a material adverse effect. The
conduct of the business of the Company and its subsidiaries is in conformity
with all federal, state and local governmental and regulatory requirements
applicable to its business and operations, except where such nonconformities
would not, in the aggregate, reasonably be expected to result in a material
adverse effect. The Company and its subsidiaries have all permits, licenses and
franchises from governmental agencies required to conduct their businesses as
now being conducted, except for such permits, licenses and franchises the
absence of which would not, in the aggregate, reasonably be expected to result
in a material adverse effect.
3.11 Voting Requirements. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock entitled to vote
approving this Agreement is the only vote of the holders of any class of the
Company's capital stock necessary to approve this Agreement and the transactions
contemplated by this Agreement.
3.12 Opinion of Financial Advisor. The Company has received an
opinion from X.X. Xxxxxx Securities Inc. to the effect that, as of the date of
this Agreement, the consideration to be received in the Merger by the holders of
Company Common Stock is fair to the holders of Company Common Stock from a
financial point of view.
3.13 Brokers. No broker, investment banker, financial advisor or
other person, other than X.X. Xxxxxx Securities Inc., the fees and expenses of
which will be paid by the
11
Company, is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Company.
3.14 Disclosure. No representation or warranty hereunder or
information contained in the financial statements referred to in Section 3.05,
the Schedules or any certificate, statement, or other document delivered by the
Company hereunder contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein, in light of the circumstances in which they were made, not
misleading.
3.15 CERCLA Notice. Neither the Company nor any of its subsidiaries
has received any request for information with respect to or been notified that
it is a potentially responsible party for any contaminated site under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"), or any similar state statute.
3.16 Environmental Matters. To the knowledge of the Company, neither
the Company nor any of its subsidiaries has stored, disposed of or released any
hazardous or toxic substance in violation of CERCLA, the Toxic Substances
Control Act, the Resource Conservation and Recovery Act or any other federal or
state law, rule or regulation which protects the environment.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent and
warrant to the Company as follows:
4.01 Organization. Each of Parent and Merger Sub and Parent's
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority and all necessary government approvals
to own, lease and operate its properties and to carry on its business as now
being conducted, except where the failure to be so organized, existing and in
good standing or to have such power, authority and governmental approvals would
not have a material adverse effect. Each of Parent and Merger Sub and each of
Parent's subsidiaries is duly qualified or licensed to do business and in good
standing in each jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such qualification or
licensing necessary, except where the failure to be so duly qualified or
licensed and in good standing would not have a material adverse effect. All
outstanding shares of capital stock of each subsidiary of Parent are owned by
Parent or by another direct or indirect wholly owned
12
subsidiary of Parent, free and clear of all liens and are duly authorized,
validly issued, fully paid and nonassessable.
4.02 Capitalization of Merger Sub. The authorized capital stock of
Merger Sub consists of 1,000 shares of common stock, par value $.01 per share,
all of which are duly authorized, validly issued, fully paid and nonassessable
and free of any pre-emptive rights in respect thereof and all of which are owned
directly or indirectly by Parent.
4.03 Authority. Each of Parent and Merger Sub has the requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Parent and Merger Sub and the consummation by
Parent and Merger Sub of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Parent and Merger
Sub and does not require the approval of the shareholders of Parent. This
Agreement has been duly executed and delivered by Parent and Merger Sub and,
assuming this Agreement constitutes the valid and binding obligation of the
Company, constitutes the valid and binding obligation of Parent and Merger Sub,
enforceable against Parent and Merger Sub in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and
similar laws, now or hereafter in effect, affecting creditors' rights and
remedies and to general principles of equity.
4.04 Noncontravention; Filings and Consents.
(a) The execution and delivery of this Agreement by either
Parent or Merger Sub do not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of this
Agreement will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation, or acceleration of any obligation or to loss
of a material benefit under, or result in the creation of any lien upon any of
the properties or assets of Parent or Merger Sub or any of Parent's other
subsidiaries under (i) the Certificate or Articles of Incorporation or By-laws
of either Parent or Merger Sub or the comparable charter or organizational
documents of any of Parent's other subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Parent or
Merger Sub or any of Parent's other subsidiaries or their respective properties
or assets or (iii) subject to the governmental filings and other matters
referred to in paragraph (b) below, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Parent or Merger Sub or any of
Parent's other subsidiaries or their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such conflicts, violations,
defaults, rights or liens that individually or in the aggregate would not (x)
impair in any material respect the ability of Parent or Merger Sub to perform
their respective obligations under this Agreement or (y) prevent or impede, in
any material respect, the consummation of the transactions contemplated by this
Agreement.
13
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity, is required
by Parent or Merger Sub or any of Parent's other subsidiaries in connection with
the execution and delivery of this Agreement by Parent or Merger Sub or the
consummation by Parent or Merger Sub of the transactions contemplated by this
Agreement, except for (i) the filing of a premerger notification and report form
by Parent and Merger Sub under the HSR Act, (ii) the filing of the Articles of
Merger with the Corporation Bureau of the Commonwealth of Pennsylvania and
appropriate documents with the relevant authorities of other states in which
Parent is qualified to do business, (iii) such as may be required by any
applicable state securities or "blue sky" laws, (iv) notice of consummation of
the Merger to the DEP and (v) such other consents, approvals, orders,
authorizations, registrations, declarations and filings the failure of which to
be obtained or made would not, individually or in the aggregate, (x) impair in
any material respect the ability of Parent or Merger Sub to perform their
respective obligations under this Agreement or (y) prevent or impede, in any
material respect, the consummation of the transactions contemplated by this
Agreement.
4.05 Information Supplied. None of the information supplied or to be
supplied by Parent or Merger Sub expressly for inclusion or incorporation by
reference in the Proxy Statement will, (i) on the date the Proxy Statement is
first mailed to the shareholders of the Company and (ii) at the time of the
Company Shareholders' Meeting, 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.
4.06 Brokers. No broker, investment banker, financial advisor or
other person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Parent or Merger
Sub.
4.07 Disclosure. No representation or warranty hereunder or
information contained in any certificate, statement, or other document delivered
by Parent hereunder contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein, in light of the circumstances in which they were made, not
misleading.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
5.01 Conduct of Business of the Company. Prior to the Effective Time,
the Company agrees (except as expressly contemplated or permitted by this
Agreement, as set forth herein or to the extent that Parent shall otherwise
consent in writing) as follows:
14
(a) Ordinary Course. The Company and its subsidiaries shall
carry on their respective businesses in the usual, regular and ordinary course
in substantially the same manner as heretofore conducted, shall preserve intact
their present business organizations and shall use commercially reasonable
efforts to keep available the services of their present officers and employees
and preserve their relationships with customers, suppliers and others having
business dealings with the Company and its subsidiaries.
(b) Dividends; Changes in Stock. Except for the payment on
June 1, 1998 of a cash dividend of $.15 per share declared on May 4, 1998, the
Company shall not (i) declare or pay any quarterly dividends on or make other
distributions in respect of any of its capital stock, (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (iii) repurchase, redeem or otherwise
acquire, or permit any subsidiary to repurchase, redeem or otherwise acquire,
any shares of capital stock.
(c) Issuance of Securities. The Company shall not, and it
shall not permit any of its subsidiaries to, issue, deliver or sell or authorize
or propose the issuance, delivery or sale of, any shares of its capital stock of
any class or any securities convertible into, or any rights, warrants, calls,
subscriptions or options to acquire, any such shares or convertible securities,
or any other ownership interest other than issuances by a wholly owned
subsidiary of the Company of its capital stock to the Company.
(d) Governing Documents. The Company shall not amend or
propose to amend its Restated Articles of Incorporation, as amended, or By-laws.
(e) No Acquisitions. The Company shall not, and it shall not
permit any of its subsidiaries to, acquire or agree to acquire by merging or
consolidating with, or by purchasing a substantial equity interest in or
substantial portion of the assets of, or by any other manner, any business or
any corporation, partnership, association or other business organization or
division thereof.
(f) No Dispositions. The Company shall not, and it shall not
permit any of its subsidiaries to, sell, lease, encumber or otherwise dispose
of, or agree to sell, lease, encumber or otherwise dispose of, any of its
assets, other than (i) sales of equipment between the Company and its
subsidiaries that do not result in the generation of taxable income on a
consolidated basis in the ordinary course of business, (ii) assets having an
aggregate book value of not more than $100,000 it being understood that this
clause (ii) shall not permit the sale or other disposition of Helvetia Coal
Company and (iii) those properties listed on Schedule 5.01(f) hereto.
(g) Indebtedness. With the exception of indebtedness between
the Company and its subsidiaries, the Company shall not, and it shall not permit
any of its subsidiaries to, incur (which shall include entering into credit
agreements, lines of credit or similar arrangements) any indebtedness for
borrowed money or guarantee any such
15
indebtedness or issue or sell any debt securities or warrants or rights to
acquire any debt securities of the Company or any of its subsidiaries or
guarantee any debt securities of others, other than (i) indebtedness outstanding
on February 28, 1998 and (ii) take downs under the Company's and its
subsidiaries' existing credit facilities, provided, however, that at the Closing
Date the sum of the Company's indebtedness and current liabilities (excluding
the current portion of the Company's long-term indebtedness) less the Company's
current assets determined in accordance with generally accepted accounting
principles shall not be greater than the amount thereof at February 28, 1998
plus $12,000,000. For the purpose of this Section 5.01(g), the Company's current
liabilities shall exclude deferred compensation and severance pay payable to
employees of the Company and its subsidiaries in connection with the Merger.
(h) Tax Matters. The Company shall not make, and will not
permit any of its subsidiaries to make, any tax election or settle or compromise
any income tax liability of the Company or of any of its subsidiaries for an
amount in excess of $25,000. The Company shall, before filing or causing to be
filed any material Tax Return of the Company or any of its subsidiaries, consult
with Parent and its advisors as to the positions and elections that may be taken
or made with respect to such return.
(i) Discharge of Liabilities. The Company shall not, and it
shall not permit any of its subsidiaries to, pay, discharge, settle or satisfy
any claim, liabilities or obligations (absolute, asserted or unasserted,
contingent or otherwise) for an amount in excess of $100,000 in the aggregate
(other than settlement of the litigation matters set forth on Schedule 5.01(i)
hereto, payments of accounts payable and accrued liabilities and reductions of
indebtedness in the ordinary course of business of the Company and its
subsidiaries and payments for goods and services under the written agreements in
effect on the date hereof and listed on Schedule 5.01(i) hereto),0. or waive the
benefit 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.
(j) Contracts. Without the consent of Parent, the Company
shall not, and shall not permit any of its subsidiaries to, enter into, modify,
amend or terminate any contract to which the Company or such subsidiary is a
party or waive, release or assign any material rights or claims thereunder other
than spot purchases of supplies necessary for the operation of the business of
the Company and its subsidiaries in the ordinary course which do not result in
the Company's acquisition of supplies in excess of those that would be consumed
in 30 days of operations in the ordinary course of business. Parent agrees to
respond in not more than two full business days to any request from the Company
to enter into, modify, amend or terminate any contract or to waive, release or
assign any material rights or claims thereunder.
(k) Employee Benefits. The Company shall not, and shall not
permit any of its subsidiaries to, (i) grant any increase in the compensation of
any of its directors, officers or key employees, (ii) pay or agree to pay any
pension, retirement allowance or other employee benefit not required or
contemplated by any of the existing Company
16
Benefit Plans as in effect on the date hereof to any director, officer or key
employee, (iii) enter into any new employment, severance or termination
agreement with any such director, officer or key employee or (iv) except as may
be required to comply with applicable law, become obligated under any Company
Benefit Plan which was not in existence on the date hereof or amend any such
plan in existence on the date hereof to enhance the benefits thereunder. As used
herein, "Company Benefit Plans" shall mean all "employee pension benefit plans"
(as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and sometimes referred to herein as "Company Pension
Plans"), "employee welfare benefit plans" (as defined in Section 3(1) of ERISA
and sometimes referred to herein as "Welfare Plans"), and each other plan,
arrangement or policy (written or oral) relating to stock options, stock
purchases, compensation, deferred compensation, severance, fringe benefits or
other employee benefits, in each case maintained, or contributed to, by the
Company or any of 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, together with the Company, a "Commonly Controlled
Entity"), for the benefit of any current or former employees, officers, agents
or directors of the Company or any of its subsidiaries.
(l) Capital Expenditures. Except as listed in Schedule 5.01(l)
hereto for the month of June 1998 or as otherwise approved in advance by Parent,
the Company shall not, and shall not permit any of its subsidiaries to,
authorize or make any capital expenditures (excluding capital expenditures for
which commitments exist as of the date of this Agreement) which in the aggregate
exceed $250,000, except for repairs and rebuilding expenditures of less than
$250,000 each necessary to keep existing mining equipment in operation. Parent
agrees to respond in not more than two full business days to any request
received from the Company to make or authorize any capital expenditures which in
the aggregate exceed $250,000 and, in emergency situations, Parent shall reply
to any such request within two hours of Parent's receipt of notification
thereof.
5.02 Conduct of Business of Parent. Prior to the Effective Time,
Parent agrees (except as expressly contemplated or permitted by this Agreement,
or to the extent that the Company shall otherwise consent in writing) as
follows:
(a) Material Acquisitions. CONSOL Energy, Inc. ("CEI") shall
not, and shall not permit any of its subsidiaries other than in conjunction with
the sale of capital stock of CEI held directly or indirectly by DuPont to,
acquire or agree to acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of or equity in, or by any other manner, any
business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to acquire any
assets if the entering into of a definitive agreement relating to or the
consummation of such acquisition, merger or consolidation would (A) impose any
material delay in the obtaining of, or increase the risk of not obtaining, any
authorizations, consents, orders, declarations or approvals of any Governmental
Entity necessary to consummate the Merger or the expiration or termination of
any applicable waiting period, (B) increase the risk of any Governmental Entity
entering an order prohibiting the consummation of
17
the Merger or (C) increase the risk of not being able to remove any such order
on appeal or otherwise.
(b) Other Actions. CEI shall not, and shall not permit any of
its subsidiaries to take other than in conjunction with the sale of capital
stock of CEI held directly or indirectly by DuPont, or fail to take, any other
action which would, or would reasonably be expected to, impede, interfere with,
prevent or materially delay the Merger.
5.03 Other Actions. Each of Parent, Merger Sub and the Company shall
not and shall not permit any of its subsidiaries to, take any action that would,
or that would reasonably be expected to, result in (i) any of its
representations and warranties set forth in this Agreement that are qualified as
to materiality becoming untrue, (ii) any of such representations and warranties
that are not so qualified becoming untrue in any material respect or (iii) any
of the conditions to the Merger set forth in Article VII not being satisfied.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Company Shareholders' Meeting. As soon as practicable after the
date hereof, the Company shall call a meeting of its shareholders (the "Company
Shareholders' Meeting") to consider and vote upon the approval of this Agreement
and the Company shall take all reasonable lawful action to solicit such
approval, including, without limitation, timely mailing the Proxy Statement.
6.02 Proxy Statement. As promptly as practicable after the execution
of this Agreement, the Company shall mail a proxy statement to its shareholders
relating to the Company Shareholders' Meeting (the "Proxy Statement"). The
Company will cause the Proxy Statement to comply as to form in all material
respects with the applicable provisions of the Securities Act, the Exchange Act
and the rules and regulations thereunder.
6.03 Information; Confidentiality.
(a) From the date of this Agreement until the mailing of the
Proxy Statement to the Company's shareholders to the extent permitted by law,
the Company shall afford to Parent, and to Parent's officers, employees,
accountants, counsel, financial advisors and other representatives, full and
complete access to all the officers, employees, properties, books, contracts,
commitments and records of the Company and its subsidiaries as Parent may
request in its sole discretion; provided, however, that Parent and its
representatives shall not interfere materially with the operation of the
business of the Company and such investigation and examination shall be
conducted at all times during normal business hours and under reasonable
circumstances. From the date of this
18
Agreement until the Effective Date, the Company shall furnish promptly to Parent
(i) a copy of each report, schedule, registration statement and other document
filed by it or its subsidiaries during such period pursuant to the requirements
of applicable federal or state securities laws and (ii) all other material
information concerning its business, properties and current and former personnel
as Parent may reasonably request. Parent will keep such information provided to
it by the Company confidential, except to the extent such information (i) is or
becomes generally available to the public other than as a result of a disclosure
by Parent, (ii) was available to Parent on a nonconfidential basis prior to
disclosure by the Company to Parent or (iii) becomes available to Parent on a
nonconfidential basis from a source other than the Company which is entitled to
disclose it, and except as required by law or as otherwise agreed to by the
Company.
(b) Only to the extent required by law, Parent shall provide
to the Company, and to the Company's officers, employees, accountants, counsel,
financial advisors and other representatives, all information which is necessary
in connection with preparing the Proxy Statement, and during the period prior to
the Effective Time, Parent shall furnish promptly to the Company a copy of each
report, schedule, registration statement and other document filed by it or its
subsidiaries during such period pursuant to the requirements of federal or state
securities laws. The Company will keep such information provided to it by Parent
confidential, except to the extent such information (i) is provided to the
Company for its use in connection with the preparation of the Proxy Statement,
(ii) is or becomes generally available to the public other than as a result of a
disclosure by the Company, (iii) was available to the Company on a
nonconfidential basis prior to disclosure by Parent to the Company or (iv)
becomes available to the Company on a nonconfidential basis from a source other
than Parent which is entitled to disclose it, and except as required by law or
as otherwise agreed to by Parent.
6.04 Approvals and Consents; HSR Filings.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, each of the parties agrees to use all commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective the Merger and
the other transactions contemplated by this Agreement, including (i) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities) and the
taking of all reasonable steps as may be necessary to obtain an approval or
waiver from, or to avoid an action or proceeding by, any Governmental Entity,
(ii) the obtaining of all necessary consents, approvals or waivers from third
parties, including consents under all of the sales contracts of the Company and
its subsidiaries, (iii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, investigating or challenging
this Agreement or the consummation of any of the transactions contemplated by
this Agreement, including seeking to have any stay or temporary restraining
order entered by any court or other Governmental Entity vacated or reversed and
(iv) the execution and
19
delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement.
(b) Parent and the Company shall file as soon as practicable
after the date of this Agreement notifications under the HSR Act and shall
respond as promptly as practicable to all inquiries or requests received from
the Federal Trade Commission or the Antitrust Division of the Department of
Justice for additional information or documentation and shall respond as
promptly as practicable to all inquiries and requests received from any State
Attorney General or other Governmental Entity in connection with antitrust
matters. The parties shall cooperate with each other in connection with the
making of all such filings or responses, including providing copies of all such
documents to the other party and its advisors prior to filing or responding.
Parent and Merger Sub agree to use their respective reasonable efforts to avoid
the entry of (or, if entered, to lift, vacate or reverse) any order, decree,
judgment or ruling of any court or Governmental Entity restraining or preventing
the consummation of the Merger on the basis of any federal, state or local
antitrust laws or regulations.
6.05 Company Benefit Plans.
(a) Parent shall cause the Surviving Corporation to maintain
the Company's existing compensation, severance, welfare and pension benefit
plans, programs and arrangements for the benefit of current and former employees
of the Company and its subsidiaries (subject to such modification as may be
required by applicable law or to maintain the tax exempt status of any such plan
which is intended to be qualified under Section 401(a) of the Code); provided,
however, that nothing herein shall prohibit Parent from (i) replacing any such
existing plans, programs or arrangements with plans, programs or arrangements
("Replacement Plans") which provide current active or inactive employees or
former employees with benefits which, in the reasonable opinion of Parent, are
not less favorable in the aggregate than the benefits that would have been
provided under such existing plans, programs or arrangements to the extent such
replacement is permitted under the terms of the applicable plans, programs or
arrangements; provided, that Parent may not subsequently replace such
Replacement Plans with other plans, programs or arrangements, unless such plans,
programs or arrangements provide such employees with benefits which, in the
reasonable opinion of Parent, are not less favorable in the aggregate than the
benefits provided under Parent's plans, programs or arrangements or (ii)
including current active or inactive employees or former employees of the
Company in the plans, programs and arrangements generally available to employees
of Parent and its subsidiaries other than the Surviving Corporation in lieu of
participation in any Company plan, program or arrangement; provided, that such
Parent plans, programs and arrangements (A) provide such employees with benefits
which, in the reasonable opinion of Parent, are not less favorable in the
aggregate than the benefits that would have been provided under the Company
plans, programs or arrangements and (B) do not discriminate against such
employees compared to other employees of Parent and its subsidiaries.
20
(b) All service credited to each employee by the Company or
its subsidiaries through the Effective Time shall be recognized by Parent for
all purposes, including for purposes of eligibility, vesting and benefit
accruals under any employee benefit plan provided by Parent for the benefit of
the employees; provided, however, that, to the extent necessary to avoid
duplication of benefits, amounts payable under employee benefit plans provided
by Parent may be reduced by amounts payable under similar Company plans with
respect to the same periods of service. Any benefits accrued by employees of the
Company and its subsidiaries prior to the Effective Time under any of the
Company's defined benefit pension plans that employ a final average pay formula
shall be calculated based on such employees' final average pay with the
Surviving Corporation or any successor to the Surviving Corporation or other
affiliate of Parent employing such employees. In addition, with respect to any
welfare benefit plan established or maintained by Parent or its subsidiaries for
the benefit of employees of the Company, Parent shall, or shall cause the
relevant subsidiary to, waive any pre-existing condition exclusions other than
any pre-existing condition that was not waived by a Company plan and provide
that any covered expenses incurred on or before the Effective Time in respect of
the current plan year by any employee of the Company (or any covered dependent
of such an employee) shall be taken into account for purposes of satisfying
applicable deductible, coinsurance and maximum out-of-pocket provisions after
the Effective Time in respect of such current plan year.
(c) Parent hereby agrees to cause the Surviving Corporation to
honor (without modification) and assume the severance policies, employment
agreements, executive termination agreements and individual benefit arrangements
previously disclosed to Parent.
(d) The provisions of this Section 6.05 shall not apply to any
employee subject to the terms of a collective bargaining plan.
6.06 Fees and Expenses. All fees and expenses incurred in connection
with this Agreement and the Merger and any other transaction contemplated by
this Agreement shall be paid by the party incurring such fees or expenses,
whether or not the Merger is consummated.
6.07 Notification. Each of the Company and Parent shall give prompt
notice to the other of (i) any representation or warranty made by it contained
in this Agreement that is qualified as to materiality becoming untrue or
inaccurate in any respect or any such representation or warranty that is not so
qualified becoming untrue or inaccurate in any material respect or (ii) the
failure by it to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement; provided, however, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
21
6.08 Obligations of Merger Sub. Parent shall take all action
necessary to cause Merger Sub to perform its obligations under this Agreement
and to consummate the Merger on the terms and subject to the conditions set
forth in this Agreement.
6.09 Public Announcements. Unless otherwise required by applicable
law or the requirements of any listing agreement with any applicable stock
exchange, Parent and the Company shall each use their reasonable efforts to
consult with each other before issuing any press release or otherwise making any
public statements with respect to this Agreement or any transaction contemplated
by this Agreement and shall not issue any such press release or make any such
public statement prior to such consultation.
ARTICLE VII
CONDITIONS TO THE MERGER
7.01 Conditions to the Obligations of Each Party. The obligations of
the Company, Parent and Merger Sub to consummate the Merger are subject to the
satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) Company Shareholder Approval. This Agreement shall have
been approved by the requisite affirmative vote of the shareholders of the
Company in accordance with the Company's Restated Articles of Incorporation, as
amended, By-laws and the PBCL.
(b) No Injunction or Restraint. No Governmental Entity shall
have enacted, issued, promulgated, enforced or entered any law, rule, regulation
or order which is then in effect and has the effect of making the Merger illegal
or otherwise prohibiting consummation of the Merger.
(c) HSR Act. Any waiting period and any extension thereof
applicable to the consummation of the Merger under the HSR Act shall have
expired or been terminated.
(d) Consents and Approvals. All consents, approvals and
authorizations legally required to be obtained to consummate the Merger shall
have been obtained from all Governmental Entities, except for such consents,
approvals and authorizations the failure of which to obtain would not have a
material adverse effect on Parent, Merger Sub or the Company assuming for
purposes of this paragraph (d) that the Merger shall have been effected.
7.02 Conditions to the Obligations of Parent and Merger Sub. The
obligations of Parent and Merger Sub to consummate the Merger are subject to the
satisfaction or waiver by Parent on or prior to the Closing Date of the
following further conditions:
22
(a) Company Representations and Warranties. Each of the
representations and warranties of the Company contained in this Agreement that
is qualified by materiality shall be true and correct on and as of the Closing
Date as if made on and as of such date (other than representations and
warranties which address matters only as of a certain date which shall be true
and correct as of such certain date) and each of the representations and
warranties that is not so qualified shall be true and correct in all material
respects on and as of the Closing Date, as if made on and as of such date (other
than representations and warranties which address matters only as of a certain
date which shall be true and correct in all material respects as of such certain
date), in each case except as contemplated or permitted by this Agreement, and
Parent shall have received a certificate of the President or Chief Financial
Officer of the Company to such effect.
(b) Company Agreements and Covenants. The Company shall have
performed or complied in all material respects with all material agreements and
covenants required by this Agreement to be performed or complied with by it on
or prior to the Closing Date, and Parent shall have received a certificate of
the President or Chief Financial Officer of the Company to that effect.
(c) Permits; Authorizations. All permits, authorizations,
licenses, approvals and notifications of Governmental Entities that are
necessary for the Company and its subsidiaries to conduct their businesses after
the Effective Date in the same manner as such businesses are conducted as of the
Effective Date, including, but not limited to, Environmental Permits, shall have
been provided, issued, obtained, transferred or reissued, to the extent
necessary under applicable law, except for such permits, authorizations,
licenses, approvals and notifications the failure of which to provide, issue,
obtain, transfer or reissue would not have a material adverse effect on the
Company and its subsidiaries taken as a whole.
7.03 Conditions to the Obligations of the Company. The obligations of
the Company to consummate the Merger are subject to the satisfaction or waiver
by the Company on or prior to the Closing Date of the following further
conditions:
(a) Parent Representations and Warranties. Each of the
representations and warranties of each of Parent and Merger Sub contained in
this Agreement that is qualified by materiality shall be true and correct on and
as of the Closing Date as if made on and as of such date (other than
representations and warranties which address matters only as of a certain date
which shall be true and correct as of such certain date) and each of the
representations and warranties that is not so qualified shall be true and
correct in all material respects on and as of the Closing Date as if made on and
as of such date (other than representations and warranties which address matters
only as of a certain date which shall be true and correct in all material
respects as of such certain date), in each case except as contemplated or
permitted by this Agreement, and the Company shall have received a certificate
of the President or Chief Financial Officer of each of Parent and Merger Sub to
such effect.
23
(b) Parent Agreements and Covenants. Each of Parent and Merger
Sub shall have performed or complied in all material respects with all material
agreements and covenants required by this Agreement to be performed or complied
with by it on or prior to the Closing Date, and the Company shall have received
a certificate of the President or Chief Financial Officer of each of Parent and
Merger Sub to that effect.
(c) Fairness Opinion. The Company shall have received the
written opinion of its financial advisor, X.X. Xxxxxx Securities Inc., dated as
of the date of this Agreement, that the consideration to be received in the
Merger by the holders of Company Common Stock is fair to the holders of Company
Common Stock from a financial point of view.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01 Termination. This Agreement may be terminated and the Merger and
the other transactions contemplated by this Agreement may be abandoned at any
time prior to the Effective Time, whether before or after approval thereof by
shareholders of the Company, as follows:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if the Effective Time
shall not have occurred on or before September 30, 1998; provided, however, that
the right to terminate this Agreement under this Section 8.01(b) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Effective
Time to occur on or before September 30, 1998;
(c) by either Parent or the Company if any Governmental Entity
shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the Merger and such
order, decree or ruling or other action shall have become final and
nonappealable; provided, however, that the party seeking to terminate this
Agreement under this Section 8.01(c) shall have used its commercially reasonable
efforts to remove such injunction, order or decree;
(d) by Parent in the event of a breach by the Company of any
representation, warranty, covenant or other agreement contained in this
Agreement which (A) would give rise to the failure of a condition set forth in
Section 7.02 and (B) cannot be or has not been cured within 20 days after the
giving by Parent of written notice to the Company;
(e) by the Company in the event of a breach by Parent or
Merger Sub of any representation, warranty, covenant or other agreement
contained in this Agreement
24
which (A) would give rise to the failure of a condition set forth in Section
7.03 or (B) cannot be or has not been cured within 20 days after the giving by
the Company of written notice to Parent or Merger Sub, as applicable; or
(f) by Parent or the Company if the shareholders of the
Company do not approve this Agreement at the Company Shareholders' Meeting or
any adjournment or postponement thereof.
8.02 Effect of Termination. In the event of termination of this
Agreement by either the Company or Parent as provided in Section 8.01, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Merger Sub or the Company, other than the
provisions of Section 3.14, Section 4.06, this Section 8.02 and Article IX, and
except to the extent that such termination results from the willful and material
breach by a party of any of its representations, warranties, covenants or
agreements set forth in this Agreement.
8.03 Amendment. This Agreement may be amended by the parties at any
time before or after any required approval of this Agreement by the shareholders
of the Company; provided, however, that after any such approval, there shall not
be made any amendment that by law requires further approval by such shareholders
without the further approval of such shareholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties.
8.04 Extension; Waiver. At any time prior to the Effective Time, the
parties may (a) extend the time for the performance of any of the obligations or
other acts of the other parties, (b) waive any inaccuracies in the
representations and warranties contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to the provision of Section
8.03, waive compliance with any of the agreements or conditions contained in
this Agreement. Any agreement on the part of a party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of any party to this Agreement to assert any
of its rights under this Agreement or otherwise shall not constitute a waiver of
those rights.
ARTICLE IX
GENERAL PROVISIONS
9.01 Nonsurvival of Representations. None of the representations and
warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time. This Section 9.01 shall not limit
any covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time. In the event of a breach of any of such
covenants or agreements, the party to whom such covenants or agreements have
been made shall have all rights and remedies for such
25
breach available to it under applicable law and the provisions of this
Agreement, regardless of any disclosure to, or investigation made by or on
behalf of, such party.
9.02 Exclusive Remedy.
(a) Parent acknowledges and agrees that (i) other than the
representations and warranties of the Company specifically contained in this
Agreement, there are no representations or warranties of the Company or any of
its subsidiaries or any other person either expressed or implied with respect to
the Company or any of its subsidiaries or their respective assets, liabilities
and businesses and (ii) neither Parent nor the Surviving Corporation shall have
any claim or right to damages or indemnification from the Company or any of its
subsidiaries or any current or former officer, director or shareholder of the
Company or any of its subsidiaries acting in their capacities as such based upon
a breach of such representations and warranties with respect to any information
(whether written or oral), documents or material furnished by the Company or any
of its subsidiaries or any of their respective officers, directors, employees,
agents, counsel, accountants or advisors to Parent with respect to the
transactions contemplated by this Agreement, including any information,
documents or material made available to Parent in certain "data rooms,"
management presentations or in any other form in expectation of the transactions
contemplated by this Agreement.
(b) The Company acknowledges and agrees that (i) other than
the representations and warranties of Parent and Merger Sub specifically
contained in this Agreement, there are no representations or warranties of
Parent or Merger Sub or any other person either expressed or implied with
respect to Parent or Merger Sub and (ii) it shall not have any claim or right to
damages or indemnification from Parent or Merger Sub or any current or former
officer, director or shareholder of Parent or Merger Sub based upon a breach of
such representations or warranties with respect to any information (whether
written or oral), documents or material furnished by Parent or Merger Sub or any
of their respective officers, directors, employees, agents, counsel, accountants
or advisors to the Company.
9.03 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such address for a
party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
CONSOL Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Vice President and General Counsel
Facsimile No.: (000) 000-0000
26
with a copy to:
CONSOL Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Senior Vice President - Administration
Facsimile No.: (000) 000-0000
(b) if to the Company, to:
Rochester & Pittsburgh Coal Company
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
President and Chief Executive Officer
Facsimile No.: (000) 000-0000
with a copy to:
Duane, Morris & Heckscher LLP
0000 Xxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
9.04 Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person;
(b) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract or otherwise;
(c) "knowledge" or "known" means, with respect to the matter
in question, if any of the officers of the Company or any of its subsidiaries or
Parent, as the case may be, has actual knowledge of such matter;
(d) "lien" means any encumbrance, hypothecation, infringement,
lien, mortgage, pledge, restriction, security interest, title retention or other
security arrangement, or any adverse right or interest, charge or claim of any
nature whatsoever of, on, or with respect to any asset, property or property
interest; provided, however, that the term "lien" shall not include (i) liens
for water and sewer charges and current taxes not
27
yet due and payable or being contested in good faith, (ii) mechanics',
carriers', workers', repairers', materialmen's, warehousemen's and other similar
liens arising or incurred in the ordinary course of business or (iii) all liens
approved in writing by the other party hereto;
(e) "material adverse change" or "material adverse effect"
means, when used in connection with the Company or Parent, any change or effect
or any development that is likely to result in any change or effect that would
impair the business, financial condition or results of operations of such party
and its subsidiaries in an amount of $5,000,000 or more;
(f) "person" means an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or other entity;
and
(g) a "subsidiary" of any person means another person, an
amount of the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its Board of
Directors or other governing body or, if there are no such voting interests, 50%
or more of the equity interests of which is owned directly or indirectly by such
first person.
9.05 Interpretation. When a reference is made in this Agreement to a
Section, Exhibit or Schedule, such reference shall be to a Section of, or an
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
9.06 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
9.07 Entire Agreement; Third-Party Beneficiaries. This Agreement
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement provided, however, that the provisions of the
Confidentiality Agreement between the Company and Parent dated December 18, 1997
shall remain valid and in effect and, except for the provisions of Article II of
which the shareholders of the Company shall be third-party beneficiaries, is not
intended to confer upon any person other than the parties any rights or remedies
hereunder.
9.08 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of
28
law or otherwise by any of the parties without the prior written consent of the
other parties, except that Merger Sub may assign, in its sole discretion, any or
all rights, interests and obligations under this Agreement to Parent or to
Parent's parent entity or to any direct or indirect wholly owned subsidiary of
Parent but no such assignment shall be permitted if it would materially impede
or delay the Merger.
9.09 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Pennsylvania,
without regard to any applicable conflicts of law, except to the extent that the
PBCL and the DGCL shall be held to govern the terms of the Merger.
9.10 Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the Commonwealth of Pennsylvania or in Pennsylvania state court,
this being in addition to any other remedy to which they are entitled at law or
in equity. In addition, each of the parties hereto (a) consents to submit itself
to the personal jurisdiction of any federal court located in the Commonwealth of
Pennsylvania or any Pennsylvania state court in the event any dispute arises
out of this Agreement or any of the transactions contemplated by this Agreement,
(b) agrees that it will not attempt to deny or defeat such personal jurisdiction
by motion or other request for leave from any such court and (c) agrees that it
will not bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a federal or state court
sitting in the Commonwealth of Pennsylvania.
29
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
CONSOL INC.
By:/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx, Senior Vice President
CONSOL COMMONWEALTH INC.
By:/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx, Vice President
ROCHESTER & PITTSBURGH COAL COMPANY
By:/s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------------
Xxxxxx X. Xxxxxx, Xx., President and
Chief Executive Officer
30
