AGREEMENT AND PLAN OF MERGER
by and among
Armor All Products Corporation
The Clorox Company
and
Shield Acquisition Corporation
dated as of
November 26, 1996
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this
"Agreement"), dated as of November 26, 1996, by and among
Armor All Products Corporation, a Delaware corporation
(the "Company"), The Clorox Company, a Delaware
corporation ("Purchaser"), and Shield Acquisition
Corporation, a Delaware corporation and a wholly owned
subsidiary of Purchaser ( Sub ).
RECITALS:
WHEREAS, the respective boards of directors of
Purchaser, Sub and the Company have each approved the
acquisition of the Company by Purchaser upon the terms
and subject to the conditions set forth in this
Agreement; and
WHEREAS, the parties intend that the
acquisition of the Company by Purchaser be effected by
Sub commencing a cash tender offer for the Shares (as
defined hereinafter) to be followed by the merger of Sub
with and into the Company with the Company as the
surviving corporation in such merger, all as provided by
and in accordance with this Agreement; and
WHEREAS, as a condition to the obligations of
Purchaser and Sub hereunder and in consideration of the
transactions contemplated hereby, McKesson Corporation, a
Delaware corporation and a stockholder of the Company
("Stockholder"), concurrently herewith is entering into a
Stockholder's Agreement (the "Stockholder's Agreement"),
dated as of the date hereof, with Purchaser and Sub, in
the form attached hereto as Exhibit A, pursuant to which
Stockholder has agreed to tender its Shares in the Offer
and to grant Sub a proxy with respect to the voting of
its Shares in favor of the Merger (as such terms are
defined herein) upon the terms and subject to the
conditions set forth therein; and
WHEREAS, the Company, Purchaser and Sub desire
to make certain representations, warranties, covenants
and agreements in connection with such cash tender offer
and merger.
NOW, THEREFORE, in consideration of the
foregoing and the mutual representations, warranties,
covenants and agreements set forth herein, and other good
and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions
Defined in
Term Section
ABO 6.9(c)
Acquisition Proposal 6.2(b)
Agreement Preamble
Applicable Amount 3.11
Audits 4.15(c)
Awards 3.11
Board 2.2(a)
Certificates 3.10(b)
Closing 3.2
Closing Date 3.2
Common Stock 2.1(a)
Company Preamble
Company Disclosure Letter Article IV
Company Employee 6.9(b)
Company SEC Documents 4.5
Confidentiality Agreement 6.3(b)
DB Employees 6.9(c)
DGCL 3.1
Dissenting Shares 3.11(a)
Effective Time 3.3
Environmental Laws 4.17(a)
ERISA Affiliate 4.10(a)
Governmental Entity 4.4(b)
Indemnified Parties 6.11(b)
Intellectual Property 4.12
Merger 3.1
Merger Consideration 3.8(a)
Moody's 3.10(a)
Offer 2.1(a)
Offer Documents 2.1(b)
Offer Price 2.1(a)
Offer to Purchase 2.1(a)
Option 3.11
Option Plans 3.11
Order 6.6(b)
Paying Agent 3.10(a)
PBGC 4.10(b)
Plans 4.10(a)
Preferred Stock 4.2(a)
Proxy Statement 3.7(c)
Purchaser Preamble
Purchaser DB Plan 6.9(c)
Restricted Stock Units 3.11
Retirement Plan 6.9(c)
S&P 3.10(a)
SARs 3.11
SEC 2.1(b)
Service Agreement 6.11
Shares 2.1(a)
Special Meeting 3.7(a)
Stockholder Recitals
Sub Preamble
Surviving Corporation 3.1
Termination Plan 4.10(h)
"Aggregate Merger Consideration" means the
product of (i) the Merger Consideration and (ii) the
number of Shares outstanding immediately prior to the
Effective Time, other than Shares owned by Purchaser, Sub
or any Subsidiary of the Company, Purchaser or Sub and
each Share held in the treasury of the Company.
"Antitrust Law" means the Xxxxxxx Act, as
amended, the Xxxxxxx Act, as amended, the HSR Act, the
Federal Trade Commission Act, as amended, and all other
federal, state and foreign statutes, rules, regulations,
orders, decrees, administrative and judicial doctrines,
and other laws that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade.
"Code" means the Internal Revenue Code of 1986,
as amended.
"Company Material Adverse Effect" means any
event, condition or circumstance that would be or would
be reasonably likely to have a material adverse effect on
the properties, assets, condition (financial or
otherwise) or results of operations of the Company and
its Subsidiaries, taken as a whole, but excluding any
such effect resulting from (a) general economic
conditions and any occurrence or condition affecting
generally the industries in which the Company and its
Subsidiaries operate or (b) any decrease in revenues of
the Company following the date of this Agreement.
"Continuing Director" means (a) any member of
the Board of Directors of the Company as of the date
hereof, (b) any member of the Board who is unaffiliated
with, and not a designated director or other nominee of,
Purchaser or Sub or their respective subsidiaries, and
(c) any successor of a Continuing Director who is (i)
unaffiliated with, and not a designated director or other
nominee of, Purchaser or Sub or their respective
subsidiaries and (ii) recommended to succeed a Continuing
Director by a majority of the Continuing Directors then
on the Board.
"DOJ" means the Antitrust Division of the
United States Department of Justice.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
"Exchange Act" means the Securities Exchange
Act of 1934, as amended.
"Former Stockholders" means the stockholders of
the Company immediately prior to the Effective Time.
"FTC" means the Federal Trade Commission.
"GAAP" means generally accepted accounting
principles in effect in the United States of America at
the time of determination, and which are applied on a
consistent basis during the periods involved.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder.
"Liens" means all mortgages, claims, charges,
liens, security interests, pledges, options, easements,
rights of way, or other encumbrances of any nature
whosoever.
"Permitted Liens" means (i) Liens for water and
sewage charges and current taxes not yet due and payable
or being contested in good faith by appropriate
proceedings, (ii) mechanics', carriers', workers',
repairers', materialmen's, warehousemen's and other
similar Liens arising or incurred in the ordinary course
of business, (iii) such other Liens as would not in the
aggregate have a Company Material Adverse Effect and (iv)
Liens arising or resulting from any action taken by
Purchaser or Sub.
"Person" means an individual, partnership,
joint venture, trust, corporation, limited liability
company or other entity (including, without limitation,
any government or political subdivision or any agency,
department or instrumentality thereof).
"Purchaser Material Adverse Effect" means any
event, condition or circumstance that would or would be
reasonably likely to have a material adverse effect on
the properties, assets, condition (financial or
otherwise), or results of operations of Purchaser and its
Subsidiaries, taken as a whole, but excluding any such
effect resulting from general economic conditions and any
occurrence or condition affecting generally the
industries in which Purchaser or its Subsidiaries
operate.
"Purchaser Plans" means employee benefit plans,
as defined in Section 3(3) of ERISA, or such nonqualified
employee benefit or deferred compensation plans, stock
option bonus or incentive plans or other employee benefit
or fringe benefit programs that may be in effect
generally for employees of Purchaser or its Subsidiaries
from time to time.
"Securities Act" means the Securities Act of
1933, as amended.
"Subsidiary" of a Person means any entity of
which the securities or other ownership interest having
ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions
are at the time directly or indirectly owned by such
Person.
"Taxes" means any and all taxes, charges, fees,
levies or other assessments, including, without
limitation, income, gross receipts, excise, real or
personal property, sales, withholding, social security,
retirement, unemployment, occupation, use, service, net
worth, payroll, franchise, transfer and recording taxes,
imposed by any federal, state, local or foreign taxing
authority, and shall include any interest, penalties or
additions to tax.
"Tax Return" means any report, return,
document, declaration or other information or filing
required to be supplied to any federal, state, local or
foreign taxing authority with respect to Taxes.
ARTICLE II
THE OFFER
Section 2.1 The Offer.
(a) Sub shall, and Purchaser shall cause
Sub to, as promptly as practicable, but in no event later
than December 2, 1996, commence (within the meaning of
Rule 14d-2 under the Exchange Act) an offer to purchase
for cash (the "Offer") any and all of the Company's
outstanding shares of common stock, par value $.01 per
share (the "Shares" or the "Common Stock"), at a price
not less than $19.09 per Share, net to the seller in cash
(the "Offer Price"). The Offer shall have a scheduled
expiration date 20 business days following the
commencement thereof. The Sub shall, and Purchaser shall
cause Sub to, accept for payment and pay for all Shares
tendered pursuant to the terms of the Offer as soon as
such actions are permitted under applicable law, subject
only to the conditions set forth in Annex A hereto and
shall be made pursuant to an offer to purchase (the
"Offer to Purchase") containing the terms set forth in
this Agreement and the other conditions set forth in
Annex A hereto. Sub shall not, and Purchaser shall not
permit Sub to, decrease the Offer Price, extend the
expiration date of the Offer beyond the twentieth
business day following commencement thereof or otherwise
amend any other condition of the Offer in any manner
adverse to the holders of the Shares without the prior
written consent of the Company; provided, however, that
Sub may extend the expiration date of the Offer if (i)
one or more conditions set forth in Annex A hereto shall
not be satisfied or (ii) Purchaser reasonably determines,
with the prior approval of the Company (such approval not
to be unreasonably withheld or delayed) that such
extension is necessary to comply with any legal or
regulatory requirements relating to the Offer. Purchaser
will not tender into the Offer any Shares beneficially
owned by it. The Company agrees that no Shares held by
the Company or any Subsidiary of the Company will be
tendered pursuant to the Offer.
(b) On the date of the commencement of
the Offer, Purchaser and Sub shall file with the United
States Securities and Exchange Commission (the "SEC") a
Tender Offer Statement on Schedule 14D-1 with respect to
the Offer which will include, as exhibits, an Offer to
Purchase and a form of letter of transmittal and summary
advertisement (together with any amendments and
supplements thereto, the "Offer Documents"). The Company
and its counsel shall be given a reasonable opportunity
to review and comment on the Offer Documents before they
are filed with the SEC. In addition, Sub agrees to
provide the Company and its counsel in writing with any
comments Purchaser, Sub or their counsel may receive from
time to time from the SEC or its staff with respect to
the Offer Documents promptly after the receipt thereof.
Section 2.2 Company Actions.
(a) The Company hereby consents to the
Offer and represents that its Board of Directors (the
"Board") at a meeting duly called and held, has (i)
determined as of the date hereof that each of the Offer
and the Merger is fair to and in the best interests of
the stockholders of the Company, and (ii) resolved to
recommend acceptance of the Offer and approval and
adoption of this Agreement by the stockholders of the
Company; provided, however, that such recommendations may
be withdrawn, modified or amended to the extent that the
Board determines in good faith, after consultation with
its counsel, that the failure to take such action may
constitute a breach of the Board's fiduciary duties
under, or otherwise violate, applicable law. The Company
further represents that PaineWebber Incorporated has
delivered to the Board its opinion that the consideration
to be received by the stockholders pursuant to the Offer
and the Merger is fair to such stockholders from a
financial point of view based on, and subject to, the
assumptions and qualifications set forth in such opinion.
Subject to the provisions of Article VIII, the Company
hereby agrees to use its best efforts to file a
Solicitation/Recommendation Statement on Schedule 14D-9
(the "Schedule 14D-9") containing such recommendations
with the SEC and to mail such Schedule 14D-9 to the
stockholders of the Company contemporaneous with the
commencement of the Offer, but in any event not later
than 10 business days following the commencement of the
Offer.
(b) Purchaser and its counsel shall be
given a reasonable opportunity to review and comment on
the Schedule 14D-9 and any amendments thereto before they
are filed with the SEC. In addition, the Company agrees
to provide Purchaser, Sub and their counsel in writing
with any comments the Company or its counsel may receive
from time to time from the SEC or its staff with respect
to the Schedule 14D-9 promptly after the receipt thereof.
Section 2.3 Stockholder Lists. In connection
with the Offer, the Company will promptly furnish Sub
with mailing labels, security position listings and any
available listing or computer file containing the names
and addresses of the record holders of the Shares as of a
recent date and shall furnish Sub with such information
and assistance as Sub or its agents may reasonably
request in communicating the Offer to the record and
beneficial holders of the Shares. Subject to the
requirements of applicable law, and except for such steps
as are necessary to disseminate the Offer Documents,
Purchaser and Sub shall hold in confidence the
information contained in any of such labels, lists and
files, will use such information only in connection with
the Offer and the Merger, and, if this Agreement is
terminated, will deliver to the Company all copies of
such information then in their possession.
Section 2.4 Directors. Promptly after the
purchase of a majority of the outstanding Shares pursuant
to the Offer, Purchaser shall be entitled to designate up
to such number of directors, rounded up to the next whole
number, on the Board as will give Purchaser
representation on the Board equal to the product of the
number of directors on the Board, after giving effect to
the directors elected pursuant to this Section, and the
percentage that the voting power represented by such
number of Shares so purchased bears to the voting power
represented by the total number of outstanding Shares, to
be elected as soon as practicable after notice by
Purchaser to the Company of its desire to have such
directors so elected. The Company shall, at the request
of Purchaser, take all action necessary to cause to be
created vacancies for that number of directors which
Purchaser is entitled to designate under this Section
and, with respect to each vacancy created, shall take all
action necessary to effect the election of such number of
Purchaser's designees to the Board of Directors,
including, if required by applicable law, mailing to its
stockholders the information required by section 14(f) of
the Exchange Act and Rule 14f-1 promulgated thereunder.
Purchaser and Sub will provide to the Company in writing,
and be solely responsible for, any information with
respect to such companies and their nominees, officers,
directors and affiliates required by Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder. Following the
election or appointment of Purchaser designees to the
Board any amendment of this Agreement, any termination of
this Agreement by the Company, any extension of time for
performance of any of the obligations of Purchaser or Sub
under this Agreement, any waiver of any condition to the
obligations of the Company or any of the Company's rights
under this Agreement or other action by the Company under
this Agreement shall be effected only by the action of a
majority of the directors of the Company then in office
who are Continuing Directors. Notwithstanding the
provisions of this Section 2.4, the parties hereto shall
use their respective best efforts to ensure that at least
three of the members of the Board of shall, at all times
prior to the Effective Time be, Continuing Directors.
ARTICLE III
THE MERGER
Section 3.1 The Merger. Upon the terms and
subject to conditions of this Agreement and in accordance
with the Delaware General Corporation Law (the "DGCL"),
at the Effective Time, Sub shall be merged with and into
the Company (the "Merger"). Following the Merger, the
separate corporate existence of Sub shall cease and the
Company shall continue as the surviving corporation (the
"Surviving Corporation").
Section 3.2 Closing. The closing of the
Merger (the "Closing") shall take place at the offices of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Four
Embarcadero Center, San Francisco, California at 10:00
a.m., local time, on the second business day after the
conditions to the parties' obligation to effect the
Merger contained in Article VII have been satisfied or
waived (the "Closing Date"), unless another date or place
is agreed to in writing by the parties hereto.
Section 3.3 Effective Time. On or as soon as
practicable following the Closing, the parties shall
cause the Merger to be consummated by causing a
certificate of merger or, if applicable, a certificate of
ownership and merger with respect to the Merger to be
executed, filed and recorded in accordance with the
relevant provisions of the DGCL. The Merger shall become
effective at the time of the filing with the Secretary of
State of the State of Delaware of such certificate of
merger or certificate of ownership and merger in
accordance with the relevant provisions of the DGCL or at
such later time as shall be specified in the certificate
of merger or certificate of ownership and merger (the
"Effective Time").
Section 3.4 Effects of the Merger. The Merger
shall have the effects set forth in the DGCL and any
other applicable law.
Section 3.5 Certificate of Incorporation and
By-Laws. Subject to Section 6.11(b) hereof, the
Certificate of Incorporation and By-Laws of Sub as in
effect at the Effective Time shall be the Certificate of
Incorporation and By-Laws of the Surviving Corporation,
provided that Article First of the Certificate of
Incorporation of the Surviving Corporation shall be
amended to read in its entirety as follows: "FIRST" The
name of the Corporation is "Armor All Products
Corporation".
Section 3.6 Directors and Officers of the
Surviving Corporation. The directors of Sub immediately
prior to the Effective Time shall be the initial
directors of the Surviving Corporation and will hold
office from the Effective Time until their respective
successors are duly elected or appointed and qualified or
until their earlier death, resignation or removal in the
manner provided in the Certificate of Incorporation and
By-laws of the Surviving Corporation, or as otherwise
provided by law. The officers of the Company immediately
prior to the Effective Time shall be the initial officers
of the Surviving Corporation and will hold office from
the Effective Time until their respective successors
shall have been duly elected or appointed and qualified
or until their earlier death, resignation or removal in
the manner provided in the Certificate of Incorporation
and By-laws of the Surviving Corporation, or as otherwise
provided by law.
Section 3.7 Stockholders' Meeting. If
required by applicable law in order to consummate the
Merger, the Company, acting through its Board, shall, in
accordance with applicable law:
(a) duly call, give notice of, convene
and hold a special meeting of its stockholders (the
"Special Meeting") as soon as practicable following
acceptance for payment of shares pursuant to the Offer
for the purpose of considering and taking action upon
this Agreement;
(b) subject to its fiduciary duties under
applicable laws as advised by counsel, the Company shall
prepare and file with the SEC (and Purchaser and Sub
shall cooperate with the Company in such preparation and
filing) a preliminary proxy statement relating to this
Agreement and the transactions contemplated hereby and
include in the preliminary proxy statement and the
definitive version thereof the recommendation of the
Board referred to in Section 2.2(a) hereof; and
(c) subject to its fiduciary duties under
applicable laws as advised by counsel, use its
commercially reasonable efforts to (i) obtain and furnish
the information required to be included by it in the
Proxy Statement, and, after consultation with Purchaser,
respond promptly to any comments made by the SEC with
respect to the preliminary proxy statement and cause a
definitive proxy statement (the "Proxy Statement") to be
mailed to its stockholders following acceptance for
payment of shares pursuant to the Offer and (ii) obtain
the necessary approvals of this Agreement by its
stockholders.
Purchaser will provide the Company with the information
concerning Purchaser and Sub required to be included in
the Proxy Statement and will vote, or cause to be voted,
all Shares owned by it or its Subsidiaries in favor of
approval and adoption of this Agreement and the Merger.
Section 3.8 Conversion of Shares. At the
Effective Time:
(a) Each Share issued and outstanding
immediately prior to the Effective Time (other than
(i) Shares to be cancelled in accordance with Section
3.8(b) and (ii) Dissenting Shares, if any) shall, by
virtue of the Merger and without any action on the part
of the holder thereof, automatically be converted into
the right to receive $19.09 in cash, or any higher price
paid per Share in the Offer (the "Merger Consideration"),
payable to the holder thereof, without interest thereon,
upon the surrender of the certificate formerly
representing such Share.
(b) Each Share issued and outstanding
immediately prior to the Effective Time owned by
Purchaser, Sub or any Subsidiary of the Company,
Purchaser or Sub and each Share held in the treasury of
the Company immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on
the part of the holder thereof, automatically be
cancelled and cease to exist at and after the Effective
Time and no consideration shall be paid with respect
thereto.
Section 3.9 Conversion of Sub's Common Stock.
Each share of common stock, par value $.01 per share, of
Sub issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without
any action on the part of the holder thereof,
automatically be converted into and thereafter represent
one validly issued, fully paid and nonassessable share of
common stock, par value $.01 per share, of the Surviving
Corporation.
Section 3.10 Exchange of Shares; Payment. (a)
Prior to the Effective Time, the Company shall designate
a federally-insured commercial bank with a combined
capital and surplus of at least $1,000,000,000 to act as
Paying Agent in the Merger (the "Paying Agent").
Immediately prior to the Effective Date, Purchaser will
take all steps necessary to enable and cause it or the
Surviving Corporation to deposit with the Paying Agent,
in trust for the benefit of the Former Stockholders, the
Aggregate Merger Consideration, in immediately available
funds, for disbursement to the Former Stockholders in the
manner set forth below. The funds on deposit shall be
invested by the Paying Agent, as directed by and for the
benefit of and shall be payable to the Surviving
Corporation; provided, that such investments shall be
limited to direct obligations of the United States of
America, obligations for which the full faith and credit
of the United States of America is pledged to provide for
the payment of principal and interest, commercial paper
rated of the highest quality by Xxxxx'x Investors
Service, Inc ("Moody's") or Standard & Poor's Ratings
Group, a division of XxXxxx-Xxxx, Inc. ("S&P"), and
certificates of deposit issued by a commercial bank whose
long-term debt obligations are rated at least A2 by
Moody's or at least A by S&P, in each case having a
maturity not in excess of one year.
(b) Promptly after (or, if agreed by the
Purchaser and the Company, prior to) the Effective Time,
the Paying Agent shall hand deliver or mail to each
holder of record, as of the Effective Time, of an
outstanding certificate or certificates which immediately
prior to the Effective Time represented Shares (the
"Certificates"), a form letter of transmittal (which
shall specify that delivery shall be effected, and risk
of loss and title to a Certificate shall pass, only upon
proper delivery of such Certificate to the Paying Agent)
and instructions for use of such letter of transmittal in
effecting the surrender of a Certificate and obtaining
payment therefor. Upon the later of the Effective Time
and surrender to the Paying Agent of a Certificate,
together with such letter of transmittal duly executed,
the holder of such Certificate shall in exchange therefor
be entitled to receive cash in an amount equal to the
product of the number of Shares represented by such
Certificate multiplied by the Merger Consideration to be
paid by the Paying Agent within five business days of
receipt of such documentation. No interest will be paid
or accrued on any amount payable upon the surrender of a
Certificate. If payment is to be made to a person other
than the person in whose name a Certificate surrendered
is registered, it shall be a condition of payment that
the Certificate so surrendered shall be properly endorsed
or otherwise in proper form for transfer and that the
person requesting such payment shall pay transfer or
other taxes required by reason of the payment to a person
other than the registered holder of the Certificate
surrendered or establish to the satisfaction of the
Paying Agent that such tax has been paid, is not
applicable or provides assurances satisfactory to the
Paying Agent that any such tax will be paid by such
person. Until surrendered in accordance with the
provisions of this Section 3.10(b), each Certificate
representing a Share (other than Certificates
representing Shares held in the treasury of the Company,
or owned by Purchaser, Sub or any Subsidiary of the
Company, Purchaser or Sub and Dissenting Shares, if any)
shall represent for all purposes only the right to
receive the Merger Consideration, and shall have no other
rights. Notwithstanding the foregoing, any funds
remaining with the Paying Agent six months following the
Effective Time shall be returned to Purchaser or the
Surviving Corporation, as specified by Purchaser, after
which time the Former Stockholders, subject to applicable
law, shall look only to the Surviving Corporation for
payment of the Merger Consideration, without interest
thereon, and shall have no greater rights against the
Surviving Corporation than may be accorded to general
creditors of the Surviving Corporation under Delaware
law.
(c) After the Effective Time there shall
be no transfers of Shares on the stock transfer books of
the Surviving Corporation. If, after the Effective Time,
Certificates are presented to the Surviving Corporation,
they shall be cancelled and exchanged as provided in this
Section 3.10.
(d) 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, the
Surviving Corporation shall pay or cause to be paid in
exchange for such lost, stolen or destroyed Certificate
the Merger Consideration for Shares represented thereby.
When authorizing such payment of the Merger Consideration
in exchange therefor, the Board of Directors of the
Surviving Corporation may, in its discretion and as a
condition precedent to the payment thereof, require the
owner of such lost, stolen or destroyed Certificate to
give the Surviving Corporation a bond in such sum as it
may direct as indemnity against any claim that may be
made against the Surviving Corporation with respect to
the Certificate alleged to have been lost, stolen or
destroyed.
Section 3.11 Dissenting Shares.
Notwithstanding anything in this Agreement to the
contrary, holders of Shares who have properly exercised,
perfected and not subsequently withdrawn or lost their
appraisal rights with respect thereto in accordance with
Section 262 of the DGCL (the "Dissenting Shares") shall
not have any of such Shares converted into or become
exchangeable for the right to receive the Merger
Consideration, and holders of such Shares shall be
entitled only to such rights as are granted by such
Section 262, including the right to receive payment of
the appraised value of such Shares in accordance with the
provisions of such Section 262 unless and until such
holders fail to perfect or shall have effectively
withdrawn or lost their rights to appraisal and payment
under the DGCL. If, after the Effective Time, any such
holder fails to perfect or shall have effectively
withdrawn or lost such right, each of such holder's
Shares shall thereupon be treated as if it had been
converted into and to have become exchangeable for, at
the Effective Time, the right to receive the Merger
Consideration without interest thereon, as provided in
Section 3.8(a) hereof and such Shares shall no longer be
Dissenting Shares.
Section 3.12 Company Option Plans. The
Company shall take all actions necessary to provide that,
immediately prior to the consummation of the Offer, (i)
each outstanding stock option ("Options") outstanding
under the Company s 1986 Stock Option Plan, whether or
not then exercisable or vested, shall be cancelled or
repurchased by the Company and (ii) in consideration of
such cancellation or repurchase, and except to the extent
that Purchaser or Sub and the holder of any such Option
otherwise agree, the Company shall pay to the holder of
each Option an amount in respect thereof equal to the
product of (A) the Applicable Amount, multiplied by (B)
the number of Shares subject thereto (such payment to be
net of applicable withholding taxes). The term
"Applicable Amount" shall mean the excess of (A) the
Merger Consideration, over (B) the exercise price of such
Option. The total number of Options outstanding as of the
date of this Agreement is 1,127,137 and a schedule of the
exercise prices of such Options is set forth in Section
4.2 of the Company Disclosure Letter.
Section 3.13 Supplementary Action. If at any
time after the Effective Time, any further assignments or
assurances in law or any other things are necessary or
desirable to vest or to perfect or confirm of record in
the Surviving Corporation the title to any property or
rights of either of the constituent corporations, or
otherwise to carry out the provisions of this Agreement,
the officers and directors of the Surviving Corporation
are hereby authorized and empowered on behalf of the
respective constituent corporations, in the name of and
on behalf of the appropriate constituent corporation, to
execute and deliver any and all things necessary or
proper to vest or to perfect or confirm title to such
property or rights in the Surviving Corporation, and
otherwise to carry out the purposes and provisions of
this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise disclosed to Purchaser in a
letter delivered to it prior to the execution hereof (the
"Company Disclosure Letter"), the Company represents and
warrants to Purchaser as follows:
Section 4.1 Organization. Each of the Company
and its Subsidiaries is a corporation or other entity
duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation
or organization and has all requisite corporate power and
authority to own, lease and operate its properties and to
carry on its business as it is now being conducted,
except where failure to be so existing and in good
standing would not in the aggregate have a Company
Material Adverse Effect. Each of the Company and its
Subsidiaries is duly qualified or licensed to do business
as a foreign corporation and is in good standing in each
jurisdiction in which the nature of the business
conducted by it makes such qualification or licensing
necessary, except where the failure to be so duly
qualified, licensed and in good standing or to have such
power and authority, or to be so qualified or licensed
would not, individually or in the aggregate, have a
Company Material Adverse Effect. The Company has
heretofore delivered to Purchaser a complete and correct
copy of each of its Certificate of Incorporation and By-
Laws, as currently in effect.
Section 4.2 Capitalization.
(a) As of the date hereof, the authorized
capital stock of the Company consists of 40,000,000
shares of Common Stock, par value $.01 per share, and
10,000,000 shares of preferred stock, par value $.01 per
share (the "Preferred Stock"). As of the date hereof,
(i) 21,369,447 shares of Common Stock are issued and
outstanding (including all restricted stock), (ii) no
shares of Common Stock are issued and held in the
treasury of the Company and (iii) there are no shares of
Preferred Stock issued and outstanding. All the
outstanding shares of the Company s capital stock are
duly authorized, validly issued, fully paid and non-
assessable. Except as set forth in Section 4.2(a) of the
Company Disclosure Letter, as of the date hereof, there
are no existing, and at the Effective Time there will not
be, (i) options, warrants, calls, preemptive rights,
subscriptions or other rights, convertible securities,
agreements or commitments of any character 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 securities
convertible into or exchangeable for such shares or
equity interests, (ii) contractual obligations of the
Company or any of its Subsidiaries to repurchase, redeem
or otherwise acquire any capital stock of the Company or
any of its Subsidiaries of the Company or (iii) voting
trusts or similar agreements to which the Company is a
party with respect to the voting of the capital stock of
the Company.
(b) Except as set forth in Section 4.2(b)
of the Company Disclosure Letter, all of the outstanding
shares of capital stock (or equivalent equity interests
of entities other than corporations) of each of the
Company s Subsidiaries are beneficially owned, directly
or indirectly, by the Company.
Section 4.3 Authorization; Validity of
Agreement.
(a) The Company has the requisite
corporate power and authority to execute and deliver this
Agreement and, subject to approval of its stockholders as
contemplated by Section 3.7(a) hereof, to consummate the
transactions contemplated hereby. The execution and
delivery by the Company of this Agreement and the
consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board and, except
for those actions contemplated by Section 2.2 hereof and
approval and adoption of this Agreement by the holders of
a majority of the outstanding shares of the Common Stock,
no other corporate proceedings on the part of the Company
are necessary to authorize the execution and delivery of
this Agreement by the Company and the consummation of the
transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Company and,
assuming due authorization, execution and delivery of
this Agreement by each of Purchaser and Sub, is a valid
and binding obligation of the Company enforceable against
the Company in accordance with its terms, except as such
enforceability may be subject to or limited by
bankruptcy, insolvency, reorganization, or other similar
laws, now or hereafter in effect, affecting the
enforcement of creditors rights generally, and except
that the availability of equitable remedies, including
specific performance, may be subject to the discretion of
the court before which any proceeding therefor may be
brought.
(b) The Board of Directors has taken all
actions necessary to render the provisions of Section 203
of the DGCL inapplicable to the transactions contemplated
by this Agreement.
Section 4.4 No Violations; Consents and
Approvals.
(a) Neither the execution, delivery or
performance of this Agreement by the Company nor the
consummation by the Company of the transactions
contemplated hereby (i) violate any provision of the
Certificate of Incorporation or By-Laws of the Company,
(ii) except as set forth in Section 4.4(a) of the Company
Disclosure Letter, result in a violation or breach of, or
constitute a default (or give rise to any right of
termination, amendment, cancellation or acceleration)
under, any of the terms, conditions or provisions of any
material note, bond, mortgage, indenture, guarantee,
other evidence of indebtedness, license, contract,
agreement or other instrument to which the Company or any
of its Subsidiaries is a party or by which any of them or
any of their properties or assets may be bound or (iii)
to the best knowledge of the Company, violate any order,
writ, judgment, injunction, decree, law, statute, rule or
regulation applicable to the Company, any of its
Subsidiaries or any of their properties or assets; except
in the case of clauses (ii) or (iii) for such violations,
breaches or defaults which, individually or in the
aggregate, would not (A) have a Company Material Adverse
Effect, (B) materially adversely affect the ability of
the Company to consummate the transactions contemplated
in this Agreement, or (C) become applicable as a result
of the business or activities in which Purchaser or Sub
is or proposes to be engaged or as a result of any acts
or omissions by, or the status of any facts pertaining
to, Purchaser or Sub.
(b) Except as disclosed in Section 4.4(b)
of the Company Disclosure Letter, no filing or
registration with, notification to, or authorization,
consent or approval of, any court, legislative, executive
or regulatory authority or agency (a "Governmental
Entity") is required in connection with the execution and
delivery of this Agreement by the Company or the
consummation by the Company of the transactions
contemplated hereby, except for (i) filings with the FTC
and with the DOJ pursuant to the HSR Act, (ii) applicable
requirements under the Exchange Act, (iii) the filing of
the certificate of merger or, if applicable, a
certificate of ownership and merger with the Secretary of
State, (iv) applicable requirements under corporation or
blue sky laws of various states, and (v) such other
consents, approvals, orders, authorizations,
notifications, registrations, declarations and filings
the failure of which to be obtained or made which,
individually or in the aggregate, would not (A) have a
Company Material Adverse Effect, (B) materially adversely
affect the ability of the Company to consummate the
transactions contemplated in this Agreement, or (C)
become applicable as a result of the business or
activities in which Purchaser or Sub is or proposes to be
engaged or as a result of any acts or omissions by, or
the status of any facts pertaining to, Purchaser or Sub.
Section 4.5 Reports. The Company has filed
all reports required to be filed by it with the SEC
pursuant to the Exchange Act since March 31, 1994
(collectively, the "Company SEC Documents"). None of the
Company SEC Documents, as of their respective filing
dates, contained, and none of the Company SEC Documents
filed after the date hereof will 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. Each of the consolidated balance sheets
(including the related notes) included in the Company SEC
Documents fairly presents in all material respects the
consolidated financial position of the Company and its
Subsidiaries as of the respective dates thereof, and the
other related statements (including the related notes)
included therein fairly present in all material respects
the results of operations and the changes in financial
position of the Company and its Subsidiaries for the
respective periods or as of the respective dates set
forth therein. Each of the financial statements
(including the related notes) included in the Company SEC
Documents has been prepared in all material respects in
accordance with GAAP during the periods involved, except
as otherwise noted therein.
Section 4.6 Absence of Certain Changes.
Except as disclosed in (a) the Company SEC Documents
filed as of the date hereof; (b) the Company's audited
consolidated financial statements for the fiscal year
ended March 31, 1996 previously delivered to Purchaser,
and (c) Section 4.6 of the Company Disclosure Letter,
since September 30, 1996 through the date hereof, there
has not been, occurred or arisen, whether or not in the
ordinary course of business:
(i) any Company Material Adverse Effect;
(ii) any material change in or exception to
the Company's policy of not accepting returns of products
shipped to customers;
(iii) any material change in the terms and
conditions of the Company's arrangements with its
copackers;
(iv) any sales incentive or bonus program or
trade promotion spending or allowance (including customer
allowances and performance-based promotion spending),
whether for the benefit of Company employees,
distributors, representatives, or customers, that would
reasonably be expected to increase trade inventories in
anticipation of the transactions contemplated by this
Agreement or that would have the effect of rewarding any
person other than as a result of achieving the targets
set forth in the Company's Sales Incentive Plan, a copy
of which has been previously provided to Purchaser; or
(v) any action or occurrence which, if it
occurred after the date hereof would be a violation of
any of Section 6.1(a) through (g) and 6.1(i) through (n).
Section 4.7 No Undisclosed Liabilities.
Except (a) for liabilities and obligations disclosed or
provided for in the Company SEC Documents filed with
respect to periods ending after September 30, 1996 or
incurred in the ordinary course of business since
September 30, 1996 and (b) for liabilities and
obligations incurred in connection with the Offer and the
Merger, since September 30, 1996 neither the Company nor
any of its Subsidiaries has incurred any liabilities or
obligations material to the Company and its Subsidiaries,
taken as a whole, that would be required to be reflected
or reserved against in a consolidated balance sheet of
the Company and its Subsidiaries prepared in accordance
with GAAP as applied in preparing the consolidated
balance sheet of the Company and its Subsidiaries as of
March 31, 1996 contained in the Company's Annual Report
on Form 10-K for the fiscal year ended March 31, 1996.
Section 4.8 Schedule 14D-9; Offer Documents;
Proxy Statement. None of the information supplied by the
Company for inclusion in the Schedule 14D-9, the Offer
Documents or the Proxy Statement, including any
amendments thereto, will be false or misleading with
respect to any material fact or will 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.
Except for information supplied by Purchaser in writing
for inclusion therein, the Proxy Statement and the
Schedule 14D-9, including any amendments thereto, will
comply in all material respects with the Exchange Act.
Section 4.9 Litigation; Compliance with Law.
As of the date hereof, except as set forth in Section 4.9
of the Company Disclosure Letter or as disclosed in the
Company SEC Documents, there is no action, suit,
proceeding or, to the best knowledge of the Company,
investigation pending or, to the best knowledge of the
Company, threatened, involving the Company or any of its
Subsidiaries, or any of their properties or assets, by or
before any court, governmental or regulatory authority or
by any third party that would have a Company Material
Adverse Effect. The businesses of the Company and its
Subsidiaries are not being conducted in violation of any
applicable law, ordinance, rule, regulation, decree or
order of any court or governmental entity, except for
violations that in the aggregate would not, individually
or in the aggregate, have a Company Material Adverse
Effect.
Section 4.10 Employee Benefit Plans; ERISA.
(a) Section 4.10(a) of the Company Disclosure Letter
lists each "employee benefit plan" (as defined in Section
3(3) of ERISA), and all other employee benefit, bonus,
incentive, stock option (or other equity-based),
severance, change in control and fringe benefit plans
maintained for the benefit of, or contributed to by the
Company or its Subsidiaries or any trade or business,
whether or not incorporated (an "ERISA Affiliate"), that
would be deemed a "single employer" within the meaning of
Section 4001 of ERISA, for the benefit of any employee or
former employee of the Company or any of its subsidiaries
(the "Plans"). The Company has made available to
Purchaser copies of each of the Plans, including all
amendments to date.
(b) Except as set forth in Section
4.10(b) of the Company Disclosure Schedule, each of the
Plans that is subject to ERISA complies with ERISA and
the applicable provisions of the Code, except for any
such violations that would not, individually or in the
aggregate, have a Company Material Adverse Effect.
Except as set forth in Section 4.10(b) of the Company
Disclosure Schedule, each of the Plans intended to be
"qualified" within the meaning of Section 401(a) of the
Code has been determined by the Internal Revenue Service
to be so qualified and the Company knows of no fact or
set of circumstances that would adversely affect such
qualification prior to the Effective Time. Except as set
forth in Section 4.10(b) of the Company Disclosure
Letter, none of the Plans is subject to Title IV of
ERISA. No "reportable event", as such term is defined in
Section 4043(b) of ERISA (for which the 30-day notice
requirement to the Pension Benefit Guaranty Board has not
been waived) has occurred with respect to any Plan,
except where the occurrence of any such event would not
have a Company Material Adverse Effect. There are no
pending or, to the best knowledge of Company, threatened
claims (other than routine claims for benefits) by, on
behalf of or against any of the Plans or any trusts
related thereto, except for any such claims that would
not, individually or in the aggregate, have a Company
Material Adverse Effect.
(c) Except as set forth in Section
4.10(c) of the Company Disclosure Letter, no Plan
provides benefits, including without limitation, death or
medical benefits (whether or not insured), with respect
to any employees of the Company or any of its
Subsidiaries beyond their retirement or other termination
of service (other than (i) coverage mandated by
applicable law, (ii) death benefits or retirement
benefits under any "employee pension plan," as that term
is defined in Section 3(2) of ERISA, or (iii) benefits
the full cost of which is borne by the current or former
employee (or his or her beneficiary)).
(d) No Plan has incurred an
"Accumulated Funding Deficiency" (as defined in Section
302(a) of ERISA or Section 412(a) of the Code), whether
or not waived, except where the occurrence of any such
event would not have a Company Material Adverse Effect.
(e) Except as set forth in Section
4.10(e) of the Company Disclosure Letter, none of the
Company, its Subsidiaries or any ERISA Affiliate has
incurred a "withdrawal" or "partial withdrawal", as
defined in Sections 4203 and 4205 of ERISA, from any Plan
that has resulted in an unpaid liability of the Company,
any of its Subsidiaries or any ERISA Affiliate, except
where the occurrence of any such event would not have a
Company Material Adverse Effect.
(f) Except as set forth in Section
4.10(f) of the Company Disclosure Schedule, with respect
to each employee benefit plan (as defined in Section 3(3)
of ERISA) which is referred to in Section 4.10(a)
(including for this purpose any terminated plan or
arrangement that would be described in Section 4.10(a) if
not terminated) and which is (or was) subject to Part 4
of Subtitle B of Title I of ERISA, none of the following
now exists or has existed within the six-year period
ending on the date hereof:
(i) any act or omission by the
Company or any of its Subsidiaries, or by any director,
officer or employee thereof, or, to the knowledge of the
Company or any of its Subsidiaries, by any other person,
constituting a violation of Section 404 or 405 of ERISA;
or
(ii) any act or omission which
constitutes a violation of Section 406 or 407 of ERISA
and is not exempted by Section 408 of ERISA or which
constitutes a violation of Section 4975(c) of the Code
and is not exempted by Section 4975(d) of the Code.
(g) Each Plan has been maintained in
substantial compliance with its terms, and all
contribution, premiums or other payments due from the
Company or any of its Subsidiaries to (or under) any such
plan or arrangement have been fully paid or adequately
provided for on the financial statements provided in the
Company SEC Documents for the fiscal quarter ended
September 30, 1996. Except as described in Section
4.10(g) of the Company Disclosure Letter there has been
no amendment, written interpretation or announcement
(whether or not written) by the Company or any of its
Subsidiaries with respect to, or change in employee
participation or coverage under, any such plan or
arrangement that would increase materially the expense of
maintaining such plans or arrangements, individually or
in the aggregate, above the level of expense incurred
with respect thereto provided in the Company SEC
Documents for the fiscal quarter ended September 30,
1996.
(h) Except as described in Section
4.10(h) of the Company Disclosure Letter, neither the
Company nor any of its Subsidiaries has any material
liability under or in connection with any terminated plan
or arrangement that would constitute a "Plan" as defined
in Section 4.10(a) if not terminated (a "Terminated
Plan"), and all benefits accrued under each such
terminated plan or arrangement, including benefits funded
through any related trust, insurance contract, annuity
contract, custodial account or similar funding method,
have been paid or distributed to the persons entitled
thereto in accordance with its terms. Each Terminated
Plan intended to be qualified under Section 401(a) of the
Code was so qualified, and each related trust, insurance
contract, annuity contract or custodial account was
exempt from taxation under Section 501(a) of the Code, at
the time of termination and at all times when payment or
distribution of benefits was made subsequent to or in
connection with such termination.
Section 4.11 Real Property. Section 4.11 of
the Company Disclosure Letter identifies all real
property owned, leased or used by the Company or its
Subsidiaries for or in the conduct its business. The
Company has, either directly or through its Subsidiaries,
(x) good title to, free and clear of all Liens other than
Permitted Liens, or (y) rights by lease or other
agreement to use, all real property used by the Company
and its Subsidiaries, except where the failure to have
such title or rights would not have a Company Material
Adverse Effect. All real property leases of property
under which the Company or any of its Subsidiaries is a
lessee or lessor, are valid, binding and enforceable in
all material respects in accordance with their terms and,
to the best knowledge of the Company, there are no
existing material defaults thereunder.
Section 4.12 Intellectual Property. As of the
date hereof, there are no pending or threatened claims of
which the Company or its Subsidiaries have been given
written notice, by any person against their use of any
trademarks, trade names, service marks, service names,
xxxx registrations, logos, assumed names and copyright
registrations, formulas, trade secrets, know-how, patents
and all applications therefor which are owned by the
Company or its Subsidiaries or are used in the operation
of the Company and its Subsidiaries as currently
conducted (collectively, the "Intellectual Property").
The Company and its Subsidiaries have such ownership of
or such rights by license, lease or other agreement to
the Intellectual Property as are necessary to permit them
to conduct their respective businesses as currently
conducted, except where the failure to have such right
would not have a Company Material Adverse Effect. The
Company is not in default of any agreement pursuant to
which the Company has rights to use any Intellectual
Property except where such default would not have a
Company Material Adverse Effect.
Section 4.13 Computer Software. To the best
knowledge of the Company, the Company and its
Subsidiaries have such title or such rights by license,
lease or other agreement to the computer software
programs which are owned, licensed, leased or otherwise
used by the Company and its Subsidiaries and which are
material to the conduct of their businesses as currently
conducted, as are necessary to permit the conduct of
their businesses as currently conducted, except where the
failure to have such right would not have a Company
Material Adverse Effect.
Section 4.14 Material Contracts. Except as
disclosed in Section 4.14 of the Company Disclosure
Letter, to the best knowledge of the Company, all
material agreements to which the Company or its
Subsidiaries are parties are valid, binding and
enforceable in all material respects in accordance with
their terms and neither the Company nor any of its
Subsidiaries nor any other party to any such contract is
in default under such agreements, other than such
defaults, if any, that would not, individually or in the
aggregate, have a Company Material Adverse Effect.
Section 4.15 Taxes. Except as set forth in
Section 4.15 of the Company Disclosure Letter:
(a) each of the Company and the
Subsidiaries have (I) duly filed with the appropriate
governmental authorities all Tax Returns required to be
filed by it other than those Tax Returns the failure of
which to file would not have a Company Material Adverse
Effect and such Tax Returns are true, correct and
complete in all material respects, and (II) duly paid in
full or made provision in accordance with GAAP for the
payment of all Taxes for all taxable periods or portions
thereof ending on or before the date hereof;
(b) each of the Company and the
Subsidiaries have complied in all material respects with
all applicable laws, rules and regulations relating to
the payment and withholding (including backup
withholding) of Taxes;
(c) no federal, state, local or
foreign audits or other administrative proceedings or
court proceedings ("Audits") are presently pending with
regard to any Taxes or Tax Returns of the Company or the
Subsidiaries and none of the Company or the Subsidiaries
has received written notice of any such Audits;
(d) there are no material Liens for
Taxes upon any property or assets of the Company or the
Subsidiaries, except for Permitted Liens;
(e) the income Tax Returns of the
Company and its Subsidiaries have been examined by the
Internal Revenue Service (or the applicable statutes of
limitation for the assessment of federal income Taxes for
such periods have expired) for all periods through the
taxable year ended 1995.
(f) the Company has made available to
the Purchaser correct and complete copies of all federal
Tax Returns of the Company and the Subsidiaries filed
from May 13, 1993 forward; provided, however, with
respect to taxable years in which the Company was a
member of the consolidated group of which Stockholder was
the common parent, only pro forma federal Tax Returns or
summaries thereof have been made available; and summaries
of examination reports and income tax audit reports of
the Company or the Subsidiaries. Except with respect to
the Audits described in subsection (c) of this Section
4.15, no waiver or extension of any statute of
limitations is in effect with respect to Taxes or Tax
Returns of the Group.
(g) Neither the Company nor any
Subsidiary is a "consenting corporation" within the
meaning of Section 341(f) of the Internal Revenue Code of
1986, as amended (the "Code"), and none of the assets of
the Company nor any Subsidiary are subject to an election
under Section 341(f) of the Code. Neither the Company
nor any Subsidiary is a party to any Tax allocation or
sharing agreement. No member of the Group is a party to
any safe harbor lease within the meaning of Section
168(f)(8) of the Code, as in effect prior to amendment by
the Tax Equity and Fiscal Responsibility Act of 1982.
None of the Company or any Subsidiary has entered into
any compensatory agreements with respect to the
performance of services which payment thereunder would
result in a nondeductible expense to the Group pursuant
to Section 280G of the Code or an excise tax to the
recipient of such payment pursuant to Section 4999 of the
Code. Neither the Company nor any Subsidiary has agreed,
nor is it required to make, any future adjustment under
Code Section 481(a) by reason of a change in accounting
method or otherwise. Section 4.14 of the Company
Disclosure Letter contains an accurate and complete
description of the Company's and each of the Subsidiary's
tax carryforwards, excess loss accounts, and deferred
intercompany transactions. Except as otherwise disclosed
in Section 4.15 of the Company Disclosure Letter, the
Company and each of the Subsidiaries has no net operating
losses or other tax attributes presently subject to
limitation under Code Sections 382, 383, or 384, or the
federal consolidated return regulations. None of the
Company or any of its Subsidiaries is an entity that is
characterized as a partnership for federal income tax
purposes.
(h) None of the Company or any
Subsidiary has participated (or will participate) in any
international boycott as defined in Code Section 999.
Section 4.16 Environmental Matters. Except as
set forth in Section 4.16 of the Company Disclosure
Letter, to the knowledge of the Company, (a) the Company
and its Subsidiaries are in material compliance with all
federal, state, and local laws governing pollution or the
protection of human health or the environment
("Environmental Laws"), except in each case where
noncompliance with Environmental Laws would not
reasonably be expected, individually or in the aggregate,
to have a Company Material Adverse Effect, (b) neither
the Company nor any of its Subsidiaries nor, to the best
knowledge of the Company, any of its copackers, has
received any written notice with respect to the business
of, or any property owned or leased by, the Company or
any of its Subsidiaries from any Governmental Entity or
third party alleging that the Company or any of its
Subsidiaries or any of its products is not in material
compliance with any Environmental Law, (c) there has been
no release of a Hazardous Substance, as that term is
defined in the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. SECTION 9601 et seq.
and used in California Health and Safety Code SECTION 25359.7,
in excess of a reportable quantity on any real property
owned or leased by the Company or any of its Subsidiaries
that is used for the business of the Company or any of
its Subsidiaries and (d) neither the Company nor any of
its Subsidiaries has received any written claims that the
Company is in violation of California's Proposition 65
or, since January 1, 1993, relating to any injuries to
any workers of a substantial nature dealing with the
Company's products, whether employed by the Company or
any co-packer or any customer.
Section 4.17 Affiliated Party Transactions.
Except as set forth on Section 4.17 of the Company
Disclosure Letter, no contracts or agreements in which
the amount involved exceeds $60,000 are in effect as of
the date hereof between the Company or its Subsidiaries
on the one hand, and affiliates of the Company, on the
other hand. For purposes of this Section 4.17 an
"affiliate" of any Person shall mean any other person
directly or indirectly controlling or controlled by or
under direct or indirect common control with such Person.
For the purposes of this definition, "control", when used
with respect to any Person means the power to direct the
management and policies of such Person, directly or
indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings that
correspond to the foregoing.
Section 4.18 No Brokers. The Company has not
employed any broker or finder or incurred any liability
for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated by this
Agreement, except for PaineWebber Incorporated
("PaineWebber"), whose fees and expenses in an aggregate
amount equal to $3,000,000 shall be borne by the Company,
and the Company shall not be liable for any such fees and
expenses in excess of such amount.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER AND SUB
Purchaser and Sub, jointly and severally, rep-
resent and warrant to the Company as follows:
Section 5.1 Organization. Purchaser is a
corporation duly organized, validly existing and in good
standing under the laws of Delaware and Sub is a
corporation duly organized, validly existing and in good
standing under the laws of Delaware and has all requisite
corporate power and authority to own, lease and operate
its properties and to carry on its business as now being
conducted except where failure to be so existing and in
good standing or to have such power and authority would
not in the aggregate have a Purchaser Material Adverse
Effect. Each of Purchaser and Sub is qualified or
licensed to do business as a foreign corporation and is
in good standing in each jurisdiction in which the nature
of the business conducted by it makes such qualification
or licensing necessary, except where the failure to be so
duly qualified, licensed and in good standing would not
have a Purchaser Material Adverse Effect. Purchaser has
heretofore delivered to the Company complete and correct
copies of its certificate of incorporation and by-laws
and the certificate of incorporation and by-laws of Sub,
in each case, as currently in effect. Since the date of
its incorporation, Sub has not engaged in any activities
other than in connection with or as contemplated by this
Agreement or in connection with arranging any financing
required to consummate the transactions contemplated
hereby.
Section 5.2 Authorization; Validity of
Agreement. Each of Purchaser and Sub has the requisite
corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated
hereby. The execution and delivery by Purchaser and Sub
of this Agreement and the consummation of the
transactions contemplated hereby have been duly and
validly authorized by the respective boards of directors
of Purchaser and Sub, and by Purchaser as the sole
stockholder of Sub, and no other corporate proceedings on
the part of Purchaser or Sub are necessary to authorize
the execution and delivery of this Agreement by Purchaser
and Sub and the consummation of the transactions
contemplated hereby. This Agreement has been duly
executed and delivered by Purchaser and Sub and, assuming
due authorization, execution and delivery of this
Agreement by the Company, is a valid and binding
obligation of each of Purchaser and Sub, enforceable
against each of them in accordance with its terms, except
as such enforceability may be subject to or limited by
bankruptcy, insolvency, reorganization or other similar
laws, now or hereafter in effect, affecting the
enforcement of creditors rights generally, except that
the availability of equitable remedies, including
specific performance, may be subject to the discretion of
the court before which any proceeding therefor may be
brought.
Section 5.3 No Violations; Consents and
Approvals.
(a) Neither the execution, delivery or
performance of this Agreement by Purchaser and Sub nor
the consummation by Purchaser and Sub of the transactions
contemplated hereby (i) violate any provision of the
respective certificate of incorporation or by-laws of
Purchaser or Sub, (ii) result in a violation or breach
of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of
the terms, conditions or provisions of any material note,
bond, mortgage, indenture, guarantee, other evidence of
indebtedness, license, contract, agreement or other
instrument to which Purchaser or any of its Subsidiaries
is a party or by which any of them or any of their assets
may be bound or (iii) violate any order, writ, judgment,
injunction, decree, law, statute, rule or regulation
applicable to Purchaser, any of its Subsidiaries or any
of their properties or assets; except in the case of
clauses (ii) and (iii) for violations, breaches or
defaults which (A) would not have a Purchaser Material
Adverse Effect, (B) materially adversely affect the
ability of either Purchaser or Sub to consummate the
transactions contemplated in this Agreement or (C) become
applicable as a result of the business or activities in
which Purchaser or Sub is or proposes to be engaged or as
a result of any acts or omissions by, or the status of
any facts pertaining to, the Company.
(b) No filing or registration with,
notification to, or authorization, consent or approval
of, any Governmental Entity is required in connection
with the execution and delivery of this Agreement by
Purchaser and Sub or the consummation by Purchaser and
Sub of the transactions contemplated hereby, except (i)
filings with the FTC and with the DOJ pursuant to the HSR
Act, (ii) applicable requirements under the Exchange Act,
(iii) the filing of the certificate of merger or, if
applicable, a certificate of ownership and merger with
the Secretary of State, (iv) applicable requirements
under corporation or blue sky laws of various states,
and (v) such other consents, approvals, orders,
authorizations, notifications, registrations,
declarations and filings the failure of which to be
obtained or made (A) would not have a Purchaser Material
Adverse Effect, (B) would not materially adversely affect
the ability of Purchaser or Sub to consummate the
transactions contemplated in this Agreement, or (C)
become applicable as a result of the business or
activities in which Purchaser or Sub is or proposes to be
engaged or as a result of any acts or omissions by, or
the status of any facts pertaining to, the Company.
Section 5.4 Schedule 14D-9; Offer Documents;
Proxy Statement. None of the information supplied by
Purchaser or Sub for inclusion in the Offer Documents,
the Schedule 14D-9 or the Proxy Statement, including any
amendments thereto, will be false or misleading with
respect to any material fact or will 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.
Except for information supplied by the Company in writing
for inclusion in the Offer Documents, the Offer Documents
will comply in all material respects with the Exchange
Act.
Section 5.5 Sufficient Funds. Purchaser and
Sub have sufficient funds available, in cash or pursuant
to existing credit agreements or binding commitments in
effect on the date of this Agreement, to purchase all
Shares on a fully diluted basis at the price per Share
set forth in Section 2.1 hereof and to perform all of
their obligations, and the obligations of the Company
following the Merger, hereunder.
Section 5.6 Beneficial Ownership of Shares.
None of Purchaser, Sub or any of their respective
"affiliates" or "associates" (as those terms are defined
in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act) "beneficially owns" (as that term is
defined in Rule 13d-3(a) under the Exchange Act) any
Shares or any securities convertible into or exchangeable
for Shares.
Section 5.7 No Brokers. Neither Purchaser nor
Sub has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders'
fees in connection with the transactions contemplated by
this Agreement, except for Xxxxxx Xxxxxxx & Co.
Incorporated, whose fees shall be borne by Purchaser.
Section 5.8 Investigation by Purchaser. Each
of Purchaser and Sub has conducted its own independent
review and analysis of the businesses, assets, condition,
operations and prospects of the Company and its
Subsidiaries and acknowledges that each of Purchaser and
Sub has been provided access to the properties, premises
and records of the Company and its Subsidiaries for this
purpose. In entering into this Agreement, Purchaser and
Sub have relied solely upon their own investigation and
analysis, and each of Purchaser and Sub:
(a) acknowledges that none of the
Company, its Subsidiaries or any of their respective
directors, officers, employees, affiliates, agents or
representatives makes any representation or warranty,
either express or implied, as to the accuracy or
completeness of any of the information provided or made
available to Purchaser or their agents or representatives
prior to the execution of this Agreement, and
(b) agrees, to the fullest extent
permitted by law, that none of the Company, its
Subsidiaries or any of their respective directors,
officers, employees, stockholders, affiliates, agents or
representatives shall have any liability or
responsibility whatsoever to Purchaser or Sub on any
basis (including, without limitation, in contract or
tort, under federal or state securities laws or
otherwise) based upon any information provided or made
available, or statements made, to Purchaser prior to the
execution of this Agreement,
except that the foregoing limitations shall not apply to
the Company to the extent (i) the Company makes the
specific representations and warranties set forth in
Article IV of this Agreement or (ii) Stockholder makes
the specific representations and warranties set forth in
Section 1(f) or (3) of the Stockholder Agreement or makes
the covenant set forth in Section 9 of the Stockholder
Agreement, but always subject to the limitations and
restrictions contained herein and therein.
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business by the Company
Pending the Merger. During the period from the date
hereof to the consummation of the Offer, except as
Purchaser shall otherwise agree in writing, as required
by applicable law, or as otherwise contemplated by this
Agreement, the Company and its Subsidiaries shall conduct
their respective businesses in the ordinary course,
consistent with past practice. Further, the Company
shall use reasonable efforts to preserve intact the
business organization of the Company and each of its
Subsidiaries, to keep available the services of its and
their present officers and key employees in good
standing, and to preserve the goodwill of those having
business relationships with it and its Subsidiaries.
Without limiting the generality of and in addition to the
foregoing, and except as set forth in the Company
Disclosure Letter hereto or as otherwise provided in this
Agreement, prior to the consummation of the Offer,
neither the Company nor any of its Subsidiaries will,
without the prior written consent of Purchaser:
(a) amend its charter or by-laws;
(b) authorize for issuance, issue,
sell, deliver or agree or commit to issue, sell or
deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to
purchase or otherwise) any stock of any class or any
other securities, except by the Company in connection
with the exercise of employee options granted and
outstanding before the date of this Agreement;
(c) split, combine or reclassify any
shares of its capital stock, declare, set aside or pay
any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect
of its capital stock or redeem or otherwise acquire any
of its securities or any securities of its subsidiaries;
provided that the Company may pay to holders of the
Shares the regular quarterly dividend of $0.16 per Share
previously declared by the Company, the record date and
payment date for which have previously been fixed by the
Board as December 2, 1996 and January 2, 1997,
respectively;
(d) (i) incur or assume any material
long-term debt or, except in the ordinary course of
business consistent with past practice under existing
lines of credit, incur or assume any material short-term
debt; (ii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingently or
otherwise) for any material obligations of any other
person except wholly owned Subsidiaries of the Company in
the ordinary course of business and consistent with past
practices; or (iii) make any material loans, advances or
capital contributions to, or investments in, any other
person (other than loans or advances to the Company's
Subsidiaries and customary loans or advances to employees
in accordance with past practices);
(e) enter into, adopt or materially
amend any bonus, profit sharing, compensation, severance,
termination, stock option, stock appreciation right,
restricted stock, performance unit, pension, retirement,
deferred compensation, employment, severance or other
employee benefit agreements, trusts, plans, funds or
other arrangements of or for the benefit or welfare of
any Company Employee, or increase in any manner the
compensation or fringe benefits of any Company Employee
or pay any benefit not required by any existing plan and
arrangement (including, without limitation, the granting
of stock options, stock appreciation rights, shares of
restricted stock or performance units) or enter into any
contract, agreement, commitment or arrangement to do any
of the foregoing; provided, however, that nothing herein
shall prohibit normal increases in wages or salary or
immaterial fringe benefits in the ordinary course of
business that are consistent with the past practices;
(f) acquire, sell, lease or dispose of
any assets outside the ordinary course of business or any
assets that are material, individually or in the
aggregate, to the Company and its Subsidiaries, taken as
a whole, or enter into any material commitment or
transaction outside the ordinary course of business;
(g) except as may be required by law
and except as set forth on the Company Disclosure Letter,
take any action to terminate or amend any of its employee
benefit plans with respect to or for the benefit of
Company Employees;
(h) hire any employee other than to
replace an employee; provided, however, that the annual
salary of such replacement employee shall not exceed
$50,000;
(i) pay, discharge or satisfy any
claims (including claims of stockholders), liabilities or
obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), except for the payment,
discharge or satisfaction of (i) liabilities or
obligations in the ordinary course of business consistent
with past practice or in accordance with their terms as
in effect on the date hereof, (ii) liabilities reflected
or reserved against in, or contemplated by, the Company's
consolidated audited financial statements (or in the
notes thereof) dated September 30, 1996, or waive,
release, grant, or transfer any rights of material value
or modify or change in any material respect any existing
license, lease, contract or other document, other than in
the ordinary course of business consistent with past
practice;
(j) change any material accounting
principle used by it, except for such changes as may be
required to be implemented following the date of this
Agreement pursuant to generally accepted accounting
principles or rules and regulations of the SEC
promulgated following the date hereof;
(k) take any action that would result
in any of its representations and warranties in this
Agreement becoming untrue in any material respect;
(l) make any material change in or
exception to the Company's policy of not accepting
returns of products shipped to customers;
(m) make any material change in the
terms and conditions of the Company's arrangements with
its copackers; or
(n) take, or agree in writing or
otherwise to take, any of the foregoing actions.
Section 6.2 Acquisition Proposals.
(a) The Company and its Subsidiaries
will not, and will cause their respective officers,
directors, employees and investment bankers, attorneys or
other agents retained by the Company or any of its
Subsidiaries not to, (i) initiate or solicit, directly or
indirectly, any inquiries or the making of any
Acquisition Proposal, or (ii) except as permitted below,
engage in negotiations or discussions with, or furnish
any information or data to any third party relating to an
Acquisition Proposal (other than the transactions
contemplated hereby). Notwithstanding anything to the
contrary contained in this Section 6.2 or in any other
provision of this Agreement, the Company and the Board
(i) may participate in discussions or negotiations
(including, as a part thereof, making any
counterproposal) with or furnish information to any third
party if the Board determines in good faith, after
consultation with its counsel, that the failure to
participate in such discussions or negotiations or to
furnish such information may constitute a breach of the
Board's fiduciary duties under applicable law, and (ii)
shall be permitted to (X) take and disclose to the
Company's stockholders a position with respect to the
Offer or the Merger or another tender or exchange offer
by a third party, or amend or withdraw such position,
pursuant to Rules 14d-9 and 14e-2 of the Exchange Act or
(Y) make disclosure to the Company's stockholders, in
each case if the Board determines in good faith, after
consultation with its counsel, that the failure to take
such action may constitute a breach of the Board's
fiduciary duties under, or otherwise violate, applicable
law. The Company shall promptly provide Purchaser with a
copy of any written Acquisition Proposal received and
inform Purchaser promptly and on a reasonable basis of
the status and content of any discussions with such a
third party (provided that the Company shall not be
obligated so to provide such Acquisition Proposal or to
inform Purchaser if the Board determines in good faith,
after consultation with its counsel, that such action may
constitute a breach of the Board's fiduciary duties under
applicable law).
(b) For purposes of this Agreement,
"Acquisition Proposal" shall mean any bona fide proposal
made by a third party to acquire (i) beneficial ownership
(as defined under Rule 13(d) of the Exchange Act) of a
majority equity interest in the Company pursuant to a
merger, consolidation or other business combination, sale
of shares of capital stock, tender offer or exchange
offer or similar transaction involving the Company
including, without limitation, any single or multi-step
transaction or series of related transactions which is
structured in good faith to permit such third party to
acquire beneficial ownership of a majority or greater
equity interest in the Company or (ii) all or
substantially all of the business or assets of the
Company (other than the transactions contemplated by this
Agreement).
Section 6.3 Access to Information.
(a) Between the date of this Agreement
and the consummation of the Offer, during normal business
hours, the Company will give Purchaser and its authorized
representatives reasonable access to all offices and
other facilities and to all books and records of it and
its Subsidiaries, will permit Purchaser to make such
inspections as it may reasonably require and will cause
its officers and those of its Subsidiaries to furnish
Purchaser with such financial and operating data and
other information as Purchaser may from time to time
reasonably request, which information shall include,
without limitation, a copy of the Company's Customer
Tracking Report (showing orders and shipments by
customer), which shall be delivered to Purchaser
substantially concurrently with its distribution to the
Company's senior management. The Company will provide
access to management of the Company regularly to discuss
timing of shipments. Purchaser and its authorized
representatives will conduct all such inspections in a
manner which will minimize any disruptions of the
business and operations of the Company and its
Subsidiaries.
(b) Purchaser, Sub, and the Company
agree that the provisions of the confidentiality
agreement among the Company, Stockholder and Purchaser,
dated as of October 10, 1996 (the "Confidentiality
Agreement") shall remain binding and in full force and
effect and that the terms of the Confidentiality
Agreement are incorporated herein by reference.
(c) Any furnishing of information
pursuant hereto or any investigation shall not affect
Purchaser's and Sub's right to rely on the
representations and warranties made by the Company in
this Agreement. Except as otherwise provided by law,
Purchaser, the Company and Sub each agrees to maintain
all information received pursuant to the terms of this
Agreement and the Confidentiality Agreement in accordance
with the terms and conditions of the Confidentiality
Agreement.
Section 6.4 Best Efforts. Subject to the
terms and conditions herein provided, each of the parties
hereto agrees to use its best efforts to take, or cause
to be taken, all action, and to do, or cause to be done,
all things necessary, proper or advisable under
applicable laws and regulations to consummate and make
effective the transactions contemplated by this
Agreement.
Section 6.5 Consents. Each of the Company,
Purchaser and Sub shall cooperate, and use their
respective best efforts, in as timely a manner as is
reasonably practicable, to make all filings and obtain
all licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental
authorities and other third parties necessary to
consummate the transactions contemplated by this
Agreement. Each of the parties hereto will furnish to
the other party such necessary information and reasonable
assistance as such other persons may reasonably request
in connection with the foregoing and will provide the
other party with copies of all filings made by such party
with any Governmental Entity or any other information
supplied by such party to a Governmental Entity in
connection with this Agreement and the transactions
contemplated hereby.
Section 6.6 HSR Filings.
(a) In addition to and without limiting
the agreements contained in Section 6.5 hereof,
Purchaser, Sub and the Company will (i) take promptly all
actions necessary to make the filings required of
Purchaser, Sub or any of their affiliates under the HSR
Act, (ii) comply at the earliest practicable date with
any formal or informal inquiry including, but not limited
to, any request for additional information or documentary
material received by Purchaser, Sub or any of their
affiliates from the FTC or DOJ pursuant to the HSR Act
and (iii) cooperate with the Company in connection with
any filing of the Company under the HSR Act and in
connection with responding to or resolving any
investigation or other inquiry concerning the
transactions contemplated by this Agreement commenced by
either the FTC or DOJ or state attorneys general.
(b) In furtherance and not in limitation
of the covenants contained in Sections 6.5 and Section
6.6(a) hereof, Purchaser, Sub and the Company shall each
use their best efforts to resolve such objections, if
any, as may be asserted with respect to the Offer, the
Merger or any other transactions contemplated by this
Agreement under any Antitrust Law whether such objection
is raised by a private party or governmental or
regulatory authority. If any administrative, judicial or
legislative action or proceeding is instituted (or
threatened to be instituted) challenging the Offer, the
Merger or any other transactions contemplated by this
Agreement as violative of any Antitrust Law, each of the
parties hereto agrees to cooperate and use its best
efforts vigorously to contest and resist any such action
or proceeding, and to have vacated, lifted, reversed or
overturned any decree, judgment, injunction or other
order (whether temporary, preliminary or permanent) (any
such decree, judgment, injunction or other order is
hereafter referred to as an "Order") that is in effect
and that restricts, prevents or prohibits consummation of
the Offer, the Merger or any other transactions
contemplated by this Agreement, including, without
limitation, by vigorously pursuing all available avenues
of administrative and judicial appeal and all available
legislative actions. Each of Purchaser and Sub also
agrees to use its best efforts to take such action,
including, without limitation, agreeing to hold separate
or to divest any of the businesses, product lines, or
assets of Purchaser or Sub or any of their affiliates or,
following the consummation of the Offer or the Effective
Time, of the Company or any of its Subsidiaries, as may
be required (a) by the applicable governmental or
regulatory authority (including without limitation the
FTC, DOJ or any state attorney general) in order to
resolve such objections as such governmental or
regulatory authority may have to such transactions under
such Antitrust Law, or (b) by any domestic or foreign
court or other tribunal, in any action or proceeding
brought by a private party or governmental or regulatory
authority challenging such transactions as violative of
any Antitrust Law, in order to avoid the entry of, or to
effect the dissolution, vacating, lifting or reversal of,
any Order that has the effect of restricting, preventing
or prohibiting the consummation of any such transactions.
The entry by a court or other tribunal, in any action or
proceeding brought by a private party or governmental or
regulatory authority challenging the transactions
contemplated hereby as violative of any Antitrust Law, of
an Order permitting such transactions, but requiring that
any of the businesses, product lines or assets of any of
Purchaser, Sub or any of their affiliates or, following
the consummation of the Offer or the Effective Time, of
the Company or any of its Subsidiaries be divested or
held separate by Purchaser and Sub, or that would
otherwise limit Purchaser's or Sub's freedom of action
with respect to, or their ability to retain, the Company,
any of its Subsidiaries or any businesses, product lines
or assets thereof or any of Purchaser's or Sub's or their
respective affiliates' other businesses, product lines or
assets, shall not be deemed a failure to satisfy any of
the conditions specified in Article VII hereof.
Notwithstanding the foregoing, the Company shall not be
required to divest or hold separate or otherwise take or
commit to take any action that, prior to the Effective
Time, limits its freedom of action with respect to, or
its ability to retain, its Subsidiaries or any of their
respective businesses, product lines or assets.
(c) Each of the Company, Purchaser and
Sub shall promptly inform the other party of any material
communication received by such party from the FTC, DOJ or
any other governmental or regulatory authority regarding
any of the transactions contemplated hereby. Purchaser
and Sub will advise the Company promptly in respect of
any understandings, undertakings or agreements (oral or
written) Purchaser or Sub proposes to make or enter into
with the FTC, DOJ or any other governmental or regulatory
authority in connection with the transactions
contemplated hereby.
Section 6.7 Public Announcements. Each of
Purchaser, Sub and the Company agrees that it will not
issue any press release or otherwise make any public
statement with respect to this Agreement or the
transactions contemplated hereby without the prior
consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, however, that
such disclosure can be made without obtaining such prior
consent if (i) the disclosure is required by law or by
obligations imposed pursuant to any listing agreement
with the Nasdaq National Market and (ii) the party making
such disclosure has first used its best efforts to
consult with the other party about the form and substance
of such disclosure.
Section 6.8 Employee Agreements. Purchaser
agrees, and agrees to cause the Surviving Corporation, to
honor and be bound by the terms of the agreements with
officers of the Company set forth in Section 6.8 of the
Company Disclosure Letter.
Section 6.9 Employee Benefits.
(a) As of the Effective Time, Company
employees will be terminated from future participation in
Stockholder's Employee Benefit Plans (as defined in
subsection (e) below). The benefits to be paid to
Company employees under each Employee Benefit Plan
sponsored or maintained by the Stockholder shall not be
increased by any service to the Company following the
Effective Time. Purchaser and Sub assume no
responsibility for any benefits, liabilities or
contributions to, or costs of administration of,
Stockholder's Employee Benefit Plans (which excludes the
Armor All PSIP and any other plans sponsored or
maintained solely by the Company) except for the
Contribution Obligation (as defined in the Stockholder
Agreement). Except as expressly provided herein,
Purchaser and Sub agree to provide Company employees
employee benefit and compensation plans, policies and
arrangements (other than severance plans) at a level no
less favorable than provided to Purchaser employees of
comparable status; provided, however, that for a period
of one year following the Effective Time, Company
employees shall also be provided a severance benefit no
less favorable than provided by the Company as of the
date hereof; provided however, that the foregoing shall
not prohibit the Surviving Corporation from amending such
severance benefit plans to clarify any ambiguities
therein.
(b) Purchaser agrees to permit Company
employees to participate immediately as of the Effective
Date in its medical, dental, disability and life
insurance plans without imposition of preexisting
condition exclusions or waiting periods prior to
participation and with full credit for deductibles and
copayments paid in respect of the current plan year.
Purchaser agrees to allow participation in its retiree
medical plan to Company employees on a basis no less
favorable than provided to Purchaser employees of
comparable status and to grant eligibility and vesting
credit in such retiree medical plans for service with the
Company or the Stockholder.
(c) Purchaser agrees to provide
Company employees with service credit for all purposes,
including without limitation, eligibility to participate,
and vesting (other than Purchaser's severance plan, for
which such Company employees are not eligible, and
Supplemental Executive Retirement Plan) under each of
Purchaser's Employee Benefit Plans for service with the
Company or Stockholder.
(d) The Company shall, prior to
December 2, 1996, amend each of the Company's Incentive
Plan for Business Managers, the 1989 Short Term Incentive
Plan, the Employee Incentive Plan and the Sales Incentive
Plan as follows: The Company's Incentive Plan for
Business Managers shall, immediately following the date
hereof, be terminated forthwith. The Employee Incentive
Plan shall, immediately following the Effective Time, be
terminated and all participants shall receive a cash
payment equal to their target bonus as though the
budgeted target had been achieved. Each of the Company's
1989 Short Term Incentive Plan, International Incentive
Plan, and the Company's Sales Incentive Plan, shall, on
April 1, 1997, be terminated and the aggregate amount of
individual bonus targets payable to participants in those
Incentive Plans shall be determined as soon as
practicable after the Effective Time as though the
budgeted target for Fiscal Year 1997 had been achieved;
individual cash payments shall be modified to reflect
individual performance ;provided, however, that such
participant either (i) has remained employed with the
Company through March 31, 1997 or (ii) was terminated by
the Company on or prior to such date but after December
31, 1996, other than for cause; provided further, that
the participants in the Company's 1989 Short Term
Incentive Plan previously identified in writing to
Purchaser shall receive such cash payment immediately
following the Effective Time. Effective April 1, 1997,
Company employees will become eligible to participate in
Purchaser's incentive plans at a level comparable to that
of other Purchaser's employees immediately prior to the
date hereof. As of the Effective Time, Company employees
will participate in all of Purchaser's Employee Benefit
Plans, including without limitation, vacation, medical
and survivor plans on a basis no less favorable than
provided to Purchaser employees of comparable status, but
excluding executive retirement and severance plans.
(e) For purposes of this Section 6.9
"Employee Benefit Plans" shall mean employee benefit
plans, incentive compensation, severance, health and
welfare plans or policies, whether or not subject to
regulation under ERISA.
Section 6.10 Indemnification; Directors' and
Officers' Insurance.
(a) In the event of any threatened or
actual claim, action, suit, proceeding or investigation,
whether civil, criminal or administrative, including,
without limitation, any such claim, action, suit,
proceeding or investigation by or in the right of the
Company or any of its Subsidiaries, in which any of the
present officers or directors (the "Indemnified Parties")
of the Company or any of its Subsidiaries is, or is
threatened to be, made a party by reason of the fact that
he or she is or was a director, officer, employee or
agent of the Company or any of its Subsidiaries, or is or
was serving at the request of the Company or any of its
Subsidiaries as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or
other enterprise, whether before or after the Effective
Time, the parties hereto agree to cooperate and use their
best efforts to defend against and respond thereto. It
is understood and agreed that the Company shall indemnify
and hold harmless, and after the Effective Time the
Surviving Corporation and Purchaser, jointly and
severally, shall indemnify and hold harmless, as and to
the full extent permitted by applicable law, each such
Indemnified Party against any losses, claims, damages,
liabilities, costs, expenses (including reasonable
attorneys' fees and expenses), judgments, fines and
amounts paid in settlement in connection with any such
claim, action, suit, proceeding or investigation, and in
the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the
Effective Time), (i) the Indemnified Parties may retain
counsel satisfactory to them, and the Company, or the
Surviving Corporation and Purchaser after the Effective
Time, shall pay all reasonable fees and expenses of such
counsel for the Indemnified Parties promptly as
statements therefor are received and (ii) the Company and
the Surviving Corporation and Purchaser will use their
respective reasonable efforts to assist in the vigorous
defense of any such matter; provided, that neither the
Company nor the Surviving Corporation nor Purchaser shall
be liable for any settlement effected without its prior
written consent (which consent shall not be unreasonably
withheld); and provided further that the Surviving
Corporation and Purchaser shall have no obligation
hereunder to any Indemnified Party when and if a court of
competent jurisdiction shall ultimately determine, and
such determination shall have become final and non-
appealable, that indemnification of such Indemnified
Party in the manner contemplated hereby is prohibited by
applicable law. Any Indemnified Party wishing to claim
indemnification under this Section 6.11, upon learning of
any such claim, action, suit, proceeding or
investigation, shall notify the Company and, after the
Effective Time, the Surviving Corporation and Purchaser,
thereof (but the failure to so notify an indemnifying
party shall not relieve it from any liability which it
may have hereunder, except to the extent such failure
prejudices such party). The Indemnified Parties as a
group may retain only one law firm to represent them with
respect to each such matter unless there is, under
applicable standards of professional conduct, a conflict
on any significant issue between the positions of any two
or more Indemnified Parties.
(b) Until the Effective Time the
Company shall keep in effect Article Tenth of its
Certificate of Incorporation and Article IX of its By-
Laws, and, thereafter, Purchaser shall cause the
Surviving Corporation to keep in effect in its By-Laws a
provision for a period of not less than six years from
the Effective Time (or, in the case of matters occurring
prior to the Effective Time which have not been resolved
prior to the sixth anniversary of the Effective Time,
until such matters are finally resolved) which provides
for indemnification of the Indemnified Parties to the
full extent permitted by the DGCL.
(c) Purchaser shall cause to be
maintained in effect for not less than six years from the
Effective Time the current policies of the directors' and
officers' liability insurance maintained by the Company,
if any, (provided that Purchaser may substitute therefor
policies of at least the same coverage containing terms
and conditions which are no less advantageous) with
respect to matters occurring prior to the Effective Time;
provided, however, that if the aggregate annual premiums
for such insurance at any time during such period shall
exceed 200% of the per annum rate of premium currently
paid by the Company and its Subsidiaries for such
insurance on the date of this Agreement, if any, then
Purchaser shall cause the Company (or the Surviving
Corporation if after the Effective Time) to, and the
Company (or the Surviving Corporation if after the
Effective Time) shall, provide the maximum coverage that
shall then be available at an annual premium equal to
200% of such rate, and Purchaser, in addition to the
indemnification provided above in this Section 6.11,
shall indemnify the Indemnified Parties for the balance
of such insurance coverage on the same terms and
conditions as though Purchaser were the insurer under
those policies.
Section 6.11 Certain Arrangements. Effective
as the Effective Time, the Company shall cause the
termination of that certain Services Agreement, dated as
of July 1, 1986 between the Company and Stockholder, as
amended through April 1, 1996 (the "Services Agreement"),
and all monies held by Stockholder pursuant to the cash
management program shall be remitted to the Company upon
such termination; provided, however, that nothing in this
provision shall impact or cause the termination of that
certain Tax Allocation Agreement, dated as of July 1,
1986 between the Company and Stockholder.
Section 6.12 Merger Without Meeting of
Stockholders. Notwithstanding the foregoing, in the
event that Purchaser or Sub shall acquire at least 90
percent of the outstanding Shares, the parties hereto
agree, at the request of Purchaser, to take all
appropriate and necessary action to cause the Merger to
become effective, as soon as practicable after the
expiration or termination of the Offer and the completion
of all activities necessary to finance the consummation
of the Merger and the transactions contemplated hereby,
without a meeting of stockholders of the Company, in
accordance with Section 253 of the DGCL.
Section 6.13 Incremental Volume Plan.
Promptly following the date hereof, the Company shall (i)
amend its Third Quarter Incremental Volume Plan referred
to in Section 4.6 of the Company Disclosure Letter to
extend the measurement period for determining whether the
incremental sales volume targets of such Plan have been
satisfied to include the fourth quarter of fiscal year
1997, and (ii) take all steps reasonably necessary to
communicate to customers eligible to participate in such
plan that the Company will honor its Third Quarter
Incremental Volume Plan with respect to shipments made in
the fourth quarter of fiscal year 1997 and to Company
sales personnel responsible for such customers.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party s
Obligation to Effect the Merger. The respective
obligation of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective
Time of each of the following conditions:
(a) If required by the DGCL, this
Agreement and the Merger shall have been approved and
adopted by the requisite vote of the stockholders of the
Company in accordance with applicable provisions of the
Company's Certificate of Incorporation and the DGCL;
(b) No statute, rule, regulation, order,
decree or injunction shall have been enacted, entered,
promulgated or enforced by any Governmental Entity of
competent jurisdiction which prohibits the consummation
of the Merger or makes the Merger illegal;
(c) The Offer shall not have been
terminated in accordance with its terms prior to the
purchase of any Shares; and
(d) Any applicable waiting period
applicable to the consummation of the Merger under the
HSR Act shall have expired or been terminated.
Section 7.2 Conditions to the Obligation of
the Company to Effect the Merger. The obligation of the
Company to effect the Merger is further subject to the
satisfaction or waiver at or prior to the Effective Time
of the following additional conditions:
(a) The representations and warranties
of Purchaser and Sub contained in this Agreement shall be
true and correct in all material respects at and as of
the Effective Time as if made at and as of such time
unless limited by their terms to a prior date;
(b) Each of Purchaser and Sub shall
have performed in all material respects its obligations
under this Agreement required to be performed by it at or
prior to the Effective Time pursuant to the terms hereof;
and
(c) The Company shall have received a
certificate of the President, an Executive Vice
President, a Senior Vice President or the Chief Financial
Officer of Purchaser as to the satisfaction of the
conditions set forth in Section 7.2(a) and (b).
Section 7.3 Conditions to Obligations of
Purchaser and Sub to Effect the Merger. The obligations
of Purchaser and Sub to effect the Merger are further
subject to the satisfaction or waiver at or prior to the
Effective Time of the following additional conditions:
(a) The representations and warranties
of the Company contained in this Agreement shall be true
and correct in all material respects at and as of the
Effective Time as if made at and as of such time unless
limited by their terms to a prior date;
(b) The Company shall have performed
in all material respects each of its obligations under
this Agreement required to be performed by it at or prior
to the Effective Time pursuant to the terms hereof; and
(c) Purchaser shall have received a
certificate of the President, an Executive Vice
President, a Senior Vice President or the Chief Financial
Officer of the Company as to the satisfaction of the
conditions set forth in Section 7.3(a) and (b).
Section 7.4 Exception. The conditions set
forth in Section 7.3 hereof shall cease to be conditions
to the obligations of the parties if Sub shall have
accepted for payment and paid for Shares validly tendered
pursuant to the Offer; provided that the terms of this
exception will be deemed satisfied if Sub fails to accept
for payment any Shares pursuant to the Offer in violation
of the terms thereof.
ARTICLE VIII
TERMINATION
Section 8.1 Termination. Notwithstanding
anything herein to the contrary, this Agreement may be
terminated and the Merger may be abandoned at any time
prior to the Effective Time, whether before or after
stockholder approval thereof:
(a) By mutual written consent of
Purchaser, the Sub and the Company;
(b) By Purchaser and Sub, on the one
hand, or the Company, on the other hand, if the Effective
Time shall not have occurred on or before January 31,
1997 from the date hereof;
(c) By either Purchaser and Sub on the
one hand, or the Company, on the other hand, if the Offer
shall expire or have been terminated in accordance with
its terms without any Shares being purchased thereunder
but only, in the case of termination by Purchaser and
Sub, if the Sub shall not have been required by the terms
of the Offer or this Agreement to purchase any Shares
pursuant to the Offer;
(d) By Purchaser and Sub, on the one
hand, or the Company, on the other hand, if any court of
competent jurisdiction in the United States or other
United States governmental body shall have issued an
order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling or
other action shall have become final and nonappealable;
(e) By Purchaser or Sub, on the one
hand, or the Company, on the other hand, if the other
party shall have failed to comply in any material respect
with any of the material obligations contained in this
Agreement to be complied with or performed by such party
at or prior to such date of termination, and such failure
continues for 20 business days after the actual receipt
by such party of a written notice from the other party
setting forth in detail the nature of such failure;
(f) By Purchaser, if any required
approval of the stockholders of the Company shall not
have been obtained by reason of the failure to obtain the
required vote upon a vote held at a duly held meeting of
stockholders or at any adjournment thereof;
(g) By Purchaser, if the Company shall
have (i) withdrawn its approval or recommendation of this
Agreement or the Merger, (ii) recommended any Acquisition
Proposal from a person other than Purchaser; or
(h) By the Company if, prior to the
purchase of Shares pursuant to the Offer, either (i) a
third party shall have made an Acquisition Proposal that
the Board determines in good faith, after consultation
with its financial advisor, is more favorable to the
Company and the holders of Shares than the transactions
contemplated by this Agreement or (ii) other than in
response to an Acquisition Proposal, the Board determines
in good faith, after consultation with its counsel, that
the failure so to terminate this Agreement may constitute
a breach of the Board's fiduciary duties under applicable
law.
Notwithstanding anything to the contrary contained in
this Section 8.1, the Company shall not be permitted to
terminate, or consent to the termination of, this
Agreement without the approval of a majority of the
Continuing Directors.
Section 8.2 Effect of Termination. In the
event of the termination of this Agreement as provided in
Section 8.1, written notice thereof shall forthwith be
given to the other party or parties specifying the
provision hereof pursuant to which such termination is
made, and this Agreement shall forthwith become null and
void, without liability or obligation on the part of
Purchaser, Sub or the Company except as set forth in
Sections 6.3(b), 9.1 and 9.13 hereof. Nothing contained
in this Section 8.2 shall relieve any party from
liability for any willful breach of this Agreement.
Section 8.3 Termination Fee. If this
Agreement is terminated (i) by either party pursuant to
Section 8.1(f), (ii) by Purchaser or Sub pursuant to
Section 8.1(e) or (g), or (iii) by the Company pursuant
to Section 8.1(h), and, in each such case, if the Company
is not then entitled to terminate this Agreement by
reason of Section 8.1(e), then, in addition to any other
rights or remedies that may be available to Purchaser,
the Company shall pay Purchaser promptly and in no event
later than two business days after receipt of notice of
termination pursuant to the relevant provision of Section
8.1 (by wire transfer of immediately available funds to
an account designated by Purchaser) a fee of $11.0
million.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Fees and Expenses. Except as
contemplated by this Agreement, all costs and expenses
incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby
shall be paid by the party incurring such expenses.
Section 9.2 Amendment; Extension and Waiver.
Subject to applicable law, this Agreement may be amended,
modified and supplemented in any and all respects,
whether before or after any vote of the stockholders of
the Company contemplated hereby, by written agreement of
the parties hereto, pursuant to action taken by their
respective Boards of Directors (which, in the case of the
Company, shall include the affirmative vote of a majority
of the Continuing Directors), at any time prior to the
Closing Date with respect to any of the terms contained
herein; provided, however, that after the approval of
this Agreement by the stockholders of the Company, no
such amendment, modification or supplement shall reduce
or change the consideration to be received by the
Company's stockholders in the Merger.
Section 9.3 Survival. (a) The respective
representations, warranties, covenants and agreements of
Purchaser, Sub and the Company contained herein or in any
certificates or other documents delivered prior to or as
of the Effective Time shall not survive beyond the
Effective Time, (b) notwithstanding this Section 9.3 the
covenants and agreements of the parties hereto to be
performed following the Effective Time (including by the
Surviving Corporation after the Merger) shall survive the
Effective Time without limitation which by their terms
contemplate performance after the Effective Time,
including, without limitation, the covenants and
agreements set forth in Sections 6.3(b), 6.8, 6.9, 6.10,
9.1 and 9.13 hereof.
Section 9.4 Notices. All notices and other
communications hereunder shall be in writing and shall be
deemed given upon (a) transmitter s confirmation of a
receipt of a facsimile transmission, (b) confirmed
delivery by a standard overnight carrier or when
delivered by hand or (c) the expiration of five business
days after the day when mailed in the United States by
certified or registered mail, postage prepaid, addressed
at the following addresses (or at such other address for
a party as shall be specified by like notice):
(a) if to the Company, to:
Armor All Products Corporation
0 Xxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
and
(b) if to Purchaser or Sub, to:
The Clorox Company
0000 Xxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
Section 9.5 Interpretation. When a reference
is made in this Agreement to Sections, such reference
shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words "include", "includes" or
"including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation".
The phrase "made available" when used in this Agreement
shall mean that the information referred to has been made
available if requested by the party to whom such
information is to be made available.
Section 9.6 Headings; Schedules. The headings
contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or
interpretation of this Agreement. Any matter disclosed
pursuant to the Company Disclosure Letter shall be deemed
to be disclosed for all purposes under this Agreement but
such disclosure shall not be deemed to be an admission or
representation as to the materiality of the item so
disclosed.
Section 9.7 Counterparts. This Agreement may
be executed in two or more counterparts, each of which
shall be deemed an original but all of which shall be
considered one and the same agreement.
Section 9.8 Entire Agreement. This Agreement,
together with the Confidentiality Agreement and the
Stockholder's Agreement, constitutes the entire
agreement, and supersedes all other prior negotiations,
commitments, agreements and understandings (written and
oral), among the parties with respect to the subject
matter hereof.
Section 9.9 Severability. If any term,
provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other
authority to be invalid, void, unenforceable or against
its regulatory policy, the remainder of the terms,
provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way
be affected, impaired or invalidated.
Section 9.10 Governing Law. This Agreement
shall be governed and construed in accordance with the
laws of the State of Delaware without giving effect to
the principles of conflicts of law thereof.
Section 9.11 Assignment. Neither this
Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto
(whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to
the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by, the
parties and their respective successors and assigns, and
except to the extent necessary to enforce the provisions
of Sections 3.12, 6.8, 6.9 and 6.11, the provisions of
this Agreement are not intended to confer upon any person
other than the parties hereto any rights or remedies
hereunder.
Section 9.12 Specific Performance; Submission
to Jurisdiction. Each of the parties hereto acknowledges
and agrees that in the event of any breach of this
Agreement, each non-breaching party would be irreparably
and immediately harmed and could not be made whole by
monetary damages. It is accordingly agreed that the
parties hereto (a) will waive, in any action for specific
performance, the defense of adequacy of a remedy at law
and (b) shall be entitled, in addition to any other
remedy to which they may be entitled at law or in equity,
to compel specific performance of this Agreement in any
action instituted in any state or federal court sitting
in Orange County, California. The parties hereto consent
to personal jurisdiction in any such action brought in
any state or federal court sitting in Orange County,
California and to service of process upon it in the
manner set forth in Section 9.4 hereof.
Section 9.13 Brokerage Fees and Commissions.
Except as previously disclosed in writing, the Company
hereby represents and warrants to Purchaser with respect
to the Company, and Purchaser hereby represents and
warrants to the Company with respect to Purchaser and
Sub, that no person or entity is entitled to receive from
the Company or Purchaser and Sub, respectively, any
investment banking, brokerage or finder's fee or fees for
financial consulting or advisory services in connection
with this Agreement or any of the transactions
contemplated hereby.
IN WITNESS WHEREOF, Purchaser, Sub and the
Company have caused this Agreement to be signed by their
respective officers thereunto duly authorized as of the
date first written above.
ARMOR ALL PRODUCTS CORPORATION
By:
Name:
Title:
THE CLOROX COMPANY
By:
Name:
Title:
SHIELD ACQUISITION CORPORATION
By:
Name:
Title:
ANNEX A
CONDITIONS TO THE TENDER OFFER
Notwithstanding any other provision of the Offer,
Sub shall not be required to purchase any Shares tendered,
and may terminate or amend the Offer, if on or after
December 2, 1996, any of the following events shall occur:
(a) the Company shall have breached in any
material respect any of its representations, warranties,
covenants or agreements contained in the Merger Agreement; or
(b) there shall be any statute, rule
regulation, decree, order or injunction promulgated, enacted,
entered or enforced by any United States federal or state
government, governmental authority or court which would (i)
make the acquisition by the Sub of a material portion of the
Shares illegal, or (ii) otherwise prohibit or restrict
consummation of the Offer or the Merger;
(c) the Merger Agreement shall have been
terminated in accordance with its terms; or
(d) the Company or its Subsidiaries shall
have suffered a change that would result in a Company
Material Adverse Effect.
The foregoing conditions are for the sole benefit
of Sub and may be asserted by Sub regardless of the
circumstances giving rise to such conditions, or may be
waived by Sub in whole or in part at any time and from time
to time in its reasonable discretion.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.1 Definitions . . . . . . . . . . . . . . . . 2
ARTICLE II
THE OFFER
Section 2.1 The Offer . . . . . . . . . . . . . . . . . 5
Section 2.2 Company Actions . . . . . . . . . . . . . . 6
Section 2.3 Stockholder Lists. . . . . . . . . . . . . . 7
Section 2.4 Directors . . . . . . . . . . . . . . . . . 8
Section 3.1 The Merger . . . . . . . . . . . . . . . . . 8
Section 3.2 Closing . . . . . . . . . . . . . . . . . . 9
Section 3.3 Effective Time . . . . . . . . . . . . . . . 9
Section 3.4 Effects of the Merger . . . . . . . . . . . 9
Section 3.5 Certificate of Incorporation and By-Laws. . 9
Section 3.6 Directors and Officers of the Surviving
Corporation . . . . . . . . . . . . . . . . 9
Section 3.7 Stockholders' Meeting . . . . . . . . . . 10
Section 3.8 Conversion of Shares . . . . . . . . . . . 11
Section 3.9 Conversion of Sub's Common Stock . . . . . 11
Section 3.10 Exchange of Shares; Payment . . . . . . . 11
Section 3.11 Dissenting Shares . . . . . . . . . . . . 13
Section 3.12 Company Option Plans . . . . . . . . . . . 14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization . . . . . . . . . . . . . . . 15
Section 4.2 Capitalization . . . . . . . . . . . . . . 15
Section 4.3 Authorization; Validity of Agreement . . . 16
Section 4.4 No Violations; Consents and Approvals . . 17
Section 4.5 Reports. . . . . . . . . . . . . . . . . . 18
Section 4.6 Absence of Certain Changes . . . . . . . . 18
Section 4.7 No Undisclosed Liabilities . . . . . . . . 19
Section 4.8 Schedule 14D-9; Offer Documents; Proxy
Statement. . . . . . . . . . . . . . . . . 19
Section 4.9 Litigation; Compliance with Law . . . . . 20
Section 4.10 Employee Benefit Plans; ERISA . . . . . . 20
Section 4.11 Real Property . . . . . . . . . . . . . . 23
Section 4.12 Intellectual Property . . . . . . . . . . 23
Section 4.13 Computer Software . . . . . . . . . . . . 23
Section 4.14 Material Contracts . . . . . . . . . . . . 24
Section 4.15 Taxes. . . . . . . . . . . . . . . . . . . 24
Section 4.16 Environmental Matters. . . . . . . . . . . 25
Section 4.17 Affiliated Party Transactions . . . . . . 26
Section 4.18 No Brokers . . . . . . . . . . . . . . . . 26
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER AND SUB
Section 5.1 Organization . . . . . . . . . . . . . . . 27
Section 5.2 Authorization; Validity of Agreement . . . 27
Section 5.3 No Violations; Consents and Approvals . . 28
Section 5.4 Schedule 14D-9; Offer Documents; Proxy
Statement. . . . . . . . . . . . . . . . . 29
Section 5.5 Sufficient Funds . . . . . . . . . . . . . 29
Section 5.6 Beneficial Ownership of Shares . . . . . . 29
Section 5.7 No Brokers . . . . . . . . . . . . . . . . 30
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business by the Company
Pending the Merger . . . . . . . . . . . . 31
Section 6.2 Acquisition Proposals . . . . . . . . . . 33
Section 6.3 Access to Information . . . . . . . . . . 34
Section 6.4 Best Efforts . . . . . . . . . . . . . . . 35
Section 6.5 Consents . . . . . . . . . . . . . . . . . 35
Section 6.6 HSR Filings . . . . . . . . . . . . . . . 36
Section 6.7 Public Announcements . . . . . . . . . . . 38
Section 6.8 Employee Agreements . . . . . . . . . . . 38
Section 6.10 Indemnification; Directors' and Officers'
Insurance . . . . . . . . . . . . . . . . 40
Section 6.11 Certain Arrangements . . . . . . . . . . . 42
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party s Obligation to
Effect the Merger . . . . . . . . . . . . 43
Section 7.2 Conditions to the Obligation of the
Company to Effect the Merger . . . . . . . 43
Section 7.3 Conditions to Obligations of Purchaser
and Sub to Effect the Merger . . . . . . . 44
Section 7.4 Exception . . . . . . . . . . . . . . . . 44
ARTICLE VIII
TERMINATION
Section 8.1 Termination . . . . . . . . . . . . . . . 44
Section 8.2 Effect of Termination . . . . . . . . . . 46
Section 8.3 Termination Fee . . . . . . . . . . . . . 46
ARTICLE IX
MISCELLANEOUS
Section 9.1 Fees and Expenses . . . . . . . . . . . . 46
Section 9.2 Amendment; Extension and Waiver . . . . . 46
Section 9.3 Survival. . . . . . . . . . . . . . . . . 47
Section 9.4 Notices . . . . . . . . . . . . . . . . . 47
Section 9.5 Interpretation . . . . . . . . . . . . . . 48
Section 9.6 Headings; Schedules. . . . . . . . 48
Section 9.7 Counterparts . . . . . . . . . . . . . . . 48
Section 9.8 Entire Agreement . . . . . . . . . . . . . 48
Section 9.9 Severability . . . . . . . . . . . . . . . 49
Section 9.10 Governing Law . . . . . . . . . . . . . . 49
Section 9.11 Assignment . . . . . . . . . . . . . . . . 49
Section 9.12 Specific Performance; Submission to
Jurisdiction . . . . . . . . . . . . . . . 49
Section 9.13 Brokerage Fees and Commissions . . . . . . 49
CONDITIONS TO THE TENDER OFFER . . . . . . . . . . . Annex A
