EXHIBIT 99.(2)
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
THYSSEN AKTIENGESELLSCHAFT,
TAQU, INC.
and
XXXXXXXX & XXXXX, INC.
June 11, 1997
TABLE OF CONTENTS
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ARTICLE I
THE OFFER
1.1 The Offer....................................................... 1
1.2 Company Action.................................................. 3
ARTICLE II
THE MERGER; EFFECTIVE TIME; CLOSING
2.1 The Merger...................................................... 5
2.2 Effective Time.................................................. 5
2.3 Closing......................................................... 5
ARTICLE III
SURVIVING CORPORATION
3.1 Articles of Incorporation....................................... 6
3.2 By-Laws......................................................... 6
3.3 Directors....................................................... 6
3.4 Officers........................................................ 6
ARTICLE IV
MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF
SHARES IN THE MERGER
4.1 Share Consideration for the Merger; Conversion or
Cancellation of Shares in the Merger............................ 6
4.2 Shareholders' Meeting........................................... 7
4.3 Payment for Shares in the Merger................................ 8
4.4 Transfer of Shares After the Effective Time..................... 10
4.5 Stock Options................................................... 10
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
5.1 Corporate Organization and Qualification........................ 10
5.2 Capitalization.................................................. 11
5.3 Authority Relative to This Agreement............................ 12
5.4 Consents and Approvals; No Violation............................ 12
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5.5 SEC Reports; Financial Statements............................... 14
5.6 Absence of Certain Changes or Events............................ 15
5.7 Litigation and Liabilities...................................... 15
5.8 Information Supplied............................................ 16
5.9 Taxes........................................................... 16
5.10 Employee Benefit Plans; Labor Matters........................... 17
5.11 Environmental Laws and Regulations.............................. 20
5.12 Brokers and Finders............................................. 21
5.13 Opinions of Financial Advisors.................................. 21
5.14 Compliance with Laws; Permits................................... 21
5.15 Takeover Statutes............................................... 22
5.16 Labor Matters................................................... 22
5.17 Insurance....................................................... 22
5.18 Intellectual Property........................................... 23
5.19 Rights Plan..................................................... 24
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT
AND NEWCO
6.1 Corporate Organization and Qualification........................ 25
6.2 Authority Relative to This Agreement............................ 25
6.3 Consents and Approvals: No Violation........................... 25
6.4 Financing....................................................... 26
ARTICLE VII
ADDITIONAL COVENANTS AND AGREEMENTS
7.1 Conduct of Business of the Company.............................. 27
7.2 Acquisition Proposals........................................... 30
7.3 Approvals and Consents; Cooperation............................. 31
7.4 Further Assurances.............................................. 31
7.5 Access to Information........................................... 32
7.6 Publicity....................................................... 32
7.7 Indemnification of Directors and Officers....................... 33
7.8 Employees....................................................... 34
7.9 Notification of Certain Matters................................. 35
7.10 Company Board................................................... 35
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
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8.1 Conditions to Each Party's Obligations to Effect the
Merger.......................................................... 36
ARTICLE IX
TERMINATION; AMENDMENT; WAIVER
9.1 Termination by Mutual Consent................................... 37
9.2 Termination by Either Parent or the Company..................... 37
9.3 Termination by the Company...................................... 37
9.4 Termination by Parent........................................... 38
9.5 Effect of Termination and Abandonment........................... 39
9.6 Extension; Waiver............................................... 40
ARTICLE X
MISCELLANEOUS AND GENERAL
10.1 Payment of Expenses............................................ 40
10.2 Survival of Representations and Warranties; Survival
of Confidentiality.............................................. 40
10.3 Modification or Amendment...................................... 40
10.4 Waiver of Conditions........................................... 40
10.5 Counterparts................................................... 40
10.6 Governing Law.................................................. 40
10.7 Notices........................................................ 41
10.8 Entire Agreement; Assignment................................... 43
10.9 Parties in Interest............................................ 43
10.10 Certain Definitions............................................. 43
10.11 Obligation of Parent............................................ 43
10.12 Validity........................................................ 44
10.13 Captions........................................................ 44
Annex A
ANNEX A.............................................................. A-1
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of June
11, 1997, by and among Thyssen Aktiengesellschaft,a stock corporation organized
under the laws of Germany ("Parent"), TAQU, Inc., a Delaware corporation and an
indirect wholly owned subsidiary of Parent ("Newco"), and Xxxxxxxx & Xxxxx,
Inc., a Wisconsin corporation (the "Company").
RECITALS
WHEREAS, the Board of Directors of the Company, has, subject to the
conditions of this Agreement, unanimously determined that each of the Offer and
the Merger (each as defined below) is in the best interests of the shareholders
of the Company and approved and adopted this Agreement and the transactions
contemplated hereby; and
WHEREAS, in furtherance thereof, it is proposed that Newco shall
make a tender offer (the "Offer") to acquire all of the outstanding shares (the
"Shares") of Common Stock, par value $.10 per share (the "Company Common
Stock"), of the Company, together with the associated Rights (as hereafter
defined), at a price of $21 per Share (such amount, or any greater amount per
share paid pursuant to the Offer, being hereinafter referred to as the "Per
Share Amount"), net to the seller in cash, in accordance with the terms and
subject to the conditions of this Agreement; and
WHEREAS, Parent, Newco and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, Parent,
Newco and the Company hereby agree as follows:
ARTICLE I
THE OFFER
1.1 The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Article IX, Newco shall
commence the Offer not later than the fifth business day from and including the
date of initial public announcement of this Agreement. Newco shall accept for
payment Shares which have been validly tendered and not withdrawn pursuant to
the Offer at the earliest time following expiration of the Offer that all
conditions to the Offer shall have been satisfied or waived by Newco. The
obligation of Newco to accept for payment, purchase and pay for Shares tendered
pursuant to the Offer shall be subject only to such conditions and to the
further condition that a number of Shares representing not less than a majority
of the Shares then outstanding on a fully diluted basis shall have been validly
tendered and not withdrawn prior to the final expiration date of the Offer (the
"Minimum Condition"). Unless previously approved by the Company in writing, no
change in the Offer may be made (i) which decreases the price per Share payable
in the Offer, (ii) which changes the form of consideration to be paid in the
Offer, (iii) which reduces the maximum number of Shares to be purchased in the
Offer or the Minimum Condition, (iv) which imposes conditions to the Offer in
addition to those set forth in Annex A hereto or which modifies the conditions
set forth in Annex A in a manner adverse to the holders of Shares or (v) which
amends any other term of the Offer in a manner adverse to the holders of the
Shares. Notwithstanding the foregoing, Newco may, without the consent of the
Company, (i) extend the Offer on one or more occasions for up to ten business
days for each such extension beyond the then scheduled expiration date (the
initial scheduled expiration date being 20 business days following commencement
of the Offer), if at the then scheduled expiration date of the Offer any of the
conditions to Newco's obligation to accept for payment and pay for the Shares
shall not be satisfied or waived, until such time as such conditions are
satisfied or waived (and, at the request of the Company, Newco shall, subject to
Parent's right to terminate this Agreement pursuant to Article IX, extend the
Offer for additional periods, unless the only conditions not satisfied or
earlier waived on the then scheduled expiration date are one or more of the
Minimum Condition and the conditions set forth in paragraphs (b) and (e) of
Annex A hereto, provided that (x) if the only condition not satisfied is the
Minimum Condition, the satisfaction or waiver of all other conditions shall have
been publicly disclosed at least five business days before termination of the
Offer and (y) if paragraph (b) of Annex A hereto has not been satisfied and the
failure to so satisfy can be remedied, the Offer shall not be terminated unless
the failure is not remedied within 30 calendar days after Parent has furnished
the Company written notice of such failure), (ii) extend the Offer for any
period required by any rule, regulation, interpretation or position of the
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Securities and Exchange Commission (the "SEC") or the staff thereof applicable
to the Offer and (iii) extend the Offer for an aggregate period of not more than
5 business days beyond the latest expiration date that would otherwise be
permitted under clause (i) or (ii) of this sentence if there shall not have been
tendered sufficient Shares so that the Merger could be effected without a
meeting of the Company's shareholders in accordance with Section 180.1104 of the
Wisconsin Business Corporation Law (the "BCL"). Subject to the terms and
conditions of the Offer and this Agreement, Newco shall, and Parent shall cause
Newco to, pay for all Shares validly tendered and not withdrawn pursuant to the
Offer that Newco becomes obligated to purchase pursuant to the Offer as soon as
practicable after the expiration of the Offer.
(b) As soon as practicable on the date of commencement of the
Offer, Newco shall file with the SEC a Tender Offer Statement on Schedule 14D-1
with respect to the Offer (together with any supplement or amendments thereto,
the "Offer Documents"). The Offer Documents will comply in all material respects
with the provisions of applicable federal securities laws. Parent, Newco and the
Company each agree promptly to correct any information provided by them for use
in the Offer Documents if and to the extent that it shall have become false or
misleading in any material respect and Newco further agrees to take all steps
necessary to cause the Offer Documents as so corrected to be filed with the SEC
and to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. To the extent practicable, the
Company and its counsel shall be given an opportunity to review and comment upon
the Offer Documents and any amendments thereto prior to the filing thereof with
the SEC.
1.2 Company Action
(a) The Company hereby approves of and consents to the Offer
and represents that the Board of Directors, including all of the disinterested
directors, at a meeting duly called and held, has, subject to the terms and
conditions set forth herein, (i) approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, and that such approval
constitutes approval of the Offer, this Agreement and the Merger for purposes of
Section 180.1141 of the BCL, and (ii) resolved to recommend that the
shareholders of the Company accept the Offer, tender their Shares thereunder to
Newco and approve and adopt this Agreement and Merger; provided, that such
recommendation may be withdrawn, modified or amended if, the
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Company reasonably determines in good faith, based on the advice of outside
legal counsel to the Company, that such action is necessary in order for the
Board of Directors of the Company to comply with its fiduciary duties under
applicable law. The Company consents to the inclusion of such recommendation and
approval in the Offer Documents.
(b) The Company hereby agrees to file with the SEC as soon as
practicable on the date of commencement of the Offer a Solicitation/
Recommendation Statement on Schedule 14D-9 (together with any amendments or
supplements thereto, the "Schedule 14D-9") containing the recommendation
described in Section 1.2(a). The Schedule 14D-9 will comply in all material
respects with the provisions of applicable federal securities laws. The Company,
Parent and Newco each agree promptly to correct any information provided by them
for use in the Schedule 14D-9 if and to the extent that it shall have become
false or misleading in any material respect and the Company further agrees to
take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed
with the SEC and disseminated to the holders of Shares, in each case as and to
the extent required by applicable federal securities laws. Notwithstanding
anything to the contrary in this Agreement, the Board of Directors may withdraw,
modify or amend its recommendation if the Company reasonably determines in good
faith, based on the advice of outside legal counsel to the Company, that such
action is necessary in order for the Board of Directors of the Company to comply
with its fiduciary duties under applicable law. To the extent practicable,
Parent and its counsel shall be given an opportunity to review and comment upon
the Schedule 14D-9 and any amendments thereto prior to the filing thereof with
the SEC.
(c) In connection with the Offer, the Company will promptly
furnish Parent and Newco with mailing labels, security position listings and any
available listing or computer files containing the names and addresses of the
record holders of the Shares as of a recent date and shall furnish Newco with
such additional information and assistance (including, without limitation,
updated lists of shareholders, mailing labels and lists of securities positions)
as Newco or its agents may reasonably request in communicating the Offer to the
record and beneficial holders of Shares. Subject to the requirements of
applicable law, and except for such steps as are necessary to disseminate the
Offer Documents and any other documents necessary to consummate the Merger,
Parent, Newco and their affiliates, associates, agents and advisors shall use
the information contained in any such labels, listings and files only in
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connection with the Offer and the Merger, and, if this Agreement shall be
terminated, will deliver to the Company all copies of such information then in
their possession.
ARTICLE II
THE MERGER; EFFECTIVE TIME; CLOSING
2.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 2.2), the Company and
Newco shall consummate a merger (the "Merger") in which (a) Newco shall be
merged with and into the Company and the separate corporate existence of Newco
shall thereupon cease, (b) the Company shall be the successor or surviving
corporation in the Merger and shall continue to be governed by the laws of the
State of Wisconsin, and (c) the separate corporate existence of the Company with
all its rights, privileges, immunities, powers and franchises shall continue
unaffected by the Merger. The corporation surviving the Merger is sometimes
hereinafter referred to as the "Surviving Corporation." The Merger shall have
the effects set forth in Section 180.1106 of the BCL and Section 259 of the
Delaware General Corporation Law (the "DGCL").
2.2 Effective Time. Parent, Newco and the Company will cause
appropriate Articles of Merger (the "Articles of Merger") and an appropriate
Certificate of Merger (the "Certificate of Merger") to be executed and filed on
the date of the Closing (as defined in Section 2.3) (or on such other date as
Parent and the Company may agree) as provided in the BCL and the DGCL. The
Merger shall become effective upon the latest to occur of (i) the date on which
the Articles of Merger have been received for filing by the Department of
Financial Institutions of the State of Wisconsin, (ii) the date on which the
Certificate of Merger is filed with the Secretary of State of the State of
Delaware, or (iii) such later date as is agreed upon by the parties and
specified in the Articles of Merger and Certificate of Merger, and the time of
such effectiveness is hereinafter referred to as the "Effective Time."
2.3 Closing. The closing of the Merger (the "Closing") shall take
place (a) at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois), 000
Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, at 10:00 a.m., local time, on the first
business day following the date on which the last of the conditions set forth in
Article VIII hereof shall be fulfilled or waived in accordance
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with this Agreement or (b) at such other place, time and date as Parent and the
Company may agree.
ARTICLE III
SURVIVING CORPORATION
3.1 Articles of Incorporation. The Articles of Incorporation (the
"Articles of Incorporation") of Newco, as in effect immediately prior to the
Effective Time, shall be the Articles of Incorporation of the Surviving
Corporation.
3.2 By-Laws. The By-Laws of Newco, as in effect immediately prior to
the Effective Time, shall be the By-Laws of the Surviving Corporation.
3.3 Directors. The directors of Newco at the Effective Time shall,
from and after the Effective Time, be the initial directors of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Articles of Incorporation and By-Laws.
3.4 Officers. The officers of the Company at the Effective Time
shall, from and after the Effective Time, be the initial officers of the
Surviving Corporation until their successors have been duly elected or appointed
and qualified or until their earlier death, resignation or removal in accordance
with the Surviving Corporation's Articles of Incorporation and By-Laws.
ARTICLE IV
MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF
SHARES IN THE MERGER
4.1 Share Consideration for the Merger; Conversion or Cancellation
of Shares in the Merger. At the Effective Time, by virtue of the Merger and
without any action on the part of the holders of any Shares or capital stock of
Newco:
(a) Each Share, together with any preferred stock purchase
rights (the "Rights"), issued pursuant to the Rights Agreement, dated as of
August 23, 1995, by and between the
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Company and Firstar Trust Company, as Rights Agent (the "Rights Agreement"),
that are issued and outstanding immediately prior to the Effective Time (other
than Shares (and Rights) owned by Parent, Newco or any direct or indirect wholly
owned subsidiary of Parent (collectively, "Parent Companies") or any of the
Company's direct or indirect wholly owned subsidiaries or shares held in the
treasury of the Company) shall, by virtue of the Merger and without any action
on the part of Newco, the Company or the holder thereof, be cancelled and
extinguished and converted into the right to receive, pursuant to Section 4.3,
the Per Share Amount in cash (the "Merger Consideration"), payable to the holder
thereof, without interest thereon, less any required withholding of taxes, upon
the surrender of the certificate formerly representing such Share.
(b) Each Share issued and outstanding and owned by any of the
Parent Companies or any of the Company's direct or indirect wholly owned
subsidiaries or authorized but unissued shares held by the Company immediately
prior to the Effective Time shall cease to be outstanding, be cancelled and
retired without payment of any consideration therefor and cease to exist.
(c) Each share of common stock of Newco issued and outstanding
immediately prior to the Effective Time shall be converted into one validly
issued, fully paid and nonassessable share of common stock of the Surviving
Corporation.
4.2 Shareholders' Meeting. (a) The Company, acting through the Board
of Directors, shall, if required by applicable law:
(i) duly call, give notice of, convene and hold a
special meeting of its shareholders (the "Shareholders Meeting"), to be
held as soon as practicable after Newco shall have purchased Shares
pursuant to the Offer, for the purpose of considering and taking action
upon this Agreement;
(ii) include in the Proxy Statement the
recommendation of the Board of Directors that shareholders of the Company
vote in favor of the approval of this Agreement and the transactions
contemplated hereby unless the Company reasonably determines in good
faith, based on the advice of outside legal counsel to the Company, that
excluding such recommendation is necessary in order for the
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Board of Directors of the Company to comply with its fiduciary duties
under applicable law; and
(iii) use all reasonable efforts (A) to obtain and
furnish the information required to be included by it in the Proxy
Statement and, after consultation with Parent and Newco, respond promptly
to any comments made by the SEC with respect to the Proxy Statement and
any preliminary version thereof and cause the Proxy Statement to be mailed
to its shareholders at the earliest practicable time following the
expiration or termination of the Offer and (b) obtain the necessary
approvals by its shareholders of this Agreement and the transactions
contemplated hereby unless, the Company reasonably determines in good
faith, based on the advice of outside legal counsel to the Company, that
not taking any such action is necessary in order for the Board of
Directors of the Company to comply with its fiduciary duties under
applicable law.
At such meeting, Parent, Newco and their affiliates will vote all
Shares owned by them in favor of approval of this Agreement and the transactions
contemplated hereby.
(b) Notwithstanding the foregoing, in the event that Newco
shall acquire at least 90 percent of the then outstanding Shares, the parties
hereto agree, at the request of Newco, subject to Article VIII, to take all
necessary and appropriate action to cause the Merger to become effective, in
accordance with Section 180.1104 of the BCL, as soon as reasonably practicable
after such acquisition, without a meeting of the shareholders of the Company.
4.3 Payment for Shares in the Merger. The manner of making payment
for Shares in the Merger shall be as follows:
(a) At the Effective Time, Parent shall make available to X.X.
Xxxxxx & Co. Inc. (the "Exchange Agent"), or such other exchange agent selected
by Parent and reasonably acceptable to the Company, for the benefit of the
holders of Shares, the funds necessary to make the payments contemplated by
Section 4.1 (the "Exchange Fund"). The Exchange Agent shall, pursuant to
irrevocable instructions, deliver the Merger Consideration out of the Exchange
Fund. The Exchange Fund shall not be used for any other purpose.
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(b) As soon as reasonably practicable, after the Effective
Time, the Exchange Agent shall mail to each holder of record (other than holders
of certificates representing Shares referred to in Section 4.1(b)) of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares (the "Certificates") (i) a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent) and (ii) instructions for use in effecting
the surrender of the Certificates for payment therefor. Upon surrender of
Certificates for cancellation to the Exchange Agent, together with such letter
of transmittal duly executed and any other required documents, the holder of
such Certificates shall be entitled to receive for each of the Shares
represented by such Certificates the Merger Consideration, without any interest
thereon, less any required withholding of taxes, and the Certificates so
surrendered shall forthwith be cancelled. Until so surrendered, such
Certificates shall represent solely the right to receive the Merger
Consideration with respect to each of the Shares represented thereby. If payment
is to be made to a person other than the person in whose name a Certificate so
surrendered is registered, it shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed and otherwise in proper
form for transfer and that the person requesting such payment shall pay to the
Exchange Agent any transfer or other taxes required by reason of the payment to
a person other than the registered holder of the Certificate surrendered, or
shall establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not applicable. Until surrendered in accordance with the provisions
of this Section 4.3(b), each Certificate (other than Certificates representing
Shares referred to in Section 4.1(b)) shall represent for all purposes only the
right to receive, for each Share represented thereby, the Merger Consideration.
(c) Any portion of the Exchange Fund made available to the
Exchange Agent which remains unclaimed by the former shareholders of the Company
one year after the Effective Time shall be delivered to Thyssen Holding
Corporation, the direct parent company of Newco, upon demand of Parent, and any
former shareholders of the Company shall thereafter look only to Thyssen Holding
Corporation for payment of their claim for the Merger Consideration for the
Shares.
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4.4 Transfer of Shares After the Effective Time. No transfers of
Shares shall be made on the stock transfer books of the Company after the
Effective Time.
4.5 Stock Options.
(a) Each option granted to a Company employee, consultant or
director to acquire shares of Company Stock ("Option") that is outstanding
immediately prior to the Effective Time, whether or not then vested or
exercisable, with respect to which, as of the Effective Time, the Per Share
Amount exceeds the exercise price per share shall, effective as of immediately
prior to the Effective Time, be cancelled in exchange for a single lump sum cash
payment equal to the product of (1) the number of shares of Company Common Stock
subject to such Option and (2) the excess of the Per Share Amount over the
exercise price per share of such Option.
(b) Each Option that is outstanding immediately prior to the
Effective Time, whether or not then vested or exercisable, shall, effective as
of the Effective Time, with respect to which, as of the Effective Time, the Per
Share Amount does not exceed the exercise price per share shall, effective as of
immediately prior to the Effective Time, be cancelled and no payments shall be
made with respect thereto.
(c) Prior to the Effective Time, the Company shall use all
reasonable efforts to obtain any consents from holders of Options as are
necessary to give effect to the provisions of paragraphs (a) and (b) of this
Section 4.5.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Newco that:
5.1 Corporate Organization and Qualification. Each of the Company
and its Subsidiaries (as defined in Section 10.10) is a corporation duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation and is qualified and in good standing
as a foreign corporation in each jurisdiction where the properties owned, leased
or operated, or the business conducted, by it require such qualification, except
where failure to so qualify or be in good
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standing is not reasonably likely to have a Material Adverse Effect (as defined
in Section 10.10). Each of the Company and its Subsidiaries has all requisite
power and authority (corporate or otherwise) to own its properties and to carry
on its business as it is now being conducted. The Company has heretofore made
available to Parent complete and correct copies of its and its Significant
Subsidiaries' Articles of Incorporation and By-Laws or other organizational
documents as in effect on the date hereof. Schedule 5.1 contains a correct and
complete list of each jurisdiction where the Company and each of its Significant
Subsidiaries is organized and qualified to do business.
5.2 Capitalization. The authorized capital stock of the Company
consists of (i) 70,000,000 shares of Company Common Stock which, as of June 6,
1997, 31,043,365 Shares were issued and outstanding and (ii) 3,000,000 shares of
Class A Preferred Stock, par value $.10 share (the "Preferred Stock"), none of
which is issued or outstanding. All of the outstanding shares of capital stock
of the Company have been duly authorized and validly issued and are fully paid
and nonassessable (except as provided in Section 180.0622(2)(b) of the BCL and
judicial interpretations thereof). As of June 6, 1997, (i) 1,643,483 shares of
Company Common Stock were reserved for issuance upon exercise of outstanding
options pursuant to the Option Plans, and (ii) 700,000 shares of Preferred Stock
were reserved for issuance in connection with the Rights. Except as set forth on
Schedule 5.2, as of the date hereof all outstanding shares of capital stock of
the Company's Significant Subsidiaries are owned by the Company or a direct or
indirect wholly owned subsidiary of the Company, free and clear of all liens,
charges, encumbrances, claims and options of any nature. Except as set forth
above and on Schedule 5.2 (which includes a correct and complete list of each
outstanding option to purchase Shares, including the holder, date of grant,
exercise price and number of Shares subject thereto), there are not, as of the
date hereof, any outstanding or authorized options, warrants, calls, rights
(including preemptive rights), commitments or any other agreements of any
character which the Company or any of its Significant Subsidiaries is a party
to, or may be bound by, requiring it to issue, transfer, sell, purchase, redeem
or acquire any shares of capital stock or any securities or rights convertible
into, exchangeable for, or evidencing the right to subscribe for, any shares of
capital stock of the Company or any of its Significant Subsidiaries. The Company
does not have outstanding any bonds, debentures, notes or other obligations the
holders of which have the right to vote (or which are convertible into or
exercisable
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for securities having the right to vote) with the shareholders of
the Company on any matter.
5.3 Authority Relative to This Agreement.
(a) The Company has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement and the consummation by the
Company of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby (other than, with respect
to the Merger, the approval of this Agreement by the shareholders of the
Company, including Newco, in accordance with the BCL and the Company's Articles
of Incorporation). This Agreement has been duly and validly executed and
delivered by the Company and, assuming this Agreement constitutes the valid and
binding agreement of Parent and Newco, constitutes the valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except that the enforcement hereof may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding in
equity or at law).
(b) The Board of Directors of the Company has duly and validly
approved and taken all corporate action required to be taken by the Board of
Directors for the consummation of the transactions (including the Offer, the
acquisition of Shares pursuant to the Offer and the Merger) contemplated herein
in accordance with the terms hereof, including but not limited to, all actions
required to (i) render the provisions of Section 180.1141 of the BCL restricting
business combinations with "interested stockholders" inapplicable to such
transactions and (ii) amend the Rights Agreement to provide that certificates
with respect to the Rights will not be distributed and the Rights will not
become exercisable as a result of any of the execution of this Agreement, the
commencement or consummation of the Offer or the consummation of the Merger.
5.4 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement nor the consummation by the Company of the
transactions contemplated hereby will (a) conflict with or result in any breach
of any provision of the
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respective Articles of Incorporation or By-Laws of the Company or any of its
Significant Subsidiaries; (b) require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or regulatory
authority, except (i) in connection with the applicable requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (ii) pursuant to the applicable requirements of the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder
(the "Exchange Act"), (iii) the filing of the Articles of Merger pursuant to the
BCL and appropriate documents with the relevant authorities of other states in
which the Company or any of its subsidiaries is authorized to do business, (iv)
in connection with any state or local tax which is attributable to the
beneficial ownership of the Company's or its subsidiaries' real property, if any
(collectively, the "Gains Taxes"), (v) as may be required by any applicable
state securities or "blue sky" laws or state takeover laws, (vi) such filings
and consents as may be required under any environmental, health or safety law or
regulation pertaining to any notification, disclosure or required approval
triggered by the Merger or the transactions contemplated by this Agreement,
(vii) such filings, consents, approvals, orders, registrations and declarations
as may be required under the laws of any foreign country in which the Company or
any of its subsidiaries conducts any business or owns any assets, or (viii)
where the failure to obtain such consent, approval, authorization or permit, or
to make such filing or notification, would not be reasonably likely to, in the
aggregate, have a Material Adverse Effect or prevent, materially delay or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement; (c) except as set forth in Schedule 5.4(c),
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 or lien or other charge or encumbrance) under any
of the terms, conditions or provisions of any note, license, agreement or other
instrument or obligation to which the Company or any of its Significant
Subsidiaries or any of their assets may be bound, except for such violations,
breaches and defaults (or rights of termination, cancellation or acceleration or
lien or other charge or encumbrance) as to which requisite waivers or consents
have been obtained or which, in the aggregate, would not be reasonably likely to
have a Material Adverse Effect or prevent, materially delay or materially impair
the ability of the Company to consummate the transactions contemplated by this
Agreement; or (d) assuming the consents, approvals, authorizations or permits
and filings or notifications referred to in this Section 5.4 are duly and timely
obtained or
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made and, with respect to the Merger, the approval of this Agreement by the
Company's shareholders has been obtained, violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Company or any of its
subsidiaries or to any of their respective assets, except for violations which
would not in the aggregate be reasonably likely to have a Material Adverse
Effect or prevent, materially delay or materially impair the ability of the
Company to consummate the transactions contemplated by this Agreement. Schedule
5.4 set forth a correct and complete list of all agreements, leases, contracts,
notes, mortgages, indentures, arrangements or other obligations binding upon the
Company or any of its Subsidiaries pursuant to which consents or waivers are or
may be required prior to consummation of the transactions contemplated by this
Agreement, except where the failure to obtain such consents or waivers would not
in the aggregate be reasonably likely to have a Material Adverse Effect or
prevent, materially delay or materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement.
5.5 SEC Reports; Financial Statements.
(a) The Company has filed all periodic reports and other
documents required to be filed by it under the Exchange Act with the SEC since
April 1, 1996 pursuant to the federal securities laws and the SEC rules and
regulations thereunder, all of which, as of their respective filing dates,
complied in all material respects with all applicable requirements of the
Exchange Act (as such post-April 1, 1996 documents have been amended since the
time of their filing, collectively, the "Company SEC Reports"). None of the
Company SEC Reports filed prior to the date hereof, including, without
limitation, any financial statements or schedules included therein, as of their
respective dates or, if amended, as of the date of the last such amendment,
contained, and any Company SEC Reports filed subsequent to the date hereof, will
not 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, or will be made, not misleading.
(b) The consolidated balance sheets and the related statements
of consolidated income, shareholders' equity and cash flows (including the
related notes thereto) of the Company included in the Company SEC Reports filed
prior to the date hereof, and to be included in the Company SEC Reports filed on
or subsequent to the date hereof, as of their respective
-14-
filing dates, complied, and will comply, in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared, and will be prepared, in
accordance with generally accepted accounting principles applied on a basis
consistent with prior periods (except as otherwise noted therein), and present,
and will present, fairly the consolidated financial position of the Company and
its consolidated subsidiaries as of their respective dates, and the consolidated
results of their operations and their cash flows for the periods presented
therein (subject, in the case of the unaudited interim financial statements, to
normal year-end adjustments).
5.6 Absence of Certain Changes or Events. Except as disclosed in the
Company SEC Reports filed prior to the date hereof, as set forth on Schedule 5.6
or as contemplated by this Agreement, since December 31, 1996 the business of
the Company has been carried on only in the ordinary and usual course, and there
has not been any change in the financial condition, properties, business or
results of operations of the Company and its Subsidiaries or any development or
combination of developments of which management of the Company and its
Subsidiaries has knowledge that, individually or in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect.
5.7 Litigation and Liabilities. Except as set forth on Schedule 5.7
or as disclosed in the Company SEC Reports filed prior to the date hereof, there
are no (i) civil, criminal or administrative actions, suits, claims, hearings,
investigations or proceedings pending or, to the knowledge of management of the
Company and its Subsidiaries, threatened against the Company or any of its
Subsidiaries or (ii) obligations or liabilities, whether or not accrued,
contingent or otherwise and whether or not required to be disclosed in the
Company SEC Reports, or any other facts or circumstances of which management of
the Company and its Subsidiaries has knowledge that could result in any claims
against, or obligations or liabilities of, the Company or any of its
Subsidiaries, except, in the case of clauses (i) or (ii), for those that are
not, individually or in the aggregate, reasonably likely to have a Material
Adverse Effect or prevent or materially burden or materially impair the ability
of the Company to consummate the transactions contemplated by this Agreement.
5.8 Information Supplied. None of the information supplied by the
Company in writing for inclusion in the Offer Documents or provided by the
Company in the Schedule 14D-9 will,
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at the respective times that the Offer Documents and the Schedule 14D-9 or any
amendments or supplements thereto are filed with the SEC and are first published
or sent or given to holders of Shares, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
5.9 Taxes. Except as set forth on Schedule 5.9, the Company and each
of its Subsidiaries (or any consolidated, combined, unitary, aggregate or other
similar group for tax purposes of which any of the Company of its Subsidiaries
is a member) (i) have prepared in good faith and duly and timely filed (taking
into account any extension of time within which to file) all material Tax
Returns (as defined below) required to be filed by any of them on or before the
date of this Agreement and all such filed material Tax Returns are complete and
accurate in all material respects; (ii) have paid all Taxes (as defined below)
that are required to be paid or that the Company or any of its Subsidiaries are
obligated to withhold from amounts owing to any employee, creditor or third
party on or before the date of this Agreement, except with respect to matters
contested in good faith and have recorded as reserves on the consolidated
balance sheets all Taxes which have accrued before the date of this Agreement
but which are not yet due and payable; and (iii) have not waived any statute of
limitations with respect to Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency. Except as set forth on Schedule 5.9,
as of the date hereof, there are not pending or, to the knowledge of management
of the Company and its Subsidiaries, threatened in writing, any audits,
examinations, investigations or other proceedings in respect of Taxes or Tax
matters. Except as set forth on Schedule 5.9, there are not, to the knowledge of
management of the Company and its Subsidiaries, any unresolved questions or
claims concerning the Company's or any of its Subsidiaries' Tax liability that
are reasonably likely to have a Material Adverse Effect. There are no liens for,
or in respect of, Taxes on any of the assets of the Company or its Subsidiaries,
except with respect to matters being contested in good faith, other than liens
for current Taxes which are not yet due or payable. Except as set forth on
Schedule 5.9, neither the Company nor any Subsidiary owes any amount pursuant to
any written or unwritten Tax sharing or indemnity agreement, or will have any
liability after the date hereof for any amounts due under or in respect of any
such agreement. The Company has made available to Parent true and correct copies
of the United States federal income Tax Returns filed by the Company and its
Subsidiaries for each of the last three fiscal years.
-16-
As used in this Agreement, (i) the term "Tax" (including, with
correlative meaning, the terms "Taxes", and "Taxable") includes all federal,
state, local and foreign income, profits, franchise, gross receipts,
environmental, customs duty, capital stock, severance, stamp, payroll, sales,
employment, unemployment, disability, use, property, withholding, excise,
production, value added, occupancy and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts and any interest in respect of such penalties and
additions, and (ii) the term "Tax Return" includes all returns and reports
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be supplied to a Tax authority relating to
Taxes.
5.10 Employee Benefit Plans; Labor Matters.
(a) All benefit and compensation plans, contracts, policies or
arrangements covering current employees or former employees of the Company and
its subsidiaries (the "Employees") and current or former directors of the
Company, including, but not limited to, "employee benefit plans" within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and deferred compensation, stock option, stock purchase,
stock appreciation rights, stock based, incentive and bonus plans (the "Benefit
Plans"), are listed in Schedule 5.10. True and complete copies of all Benefit
Plans, including, but not limited to, any trust instruments and insurance
contracts forming a part of any Benefit Plans, and all amendments thereto have
been provided or made available to Purchaser.
(b) Except as set forth on Schedule 5.10, all Benefit Plans,
other than "multiemployer plans" within the meaning of Section 3(37) of ERISA,
covering Employees (the "Plans"), to the extent subject to ERISA, are in
substantial compliance with ERISA. Except as set forth on Schedule 5.10, each
Plan which is an "employee pension benefit plan" within the meaning of Section
3(2) of ERISA ("Pension Plan") and which is intended to be qualified under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
has received a favorable determination letter from the Internal Revenue Service
with respect to "TRA" (as defined in Section 1 of Rev. Proc. 93-39), and
management of the Company and its Subsidiaries is not aware of any circumstances
likely to result in revocation of any such favorable determination letter. There
is no material pending or threatened litigation relating to the Plans. Neither
-17-
the Company nor any of its subsidiaries has engaged in a transaction with
respect to any Plan that, assuming the taxable period of such transaction
expired as of the date hereof, could subject the Company or any subsidiary to a
tax or penalty imposed by either Section 4975 of the Code or Section 502(i) of
ERISA in an amount which would be material.
(c) No liability under Subtitle C or D of Title IV of ERISA
has been or is expected to be incurred by the Company or any of its subsidiaries
with respect to any ongoing, frozen or terminated "single-employer plan", within
the meaning of Section 4001(a)(15) of ERISA, currently or formerly maintained by
any of them, or the single-employer plan of any entity which is considered one
employer with the Company under Section 4001 of ERISA or Section 414 of the Code
(an "ERISA Affiliate"). The Company and the subsidiaries have not incurred and
do not expect to incur any withdrawal liability with respect to a multiemployer
plan under Subtitle E of Title IV of ERISA (regardless of whether based on
contributions of an ERISA Affiliate). No notice of a "reportable event", within
the meaning of Section 4043 of ERISA for which the 30-day reporting requirement
has not been waived, has been required to be filed for any Pension Plan or by
any ERISA Affiliate within the 12-month period ending on the date hereof or will
be required to be filed in connection with the transactions contemplated by this
Agreement.
(d) Except as set forth on Schedule 5.10, all contributions
required to be made under the terms of any Benefit Plan have been timely made or
have been reflected on the financial statements included in the Company SEC
Reports. Neither any Pension Plan nor any single-employer plan of an ERISA
Affiliate has an "accumulated funding deficiency" (whether or not waived) within
the meaning of Section 412 of the Code or Section 302 of ERISA and no ERISA
Affiliate has an outstanding funding waiver. Neither the Company nor any of its
subsidiaries has provided, or is required to provide, security to any Pension
Plan or to any single-employer plan of an ERISA Affiliate pursuant to Section
401(a)(29) of the Code.
(e) Except as set forth on Schedule 5.10, under each Pension
Plan which is a single-employer plan, as of the last day of the most recent plan
year ended prior to the date hereof, the actuarially determined present value of
all "benefit liabilities", within the meaning of Section 4001(a)(16) of ERISA
(as determined on the basis of the actuarial assumptions contained in the Plan's
most recent actuarial valuation), did not exceed the then current value of the
assets of such Plan, and
-18-
there has been no material change in the financial condition of such Plan since
the last day of the most recent plan year. The withdrawal liability of the
Company and its subsidiaries under each Benefit Plan which is a multiemployer
plan to which the Company, any of its subsidiaries or an ERISA Affiliate has
contributed during the preceding 12 months, determined as if a "complete
withdrawal", within the meaning of Section 4203 of ERISA, had occurred as of the
date hereof, does not exceed $100,000.
(f) Neither the Company nor any of its subsidiaries has any
obligations for retiree health and life benefits under any Benefit Plan, except
as set forth on Schedule 5.10. The Company and its subsidiaries have, at all
times since the effective date of any Benefit Plan providing retiree health and
life benefits, reserved the right to amend or terminate any such Benefit Plan at
any time and have communicated this right to all participants.
(g) Except as indicated on Schedule 5.10, the consummation of
the transactions contemplated by this Agreement will not (x) entitle any
employees of the Company or any of the subsidiaries to severance pay, (y)
accelerate the time of payment or vesting or trigger any payment of compensation
or benefits under, increase the amount payable or trigger any other material
obligation pursuant to, any of the Benefit Plans or (z) result in any breach or
violation of, or a default under, any of the Benefit Plans.
(h) All Benefit Plans covering current or former non-U.S.
Employees comply in all material respects with applicable local law. The Company
and its subsidiaries have no material unfunded liabilities with respect to any
Pension Plan that covers such non-U.S. Employees.
(i) The Company has made available to Parent all collective
bargaining or other labor union contracts to which the Company or any of its
Significant Subsidiaries is a party applicable to persons employed by the
Company or its Significant Subsidiaries as of the date of this Agreement. As of
the date of this Agreement, there is no pending or threatened in writing labor
dispute, strike or work stoppage against the Company or any of its subsidiaries
which may interfere with the respective business activities of the Company or
its subsidiaries, except where such dispute, strike or work stoppage would not
have a Material Adverse Effect.
-19-
5.11 Environmental Laws and Regulations. Except as disclosed in
Schedule 5.11 and except as would not have a Material Adverse Effect: (i) the
Company and its Subsidiaries have complied at all times with all applicable
Environmental Laws; (ii) all properties currently owned or operated by the
Company or any Subsidiary (including soils, groundwater, surface water,
buildings or other structures) are not contaminated with any Hazardous
Substance; (iii) no property formerly owned or operated by the Company or any
Subsidiary has been contaminated with any Hazardous Substance during or prior to
such period of ownership or operation; (iv) neither the Company nor any
Subsidiary is subject to liability for any Hazardous Substance disposal or
contamination on any third party property other than for matters that have been
fully resolved; (v) neither the Company nor any Subsidiary has caused any
release or threat of release of any Hazardous Substance; (vi) neither the
Company nor any Subsidiary has received any notice, demand, letter, claim or
request for information indicating that it may be in violation of or subject to
liability under any Environmental Law other than for matters that have been
fully resolved; (vii) neither the Company nor any Subsidiary is subject to any
order, decree, injunction or other agreement with any Governmental Entity
relating to liability under any Environmental Law; (viii) none of the properties
of the Company or any Subsidiary contain any underground storage tanks,
asbestos-containing material, or polychlorinated biphenyls; (ix) there are no
circumstances or conditions involving the Company or any Subsidiary that could
reasonably be expected to result in any claims, liability, costs or restrictions
on the ownership, use, or transfer of any property pursuant to any Environmental
Law; and (x) the Company has made available to Buyer copies of all material
environmental reports, studies, assessments, sampling data and other
environmental information in its possession relating to the Company or any
Subsidiary or any of their current or former properties or operations. As used
herein, the term "Environmental Law" means any federal, state or local law,
regulation, order, decree, permit, authorization, opinion, common law or agency
requirement relating to: (A) the protection, investigation or restoration of the
environment, health and safety relating to Hazardous Substances, or natural
resources, (B) the handling, use, presence, disposal, release or threatened
release of any Hazardous Substance or (C) noise, odor, wetlands, pollution,
contamination or any injury or threat of injury to persons or property relating
to Hazardous Substances. As used herein, the term "Hazardous Substance" means
any substance that is: (A) listed, classified or regulated pursuant to any
Environmental Law; or (B) any petroleum product or by-product,
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asbestos-containing material, lead-containing paint or plumbing, polychlorinated
biphenyls or radioactive materials or radon.
5.12 Brokers and Finders. Except for the fees and expenses payable
to Credit Suisse First Boston Corporation, which fees and expenses are reflected
in their agreements with the Company, true and complete copies of which have
been furnished to Parent, the Company has not employed any investment banker,
broker, finder, consultant or intermediary in connection with the transactions
contemplated by this Agreement which would be entitled to any investment
banking, brokerage, finder's or similar fee or commission in connection with
this Agreement or the transactions contemplated hereby.
5.13 Opinions of Financial Advisors. The Company has received the
opinion of Credit Suisse First Boston Corporation, dated June 8, 1997, to the
effect that, as of such date, the cash consideration to be received by the
shareholders of the Company pursuant to the Offer and the Merger is fair to such
shareholders from a financial point of view.
5.14 Compliance with Laws; Permits. Except as set forth in the
Company SEC Reports filed prior to the date hereof and as set forth on Schedule
5.14, the businesses of each of the Company and its Subsidiaries have not been,
and are not being, conducted in violation of any federal, state, local or
foreign law, statute, ordinance, rule, regulation, judgment, order, injunction,
decree, arbitration award, agency requirement, license or permit of any
Governmental Entity (collectively, "Laws"), except for violations or possible
violations that, individually or in the aggregate, are not reasonably likely to
have a Material Adverse Effect or prevent or materially burden or materially
impair the ability of the Company to consummate the transactions contemplated by
this Agreement. Except as set forth in the Company SEC Reports filed prior to
the date hereof and as set forth on Schedule 5.14, no investigation or review by
any Governmental Entity with respect to the Company or any of its Subsidiaries
is pending or, to the knowledge of management of the Company and its
Subsidiaries, threatened, nor has any Governmental Entity indicated an intention
to conduct the same. The Company and its Subsidiaries each has all permits,
licenses, franchises, variances, exemptions, orders and other governmental
authorizations, consents and approvals necessary to conduct its business as
presently conducted except those the absence of which are not, individually or
in the aggregate, reasonably likely to have a Material Adverse Effect or prevent
or materially burden or materially impair the ability of the Company to
consummate the
-21-
Merger and the other transactions contemplated by this Agreement.
5.15 Takeover Statutes. The Board of Directors of the Company has
taken all actions required to render the provisions of Section 180.1140 through
Section 180.1144 of the BCL inapplicable to the transactions contemplated by
this Agreement, including the Offer and the Merger, pursuant to the terms of
this Agreement. The Company has elected, pursuant to its Articles of
Incorporation not to be subject to the control share voting restrictions
contained in Section 180.1150 of the BCL are inapplicable to the Company.
5.16 Labor Matters. Except as listed on Schedule 5.16, neither the
Company nor any of its Subsidiaries is a party to or otherwise bound by any
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization, nor is the Company or any of its
Subsidiaries the subject of any material proceeding asserting that the Company
or any of its Subsidiaries has committed an unfair labor practice or is seeking
to compel it to bargain with any labor union or labor organization nor is there
pending or, to the knowledge of management of the Company and its Subsidiaries,
threatened, nor has there been for the past three years, any material labor
strike, dispute, walk-out, work stoppage, slow-down or lockout involving
directly the Company or any of its Subsidiaries. The Company has previously made
available to Parent correct and complete copies of all labor and collective
bargaining agreements to which the Company or any of its Subsidiaries is party
or by which any of them are otherwise bound.
5.17 Insurance. Schedule 5.17 contains a correct and complete list
of all material insurance policies of the Company and its Subsidiaries. All
material fire and casualty, general liability, business interruption, product
liability, and sprinkler and water damage insurance policies maintained by the
Company or any of its Subsidiaries are with reputable insurance carriers,
provide customary coverage for all normal risks incident to the business of the
Company and its Subsidiaries and their respective properties and assets, and are
customary in character and amount at least equivalent to that carried by persons
engaged in similar businesses and subject to the same or similar perils or
hazards, except for any such failures to maintain insurance policies that,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect.
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5.18 Intellectual Property. Except as disclosed in Company SEC
Reports filed prior to the date hereof or as set forth on Schedule 5.18,
(i) The Company and/or each of its Subsidiaries
owns, or is licensed or otherwise possesses valid rights to use all
patents, trademarks, trade names, service marks, copyrights, and any
applications therefor, technology, know-how, computer software programs or
applications, and tangible or intangible proprietary information or
materials that are used in the business of the Company and its
Subsidiaries as currently conducted, except for any such failures to own,
be licensed or possess rights to use that, individually or in the
aggregate, are not reasonably likely to have a Material Adverse Effect,
and to the knowledge of management of the Company and its Subsidiaries all
registrations for patents, trademarks, trade names, service marks and
copyrights owned by the Company and/or its Subsidiaries are valid and
subsisting, except as are not reasonably likely to have a Material Adverse
Effect.
(ii) Except as disclosed in Company SEC Reports
filed prior to the date hereof, as set forth on Schedule 5.18 or as is not
reasonably likely to have a Material Adverse Effect:
(A) the Company is not, nor will it be as a result of the execution
and delivery of this Agreement or the performance of its obligations
hereunder, in violation of any licenses, sublicenses and other
agreements as to which the Company is a party and pursuant to which
the Company is authorized to use any third-party patents,
trademarks, service marks, and copyrights ("Third-Party Intellectual
Property Rights");
(B) no claims against the Company and/or its Subsidiaries with
respect to (I) the patents, registered and material unregistered
trademarks and service marks, registered copyrights, trade names,
and any applications therefor owned by the Company or any its
Subsidiaries (the "Company Intellectual Property Rights"); (II) any
trade secret material to the Company; or (III) Third-Party
Intellectual Property Rights are currently pending or, to the
knowledge of
-23-
management of the Company and its Subsidiaries, are threatened by
any Person;
(C) management of the Company and its Subsidiaries does not know of
any valid grounds for any bona fide claims (I) to the effect that
the manufacture, sale, licensing or use of any product as now used,
sold or licensed or proposed for use, sale or license by the Company
or any of its Subsidiaries, infringes on any copyright, patent,
trademark, service xxxx or trade secret; (II) against the use by
the Company or any of its Subsidiaries, of any trademarks, trade
names, trade secrets, copyrights, patents, technology, know-how or
computer software programs and applications used in the business of
the Company or any of its Subsidiaries as currently conducted; (III)
challenging the ownership, or validity of any of the Company
Intellectual Property Rights or other trade secret material to the
Company; or (IV) challenging the license or right to use of the
Third-Party Intellectual Rights by the Company or any of its
Subsidiaries; and
(D) to the knowledge of management of the Company and its
Subsidiaries, there is no unauthorized use, infringement or
misappropriation of any of the Company Intellectual Property Rights
material to the Company by any third party, including any employee
or former employee of the Company or any of its Subsidiaries.
5.19 Rights Plan. The Company has amended the Rights Agreement to
provide that Parent shall not be deemed an Acquiring Person (as defined in the
Rights Agreement) and that the Rights will not separate from the Shares as a
result of entering into this Agreement, commencing or consummating the Offer or
consummating the Merger pursuant to the terms of this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT
AND NEWCO
Each of Parent and Newco represent and warrant jointly and severally
to the Company that:
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6.1 Corporate Organization and Qualification. Each of Parent and
Newco is a corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation and is qualified
and in good standing as a foreign corporation in each jurisdiction where the
properties owned, leased or operated, or the business conducted, by it require
such qualification, except where the failure to so qualify or be in such good
standing would not have a Material Adverse Effect.
6.2 Authority Relative to This Agreement. Each of Parent and Newco
has the requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This Agreement
and the consummation by Parent and Newco of the transactions contemplated hereby
have been duly and validly authorized by the respective Boards of Directors of
Parent and Newco and by Thyssen Holding Corporation as sole shareholder of
Newco, and no other corporate proceedings on the part of Parent, Newco and
Thyssen Holding Corporation are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by each of Parent and Newco and, assuming
this Agreement constitutes the valid and binding agreement of the Company,
constitutes valid and binding agreements of each of Parent and Newco,
enforceable against each of them in accordance with its terms, except that the
enforcement hereof may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (b) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity).
6.3 Consents and Approvals: No Violation. Neither the execution and
delivery of this Agreement by Parent or Newco nor the consummation by Parent and
Newco of the transactions contemplated hereby will (a) conflict with or result
in any breach of any provision of the Articles of Incorporation or the By-Laws,
respectively, of Parent or Newco; (b) require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, except (i) in connection with the applicable
requirements of the HSR Act, (ii) pursuant to the applicable requirements of the
Exchange Act, (iii) the filing of the Articles of Merger pursuant to the BCL and
appropriate documents with the relevant authorities of other states in which
Parent is authorized to do business, (iv) as may be required by any applicable
state securities or "blue
-25-
sky" laws or state takeover laws, (v) the filing of a Pre-Merger Notification
Form with the German Federal Cartel Office pursuant to the German Act Against
Restraints of Competition (the "AARC") and such other filings, consents,
approvals, orders, registrations, declarations and filings as may be required
under the laws of any foreign country in which Parent or any of its Subsidiaries
conducts any business or owns any assets, (vi) such filings and consents as may
be required under any environmental, health or safety law or regulation
pertaining to any notification, disclosure or required approval triggered by
the Merger or the transactions contemplated by this Agreement or (vii) where the
failure to obtain such consent, approval, authorization or permit, or to make
such filing or notification, would not in the aggregate have a Material Adverse
Effect; (c) except as set forth in Schedule 6.4(c), 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
or lien or other charge or encumbrance) under any of the terms, conditions or
provisions of any note, license, agreement or other instrument or obligation to
which Parent or any of its Significant Subsidiaries may be bound, except for
such violations, breaches and defaults (or rights of termination, cancellation
or acceleration or lien or other charge or encumbrance) as to which requisite
waivers or consents have been obtained or which, in the aggregate, would not
have a Material Adverse Effect; or (d) assuming the consents, approvals,
authorizations or permits and filings or notifications referred to in this
Section 6.4 are duly and timely obtained or made, violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Parent or any of
its subsidiaries or to any of their respective assets, except for violations
which would not in the aggregate have a Material Adverse Effect.
6.4 Financing. Either Parent or Newco will have at the time required
sufficient funds available to purchase all of the Shares outstanding on a fully
diluted basis and to pay all fees and expenses related to the transactions
contemplated by this Agreement.
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ARTICLE VII
ADDITIONAL COVENANTS AND AGREEMENTS
7.1 Conduct of Business of the Company.
(a) The Company agrees that during the period from the date of
this Agreement to the Effective Time (unless the other party shall otherwise
agree in writing and except as otherwise contemplated by this Agreement), the
Company will, and will cause each of its Significant Subsidiaries to, conduct
its operations according to its ordinary and usual course of business consistent
with past practice. Without limiting the generality of the foregoing, and except
as otherwise permitted in this Agreement or set forth on Schedule 7.1, prior to
the Effective Time, neither the Company nor any of its Significant Subsidiaries
will, without the prior written consent of Parent:
(i) except for shares to be issued or delivered
pursuant to the Company's Option Plans, issue, deliver, sell, dispose of,
pledge or otherwise encumber, or authorize or propose the issuance, sale,
disposition or pledge or other encumbrance of (A) any additional shares of
capital stock of any class (including the Shares), or any securities or
rights convertible into, exchangeable for, or evidencing the right to
subscribe for any shares of capital stock, or any rights, warrants,
options, calls, commitments or any other agreements of any character to
purchase or acquire any shares of capital stock or any securities or
rights convertible into, exchangeable for, or evidencing the right to
subscribe for, any shares of capital stock, or (B) any other securities in
respect of, in lieu of, or in substitution for, Shares outstanding on the
date hereof;
(ii) except pursuant to the Company's stock-based
employee benefit plans, redeem, purchase or otherwise acquire, or propose
to redeem, purchase or otherwise acquire, any of its outstanding Shares;
(iii) split, combine, subdivide or reclassify any
Shares or declare, set aside for payment or pay any dividend, or make any
other actual, constructive or deemed distribution in respect of any Shares
or otherwise make any payments to shareholders in their capacity as such,
other than the declaration
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and payment of regular quarterly cash dividends not in excess of $0.03 per
Share for any quarterly period and except for dividends by a wholly owned
subsidiary of the Company;
(iv) adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company or any of its
subsidiaries (other than the Merger);
(v) adopt any amendments to its Articles of
Incorporation or By-Laws or alter through merger, liquidation,
reorganization, restructuring or in any other fashion the corporate
structure or ownership of any subsidiary of the Company;
(vi) make any material acquisition, by means of
merger, consolidation or otherwise, or material disposition (other than
disposition of assets in the ordinary course of business, consistent with
past practice), of assets or securities;
(vii) other than in the ordinary course of
business consistent with past practice, incur any indebtedness for
borrowed money or guarantee any such indebtedness or make any loans,
advances or capital contributions to, or investments in, any other person,
other than to the Company or any wholly owned subsidiary of the Company;
(viii) grant any material increases in the
compensation of any of its directors, officers or key employees, except in
the ordinary course of business and in accordance with past practice;
(ix) pay or agree to pay any pension, retirement
allowance or other employee benefit not required or contemplated by any of
the existing benefit, severance, termination, pension or employment plans,
agreements or arrangements as in effect on the date hereof to any director
or officer of the Company, whether past or present;
(x) enter into any new or materially amend any
existing employment or severance or
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termination agreement with any such director or officer;
(xi) except in the ordinary course of business
consistent with past practice or as may be required to comply with
applicable law, become obligated under any new pension plan, welfare plan,
multiemployer plan, employee benefit plan, severance plan, benefit
arrangement, or similar plan or arrangement, which was not in existence on
the date hereof, or amend any such plan or arrangement in existence on
the date hereof if such amendment would have the effect of materially
enhancing any benefits thereunder;
(xii) authorize or make any individual capital
expenditure in excess of $1,000,000 or authorize or make capital
expenditures in excess of $15,000,000 in the aggregate;
(xiii) settle or compromise any material claims or
litigation or, except in the ordinary and usual course of business,
modify, amend or terminate any of its material Contracts or waive, release
or assign any material rights or claims;
(xiv) make any material change, other than in the
ordinary course of business and consistent with past practice or as
required by applicable law, regulation or change in generally accepted
accounting principles, in accounting policies or procedures applied by the
Company (including tax accounting policies and procedures);
(xv) except as otherwise required by applicable
law or regulation, make any tax election or permit any insurance policy
naming it as a beneficiary or a loss payable payee to be canceled or
terminated, except in the ordinary course of business;
(xvi) take any action to amend or alter the Rights
Agreement in any manner adverse to Parent's, Newco's or the Company's
ability to commence or consummate the transactions contemplated by this
Agreement pursuant to the terms hereof; or
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(xvii) authorize, or enter into any contract,
agreement, commitment or arrangement to do any of the foregoing.
7.2 Acquisition Proposals. The Company agrees that neither it nor
any of its Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall direct and use its best efforts to cause
its and its Subsidiaries' employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, initiate, solicit, encourage or
otherwise facilitate any inquiries or the making of any proposal or offer with
respect to a merger, reorganization, share exchange, consolidation or similar
transaction involving, or any purchase of all or any significant portion of the
assets or equity securities of, it or any of its Subsidiaries (any such proposal
or offer being hereinafter referred to as an "Acquisition Proposal"). The
Company further agrees that neither it nor any of its Subsidiaries nor any of
the officers and directors of it or its Subsidiaries shall, and that it shall
direct and use its best efforts to cause its and its Subsidiaries' employees,
agents and representatives (including any investment banker, attorney or
accountant retained by it or any of its Subsidiaries) not to, directly or
indirectly, engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any Person relating to an
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal; provided, however, that nothing contained in
this Agreement shall prevent the Company or its Board of Directors from (A)
complying with Rules 14d-9 and 14e-2 promulgated under the Exchange Act with
regard to an Acquisition Proposal; (B) providing information in response to a
request therefor by a Person who has made an unsolicited bona fide written
Acquisition Proposal if the Board of Directors takes reasonable steps to protect
the confidentiality of such information; (C) engaging in any negotiations or
discussions with any Person who has made an unsolicited bona fide written
Acquisition Proposal; or (D) recommending such an Acquisition Proposal to the
shareholders of the Company, if (i) in each such case referred to in clause (B),
(C) or (D) above, the Company reasonably determines in good faith based upon the
advice of outside legal counsel to the Company that such action is necessary in
order for the Board of Directors of the Company to comply with its fiduciary
duties under applicable law, and (ii) in each case referred to in clause (C) or
(D) above, the Board of Directors of the Company determines in good faith (after
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consultation with its financial advisor) that such Acquisition Proposal would,
if consummated, result in a transaction more favorable to the Company's
shareholders from a financial point of view than the transaction contemplated by
this Agreement (any such more favorable Acquisition Proposal being referred to
in this Agreement as a "Superior Proposal"). The Company agrees that it will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. The Company agrees that it will take the necessary
steps to promptly inform the individuals or entities referred to in the first
sentence hereof of the obligations undertaken in this Section 7.2. The Company
agrees that it will notify Parent immediately if any such inquiries, proposals
or offers are received by, any such information is requested from, or any such
discussions or negotiations are sought to be initiated or continued with, any of
its representatives indicating, in connection with such notice, the name of such
Person and the material terms and conditions of any proposals or offers. The
Company also agrees that it will promptly request each Person that has
heretofore executed a confidentiality agreement in connection with its
consideration of acquiring it or any of its Subsidiaries to return all
confidential information heretofore furnished to such Person by or on behalf of
it or any of its Subsidiaries.
7.3 Approvals and Consents; Cooperation. Subject to the other
provisions of this Agreement, the parties hereto shall use their respective best
efforts, and cooperate with each other, to obtain as promptly as practicable all
governmental and third party authorizations, approvals, consents or waivers,
including, without limitation, pursuant to the HSR Act and the AARC, required in
order to consummate the transactions contemplated by this Agreement, including,
without limitation, the Offer and the Merger.
7.4 Further Assurances. Subject to the other provisions of this
Agreement, 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,
including, without limitation, the Offer and the Merger, which efforts shall
include, without limitation, Parent and Newco using their best efforts to
prevent any preliminary or permanent injunction or other order by a court of
competent jurisdiction or governmental entity relating to consummating the
transactions
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contemplated by this Agreement, including, without limitation, under the
antitrust laws, and, if issued, to appeal any such injunction or order through
the appellate court or body for the relevant jurisdiction; provided, however,
that nothing in this Agreement shall require, or be construed to require, Parent
to proffer to, or agree to, sell or hold separate and agree to sell, before or
after the Effective Time, any assets, businesses, or interest in any assets or
businesses of Parent, the Company or any of their respective affiliates (or to
consent to any sale, or agreement to sell, by the Company of any of its assets
or businesses) or to agree to any material changes or restriction in the
operations of any such assets or businesses. If at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, the parties hereto shall take or cause to be taken all such
necessary action, including, without limitation, the execution and delivery of
such further instruments and documents as may be reasonably requested by the
other party for such purposes or otherwise to consummate and make effective the
transactions contemplated hereby.
7.5 Access to Information. Upon reasonable notice, the Company shall
(and shall cause each of its subsidiaries to) afford to officers, employees,
counsel, accountants and other authorized representatives of Parent
("Representatives"), in order to evaluate the transactions contemplated by this
Agreement, reasonable access, during normal business hours throughout the period
prior to the Effective Time, to its properties, books and records and, during
such period, shall (and shall cause each of its subsidiaries to) furnish
promptly to such Representatives all information concerning its business,
properties and personnel as may reasonably be requested. Parent agrees that it
will not, and will cause its Representatives not to, use any information
obtained pursuant to this Section 7.5 for any purpose unrelated to the
consummation of the transactions contemplated by this Agreement. The
Confidentiality Agreement, dated April 30, 1997 (the "Confidentiality
Agreement"), by and between the Company and Parent shall apply with respect to
information furnished by the Company, its subsidiaries and the Company's
officers, employees, counsel, accountants and other authorized representatives
hereunder.
7.6 Publicity. The parties will consult with each other and will
mutually agree upon any press releases or public announcements pertaining to the
Offer or the Merger and shall not issue any such press releases or make any such
public announcements prior to such consultation and agreement, except as
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may be required by applicable law or by obligations pursuant to any listing
agreement with any national securities exchange, in which case the party
proposing to issue such press release or make such public announcement shall use
its reasonable efforts to consult in good faith with the other party before
issuing any such press releases or making any such public announcements.
7.7 Indemnification of Directors and Officers.
(a) The Articles of Incorporation and By-Laws of the Surviving
Corporation shall contain the provisions with respect to indemnification set
forth in the Articles of Incorporation and By-Laws of the Company on the date of
this Agreement, which provisions shall not be amended, repealed or otherwise
modified for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who at any time
prior to the Effective Time were directors or officers of the Company in respect
of actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the transactions contemplated by this Agreement), unless
such modification is required by law; provided, that in the event any claim or
claims are asserted or made within such six-year period, all rights to
indemnification in respect of any such claim or claims shall continue until
disposition of any and all such claims.
(b) Parent shall cause to be maintained in effect for the
Indemnified Parties (as defined below) for not less than five years the current
policies of directors, and officers, liability insurance and fiduciary liability
insurance maintained by the Company and the Company's subsidiaries with respect
to matters occurring at or prior to the Effective Time (including, without
limitation, the transactions contemplated by this Agreement); provided, that
Parent may substitute therefor policies of substantially the same coverage
containing terms and conditions which are no less advantageous to the Company's
present or former directors or officers or other employees covered by such
insurance policies prior to the Effective Time (the "Indemnified Parties").
Notwithstanding the foregoing, in no case shall Parent or the Surviving
Corporation be required to pay an annual premium for such insurance greater than
125% of the last annual premium paid prior to the date hereof. Should payment of
the maximum amount of premium provided for in the previous sentence not allow
the purchase of an amount of such insurance equal to the amount provided under
the current policies, Parent shall purchase the maximum amount of insurance
available for 125% of the last annual premium.
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(c) This Section 7.7 is intended to benefit the Indemnified
Parties and shall be binding on all successors and assigns of Parent, Newco, the
Company and the Surviving Corporation.
7.8 Employees
(a) Except as set forth on Schedule 7.8(a), for a period of
one year following the Effective Time, Parent agrees to provide employee benefit
plans and programs for the benefit of employees of the Company and its
Subsidiaries (excluding plans or programs which provide for issuance of Shares
or options on Shares) that are in the aggregate no less favorable to such
employees than the Company Plans. All service credited to each employee by the
Company through the Effective Time shall be recognized by Parent for purposes of
eligibility and vesting under any employee benefit plan provided by Parent for
the benefit of the employees.
(b) Parent shall cause the Surviving Corporation to honor
(without modification) and assume the written employment agreements, severance
agreements and other agreements listed on Schedule 7.8(b), all as in effect on
the date of this Agreement.
(c) Parent shall maintain in effect the Company Severance Plan
for a period of two years immediately following the Effective Time and the
Company Severance Plan shall not be terminated or adversely amended during such
two-year period.
(d) Parent shall maintain in effect the Company Management
Incentive Compensation Plan and the Company Profit Improvement Plan until
December 31, 1997 and such plans shall not be terminated or adversely amended
until after such date.
(e) Parent shall maintain in effect the Xxxxxxxx & Xxxxx
Foundation, Inc. for a period of two years immediately following the Effective
Time and, during such period, shall operate the Xxxxxxxx & Xxxxx Foundation,
Inc. on substantially the same basis (which shall include selection of
beneficiaries based on the same geographical and other attributes) as the
Xxxxxxxx & Xxxxx Foundation, Inc. was operated during the twelve-month period
immediately preceding the Effective Time; provided, however that neither Parent
nor any of its subsidiaries nor the Company or any of its subsidiaries shall be
required to expend any funds in connection with the operation of the Xxxxxxxx &
Xxxxx Foundation, Inc.
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7.9 Notification of Certain Matters. The Company shall give prompt
notice to Parent of: (a) any notice of, or other communication relating to, a
default or event that, with notice or lapse of time or both, would become a
default, received by the Company or any of its subsidiaries subsequent to the
date of this Agreement and prior to the Effective Time, under any Contract to
which the Company or any of its subsidiaries is a party or is subject, which
default is reasonably likely to have a Material Adverse Effect; and (b) any
material adverse change in the financial condition, properties, business or
results of operations of the Company and its subsidiaries taken as a whole or
the occurrence of any event which is reasonably likely to result in any such
change. Each of the Company and Parent shall give prompt notice to the other
party of any notice or other communication from any third party alleging that
the consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement.
7.10 Company Board.
(a) Promptly (but in any event within two business days) upon
the purchase by Parent of a majority of the outstanding Shares pursuant to the
Offer, either (a) a majority of the members of the Board of Directors of the
Company shall resign and the remaining members of the Board of Directors of the
Company shall fill all of the Board positions so vacated with persons designated
by Parent or (b) the size of the Board of Directors of the Company shall be
expanded and the vacant seats filled with persons designated by Parent so that
Parent's designees shall constitute a majority of the members of the Board of
Directors of the Company. In either case, at all times thereafter through the
Effective Time a majority of the members of the Board of Directors of the
Company shall be persons designated by Parent.
(b) The Company's obligation to appoint designees to the Board
of Directors of the Company shall be subject to Section 14(f) of the Exchange
Act and Rule 14e-1 promulgated thereunder. The Company shall promptly take all
actions required pursuant to such Section and Rule in order to fulfill its
obligations under this Section 7.10 and shall include in the Schedule 14D-9 such
information with respect to the Company and its officers and directors as is
required under Section 14(f) and Rule 14e-1 to fulfill such obligations. Parent
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or Newco shall supply to the Company and be solely responsible for any
information with respect to either of them and their nominees, officers,
directors and affiliates required by such Section 14(f) and Rule 14e-1.
(c) Following the election of designees of Newco pursuant to
this Section 7.10, prior to the Effective Time, any amendment of this Agreement
or the Articles of Incorporation or By-laws of the Company, any termination of
this Agreement by the Company, any extension by the Company of the time for the
performance of any of the obligations or other acts of Parent or Newco or waiver
of any of the Company's rights hereunder shall require the concurrence of a
majority of the directors of the Company then in office who are directors as of
the date hereof or persons designated by such directors and who were neither
designated by Newco nor employees of the Company ("Continuing Directors"). Prior
to the Effective Time, the Company and Newco shall use all reasonable efforts to
ensure that the Company's Board of Directors at all times includes at least
three Continuing Directors.
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
8.1 Conditions to Each Party's Obligations to Effect the Merger. The
respective obligations of each party to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) Shareholder Approval. To the extent required by applicable
law, this Agreement shall have been duly approved by the shareholders of the
Company in accordance with applicable law and the Articles of Incorporation of
the Company; provided that Parent and Newco shall vote all of their Shares in
favor of the Merger.
(b) Injunction. There shall not be in effect any statute,
rule, regulation, executive order, decree, ruling or injunction or other order
of a court or governmental or regulatory agency of competent jurisdiction
directing that the transactions contemplated herein not be consummated;
provided, however, that prior to invoking this condition each party shall use
its best efforts to have any such decree, ruling, injunction or order vacated.
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(c) Governmental Filings and Consents. All governmental
consents, orders and approvals legally required for the consummation of the
Merger and the transactions contemplated hereby shall have been obtained and be
in effect at the Effective Time, except where the failure to obtain any such
consent would not reasonably be expected to have a Material Adverse Effect on
Parent and its subsidiaries, considered as whole (assuming the Merger had taken
place), and the waiting periods under the HSR Act shall have expired or been
terminated.
(d) The Offer. Newco shall have purchased Shares pursuant to
the Offer.
ARTICLE IX
TERMINATION; AMENDMENT; WAIVER
9.1 Termination by Mutual Consent. This Agreement may be terminated
and the Offer and the Merger may be abandoned at any time prior to the Effective
Time, by the mutual written consent of Parent and the Company.
9.2 Termination by Either Parent or the Company. This Agreement may
be terminated and the Offer and the Merger may be abandoned by Parent or the
Company if (i) any governmental body or regulatory authority of the United
States of America or the Federal Republic of Germany shall have commenced legal
action or provided formal notice to Parent, Newco or the Company that it is
about to commence legal action, with respect to the transactions contemplated by
this Agreement, or (ii) Newco shall not have purchased Shares pursuant to the
Offer on or prior to December 31, 1997; provided, that the right to terminate
this Agreement pursuant to this Section 9.2 shall not be available to any party
whose failure to fulfill any of its obligations under this Agreement results in
such failure to purchase.
9.3 Termination by the Company. This Agreement may be terminated and
the Offer and the Merger may be abandoned at any time prior to the Effective
Time, by action of the Board of Directors of the Company:
(a) if (i) the Company, based on the advice of outside legal
counsel to the Company that such action is necessary in order for the Board of
Directors of the Company to comply with its fiduciary duties under applicable
law, subject to complying with the terms of this Agreement, enters into a
binding
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written agreement concerning a transaction that constitutes a Superior Proposal
and the Company notifies Parent in writing that it intends to enter into such an
agreement, attaching the most current version of such agreement to such notice,
(ii) Parent does not make, within two business days of receipt of the Company's
written notification of its intention to enter into a binding agreement for a
Superior Proposal, an offer to enter into an amendment to this Agreement such
that the Board of Directors of the Company determines, in good faith after
consultation with its financial advisors, that this Agreement as so amended is
at least as favorable, from a financial point of view, to the shareholders of
the Company as the Superior Proposal and (iii) the Company prior to such
termination pays to Parent in immediately available funds any fees required to
be paid pursuant to Section 9.5. The Company agrees (A) that it will not enter
into a binding agreement referred to in clause (i) above until at least the
third business day after it has provided the notice to Parent required thereby
and (B) to notify Parent promptly if its intention to enter into a written
agreement referred to in its notification shall change at any time after giving
such notification.
(b) if (i) Newco shall have (x) failed to commence the Offer
within five business days following the date of the initial public announcement
of the Offer or (y) terminated the Offer without purchasing Shares pursuant to
the Offer, or (ii) there has been a material breach by Parent or Newco of any
representation, warranty, covenant or agreement contained in this Agreement that
is not curable or, if curable, is not cured within 30 calendar days after
written notice of such breach is given by the Company to the party committing
such breach.
9.4 Termination by Parent. This Agreement may be terminated and the
Offer and Merger may be abandoned at any time prior to the Effective Time by
action of the Board of Directors of Parent if (i) the Board of Directors of the
Company shall have withdrawn or adversely modified its approval or
recommendation of this Agreement or failed to reconfirm its recommendation of
this Agreement within five business days after a written request by Parent to do
so, (ii) there has been a breach by the Company of any representation, warranty,
covenant or agreement contained in this Agreement that is qualified as to
materiality or there has been a material breach of any other representation,
warranty, covenant or agreement contained in this Agreement, in any case that is
not curable or, if curable, is not cured within 30 calendar days after written
notice of such breach is given by Parent to the party committing such breach, or
(iii) on a
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scheduled expiration date all conditions to Newco's obligation to accept for
payment and pay for Shares pursuant to the Offer shall have been satisfied or
waived other than the Minimum Condition and Newco terminates the Offer without
purchasing Shares pursuant to the Offer, provided that the satisfaction or
waiver of all other conditions shall have been publicly disclosed at least five
business days before termination of the Offer, or (iv) Newco shall have
otherwise terminated the Offer in accordance with the terms of this Agreement,
including Annex A, without purchasing shares pursuant to the Offer.
9.5 Effect of Termination and Abandonment. (a) In the event of
termination of this Agreement and the abandonment of the Merger pursuant to this
Article IX, this Agreement (other than, with respect to the parties hereto, the
obligations pursuant to this Section 9.5 and Sections 10.1 and 10.2) shall
become void and of no effect with no liability on the part of any party hereto
(or of any of its directors, officers, employees, agents, legal and financial
advisors or other representatives); provided, however, except as otherwise
provided herein, no such termination shall relieve any party hereto of any
liability or damages resulting from any wilful breach of this Agreement.
(b) In the event that (x) this Agreement is terminated by the
Company pursuant to Section 9.3(a) or (y) this Agreement is terminated by Parent
pursuant to Section 9.4(i) then the Company shall promptly, but in no event
later than two days after the date of such termination or event, pay Parent a
termination fee of $20,000,000 (the "Termination Fee") and shall promptly, but
in no event later than two days after being furnished documentation in respect
thereto by Parent, pay all of the charges and expenses, including those of the
Exchange Agent, actually incurred by Parent or Newco in connection with this
Agreement and the transactions contemplated by this Agreement up to a maximum
amount of $3,000,000 (the "Expense Reimbursement"), in each case payable by wire
transfer of same day funds. If (A) this Agreement is terminated by the Parent
pursuant to Section 9.4(iii) or by the Company pursuant to Section 9.3(b)(i)(y)
when the Offer is terminated by Parent under the circumstances contemplated by
Section 9.4(iii), and (B) within one year after such termination either (X) the
Company enters into an agreement to merge with another company (other than a
merger pursuant to which the shareholders of the Company will acquire more than
50% of the voting securities of such surviving corporation) or enters into an
agreement pursuant to which more than 50% of the Shares are acquired by another
person or pursuant to which new voting securities are issued to another person
or to
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the shareholders of another company which will aggregate more than 50% of the
outstanding voting securities of the Company after such issuance, or (Y) another
Person acquires more than 50% of the Shares, then the Company shall promptly,
but in no event later than two days after the date of any of the events in (X)
or (Y), pay Parent the Termination Fee and the Expense Reimbursement. The
Company acknowledges that the agreements contained in this Section 9.5(b) are an
integral part of the transactions contemplated by this Agreement, and that,
without these agreements, Parent and Newco would not enter into this Agreement;
accordingly, if the Company fails to promptly pay the amount due pursuant to
this Section 9.5(b), and, in order to obtain such payment, Parent or Newco
commences a suit which results in a judgment against the Company for the fee set
forth in this paragraph (b), the Company shall pay to Parent or Newco its costs
and expenses (including attorneys' fees) in connection with such suit, together
with interest on the amount of the fee at the prime rate of Citibank, N.A. in
effect on the date such payment was required to be made.
9.6 Extension; Waiver. Subject to the applicable provisions of the
BCL and the provisions of this Agreement, including Section 7.10, at any time
prior to the Effective Time, each of Parent, Newco and the Company may (i)
extend the time for the performance of any of the obligations or other acts of
the other party, (ii) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any document, certificate
or writing delivered pursuant hereto or (iii) waive compliance by the other
party with any of the agreements or conditions contained herein. Any agreement
on the part of either party hereto to any such extension or waiver shall be
valid only if set forth in any instrument in writing signed on behalf of such
party. The failure of either party hereto to assert any of its rights hereunder
shall not constitute a waiver of such rights.
ARTICLE X
MISCELLANEOUS AND GENERAL
10.1 Payment of Expenses. Except as provided in Section 9.5(b),
whether or not the Offer and the Merger shall be consummated, each party hereto
shall pay its own expenses incident to preparing for, entering into and carrying
out this Agreement and the consummation of the transactions contemplated hereby.
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10.2 Survival of Representations and Warranties; Survival of
Confidentiality. The representations and warranties made herein shall not
survive beyond the earlier of (i) termination of this Agreement or (ii) the
Effective Time, in the case of the representations and warranties of Parent or
Newco or the purchase of Shares by Newco pursuant to the Offer, in the case of
the representations and warranties of the Company. This Section 10.2 shall not
limit any covenant or agreement of the parties hereto which by its terms
contemplates performance after the Effective Time or the Purchase of Shares by
Newco pursuant to the Offer. The Confidentiality Agreement shall survive any
termination of this Agreement and the provisions of such Confidentiality
Agreement shall apply to all information and material delivered by any party
hereunder.
10.3 Modification or Amendment. Subject to the applicable provisions
of the BCL and the provisions of this Agreement, including Section 7.10, at any
time prior to the Effective Time, the parties hereto may modify or amend this
Agreement by written agreement executed and delivered by duly authorized
officers of the respective parties.
10.4 Waiver of Conditions. Subject to the applicable provisions of
the BCL and the provisions of this Agreement, including Section 7.10, the
conditions to each of the parties' obligations to consummate the Merger are for
the sole benefit of such party and may be waived by such party in whole or in
part.
10.5 Counterparts. For the convenience of the parties hereto, this
Agreement may be executed in any number of counterparts, each such counterpart
being deemed to be an original instrument, and all such counterparts shall
together constitute the same agreement.
10.6 Governing Law. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Wisconsin, without giving
effect to the principles of conflicts of law thereof.
(b) Each of the parties hereto (i) consents to submit itself
to the personal jurisdiction of any Federal court located in the State of
Delaware or any Delaware state court in the event any dispute arises out of
this Agreement or any of the transactions contemplated hereby, (ii) agrees that
it will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court and (iii) agrees that
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it will not bring any action relating to this Agreement or any of the
transactions contemplated hereby in any court other than a Federal or state
court sitting in the State of Delaware.
(c) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 10.6.
10.7 Notices. Any notice, request, instruction or other document to
be given hereunder by any party to the other parties shall be in writing and
delivered personally or sent by overnight courier with confirmation of next day
delivery or by facsimile transmission (with a confirming copy sent by overnight
courier), as follows:
(a) If to the Company, to
Xxxxxxxx & Xxxxx, Inc.
000 Xxxx Xxxxxx
Xxxx xx Xxx, Xxxxxxxxx 00000-0000
Attn: Xxxxxx X. Isles
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
(Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Xx.
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
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(b) If to Parent, to
Thyssen Aktiengesellschaft
Xxxxxx-Xxxxxxx-XxxxXx 0
Xxxxxxxxxx
Xxxxxxxxxxxxx: Postfach 10 10 10,
D-40001 Dusseldorf
Attn: Xxxx Xxxxxx
000 00 000 000 0000 (telephone)
011 49 211 824 8376 (telecopier)
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxx
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
(c) If to Newco, to
TAQU, Inc.
c/o The Xxxx Company
0000 Xxxx Xxx Xxxxxx Xxxx
Xxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxx
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxxxx
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
or to such other persons or addresses as may be designated in writing by the
party to receive such notice.
10.8 Entire Agreement; Assignment. This Agreement and the
Confidentiality Agreement (a) constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all other prior
agreements and understandings, both
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written and oral, among the parties or any of them with respect to the subject
matter hereof, and (b) shall not be assigned by operation of law or otherwise.
10.9 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their respective successors
and assigns. Nothing in this Agreement, express or implied, other than the right
to receive the consideration payable in the Merger pursuant to Article IV hereof
is intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement;
provided, however, that the provisions of Section 7.7 shall inure to the benefit
of and be enforceable by the Indemnified Parties and the provisions of Section
7.8(b) shall inure to the benefit of and be enforceable by the officers and
directors of the Company.
10.10 Certain Definitions. As used herein:
(a) "Significant Subsidiary" shall have the meaning ascribed
to it under Rule 1-02 of Regulation S-X of the SEC.
(b) "Subsidiary" shall mean, when used with reference to any
entity, any corporation a majority of the outstanding voting securities of which
are owned directly or indirectly by such entity.
(c) "Material Adverse Effect" shall mean any adverse change or
changes in the financial condition, properties, business or results of
operations of the Company or any of its subsidiaries or Parent or any of its
subsidiaries, as the case may be, which individually or in the aggregate is or
are material to the Company and its subsidiaries, taken as a whole, or Parent
and its subsidiaries, taken as a whole, as the case may be, other than any
change or effect arising out of general economic conditions.
10.11 Obligation of Parent. Whenever this Agreement requires Newco
to take any action, such requirement shall be deemed to include an undertaking
on the part of Parent to cause Newco to take such action and a guarantee of the
performance thereof.
10.12 Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or
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enforceability of any other provisions of this Agreement, each of which shall
remain in full force and effect.
10.13 Captions. The Article, Section and paragraph captions herein
are for convenience of reference only, do not constitute part of this Agreement
and shall not be deemed to limit or otherwise affect any of the provisions
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective duly authorized officers as of the date first
above written.
THYSSEN AKTIENGESELLSCHAFT
By: /s/ Xx. Xxxxxxx Xxxxxxx
--------------------------------------
Name: Xx. Xxxxxxx Xxxxxxx
Title: Member of The Executive Board
By: /s/ Xx. Xxxxxx Blockfeld
--------------------------------------
Name: Xx. Xxxxxx Blockfeld
Title: Authorized Officer
XXXXXXXX & XXXXX, INC.
By: /s/ Xxxxxx X. Isles
--------------------------------------
Name: Xxxxxx X. Isles
Title: Chairman and Chief Executive
Officer
TAQU, INC.
By: /s/ Xxxx Xxxxxx
--------------------------------------
Name: Xxxx Xxxxxx
Title: President
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Annex A
Certain Conditions of the Offer. Notwithstanding any other provision
of the Offer and provided that Newco shall not be obligated to accept for
payment any Shares until (i) expiration of all applicable waiting periods under
the HSR Act and the AARC and (ii) the Minimum Condition shall have been
satisfied, Newco shall not be required to accept for payment or pay for, or may
delay the acceptance for payment of or payment for, any Shares tendered pursuant
to the Offer, or may, subject to the terms of the Agreement, terminate or amend
the Offer if on or after June 11, 1997, and at or before the time of payment for
any of such Shares, any of the following events shall occur (or become known to
Parent) and remain in effect:
(a) there shall have occurred and be continuing as of the then
scheduled expiration date of the Offer (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange, the Nasdaq National Market or stock exchanges in the Federal
Republic of Germany, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or the
Federal Republic of Germany, (iii) a commencement or escalation of a war,
armed hostilities or other international or national calamity directly
involving the United States or the Federal Republic of Germany, (iv) any
material limitation (whether or not mandatory) by any governmental or
regulatory authority, agency or commission, domestic or foreign
("Governmental Entity"), on the extension of credit by banks or other
lending institutions in the United States or the Federal Republic of
Germany, (v) or in the case of any of the foregoing existing at the time
of the commencement of the Offer, a material acceleration or worsening
thereof;
(b) (i) the Company shall have breached or failed to perform in any
material respect any of its obligations, covenants or agreements under the
Agreement, (ii) any representation or warranty of the Company set forth in
the Agreement which is qualified by materiality shall not have been true
and correct as of the date of the Agreement and as of the then scheduled
expiration date of the Offer as though made on and as of the then
scheduled expiration date of the Offer or (iii) any
representation or warranty of the Company set forth in the Agreement which
is not qualified by materiality shall not have been true and correct in
all material respects as of the date of this Agreement and as of the then
scheduled expiration date of the Offer as though made on and as of the
then scheduled expiration date of the Offer, except in the case of clauses
(ii) and (iii) of this paragraph (b) for representations and warranties
which by their terms speak only as of another date, which representations
and warranties, if qualified by materiality, shall not have been true and
correct as of such date and, if not qualified, shall not have been true
and correct in all material respects as of such other date;
(c) any court or Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order which is in effect and which (i)
restricts (other than restrictions which in the aggregate do not have a
Material Adverse Effect on Parent, Newco or the Company or which do not
materially restrict the ability of Parent and Newco to consummate the
Offer and the Merger as originally contemplated by Parent and Newco),
prevents or prohibits consummation of the Offer or the Merger, (ii)
prohibits or limits (other than limits which in the aggregate do not have
a Material Adverse Effect on Parent, Newco or the Company or which do not
materially limit the ability of Parent to own and operate all of the
business and assets of Parent and the Company after the consummation of
the transactions contemplated by the Offer and the Agreement) the
ownership or operation by the Company, Parent or any of their subsidiaries
of all or any material portion of the business or assets of the Company
and its subsidiaries taken as a whole, or as a result of the Offer or the
Merger compels the Company, Parent or any of their subsidiaries to dispose
of or hold separate all or any material portion of their respective
business or assets, (iii) imposes limitations (other than limits which in
the aggregate do not have a Material Adverse Effect on Parent, Newco or
the Company or which do not materially limit the ability of Parent to own
and operate all of the business and assets of Parent and the Company after
the consummation of the transactions contemplated by the Offer and the
Agreement) on the ability of Parent or
A-2
any subsidiary of Parent to exercise effectively full rights of ownership
of any Shares, including, without limitation, the right to vote any Shares
acquired by Newco pursuant to the Offer or otherwise on all matters
properly presented to the Company's shareholders including, without
limitation, the approval and adoption of the Agreement and the
transactions contemplated thereby, (iv) requires divestiture by Parent or
any affiliate of Parent of any Shares or (v) otherwise materially
adversely affects the financial condition, business or results of
operations of the Company and its subsidiaries taken as a whole;
(d) all consents, registrations, approvals, permits, authorizations,
notices, reports or other filings required to be obtained or made by the
Company, Parent or Newco with or from any governmental entity in
connection with the execution and delivery of the Agreement, the Offer and
the consummation of the transactions contemplated by the Agreement shall
not have been made or obtained as of the then scheduled expiration date of
the Offer (other than the failure to receive any consent, registration,
approval, permit or authorization or to make any notice, report or other
filing that, in the aggregate, is not reasonably likely to have a Material
Adverse Effect on Parent, Newco or the Company, or would not prevent the
consummation of the Offer or the Merger);
(e) any change or development in the financial condition,
properties, business or results of operations of the Company and its
Subsidiaries that, individually or in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect;
(f) the Board of Directors of the Company (or a special committee
thereof) shall have withdrawn or amended, or modified in a manner adverse
to Parent and Newco its recommendation of the Offer or the Merger, or
shall have endorsed, approved or recommended any other Acquisition
Proposal; or
(g) the Agreement shall have been terminated by the Company or
Parent or Newco in accordance with its terms or Parent or Newco shall have
reached an agreement or understanding in writing with the Company
A-3
providing for termination or amendment of the Offer or delay in payment
for the Shares;
(h) the German Federal Cartel Office shall have notified Parent, or
Parent shall have become aware, that it will object to the transactions
contemplated by this Agreement;
which, in the reasonable judgment of Parent and Newco, in any such case, and
regardless of the circumstances (including any action or inaction by Parent or
Newco) giving rise to any such conditions, makes it inadvisable to proceed with
the Offer and/or with such acceptance for payment of or payment for Shares.
The foregoing conditions (other than the Minimum Condition) are for
the sole benefit of Parent and Newco and may be asserted by Parent or Newco
regardless of the circumstances (including any action or inaction by Parent or
Newco) giving rise to such condition or may be waived by Parent or Newco, in
whole or in part at any time and from time to time in its sole discretion.
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