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EXHIBIT 1
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
By and Among
XXXXXXX ELECTRIC CO.
EMERSUB LXXIV, INC.
and
XXXXXX INDUSTRIES, INC.
MAY 12, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I
THE OFFER................................................................................................1
SECTION 1.1. The Offer...................................................................................1
SECTION 1.2. Company Actions.............................................................................3
ARTICLE II
THE MERGER...............................................................................................4
SECTION 2.1. The Merger..................................................................................4
SECTION 2.2. Effective Time..............................................................................4
SECTION 2.3. Effects of the Merger.......................................................................4
SECTION 2.4. Certificate of Incorporation and By-laws....................................................5
SECTION 2.5. Directors...................................................................................5
SECTION 2.6. Officers....................................................................................5
SECTION 2.7. Effect on Capital Stock.....................................................................5
(a) Capital Stock of Sub........................................................................5
(b) Cancellation of Treasury Stock and Parent Owned Stock.......................................5
(c) Conversion of Shares........................................................................5
(d) Shares of Dissenting Stockholders...........................................................5
SECTION 2.8. Exchange of Certificates....................................................................6
(a) Paying Agent................................................................................6
(b) Parent to Provide Funds.....................................................................6
(c) Exchange Procedure..........................................................................6
(d) No Further Ownership Rights in Shares.......................................................7
SECTION 2.9. Withholding Rights..........................................................................7
SECTION 2.10. Lost Certificates..........................................................................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES...........................................................................7
SECTION 3.1. Representations and Warranties of the Company...............................................7
(a) Organization, Standing and Power............................................................8
(b) Subsidiaries. ..........................................................................8
(c) Capital Structure...........................................................................8
(d) Authority; Non-contravention................................................................9
(e) SEC Documents. .........................................................................10
(f) Information Supplied.......................................................................11
(g) Absence of Certain Changes or Events.......................................................11
(h) State Takeover Statutes; Absence of Supermajority Provision................................12
(i) Brokers....................................................................................12
(j) Litigation.................................................................................12
(i)
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(k) Employee Benefit Matters...................................................................12
(l) Taxes......................................................................................15
(m) No Excess Parachute Payments...............................................................16
(n) Environmental Matters......................................................................16
(o) Compliance with Laws.......................................................................17
(p) Material Contracts and Agreements..........................................................17
(q) Title to Properties........................................................................17
(r) Intellectual Property......................................................................17
(s) Labor Matters..............................................................................18
(t) Undisclosed Liabilities....................................................................18
(u) Board Recommendation.......................................................................18
SECTION 3.2. Representations and Warranties of Parent and Sub..........................................18
(a) Organization; Standing and Power...........................................................19
(b) Authority; Non-contravention...............................................................19
(c) Information Supplied.......................................................................20
(d) Brokers....................................................................................20
(e) Litigation.................................................................................20
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS...............................................................20
SECTION 4.1. Conduct of Business of the Company........................................................20
(a) Ordinary Course............................................................................20
(b) Changes in Employment Arrangements.........................................................23
(c) Severance..................................................................................23
(d) Other Actions..............................................................................23
ARTICLE V
ADDITIONAL AGREEMENTS...................................................................................23
SECTION 5.1. Stockholder Approval; Preparation of Proxy Statement......................................23
SECTION 5.2. Access to Information.....................................................................24
SECTION 5.3. Reasonable Efforts; Notification..........................................................26
SECTION 5.4. Employee Benefit Matters..................................................................27
SECTION 5.5. Indemnification...........................................................................29
SECTION 5.6. Fees and Expenses.........................................................................29
SECTION 5.7. Public Announcements......................................................................30
SECTION 5.8. Stockholder Litigation....................................................................30
SECTION 5.9. Directors.................................................................................30
SECTION 5.10. Tax Certification........................................................................31
ARTICLE VI
CONDITIONS PRECEDENT....................................................................................31
SECTION 6.1. Conditions to Each Party's Obligation to Effect the Merger................................31
(a) Stockholder Approval.......................................................................31
(ii)
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(b) Other Approvals. .........................................................................31
(c) No Injunctions or Restraints...............................................................31
SECTION 6.2. Conditions to Obligation of Parent and Sub.................................................31
SECTION 6.3. Condition to Obligation of the Company.....................................................32
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER.......................................................................32
SECTION 7.1. Termination................................................................................32
SECTION 7.2. Procedure for Termination, Amendment, Extension or Waiver..................................33
SECTION 7.3. Effect of Termination......................................................................34
SECTION 7.4. Amendment..................................................................................34
SECTION 7.5. Extension; Waiver..........................................................................34
ARTICLE VIII
SPECIAL PROVISIONS AS TO CERTAIN MATTERS................................................................34
SECTION 8.1. Takeover Defenses of the Company and Standstill Agreements.................................34
SECTION 8.2. No Solicitation............................................................................34
SECTION 8.3. Fee and Expense Reimbursements.............................................................37
ARTICLE IX
GENERAL PROVISIONS......................................................................................38
SECTION 9.1. Nonsurvival of Representations and Warranties..............................................38
SECTION 9.2. Notices....................................................................................38
SECTION 9.3. Definitions................................................................................39
SECTION 9.4. Interpretation.............................................................................40
SECTION 9.5. Counterparts...............................................................................40
SECTION 9.6. Entire Agreement; No Third-Party Beneficiaries.............................................40
SECTION 9.7. Governing Law..............................................................................40
SECTION 9.8. Assignment.................................................................................40
SECTION 9.9. Enforcement of the Agreement...............................................................41
SECTION 9.10. WAIVER OF JURY TRIAL......................................................................41
SECTION 9.11. Performance by Sub........................................................................41
SECTION 9.12. Severability..............................................................................41
(iii)
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AGREEMENT AND PLAN OF MERGER dated as of May 12, 1999, among XXXXXXX
ELECTRIC CO., a Missouri corporation ("Parent"), EMERSUB LXXIV, INC., a
Delaware corporation ("Sub") and a wholly owned subsidiary of Parent, and
XXXXXX INDUSTRIES, INC., a Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the acquisition of the Company by Parent on the terms and
subject to the conditions of this Agreement and Plan of Merger (this
"Agreement");
WHEREAS, in furtherance of such acquisition, Parent proposes to cause
Sub to make a tender offer (as it may be amended from time to time as permitted
hereunder, the "Offer") to purchase all the issued and outstanding shares of
Common Stock, par value $1.25 per share, of the Company, including the related
right as to each Share to purchase one one-hundredth of a share of Series A
Junior Participating Preferred Stock, $1.00 par value, of the Company
(singularly a "Right" and collectively, the "Rights") (singularly, a share of
such Common Stock including the related Right, a "Share" and collectively, the
"Shares"), at a price per Share of $21.25 net to the seller in cash, upon the
terms and subject to the conditions of this Agreement; and the Board of
Directors of the Company has adopted resolutions approving the Offer and the
Merger (as hereinafter defined) and recommending that the Company's
stockholders accept the Offer;
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the merger of Sub with and into the Company (the
"Merger"), upon the terms and subject to the conditions of this Agreement,
whereby each issued and outstanding Share not owned directly or indirectly by
Parent or the Company, except Shares held by persons who object to the Merger
and comply with all the provisions of Delaware law concerning the right of
holders of Shares to dissent from the Merger and require appraisal of their
Shares ("Dissenting Stockholders"), will be converted into the right to receive
the per share consideration paid to holders of Shares pursuant to the Offer;
and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties and agreements in connection with the Offer and the
Merger and also to prescribe various conditions to the Offer and the Merger;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreement herein contained, the parties agree
as follows:
ARTICLE I
THE OFFER
SECTION 1.1. The Offer. (a) Subject to the provisions of this
Agreement, as promptly as practicable but in no event later than the fifth
business day from and including the date of public announcement of the terms of
this Agreement, Sub shall, and Parent shall cause Sub to,
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commence the Offer. Unless earlier terminated in accordance with the provisions
of this Agreement, the Offer shall not expire before 12:00 midnight on the date
that is 20 business days from and including the date the Offer is commenced.
The obligation of Sub to, and of Parent to cause Sub to, commence the Offer
shall be subject to the conditions set forth in clauses (a) through (h) set
forth in Exhibit A (any of which may be waived by Sub in its sole discretion,
and it being understood for all purposes of this Agreement that the fact that
any condition specified in the first paragraph of Exhibit A shall not have been
satisfied shall not, without more, constitute a failure of any other condition
set forth in Exhibit A) and to the terms and conditions of this Agreement. The
obligation of Sub to accept for payment, and pay for, any Shares tendered
pursuant to the Offer shall be subject to the conditions set forth in Exhibit A
(any of which may be waived by Sub in its sole discretion, provided that,
without the consent of the Company, Sub shall not waive the Minimum Tender
Condition (as defined in Exhibit A)) and to the terms and conditions of this
Agreement. Sub expressly reserves the right to modify the terms of the Offer,
except that, without the consent of the Company, Sub shall not (i) reduce the
number of Shares subject to the Offer, (ii) reduce the price per Share to be
paid pursuant to the Offer, (iii) modify or add to the conditions set forth in
Exhibit A, (iv) except as provided in the next two sentences, extend the Offer,
(v) change the form of consideration payable in the Offer or (vi) otherwise
amend the Offer in any manner materially adverse to the Company's stockholders.
Notwithstanding the foregoing, Sub may, without the consent of the Company, (i)
extend the Offer if at the scheduled expiration date of the Offer any of the
conditions to Sub's obligation to purchase Shares (as set forth in Exhibit A)
shall not be satisfied, (ii) extend the Offer for any period required by any
rule, regulation, interpretation or position of the Securities and Exchange
Commission (the "SEC") or the staff thereof applicable to the Offer or for any
period required by applicable law and (iii) extend the Offer on one or more
occasions for an aggregate period of not more than 10 business days beyond the
latest expiration date that would otherwise be permitted under clause (i) or
(ii) of this sentence, if, on such expiration date, the number of Shares
tendered (and not withdrawn) pursuant to the Offer represents less than 90% of
the Fully Diluted Shares (as defined in Exhibit A). Sub and Parent agree that
if at any scheduled expiration date of the Offer the HSR Condition (as defined
in Exhibit A) has not been satisfied, but at such scheduled expiration date all
the other conditions set forth in Exhibit A shall have been satisfied (other
than the Minimum Tender Condition), Sub may (and at the request of the Company
(confirmed in writing) shall) extend the Offer (a "Special Extension") from
time to time until the HSR Condition has been satisfied. In no event may the
Company or Sub require that the Offer be extended to a date later than 270 days
following the date hereof by Special Extensions or to a date later than 180
days following the date hereof for any other reason. Subject to the terms and
conditions of the Offer and this Agreement, Sub shall, and Parent shall cause
Sub to, pay for all Shares validly tendered and not withdrawn pursuant to the
Offer that Sub becomes obligated to purchase pursuant to the Offer as promptly
as practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall
file with the SEC a Tender Offer Statement on Schedule 14D-1 with respect to
the Offer, which shall contain an offer to purchase and a related letter of
transmittal and summary advertisement (such Schedule 14D-1 and the documents
therein pursuant to which the Offer will be made, together with any supplements
or amendments thereto, the "Offer Documents"). The Offer Documents shall comply
as to form in all material respects with the requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations promulgated thereunder and the Offer Documents, on the date first
published, sent or given to the Company's stockholders, shall not contain any
untrue
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statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, except that no
representation is made by Parent or Sub with respect to information supplied by
the Company for inclusion in the Offer Documents. Each of Parent, Sub and the
Company agrees promptly to amend or supplement any information provided by it
for use in the Offer Documents if and to the extent that such information shall
have become false or misleading in any material respect, and each of Parent and
Sub further agrees to take all steps necessary to amend or supplement the Offer
Documents and to cause the Offer Documents as so amended or supplemented to be
filed with the SEC and to be disseminated to the Company's stockholders, in
each case as and to the extent required by applicable Federal securities laws.
The Company and its counsel shall be given a reasonable opportunity to review
and comment on the Offer Documents and all amendments and supplements thereto
prior to their filing with the SEC or dissemination to stockholders of the
Company. Parent and Sub agree to provide the Company and its counsel with any
comments Parent, Sub or their counsel may have received from the SEC or its
staff with respect to the Offer Documents promptly after the receipt of such
comments.
(c) Parent shall provide or cause to be provided to Sub on a timely
basis the funds necessary to purchase any Shares that Sub becomes obligated to
purchase pursuant to the Offer.
SECTION 1.2. Company Actions. (a)The Company hereby approves of and
consents to the Offer and represents that the Board of Directors of the
Company, at a meeting duly called and held, has duly adopted resolutions
approving this Agreement, the Offer and the Merger, determining that the terms
of the Agreement, the Offer and the Merger are fair to, and in the best
interests of, the Company's stockholders and recommending that the Company's
stockholders accept the Offer and tender their Shares pursuant to the Offer and
approve and adopt this Agreement and the Merger. The Company represents that
its Board of Directors has received the written opinion of Xxxxxxx & Company
International ("Xxxxxxx") that the proposed consideration to be received by the
holders of Shares pursuant to the Offer and in the Merger is fair to such
holders from a financial point of view, and a complete and correct copy of such
opinion has been delivered by the Company to Parent.
(b) On the date the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as amended from
time to time, the "Schedule 14D-9") containing the recommendations described in
paragraph (a) above and shall mail the Schedule 14D-9 to the stockholders of
the Company. The Schedule 14D-9 shall comply as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder and, on the date filed with the SEC and on
the date first published, sent or given to the Company's stockholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation is made by the Company with
respect to information supplied by Parent or Sub for inclusion in the Schedule
14D-9. Each of the Company, Parent and Sub agrees promptly to amend or
supplement any information provided by it for use in the Schedule 14D-9 if and
to the extent that such information shall have become false or misleading in
any material respect, and the Company further agrees to take all steps
necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule
14D-9 as so amended or supplemented to be filed with the SEC and disseminated
to the Company's
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stockholders, in each case as and to the extent required by applicable Federal
securities laws. Parent and its counsel shall be given a reasonable opportunity
to review and comment on the Schedule 14D-9 and all amendments and supplements
thereto prior to their filing with the SEC or dissemination to stockholders of
the Company. The Company agrees to provide Parent and its counsel in writing
with any comments the Company or its counsel may have received from the SEC or
its staff with respect to the Schedule 14D-9 promptly after the receipt of such
comments.
(c) In connection with the Offer, the Company shall cause its transfer
agent to furnish Sub promptly with mailing labels containing the names and
addresses of the record holders of Shares as of a recent date and of those
persons becoming record holders subsequent to such date, together with copies
of all lists of stockholders, security position listings and computer files and
all other information in the Company's possession or control regarding the
beneficial owners of Shares, in each case true and correct as of the most
recent practicable date, and shall furnish to Sub such information and
assistance (including updated lists of stockholders, security position listings
and computer files) as Parent may reasonably request in communicating the Offer
to the Company's stockholders. 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 and Sub
shall hold in confidence the information contained in any such labels, listings
and files, will use such information only in connection with the Offer and the
Merger and, if this Agreement shall be terminated, will, upon request, deliver
to the Company all copies of such information then in their possession or
control.
ARTICLE II
THE MERGER
SECTION 2.1. The Merger. Upon the terms and subject to the conditions
hereof and in accordance with the Delaware General Corporation Law (the
"DGCL"), Sub shall be merged with and into the Company at the Effective Time of
the Merger (as hereinafter defined). Following the Merger, the separate
corporate existence of Sub shall cease and the Company shall continue as the
surviving corporation (the "Surviving Corporation") and shall succeed to and
assume all the rights and obligations of Sub and the Company in accordance with
the DGCL.
SECTION 2.2. Effective Time. As soon as practicable following the
satisfaction or waiver of the conditions to the Merger, the parties shall file
a certificate of merger or other appropriate documents (in any such case, the
"Certificate of Merger") executed in accordance with the relevant provisions of
the DGCL. The Merger shall become effective at such time as the Certificate of
Merger is duly filed with the Delaware Secretary of State, or at such other
time as Sub and the Company shall agree should be specified in the Certificate
of Merger (the time the Merger becomes effective being the "Effective Time of
the Merger").
SECTION 2.3. Effects of the Merger. The Merger shall have the effects
set forth in Section 259 of the DGCL.
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SECTION 2.4. Certificate of Incorporation and By-laws. (a) The
Certificate of Incorporation of Sub, as in effect at the Effective Time of the
Merger, shall be the Certificate of Incorporation of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
(b) The By-laws of Sub as in effect at the Effective Time of the
Merger shall be the By-laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
SECTION 2.5. Directors. The directors of Sub at the Effective Time of
the Merger shall be the directors of the Surviving Corporation and shall hold
office until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified in accordance with
applicable law, as the case may be.
SECTION 2.6. Officers. The officers of the Company at the Effective
Time of the Merger shall be the officers of the Surviving Corporation and shall
hold office until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, in accordance with
applicable law, as the case may be.
SECTION 2.7. Effect on Capital Stock. As of the Effective Time of the
Merger, by virtue of the Merger and without any action on the part of the
holder of any Shares:
(a) Capital Stock of Sub. Subject to Section 2.7(b) below, each issued
and outstanding share of the capital stock of Sub shall be converted into
and become one fully paid and nonassessable share of Common Stock, par
value $1.00 per share, of the Surviving Corporation with the same rights,
powers and privileges as the shares so converted and shall constitute the
only outstanding shares of capital stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent Owned Stock. All Shares
that are owned directly or indirectly by the Company as treasury stock or
by any wholly owned subsidiary of the Company and any Shares owned by
Parent, Sub or any other wholly owned subsidiary of Parent shall be
canceled, and no consideration shall be delivered in exchange therefor.
(c) Conversion of Shares. Subject to Section 2.7(d), each issued and
outstanding Share (other than Shares to be canceled in accordance with
Section 2.7(b)) shall be converted into the right to receive from the
Surviving Corporation in cash, without interest, the price per Share paid
pursuant to the Offer (the "Merger Consideration").
(d) Shares of Dissenting Stockholders. Notwithstanding anything in
this Agreement to the contrary, any issued and outstanding Shares held by
a Dissenting Stockholder shall not be converted as described in Section
2.7(c) but shall become the right to receive such consideration as may be
determined to be due to such Dissenting Stockholder pursuant to the DGCL;
provided, however, that Shares outstanding
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immediately prior to the Effective Time of the Merger and held by a
Dissenting Stockholder who shall, after the Effective Time of the Merger,
withdraw his demand for appraisal or lose his right of appraisal, in
either case pursuant to the DGCL, shall be deemed to be converted, as of
the Effective Time of the Merger, into the right to receive the Merger
Consideration. The Company shall give Parent (i) prompt notice of any
written demands for appraisal of Shares received by the Company and (ii)
the opportunity to direct all negotiations and proceedings with respect to
any such demands. The Company shall not, without the prior written consent
of Parent, make any payment with respect to, or settle, offer to settle or
otherwise negotiate, any such demands.
SECTION 2.8. Exchange of Certificates. (a) Paying Agent. Prior to the
Effective Time of the Merger, Parent shall select a bank or trust company to
act as paying agent (the "Paying Agent") for the payment of the Merger
Consideration upon surrender of certificates representing Shares.
(b) Parent to Provide Funds. Parent shall take all steps necessary to
enable and cause the Surviving Corporation to provide the Paying Agent on a
timely basis, as and when needed after the Effective Time of the Merger, funds
necessary to pay for the Shares pursuant to Section 2.7.
(c) Exchange Procedure. Promptly after the Effective Time of the
Merger, the Paying Agent shall mail to each holder of record of a certificate
or certificates that immediately prior to the Effective Time of the Merger
represented outstanding Shares (the "Certificates"), other than the Company,
Parent and any subsidiary of the Company or Parent, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the Certificates to
the Paying Agent and which shall be in a form and have such other provisions as
Parent may reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate for cancellation to the Paying Agent or to such
other agent or agents as may be appointed by the Surviving Corporation,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor the Merger
Consideration into which the Shares theretofore represented by such Certificate
shall have been converted pursuant to Section 2.7, and the Certificate so
surrendered shall forthwith be canceled. No interest will be paid or will
accrue on the Merger Consideration payable upon the surrender of any
Certificate. If payment is to be made to a person other than the person in
whose name the Certificate so surrendered is registered, it shall be a
condition of payment that such Certificate shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
payment shall pay to the Paying Agent any transfer or other taxes required by
reason of the payment to a person other than the registered holder of such
Certificate or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. Until surrendered as contemplated
by this Section 2.8, each Certificate shall be deemed at any time after the
Effective Time of the Merger to represent only the right to receive upon such
surrender the Merger Consideration, without interest, into which the Shares
theretofore represented by such Certificate shall have been converted pursuant
to Section 2.7(c). Any portion of the Merger Consideration made available to
the Paying Agent pursuant to Section 2.8(b) (and any interest or other income
earned thereon) that remains unclaimed by the holders of Shares six months
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after the Effective Time of the Merger shall be returned to Parent, upon
demand, and any such holder who has not exchanged them for the Merger
Consideration in accordance with this Section prior to that time shall
thereafter look only to Parent for payment of the Merger Consideration in
respect of such Shares without any interest thereon. Notwithstanding the
foregoing, neither the Paying Agent nor any party shall be liable to a former
stockholder of the Company for any cash or interest delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws. If
any Certificates shall not have been surrendered prior to seven years after the
Effective Time of the Merger (or immediately prior to such earlier date on
which any payment pursuant to this Section 2.8 would otherwise escheat to or
become the property of any governmental body or agency) the payment in respect
of such Certificate shall, to the extent permitted by applicable law, become
the property of Parent, free and clear of all claims or interest of any person
previously entitled thereto.
(d) No Further Ownership Rights in Shares. All Merger Consideration
paid upon the surrender of Certificates in accordance with the terms of this
Article II shall be deemed to have been paid in full satisfaction of all rights
pertaining to the Shares theretofore represented by such Certificates and there
shall be no further registration of transfers on the stock transfer books of
the Surviving Corporation of the Shares that were outstanding immediately prior
to the Effective Time of the Merger. If, after the Effective Time of the
Merger, Certificates are presented to the Surviving Corporation for any reason,
they shall be canceled and exchanged as provided in this Article II.
SECTION 2.9. Withholding Rights. Each of the Surviving Corporation and
Parent shall be entitled to deduct and withhold from the Merger Consideration
otherwise payable to any person pursuant to this Article such amounts as it is
required to deduct and withhold with respect to the making of such payment
under any provision of federal, state, local or foreign tax law. If the
Surviving Corporation or Parent, as the case may be, so withholds amounts, such
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of the Shares in respect of which the Surviving Corporation or
Parent, as the case may be, made such deduction and withholding.
SECTION 2.10. Lost Certificates. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificate,
the Paying Agent will pay, in exchange for such lost, stolen or destroyed
Certificate, the Merger Consideration to be paid in respect of the Shares
represented by such Certificate, as contemplated by this Article.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, Parent and Sub as follows,
subject to any exceptions specified in the Company Disclosure Document in the
form attached hereto as Schedule I:
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(a) Organization, Standing and Power. The Company is a corporation
duly organized, validly existing and in good standing under the law of the
jurisdiction in which it is incorporated and has the requisite corporate power
and governmental licenses, authorizations, permits, consents and approvals
(except where the failure to have such licenses, authorizations, permits,
consents and approvals, individually or in the aggregate, would not have a
material adverse effect on the Company and its subsidiaries taken as a whole)
to carry on its business as now being conducted. The Company is duly qualified
to do business and is in good standing in each jurisdiction in which the nature
of its business or the ownership or leasing of its properties makes such
qualification necessary, other than in such jurisdictions where the failure to
be so qualified to do business or in good standing (individually or in the
aggregate) would not have a material adverse effect (as defined in Section 9.3)
on the Company and its subsidiaries, taken as a whole.
(b) Subsidiaries. The Company's subsidiaries that are corporations are
corporations duly organized, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation and have the requisite
corporate power and authority to carry on their respective businesses as they
are now being conducted and to own, operate and lease the assets they now own,
operate or hold under lease. The Company's subsidiaries are duly qualified to
do business and are in good standing in each jurisdiction in which the nature
of their respective businesses or the ownership or leasing of their respective
properties makes such qualification necessary, other than in such jurisdictions
where the failure to be so qualified or in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
All subsidiaries of the Company and their respective jurisdictions of
incorporation are identified in the Company 10-K. All the outstanding shares of
capital stock of the Company's subsidiaries that are corporations have been
duly authorized and validly issued and are fully paid and non-assessable and
were not issued in violation of any preemptive rights or other preferential
rights of subscription or purchase of any person. Except as disclosed in the
SEC Documents (as defined in Section 3.1(e)) filed on or prior to the date
hereof, all such stock and ownership interests are owned of record and
beneficially by the Company or by a wholly owned subsidiary of the Company,
free and clear of all liens, pledges, security interests, charges, claims and
other encumbrances of any kind or nature ("Liens"). Except for the capital
stock of, or ownership interests in, its subsidiaries, the Company does not
own, directly or indirectly, any capital stock, equity interest or other
ownership interest in any corporation, partnership, association, joint venture,
limited liability company or other entity.
(c) Capital Structure. The authorized capital stock of the Company
consists of 40,000,000 shares of common stock, $1.25 par value ("Company Common
Stock"), and 1,000,000 shares of preferred stock, $1 par value ("Preferred
Stock"), of which 150,000 shares have been designated Series A Junior
Participating Preferred Stock and reserved for issuance pursuant to the Rights
Agreement dated May 31, 1990 (as amended) between the Company and Equiserve
Trust Company, N.A., as rights agent (the "Company Rights Agreement"). At the
close of business on May 11, 1999, (i) 19,482,588 Shares were issued and
outstanding; (ii) 10,000, 10,956, 20,000 and 18,368 shares were reserved for
issuance pursuant to options not yet granted under the Company's 1997
Non-Employee Directors' Stock Option Plan, 1997 Stock Option Plan, 1995
Non-Employee Directors' Stock Plan and 1977 Stock Option Plan, respectively,
(iii) 9,416 Shares were reserved for issuance under the Company's Stock Award
Plan, (iv) 110,000, 716,857, 135,000, 33,000, 567,543, 385,468 and 10,000
Shares were reserved for issuance pursuant to outstanding options granted under
the Company's 1997 Non-Employee Director Stock Option Plan, 1997 Stock Option
Plan, 1995
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13
Non-Employee Directors' Stock Option Plan, 1981 Stock Option Plan, 1977 Stock
Option Plan, options assumed in connection with the acquisition of Xxxxxx
Corporation and a stock option agreement with a director of the Company and (v)
75,000 Shares were reserved for issuance pursuant to stock options granted in
connection with the acquisition of Hytork International Plc. Except as set
forth above, no shares of capital stock or other equity or voting securities of
the Company are reserved for issuance or outstanding. All outstanding shares of
capital stock of the Company are, and all such shares issuable upon the
exercise of stock options will be when issued thereunder, validly issued, fully
paid and nonassessable and not subject to preemptive rights. No capital stock
has been issued by the Company since May 11, 1999, other than Shares issued
pursuant to options, referred to in (iv) and (v) above, outstanding on or prior
to such date in accordance with their terms at such date. Except for options
referred to in (iv) and (v) above, there are no outstanding or authorized
securities, options, warrants, calls, rights, commitments, preemptive rights,
agreements, arrangements or undertakings of any kind to which the Company or
any of its subsidiaries is a party, or by which any of them is bound,
obligating the Company or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, any shares of capital stock or other
equity or voting securities of, or other ownership interests in, the Company or
of any of its subsidiaries or obligating the Company or any of its subsidiaries
to issue, grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. There are no
outstanding obligations of the Company or any of its subsidiaries to
repurchase, redeem or otherwise acquire such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking.
(d) Authority; Non-contravention. The Company has the requisite
corporate power and authority to enter into this Agreement and, subject to
Company Stockholder Approval (as defined in Section 3.1(h)), to consummate the
transactions contemplated hereby and to take such actions, if any, as shall
have been taken with respect to the matters referred to in Section 3.1(h). The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of the Company,
subject to Company Stockholder Approval. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws or
judicial decisions now or hereafter in effect relating to creditors' rights
generally and (ii) the remedy of specific performance and injunctive relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought. The execution, delivery and
performance of this Agreement by the Company do not, and the consummation of
the transactions contemplated hereby and compliance with the provisions hereof
will not, conflict with, or result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of or "put" right with respect to any
obligation or to loss of a material benefit under, or result in the creation of
any lien, security interest, charge or encumbrance upon any of the properties
or assets of the Company or any of its subsidiaries under, any provision of (i)
the Certificate of Incorporation or By-laws of the Company or any provision of
the comparable organizational documents of its subsidiaries, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease, or other agreement,
instrument, permit, concession, franchise or license applicable to the Company
or any of its subsidiaries or their respective properties or assets or (iii)
subject to governmental filing and other matters referred to in the following
sentence, any judgment, order, decree, statute, law, ordinance, rule or
regulation or
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arbitration award applicable to the Company or any of its subsidiaries or their
respective properties or assets, other than, in the case of clause (ii), any
such conflicts, violations, defaults, rights or liens, security interests,
charges or encumbrances that individually or in the aggregate would not have a
material adverse effect on the Company or would not materially impair the
ability of the Company to perform its obligations hereunder or prevent the
consummation of any of the transactions contemplated hereby. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
authority or agency, domestic or foreign, including local authorities (a
"Governmental Entity"), is required by or with respect to the Company or any of
its subsidiaries in connection with the execution, delivery and performance of
this Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, except for (i) the filing of a premerger
notification and report form by the Company under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and any required
filings or approvals under applicable foreign antitrust laws and regulations,
(ii) the filing with the Securities and Exchange Commission (the "SEC") of (A)
a proxy statement relating to the Company Stockholder Approval (such proxy
statement as amended or supplemented from time to time, the "Proxy Statement")
and (B) the Schedule 14D-9; and (C) such reports under Section 13(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as may be
filed in connection with this Agreement and the transactions contemplated
hereby, and (iii) the filing of the Certificate of Merger with the Delaware
Secretary of State with respect to the Merger as provided in the DGCL and
appropriate documents with the relevant authorities of other jurisdictions in
which the Company is qualified to do business and such other consents,
approvals, orders, authorizations, registrations, declarations and filings the
failure of which to be obtained or made would not have a material adverse
effect on the Company.
(e) SEC Documents. The Company has filed all required reports,
schedules, forms, statements and other documents with the SEC since January 1,
1996 (such documents, together with all exhibits and schedules thereto and
documents incorporated by reference therein, collectively referred to herein as
the "SEC Documents"). No subsidiary of the Company is required to file any
reports, schedules, forms, statements or other documents with the SEC. As of
their respective dates, the SEC Documents complied in all material respects
with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC Documents,
and none of such SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of the Company included in the SEC Documents comply in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in the case
of unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments and other adjustments described therein).
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15
(f) Information Supplied. (i) None of the information
supplied or to be supplied by the Company or its subsidiaries for inclusion or
incorporation by reference in the Offer Documents, the Schedule 14D-9 or the
Information Statement referred to in Section 5.9 will, at the time they are
filed with the SEC, at any time they are amended or supplemented, at the time
of any distribution or dissemination thereof and at the time of the
consummation of the Offer, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; and (ii) the Proxy Statement will
not, at the date the Proxy Statement is first mailed to the Company's
stockholders, at the time of the Company Stockholders Meeting and at the
Effective Time of the Merger, and each document required to be filed by the
Company with the SEC or required to be distributed or otherwise disseminated to
the Company's stockholders in connection with the transactions contemplated by
this Agreement (the "Company Disclosure Documents") will not, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. The Proxy
Statement, as it relates to the Company Stockholders Meeting, and the Company
Disclosure Documents, when filed, distributed or disseminated, as applicable,
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, except that no
representation or warranty contained in this Section 3.1(f)(ii) is made by the
Company with respect to statements made or incorporated by reference in the
Company Disclosure Documents based on information supplied by Parent or Sub for
inclusion or incorporation by reference therein.
(g) Absence of Certain Changes or Events. Except as disclosed in the
SEC Documents filed on or prior to the date hereof, since December 31, 1998,
the Company has conducted its business only in the ordinary course consistent
with past practice, and there has not been (i) any material adverse change with
respect to the Company, (ii) any declaration, setting aside or payment of any
dividend (whether in cash, stock or property) with respect to any of the
Company's capital stock other than the regular quarterly dividends on Shares in
the amount of $.045 per Share (the "Company's regular dividend"), (iii) (A) any
granting by the Company or any of its subsidiaries to any officer, director or
employee of the Company or any of its subsidiaries of any increase in
compensation, bonus or other benefits, except in the ordinary course of
business consistent with prior practice or as was required under employment
agreements in effect as of December 31, 1998, (B) any granting by the Company
or any of its subsidiaries to any such officer, director or employee of, or any
increase in, severance or termination pay, except as was required under
employment, severance or termination agreements in effect as of December 31,
1998, or any amendment to any existing arrangement with such officer, director
or employee, (C) except in accordance with past practice as to officers,
directors or employees of the Company or any of its subsidiaries, any entry by
the Company or any of its subsidiaries into any employment, deferred
compensation, severance, termination or other similar agreement (or any
amendment to such existing agreement) with any such officer, director or
employee, or (D) any establishment, adoption or amendment (except as required
by applicable law) of any collective bargaining, bonus, profit-sharing, thrift,
pension, retirement, deferred compensation, compensation, stock option,
restricted stock or other benefit plan or arrangement covering any director,
officer or employee of the Company or any of its subsidiaries, (iv) any damage,
destruction or loss, whether or not covered by insurance, affecting the
business or assets of the Company or any of its subsidiaries that has or
reasonably could be expected to have a material adverse effect on the Company,
(v) any change in accounting methods, principles or practices or any change in
any method of tax accounting by the Company materially
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affecting the assets, liabilities or business of the Company and its
subsidiaries, taken as a whole, except insofar as may have been required by a
change in generally accepted accounting principles, or (vi) any event which, if
it had taken place following the execution of this Agreement, would not have
been permitted by Section 4.1.
(h) State Takeover Statutes; Absence of Supermajority Provision. The
Company has taken all action to assure that no state takeover statute or
similar statute or regulation, including, without limitation Section 203 of the
DGCL, shall apply to the Offer or the Merger or any of the other transactions
contemplated hereby. Except for the approval of the Merger by the holders of
two-thirds of the outstanding Shares ("Company Stockholder Approval"), no other
stockholder action on the part of the Company is required for approval of the
Merger and the transactions contemplated hereby. The Company has taken all
action necessary to (i) render the rights issued pursuant to the terms of the
Company Rights Agreement inapplicable to the Offer, the Merger, this Agreement
and the transactions contemplated hereby and (ii) ensure that (A) neither
Parent, Sub nor any of their affiliates is an Acquiring Person (as defined in
the Company Rights Agreement) and (B) no Distribution Date (as defined in the
Company's Rights Agreement dated May 31, 1990, as amended and supplemented to
the date hereof (the "Company Rights Agreement")) shall occur by reason of the
approval or execution of this Agreement, the announcement or consummation of
the Offer or Merger or the consummation of any of the other transactions
contemplated hereby.
(i) Brokers. Except for Xxxxxxx, which has rendered the opinion
referred to in Section 1.2 and whose fees are to be paid by the Company, no
broker, investment banker or other person is entitled to receive from the
Company or any of its subsidiaries any investment banking, brokerage or
finder's fees in connection with this Agreement or the transactions
contemplated hereby, including any fee for any opinion rendered by any
investment banker. The engagement letter between the Company and Xxxxxxx
provided to Parent on or prior to the date of this Agreement constitutes the
entire understanding of the Company and Xxxxxxx with respect to the matters
referred to therein, and has not been amended or modified, nor will it be
amended or modified prior to the Effective Time of the Merger.
(j) Litigation. Except as disclosed in the SEC Documents filed on or
prior to the date hereof, there is no suit, action, proceeding or investigation
(or any basis therefor as to which the Company has knowledge) pending or, to
the best of the Company's knowledge, threatened against or affecting the
Company or any of its subsidiaries (or any present or former officer, director
or employee of the Company or any of its subsidiaries or any other person, in
each case for whom the Company or any of such subsidiaries may be liable)
before any court or arbitrator or before or by any governmental body, agency or
official, domestic or foreign, as of the date hereof and after the date hereof
there will be no such suits, actions, proceedings or investigations or any such
bases that could reasonably be expected to have a material adverse effect on
the Company or prevent, hinder or materially delay the ability of the Company
to consummate the transactions contemplated by this Agreement; nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company or any of its subsidiaries having,
or which, insofar as reasonably can be foreseen, in the future could have, any
such effect.
(k) Employee Benefit Matters. As used in this Section 3.1(l), the term
"Employer" shall mean the Company as defined in the preamble of this Agreement
and any member of a controlled
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group or affiliated service group, as defined in sections 414(b), (c), (m) and
(o) of the Internal Revenue Code of 1986, as amended ("Code") of which the
Company is a member.
(i) Except for the terminated Xxxxxx Valve Company Pension Plan and
Trust, all liabilities (including administrative responsibilities) with
respect to which were retained by Shiloh Industries, Inc., with respect to
each employee welfare benefit plan, employee pension benefit plan and
employee benefit plan as defined in sections 3(1), 3(2), and 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
which have been or are sponsored by, participated in, or contributed to by
the Employer at any time during the three-year period ending on the date
of this Agreement, or with respect to which the Employer may have any
liability, and except for any matter that would not individually or in the
aggregate have a material adverse effect on the Company, to the extent
applicable: (A) the plan is in substantial compliance with the Code and
ERISA, including all reporting and disclosure requirements of Part 1 of
Subtitle B of Title I of ERISA; (B) the appropriate Form 5500 has been
timely filed for each year of its existence; (C) there has been no
transaction described in section 406 or section 407 of ERISA or section
4975 of the Code unless exempt under section 408 of ERISA or section 4975
of the Code, as applicable; (D) the bonding requirements of section 412 of
ERISA have been satisfied; (E) there is no issue pending nor any issue
resolved adversely to the Employer which may subject the Company to the
payment of a penalty, interest, tax or other amount, (F) the plan can be
unilaterally terminated or amended on no more than 90 days notice; (G) all
contributions or other amounts payable by the Employer as of the Effective
Time of the Merger with respect to the plan have either been paid or
accrued in the Employer's most recent financial statements included in the
SEC Documents and (H) no notice has been received by the Employer of an
increase or proposed increase in the cost of any such plan or any other
employee benefit agreement or arrangement, including deferred compensation
plans, incentive plans, bonus plans or arrangements, stock option plans,
stock purchase plans, golden parachute agreements, severance pay plans or
agreements, dependent care plans, cafeteria plans, employee assistance
programs, scholarship programs, employment contracts and other similar
plans, agreements and arrangements that are currently in effect or were
maintained within three years of the date hereof, or have been approved
before this date but are not yet effective, for the benefit of directors,
officers or employees, or former directors, officers or employees (or
their beneficiaries) of the Employer (each, a "Company Benefit Plan").
There are no pending or, to the Company's knowledge, threatened or
anticipated claims (other than routine claims for benefits) by, on behalf
of or against any Company Benefit Plan or their related trusts. A complete
list of all material Company Benefit Plans that are currently in
existence, or with respect to which the Company or any of its subsidiaries
may have any liability (other than Foreign Plans, as defined below) is set
forth in Schedule I. Copies of all Company Benefit Plans have been
furnished or made available to Parent.
(ii) Except for the terminated Xxxxxx Valve Company Pension Plan and
Trust, all liabilities (including administrative responsibilities) with
respect to which were retained by Shiloh Industries, Inc., neither the
Company nor any entity (whether or not incorporated) that was at any time
during the six years before the date of this Agreement treated as a single
employer together with the Company under section 414 of the Code has ever
maintained, had any obligation to contribute to or incurred any liability
with respect to a pension plan that is
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or was subject to the provisions of Title IV of ERISA or section 412 of
the Code. Neither the Company nor any entity (whether or not incorporated)
that was at any time during the six years before the date of this
Agreement treated as a single employer together with the Company under
section 414 of the Code has ever maintained, had an obligation to
contribute to, or incurred any liability with respect to a multiemployer
pension plan as defined in section 3(37) of ERISA. During the last six
years, the Company has not maintained, had an obligation to contribute to
or incurred any liability with respect to a voluntary employees
beneficiary association that is or was intended to satisfy the
requirements of section 501(c)(9) of the Code. No plan, arrangement or
agreement with any one or more employees will cause the Employer to have
liability for severance pay as a result of the Merger, except as otherwise
set forth in the Change-in-Control Agreements and Severance Agreements
between the Company and each of the persons named on Schedule II hereto
(the "Severance Agreements"). The Employer does not provide employee
benefits, including without limitation, death, post-retirement medical or
health coverage (whether or not insured) or contribute to or maintain any
employee benefit plan which provides for benefit coverage following
termination of employment except (A) as is required by section 4980B(f) of
the Code or other applicable statute, (B) death benefits or retirement
benefits under any employee pension benefit plan as defined in section
3(2) of ERISA, (C) benefits the full cost of which is borne by the current
or former employee (or his beneficiary), nor has it made any
representations, agreements, covenants or commitments to provide that
coverage, or (D) deferred compensation benefits which have been accrued as
liabilities on the books of the Employer and disclosed on its financial
statements included in the SEC Documents. All group health plans
maintained by the Employer have been operated in material compliance with
section 4980B(f) of the Code.
(iii) All Company Benefit Plans that are intended to qualify under
section 401(a) of the Code have been submitted to and approved as
qualifying under section 401(a) of the Code by the Internal Revenue
Service ("IRS") or the applicable remedial amendment period will not have
ended prior to the Effective Time of the Merger. Except for the terminated
Xxxxxx Valve Company Pension Plan and Trust, all liabilities (including
administrative responsibilities) with respect to which were retained by
Shiloh Industries, Inc., the Company knows of no fact or circumstance
giving rise to a material likelihood that any such Company Benefit Plan
would not be treated as qualified by the IRS.
(iv) Except as expressly provided in this Agreement or the Severance
Agreements and except pursuant to certain options described in section
3.1(c), the transactions contemplated by this Agreement will not
accelerate the time of payment or vesting, or increase the amount, of
compensation due any director, officer or employee or former director,
officer or employee (including any beneficiary) from the Company.
(v) Schedule I separately identifies each material Company Benefit
Plan that is primarily intended to benefit individuals whose principal
place of employment is located outside the United States (each, a "Foreign
Plan"). With respect to each Foreign Plan, the Company has either made
available to Parent a copy of the Foreign Plan or there are no material
liabilities associated with the Foreign Plan that are not disclosed on the
SEC Documents. Each Foreign Plan has been maintained in substantial
compliance with its terms
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and with the requirements prescribed by any and all applicable statutes,
orders, rules and regulations (including any special provisions that the
Plan was intended to so satisfy) and has been maintained in good standing
with applicable regulatory authorities.
(l) Taxes. Each of the Company and each of its subsidiaries, and any
consolidated, combined, unitary or aggregate group for Tax (as defined below)
purposes of which the Company or any of its subsidiaries is or has been a
member, has timely filed all Tax Returns (as defined below) required to be
filed by it on or before the Effective Time of the Merger and has timely paid
or deposited (or the Company has paid or deposited on its behalf) all Taxes
which are required to be paid or deposited on or before the Effective Time of
the Merger. Each of the Tax Returns filed by the Company or any of its
subsidiaries is accurate and complete in all material respects. The most recent
consolidated financial statements of the Company contained in the filed SEC
Documents reflect an adequate reserve for all Taxes payable by the Company and
its subsidiaries for all taxable periods and portions thereof through the date
of such financial statements. The books and records of the Company and its
subsidiaries reflect adequate reserves for Taxes. No deficiencies for any Taxes
have been proposed, asserted or assessed against the Company or any of its
subsidiaries. No unexpired requests for waivers of the time to assess any Taxes
have been granted or are pending and there are no tax liens upon any assets of
the Company or any of its subsidiaries other than liens for Taxes which are not
yet delinquent. The Federal income Tax Returns of the Company and its
subsidiaries consolidated in such Tax Returns have been examined by and settled
with the IRS through the year ended September 30, 1990. There are no current
examinations of any Tax Return of the Company or any of its subsidiaries being
conducted. There are no settlements of any prior examinations that could
reasonably be expected to adversely affect any taxable period for which the
statute of limitations has not run or have not been paid in full. Since January
1, 1995, neither the Company nor any of its subsidiaries has been a member of
an affiliated, consolidated, combined or unitary group other than one of which
the Company was the common parent. Neither the Company nor any of its
subsidiaries has any obligation under any Tax sharing agreement, Tax allocation
agreement, Tax indemnification agreement or any other agreement or arrangement
pursuant to which the Company or any subsidiary is or might be required to make
any payment in respect of any Tax of any person (other than the Company or any
of its subsidiaries). Neither the Company nor any of its subsidiaries has
entered into any agreement or arrangement with any governmental authority with
regard to liabilities for Taxes other than settlements or compromises with
respect to asserted Tax liabilities for prior taxable years. There are no
requests for rulings or determinations in respect of any tax or tax asset
pending between the Company or any subsidiary and any taxing authority. Neither
the Company nor any subsidiary will be required to include any adjustment in
taxable income for any post-closing tax period under Section 481(c) of the Code
(or any similar provision of the tax laws of any jurisdiction) as a result of a
change in method of accounting for a pre-closing tax period or pursuant to the
provisions of any agreement entered into with any taxing authority with regard
to the Tax liability of the Company or any subsidiary for any pre-closing tax
period that has continuing effect. Other than the acquisition of Xxxxxx
Corporation, since January 1, 1995, neither the Company nor any of its
subsidiaries is a party to a transaction intended to be treated as a
reorganization under Section 368 or a distribution under Section 355 of the
Code. As used herein, "Tax" or "Taxes" shall mean all taxes of any kind,
including, without limitation, those on or measured by or referred to as
income, gross receipts, unemployment, sales, use, ad valorem, franchise,
capital, earned surplus, profits, license, withholding, payroll, employment,
estimated, excise, severance, stamp, occupation, premium, value added, property
or windfall profits taxes, customs, duties or similar fees, assessments
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or charges of any kind whatsoever, together with any interest and any
penalties, additions to tax or additional amounts imposed by any Governmental
Entity, domestic or foreign. As used herein, "Tax Return" shall mean any
return, report, statement or information required to be filed with any
governmental authority with respect to Taxes.
(m) No Excess Parachute Payments. Except with respect to remuneration
that could be received by Xxxxxx X. Xxxxxxxx under his deferred compensation
arrangement relating to Shares granted under the Company's Stock Award Plan,
and his change in control agreement, and in connection with the acceleration of
any unvested options, any amount that could be received (whether in cash or
property or the vesting of property) as a result of any of the transactions
contemplated by this Agreement by any employee, officer or director of the
Company or any of its affiliates who is a "disqualified individual" (as such
term is defined in proposed Treasury Regulation section 1.280G-1) under any
employment, severance or termination agreement, other compensation arrangement
or Company Benefit Plan currently in effect would not be characterized as an
"excess parachute payment" (as such term is defined in section 280G(b)(1) of
the Code).
(n) Environmental Matters. Except as would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole, (i) the business
operations of the Company and its subsidiaries have been and are being
conducted in compliance with all limitations, restrictions, standards and
requirements established under Environmental Laws, (ii) no facts or
circumstances exist that impose or could reasonably be expected to impose on
the Company or any of its subsidiaries an obligation under Environmental Laws
to conduct any removal, remediation, or similar response action, or to pay any
fines, penalties or other expenses, (iii) there is no obligation, undertaking
or liability arising out of or relating to Environmental Laws that the Company
or any of its subsidiaries has agreed to, assumed or retained, by contract or
otherwise, or that has been or could reasonably be expected to be imposed on
the Company or any of its subsidiaries by any Environmental Law, writ,
injunction, decree, order or judgment, and (iv) there are no lawsuits, claims
or proceedings and no notice, notification, demand, request for information,
citations, summons, complaint or order has been received by, or, to the
knowledge of the Company or any of its subsidiaries, is threatened or pending
against the Company or any of its subsidiaries that arise out of or relate to
Environmental Laws. There has been no environmental investigation, study,
audit, test, review or other analysis conducted by or on behalf of or in the
possession of the Company or any of its subsidiaries that discusses, reveals,
or discloses any material liabilities (whether accrued, absolute, contingent or
otherwise) in relation to the current or prior business of the Company or any
of its subsidiaries or any property or facility now or previously owned, leased
or operated by the Company or any of its subsidiaries which has not been
delivered to Parent at least five days prior to the date hereof. Neither the
Company nor any of its subsidiaries owns or leases or, to the Company's
knowledge, has owned or leased any real property in New Jersey or Connecticut.
For purposes of this section 3.1(n), "Environmental Laws" means any applicable
federal, state, local and foreign statutes, laws, judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees, codes, plans,
injunctions, permits, licenses, agreements or governmental restrictions
relating to human health, the environment or to the use, manufacture,
treatment, storage, transport, clean-up or other remediation of pollutants,
contaminants or other hazardous substances or wastes or to the emissions,
discharges or releases of pollutants, contaminants or other hazardous
substances or wastes into the environment.
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(o) Compliance with Laws. The Company and its subsidiaries hold all
required, necessary or applicable permits, licenses, variances, exemptions,
orders, franchises and approvals of all Governmental Entities, except where the
failure to so hold would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole (the "Company Permits"). The Company and its
subsidiaries are in compliance with the terms of the Company Permits except
where the failure to so comply would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole. Neither the Company nor any of
its subsidiaries has violated or failed to comply with any statute, law,
ordinance, regulation, rule, permit or order of any Federal, state or local
government, domestic or foreign, or any Governmental Entity, any arbitration
award or any judgment, decree or order of any court or other Governmental
Entity, applicable to the Company or any of its subsidiaries or their
respective business, assets or operations, except for violations and failures
to comply that could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(p) Material Contracts and Agreements. All material contracts of the
Company or its subsidiaries have been included in the SEC Documents filed on or
prior to the date hereof, except for those contracts not required to be filed
pursuant to the rules and regulations of the SEC. Neither the Company nor any
subsidiary is a party to any joint venture agreement or agreement to form any
joint venture nor does the Company or any of its subsidiaries have any
liability if it fails to pursue any contemplated joint ventures.
(q) Title to Properties.
(i) Each of the Company and each of its subsidiaries has good and
defensible title to, or valid leasehold interests in, all its material
assets and properties purported to be owned by it in the SEC Documents,
except for such as are no longer used or useful in the conduct of its
businesses or as have been disposed of in the ordinary course of business
and except for defects in title, easements, restrictive covenants and
similar encumbrances or impediments that, in the aggregate, do not and
will not materially interfere with its ability to conduct its business as
currently conducted or as reasonably expected to be conducted. All such
assets and properties, other than assets and properties in which the
Company or any of the subsidiaries has leasehold interests, are free and
clear of all Liens, other than those set forth in the SEC Documents filed
on or prior to the date hereof, and except for Liens, that, in the
aggregate, do not and will not materially interfere with the ability of
the Company or any of its subsidiaries to conduct business as currently
conducted or as reasonably expected to be conducted.
(ii) Except as would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole, each of the Company and each of
its subsidiaries has complied in all material respects with the terms of
all leases to which it is a party and under which it is in occupancy, and
all such leases are in full force and effect. Each of the Company and each
of its subsidiaries enjoys peaceful and undisturbed possession under all
such leases.
(r) Intellectual Property. The Company and its subsidiaries own, or
are licensed or otherwise have the right to use, all Intellectual Property that
is material to the condition (financial or otherwise) or conduct of the
business and operations of the Company and its subsidiaries taken
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as a whole. The Company and its subsidiaries have not infringed or
misappropriated and do not infringe or misappropriate any item of Intellectual
Property of any person, except for infringement or misappropriation that could
not, in the aggregate, have a material adverse effect with respect to the
Company and its subsidiaries, taken as a whole. No person has infringed or
misappropriated, or is infringing or misappropriating, any item of Intellectual
Property that is owned by or licensed to the Company or its subsidiaries,
except for infringement or misappropriation that could not have a material
adverse effect with respect to the Company and its subsidiaries taken as a
whole. There are no pending or, to the knowledge of the Company, threatened
claims relating to infringement, misappropriation, unenforceability,
invalidity, misuse, ownership, right to use, or other violation asserted by or
against the Company or its subsidiaries relating to any item of Intellectual
Property. For purposes of this Section 3.1(r), "Intellectual Property" means
domestic and foreign patents, trademarks, service marks, trade names,
copyrights, trade secrets, know-how, utility models, mask works, rights in
inventions, discoveries, processes, formulae, and registrations and
applications for any of the foregoing, and any other intellectual property and
proprietary information, including rights in software, firmware, computer
programs and data.
(s) Labor Matters. There are no collective bargaining agreements or
other labor union agreements or understandings to which the Company or any of
its subsidiaries is a party or by which any of them is bound, nor is it or any
of its subsidiaries the subject of any proceeding asserting that it or any
subsidiary has committed an unfair labor practice or seeking to compel it to
bargain with any labor organization as to wages or conditions. To the Company's
knowledge, since December 31, 1997, neither the Company nor any of its
subsidiaries has encountered any labor union organizing activity, or had any
actual or threatened employee strikes, work stoppages, slowdowns or lockouts.
(t) Undisclosed Liabilities. Except as set forth in the SEC Documents
filed on or prior to the date hereof, at the date of the most recent audited
financial statements of the Company included in such SEC Documents, neither the
Company nor any of its subsidiaries had, and since such date neither the
Company nor any of such subsidiaries has incurred, any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise
other than those attributable to purchase orders issued, accounts payable
incurred or contracts entered into with customers in each case in the ordinary
course of the Company's business consistent with past practices), and there is
no existing condition, situation or set of circumstances that could reasonably
be expected to result in such a liability or obligation, which liabilities or
obligations in all such cases, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(u) Board Recommendation. The Board of Directors of the Company, at a
meeting duly called and held, has by vote of those directors present (i)
determined that this Agreement and the transactions contemplated hereby,
including the Offer and the Merger and the transactions contemplated thereby,
are fair to and in the best interests of the stockholders of the Company, and
(ii) resolved to recommend to the holders of the Shares that they tender their
Shares pursuant to the Offer and/or approve the Merger and the transactions
contemplated thereby.
SECTION 3.2. Representations and Warranties of Parent and Sub. Parent
and Sub represent and warrant to, and agree with, the Company as follows:
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(a) Organization; Standing and Power. Parent and Sub are corporations
duly organized, validly existing and in good standing under laws of their
states of incorporation and have the requisite corporate power and governmental
licenses, authorizations, permits, consents and approvals (except where the
failure to have such licenses, authorizations, permits, consents and approvals,
individually or in the aggregate, would not have a material adverse effect on
Parent and its subsidiaries taken as a whole) to carry on their business as now
being conducted. Parent and Sub are duly qualified to do business and in good
standing in each jurisdiction in which the nature of their business or the
ownership or leasing of their properties makes such qualification necessary,
other than in such jurisdictions where the failure to be so qualified to do
business (individually or in the aggregate) would not have a material adverse
effect on Parent and its subsidiaries, taken as a whole.
(b) Authority; Non-contravention. Parent and Sub have the requisite
corporate power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. The execution, delivery and performance
of this Agreement by Parent and Sub and the consummation by Parent and Sub of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Parent and Sub. This Agreement has been duly
executed and delivered by Parent and Sub and constitutes a valid and binding
obligation of Parent and Sub, enforceable against Parent and Sub in accordance
with its terms, except that (i) such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws or judicial
decisions now or hereafter in effect relating to creditors' rights generally
and (ii) the remedy of specific performance and injunctive relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought. The execution, delivery and performance
of this Agreement by Parent and Sub do not, and the consummation of the
transactions contemplated hereby and compliance with the provisions hereof will
not, conflict with, or result in any violation of, or default (with or without
notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or acceleration of or "put" right with respect to any
obligation or to loss of a material benefit under, or result in the creation of
any lien, security interest, charge or encumbrance upon any of the properties
or assets of Parent or Sub or any of their subsidiaries under, any provision of
(i) the Certificate of Incorporation or By-laws of Sub or of Parent or any
comparable organizational documents of their subsidiaries, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to Parent or
Sub or any of their subsidiaries or their respective properties or assets or
(iii) subject to the governmental filings and other matters referred to in the
following sentence, any judgment, order, decree, statute, law, ordinance, rule
or regulation or arbitration account applicable to Parent or Sub or any of
their subsidiaries or their respective properties or assets, other than, in the
case of clause (ii), any such conflicts, violations or defaults that
individually or in the aggregate would not be reasonably expected to have,
individually or in the aggregate, a material adverse effect on Parent or
materially impair the ability of Parent and Sub to perform their respective
obligations hereunder or prevent the consummation of any of the transactions
contemplated hereby. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required
by or with respect to Parent or Sub or any of their subsidiaries in connection
with the execution, delivery and performance of this Agreement by Parent and
Sub or the consummation by Parent and Sub of the transactions contemplated
hereby, except for (i) the filing by Parent of a premerger notification and
report form under the HSR Act and any filings or approvals required under
applicable foreign antitrust laws and regulations, (ii) the filing with the SEC
of the Offer Documents and such reports under Sections 13 and 16 of the
Exchange Act as may
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be required in connection with this Agreement and the transactions contemplated
hereby and (iii) filings in Delaware by Sub in connection with the Merger.
(c) Information Supplied. None of the information supplied or to be
supplied by Parent in writing for inclusion or incorporation by reference in
(i) the Offer Documents, the Schedule 14D-9, the Information Statement referred
to in Section 5.9, or the Proxy Statement will, in the case of the Offer
Documents and the Schedule 14D-9 and the Information Statement at the
respective times they are filed with the SEC or first published, sent or given
to the Company's stockholders, and at any time they are amended or
supplemented, or in the case of the Proxy Statement at the date the Proxy
Statement is first mailed to the Company's stockholders and at the time of the
Company Stockholders Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they are made, not misleading.
(d) Brokers. No broker, investment banker or other person, is entitled
to any broker's, finder's or other similar fee or commission from the Company
or any of its subsidiaries in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Parent or Sub,
including any fee for any opinion rendered by any investment banker, and the
Company shall have no liability for any fees to any such broker, investment
banker or other person.
(e) Litigation. There is no suit, action, proceeding or investigation
pending or, to the knowledge of Parent, threatened against or affecting Parent
or any of its subsidiaries that could reasonably be expected to prevent, hinder
or materially delay the ability of Parent to consummate the transactions
contemplated by this Agreement, nor is there any judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding against
Parent or any of its subsidiaries having, or which, insofar as reasonably can
be foreseen, in the future could have, any such effect.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 4.1. Conduct of Business of the Company.
(a) Ordinary Course. During the period from the date of this Agreement
to the Effective Time of the Merger (except as otherwise specifically
contemplated by the terms of this Agreement or as described in the Company
Disclosure Document), the Company shall and shall cause its subsidiaries to
carry on their respective businesses in the usual, regular and ordinary course
in substantially the same manner as heretofore conducted and, to the extent
consistent therewith, use all reasonable efforts to preserve intact their
current business organizations, keep available the services of their current
officers and employees and preserve their relationships with customers,
suppliers, licensors, licensees, distributors and others having business
dealings with them, in each case consistent with past practice, to the end that
their goodwill and ongoing businesses shall be unimpaired to the fullest extent
possible at the Effective Time of the Merger. Without limiting the
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generality of the foregoing, and except as otherwise expressly contemplated by
this Agreement, the Company shall not, and shall not permit any of its
subsidiaries to:
(i) (A) declare, set aside or pay any dividends (other than the
Company's regular quarterly dividends payable to stockholders on or after
August 14, 1999, and quarterly thereafter) on, or make any other
distributions in respect of, any of its capital stock, other than
dividends and distributions by any direct or indirect wholly owned
subsidiary of the Company to the Company or a wholly owned subsidiary of
the Company, (B) split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock or (C)
purchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its subsidiaries or any other securities thereof or any
rights, warrants or options to acquire any such shares or other
securities; provided, however, with respect to clause (A) above after the
consummation of the Offer the Company will make no further dividends or
distributions;
(ii) issue, deliver, sell, pledge or otherwise encumber any shares of
its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities (other than, in the
case of the Company, the issuance of Shares upon the exercise of options
outstanding on the date of this Agreement (as identified and described in
Section 3.1(c)(iv) and (v)) in accordance with their current terms),
purchase, redeem or otherwise acquire or agree to acquire any shares of
capital stock or other securities of the Company or any of its
subsidiaries;
(iii) amend any material term of any of its outstanding securities;
(iv) amend its Certificate of Incorporation, By-laws or other
comparable charter or organizational document;
(v) acquire or agree to acquire (A) by merging or consolidating with,
or by purchasing a substantial portion of the stock or assets of, or by
any other manner, any business or any corporation, partnership,
association, joint venture, limited liability company or other entity or
division thereof or (B) any assets that would be material, individually or
in the aggregate, to the Company and its subsidiaries taken as a whole,
except purchases of supplies and inventory in the ordinary course of
business consistent with past practice;
(vi) form any joint venture with any other person under circumstances
wherein the Company and its subsidiaries would have any liability or
obligation for a contribution to be evidenced by debt or equity of such
venture in excess of $100,000;
(vii) sell, lease, mortgage, pledge, xxxxx x Xxxx on or otherwise
encumber or dispose of any of its properties or assets, except (A) sales
of inventory in the ordinary course of business consistent with past
practice and (B) other transactions involving not in excess of $1,000,000
in the aggregate;
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(viii) (A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or
any of its subsidiaries, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having
the economic effect of any of the foregoing, except for working capital
borrowings under currently existing revolving credit facilities incurred
in the ordinary course of business and except for indebtedness incurred to
refund, refinance or replace indebtedness for borrowed money outstanding
on the date hereof, or (B) make any loans, advances or capital
contributions to, or investments in, any other person, other than to the
Company or any direct or indirect wholly owned subsidiary of the Company;
(ix) make or incur any new capital expenditure not included in the
Company's approved capital expenditure budget for 1999, which, singly or
in the aggregate with all other expenditures, would exceed $1,000,000;
(x) make or change any Tax election not required by law, other than
consistent with past practice, make any change in any method of Tax
accounting, except as described in the Company Disclosure Document, enter
into any settlement or compromise with respect to any Tax liability, or
make any material change in reserves for Tax items other than any change
in such reserves relating to the ordinary course operation of the
respective businesses of the Company and its subsidiaries during current
taxable periods;
(xi) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise),
other than the payment, discharge or satisfaction, in the ordinary course
of business consistent with past practice or in accordance with their
terms, of liabilities reflected or reserved against in, or contemplated
by, the most recent consolidated financial statements (or the notes
thereto) of the Company included in the SEC Documents or incurred in the
ordinary course of business consistent with past practice;
(xii) waive the benefits of, or agree to modify in any manner, any
confidentiality, standstill or similar agreement to which the Company or
any of its subsidiaries is a party;
(xiii) adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such a liquidation or a dissolution, merger,
consolidation, restructuring, recapitalization or reorganization;
(xiv) enter into any new collective bargaining agreement;
(xv) change any material accounting principle used by it, except as
required by regulations promulgated by the SEC or the Financial Accounting
Standards Board;
(xvi) settle or compromise any litigation (whether or not commenced
prior to the date of this Agreement) other than settlements or
compromises: (A) of litigation where the amount paid in settlement or
compromise does not exceed $250,000, or (B) in consultation
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and cooperation with Parent, and, with respect to any such settlement,
with the prior written consent of Parent;
(xvii) make any transaction or commitment, or enter into any contract
or agreement relating to its assets or business (including the acquisition
or disposition of any assets) or relinquish any contract or other right,
in either case, material to the Company and its subsidiaries, taken as a
whole, other than transactions and commitments made or entered into in the
ordinary course of business consistent with past practices and those
contemplated by this Agreement; or
(xviii) authorize any of, or commit or agree to take any of, the
foregoing actions.
(b) Changes in Employment Arrangements. Neither the Company nor any of
its subsidiaries shall adopt or amend (except as may be required by law) any
bonus, profit sharing, compensation, stock option, pension, retirement,
deferred compensation, employment or other employee benefit plan, agreement,
trust, fund or other arrangement (including any Company Benefit Plan) for the
benefit of any employee, director or former director or employee, increase the
compensation or fringe benefits of any officer of the Company or any of its
subsidiaries, or, except as provided in an existing Company Benefit Plan or in
the ordinary course of business consistent with past practice, increase the
compensation or fringe benefits of any employee or former employee or pay any
benefit not required by any existing plan, arrangement or agreement.
(c) Severance. Neither the Company nor any of its subsidiaries shall
grant any new or modified severance or termination arrangement or increase or,
except as required under the existing terms of a Company Benefit Plan,
accelerate any benefits payable under its severance or termination pay policies
in effect on the date hereof.
(d) Other Actions. The Company shall not, and shall not permit any of
its subsidiaries to, take any action that would, or that could reasonably be
expected to, result in any of the representations and warranties of the Company
set forth in this Agreement becoming untrue.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1. Stockholder Approval; Preparation of Proxy Statement. (a)
The Company will, as soon as practicable following the consummation of the
Offer, duly call, give notice of, convene and hold a meeting of its
stockholders for the purpose of approving and adopting this Agreement and the
Merger and approving related matters, unless the DGCL does not require a vote
of stockholders of the Company for the consummation of the Merger. The Company
will, through its Board of Directors, recommend to its stockholders approval
and adoption of this Agreement and the Merger, except to the extent that the
Board of Directors of the Company shall have withdrawn its approval or
recommendation of this Agreement or the Merger as permitted by Section 8.2.
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(b) If required by applicable law, the Company will, as soon as
practicable following the consummation of the Offer, prepare and file a
preliminary Proxy Statement with the SEC and will use its best efforts to
respond to any comments of the SEC or its staff and to cause the Proxy
Statement and all other proxy materials to be mailed to the Company's
stockholders. The Company will notify Parent promptly of the receipt of any
comments from the SEC or its staff and of any request by the SEC or its staff
for amendments or supplements to the Proxy Statement or for additional
information and will supply Parent with copies of all correspondence between
the Company or any of its representatives, on the one hand, and the SEC or its
staff, on the other hand, with respect to the Proxy Statement or the Merger. If
at any time prior to the approval of this Agreement and the Merger by the
Company's stockholders there shall occur any event that should be set forth in
an amendment or supplement to the Proxy Statement, the Company will promptly
prepare and mail to its stockholders such an amendment or supplement. The
Company will not mail any Proxy Statement, or any amendment or supplement
thereto, to which Parent reasonably objects.
(c) Parent agrees to cause all Shares purchased pursuant to the Offer
and all other Shares owned by Sub or any other subsidiary of Parent to be voted
in favor of the approval and adoption of this Agreement.
SECTION 5.2. Access to Information.
(a) During the period from the date hereof to the Effective Time of
the Merger, except to the extent otherwise required by applicable law,
(i) the Company shall, and shall cause each of its subsidiaries,
officers, employees, counsel, financial advisors and other representatives
to, afford to Parent, and to Parent's accountants, counsel, financial
advisors and other representatives, reasonable access to the Company's and
its subsidiaries' respective offices, officers, employees, properties,
books, Tax Returns and related documents and work papers, contracts,
commitments and records and, during such period, the Company shall, and
shall cause each of its subsidiaries, officers, employees, counsel,
financial advisors and other representatives to, furnish promptly to
Parent:
(A) a copy of each report, schedule, registration statement and
other document filed by the Company during such period pursuant to the
requirements of Federal or state securities laws and
(B) all other information concerning its business, properties,
financial condition, operations and personnel as Parent may from time
to time reasonably request so as to afford Parent a reasonable
opportunity to make such review, examination and investigation of the
Company and its subsidiaries as Parent may reasonably desire to make.
The Company agrees to advise Parent of all material developments with
respect to the Company, its subsidiaries and their respective assets
and liabilities.
(ii) the Company agrees to request PricewaterhouseCoopers to permit
KPMG Peat Marwick to review and examine the work papers of
PricewaterhouseCoopers with
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respect to the Company and its subsidiaries, and the officers of the
Company will furnish to Parent such financial and operating data and other
information with respect to the business and properties of the Company and
its subsidiaries as Parent shall from time to time reasonably request,
(iii) the Company shall instruct the officers, employees, counsel,
financial advisors and other representatives of the Company and its
subsidiaries to cooperate with Parent in its investigation of the Company
and its subsidiaries. Any investigation pursuant to this Section shall be
conducted in such a manner as not to interfere unreasonably with the
conduct of the business of the Company and its subsidiaries,
(iv) the Company shall promptly notify Parent of any notices from or
investigations by Governmental Entities that could, to the knowledge of
the Company, affect the Company's business or assets or the consummation
of the Merger. Parent will promptly notify the Company of any notices from
or investigations by Governmental Entities that could materially affect
Parent's consummation of the Merger; and
(v) the Company shall promptly notify Parent of any notice or other
communication from any person alleging that the consent of such person is
or may be required in connection with the transactions contemplated by
this Agreement.
(b) Except as required by law and without limiting in any way the
continued efficacy of the Confidentiality and Standstill Agreement referred to
in Section 8.1, prior to the Effective Time of the Merger and after any
termination of this Agreement, each of the Company and Parent shall, and shall
cause its respective directors, officers, employees, accountants, counsel,
financial advisors and representatives and affiliates to, (i) hold in
confidence, unless compelled to disclose by judicial or administrative process,
or, in the opinion of its counsel, by other requirements of law, all nonpublic
information concerning the other party furnished in connection with the
transactions contemplated by this Agreement except to the extent that such
information can be shown to have been previously known on a nonconfidential
basis by Parent or later lawfully acquired by Parent from sources other than
the Company, or until such time as such information becomes publicly available
(otherwise than through the wrongful act of such person), (ii) not release or
disclose such information to any other person, except in connection with this
Agreement to its auditors, attorneys, financial advisors, other consultants and
advisors, and (iii) not use such information for any competitive or other
purpose other than with respect to its consideration and evaluation of the
transactions contemplated by this Agreement. Any investigation by any party of
the assets and business of the other party and its subsidiaries shall not
affect any representations and warranties hereunder or either party's right to
terminate this Agreement as provided in Article VII.
(c) In the event of the termination of this Agreement, each party
promptly will deliver to the other party (and destroy all electronic data
reflecting the same) all documents, work papers and other material (and any
reproductions or extracts thereof and any notes or summaries thereto) obtained
by such party or on its behalf from such other party or its subsidiaries as a
result of this Agreement or in connection therewith so obtained before or after
the execution hereof.
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SECTION 5.3. Reasonable Efforts; Notification. (a) Upon the terms and
subject to the conditions set forth in this Agreement, except to the extent
otherwise required by applicable law and otherwise provided in this Section
5.3, each of the parties agrees to use reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger, and the other transactions contemplated by this
Agreement, including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of
all necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals or
waivers from third parties, and (iii) the execution and delivery of any
additional instruments (including any required supplemental indentures)
necessary to consummate the transactions contemplated by this Agreement. In
connection with and without limiting the foregoing, each of the Company and
Parent shall (i) take all action necessary to ensure that no state takeover
statute or similar statute or regulation is or becomes applicable to the
Merger, the Offer, this Agreement and the other transactions contemplated by
this Agreement, (ii) if any state takeover statute or similar statute or
regulation becomes applicable to the Merger, the Offer, this Agreement and the
other transactions contemplated by this Agreement, take all action necessary to
ensure that the Merger, the Offer and the other transactions contemplated by
this Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Merger, the Offer, this Agreement and the other
transactions contemplated by this Agreement.
(b) The Company shall give prompt notice to Parent, and Parent or Sub
shall give prompt notice to the Company, of (i) any representation or warranty
made by it contained in this Agreement becoming untrue or inaccurate in any
respect or (ii) the failure by it to comply with or satisfy in any respect any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement; provided, however, that no such notification shall affect the
representations or warranties or covenants or agreements of the parties or the
conditions to the obligations of the parties hereunder.
(c) (i) Each of the parties hereto shall file a premerger notification
and report form under the HSR Act (and any other applicable foreign
antitrust law or regulation) with respect to the Merger as promptly as
reasonably possible following execution and delivery of this Agreement.
Each of the parties agrees to use reasonable efforts to promptly respond
to any request for additional information that may be received from any
Governmental Entity in connection with the HSR filing or any filings under
applicable foreign antitrust laws and regulations.
(ii) The Company will furnish to Parent and Sub copies of all
correspondence, filings or communications (or memoranda setting forth the
substance thereof (collectively, "Company HSR Documents")) between the
Company, or any of its respective representatives, on the one hand, and
any Governmental Entity, or members of the staff of such agency or
authority, on the other hand, with respect to this Agreement or the
Merger; provided, however, that (x) with respect to documents and other
materials filed by or on behalf of the
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Company with the Antitrust Division of the Department of Justice, the
Federal Trade Commission, or any state attorneys general that are
available for review by Parent and Sub, copies will not be required to be
provided to Parent and Sub and (y) with respect to any Company HSR
Documents (1) that contain any information which, in the reasonable
judgment of Fulbright & Xxxxxxxx L.L.P., should not be furnished to Parent
or Sub because of antitrust considerations or (2) relating to a request
for additional information pursuant to Section (e)(1) of the HSR Act, the
obligation of the Company to furnish any such Company HSR Documents to
Parent and Sub shall be satisfied by the delivery of such Company HSR
Documents on a confidential basis to Xxxxx Xxxx & Xxxxxxxx pursuant to a
confidentiality agreement in form and substance reasonably satisfactory to
Parent. Except as otherwise required by United States regulatory
considerations, Parent and Sub will furnish to the Company copies of all
correspondence, filings or communications (or memoranda setting forth the
substance thereof (collectively, "Parent HSR Documents")) between Parent,
Sub or any of their respective representatives, on the one hand, and any
Governmental Entity, or member of the staff of such agency or authority,
on the other hand, with respect to this Agreement or the Merger; provided,
however, that (x) with respect to documents and other materials filed by
or on behalf of Parent or Sub with the Antitrust Division of the
Department of Justice, the Federal Trade Commission, or any state
attorneys general that are available for review by the Company, copies
will not be required to be provided to the Company, and (y) with respect
to any Parent HSR Documents (1) that contain information which, in the
reasonable judgment of Xxxxx Xxxx & Xxxxxxxx, should not be furnished to
the Company because of antitrust considerations or (2) relating to a
request for additional information pursuant to Section (e)(1) of the HSR
Act, the obligation of Parent and Sub to furnish any such Parent HSR
Documents to the Company shall be satisfied by the delivery of such Parent
HSR Documents on a confidential basis to Fulbright & Xxxxxxxx L.L.P.
pursuant to a confidentiality agreement in form and substance reasonably
satisfactory to the Company.
(iii) Notwithstanding the foregoing, nothing contained in this
Agreement shall be construed so as to require Parent, Sub or the Company,
or any of their respective subsidiaries or affiliates, to sell, license,
dispose of, or hold separate, or to operate in any specified manner, any
assets or businesses of Parent, Sub, the Company or the Surviving
Corporation or to defend any lawsuits or other legal proceedings, whether
judicial or administrative, challenging this Agreement or the consummation
of the transactions contemplated hereby, or to seek and to have any stay
or temporary restraining order entered by any court or other Governmental
Entity vacated or reversed (or to require Parent, Sub, the Company or any
of their respective subsidiaries or affiliates to agree to any of the
foregoing). The obligations of each party under Section 5.3(a) to use
reasonable efforts with respect to antitrust matters shall be limited to
compliance with the reporting provisions of the HSR Act and with its
obligations under this Section 5.3(c).
SECTION 5.4. Employee Benefit Matters.
(a) Replacement Plans. Parent may cause any Company Benefit Plan to be
terminated or discontinued at or after the Effective Time of the Merger,
provided that, to the extent Parent or its affiliates maintain a Parent Benefit
Plan of the same type for employees of Parent or any of its affiliates, Parent
shall use its best efforts to permit the Company Employees participating in
such
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Company Benefit Plan (other than any stock option or other stock based
incentive plan) to immediately thereafter participate in a Parent Benefit Plan
of the same type maintained by Parent or any of its affiliates for their
employees generally (a "Replacement Plan"); provided, however, that if the
Company Benefit Plan that is so terminated or discontinued is a group health
plan, then Parent shall permit each Company Employee participating in such
group health plan and his or her eligible dependents to be covered under a
Replacement Plan under the terms and conditions of the Replacement Plan as
modified to the extent necessary to (i) provide medical and dental benefits to
each such Company Employee and such eligible dependents effective immediately
upon the cessation of coverage of such individuals under such group health
plan, (ii) credit to such Company Employee, for the year during which such
coverage under such Replacement Plan begins, with any deductibles and
copayments already incurred during such year under such group health plan, and
(iii) waive any preexisting condition restrictions to the extent that the
preexisting condition restrictions were satisfied under such group health plan.
Parent, the Surviving Corporation, their affiliates, and the Parent Benefit
Plans (including, without limitation, the Replacement Plans) shall recognize
each Company Employee's years of service and level of seniority with the
Company and its subsidiaries for purposes of terms of employment, eligibility
and vesting under the Parent Benefit Plans. Nothing in this Agreement shall be
construed to require Parent to provide any particular type or amount of
benefits for any person under any Parent Benefit Plan.
(b) Stock Options and Stock Awards. (1) At or immediately prior to the
Effective Time of the Merger, each outstanding stock option to purchase Shares
and award of Shares granted under any stock option or compensation plan or
arrangement of the Company, whether or not vested or exercisable, shall be
canceled, and promptly after the Effective Time of the Merger the Company shall
pay (i) each holder of any such option for each such option an amount in cash
(net of applicable withholding taxes) determined by multiplying the excess, if
any, of $21.25 per Share over the applicable exercise price of such Share under
such option by the number of Shares subject to such option (whether or not
vested or exercisable), and (ii) each holder of any such award of Shares an
amount in cash (net of applicable withholding taxes) determined by multiplying
$21.25 times the number of Shares subject to such award (whether or not
vested). Notwithstanding the foregoing, the amount of any payment pursuant to
this Section 5.4(b) shall be subject to any relevant limit or cap under any
employment or change in control agreement between the Company and the
applicable individual.
(2) Prior to the Effective Time of the Merger, the Company shall
(i) use its best efforts to obtain any consents from holders of options to
purchase Shares and awards of Shares granted under the Company's employee stock
option or compensation plans or arrangements and (ii) make any amendments to
the terms of such stock option or compensation plans or arrangements that, in
the case of either clauses (i) or (ii), are necessary to give effect to the
transactions contemplated by Section 5.4(b)(1). Notwithstanding any other
provision of this Section 5.4(b), payment may be withheld in respect of an
employee stock option or award of Shares until such necessary consents are
obtained with respect to such option or award of Shares.
(3) The parties hereto expressly acknowledge and agree that for
purposes of the change of control agreements listed on Schedule II, such
payment of consideration upon the cancellation of a stock option pursuant to
this Section 5.4(b) shall be treated as attributable to the exercise of such
stock options.
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SECTION 5.5. Indemnification. (a) The Company shall, and from and
after the Effective Time of the Merger, Parent and the Surviving Corporation
shall, indemnify, defend and hold harmless each person who is now, or has been
at any time prior to the date hereof or who becomes prior to the Effective Time
of the Merger, an officer or director of the Company or any of its subsidiaries
or an employee of the Company or any of its subsidiaries who acts as a
fiduciary under any Company Benefit Plans (the "Indemnified Parties") against
all losses, claims, damages, costs, expenses (including attorneys' fees),
liabilities or judgments or amounts that are paid in settlement with the
approval of the indemnifying party (which approval shall not be unreasonably
withheld) of or in connection with any threatened or actual claim, action,
suit, proceeding or investigation based in whole or in part on or arising in
whole or in part out of the fact that such person is or was a director, officer
or such employee of the Company or any subsidiary whether pertaining to any
matter existing or occurring at or prior to the Effective Time of the Merger
and whether asserted or claimed prior to, or at or after, the Effective Time of
the Merger (including arising out of or relating to the Merger, the
consummation of the transactions contemplated herein, and any action taken in
connection therewith) ("Indemnified Liabilities"). Any Indemnified Party
wishing to claim indemnification under this Section 5.5, upon learning of any
such claim, action, suit, proceeding or investigation, shall notify the Company
(or after the Effective Time of the Merger, Parent and the Surviving
Corporation), but the failure so to notify shall not relieve a party from any
liability that it may have under this Section 5.5, except to the extent such
failure materially prejudices such party. The Indemnified Parties as a group
may retain only one law firm to represent them with respect to each such matter
unless there is, under applicable standards of professional conduct, a conflict
between the positions of any two or more Indemnified Parties.
(b) Parent shall purchase and maintain in effect, or the Company shall
be permitted to purchase and maintain in effect, for the benefit of the
Indemnified Parties for a period of six years after the Effective Time,
directors' and officers' liability insurance of at least the same coverage and
amounts containing terms and conditions that are no less advantageous in any
material respect to the Indemnified Parties than that maintained by the Company
and its Subsidiaries as of the date of this Merger Agreement with respect to
matters arising before the Effective Time, provided that Parent shall not be
required to pay an annual premium of such insurance in excess of two times the
last annual premium paid by the Company prior to the date hereof, but in such
case shall purchase as much coverage as possible for such amounts.
(c) All rights to indemnification for acts or omissions occurring
prior to the Effective Time of the Merger now existing in favor of the
Indemnified Parties as provided in the Certificate of Incorporation or by-laws
of the Company or its subsidiaries and in any indemnification agreements
existing as of the date hereof to which they are parties shall survive the
Merger, and the Surviving Corporation shall continue such indemnification
rights for acts or omissions occurring prior to the Effective Time of the
Merger in full force and effect in accordance with their terms and Parent shall
be financially responsible therefor.
(d) The provisions of this Section 5.5 are intended to be for the
benefit of, and shall be enforceable by, each indemnified party, his heirs and
representatives.
SECTION 5.6. Fees and Expenses. Except as provided in Article VIII,
all fees and expenses incurred in connection with the Offer, the Merger, this
Agreement and the other transactions
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contemplated hereby shall be paid by the party incurring such fees or expenses,
whether or not the Offer or the Merger is consummated.
SECTION 5.7. Public Announcements. Parent and Sub, on the one hand,
and the Company, on the other hand, will consult with each other before issuing
any press release or otherwise making any public statements with respect to
this Agreement and the transactions contemplated by this Agreement and shall
not issue any such press release or make any such public statement prior to
such consultation, except that each party may respond to questions from
stockholders and Parent may respond to inquiries from financial analysts and
media representatives in a manner consistent with its past practice and each
party may make such disclosure as may be required by applicable law or by
obligations pursuant to any listing agreement with any national securities
exchange without prior consultation to the extent such consultation is not
reasonably practicable. The parties agree that the initial press release or
releases to be issued in connection with the execution of this Agreement shall
be mutually agreed upon prior to the issuance thereof.
SECTION 5.8. Stockholder Litigation. The Company shall give Parent the
opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and its directors as of the date hereof or as of
immediately prior to the Effective Time of the Merger relating to the
transactions contemplated by this Agreement until the Effective Time of the
Merger, and thereafter, shall give Parent the opportunity to control the
defense of such litigation and, if Parent so chooses to control such
litigation, Parent shall give the Company and such directors an opportunity to
participate in such litigation; provided, however, that no settlement of such
litigation shall be agreed to without the consent of Parent, the Company and
such directors, which consent shall not be unreasonably withheld.
SECTION 5.9. Directors. Effective upon the acceptance for payment of,
and payment by Sub for, any Shares pursuant to the Offer, Sub shall be entitled
to designate such number of directors on the Board of Directors of the Company
as will give Sub, subject to compliance with Section 14(f) of the Exchange Act,
representation on such Board of Directors equal to at least that number of
directors, rounded up to the next whole number, which is the product of (a) the
total number of directors on such Board of Directors (giving effect to the
directors elected pursuant to this sentence) multiplied by (b) the percentage
that (i) such number of Shares so accepted for payment and paid for by Sub plus
the number of Shares otherwise owned by Sub or any other subsidiary of Parent
bears to (ii) the number of Shares outstanding, and the Company shall, at such
time, cause Sub's designees to be so elected; provided, however, that in the
event that Sub's designees are appointed or elected to the Board of Directors
of the Company, until the Effective Time of the Merger such Board of Directors
shall have at least three directors who are directors on the date hereof and
who are not officers of the Company (the "Independent Directors") and provided
further that, in such event, if the number of Independent Directors shall be
reduced below three for any reason whatsoever, any remaining Independent
Directors (or Independent Director, if there shall be only one remaining) shall
be entitled to designate persons to fill such vacancies who shall be deemed to
be Independent Directors for purposes of this Agreement or, if no Independent
Directors then remain, the other directors shall designate three persons to
fill such vacancies who shall not be officers, stockholders or affiliates of
the Company, Parent or Sub, and such persons shall be deemed to be Independent
Directors for purposes of this Agreement. Subject to applicable law, the
Company shall promptly take all action necessary to effect any such election,
including mailing to its stockholders the
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Information Statement (the "Information Statement") containing the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, and the Company agrees to make such mailing with the mailing of
Schedule 14D-9 (provided that Sub shall have provided to the Company on a
timely basis all information required to be included in the Information
Statement with respect to Sub's designees). In connection with the foregoing,
the Company will promptly, at the option of Sub, either increase the size of
the Company's Board of Directors or obtain the resignation of such number of
its current directors as is necessary to enable Sub's designees to be elected
or appointed to the Company's Board of Directors as provided above.
SECTION 5.10. Tax Certification. At any time during the period
beginning on the date hereof and ending on the Effective Time of the Merger, the
Company shall provide to Parent, within two business days of a request by
Parent, a certificate meeting the requirements of Treas. Reg. Section 1.897-2(h)
to the effect that the Company is not, nor has it been within 5 years of the
date thereof, a "United States real property holding corporation" as defined in
Section 897 of the Code.
ARTICLE VI
CONDITIONS PRECEDENT
SECTION 6.1. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger is subject
to the satisfaction prior to the Effective Time of the Merger of the following
conditions:
(a) Stockholder Approval. If required by the DGCL, this Agreement
shall have been approved and adopted by the affirmative vote or consent of
the stockholders of the Company by the requisite vote in accordance with
the DGCL and the Company's Certificate of Incorporation.
(b) Other Approvals. All authorizations, consents, orders or approvals
of, or declarations or filings with, or terminations or expirations of
waiting periods imposed by, any Governmental Entity necessary for the
consummation of the transactions contemplated by this Agreement shall have
been filed, shall have occurred or shall have been obtained.
(c) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any
Governmental Entity or court of competent jurisdiction or statute, rule or
regulation restraining or prohibiting the consummation of the Merger shall
be in effect; provided, however, that each of the parties shall have used
reasonable efforts, subject to the limitations set forth in Section 5.3
hereof, to prevent the entry of any such injunction or other order.
SECTION 6.2. Conditions to Obligation of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are subject to the condition
that (i) the Company shall have performed in all material respects all
obligations to be performed by it under this Agreement at or
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prior to the Effective Time of the Merger and (ii) the representations and
warranties of the Company contained in this Agreement and in any certificate or
other writing delivered by the Company pursuant hereto, disregarding all
qualifications and exceptions contained herein and therein relating to
materiality or material adverse effect or any similar standard or
qualification, shall be true in all material respects at and as of the
Effective Time of the Merger as if made at and as of such time.
SECTION 6.3. Condition to Obligation of the Company. The obligation of
the Company to effect the Merger is subject to the condition that (i) Parent
and Sub shall have performed in all material respects all obligations to be
performed by them under this Agreement at or prior to the Effective Time of the
Merger and (ii) the representations and warranties of Parent and Sub contained
in this Agreement and in any certificate or other writing delivered by Parent
or Sub pursuant hereto, disregarding all qualifications and exceptions
contained herein and therein relating to materiality or material adverse effect
or any similar standard or qualification, shall be true in all material
respects at and as of the Effective Time of the Merger as if made at and as of
such time.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time of the Merger, whether before or after approval of
matters presented in connection with the Merger by the stockholders of the
Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if the stockholders of the Company fail to give any required
approval of the Merger and the transactions contemplated hereby upon a
vote at a duly held meeting of stockholders of the Company or at any
adjournment thereof;
(ii) if (w) as a result of the failure of any of the conditions set
forth in paragraphs (a) through (h) of Exhibit A hereto, Sub shall
have failed to commence the Offer within 5 business days of the date
hereof or (x) as a result of the failure of any of the conditions set
forth in Exhibit A hereto the Offer shall have been terminated or
expired in accordance with its terms without Sub having purchased any
Shares pursuant to the Offer or (y) Sub shall not have purchased any
Shares pursuant to the Offer within 180 days following the date
hereof; provided, however, that the passage of the period referred to
in clause (y) shall be tolled for any part thereof during which the
Offer shall have been extended pursuant to one or more Special
Extensions but in no event shall such period be tolled for more than
90 days; and provided further that the right to terminate this
Agreement pursuant to this Section 7.1(b)(ii) shall not be available
to any party whose failure to perform any of its obligations under
this Agreement results in the failure of any such condition;
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(iii) if the Merger shall not have been consummated on or before
the date one year following the purchase of Shares pursuant to the
Offer, unless the failure to consummate the Merger is the result of a
material breach of this Agreement by the party seeking to terminate
this Agreement; provided, however, that the passage of such period
shall be tolled for any part thereof during which any party shall be
subject to a nonfinal order, decree or ruling or action restraining,
enjoining or otherwise prohibiting the consummation of the Merger or
the calling or holding of a meeting of the stockholders of the Company
called to approve, inter alia, the Merger; or
(iv) if any court of competent jurisdiction or any Governmental
Entity shall have issued an order, decree or ruling or taken any other
action permanently enjoining, restraining or otherwise prohibiting the
purchase of Shares pursuant to the Offer or the Merger and such order,
decree, ruling or other action shall have become final and
nonappealable.
(c) by the Company in accordance with the provisions of Section 8.2;
(d) by Parent in accordance with the provisions of Section 8.2;
(e) by Parent, if the Company breaches in any material respect any of
its representations or warranties herein or fails to perform in any material
respect any of its covenants, agreements or obligations under this Agreement;
(f) by the Company, if Parent or Sub breaches in any material respect
any of its representations or warranties herein or fails to perform in any
material respect any of its covenants, agreements or obligations under this
Agreement; or
(g) by Parent, if Parent shall have received any communication from
the Department of Justice or Federal Trade Commission (each an "HSR Authority")
(which communication shall be confirmed to the Company by the HSR Authority)
that causes Parent to reasonably believe that any HSR Authority has authorized
the institution of litigation challenging the transactions contemplated by this
Agreement under the U.S. antitrust laws, which litigation will include a motion
seeking an order or injunction prohibiting the consummation of any of the
transactions contemplated by this Agreement.
The party desiring to terminate this Agreement pursuant to this
Section 7.1 (other than pursuant to Section 7.1(a)) shall give notice of such
termination to the other party.
SECTION 7.2. Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 7.1, an amendment
of this Agreement pursuant to Section 7.4 or an extension or waiver pursuant to
Section 7.5 shall, in order to be effective, require action by a majority of
the members of the Board of Directors of the Company who were members thereof
on the date of this Agreement and remain as such hereafter or the duly
authorized designees of such members; provided, however, that in the event that
Sub's designees are appointed or elected to the Board of Directors of the
Company as provided in Section 5.9, after the acceptance for payment of Shares
pursuant to the Offer and prior to the Effective Time of the Merger, the
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affirmative vote of a majority of the Independent Directors, in lieu of the
vote required pursuant to this Section, shall be required to (i) amend or
terminate this Agreement by the Company, (ii) exercise or waive any of the
Company's rights or remedies under this Agreement or (iii) extend the time for
performance of Parent's and Sub's respective obligations under this Agreement.
SECTION 7.3. Effect of Termination. In the event of termination of
this Agreement by either the Company or Parent as provided in Section 7.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company, except that no such
termination shall relieve any party of any liability or damages resulting from
any willful breach by such party of this Agreement. The confidentiality
provisions of Sections 5.2(b) and (c) and the provisions of Sections 3.1(h),
3.1(i), 3.2(d), 5.6, 7.3, 8.1, 8.2, 8.3 and Article IX shall survive any
termination hereof.
SECTION 7.4. Amendment. This Agreement may be amended by the parties
at any time before or after any required approval of matters presented in
connection with the Merger by the stockholders of the Company; provided,
however, that after any such approval, there shall be made no amendment that by
law requires further approval by such stockholders without the further approval
of such stockholders. This Agreement may not be amended except by an instrument
in writing signed on behalf of all of the parties hereto.
SECTION 7.5. Extension; Waiver. At any time prior to the Effective
Time of the Merger, the parties may, to the extent legally allowed, (a) extend
the time for the performance of any of the obligations or the other acts of the
other parties, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (c) subject to
the proviso of Section 7.4, waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
ARTICLE VIII
SPECIAL PROVISIONS AS TO CERTAIN MATTERS
SECTION 8.1. Takeover Defenses of the Company and Standstill
Agreements. The Company shall take such action with respect to any
anti-takeover provisions in its charter or afforded it by statute to the extent
necessary to facilitate the Offer and consummate the Merger on the terms set
forth in this Agreement. The Company hereby waives the provisions of the letter
agreement dated April 1, 1999 (the "Confidentiality and Standstill Agreement"),
between the Company and Parent, prohibiting the purchase of Shares or acting to
influence or control the Company.
SECTION 8.2. No Solicitation. (a) From the date hereof until the
termination hereof, the Company will not, and will cause its subsidiaries and
the officers, directors, employees, investment bankers, attorneys, accountants,
consultants or other agents or advisors of the Company and its
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subsidiaries not to, directly or indirectly, (i) take any action to solicit,
initiate, facilitate or encourage the submission of any takeover proposal, (ii)
engage in discussions or negotiations with, or disclose any nonpublic
information relating to the Company or any of its subsidiaries or afford access
to the properties, books or records of the Company or any of its subsidiaries
to, any person who may be considering making, or has made, a takeover proposal,
(iii) grant any waiver or release under any standstill or similar agreement
with respect to any class of equity securities of the Company, (iv) to the
fullest extent permitted by the DGCL, amend or grant any waiver or release or
approve any transaction or redeem rights under the Company Rights Agreement or
(v) enter into any agreement with respect to a takeover proposal (other than
the confidentiality and standstill agreement described in (c)(iii) below).
(b) The Company will notify Parent promptly (but in no event later
than 24 hours) after receipt by the Company (or any of its advisors) of any
takeover proposal or any request for nonpublic information relating to the
Company or any of its subsidiaries or for access to the properties, books or
records of the Company or any of its subsidiaries by any person who may be
considering making, or has made, a takeover proposal. The Company shall provide
such notice orally and in writing and shall identify the person making, and the
price, terms and conditions of, any such takeover proposal or request. The
Company shall keep Parent fully informed, on a current basis, of the status and
details of any such takeover proposal or request. The Company shall, and shall
cause its subsidiaries and the directors, employees and other agents of the
Company and its subsidiaries to, (i) cease immediately and cause to be
terminated all activities, discussions and negotiations, if any, with any
persons conducted prior to the date hereof with respect to any takeover
proposal and (ii) require all such persons to return to the Company all
confidential information provided by or on behalf of the Company and to destroy
any materials prepared by such persons based upon such confidential
information. Nothing contained in this Agreement shall prevent the Board of
Directors of the Company from complying with Rule 14e-2 under the Exchange Act
with respect to any takeover proposal. For purposes of this Agreement,
"takeover proposal" means (i) any offer or proposal for, other than a proposal
by Parent or any of its affiliates, a merger or other business combination
involving the Company or any of its subsidiaries, (ii) any proposal or offer,
other than a proposal or offer by Parent or any of its affiliates, to acquire
from the Company or any of its affiliates in any manner, directly or
indirectly, an equity interest in the Company or any subsidiary, any voting
securities of the Company or any subsidiary or a material amount of the assets
of the Company and its subsidiaries, taken as a whole, or (iii) any proposal or
offer, other than a proposal or offer by Parent or any of its affiliates, to
acquire from the stockholders of the Company by tender offer, exchange offer or
otherwise more than 20% of the outstanding Shares.
(c) Notwithstanding the foregoing, the Company may negotiate or
otherwise engage in substantive discussions with, and furnish nonpublic
information to, any person who delivers a superior proposal if (i) the Company
has complied with the terms of this Section 8.2, including, without limitation,
the requirement in Section 8.2(b) that it notify Parent promptly after its
receipt of any takeover proposal, (ii) the Board of Directors of the Company
determines in good faith by a majority of the disinterested members thereof, on
the basis of advice from outside legal counsel to the Company, that it should
take such action to comply with its fiduciary duties under applicable law,
(iii) such person executes a confidentiality and standstill agreement with
terms no less favorable to the Company than those contained in the
Confidentiality and Standstill Agreement, and (iv) the Company shall have
delivered to Parent a prior written notice advising Parent that it intends to
take
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such action. In furtherance and not in limitation of the foregoing, the Company
shall give Parent at least 24 hours' advance notice of any information to be
supplied to any person making such superior proposal. For purposes of this
Agreement, "superior proposal" means any bona fide, written takeover proposal
to acquire, directly or indirectly, for consideration consisting of cash,
securities or a combination thereof, at least a majority of the Shares then
outstanding or all or substantially all the assets of the Company, and
otherwise on terms which a majority of disinterested members of the Board of
Directors of the Company determines in its good faith reasonable judgment
(based on the written advice of its financial advisor, a copy of which shall be
provided to Parent, and taking into account all the terms and conditions of the
takeover proposal, including any break-up fees, expense reimbursement
provisions and conditions to consummation) to be more favorable and provide
greater value to all the Company's stockholders than the Offer, the Merger and
the transactions contemplated hereby and for which the financing, to the extent
required, is then committed or in the judgment of such majority of
disinterested members of the Board of Directors of the Company is reasonably
obtainable.
(d) Except as provided in the next sentence, the Board of Directors of
the Company shall recommend approval and adoption of this Agreement and that
the holders of the Shares tender their Shares pursuant to the Offer and vote to
approve the Merger and the transactions contemplated hereby and shall advise
the stockholders of the determination by the Board of Directors that the
transactions contemplated hereby, including the Offer and the Merger, are fair
to and in the best interests of the stockholders of the Company. The Board of
Directors of the Company shall be permitted to withdraw, or modify in a manner
adverse to Parent or Sub, its recommendation to its stockholders, but only if
(x) the Company has complied with the terms of this Section 8.2, including,
without limitation, the requirement in Section 8.2(b) that it notify Parent
promptly after its receipt of any takeover proposal and in Section 8.2(e) that
it provide Parent with an opportunity to respond to any superior proposal, (y)
a superior proposal is pending at the time the Company's Board of Directors
determines to take any such action and (z) the Company's Board of Directors
determines in good faith by a majority of the disinterested members thereof, on
the basis of consultations with its financial advisors and the advice of
outside legal counsel to the Company, that it should take such action to comply
with its fiduciary duties under applicable law.
(e) Prior to exercising the right of the Company's Board of Directors
pursuant to Section 8.2(d) to withdraw or modify its recommendation, the
Company shall (i) notify Parent in writing that it intends to enter into a
binding written agreement concerning a transaction that constitutes a superior
proposal, attaching the most current version of such agreement to such notice
(which version shall be updated on a current basis) and (ii) provide Parent
with an opportunity to respond to such superior proposal within two business
days of receipt of such written notice by making an offer that the Company's
Board of Directors determines in good faith, after consultation with its
financial advisors, by a majority of the disinterested members thereof, is more
favorable to the stockholders of the Company than the superior proposal. The
Company agrees 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.
(f) In the event that Parent shall not make an offer described in
(e)(ii) above, the Company may terminate this Agreement; provided that the
Company shall pay to Parent the Termination Fee (as defined below) prior to
such termination.
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(g) In the event that (i) the Board of Directors of the Company or any
committee thereof shall (A) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Parent or Sub the approval or recommendation by
the Board of Directors of the Company or any such committee of this Agreement,
the transactions contemplated hereby, and the Offer or the Merger, or take any
action having such effect or (B) approve or recommend, or propose to approve or
recommend, any takeover proposal; (ii) the Company shall provide Parent with
any notice described in (e)(i) above; or (iii) the Company shall have entered
into any agreement (other than any confidentiality and standstill agreement
entered into in accordance with this Section 8.2) with respect to any takeover
proposal, Parent may terminate this Agreement immediately.
(h) Any breach of the provisions of this Section 8.2 shall be deemed a
material breach of this Agreement.
SECTION 8.3. Fee and Expense Reimbursements.
(a) If this Agreement is terminated pursuant to Section 7.1(c),
7.1(d), 8.2(f) or 8.2(g), the Company shall pay to Parent a termination fee in
immediately available funds of $15 million in cash (the "Termination Fee"). The
Company shall pay to Parent the Termination Fee (i) immediately prior to the
termination of this Agreement in the event this Agreement is terminated
pursuant to Section 7.1(c) or 8.2(f) or (ii) promptly upon termination of this
Agreement in the event this Agreement is terminated pursuant to Section 7.1(d)
or 8.2(g).
(b) In the event that (i) a takeover proposal is made by any person
during the pendency of the Offer, other than by Parent or Sub, (ii) the Offer
shall have terminated or expired without the Minimum Tender Condition being
satisfied and (iii) within one year after the Offer shall have terminated or
expired, either (A) the Company enters into an agreement (which is subsequently
consummated, whether before or after the expiration of such one year period)
with any person, other than Parent or Sub, with respect to a takeover proposal
which provides for (1) the transfer or issuance of securities representing more
than 50% of the equity or voting interests in the Company, or (2) transfer of
assets, securities or ownership interests representing more than 50% of the
consolidated assets or earning power of the Company, or (B) any person acquires
a majority of the Shares, then the Company shall pay to Parent the Termination
Fee (as defined above). Any payment of such Termination Fee shall be paid
within one business day after it becomes payable.
(c) In the event (i) this Agreement is terminated by Parent or the
Company pursuant to Sections 7.1(b)(i) 7.1(c), 7.1(d), 7.1(e), 8.2(f) or 8.2(g)
or (ii) the Company shall be required to pay the Termination Fee pursuant to
Section 8.3(b), the Company shall assume and pay, or reimburse Parent for, all
reasonable fees and expenses incurred by Parent or Sub (including the fees and
expenses of its counsel, accountants and financial advisors) through the date
of termination of this Agreement or, in the case of clause (ii) above, the
Offer, and which are specifically related to the Offer, the Merger, this
Agreement and the matters contemplated by this Agreement, but not to exceed
$2,500,000 in the aggregate, promptly, but in no event later than five business
days after submission of a request for payment of the same.
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ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1. Nonsurvival of Representations and Warranties. None of
the representations, warranties, covenants or agreements in this Agreement or
in any instrument delivered pursuant to this Agreement shall survive the
Effective Time of the Merger. This Section 9.1 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time of the Merger.
SECTION 9.2. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or by
facsimile or sent by overnight courier to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Parent or Sub, to
Xxxxxxx Electric Co.
0000 Xxxx Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxx, Xx.
Senior Vice President
with a copy to
Xxxxxxx Electric Co.
0000 Xxxx Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: W. Xxxxx Xxxxxxx
Senior Vice President, General
Counsel and Secretary
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Xxx.
-00-
00
(x) if to the Company, to
Xxxxxx Industries, Inc.
0000 Xxxx Xxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000 000-0000
Confirmation: (000) 000-0000
Attention: X. X. Xxxxxxxx
Chairman, President and Chief Executive Officer
with a copy to
Xxxxxx Industries, Inc.
0000 Xxxx Xxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
Attention: Xxxxx-Xxx Xxxxxx
General Counsel
with a copy to:
Fulbright & Xxxxxxxx L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
Attention: Xxxxxxx X. Still, Esq.
SECTION 9.3. Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person;
(b) "knowledge" means, with respect to any matter stated herein to be
"to the Company's knowledge," or similar language, the actual knowledge
(including without limitation, any matter which a person holding the office and
performing the functions of such person, should reasonably be expected to know)
of the Chairman of the Board, the Chief Executive Officer, President, any Vice
President or Chief Financial Officer of the Company or the president at each
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division of the Company, and with respect to any matter stated herein to be "to
Parent's knowledge," or similar language, the actual knowledge of the Chairman
of the Board, the Chief Executive Officer, President, any Vice President, Chief
Financial Officer or General Counsel of Parent.
(c) "material adverse effect" or "material adverse change" means, when
used in connection with any person, any change or effect (or any development
that, insofar as can reasonably be foreseen, is likely to result in any change
or effect) that is materially adverse to the business, properties, assets,
condition (financial or otherwise) or results of operations of that person and
its subsidiaries, taken as a whole.
(d) "person" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization or other
entity; and
(e) a "subsidiary" of any person means any corporation, partnership,
association, joint venture, limited liability company or other entity in which
such person owns over 50% of the stock or other equity interests, the holders
of which are generally entitled to vote for the election of directors or other
governing body of such other legal entity.
SECTION 9.4. Interpretation. When a reference is made in this
Agreement to a Section, Exhibit or Schedule, such reference shall be to a
Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
SECTION 9.5. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
SECTION 9.6. Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein), the
Stock Option Agreement dated the date hereof between Parent and the Company and
the Confidentiality and Standstill Agreement (a) constitute the entire
agreement and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof and (b)
except for the provisions of Section 5.5, are not intended to confer upon any
person other than the parties any rights or remedies hereunder.
SECTION 9.7. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
SECTION 9.8. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of, and be enforceable by, the parties and their respective successors and
assigns.
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SECTION 9.9. Enforcement of the Agreement. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any district court of
the United States located in the State of Delaware or in any Delaware state
court, this being in addition to any other remedy to which they are entitled at
law or in equity. In addition, each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any Federal or state court
sitting in the State of Delaware in the event any dispute between the parties
hereto arises out of this Agreement solely in connection with such a suit
between the parties, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court
and (c) agrees that it will not bring any action relating to this Agreement in
any court other than such a Federal or state court.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 9.11. Performance by Sub. Parent hereby agrees to cause Sub to
comply with its obligations under this Agreement and the Offer.
SECTION 9.12. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
XXXXXXX ELECTRIC CO.
By /s/ X. X. Xxx, Xx.
--------------------------------------
Name: X. X. Xxx, Xx.
-----------------------------------
Title: Sr. Vice President-Acquisitions &
----------------------------------
Development
-----------
EMERSUB LXXIV, INC.
By /s/ X. X. Xxx, Xx.
--------------------------------------
Name: X. X. Xxx, Xx.
-----------------------------------
Title: Vice President
----------------------------------
XXXXXX INDUSTRIES, INC.
By /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Name Xxxxx X. Xxxxxxx
------------------------------------
Title: Executive Vice President
----------------------------------
47
EXHIBIT A
CONDITIONS TO THE OFFER
Notwithstanding any other term of the Offer or this Agreement, Sub shall
not be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered Shares after the
termination or withdrawal of the Offer), to pay for any Shares tendered
pursuant to the Offer, and may terminate the Offer, unless (i) there shall have
been validly tendered and not withdrawn prior to the expiration date of the
Offer that number of Shares which would represent at least 66-2/3% of the Fully
Diluted Shares (the "Minimum Tender Condition"), (ii) any waiting period under
the HSR Act applicable to the purchase of Shares pursuant to the Offer shall
have expired or been terminated (the "HSR Condition") and (iii) any filings or
approvals under applicable foreign antitrust laws and regulations shall have
been made and obtained and any related waiting periods shall have expired. The
term "Fully Diluted Shares" means all Shares, on a fully diluted basis, after
giving effect to the exercise or conversion of all options, warrants, rights
and securities exercisable or convertible into Shares, other than potential
issuances attributable to the Rights unless such Rights shall be exercisable
pursuant to the Company's Rights Agreement. Furthermore, notwithstanding any
other term of the Offer or this Agreement, Sub shall not be required to accept
for payment or, subject as aforesaid, to pay for any Shares not theretofore
accepted for payment or paid for, and may terminate or amend the Offer, with
the consent of the Company (except as otherwise provided in this Agreement) or
if, at any time on or after the date of this Agreement and before the
acceptance of such Shares for payment or the payment therefor, any of the
following conditions exists:
(a) there shall be any action taken, or any statute, rule, regulation,
decree, order or injunction enacted, enforced, promulgated, issued or
deemed applicable to the Offer or the Merger, by any court, government or
governmental authority or agency, domestic or foreign, other than the
application of the waiting period provisions of the HSR Act to the Offer
or the Merger, that is likely to (i) make illegal, delay materially or
restrain or prohibit the making or consummation of the Offer or the Merger
or restrains or prohibits the performance of this Agreement and the
transactions contemplated hereby, (ii) in connection with the transactions
contemplated by this Agreement, prohibit or limit the ownership or
operation by Parent or Sub of all or any material portion of the business
or assets of the Company, Parent or any of their respective subsidiaries,
or compel Parent or any of its subsidiaries to dispose of or to hold
separate all or any material portion of the business or assets of the
Company, Parent or any of their subsidiaries (taken as a whole for
purposes of materiality), or imposes any material limitation on the
ability of the Company, Parent or any of their respective subsidiaries to
conduct such business or own such assets, (iii) impose material
limitations on the ability of Parent or Sub (or any other affiliate of
Parent or Sub) to acquire or hold or to exercise full rights of ownership
of the Shares, including, but not limited to, the right to vote the Shares
purchased by Sub on all matters properly presented to the stockholders of
the Company , or (iv) require divestiture by Parent, Sub or any of
Parent's other subsidiaries or affiliates of any Shares;
48
(b) there shall be instituted or pending any action or any
investigation or other inquiry by any Governmental Entity that is likely
to result in any of the consequences referred to in clauses (i) through
(iv) of paragraph (a) above;
(c) it shall have been publicly disclosed or Parent shall have
otherwise learned that (i) any person or "group" (as defined in Section
13(d)(3) of the Exchange Act) shall have acquired beneficial ownership of
more than 25% of any class or series of capital stock of the Company
(including the Shares), through the acquisition of stock, the formation of
a group or otherwise, or shall have been granted any option, right or
warrant, conditional or otherwise, to acquire beneficial ownership of more
than 25% of any class or series of capital stock of the Company (including
the Shares); or (ii) any person or group shall have entered into a
definitive agreement or an agreement in principle with the Company
regarding an acquisition of 25% or more of the Shares or a merger,
consolidation or other business combination;
(d) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Parent or Sub its
approval or recommendation of the Offer, the Merger or this Agreement, or
approved or recommended any takeover proposal, (ii) the Company shall have
recommended or entered into any agreement (other than any confidentiality
and standstill agreement entered into in accordance with Section 8.2) with
respect to any takeover proposal, (iii) the Company shall have delivered
to Parent a notice of superior proposal, or (iv) the Board of Directors of
the Company or any committee thereof shall have resolved to do any of the
foregoing;
(e) there shall have occurred a material adverse change in the Company
and its subsidiaries, taken as a whole, or a material adverse effect on
the Company and its subsidiaries, taken as a whole, it being understood ,
however, that no such change or effect shall be deemed to have occurred to
the extent such change or effect arises from conditions generally
affecting the Company's industry or from the United States or global
economies.
(f) any of the representations and warranties of the Company set forth
in this Agreement that are qualified as to materiality shall not be true
and correct and any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each
case (i) as of the date of this Agreement or any other date as of which
such representations and warranties expressly speak or (ii) at any time
prior to the consummation of the Offer as if made at and as of such time,
it being understood, however, that with respect to clause (ii) no
representation or warranty shall be deemed to be not true and correct to
the extent that the failure to be so arises from conditions generally
affecting the Company's industry or from the United States or global
economies and further that the consequence of such failure to be true and
correct (disregarding all references to materiality or material adverse
effect therein) is a material adverse change or effect on the Company and
its subsidiaries, taken as a whole;
49
(g) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under this
Agreement which failure has not been cured; or
(h) this Agreement shall have been terminated in accordance with its
terms.
The foregoing conditions are for the sole benefit of Sub and Parent and,
subject to the terms and conditions of this Agreement, may be waived by Sub and
Parent in whole or in part at any time and from time to time in their sole
discretion.
