EXHIBIT 2.6
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AGREEMENT AND PLAN OF REORGANIZATION
DATED AS OF APRIL 10, 1998
BY AND AMONG
OEI INTERNATIONAL, INC.
C&I ACQUISITION, INC.
CHEMICAL & INDUSTRIAL ENGINEERING, INC.
AND
CERTAIN OF ITS
STOCKHOLDERS
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "AGREEMENT") is made as
of April 10, 1998, among OEI INTERNATIONAL, INC., a Delaware corporation
("OEI"), C&I ACQUISITION, INC., a Kentucky corporation and a wholly owned
subsidiary of OEI ("NEWCO"), CHEMICAL & INDUSTRIAL ENGINEERING, INC., a Kentucky
corporation (the "COMPANY"), and the persons executing this Agreement on the
signature pages under the caption "STOCKHOLDERS" (collectively, the
"STOCKHOLDERS," and each of them, individually, a "STOCKHOLDER").
PRELIMINARY STATEMENTS
The parties to this Agreement wish to effect a business combination
pursuant to which:
(i) Newco will merge into the Company (the "MERGER") on
the terms and subject to the conditions of this Agreement;
(ii) OEI, VIA mergers involving other OEI subsidiaries,
will acquire the stock of all or some of the entities other than
the Company identified in the accompanying Addendum I (each an
"OTHER FOUNDING COMPANY" and, collectively with the Company, the
"FOUNDING COMPANIES") under agreements similar to this Agreement
entered into among the Other Founding Companies, their
stockholders, OEI and other subsidiaries of OEI (collectively,
the "OTHER AGREEMENTS"); and
(iii) OEI will effect a public offering of shares of its
common stock.
The respective boards of directors of OEI, Newco and the Company have
approved and adopted this Agreement to effect a transaction involving a transfer
of the nature described in Section 351 of the Code.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and undertakings contained in this Agreement, the
parties to this Agreement agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms have the meanings assigned to them below in this Section 1.01:
"AGREEMENT" means this Agreement, including the Disclosure
Statement relating to this Agreement and all attached Schedules,
Addendum, Annexes and Exhibits, as each of
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them may be amended, modified or supplemented from time to time under
their provisions or the provisions of this Agreement.
"BUSINESS CORPORATION ACT" means the Kentucky Business
Corporation Act.
"CEILING AMOUNT" means $7,200,000.
"CLOSING" has the meaning specified in Section 7.01(a).
"CLOSING MEMORANDUM" means the form of closing memorandum to be
prepared by OEI for the Closing, in which there shall be included the
forms of certificates of officers, the opinions of counsel and certain
other documents to be delivered at the Closing as provided in Article
VII.
"COMPANY COMMON STOCK" means the common stock, no par value, of
the Company.
"COUNSEL FOR OEI AND NEWCO" means Xxxxxx & Xxxxxx, L.L.P.
"COUNSEL FOR THE COMPANY AND THE STOCKHOLDERS" means Borowitz &
Xxxxxxxxx, PLC.
"CURRENT BALANCE SHEET" means the audited balance sheet of the
Company at December 31, 1997, which is included in the Initial Financial
Statements.
"CURRENT BALANCE SHEET DATE" means December 31, 1997.
"CURRENT DATE" means any day during the 20-day period ending on
the date of the Closing.
"DISCLOSURE STATEMENT" means the written statement executed, for
identification purposes only, by an officer of the Company and delivered
to OEI prior to the execution and delivery of this Agreement, in which
either (a) exceptions are taken to each of certain of the
representations and warranties made by the Company and the Stockholders
in this Agreement or (b) it is confirmed that no exception is taken to
that representation and warranty.
"INITIAL FINANCIAL STATEMENTS" means the audited balance sheets
of the Company at December 31, 1997 and 1996 and the related audited
statements of income, stockholders' equity and cash flows for each of
the Company's three fiscal years in the three-year period ended December
31, 1997, together with the related audit report of Xxxxxx Xxxxxxxx LLP.
"MAJORITY STOCKHOLDERS" means any Stockholder or combination of
Stockholders who at the date of this Agreement own shares of Company
Common Stock representing more
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than two-thirds of the total number of shares of Company Common Stock
outstanding at the date of this Agreement.
"MERGER CONSIDERATION" has the meaning specified in Section 2.04.
"NEW EMPLOYMENT AGREEMENTS" means the Employment Agreements dated
as of April 10, 1998, but to be effective as of the Closing, between the
Company and Xxxxx X. Xxxx and Xxxxx Xxxxx, respectively.
"NEWCO" means C&I Acquisition, Inc., a Kentucky corporation.
"OEI" means OEI International, Inc., a Delaware corporation.
"OEI ACQUISITION CANDIDATE" means any Entity engaged in the
Practice of Engineering and which shall have been called on by any of
the Company, OEI or a Subsidiary of the Company or OEI in connection
with the possible acquisition by any of them of that Entity or with
respect to which any of them has made an acquisition analysis.
"OTHER STOCKHOLDERS" means all Persons, other than the
Stockholders, who own shares of Company Common Stock.
"PARTIES" means the parties to this Agreement.
"PRO RATA SHARE" means for each Stockholder and each Other
Stockholder the fraction expressed as a percentage, (a) the numerator of
which is the number of shares of outstanding Company Common Stock owned
by that Stockholder or Other Stockholder immediately prior to the
Effective Time, and (b) the denominator of which is the total number of
shares of outstanding Company Common Stock owned by all Stockholders and
all Other Stockholders immediately prior to the Effective Time.
"RESPONSIBLE OFFICER" means either of Xxxxx X. Xxxx or Xxxxx
Xxxxx.
"RESTRICTED STOCKHOLDER" has the meaning specified in Section
10.01.
"SCHEDULED AGREEMENTS" means the agreements described in Schedule
4.11.
"STOCKHOLDER PRO RATA SHARE" means for each Stockholder the
fraction expressed as a percentage, (a) the numerator of which is the
number of shares of outstanding Company Common Stock owned by that
Stockholder immediately prior to the Effective Time, and (b) the
denominator of which is the total number of shares of outstanding
Company Common Stock owned by all Stockholders immediately prior to the
Effective Time.
"SURVIVING CORPORATION" means the Company, which is to be
designated in the Certificate of Merger as the surviving corporation of
the Merger.
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"TERRITORY" has the meaning specified in Section 10.01(a).
"THRESHOLD AMOUNT" means $192,000.
"TRANSFER TAXES" has the meaning specified in Section 11.07.
"TRANSFERORS' AGREEMENT" means the Transferors' Agreement and
Plan of Transfer entered into as of April 10, 1998, among OEI, the
Stockholders and the other Persons party thereto.
"UNIFORM PROVISIONS" means the Uniform Provisions for the
Acquisition of Founding Companies attached as Annex 1 to this Agreement.
Section 1.02. DEFINITIONS IN UNIFORM PROVISIONS. Capitalized terms used
in this Agreement but not defined in this Section 1.01 have the meanings
assigned to them in the Preliminary Statements or in Article I of the Uniform
Provisions (the text of which is by this reference incorporated in this
Agreement), as the case may be.
ARTICLE II
THE MERGER AND RELATED MATTERS
Section 2.01. CERTIFICATE OF MERGER. On the terms and subject to the
conditions of this Agreement, the Company will cause a Certificate of Merger to
be duly executed and delivered on or promptly after the date of the Closing to
the Secretary of State of the Commonwealth of Kentucky.
Section 2.02. THE EFFECTIVE TIME. The effective time of the Merger (the
"EFFECTIVE TIME") will be the time on the IPO Closing Date which the Certificate
of Merger specifies or, if the Certificate of Merger does not specify another
time, 8:00 a.m., eastern time, on the IPO Closing Date.
Section 2.03. CERTAIN EFFECTS OF THE MERGER. At and as of the Effective
Time, (a) Newco will be merged with and into the Company in accordance with the
provisions of the Business Corporation Act, (b) Newco will cease to exist as a
separate legal entity, (c) the certificate or articles of incorporation of the
Company will be amended to change its authorized capital stock to 1,000 shares,
par value $1.00 per share, of Common Stock, (d) the Company will be the
Surviving Corporation and, as such, will, all with the effect provided by the
Business Corporation Act, (i) possess all the properties and rights, and be
subject to all the restrictions and duties, of the Company and Newco and (ii) be
governed by the laws of the Commonwealth of Kentucky, (e) the Charter Documents
of the Company then in effect (after giving effect to the amendment of the
Company's certificate or articles of incorporation specified in clause (c) of
this sentence) will become and thereafter remain (until changed in accordance
with (i) applicable law, in the case of the certificate or articles of
incorporation or (ii) their terms, in the case of the bylaws) the Charter
Documents of
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the Surviving Corporation, (f) the initial board of directors of the Surviving
Corporation will be the Persons named in Schedule 2.03, who will hold the office
of director of the Surviving Corporation subject to the provisions of the
applicable laws of the Commonwealth of Kentucky and the Charter Documents of the
Surviving Corporation, and (g) the officers of the Surviving Corporation
immediately following the Merger will be as set forth in Schedule 2.03, and each
of the Persons so designated in Schedule 2.03 will serve in each office
specified for that Person in Schedule 2.03, subject to the provisions of the
Charter Documents of the Surviving Corporation, until his or her successor is
duly elected to, and, if necessary, qualified for, that office.
Section 2.04. EFFECT OF THE MERGER ON CAPITAL STOCK. As of the Effective
Time, as a result of the Merger and without any action on the part of any holder
thereof:
(a) the shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time will (i) be converted into the
right to receive, without interest, on surrender of the certificate
evidencing those shares, the amount of cash and the number of whole and
fractional shares of OEI Common Stock, or the amount of cash only, set
forth or determined as provided in Schedule 2.04 (the "MERGER
CONSIDERATION"), (ii) cease to be outstanding and to exist, and (iii) be
canceled and retired;
(b) each share of Company Common Stock held in the treasury of
the Company or by any Company Subsidiary will (i) cease to be
outstanding and to exist and (ii) be canceled and retired; and
(c) each share of Newco Common Stock issued and outstanding
immediately prior to the Effective Time will be converted into one share
of Common Stock, par value $1.00 per share, of the Surviving
Corporation, and the shares of Common Stock of the Surviving Corporation
issued on such conversion will constitute all the issued and outstanding
shares of Capital Stock of the Surviving Corporation.
Each holder of a certificate representing shares of Company Common Stock
immediately prior to the Effective Time will, as of the Effective Time and
thereafter, cease to have any rights respecting those shares other than the
right to receive, without interest, the Merger Consideration and the additional
cash, if any, owing with respect to those shares as provided in Section 2.06.
Section 2.05. DELIVERY, EXCHANGE AND PAYMENT.
(a) At or after the Effective Time: (i) each Stockholder and each
Other Stockholder, as the holder of certificates representing shares of
Company Common Stock, will, on surrender of his certificates to OEI (or
any agent which may be appointed by OEI for purposes of this Section
2.05), receive, and OEI will pay and issue to each Stockholder and each
Other Stockholder, in each case subject to the provisions of Section
2.06, the Merger Consideration; and (ii) until any certificate
representing Company Common Stock has been surrendered and replaced
pursuant to this Section 2.05, that certificate will, for all purposes,
be deemed to evidence ownership of the number of whole shares of OEI
Common
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Stock included in the Merger Consideration payable in respect of that
certificate pursuant to Section 2.04 and the amount of cash payable in
respect of that certificate pursuant to Section 2.04. All shares of OEI
Common Stock issuable in the Merger will be deemed for all purposes to
have been issued by OEI at the Effective Time. All cash included in the
Merger Consideration shall be paid by OEI's company checks, certified or
official bank checks, or wire transfers, at OEI's option. In the case of
wire transfers, the transfers shall be to accounts designated by the
respective Stockholders or Other Stockholders, as the case may be, at
least five Business Days before the IPO Closing Date.
(b) Each Stockholder will deliver to OEI (or any agent that may
be appointed by OEI for purposes of this Section 2.05), on or before the
IPO Closing Date, the certificates representing Company Common Stock
owned by the Stockholder duly endorsed in blank by him, or accompanied
by stock powers duly executed by him in blank, and with all necessary
transfer tax and other revenue stamps, acquired at his expense, affixed
and canceled. In the event this Agreement is terminated pursuant to
Article XII prior to the Effective Time, OEI or its agent will return
all such certificates and other documents to the Stockholders. Each
Stockholder shall cure any deficiencies in the endorsement of the
certificates or other documents of conveyance respecting, or in the
stock powers accompanying, the certificates representing Company Common
Stock delivered by him.
(c) No dividends (or interest) or other distributions declared or
earned after the Effective Time with respect to OEI Common Stock and
payable to the holders of record thereof after the Effective Time will
be paid to the holder of any unsurrendered certificates representing
shares of Company Common Stock for which shares of OEI Common Stock have
been issued in the Merger until the unsurrendered certificates are
surrendered as provided herein, but (i) on such surrender, OEI will
cause to be paid, to the Person in whose name the certificates
representing such shares of OEI Common Stock shall then be issued, the
amount of dividends or other distributions previously paid with respect
to such whole shares of OEI Common Stock with a record date, or which
have accrued, subsequent to the Effective Time, but prior to surrender,
and the amount of any cash payable to such Person for and in lieu of
fractional shares pursuant to Section 2.06 and (ii) at the appropriate
payment date or as soon as practicable thereafter, OEI will cause to be
paid to that Person the amount of dividends or other distributions with
a record date, or which have been accrued, subsequent to the Effective
Time, but which are not payable until a date subsequent to surrender,
which are payable with respect to such number of whole shares of OEI
Common Stock, subject in all cases to any applicable escheat laws. No
interest will be payable with respect to the payment of such dividends
or other distributions (or cash for and in lieu of fractional shares) on
surrender of outstanding certificates.
Section 2.06. FRACTIONAL SHARES. Notwithstanding any other provision of
this Article II, no fractional shares of OEI Common Stock will be issued, and
any Stockholder otherwise entitled to receive a fractional share of OEI Common
Stock but for this Section 2.06 will instead be entitled to receive a cash
payment for and in lieu thereof in the amount (rounded to the nearest whole
cent) equal to that Person's fractional interest in a share of OEI Common Stock
multiplied by $12.
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Section 2.07. SPECIAL MEETING. The Company hereby agrees to call a
special meeting of the holders of the Company Common Stock to be held to vote
upon the Merger. The Company will use its best efforts to hold such meeting no
later than 15 days after the date of this Agreement. The Board of Directors of
the Company will recommend approval of the Merger. The notice of such special
meeting shall state that any holder of Company Common Stock who is an Other
Stockholder is or may be entitled to assert dissenters' rights under Subtitle 13
of the Business Corporation Act, and the Company shall provide to each Other
Stockholder entitled to vote at the special meeting of copy of such Subtitle. By
execution of this Agreement, each of the Stockholders hereby waives its right to
assert dissenter's rights under Subtitle 13 of the Business Corporation Act.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EACH STOCKHOLDER
Section 3.01. BY EACH STOCKHOLDER. Each Stockholder, severally as to
himself or herself only, represents and warrants to OEI that all the following
representations and warranties in this Article III are true and correct:
(a) (i) the Stockholder will be acquiring the shares of OEI
Common Stock to be issued to him pursuant to Section 2.04 solely for the
Stockholder's account, for investment purposes only and with no current
intention or plan to distribute, sell or otherwise dispose of any of
those shares in connection with any distribution; (ii) the Stockholder
is not a party to any agreement or other arrangement for the disposition
of any shares of OEI Common Stock other than this Agreement, the
Transferors' Agreement and the Registration Rights Agreement; (iii)
unless otherwise specified on Schedule 3.01, the Stockholder is an
"accredited investor" as defined in Securities Act Rule 501 (a); (iv)
the Stockholder (A) is able to bear the economic risk of an investment
in the OEI Common Stock to be acquired by him pursuant to this
Agreement, (B) can afford to sustain a total loss of that investment,
(C) has such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of the proposed
investment in the OEI Common Stock, (D) has had an adequate opportunity
to ask questions and receive answers from the officers of OEI concerning
any and all matters relating to the transactions contemplated by this
Agreement, including the background and experience of the current and
proposed officers and directors of OEI, the plans for the operations of
the business of OEI, the business, operations and financial condition of
the Other Founding Companies and any plans of OEI for additional
acquisitions, and (E) has asked all questions of the nature described in
preceding clause (D), and all those questions have been answered to his
satisfaction; and
(b) the representations and warranties contained in Article III
of the Uniform Provisions (the text of which Article hereby is
incorporated herein by this reference) are true and correct, and the
agreements set forth therein are hereby agreed to.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND THE STOCKHOLDERS
Section 4.01. BY THE COMPANY AND EACH STOCKHOLDER. The Company and each
Stockholder jointly and severally represent and warrant to, and agree with, OEI
that all the following representations and warranties in this Article IV are
true and correct:
(a) the Organization State of the Company is the Commonwealth of
Kentucky, and the Company (i) is a corporation duly organized and
validly existing under the laws of that Commonwealth and (ii) has the
corporate power and authority under those laws and its Charter Documents
to own or lease and to operate its properties and to carry on its
business as now conducted;
(b) the authorized Capital Stock of the Company is comprised of
300,000 shares of Company Common Stock, 200,000 of which are voting
shares and 100,000 of which are nonvoting shares, of which 26,540 voting
shares and 13,384 nonvoting shares have been issued and are now
outstanding and no shares are held by the Company as treasury shares,
and no outstanding Derivative Securities of the Company exist;
(c) the Stockholders own, in the aggregate, 87.92% of the issued
and outstanding shares of the voting Company Common Stock and 99.8% of
the issued and outstanding shares of the nonvoting Company Common Stock;
(d) Section 4.01(d) of the Disclosure Statement accurately sets
forth (i) the name and state of residence of each person to whom the
Company has issued or sold shares of Company Common Stock, or from whom
shares of Company Common Stock have been redeemed by the Company, during
the period commencing on January 1, 1995, and ending on the date hereof,
(ii) the date such shares were issued, sold or redeemed, the number of
shares involved in each such transaction, (iii) the price at which such
shares were bought or sold in each such transaction and (iv) certain
other information with respect to such transactions; and
(e) the representations and warranties contained in Article IV of
the Uniform Provisions (the text of which Article hereby is incorporated
herein by this reference) are true and correct, and the agreements set
forth therein are agreed to. References to "Stockholder" or
"Stockholders" shall mean "Stockholder or Other Stockholder" or
"Stockholders or Other Stockholders," as the case may be, in Sections
4.16, 4.18(a), 4.19(a), 4.26(a), 4.30(f) and 4.30(g) of the Uniform
Provisions and in the definition of the term "Related Person" in Section
1.02 of the Uniform Provisions. The reference to "Stockholders" shall
mean "Stockholders and Other Stockholders" in Section 4.30(d) of the
Uniform Provisions.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF OEI AND NEWCO
Section 5.01. BY OEI AND NEWCO. OEI and Newco jointly and severally
represent and warrant to the Company and each Stockholder that all the following
representations and warranties in this Article V are true and correct: (a) Newco
is a corporation duly organized and validly existing under the laws of the
Commonwealth of Kentucky, (b) no Derivative Securities of Newco are outstanding,
(c) Newco has been organized for the sole purpose of participating in the Merger
and has not, and will not, engage in any activities other than those necessary
to effectuate the Merger, and (d) the representations and warranties contained
in Article V of the Uniform Provisions (the text of which Article hereby is
incorporated herein by this reference) are true and correct. The reference to
the term "the Stockholders" in Section 5.10 of the Uniform Provision shall be
deemed to be a reference to "the Stockholders and the Other Stockholders."
ARTICLE VI
COVENANTS EXTENDING TO THE EFFECTIVE TIME
Section 6.01. OF EACH PARTY. Until the Effective Time, subject to the
waiver provisions of Section 11.05, each Party will comply with each covenant
for which provision is made in Article VI of the Uniform Provisions (the text of
which Article VI is hereby incorporated herein by this reference) to be
performed or observed by that Party. References to "Stockholder" or
"Stockholders" shall mean "Stockholder or Other Stockholder" or "Stockholders or
Other Stockholders," as the case may be, in Section 6.04(f) of the Uniform
Provisions and the second and fourth times either such term is used in Section
6.08 of the Uniform Provisions.
ARTICLE VII
THE CLOSING AND CONDITIONS TO CLOSING AND CONSUMMATION
Section 7.01. THE CLOSING AND CERTAIN CONDITIONS.
(a) THE CLOSING. On or before the IPO Pricing Date, the Parties
will take all actions necessary to (i) effect the Merger on the IPO
Closing Date (including, as permitted by the Business Corporation Act,
(A) the execution of a Certificate of Merger meeting the requirements of
the Business Corporation Act and providing that the Merger will become
effective on the IPO Closing Date and (B) the filing of the Certificate
of Merger with the Secretary of State of the Commonwealth of Kentucky),
(ii) verify the existence and ownership of the certificates evidencing
the Company Common Stock to be exchanged for the Merger Consideration
pursuant to Section 2.05, and (iii) satisfy the document delivery
requirements to which the obligations of the Parties to effect the
Merger and the other transactions contemplated hereby are conditioned by
the provisions of this Article VII (all those actions collectively being
the "CLOSING"). The Closing will take place at the offices
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of Xxxxxx & Xxxxxx, L.L.P., 000 Xxxxxxxxx, Xxxxxxx, Xxxxx at 10:00 a.m.,
Houston time, or at such later time on the IPO Pricing Date as OEI shall
specify by written notice to either Responsible Officer. The actions
taken at the Closing will not include the completion of either the
Merger or the delivery of the Company Common Stock or the Merger
Consideration pursuant to Section 2.05. Instead, on the IPO Closing
Date, the Certificate of Merger will become effective pursuant to
Section 2.02, and all transactions contemplated by this Agreement to be
closed or completed on or before the IPO Closing Date, including the
surrender of the Company Common Stock in exchange for the Merger
Consideration will be closed or completed, as the case may be. During
the period from the Closing to the IPO Closing Date, this Agreement may
be terminated by the parties only pursuant to Section 12.01 (b)(i).
(b) CERTAIN CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND THE
STOCKHOLDERS. The obligations of the Company and the Stockholders with
respect to the actions to be taken by them at or before the Closing are
subject to the satisfaction on or before the date of the Closing, or
waiver by them pursuant to Section 11.05, of all the conditions set
forth in Sections 7.02(a) and 7.03. The obligations of the Stockholders
with respect to the actions to be taken on the IPO Closing Date are
subject to the satisfaction on that date of the following conditions:
(i) the Transferors' Agreement and each of the New Employment Agreements
then shall be in full force and effect; (ii) at the special meeting of
the holders of the Company Common Stock to be held pursuant to Section
2.07 of this Agreement, the holders of at least a majority of the
outstanding shares of voting Company Common Stock, and of at least a
majority of the outstanding shares of non-voting Company Common Stock,
shall have approved the Merger and the plan of merger described in this
Agreement; and (iii) all the conditions set forth in Sections 7.02(b)
and 7.03.
(c) CERTAIN CONDITIONS TO THE OBLIGATIONS OF OEI AND NEWCO. The
obligations of OEI and Newco with respect to actions to be taken by them
at or before the Closing are subject to the satisfaction on or before
the date of the Closing, or waiver by them pursuant to Section 11.05, of
the following conditions: (i) the Company shall have delivered to OEI a
copy of the articles or certificate of incorporation, as amended to the
date of the Closing and certified by the Secretary of State of the
Commonwealth of Kentucky as of a Current Date, of the Company; (ii) at
the special meeting of the holders of the Company Common Stock to be
held pursuant to Section 2.07 of this Agreement, the holders of at least
a majority of the outstanding shares of voting Company Common Stock, and
of at least a majority of the outstanding shares of non-voting Company
Common Stock, shall have approved the Merger and the plan of merger
described in this Agreement; and (iii) all the conditions set forth in
Sections 7.02(a) and 7.04(a).
(d) CERTAIN CONDITIONS TO BE MET BY IPO CLOSING DATE. The
obligations of OEI and Newco with respect to the actions to be taken on
the IPO Closing Date are subject to the satisfaction on that date of the
following conditions: (i) the Transferors' Agreement and each of the New
Employment Agreements then shall be in full force and effect; and (ii)
all the conditions set forth in Sections 7.02(b) and 7.04(b).
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(e) INCORPORATION OF ARTICLE VII OF UNIFORM PROVISIONS. The text
of Article VII of the Uniform Provisions hereby is incorporated herein
by this reference.
ARTICLE VIII
COVENANTS FOLLOWING THE EFFECTIVE TIME
Section 8.01. OF EACH PARTY OTHER THAN THE COMPANY. From and after the
Effective Time, subject to the waiver provisions of Section 11.05, each
Party(other than the Company) will comply with each covenant for which provision
is made in Article VIII of the Uniform Provisions (the text of which Article
hereby is incorporated herein by this reference) to be performed or observed by
that Party.
ARTICLE IX
INDEMNIFICATION
Section 9.01. INDEMNIFICATION RIGHTS AND OBLIGATIONS. The text of
Article IX of the Uniform Provisions hereby is incorporated herein by this
reference. For purposes of Section 9.07(a), the term "Stockholder Pro Rata
Share" shall be substituted for the term "Pro Rata Share." For purposes of
Section 9.07(b), the Ceiling Amount shall be 91.92% of the amount determined as
the Ceiling Amount for other purposes in this Agreement and the Uniform
Provisions.
ARTICLE X
LIMITATIONS ON COMPETITION
Section 10.01. PROHIBITED ACTIVITIES. Each Stockholder identified on
Schedule 10.01 (each a "Restricted Stockholder") and, in the case of paragraphs
(b) and (d) below of this Section 10.01, each Stockholder, severally agrees that
he will not during the period beginning on the date hereof and ending on the
third anniversary of the date hereof, directly or indirectly, for any reason,
for his own account or on behalf of or together with any other Person:
(a) engage as an officer, director or in any other managerial
capacity or as an owner, co-owner or other investor of or in, whether as
an employee, independent contractor, consultant or advisor, any business
engaged in the Practice of Engineering in competition with the Company,
any Company Subsidiary or OEI or any Subsidiary of OEI (OEI and its
Subsidiaries collectively being called "OEI" for purposes of this
Article X) within any territory surrounding any office or facility (each
a "facility") in which any of the Company or the Company Subsidiaries
was engaged in business on the date hereof or immediately prior to the
Effective Time (for purposes of this Article X, the territory
surrounding a facility shall be: (i) the city, town or village in which
the facility is located, (ii) the county or parish in which the facility
is located, (iii) the counties or parishes contiguous to the county or
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parish in which the facility is located, and (iv) the area located
within 100 miles of the facility, all of such locations being herein
collectively called the "TERRITORY");
(b) call on any natural Person who is at that time employed by
the Company, any Company Subsidiary or OEI with the purpose or intent of
attracting that person from the employ of the Company, any Company
Subsidiary or OEI, provided that a Stockholder may call on and hire any
of his Immediate Family Members;
(c) call on any Person that at that time is, or at any time
within one year prior to that time was, a customer of the Company, any
Company Subsidiary or OEI within the Territory, (i) for the purpose of
soliciting or selling any product or service in competition with the
Company, any Company Subsidiary or OEI within the Territory and (ii)
with the knowledge of the customer relationship; or
(d) call on any OEI Acquisition Candidate, with the knowledge of
that Person's status as an OEI Acquisition Candidate, for the purpose of
acquiring that Person or arranging the acquisition of that Person by any
Person other than OEI.
Notwithstanding the foregoing, any Restricted Stockholder may own and hold as a
passive investment up to 1% of a class of the outstanding Capital Stock of a
competing Entity if that class of Capital Stock is publicly traded.
Section 10.02. DAMAGES. Because of the difficulty of measuring economic
losses to OEI as a result of any breach by a Restricted Stockholder or any other
Stockholder of his covenants in Section 10.01, and because of the immediate and
irreparable damage that could be caused to OEI for which it would have no other
adequate remedy, each Restricted Stockholder (and, in the case of paragraphs (b)
and (d) of Section 10.01, each Stockholder) agrees that OEI may enforce the
provisions of Section 10.01 by injunctions and restraining orders against the
Restricted Stockholder or Stockholder, as the case may be, if he breaches any of
those provisions.
Section 10.03. REASONABLE RESTRAINT. The Parties each agree that
Sections 10.01 and 10.02 impose a reasonable restraint on the Restricted
Stockholder or Stockholders, as the case may be, in light of the activities and
business of OEI on the date hereof, the current business plans of OEI and the
investment by each Stockholder in OEI as a result of the Merger.
Section 10.04. SEVERABILITY; REFORMATION. The covenants in this Article
X are severable and separate. The unenforceability of any specific covenant in
this Article X is not intended by any Party to, and shall not, affect the
provisions of any other covenant in this Article X. If any court of competent
jurisdiction determines that the scope, time or territorial restrictions set
forth in Section 10.01 are unreasonable as applied to any Restricted Stockholder
or Stockholder, as the case may be, the Parties, including the Restricted
Stockholder or Stockholder in question, acknowledge their mutual intention and
agreement that those restrictions be enforced to the fullest extent the court
deems reasonable, and thereby shall be reformed to that extent as applied to
that Restricted
12
Stockholder or Stockholder, as the case may be, and any other Restricted
Stockholder or Stockholder, as the case may be, similarly situated.
Section 10.05. INDEPENDENT COVENANT. All the covenants in this Article X
are intended by each Party to, and shall, be construed as an agreement
independent of any other provision in this Agreement, and the existence of any
claim or cause of action of any Restricted Stockholder or Stockholder against
OEI, whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by OEI of any covenant in this Article X. It is
specifically agreed that the period specified in Section 10.01 shall be computed
in the case of each Restricted Stockholder and Stockholder by excluding from
that computation any time during which the Restricted Stockholder or Stockholder
is in violation of any provision of Section 10.01. The covenants contained in
this Article X shall not be affected by any breach of any other provision of
this Agreement by any Party.
Section 10.06. MATERIALITY. The Company and each Stockholder, severally
and not jointly with any other Person, hereby agree that this Article X is a
material and substantial part of the transactions contemplated by this
Agreement.
ARTICLE XI
GENERAL PROVISIONS
Section 11.01. TREATMENT OF CONFIDENTIAL INFORMATION. Each Party will
comply with each covenant for which provision is made in Section 11.01 of the
Uniform Provisions (the text of which Section hereby is incorporated herein by
this reference) to be performed or observed by that Party.
Section 11.02. RESTRICTIONS ON TRANSFERS OF OEI COMMON STOCK.
(a) During the two-year period ending on the second anniversary
of the IPO Closing Date (the "RESTRICTED PERIOD"), no Stockholder
voluntarily will: (i) sell, assign, exchange, transfer, encumber,
pledge, distribute, appoint or otherwise dispose of (A) any shares of
OEI Common Stock received by any Stockholder in the Merger or (B) any
interest in (including any option to buy or sell) any such shares of OEI
Common Stock, in whole or in part, and OEI will have no obligation to,
and shall not, treat any such attempted transfer as effective for any
purpose; or (ii) engage in any transaction, whether or not with respect
to any shares of OEI Common Stock or any interest therein, the intent or
effect of which is to reduce the risk of owning the shares of OEI Common
Stock acquired pursuant to Section 2.04 (including, for example engaging
in put, call, short-sale, straddle or similar market transactions);
PROVIDED, HOWEVER, that this Section 11.02 shall not restrict any
transfer of OEI Common Stock acquired by a Stockholder pursuant to
Section 2.04 to any of that Stockholder's Related Persons who agree in
writing to be bound by the provisions of Section 11.01 and this Section
11.02. The certificates evidencing the OEI Common Stock delivered to
each Stockholder pursuant to Section 2.05 will bear a legend
substantially in the form set
13
forth below and containing such other information as OEI may deem
necessary or appropriate:
EXCEPT PURSUANT TO THE TERMS OF THE AGREEMENT AND PLAN OF
REORGANIZATION AMONG THE ISSUER, THE HOLDER OF THIS CERTIFICATE
AND THE OTHER PARTIES THERETO, THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE VOLUNTARILY SOLD, ASSIGNED, EXCHANGED,
TRANSFERRED, ENCUMBERED, PLEDGED, DISTRIBUTED, APPOINTED OR
OTHERWISE DISPOSED OF, AND THE ISSUER SHALL NOT BE REQUIRED TO
GIVE EFFECT TO ANY ATTEMPTED VOLUNTARY SALE, ASSIGNMENT,
EXCHANGE, TRANSFER, ENCUMBRANCE, PLEDGE, DISTRIBUTION,
APPOINTMENT OR OTHER DISPOSITION OF ANY OF THOSE SHARES, DURING
THE TWO-YEAR PERIOD ENDING ON [DATE THAT IS THE SECOND
ANNIVERSARY OF THE IPO CLOSING DATE] (THE "RESTRICTED PERIOD").
ON THE WRITTEN REQUEST OF THE HOLDER OF THIS CERTIFICATE, THE
ISSUER AGREES TO REMOVE THIS RESTRICTIVE LEGEND (AND ANY STOP
ORDER PLACED WITH THE TRANSFER AGENT) AFTER THE EXPIRATION OF THE
RESTRICTED PERIOD.
(b) Each Stockholder, severally and not jointly with any other
Person, (i) acknowledges that the shares of OEI Common Stock to be
delivered to him pursuant to Section 2.04 (A) have not been and, except
pursuant to the Registration Rights Agreement, if applicable, will not
be registered under the Securities Act and therefore may not be resold
by him without compliance with the Securities Act and (B) will, as a
result of their restrictions on transferability which are imposed by
this Agreement during the Restricted Period, have a value materially
less at the Effective Time than the value of then freely tradeable
shares of OEI Common Stock, and (ii) covenants that none of the shares
of OEI Common Stock issued to him pursuant to Section 2.04 will be
offered, sold, assigned, pledged, hypothecated, transferred or otherwise
disposed of except after full compliance with all the applicable
provisions of the Securities Act and the rules and regulations of the
SEC and applicable state securities laws and regulations. All
certificates evidencing shares of OEI Common Stock issued pursuant to
Section 2.04 will bear the following legend in addition to the legend
prescribed by Section 11.02(a):
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY ONLY BE SOLD OR
OTHERWISE TRANSFERRED IF THE HOLDER HEREOF COMPLIES WITH THAT ACT
AND OTHER APPLICABLE SECURITIES LAWS.
In addition, certificates evidencing shares of OEI Common Stock issued
to each Stockholder pursuant to Section 2.04 will bear any legend
required by (i) the securities or blue sky laws of the state in which
that Stockholder resides or (ii) the Underwriter in connection with any
agreement of that Stockholder with the Underwriter to the effect set
forth in Section 11.02(a).
Section 11.03. BROKERS AND AGENTS. The Stockholders jointly and
severally represent and warrant to OEI that the Company has not directly or
indirectly employed or become obligated to pay
14
any broker or similar agent in connection with the transactions contemplated
hereby and agree, without regard to the Threshold Amount limitations set forth
in Article IX, to indemnify OEI against all Damage Claims arising out of claims
for any and all fees and commissions of brokers or similar agents employed or
promised payment by the Company.
Section 11.04. ASSIGNMENT; NO THIRD PARTY BENEFICIARIES. This Agreement
and the rights of its Parties may not be assigned (except by operation of law)
and shall be binding on and inure to the benefit of the Parties, the successors
of OEI, and the heirs and legal representatives of the Stockholders (and, in the
case of any trust, the successor trustees of the trust). Neither this Agreement
nor any other Transaction Document is intended, or shall be construed, deemed or
interpreted, to confer on any Person not a party hereto or thereto any rights or
remedies hereunder or thereunder, except as provided in Section 6.05(b) or
11.14, in Article IX, or as otherwise provided expressly herein or therein.
Section 11.05. ENTIRE AGREEMENT; AMENDMENT; WAIVERS. This Agreement and
the documents delivered pursuant to it constitute the entire agreement and
understanding among the Parties and supersede all prior agreements and
understandings, both written and oral, relating to the subject matter of this
Agreement. This Agreement may be amended, modified or supplemented, and any
right hereunder may be waived, if, but only if, the amendment, modification,
supplement or waiver is in writing and signed by the Majority Stockholders, the
Company and OEI. The waiver of any of the terms and conditions of this Agreement
shall not be construed or interpreted as, or deemed to be, a waiver of any of
its other term or conditions.
Section 11.06. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which will be an original, but all of which together will
constitute one and the same instrument.
Section 11.07. EXPENSES. Whether or not the transactions contemplated
hereby are consummated, (a) OEI will pay the fees, expenses and disbursements of
OEI and Newco and their Representatives which are incurred in connection with
the subject matter of this Agreement and any amendments to this Agreement
including all costs and expenses incurred in the performance of and compliance
with all conditions to be performed by OEI and Newco under this Agreement,
including the costs of preparing the Registration Statement, (b) the Company may
pay any fees, expenses and disbursements of Counsel for the Company and the
Stockholders incurred in connection with the subject matter of this Agreement
and the Registration Statement on or before the IPO Closing Date, up to a
maximum of $40,000 in the aggregate, and (c) the Stockholders will pay from
personal funds, and not from funds of the Company or any Company Subsidiary, (i)
all sales, use, transfer and other similar taxes and fees (collectively,
"TRANSFER TAXES") incurred in connection with the transactions contemplated
hereby, and (ii) the fees, expenses and disbursements in excess of $40,000 in
the aggregate of Counsel for the Company and the Stockholders incurred in
connection with the subject matter of this Agreement and the Registration
Statement on or before the IPO Closing Date. The undertaking of Stockholders to
pay amounts referred to in clause (c) of the preceding sentence shall not
preclude the Stockholders from recovering a portion of such amounts from Other
Stockholders who agree to pay a portion thereof, but failure of any Other
Stockholder to do so will not affect the
15
obligations of the Stockholders to pay such amounts which, as among OEI, the
Company and the Stockholders, shall be absolute. The Stockholders will file all
necessary documentation and Returns with respect to all Transfer Taxes. In
addition, each Stockholder acknowledges that he, and not the Company, OEI or the
Surviving Corporation, will pay all Taxes due upon receipt of the consideration
payable to the Stockholder pursuant to Article II.
Section 11.08. NOTICES. All notices required or permitted hereunder
shall be in writing, and shall be deemed to be delivered and received (a) if
personally delivered or if delivered by telex, telegram, facsimile or courier
service, when actually received by the Party to whom notice is sent or (b) if
delivered by mail (whether actually received or not), at the close of business
on the third Business Day next following the day when placed in the mail,
postage prepaid, certified or registered, addressed to the appropriate Party or
Parties, at the address of such Party set forth below (or at such other address
as such party may designate by written notice to all other Parties in accordance
herewith):
(i) if to OEI or Newco, addressed to it at:
OEI International, Inc.
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn.: Xxxxxxx X. Xxxxxx,
Chief Executive Officer
Telecopy No.: (000) 000-0000
with copies (which shall not constitute notice for purposes of
this Agreement) to:
Xxxxxx & Xxxxxx, L.L.P.
000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Xx.
Telecopy No.: (000) 000-0000
(ii) if to the Stockholders, addressed to them at their
respective addresses set forth in Schedule 2.04; and
(iii) if to the Company, addressed to it at:
Chemical & Industrial Engineering, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxx
Telecopy No.: (000) 000-0000
16
with copies (which shall not constitute notice for purposes of
this Agreement) to:
Borowitz & Xxxxxxxxx, PLC
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxx Xxxx
Telecopy No.: (000) 000-0000
and to:
Xxxxxx & Xxxxxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. (Xxxx) Xxxxxxxxxx, Jr.
Telecopy No.: (000) 000-0000
SECTION 11.09. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE, WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE CONFLICTS OF LAW PROVISIONS THEREOF: PROVIDED, HOWEVER, THAT: (A) ARTICLE X
AND THE RIGHTS AND OBLIGATIONS THEREUNDER OF THE PARTIES WILL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE
COMMONWEALTH OF KENTUCKY WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS
THEREOF AND (B) MATTERS PERTAINING SOLELY TO THE LEGALITY AND EFFECTUATION OF
THE MERGER SHALL BE GOVERNED BY THE BUSINESS CORPORATION ACT.
Section 11.10. EXERCISE OF RIGHTS AND REMEDIES. Except as otherwise
provided herein, no delay or omission in the exercise of any right, power or
remedy accruing to any Party as a result of any breach or default hereunder by
any other Party shall impair any such right, power or remedy, nor shall it be
construed, deemed or interpreted as a waiver of or acquiescence in any such
breach or default, or of any similar breach or default occurring later; nor
shall any waiver of any single breach or default be construed, deemed or
interpreted as a waiver of any other breach or default hereunder occurring
before or after that waiver.
Section 11.11. TIME. Time is of the essence in the performance of this
Agreement in all respects.
Section 11.12. REFORMATION AND SEVERABILITY. If any provision of this
Agreement is invalid, illegal or unenforceable, that provision shall, to the
extent possible, be modified in such manner as to be valid, legal and
enforceable but so as to most nearly retain the intent of the Parties as
expressed herein, and if such a modification is not possible, that provision
shall be severed from this Agreement, and in either case the validity, legality
and enforceability of the remaining provisions of this Agreement shall not in
any way be affected or impaired thereby.
17
Section 11.13. REMEDIES CUMULATIVE. Except as otherwise provided in
Section 9.06, no right, remedy or election given by any term of this Agreement
shall be deemed exclusive, but each shall be cumulative with all other rights,
remedies and elections available at law or in equity.
Section 11.14. RESPECTING THE IPO. Each of the Company and the
Stockholders acknowledges and agrees that: (a) no firm commitment, binding
agreement or promise or other assurance of any kind, whether express or implied,
oral or written, exists at the date hereof that the Registration Statement will
become effective or that the IPO will occur at a particular price or within a
particular range of prices or occur at all; (b) neither OEI or any of its
Representatives nor any prospective underwriters in the IPO will have any
liability to the Company, the Stockholders or any of their respective Affiliates
or associates for any failure of (i) the Registration Statement to become
effective (provided, however, that OEI will use its reasonable best efforts to
cause the Registration Statement to become effective prior to October 31, 1998)
or (ii) the IPO to occur at a particular price or within a particular range of
prices or to occur at all; and (c) the decision of Stockholders to enter into
this Agreement, or to vote in favor of or consent to the Merger, has been or
will be made independent of, and without reliance on, any statements, opinions
or other communications of, or due diligence investigations that have been or
will be made or performed by, any prospective underwriter relative to OEI or the
IPO. The Underwriter shall have no obligation to any of the Company and the
Stockholders with respect to any disclosure contained in the Registration
Statement.
SECTION 11.15. APPOINTMENT OF PROXIES. EACH STOCKHOLDER HEREBY
IRREVOCABLY APPOINTS, CONSTITUTES AND NOMINATES EACH OF XXXXXXX X. XXXXXX AND
XXXX X. XXXXX AND EACH OF THEM ACTING SEPARATELY, THE TRUE AND LAWFUL ATTORNEY
AND PROXY FOR THE STOCKHOLDER, WITH FULL POWER OF SUBSTITUTION, IN THE NAME,
PLACE AND STEAD OF THE STOCKHOLDER, TO VOTE, AT THE SPECIAL MEETING OF
STOCKHOLDERS TO BE HELD PURSUANT TO SECTION 2.07 OF THIS AGREEMENT, AND ANY
ADJOURNMENT OR POSTPONEMENT OF SUCH SPECIAL MEETING, ALL SHARES OF COMPANY
COMMON STOCK WHICH ARE REGISTERED IN THE NAME OF THE STOCKHOLDER ON THE STOCK
TRANSFER RECORDS OF THE COMPANY, IN FAVOR OF THE MERGER AND THE PLAN OF MERGER
DESCRIBED IN THIS AGREEMENT. EACH STOCKHOLDER IS GRANTING THE PROXY AND THE
POWERS AND AUTHORITIES GRANTED IN THIS SECTION 11.15 IN CONSIDERATION OF OEI'S
AND NEWCO'S EXECUTION OF THIS AGREEMENT AND THEIR AGREEMENT TO CONSUMMATE THE
MERGER AND PAY THE MERGER CONSIDERATION, AND IN CONSIDERATION OF EACH OTHER
STOCKHOLDERS' EXECUTION OF THIS AGREEMENT. EACH STOCKHOLDER ACKNOWLEDGES AND
AGREES THAT THE PROXY GRANTED BY THE STOCKHOLDER UNDER THIS SECTION 11.15 IS
IRREVOCABLE AND IS COUPLED WITH AN INTEREST IN THAT (I) OEI AND NEWCO ARE
UNWILLING TO EXECUTE AND DELIVER THIS AGREEMENT UNLESS EACH STOCKHOLDER GRANTS
THE PROXY, (II) THE MERGER IS IN THE BEST INTERESTS OF THE COMPANY AND WILL
BENEFIT BOTH THE COMPANY AND ALL STOCKHOLDERS FROM A FINANCIAL POINT OF VIEW,
AND (III) ALL OF THE OTHER STOCKHOLDERS WISH TO BE ASSURED THAT THE MERGER WILL
BE APPROVED. ALL PREVIOUS PROXIES TO VOTE SHARES OF COMPANY COMMON STOCK OWNED
BY A STOCKHOLDER ARE HEREBY REVOKED BY THAT STOCKHOLDER.
Section 11.16. BY-LAW AMENDMENT. Prior to the date hereof, the bylaws of
the Company have been amended, and the Company has delivered a true and correct
copy of such amendment to OEI. By execution and delivery of this Agreement, each
of the Stockholders (i) ratifies, approves
18
and consents to the amendment to the bylaws contemplated by this Section 11.16
and (ii) agrees that he or she has no right to require the redemption of any of
the shares of Company Common Stock owned by such Stockholder pursuant to the
bylaws of the Company (as they now exist or as they heretofore existed).
Section 11.17. WAIVER OF RIGHT OF REDEMPTION. Each of the Stockholders
is a party to a Stock Subscription Agreement between such Stockholder and the
Company pursuant to which, INTER ALIA, the Company has agreed to redeem such
Stockholder's shares of Company Common Stock upon the occurrence of certain
events enumerated therein. True and correct copies of all such Stock
Subscription Agreement have been provided to OEI. The Company and each
Stockholder agree that:
(a) at the Effective Time, the Stock Subscription Agreement
between the Company and such Stockholder shall be terminated without any
further action on the part of any party thereto;
(b) the execution and delivery of this Agreement by the Company
and the Stockholders shall not be affected by, or constitute a breach of
or default under, such Stock Subscription Agreement;
(c) if an Event of Termination (as such term is defined in such
Stock Subscription Agreement) occurs at any time after the date hereof
and prior to the Effective Time, the right and obligation of such
Stockholder to be redeemed, and the right and obligation of the Company
to redeem such Stockholder, pursuant to such Stock Subscription
Agreement or pursuant to any other agreement or understanding, shall be
tolled as of the date of this Agreement, and shall not begin to run,
unless and until such right and obligation shall be reinstated as
provided in Section 11.17 (e);
(d) so long as the rights and obligations of the Company and such
Stockholder are tolled pursuant to Section 11.17(c), neither party to
such Stock Subscription Agreement may exercise any right or option such
party would otherwise have but for the provisions of this Section 11.17;
and
(e) if this Agreement is terminated pursuant to Article XII, then
(i) as of the close of business on the date this Agreement is so
terminated, the provisions of this Section 11.17 shall terminate and the
rights and obligations of the Company and such Stockholder with respect
to the redemption of such Stockholder's shares of Company Common Stock
shall be reinstated or shall commence, as the case may be, ten days
following such termination, and (ii) promptly thereafter, the Company
shall notify each of the Stockholders that the provisions of this
Section 11.17 have terminated.
Section 11.18. CERTAIN EMPLOYEE BENEFITS. During the three fiscal years
commencing January 1, 1998, employee benefit policies applicable to employees of
the Company will include, at a minimum, (i) the accrual of a discretionary bonus
pool for the Company's employees consisting of and payable from fifteen percent
of the Company's income before interest, income taxes and
19
allocations of indirect corporate overhead expense (but not expenses directly
attributable to the Company or its operations, such as charges for insurance) of
OEI, contingent on the Company achieving a minimum income before interest,
income taxes, allocation of indirect corporate overhead expense (but not
expenses directly attributable to the Company or its operations, such as charges
for insurance) of OEI and bonuses payable, of 6% of revenues (which does not
include reimbursable costs of materials and equipment to the extent described
under the caption "Revenue Recognition" in Note 1 to the Initial Financial
Statements), and (ii) 50% matching by the Company of the first 6% of employee
compensation contributed by employees to the Company's 401(k) plan, contingent
on the net income of the Company being greater than zero for the immediately
preceding month and year to date. Bonuses will be paid pursuant to the Company's
Discretionary Bonus Plan (Personnel Policy No. IV-7) as it may be modified from
time to time. Equivalent bonus and 401(k) plans that satisfy the minimum
requirements of (i) and (ii) above will be permitted substitutes.
ARTICLE XII
TERMINATION
Section 12.01. TERMINATION OF THIS AGREEMENT.
(a) This Agreement may be terminated at any time prior to the
Closing solely:
(i) by the mutual written consent of OEI and the
Company;
(ii) by the Majority Stockholders or the Company, on the
one hand, or by OEI, on the other hand, if the transactions
contemplated by this Agreement to take place at the Closing shall
not have been consummated by October 31, 1998, unless the failure
of such transactions to be consummated results from the willful
failure of the Party (or in the case of the Stockholders and the
Company, any of them) seeking to terminate this Agreement to
perform or adhere to any agreement required hereby to be
performed or adhered to by that Party prior to or at the Closing
or thereafter on the IPO Closing Date;
(iii) by the Majority Stockholders or the Company, on the
one hand, or by OEI, on the other hand, if a material breach or
default shall be made by the other Party (or in the case of the
Stockholders and the Company, any of them) in the observance or
in the due and timely performance of any of the covenants,
agreements or conditions contained herein; or
(iv) by OEI if it is entitled to do so as provided in
Section 6.07;
(b) This Agreement may be terminated after the Closing solely:
(i) by OEI or the Company if the Underwriting Agreement
is terminated pursuant to its terms after the Closing and prior
to the consummation of the IPO; or
20
(ii) automatically and without action on the part of any
party hereto if the IPO is not consummated within 15 Business
Days after the date of the Closing.
(c) If this Agreement is terminated pursuant to this Section
12.01, the Merger will be deemed for all purposes to have been abandoned
and of no force or effect. If this Agreement is terminated pursuant to
this Section 12.01 after the Certificate of Merger has been filed with
the Secretary of State of the Commonwealth of Kentucky, but before the
IPO has been consummated, OEI will take all actions that Counsel for the
Company and the Stockholders advises OEI are required by the applicable
laws of the Commonwealth of Kentucky to rescind the Merger.
Section 12.02. LIABILITIES IN EVENT OF TERMINATION. If this Agreement is
terminated pursuant to Section 12.01, there shall be no liability or obligation
on the part of any Party except (a) as provided in Section 11.07, (b) to the
extent that such liability is based on the breach of that Party of any of its or
his representations, warranties or covenants set forth in of this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
OEI INTERNATIONAL, INC.
By:/s/Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, Chief Executive Officer
C&I ACQUISITION, INC.
By:/s/Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, President
CHEMICAL & INDUSTRIAL ENGINEERING, INC.
By:/s/Xxxxx X. Xxxx
Xxxxx X. Xxxx, President
STOCKHOLDERS:
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
21
/s/C. Xxxxxx Xxx
C. Xxxxxx Xxx
/s/Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
/s/Xxxxxx X. Xxxxxxxxxxx
Xxxxxx X. Xxxxxxxxxxx
/s/Xxxxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx Xxxxxx
/s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
/s/Xxxxx Xxxxx
Xxxxx Xxxxx
/s/Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
/s/Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
/s/Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
/s/Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
/s/Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
22
/s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
/s/Xxxxx X. Xxxx
Xxxxx X. Xxxx
/s/Xxx X. Xxxx
Xxx X. Xxxx
/s/Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
/s/Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
/s/Xxxxx X. Xxxxx, Xx.
Xxxxx X. Xxxxx, Xx.
/s/Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
/s/C. Xxxxx Xxxxxxxxx
C. Xxxxx Xxxxxxxxx
/s/Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
/s/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
/s/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
23
ADDENDUM 1
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
C&I Acquisition, Inc.
Chemical & Industrial Engineering, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Addendum which are defined in the
captioned Agreement to which this is an Addendum are used herein as therein
defined.
(2) The Founding Companies are:
Chemical & Industrial Engineering, Inc.
Xxxxxx Engineering, Inc.
Xxxxxx, Xxxxxxxxxx and Xxxxxx, Inc.
Petrocon Engineering, Inc.
W-Industries, Inc.
SCHEDULE 2.03
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
C&I Acquisition, Inc.
Chemical & Industrial Engineering, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 2.03 are used
herein as therein defined.
(2) The directors of the Surviving Corporation immediately after the
Effective Time are as follows:
Xxxxx X. Xxxx
Xxxx X. Xxxxx
Xxxx Xxxxx
(3) The officers of the Surviving Corporation immediately following the
Effective Time are as follows:
President Xxxxx X. Xxxx
Vice President Xxxxx Xxxxx
Vice President Xxxx X. Xxxxx
Vice President Xxxx Xxxxx
Vice President, Secretary
and Treasurer Xxxxxxx X. Xxxxxxxxx
Assistant Secretary Xxxxxxx X. Xxxxxxx
SCHEDULE 2.04
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
C&I Acquisition, Inc.
Chemical & Industrial Engineering, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 2.04 are used
herein as therein defined.
(2) The name and address of each Stockholder are as follows:
NAME ADDRESS
---- -------
Stockholders:
Xxxxxxx X. Xxxxxx 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
C. Xxxxxx Xxx 00000 Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxxxx 0000 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxx X. Xxxxxxxxxxx 0000 Xxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxxx Xxxxx Xxxxxx 000 Xxxxxx Xxx Xxx, Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxx X. Xxxxxxx 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxx Xxxxx 0000 Xxxxxx Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxxxxx 000 Xxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxxxxxx 0000 Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxxxxx 00000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxxx X. and Xxxxxxx X.
Xxxxxxxxx 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxx X. Xxxxxxx 00 Xxxxxxx Xxxxx, Xxxxxxxxxxxxxx, Xxxxxxx 00000
Xxxxx X. and Xxx X. Xxxx 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxxxxx 000 Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
Xxxx X. Xxxxxx 0000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxx X. Xxxxx, Xx. 0000 Xxxxxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxx 00000
Xxxxxxx X. Xxxxx 0000 Xxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx 00000
C. Xxxxx Xxxxxxxxx 0000 Xxxxx Xxxx, Xxxxxxxxxxxxxx, Xxxxxxx 00000
Xxxx X. Xxxxxx 0000 Xxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxx X. Xxxxx 000 Xxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxx X. Xxxxx 00 Xxxxxxx Xxxxx, Xxxxxxxxxxxxx, Xxxxxxxx 00000
(3) The aggregate Merger Consideration shall be comprised of (i)
$2,879,981 cash minus the amount paid or payable by the Company to redeem shares
of Company Common Stock which
are redeemed after the date hereof from Other Stockholders as more fully
described in paragraph (4) of Schedule 6.04 (the "Cash Consideration") and (ii)
559,995 shares (the "Merger Shares") of OEI Common Stock.
(4) Each Other Stockholder will receive an amount of cash equal to the
product obtained by multiplying (i) the Pro Rata Share of such Other Stockholder
times (ii) the sum of (a) the Cash Consideration plus (b) the product obtained
by multiplying the Merger Shares times the IPO Price. Other Stockholders will
not receive any of the Merger Shares.
(5) Each Stockholder will receive his Stockholder Pro Rata Share of the
Cash Consideration remaining after payment of the cash to be paid to the Other
Stockholders pursuant to the preceding paragraph and his Stockholder Pro Rata
Share of the Merger Shares.
SCHEDULE 3.01
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
C&I Acquisition, Inc.
Chemical & Industrial Engineering, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 3.01 are used
herein as therein defined.
(2) Each Stockholder is an "accredited investor" as defined in
Securities Act Rule 501(a) except for the following:
NAME
----------------------------------------
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxxxxx
Xxxxxxx Xxxxx Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxx
C. Xxxxx Xxxxxxxxx
Xxxx X. Xxxxxx
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
SCHEDULE 3.02
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
C&I Acquisition, Inc.
Chemical & Industrial Engineering, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 3.02 are used
herein as therein defined.
(2) The following table sets forth the ownership of the Company's
Capital Stock:
VOTING NON-VOTING TOTAL
NAME CLASS SHARES SHARES SHARES
--------------------------------- ------------- --------------- ------------- ---------------
STOCKHOLDERS:
Xxxxxxx X. Xxxxxx Common 1,000 607 1,607
C. Xxxxxx Xxx Common 1,500 2,836 4,336
Xxxxxxx X. Xxxxxx Common 593 0 593
Xxxxxx X. Xxxxxxxxxxx Common 787 0 787
Xxxxxxx Xxxxx Xxxxxx Common 686 0 686
Xxxxxx X. Xxxxxxx Common 1,000 500 1,500
Xxxxx Xxxxx Common 1,500 2,916 4,416
Xxxxxxx X. Xxxxxxx Common 1,500 13 1,513
Xxxxxxx X. Xxxxxxxx Common 1,500 1,214 2,714
Xxxxxxx X. Xxxxxxx Common 500 26 526
Xxxxxxx X. Xxxxxxxxx Common 0 125 125
Xxxxxxx X. Xxxxxxxxx Common 1,500 1,788 3,288
Xxxxxx X. Xxxxxxx Common 1,500 383 1,883
Xxxxx X. Xxxx Common 1,500 1,331 2,831
Xxx X. Xxxx Common 510 0 000
Xxxxxxx X. Xxxxxxx Xxxxxx 1,341 0 1,341
Xxxx X. Xxxxxx Common 1,000 325 1,325
Xxxxx X. Xxxxx, Xx. Common 1,000 1,174 2,174
VOTING NON-VOTING TOTAL
NAME CLASS SHARES SHARES SHARES
--------------------------------- ------------- --------------- ------------- ---------------
Xxxxxxx X. Xxxxx Common 578 0 578
C. Xxxxx Xxxxxxxxx Common 1,500 124 1,624
Xxxx X. Xxxxxx Common 954 0 954
Xxxxxx X. Xxxxx Common 695 0 695
Xxxxxx X. Xxxxx Common 691 0 691
--------------------------------- ---------------- -------------- ------------- ---------------
STOCKHOLDERS SUBTOTAL: 23,335 13,362 36,697
--------------------------------- ---------------- -------------- ------------- ---------------
OTHER STOCKHOLDERS:
Xxx Xxxxxx Common 0 17 17
Xxxxxxx Xxxxxx Common 216 0 216
Xxxx Xxxxxxxxx Common 16 0 16
Xxxxxx Xxxxxx Common 49 0 49
Xxxxx Xxxxxx Common 18 0 18
Xxxxx Xxxxxxxxxx Common 66 0 66
Xxxxxxx Xxxxxx Common 4 0 4
Xxxxx Xxxxxxxxxx Common 26 0 26
Xxxxx Xxxxxxxx Common 27 0 27
Xxxxxxxx Xxxxxxx Common 18 0 18
Xxx Xxxxxxxxxx Common 344 0 344
Xxxxx Fiesta Common 26 0 26
Xxxx Xxxxx Common 13 0 13
Xxxx Xxxx Common 130 0 130
Xxxxx Xxxxx Common 1 0 1
Xxxx Xxxxx Common 41 0 41
Xxxxx Xxxx Common 4 0 4
Xxxxx Xxxxxxx Common 366 0 366
Xxxxx Xxxxx Common 8 0 8
Xxxxxx Xxxxxxxxx Common 20 0 20
Xxxx XxXxxxxx Common 24 0 24
Xxxxxxxx Xxxxx Common 37 0 37
Xxxxxx XxxXxxxxx Common 20 0 20
Xxxxxx XxXxxxxxx Common 79 0 79
Xxxxx Xxxx Common 100 0 100
VOTING NON-VOTING TOTAL
NAME CLASS SHARES SHARES SHARES
--------------------------------- ------------- --------------- ------------- ---------------
Xxxxxxxx Xxxxx Common 13 0 13
Xxxxxx Xxxxxx Common 189 0 189
Xxxxx Xxxxx Common 0 5 5
Xxxxxx Xxxxxx Common 1 0 1
Xxxxxxx X'Xxxxx Common 68 0 68
Hoss Oshrieh Common 154 0 154
Xxxxxxx Xxx Common 20 0 20
Xxxxx Xxxxxx Common 78 0 78
Xxx Xxxxxxxx Common 215 0 215
Xxxxxxx Xxxxxx Common 112 0 112
Xxxxx Xxxxxxx Common 1 0 1
Xxxxxxx Xxxxxxx Common 1 0 1
Xxxx Xxxxx Common 39 0 39
Xxxx Xxxxx Common 105 0 105
Xxxx Xxxxxxxx Common 5 0 5
Xxxxxx Xxxxxxx Common 142 0 142
Xxxx Xxxxxxxx Common 192 0 192
Xxxxx Xxxxxx Common 186 0 186
Xxxxxx Xxxx Common 21 0 21
Xxxxx Xxxxxx Common 5 0 5
Xxxxx Xxxxx Common 5 0 5
--------------------------------- ------------- ----------------- ------------- ---------------
OTHER STOCKHOLDERS SUBTOTAL 3,205 22 3,227
================================= ============= ================= ============= ===============
GRAND TOTAL 26,540 13,384 39,924
================================= ============= ================= ============= ===============
(3) No exception is taken to the representations and warranties made in
Section 3.02 of the captioned Agreement.
SCHEDULE 3.07
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
C&I Acquisition, Inc.
Chemical & Industrial Engineering, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 3.07 are used
herein as therein defined.
(2) The Stockholder is, alone or with one or more other Persons, the
controlling Affiliate of the following Entity, business or trade (other than the
Company and the Company Subsidiaries, if the Stockholder is an Affiliate of the
Company) that is (a) engaged in any line of business which is the same as or
similar to any line of business in which the Company or any Company Subsidiary
is engaged or (b) is, or has within the three year period ending on the date of
the captioned Agreement, engaged in any transaction with the Company or any
Company Subsidiary except for (i) transactions in the ordinary course of
business of the Company or that Company Subsidiary and (ii) any single
transaction (or series of related transactions) involving property or services
having a value, or the payment of money, of less than $10,000:
None
SCHEDULE 4.11
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
C&I Acquisition, Inc.
Chemical & Industrial Engineering, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 4.11 are used
herein as therein defined.
(2) The following Related Party Agreements will be permitted to continue
in effect past the date of the Closing in accordance with their terms, subject
to the following provisions of this Schedule:
The New Employment Agreements
SCHEDULE 6.03
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
C&I Acquisition, Inc.
Chemical & Industrial Engineering, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 6.03 are used
herein as therein defined.
(2) The Company may deviate from the restrictions in Section 6.03 with
the consent in writing of OEI (which consent shall not be unreasonably
withheld).
(3) The Company shall not be required to comply with obligations under
debt and lease instruments and other agreements relating to or affecting its
assets, properties or rights unless such obligations are material.
SCHEDULE 6.04
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
C&I Acquisition, Inc.
Chemical & Industrial Engineering, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 6.04 are used
herein as therein defined.
(2) The Company may adjust, in the ordinary course of business, present
salaries of employees who are not officers and directors.
(3) The Company may pay normal merit bonuses to employees in amounts
consistent with the Company's past practices, policies and agreements.
(4) To the extent the Company is obligated to do so pursuant to
contractual obligations between the Company and any Other Stockholder in
existence on the date hereof and accurately disclosed to OEI prior to the date
hereof, the Company may redeem shares of the Common Stock from Other
Stockholders.
SCHEDULE 6.11
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
C&I Acquisition, Inc.
Chemical & Industrial Engineering, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 6.11 are used
herein as therein defined.
(2) The Company will make all arrangements and take all such actions as
are necessary and satisfactory to OEI to dispose, prior to the Effective Time,
of the following assets in the manner indicated below:
None
SCHEDULE 8.05
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
C&I Acquisition, Inc.
Chemical & Industrial Engineering, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 8.05 are used
herein as therein defined.
(2) At or within 10 days following the Effective Time, OEI will cause
the following Stockholder and Other Stockholder Guarantees to be terminated:
None
SCHEDULE 10.01
to the
Agreement and Plan of Reorganization
dated as of April 10, 1998
among
OEI International, Inc.
C&I Acquisition, Inc.
Chemical & Industrial Engineering, Inc.
and
the Stockholders Named Therein
(1) Words and terms used in this Schedule which are defined in the
captioned Agreement to which this Schedule is attached as Schedule 10.01 are
used herein as therein defined.
(2) Each of the Stockholders identified below is a Restricted
Stockholder and subject to all the restrictions set forth in Section 10.01 of
the captioned Agreement:
C. Xxxxxx Xxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxx, Xx.
