Exhibit A
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is entered into as of
January 29, 1998, by and among U.S. Aggregates, Inc., a Delaware corporation
("Purchaser"), Western Acquisition, Inc., a Delaware corporation and a wholly-
owned indirect subsidiary of Purchaser ("Sub"), and Monroc, Inc., a Delaware
corporation (the "Company").
RECITALS
A. The Boards of Directors of Purchaser, Sub and the Company each have
determined that the merger of Sub with and into the Company, upon the terms and
subject to the conditions set forth herein, is fair to, and in the best
interests of, their respective corporations and stockholders.
B. Concurrently with the execution of this Agreement, certain
stockholders of the Company have entered into the Voting Agreement attached
hereto as Exhibit A (the "Voting Agreement") which provides that such
stockholders will vote their shares of common stock of the Company in favor of
this Agreement.
C. Purchaser, Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with, and to establish
various conditions precedent to, the merger provided for herein.
ARTICLE 1
THE MERGER
1.1. Merger. At the Effective Time, upon the terms and subject to the
conditions hereof, and in accordance with the provisions of the Delaware General
Corporation Law (the "DGCL") and the Certificate of Incorporation and Bylaws of
the Company, Sub shall be merged with and into the Company (the "Merger").
Following the Merger, the Company shall continue as the surviving corporation
(the "Surviving Corporation") under the name Monroc, Inc. and shall continue its
existence under the laws of the State of Delaware, and the separate corporate
existence of Sub shall cease.
1.2. Consummation of the Merger. As soon as practicable after the
satisfaction or waiver of the conditions set forth in Article 6, the parties
hereto will cause a duly executed and acknowledged certificate of merger, or
certificate of ownership and merger if permitted by the DGCL of the State of
(the "Merger Certificate"), to be filed with the Secretary of State of Delaware,
and the parties hereto shall take all such other and further actions as may be
required by law to make the Merger effective. The Merger shall become effective
on the date on which the Merger Certificate has been duly filed with the
Secretary of State of the State of Delaware (such time is hereinafter referred
to as the "Effective Time"). The closing of the Merger will take place at 10:00
a.m. on a date to be specified by the Purchaser or Sub, but shall be no later
than the third business day after satisfaction or waiver of the conditions to
closing set forth in Article 6 (the "Closing Date"), at the offices of LeBoeuf,
Lamb, Xxxxxx & XxxXxx, L.L.P., 1000 Xxxxxx Building, 000 Xxxxx Xxxx Xxxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000, unless another date or place is agreed to in writing by
the parties hereto.
1.3 Effects of the Merger. The Merger shall have the effects set forth in
the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the properties, rights, privileges, powers
and franchises of the Company and Sub shall vest in the Surviving Corporation,
and all debts, liabilities and duties of the Company and Sub shall become the
debts, liabilities and duties of the Surviving Corporation. As of the Effective
Time, the Company shall be a wholly owned subsidiary of Purchaser.
1.4 Certificate of Incorporation and Bylaws. Subject to Section 5.11
(indemnification), the Certificate of Incorporation and the Bylaws of Sub in
effect at the Effective Time shall be the Certificate of Incorporation and
Bylaws of the Surviving Corporation until amended in accordance with applicable
law; provided that Article I of the Certificate of Incorporation of Sub shall be
Amended as of the Effective Time to read "The name of the corporation is Monroc,
Inc."
1.5 Directors and Officers. The directors of Sub at the Effective Time
shall be the directors of the Surviving Corporation and the officers of the
Company at the Effective Time shall be the officers of the Surviving
Corporation, in each case until their respective successors are duly elected (or
appointed in the case of officers) and qualified.
ARTICLE 2
CONVERSION OF SECURITIES
2.1 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of Purchaser, Sub, the Company or the
holders of any of the following securities:
2.1.1 Each share of common stock, par value $.01 per share, of the
Company issued and outstanding immediately prior to the Effective Time (the
"Shares"), other than Shares to be canceled pursuant to Section 2.1.2 and
Dissenting Shares (as hereinafter defined), shall by virtue of the Merger and
without any action on the part of the holder thereof be canceled and
extinguished and be converted into the right to receive $10.771 without interest
thereon (the "Merger Consideration").
2.1.2 Each Share which is issued and outstanding immediately prior to
the Effective Time and held by Purchaser or Sub or any direct or indirect
subsidiary of Purchaser or Sub, or which is held in the treasury of the Company
or any of its subsidiaries, shall be canceled and retired and no payment shall
be made with respect thereto.
2.1.3 Each share of common stock, par value $.01 per share, of Sub
issued and outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and nonassessable share
of common stock, par value $.01 per share (or such other value as may be
determined by Sub), of the Surviving Corporation.
2.2 Employee Stock Options; Outstanding Warrants. Immediately prior to
the Effective Time, each stock option (an "Option") granted under the Monroc,
Inc. 1996 Stock Option Plan and the Monroc, Inc. 1994 Stock Option Plan
(collectively, the "Stock Option Plans") and each outstanding warrant of the
Company (a "Warrant"), whether or not such Option or Warrant is then
exercisable, shall be canceled and each holder of a canceled Option or Warrant
shall be entitled to receive from the Company, in consideration for cancellation
and settlement of such Option or Warrant, a cash payment equal to the
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product of (i) the aggregate number of Shares subject to the Option or Warrant
and (ii) the excess, if any, of the Merger Consideration over the exercise price
per Share of such Option or Warrant as set forth in Schedule 3.2 (the "Option
Consideration"). Prior to the Closing, the Company will make any amendments to
the Stock Option Plans, the Warrants and any agreements related thereto, and
will obtain any consents or releases, necessary to effect the transactions
contemplated by this Section 2.2. Any amounts payable pursuant to this Section
2.2 shall be subject to any required withholding of taxes and shall be paid
without interest.
2.3 Dissenting Shares; Payment For Shares. Notwithstanding anything in
this Agreement to the contrary, Shares outstanding immediately prior to the
Effective Time and held by holders who did not vote in favor of the Merger and
who comply with all of the relevant provisions of Section 262 of the DGCL (the
"Dissenting Shares") shall not be converted into the right to receive the Merger
Consideration, and the holders of such Dissenting Shares shall be entitled to
receive payment of the appraised value of such Shares in accordance with the
provisions of Section 262 unless and until such holders shall have failed to
perfect or shall have effectively withdrawn or lost their rights to appraisal.
If, after the Effective Time, any such holder fails to perfect or shall have
effectively withdrawn or otherwise lost such right, each of such holder's Shares
shall thereupon be deemed to have been converted into the right to receive, as
of the Effective Time, the Merger Consideration without any interest thereon.
The Company shall give Sub prompt notice of any demands received by the Company
for appraisal of Shares, and, prior to the Effective Time, Sub shall have the
right to participate in all negotiations and proceedings with respect to such
demands. Prior to the Effective Time, the Company shall not, except with the
prior written consent of Sub, make any payment with respect to, or settle or
offer to settle, any such demands.
2.4 Payment For Shares. Prior to the Effective Time, Purchaser shall
designate a United States bank or trust company reasonably satisfactory to the
Company to act as Payment Agent in the Merger (the "Payment Agent"). At or
prior to the Effective Time, Purchaser or Sub shall deposit, or cause to be
deposited, in trust with the Payment Agent immediately available funds in an
amount sufficient to make the payments contemplated by Section 2.1.1 on a timely
basis (the "Exchange Fund"). The Payment Agent shall, pursuant to irrevocable
instructions and subject to Section 2.4.3, make payments out of the Exchange
Fund to holders of record who hold Shares immediately prior to the Effective
Time and the Exchange Fund shall not be used for any other purpose. The
Exchange Fund may, as directed by the Surviving Corporation (so long as such
directions do not impair the rights of holders of Shares to receive the Merger
Consideration promptly upon the surrender of their shares in accordance with
this agreement), be invested by the Payment Agent in direct obligations of the
United States of America, obligations for which the full faith and credit of
the United States of America is pledged to provide for the payment of principal
and interest, commercial paper rated of the highest quality by Xxxxx'x Investors
Services, Inc. or Standard & Poor's Corporation, or certificates of deposit
issued by a commercial bank having at least $1,000,000,000 in assets. Deposit
of funds pursuant hereto shall not relieve Purchaser or the Surviving
Corporation of their obligations to make payments in respect of Shares and
Purchaser hereby guarantees the Surviving Corporation's obligations in respect
thereof.
2.4.1 Promptly after the Effective Time, Purchaser and the Surviving
Corporation shall cause the Payment Agent to mail and/or make available to each
record holder, as of the Effective Time, of a certificate or certificates (the
"Certificates") which immediately prior to the Effective Time represented Shares
(other than those cancelled pursuant to Section 2.1.2), a notice and letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Payment Agent) and instructions for use in effecting the
surrender
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of the Certificates in exchange for the Merger Consideration. As promptly as
practicable after surrender to the Payment Agent of a Certificate, together with
such letter of transmittal duly executed and completed in accordance with the
instructions thereon, the holder of such Certificate shall be paid in exchange
therefor cash in an amount equal to the product of the number of Shares
represented by such Certificate multiplied by the Merger Consideration, and such
Certificate shall be canceled. No interest shall be paid or accrued in respect
of the Merger Consideration. If payment is to be made to a person other than the
person in whose name the certificate surrendered is registered, it shall be a
condition of payment that the Certificate so surrendered shall be properly
endorsed or otherwise in proper form for transfer and that the person requesting
such payment shall pay any transfer or other taxes required by reason of the
payment to a person other than the registered holder of the surrendered
Certificate or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. Until surrendered in accordance
with the provisions of this Section 2.4, each Certificate (other than
Certificates cancelled pursuant to Section 2.1.2 and Dissenting Shares) shall
represent for all purposes solely the right to receive the Merger Consideration,
without any interest thereon.
2.4.2 After the Effective Time, there shall be no transfers of Shares
on the stock transfer books of the Surviving Corporation. If, after the
Effective Time, Certificates are presented to the Payment Agent or the Surviving
Corporation, they shall be canceled and exchanged for cash as provided in this
Section 2.4, subject to applicable law in the case of Dissenting Shares.
2.4.3 Any portion of the Exchange Fund which remains unclaimed by the
stockholders of the Company on the date six months after the Effective Time
shall be repaid to the Surviving Corporation, upon demand, and any stockholder
of the Company who has not theretofore complied with Section 2.4 shall
thereafter look only to the Surviving Corporation for payment of such
stockholder's claim for the Merger Consideration, without any interest thereon.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser and Sub as follows:
3.1 Organization and Qualification. The Company and each subsidiary of
the Company is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted and is duly qualified to do
business as a foreign corporation and in good standing in each jurisdiction in
which the character of its properties or the nature of its business makes such
qualification necessary, except where the failure to be so organized, existing,
qualified or in good standing or have such power and authority would not have a
Material Adverse Effect (as defined in Section 8.12). The Company has delivered
or made available to Purchaser complete and correct copies of its and its
subsidiaries' respective certificates of incorporation and bylaws. All
subsidiaries of the Company and their respective jurisdictions of incorporation
or organization are identified on Schedule 3.1.
3.2 Capitalization. The authorized capital stock of the Company consists
of 20,000,000 Shares and 1,000,000 shares of Preferred Stock, par value $.01 per
share ("Preferred Shares"). No Preferred Shares are outstanding. All of the
outstanding Shares have been duly authorized and validly issued and are fully
paid and nonassessable and free of preemptive rights. As of the date hereof,
(i) 4,514,200 Shares were issued and outstanding, (ii) 52 Shares were held in
the Company's treasury, (iii) 415,600 Shares were reserved for issuance pursuant
to outstanding Options and (iv) 1,501,250 Shares were
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reserved for issuance upon the exercise of outstanding Warrants. Except for the
rights as set forth in this Section 3.2, there are not as of the date hereof any
outstanding or authorized subscriptions, options, warrants, calls, rights,
commitments or any other agreements of any character obligating the Company or
any of its subsidiaries to issue any additional Shares or any other shares of
capital stock of the Company or any other securities convertible into or
evidencing the right to subscribe for any Shares. The exercise prices of the
outstanding Options and Warrants are set forth on Schedule 3.2. Except as
provided in Section 2.2 or as set forth on Schedule 3.2, there are no
outstanding obligations of the Company or any of its subsidiaries to repurchase,
redeem or otherwise acquire any of their respective equity securities. Each of
the outstanding shares of capital stock of each of the Company's subsidiaries is
duly authorized, validly issued, fully paid and nonassessable, and is owned,
directly or indirectly, by the Company. The Shares which are the subject of the
Voting Agreement represent approximately 36.6% of the total Shares outstanding
as of the date hereof.
3.3 Authority Relative to this Agreement. The Company has all requisite
corporate power and authority to execute and deliver this Agreement and subject
to the terms and conditions hereof, to consummate the transactions contemplated
hereby (other than, with respect to the Merger, the approval and adoption of
this Agreement and the transactions contemplated hereby by the stockholders of
the Company in accordance with the applicable provisions of the DGCL). The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of the Company and no other corporate proceedings on the part
of the Company are necessary to authorize this Agreement or to consummate the
transactions so contemplated (other than, with respect to the Merger, the
approval and adoption of this Agreement and the transactions contemplated hereby
by the stockholders of the Company in accordance with the applicable provisions
of the DGCL). This Agreement has been duly and validly executed and delivered
by the Company and, assuming this Agreement constitutes a valid and binding
obligation of each of Purchaser and Sub, this Agreement constitutes a valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except that such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
3.4 Absence of Certain Changes. Except as disclosed in the Company
Filings (as defined in Section 3.5) or as set forth on Schedule 3.4, since
November 30, 1997 (a) the Company and its subsidiaries have not suffered any
Material Adverse Effect, (b) the Company has not issued any shares of its
capital stock or granted any rights to purchase its capital stock or securities
convertible into or exchangeable for its capital stock or (c) the Company has
not declared, set aside or made any payments of a dividend or other distribution
in respect of any of its capital stock and has not, directly or indirectly,
redeemed, purchased or otherwise acquired any of its capital stock.
3.5 Reports; Financial Statements. Since December 31, 1994, the Company
has filed all required forms, reports and documents with the Securities and
Exchange Commission (the "SEC") required to be filed by it pursuant to the
federal securities laws and the SEC rules and regulations thereunder (the
"Company Filings"), all of which have been delivered or made available to
Purchaser and all of which have complied in all material respects with all
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations promulgated thereunder. None of
the Company Filings, including without
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limitation any financial statements or schedules included therein, at the time
filed, 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 audited and unaudited consolidated financial statements of
the Company included in such reports have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis (except
as stated in such financial statements) and fairly present the financial
position of the Company and its consolidated subsidiaries as of the dates
thereof and the results of their operations and changes in financial position
for the periods then ended, subject, in the case of the unaudited financial
statements, to normal year-end audit adjustments. Except as reflected, reserved
against or otherwise disclosed in the financial statements of the Company
included in the Company Filings, as otherwise disclosed in the Company Filings
or as disclosed on Schedule 3.5, neither the Company nor any of its subsidiaries
has any material liabilities or obligations (whether accrued, absolute,
contingent or otherwise) that would be required to be reflected on, or reserved
against in, the financial statements of the Company or in the notes thereto,
prepared in accordance with generally accepted accounting principles
consistently applied, except liabilities arising in the ordinary course of
business since November 30, 1997.
3.6 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by the Company nor the consummation by the Company of
the transactions contemplated hereby will (except as disclosed by the Company on
Schedule 3.6):
3.6.1 subject to the obtaining of any requisite approval of the
Company's stockholders, conflict with any provision of the Certificate of
Incorporation or Bylaws of the Company or the charter documents of the Company's
subsidiaries;
3.6.2 require any consent, approval, authorization or permit of, or
filing with or notification to, any court, administrative agency or commission
or other governmental authority domestic or foreign (a "Governmental Entity"),
except (i) in connection with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of l976, as amended (the "HSR Act"), (ii) pursuant to the Exchange Act and the
rules and regulations thereunder, (iii) pursuant to state laws relating to
takeovers and state securities laws, (iv) the filing of the Merger Certificate
pursuant to the DGCL, or (v) where the failures to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not in the aggregate have a Material Adverse Effect;
3.6.3 violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company or its subsidiaries, except for violations
which, in the aggregate, would not have a Material Adverse Effect; or
3.6.4 result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any note, lease, mortgage, license, agreement, permit or other instrument or
obligations to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any of their respective assets
may be bound, except for such defaults (or rights of termination, cancellation
or acceleration) as to which requisite waivers or consents have been obtained or
which, in the aggregate, would not have a Material Adverse Effect.
3.7 Litigation. Except as set forth on Schedule 3.7 or as disclosed in
the Company Filings filed prior to the date of this Agreement, there are no
actions, suits or proceedings pending or, to the
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knowledge of the Executive Officers of the Company, threatened against the
Company or any of its subsidiaries which would have a Material Adverse Effect.
3.8 Compliance with Laws. To the best knowledge of the Executive Officers
of the Company, except as disclosed in the Company Filings or as set forth on
Schedule 3.8, the Company and its subsidiaries have conducted their businesses
in accordance with applicable federal, state and local laws, rules and
regulations, except where the failure to so conduct their businesses would not
in the aggregate have a Material Adverse Effect. The Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders,
franchises and approvals of all Governmental Entities necessary for the conduct
of their respective businesses as presently conducted, except where the failure
to so hold would not have a Material Adverse Effect (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.
3.9 Employee Matters. Except as set forth on Schedule 3.9, none of the
Company or any of its subsidiaries is a party to, or bound by, any collective
bargaining agreement, contract or other agreement or understanding with a labor
union or labor organization. There is no unfair labor practice or labor
arbitration proceeding pending or, to the knowledge of the Executive Officers of
the Company, threatened against the Company or any of its subsidiaries, except
for any such proceedings which would not in the aggregate have a Material
Adverse Effect.
3.10 Material Contracts. The Company has delivered or made available to
Purchaser true and complete copies of all written, and written descriptions of
all oral, contracts, agreements, commitments, leases (including with respect to
personal property) and other arrangements to which it or any of its subsidiaries
is a party or by which it or any of its subsidiaries are bound which require
payments to be made in excess of $250,000 per year, other than agreements listed
in any of the other schedules attached hereto (the "Material Contracts"). Each
of the Material Contracts is listed on Schedule 3.10. Each of the Material
Contracts is valid and in full force and effect except to the extent it has
previously expired in accordance with its terms. Neither the Company nor any of
its subsidiaries is in violation of or in default under (nor does any
circumstance exist which, with notice of the lapse of time or both, would result
in such a violation of or default under) any Material Contract, other than such
violations or defaults which would not have a Material Adverse Effect. To the
knowledge of the Executive Officers of the Company, none of the other parties to
the Material Contracts are in violation of or in default under (nor does any
circumstance exist which, with notice of the lapse of time or both, would result
in such a violation of or default under) any Material Contract, other than such
violations or defaults which would not have a Material Adverse Effect.
3.11 Taxes.
3.11.1 Each of the Company and its Subsidiaries (as defined below for
purposes of this Section 3.11) has timely filed all material federal, state,
local and foreign Tax Returns (as defined below) required to be filed by it for
tax years prior to the date of this Agreement or has timely requested extensions
and any such request has been granted and has not expired. Except as set forth
on Schedule 3.11, no agreement or arrangement extending the period for
assessment or collection of Taxes of the Company or any of its Subsidiaries is
in effect as of the date hereof. Each of such Tax Returns is complete and
accurate in all material respects. All Taxes (as defined below) owed by the
Company or any of its Subsidiaries on any such Tax Return have been paid or
accrued, except for Taxes being contested in good
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faith and for which adequate reserves have been taken. The Company and each of
its Subsidiaries have properly accrued for all Taxes for such periods subsequent
to the periods covered by such Tax Returns. For purposes of this Section 3.11,
the term "Subsidiary" of an entity shall mean any corporation, 80% of the voting
power and 80% of the total value of all of the outstanding capital stock of
which are owned directly by such entity.
3.11.2 Except as set forth on Schedule 3.11, there are no pending or,
to the knowledge of the Executive Officers of the Company, threatened audits or
other proceedings by any court, governmental or regulatory authority or similar
person in respect of Taxes or Tax Returns relating to the Company or any of its
Subsidiaries which, if determined adversely to the Company or any of its
Subsidiaries, could reasonably be expected to have a Material Adverse Effect.
3.11.3 No election under Section 338 of the Internal Revenue Code of
1986, as amended (the "Code"), has been made or filed by or with respect to the
Company or any of its Subsidiaries. None of the Company or any of its
Subsidiaries has agreed to make any adjustment pursuant to Section 481(a) of the
Code by reason of any change in any accounting method, and there is no
application pending with any Taxing Authority (as defined below) requesting
permission for any changes in any accounting method of the Company or any of its
Subsidiaries. None of the assets of the Company or any of its Subsidiaries is
or will be required to be treated as being owned by any person (other than the
Company or its Subsidiaries) pursuant to the provisions of Section 168(f)(8) of
the Internal Revenue Code of 1954, as amended and in effect immediately before
the enactment of the Tax Reform Act of 1986.
3.11.4 Except as set forth on Schedule 3.11, none of the Company or
any of its Subsidiaries is party to, is bound by, or has any obligation under,
any Tax sharing or allocation agreement or similar contract.
3.11.5 Except as set forth on Schedule 3.11, none of the Company or
any of its Subsidiaries is a party to any contract, agreement, plan or
arrangement that could reasonably be expected to result in the payment of any
amount that would not be deductible by the Company or any of its Subsidiaries by
reason of Section 280G of the Code.
3.11.6 Schedule 3.11 accurately set forth (i) the amount of all
deferred intercompany gains for purposes of Treasury Regulation section 1.1502-
13 (including any predecessor regulation) with respect to the Company and its
Subsidiaries and (ii) the amount of any excess loss account with respect to the
stock of each of the Subsidiaries for purposes of Treasury Regulation section
1.1502-19 (including any predecessor regulation).
3.11.7 For purposes of this Agreement, the term "Taxes" shall mean
all taxes, charges, fees, levies or other similar assessments or liabilities,
including (i) income, gross receipts , ad valorem, premium, excise, real
property, personal property, sales, use, transfer, withholding, employment,
payroll and franchise taxes imposed by the United States or by any state, local
or foreign government or any subdivision, agency or similar organization
thereof, and (ii) any interest, fines, penalties, assessments and additions in
connection therewith. For purposes of this Agreement, the term "Tax Returns"
shall mean any report, return or statement required to be supplied to a Taxing
Authority in connection with Taxes. For purposes of this Agreement, the term
"Taxing Authority" means the Internal Revenue Service (the "IRS") or any
domestic or foreign Governmental Entity responsible for the administration of
Taxes.
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3.12 Brokerage Fees and Commissions. Except for those fees and expenses
payable to SBC Warburg Dillon Read Inc. (the "Company Financial Advisor") (a
true and complete copy of whose engagement agreement has been provided to
Purchaser), no person or entity is entitled to receive from the Company any
investment banking, brokerage or finder's fee in connection with this Agreement
or the transactions contemplated hereby based upon arrangements made by or on
behalf of the Company.
3.13 Proxy Statement. None of the information supplied or to be supplied
by the Company for inclusion or incorporation by reference in the Proxy
Statement (as defined herein) will, on the date it is first mailed to the
Company's stockholders or at the time of the Stockholders Meeting (as defined
herein), 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 statements made or incorporated by reference therein based on
information supplied in writing by Purchaser or Sub specifically for inclusion
therein. The Proxy Statement, insofar as it relates to the Company or its
subsidiaries, will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations promulgated
thereunder.
3.14 Employee Benefit Plans; ERISA.
3.14.1 Schedule 3.14.1 sets forth a complete and accurate list of (i)
all "employee benefit plans," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (collectively,
"Benefit Plans"), and (ii) all employment and consulting agreements and all
bonus, incentive compensation, deferred compensation, disability, severance,
stock bonus, stock option, stock purchase or vacation pay agreements, policies
or arrangements which the Company or any of its subsidiaries maintains or has
any liability in respect of and each of which has a cost to the Company or any
of its subsidiaries in excess of $25,000 for any year (collectively, the
"Employee Arrangements").
3.14.2 With respect to each Benefit Plan and Employee Arrangement, a
complete and correct copy of each of the following documents (if applicable) has
been delivered or made available to Purchaser or its representatives (i) the
most recent plan and related trust documents, (ii) the most recent summary plan
description, (iii) the most recent form 5500, (iv) the most recent determination
letter issued by the IRS and (v) the most recent actuarial report.
3.14.3 Except as set forth on Schedule 3.14, the Company and its
subsidiaries have not during the preceding six years had any obligation or
liability with respect to a multi-employer plan within the meaning of Section
3(37) of ERISA.
3.14.4 Each of the Benefit Plans intended to be qualified under
Section 401(a) of the Code is so qualified.
3.14.5 All contributions or other payments required to have been made
or accrued by the Company or any of its subsidiaries under the terms of any of
Benefit Plan or Employee Arrangement have been made or accrued, except for those
contributions or payments the failure of which to make or accrue would not have
a Material Adverse Effect.
3.14.6 The Benefit Plans and Employee Arrangements have been
maintained and administered in all material respects in accordance with their
terms and applicable laws.
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3.14.7 Except as disclosed in the Company Filings or in Schedule
3.14, there are no pending or, to the knowledge of the Executive Officers of the
Company, threatened actions, claims or proceedings (other than routine claims
for benefits) against or involving any Benefit Plan or Employee Arrangement,
except for any of the foregoing which would not have a Material Adverse Effect.
3.14.8 Except as disclosed in the Company Filings or in Schedule
3.14, the Company or any subsidiary does not maintain or have an obligation to
contribute to retiree life or retiree health plans which provide for continuing
benefits or coverage for current or former officers, directors and employees of
the Company or any of its subsidiaries, except (i) as may be required under Part
6 of Title I of ERISA or (ii) a medical expenses reimbursement account plan
pursuant to Section 125 of the Code.
3.14.9 Except as disclosed in Schedule 3.14 or in connection with
equity compensation or except as discussed in this Agreement, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment becoming due to
any employee of the Company or any of its subsidiaries, (ii) increase in any
benefits under any Benefit Plan or Employee Arrangement or (iii) result in the
acceleration of the time of payment of, vesting or other rights with respect to
any benefits under any Benefit Plan or Employee Arrangement.
3.14.10 The Company and its subsidiaries have no liability under
Section 4069 of ERISA by reason of a transfer of an under funded pension plan.
3.14.11 The Company's liability under any multi-employer plan, if the
Company withdrew in part or in whole on the date hereof, would not exceed
$150,000.
3.15 Opinion of Financial Advisor. The Company has received the opinion
of the Company Financial Advisor to the effect that, as of the date hereof, the
Merger Consideration is fair to the holders of Shares from a financial point of
view, a copy of which has been provided to Purchaser.
3.16 Vote Required. The affirmative vote of the holders of a majority of
the outstanding Shares is the only vote of the holders of any class or series
of the Company's capital stock necessary to approve this Agreement and the
transactions contemplated hereby.
3.17 Intellectual Property. Except as set forth on Schedule 3.17, the
Company and its subsidiaries possess or have adequate rights to use all material
trademark, trade name, patent, service xxxx, brand xxxx, brand names, industrial
designs and copyrights necessary for the operation of their businesses as
currently being conducted, except where the failure to so possess or have
adequate rights would not result in a Material Adverse Effect (collectively, the
"Company Intellectual Property"). To the knowledge of the Executive Officers of
the Company, the use of Company Intellectual Property by the Company or its
subsidiaries does not conflict with, infringe upon, violate or interfere with or
constitute an appropriation of any right, title, interest or goodwill, including
any trademark, trade name, patent, service xxxx, brand xxxx, brand name,
computer program, database, industrial design or copyright of any other person,
except for any such conflict, infringement, violation, interference, claim,
invalidity, abandonment, cancellation or unenforceability that would not have a
Material Adverse Effect.
3.18 Environmental Matters.
3.18.1 For purposes of this Agreement:
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(i) "Environmental Law" means any applicable law regulating or
prohibiting releases of Hazardous Materials into any part of the natural
environment, or pertaining to the protection of natural resources, the
environment and public and employee health and safety from Hazardous
Materials including the Comprehensive Environmental Response, Compensation,
and Liability Act ("CERCLA") (42 U.S.C. (S)9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. (S) 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the Clean Water
Act (33 U.S.C. (S) 1251 et seq.), the Clean Air Act (33 U.S.C. (S) 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. (S) 7401 et seq.), the
Federal Insecticide Fungicide, and Rodenticide Act (7 U.S.C. (S) 136 et
seq.), and the Occupational Safety and Health Act (29 U.S.C. (S) 651 et
seq.) ("OSHA") and the regulations promulgated pursuant thereto, and any
such applicable state or local statutes and the regulations promulgated
pursuant thereto, as such laws have been and may be amended or supplemented
through the Closing Date;
(ii) "Hazardous Material" means any substance, material or waste
which is regulated by any public or governmental authority in the
jurisdictions in which the applicable party or its subsidiaries conducts
business, or the United States, including any material or substance which
is defined as a "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste" or "restricted hazardous waste,"
"contaminant," "toxic waste" or "toxic substance" under any provision of
Environmental Law and shall also include petroleum, petroleum products,
asbestos, polychlorinated biphenyls and radioactive materials;
(iii) "Release" means any release spill, effluent, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching, or migration into the environment, or into or out of any
property; and
(iv) "Remedial Action" means all actions, including any
expenditures, required by a governmental entity or defined under any
Environmental Law, or voluntarily undertaken to (a) clean up, remove,
treat, or in any other way ameliorate or address any Hazardous Materials or
other substance in the environment; (b) prevent the Release or threat of
Release, or minimize the further Release of any Hazardous Material so it
does not endanger or threaten to endanger the public health or welfare or
the environment; (c) perform pre-remedial studies and investigations or
post-remedial monitoring and care pertaining or relating to a Release; or
(d) bring the applicable party into compliance with any Environmental Law.
3.18.2 Except as set forth on Schedule 3.18, the operations of the
Company and its subsidiaries are in compliance with all Environmental Laws,
except where the failure to so comply would not reasonably be expected to have a
Material Adverse Effect.
3.18.3 Except as set forth on Schedule 3.18, the Company and its
subsidiaries have obtained and maintained all permits required under applicable
Environmental Laws for the continued operations of their respective business,
except such permits the lack of which would not reasonably be expected to have a
Material Adverse Effect.
3.18.4 Except as set forth on Schedule 3.18, the Company and its
subsidiaries (i) are not subject to any material written consent decree,
compliance order or administrative order from any Governmental Entity or other
person respecting any Environmental Law, Remedial Action or any Release of a
Hazardous Material, (ii) have not received written notice under the citizen suit
provision of any
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Environmental Law or (iii) have not received any written request for
information, notice, demand letter, administrative inquiry or complaint with
respect to any Environmental Law, remedial Action or Release of a Hazardous
Material, except for with respect to (ii) and (iii) those written notices,
requests or other documents the subject matter of which would reasonably be
expected to have a Material Adverse Effect.
3.18.5 Except as set forth on Schedule 3.18, the Company and its
subsidiaries have not received any written communication alleging, with respect
to any such party, the violation of or liability under any Environmental Law,
which violation or liability is outstanding and would reasonably be expected to
have a Material Adverse Effect.
3.18.6 Except as set forth on Schedule 3.18, neither the Company nor
any of its subsidiaries has any contingent liability in connection with the
Release of any Hazardous Material which would reasonably be expected to have a
Material Adverse Effect.
3.18.7 Except as set forth on Schedule 3.18, the operations of the
Company or its subsidiaries involving the transportation, treatment, storage or
disposal of hazardous waste, as defined and regulated under 40 C.F.R. Parts 260-
270 (in effect as of the date of this Agreement) or any state equivalent are in
compliance with all Environmental Laws, except where the failure to so comply
would not reasonably be expected to have a Material Adverse Effect.
3.18.8 Except as set forth on Schedule 3.18, to the knowledge of the
Company, there is not now nor has there been in the past, on or in any owned
property of the Company or its subsidiaries any of the following: (i) any
underground storage tanks or surface impoundments, (i) any asbestos-containing
materials in friable form or (iii) any polychlorinated biphenyls, any of which
((i), (ii) or (iii) preceding) could reasonably be expected to have a Material
Adverse Effect.
3.18.9 Except as set forth on Schedule 3.18, no judicial or
administrative proceedings or governmental investigations are pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries alleging the violation of or seeking to impose liability pursuant
to any Environmental Law.
3.19 Title to Real Property; Leases. Schedule 3.19 sets forth a list of
(a) all real property currently owned by the Company and its subsidiaries and
(b) all leases with respect to real property to which the Company or any of its
subsidiaries is a party (collectively, the "Real Property Leases"). Except as
set forth on Schedule 3.19, each of the Company and its subsidiaries has good
and marketable title, or valid leasehold rights in the case of leased property,
to the real property owned or leased by it, including, without limitation, all
sand, gravel, rock and similar mineral rights (and rights of access thereto)
with respect to mineral producing properties, free and clear of any mortgages,
pledges, liens, encumbrances and security interests (collectively,
"Encumbrances"), except for (i) those Encumbrances reflected or reserved against
in the Company's Quarterly Report on Form 10-Q for the Quarter Ended September
30, 1997, (ii) Encumbrances for taxes, levies, imposts, assessments or
governmental charges of any kind which are not yet delinquent or which are being
contested in good faith by appropriate proceedings, (iii) liens for mechanics,
materialmen, laborers, employees, suppliers or other liens arising by operation
of law for which amounts which are not yet delinquent or which are being
contested in good faith by appropriate proceedings, (iv) as to leased property,
interests of lessors and Encumbrances affecting the interests of lessors, (v)
deposits made in the ordinary course of business to secure contractual or other
obligations of the Company or any of its subsidiaries, if the underlying
obligation is not yet delinquent, and (vi) liens or
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defects in title or leasehold rights that, individually or in the aggregate,
would not have a Material Adverse Effect. Each of the Real Property Leases is
valid and in full force and effect, except to the extent it has previously
expired in accordance with its terms. Neither the Company nor any of its
subsidiaries is in violation of or in default under any Real Property Lease,
other than such violations or defaults which would not have a Material Adverse
Effect. Notwithstanding anything in Schedule 3.19 to the contrary, the Company
represents and warrants that there are no exceptions to the Company's title to
its aggregate properties (as such properties are identified as aggregate
properties on Schedule 3.19) either noted on Schedule B to any of the title
policies attached to Schedule 3.19 with respect to such aggregate properties or
otherwise, that would, in any material way, interfere with the Company's title
to its aggregate properties, its right to access such aggregate properties, or
the Company's right to extract and remove aggregates from such properties in the
ordinary course of the Company's business.
3.20 Board Recommendation. The Board of Directors of the Company, at a
meeting duly called and held, has by the vote of those directors participating
(a) determined that this Agreement and the transaction contemplated hereby are
fair to and in the best interests of the stockholders of the Company and
approved the same by at least a majority vote and (b) resolved to recommend that
the holders of the Shares approve this Agreement and the transactions
contemplated hereby.
3.21 Indebtedness. Except as set forth on Schedule 3.21 or as otherwise
disclosed in the financial statements and notes thereto set forth in the Company
Filings, the Company has no outstanding indebtedness for borrowed money and is
not a party to any agreement providing for the creation, incurrence or
assumption thereof.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER AND SUB
Purchaser and Sub represent and warrant to the Company as follows:
4.1 Organization. Each of Purchaser and Sub is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power to carry
on its business as it is now being conducted except where the failure to be so
organized, existing and in good standing or to have such power and authority
would not in the aggregate have a material adverse effect on the results of
operations, properties or financial condition of Purchaser and its subsidiaries
taken as a whole or on the ability of Purchaser or Sub to fully perform their
obligations hereunder. Each of Purchaser and Sub has heretofore made available
to the Company an accurate and complete copy of its respective certificate of
incorporation and Bylaws, as currently in effect.
4.2 Authority Relative to This Agreement. Each of Purchaser and Sub has
all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the respective
Boards of Directors of Purchaser and Sub, and the stockholder of Sub, and no
other corporate proceedings on the part of Purchaser or Sub are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by each of
Purchaser and Sub and, assuming this Agreement constitutes a valid and binding
obligation of the Company, this Agreement constitutes a valid and binding
agreement of each of Purchaser and Sub, enforceable against each of Purchaser
and Sub in accordance with its terms, except that such enforcement
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may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
4.3 Consent and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Purchaser and Sub nor the consummation by
Purchaser and Sub of the transactions contemplated hereby will:
4.3.1 conflict with any provision of the respective Certificates of
Incorporation or Bylaws (or other similar governing documents) of Purchaser or
Sub;
4.3.2 require any consent, approval, authorization or permit of, or
filing with or notification to, any Governmental Entity, except (i) in
connection with the HSR Act, (ii) pursuant to the Exchange Act and the rules and
regulations thereunder, (iii) pursuant to state laws relating to takeovers and
state securities laws, if any are applicable, (iv) the filing of the Merger
Certificate pursuant to the applicable law or (v) where the failures to obtain
such consents' approvals, authorizations or permits, or to make such filings or
notifications, would not in the aggregate have any material adverse effect on
the results of operations, properties or financial condition of Purchaser and
its subsidiaries taken as a whole or on the ability of Purchaser or Sub to fully
perform their obligations hereunder;
4.3.3 result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or provisions
of any note, lease, mortgage, license, agreement or other instrument or
obligations to which Purchaser or any of its subsidiaries is a party or by which
Purchaser or any of its subsidiaries or any of their respective assets may be
bound, except for such defaults (or rights of termination, cancellation or
acceleration) as to which requisite waivers or consents have been obtained or
which, in the aggregate, would not have any material adverse effect on the
financial condition, business or results of operations of Purchaser and its
subsidiaries taken as a whole or on the ability of Purchaser or Sub to fully
perform their obligations thereunder; or
4.3.4 violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Purchaser or any of its subsidiaries, except for
violations which would not have in the aggregate any material adverse effect on
the financial condition, business or results of operations of Purchaser and its
subsidiaries taken as a whole or on the ability of Purchaser or Sub to fully
perform their obligations hereunder.
4.4 Financing. Purchaser has received binding written commitments from
financially responsible financial institutions to obtain, funds necessary to
consummate this Agreement and the transactions contemplated thereby, and to pay
related fees and expenses, and will make such funds available to Sub. Purchaser
has provided the Company with true and complete copies of all commitments and
agreements from third parties to provide such financing to Purchaser or to Sub.
4.5 Brokerage Fees and Commissions. No person or entity is entitled to
receive from Purchaser or Sub any investment banking, brokerage or finder's fee
in connection with this Agreement or the transactions contemplated hereby based
upon arrangements made by or on behalf of Purchaser or Sub.
ARTICLE 5
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COVENANTS
5.1 Conduct of Business of the Company. Except as contemplated by this
Agreement or as set forth on Schedule 5.1, during the period from the date of
this Agreement to the Effective Time, the Company and its subsidiaries shall in
all material respects conduct its operations according to its ordinary and usual
course of business and consistent with past practice and the Company shall use
commercially reasonable efforts to preserve intact in all material respects the
business organization of the Company, keep available the services of its current
officers and key employees, and preserve in all material respects the good will
of those having advantageous business relationships with it and its
subsidiaries. Without limiting the generality of the foregoing, and except as
contemplated by this Agreement, as set forth on Schedule 5.1 or as disclosed in
writing to Purchaser on or prior to the date hereof, prior to the Effective
Time, neither the Company nor any of its subsidiaries, as the case may be, will,
without the prior written consent of Purchaser:
5.1.1 issue, sell or pledge, or authorize or propose the issuance,
sale or pledge of, additional shares of its capital stock or securities
convertible into any such shares, or any rights, warrants or options to acquire
any such shares or other convertible securities, other than Shares, preferred
stock, treasury shares, rights, warrants or options, each as issuable pursuant
to the Options and Warrants;
5.1.2 split, combine, subdivide, reclassify or redeem, or purchase or
otherwise acquire, or propose to do any of the foregoing with respect to, any of
its outstanding securities;
5.1.3 declare or pay any dividend or distribution on the Shares;
5.1.4 subject to the fiduciary duties of the Board of Directors of
the Company (after consultation with and advice from outside legal counsel) and
except pursuant to agreements or arrangements in effect on the date hereof,
purchase or otherwise acquire, sell or otherwise dispose of or encumber (or
enter into any agreement to so purchase or otherwise acquire, sell or otherwise
dispose of or encumber) material properties or material assets except in the
ordinary course of business;
5.1.5 subject to the rights of the stockholders of the Company under
applicable law, adopt any amendments to the Certificate of Incorporation or
Bylaws of the Company;
5.1.6 except as provided in Section 5.12, (i) increase the
compensation of any of its directors, officers or key employees, except pursuant
to the terms of agreements or plans currently in effect in amounts material to
the Company and its subsidiaries taken as a whole; (ii) pay or agree to pay any
pension, retirement allowance or other employee benefit not required or
permitted by any existing plan, agreement or arrangement to any director,
officers or key employee in amounts material to the Company and its subsidiaries
taken as a whole; (iii) commit itself (other than pursuant to any collective
bargaining agreement) to any additional pension, profit-sharing, bonus, extra
compensation, incentive, deferred compensation, stock purchaser, stock option,
stock appreciation right, group insurance, severance pay, retirement or other
employee benefit plan, agreement or arrangement, or to any employment or
consulting agreement with or for the benefit of any director, officer or key
employee, whether past or present in amounts material to the Company and its
subsidiaries taken as a whole; or (iv) except as required by applicable law,
amend in any material respect any such plan, agreement or arrangement; or
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5.1.7 except in the ordinary course of business and consistent with
past practice, (i) incur any material amount of long-term indebtedness for
borrowed money or issue any material amount of debt securities or assume,
guarantee or endorse the obligations of any other person except for obligations
of wholly owned subsidiaries of the Company; (ii) make any material loans,
advances or capital contributions to, or investments in, any other person (other
than to wholly owned subsidiaries of the Company or customary loans or advances
to employees in amounts not material to the maker of such loan or advance);
(iii) pledge or otherwise encumber shares of capital stock of the Company or a
material portion of the capital stock of any if its subsidiaries, or (iv)
mortgage or pledge any of its material assets, tangible or intangible, or create
or suffer to exist any material lien thereupon;
5.2 Acquisition Proposals. The Company shall not, directly or
indirectly, solicit, carry on discussions with or enter into any agreement with
any corporation, partnership, person or other entity or group (other than
Purchaser or an affiliate or an associate of Purchaser) concerning any merger,
acquisition or similar transaction involving, or the sale of all or
substantially all of the assets or equity securities of, the Company or any of
its subsidiaries or divisions (other than with respect to the Company's Wyoming
operations) (an "Acquisition Proposal"). Notwithstanding the foregoing, the
Company may (i) directly or indirectly, furnish information to or enter into
discussions and negotiations with any person, entity or group that makes an
unsolicited Acquisition Proposal if the Board of Directors of the Company
determines in good faith (after consultation with and advice from outside legal
counsel) that such action is required for the Board of Directors to comply with
its fiduciary duties under applicable law, and (ii) to the extent applicable,
comply with Rule 14e-2 and 14d-9 promulgated under the Exchange Act with regard
to an Acquisition Proposal. The Company will promptly communicate to Purchaser
the terms of any proposal or inquiry which it may receive in respect of any
Acquisition Proposal by any person (other than Purchaser or any affiliate of
Purchaser or their respective directors, officers, employees, representatives
and agents).
5.3. Access to Information.
5.3.1 Subject to applicable law and the agreements set forth in
Section 5.3.2, between the date of this Agreement and the Effective time, the
Company will (i) give Purchaser and its authorized representatives reasonable
access, during regular business hours upon reasonable notice, to all of its
facilities, books and records and key employees, (ii) permit Purchaser to make
such reasonable inspections as it may be required, and (iii) cause its officers
and those of its subsidiaries to furnish Purchaser with such financial and
operating data and other information with respect to the business and assets of
the Company and its subsidiaries as Purchaser may from time to time reasonably
request.
5.3.2 Information obtained by Purchaser pursuant to this Section 5.3
shall be subject to the provisions of the confidentiality agreement between
Purchaser and the Company dated September 26, 1997 (the "Confidentiality
Agreement"), which agreement remains in full force and effect; except insofar as
such provisions would expressly prohibit Purchaser or Sub from taking any of the
actions contemplated by this Agreement.
5.4 Best Efforts. Subject to the fiduciary duties of the Board of
Directors of the Company under applicable law as advised by legal counsel, each
of the parties hereto agrees to use its best efforts to take, or cause to be
taken, all necessary or appropriate action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations or
otherwise to consummate and make effective the transactions contemplated by this
Agreement including, without limitation, the execution of any additional
instruments necessary to consummate the transactions contemplated hereby and
seeking to
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lift or reverse any legal restraint imposed on the consummation of the
transactions contemplated by this Agreement. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each party
hereto shall take all such necessary action.
5.5 Stockholders' Meeting. The Company, acting through its Board of
Directors, shall in accordance with applicable law, its Certificate of
Incorporation and Bylaws duly call, give notice of, convene and hold an annual
or special meeting (the "Stockholders Meeting") of its stockholders as soon as
practicable to consider and vote upon approval of this Agreement and the
transactions contemplated hereby. Subject to its fiduciary duties under
applicable laws as advised by legal counsel, the Company will include in the
proxy statement (such proxy statement as amended or supplemented from time to
time being referred to herein as the "Proxy Statement") to be sent to the
Company's stockholders with respect to the Stockholders Meeting the
recommendation of its Board of Directors that its stockholders vote in favor of
the approval and adoption of this Agreement and the transactions contemplated
hereby. At the Stockholders Meeting, all of the Shares beneficially owned by
Purchaser or its affiliates, if any, shall be voted in favor of approval and
adoption of this Agreement and the transactions contemplated hereby.
5.6 Proxy Statement. The Company will use its commercially reasonable
efforts (i) to obtain and furnish the information required to be included by it
in the Proxy Statement, (ii) to file the Proxy Statement with the SEC, (iii)
after consultation with the other parties hereto, respond as promptly as is
reasonably practicable to any comments made by the SEC with respect to the Proxy
Statement and any preliminary version thereof, and (iv) cause the Proxy
Statement to be mailed to its stockholders at the earliest practicable time
following the date of this Agreement. The information provided and to be
provided by the Company, Purchaser and Sub for use in the Proxy Statement shall,
as of the date of mailing of the Proxy Statement and as of the date of the
Stockholders Meeting, not include any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
5.7 Voting Agreement. Concurrently with the execution of this Agreement,
Building and Construction Capital Partners I, L.P. and Purchaser shall enter
into the Voting Agreement set forth as Exhibit A hereto.
5.8 Fees and Expenses. Each party shall bear its own expenses in
connection with this Agreement and the transactions contemplated hereby;
provided, however, that if the Merger is consummated, the Surviving Corporation
shall assume responsibility for the payment of all Company expenses in
connection with this Agreement and the transactions contemplated hereby.
5.9 Standstill. In the event of the termination of this Agreement,
neither Purchaser nor its subsidiaries, employees, officers or affiliates shall,
for a period of three years from the date of this Agreement, directly or
indirectly (unless and until Purchaser shall have received the prior written
invitation or approval of a majority of the Board of Directors of the Company):
5.9.1 solicit, seek or offer to effect, or effect;
5.9.2 negotiate with or provide any information to the Board of
Directors of the Company, any director or officer of the Company, any
stockholder of the Company, any employee or
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union or other labor organization representing employees of the Company or any
other person with respect to;
5.9.3 make any statement or proposal, whether written or oral, either
alone or in concert with others, to the Board of Directors of the Company, any
director or officer of the Company or any stockholder of the Company, any union
or other labor organization representing employees of the Company or any other
person with respect to; or
5.9.4 make any public announcement (except as required by law) or
proposal or offer whatsoever (including, but not limited to, any "solicitation"
of "proxies" as such terms are defined or used in Regulation 14A of the Exchange
Act) with respect to:
(a) any form of business combination or transaction involving the
Company or any affiliate thereof, including, without limitation, a merger,
tender or exchange offer or liquidation of the Company's assets;
(b) any form of restructuring, recapitalization or similar
transaction with respect to the Company or any affiliate thereof;
(c) any purchase of any securities or assets, or rights or
options to acquire any securities or assets (through purchase, exchange,
conversion or otherwise), of the Company or any affiliate thereof;
(d) any proposal to seek representation on the Board of Directors
of the Company or otherwise to seek to control or influence the management,
Board of Directors or policies of the Company or any affiliate thereof;
(e) any request or proposal to waive, terminate or amend the
provisions of this Section 5.9; or
(f) any proposal or other statement inconsistent with the terms
of this Section 5.9. or instigate, encourage, joint, act in concert with or
assist (including, but not limited to, providing or assisting in any way in the
obtaining of financing for or acting as a joint bidder or co-bidder for the
Company with) any third party to do any of the foregoing.
5.10 Public Announcements. Purchaser and the Company shall consult with
each other before issuing any press release or otherwise making any public
statements with respect to 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 as may be required by law.
5.11 Indemnification And Insurance.
5.11.1 The Company shall indemnify and hold harmless, and after the
Effective Time the Surviving Corporation shall indemnify and hold harmless, each
present and former employee, agent, director or officer of the Company and its
subsidiaries (the "Indemnified Parties") from and against any and all claims
arising out of or in connection with activities, including without limitation,
the transactions contemplated by this Agreement, in such capacity, or on behalf
of, or at the request of the Company, its
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subsidiaries or affiliates, to the fullest extent permitted under Delaware law
(subject to applicable limitations thereunder) and in addition, to the fullest
extent provided in their respective charters or Bylaws (subject to applicable
limitations thereunder) or any contract or other arrangement in effect at the
date hereof which obligations shall survive the Merger and shall continue in
full force and effect for a period of not less than six years from the Effective
Time; provided, however, that if any claim or claims (a "Claim or Claims") are
asserted or made within such six year period, all rights to indemnification in
respect of any such Claim or Claims shall continue until disposition of any and
all such Claims. Without limiting the foregoing, the Company, and after the
Effective Time the Surviving Corporation, shall advance expenses incurred with
respect to the foregoing, as they are incurred, to the fullest extent permitted
under applicable law, provided that the person on whose behalf the expenses are
advanced provides and undertakes (which need not be secured) to repay such
advances if it is ultimately determined that such person is not entitled to
indemnification.
5.11.2 The Surviving Corporation shall use its best efforts to cause
to be maintained in effect for not less than six years from the Effective Time
the current policies of directors, and officers, liability insurance maintained
by the Company and its subsidiaries (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms and
conditions which are no less advantageous so long as no lapse in coverage occurs
as a result of such substitution) with respect to all matters, including the
transactions contemplated hereby, occurring prior to and including the Effective
Time; provided that, in the event that any Claim or Claims are asserted or made
within such six-year period, such insurance shall be continued in respect of any
such Claim or Claims until final disposition of any and all such Claims;
provided further that the Surviving Corporation shall not be required to pay
annual premiums in excess of 200% of the Company's total current annual premiums
for such insurance and if the Surviving Corporation is unable to obtain the
insurance required by this Section 5.11 it shall obtain as much comparable
insurance as can be obtained for an annual premium equal to such maximum amount.
5.12 Employee Benefit Plans.
5.12.1 The Purchaser and the Surviving Corporation agree that all
employees of the Company and its subsidiaries which are offered employment after
the Effective Date shall be entitled to the same employee benefits, plans,
programs, arrangements and policies as are available to the employees of
Purchaser and its subsidiaries.
5.12.2 From and after the Effective Time, the Purchaser and the
Surviving Corporation shall assume and honor in accordance with their terms all
existing employment and severance agreements and arrangements set forth on
Schedule 5.12.
5.12.3 If any employee of the Company or any of its subsidiaries
becomes a participant in any employee benefit plan, program or policy of the
Purchaser or the Surviving Corporation, such employee shall be given credit for
purposes of eligibility and vesting under such plan for all service prior to the
Effective Time with the Company and its subsidiaries, or any predecessor
employer (to the extent such credit was given by the Company).
5.12.4 The Surviving Corporation shall provide professional out
placement services for all officers and salaried employees of the Company or any
subsidiaries employed at the Effective Time and who are terminated within one
year after the Effective Time.
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5.12.5 The Purchaser shall reimburse (or cause the Surviving
Corporation to reimburse) any director, officer or employee (or former director,
officer or director) of the Company or any of its subsidiaries for all costs and
expenses, including attorneys' fees, incurred by such person in successfully
enforcing the provisions of this Section 5.
5.13 Real Estate Gains Tax and New Real Property Transfer Tax. The
Purchaser shall pay any State Tax on Gains Derived from Certain Real Property
Transfers and Real Property Transfer Tax and any similar tax in any other
jurisdiction (and any penalties or interest with respect to such taxes) payable
in connection with the Merger or the acquisition of a controlling interest in
the Company by Purchaser or Sub, and the Purchaser shall indemnify and hold
harmless the stockholders of the Company from and against any liability with
respect to such taxes (including any penalties, interest and professional fees).
The Purchaser shall file any returns with respect to such taxes.
5.14 Employee Stock Ownership Plan. The Company agrees that, in
accordance with its rights under the Monroc, Inc. Employee Stock Ownership Plan
(the "ESOP"), the Company will direct the voting in favor of approval and
adoption of the Merger Agreement of any Shares held in the ESOP with respect to
which any ESOP participant has failed to give the ESOP trustee timely
instructions as to how to vote such Shares.
ARTICLE 6
CONDITIONS TO CLOSING
6.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger are subject to the
satisfaction or waiver, at or prior to the Effective Time, of the following
conditions:
6.1.1 This Agreement shall have been approved and adopted by the
affirmative vote of the stockholders of the Company to the extent required by
applicable law and the Certificate of Incorporation of the Company.
6.1.2 No statute, rule, regulation, decree, order or injunction
shall have been promulgated, enacted, entered or enforced by any United States
federal or state government, governmental agency or authority or court which
remains in effect and prohibits, restrains, enjoins or restricts the
consummation of the Merger.
6.1.3 Any waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.
6.2 Conditions to Obligations of Purchaser and Sub to Effect the Merger.
Unless waived by Purchaser in writing, the obligations of Purchaser and Sub to
effect the Merger provided for hereby shall be subject to the satisfaction, at
or prior to the Effective Time, of each of the following conditions:
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6.2.1 The representations and warranties of the Company contained in
this Agreement shall be true and correct in all material respects (except as to
the extent such representations and warranties are qualified as to materiality,
in which case such representations and warranties shall be true and correct in
all respects) at and as of the Closing Date as if such representations and
warranties were made at and as of the Closing Date (other than representations
and warranties which address matters only as of a certain date which shall be
true and correct as of such certain date), except as and to the extent that the
facts and conditions upon which such representations and warranties are based
are expressly required or permitted to be changed by the terms thereof.
6.2.2 The Company shall have performed in all material respects all
agreements and covenants required hereby to be performed by it prior to or at
the Effective Time; provided, however, that neither Purchaser nor Sub shall be
entitled to refuse to consummate the transaction in reliance upon its own breach
or failure to perform.
6.2.3 From the date of this Agreement through the Effective Time,
there shall not have occurred any change in or effect on the business of the
Company or any of its subsidiaries, individually or in the aggregate, that is
materially adverse to the results of operations, properties, financial condition
or prospects of the Company and its subsidiaries taken as a whole, except for
such changes or effects resulting from, or in connection with general economic,
industry-wide or financial market conditions.
6.2.4 Purchaser shall have received a certificate executed on behalf
of the Company by an executive officer of the Company to the effect set forth in
clauses 6.2.1 through 6.2.3.
6.3 Conditions to Obligation of the Company to Effect the Merger. Unless
waived by the Company in writing, the obligations of the Company to effect the
Merger provided for hereby shall be subject to the satisfaction, at or prior to
the Effective Time, of each of the following conditions:
6.3.1 The representations and warranties of Purchaser and Sub
contained in this Agreement shall be true and correct in all material respects
(except as to the extent such representations and warranties are qualified as to
materiality, in which case such representations and warranties shall be true and
correct in all respects) at and as of the Closing Date as if such
representations and warranties were made at and as of the Closing Date (other
than representations and warranties which address matters only as of a certain
date which shall be true and correct as of such certain date), except as and to
the extent that the facts and conditions upon which such representations and
warranties are based are expressly required or permitted to be changed by the
terms thereof.
6.3.2 Purchaser and Sub shall have performed in all material respects
all agreements and covenants required hereby to be performed by them prior to or
at the Effective Time; provided, however, that the Company shall not be entitled
to refuse to consummate the transaction in reliance upon its own breach or
failure to perform.
6.3.3 The Company shall have received a certificate executed on
behalf of Purchaser and Sub by an executive officer of Purchaser to the effect
set forth in clauses 6.3.1 and 6.3.2.
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ARTICLE 7
TERMINATION
7.1 Termination. This Agreement may be terminated and the Merger may be
abandoned at any time notwithstanding approval thereof by the stockholders of
the Company (except as otherwise set forth in this Section 7.1), but prior to
the Effective Time:
7.1.1 by mutual written consent duly authorized by the Boards of
Directors of the Company, Purchaser and Sub;
7.1.2 by Purchaser or the Company if (i) the Effective Time shall not
have occurred on or before August 31, 1998 (provided that the right to terminate
this Agreement under this Section 7.1.2 shall not be available to any party
whose failure to fulfill any obligations under this Agreement has been the cause
of or resulted in the failure of the Effective Time to occur on or before such
date), (ii) the approval of the Company's stockholders required by Section 6.1.1
shall not have been obtained by August 31, 1998 at a meeting duly convened
therefor or at any adjournment thereof or (iii) any United States federal or
state government, governmental agency or authority or court shall have issued an
order, decree or ruling, or taken any other action, permanently restraining,
enjoining or otherwise prohibiting the Merger (which the party seeking to
terminate this Agreement shall have used its best efforts to have lifted or
reversed) and such order, decree, ruling or other action shall have become final
and non-appealable;
7.1.3 by the Company if an Acquisition Proposal has been made and the
Board of Directors of the Company determines, in the exercise of its good faith
judgment (after consultation with and advice from outside legal counsel) that
such termination is required for the Board of Directors to comply with its
fiduciary duties under applicable law; or
7.1.4 by Purchaser if the Board of Directors of the Company withdraws
or modifies in a manner adverse to Purchaser or Sub its determination to
recommend that the stockholders of the Company approve this Agreement and the
transactions contemplated hereby.
7.2 Effect of Termination.
7.2.1 In the event of the termination of this Agreement pursuant to
Section 7 hereof, this Agreement, except for the provisions of Section 5.3.2
(confidentiality), Section 5.11 (indemnity), Section 5.8 (fees and expenses),
Section 5.9 (standstill) and this Section 7.2, shall forthwith become void and
have no effect, without any liability on the part of any party or its
affiliates, directors, officers or stockholders. Nothing in this Section 7.2 or
in Section 8.3 shall relieve any party to this Agreement of liability for breach
of this Agreement on or prior to the date of termination.
7.2.2 If (i) the Company terminates this Agreement pursuant to
Section 7.1.3, Purchaser terminates this Agreement pursuant to Section 7.1.4
following receipt by the Company of an Acquisition Proposal or either the
Company or Purchaser terminates this Agreement pursuant to clause (ii) of
Section 7.1.2 and immediately prior to any such meeting of the Company's
stockholders an Acquisition Proposal was pending, and (ii) the Acquisition
Proposal which gave rise to such termination (or any revised transaction based
upon such Acquisition Proposal) is consummated within nine months of such
termination, then the Company (or any successor thereto) shall pay to Purchaser
a fee of $2.0 million (the "Termination Fee") in immediately available funds
within five business days following such termination. Only one
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Termination Fee shall be payable pursuant to this Section 7.2.2. If the Company
has paid any amounts to Purchaser pursuant to Section 7.2.3, such amounts shall
be deducted from any Termination Fee owed to Purchaser so that in no event shall
the aggregate payments made by the Company to Purchaser pursuant to Sections
7.2.2 and 7.2.3 exceed $2.0 million.
7.2.3 If (i) the Company terminates this Agreement pursuant to
Section 7.1.3, Purchaser terminates this Agreement pursuant to Section 7.1.4
following receipt by the Company of an Acquisition Proposal or either the
Company or Purchaser terminates this Agreement pursuant to clause (ii) of
Section 7.1.2 and immediately prior to any such meeting of the Company's
stockholders an Acquisition Proposal was pending, then the Company (or any
successor thereto) shall pay to Purchaser the out-of-pocket fees and expenses
incurred or paid by or on behalf of Purchaser or Sub in connection with the
transactions contemplated by this Agreement, including all fees and expenses of
counsel, commercial banks, accountants, experts and consultants to Parent and
Sub. Payment of Purchaser's expenses pursuant to this Section 7.2.3 shall be
made no later than five business days after delivery to the Company of notice of
demand for payment and a written itemization setting forth in reasonable detail
all of Purchaser's expenses. Notwithstanding the foregoing, if the Company pays
to Purchaser the Termination Fee pursuant to Section 7.2.2, no amounts shall be
owed to Purchaser by the Company pursuant to this Section 7.2.3.
ARTICLE 8
MISCELLANEOUS
8.1 Amendment. To the extent permitted by applicable law, this Agreement
may be amended by action taken by or on behalf of the respective Boards of
Directors of the Company, Purchaser and Sub at any time before or after adoption
of this Agreement by the stockholders of the Company (if required by applicable
law) but, after any such stockholder approval, no amendment shall be made which
decreases the Merger Consideration or changes the form thereof or which
adversely affects the rights of the Company's stockholders hereunder without the
approval of such stockholders. This Agreement may not be amended except by an
instrument in writing signed on behalf of all the parties.
8.2 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken by or on behalf of the respective Boards of
Directors of the Company, Purchaser or Sub, may,
8.2.1 extend the time for the performance of any of the obligations
or other acts of the other parties hereto;
8.2.2 waive any inaccuracies in the representations and warranties of
any other party contained herein or in any document, certificate or writing
delivered pursuant hereto by any other party; or
8.2.3 waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of any 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 assert any of its rights
hereunder shall not constituent a waiver of such rights.
8.3 Nonsurvival of Representations and Warranties. The representations
and warranties made in Articles 3 and 4 shall not survive beyond the Effective
Time or the termination of this Agreement. This
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Section 8.3 shall not limit any covenant or agreement of the parties hereto
which by its terms contemplates performance after the Effective Time.
8.4 Entire Agreement; Assignment. This Agreement, together with the
Schedules hereto, (i) constitutes the entire agreement among the parties with
respect to the subject matter hereof and supersedes all other prior agreements
and understandings, both written and oral, other than the Confidentiality
Agreement, among the parties or any of them with respect to the subject matter
hereof and (ii) shall not be assigned by operation of law or otherwise, provided
that Purchaser or Sub may assign any of their rights and obligations to any
wholly owned, direct or indirect subsidiary of Purchaser, but no such assignment
shall relieve Purchaser or Sub of its obligations hereunder.
8.5 Enforcement of the Agreement. The parties hereto 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 and other persons
entitled to enforce this Agreement pursuant to this Section 8.5 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 federal or
state court located in Delaware (as to which the parties agree to submit to
jurisdiction for the purposes of such action), this being in addition to any
other remedy to which they are entitled at law or in equity.
8.6 Validity. If any provision of this Agreement, or the application
thereof to any person or circumstance, is held invalid or unenforceable, the
remainder of this Agreement, and the application of such provision to other
persons or circumstances, shall not be affected thereby, and to such end, the
provisions of this Agreement are agreed to be severable.
8.7 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have teen duly given upon receipt) by delivery in person, by cable,
telegram, telex or telecopies, or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties as follows:
If to Purchaser or Sub: U.S. Aggregates, Inc.
000 Xxxxx Xx Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
with a copy to: Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxx, Esq.
If to the Company: Monroc, Inc.
0000 Xxxx Xxxxxx
X.X. Xxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxx
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with copies to: LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxxx Xxxx Xxxxxx
0000 Xxxxxx Xxxxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
8.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Delaware regardless of the laws that might otherwise
govern under principles of conflicts of laws applicable thereto.
8.9 Descriptive Headings. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
8.10 Parties In Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reasons of this Agreement except
for the holders of Employee Options with respect to Section 2.2, the holders of
Shares with respect to Articles 1 and 2 and Sections 5.9 and 8.4 (which are
intended to be for the benefit of the persons provided for therein, and may be
enforced by such persons).
8.11 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement.
8.12 Certain Definitions. As used in this Agreement:
"Affiliate" or "Associate" of a person shall have the meaning
ascribed thereto in Rule 1 2b-2 under the Exchange Act.
"Beneficial Ownership" shall have the meaning as used in Rule 13d
under the Exchange Act.
"Executive Officers" means Xxxxxx X. Xxxxx and L. Xxxxxxx Xxxxx.
"Group" shall have the meaning as used in Rule 13d-5(b) under the
Exchange Act.
"Person" means any individual, corporation, company, group,
partnership. association, governmental body or other entity.
"Subsidiary" of an entity shall means any corporation, a majority of
the outstanding voting securities of which are owned directly or indirectly by
such entity.
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"Material Adverse Effect" shall mean any change in or effect on the
business of the Company or any of its subsidiaries that is materially adverse to
the results of operations, properties or financial condition of the Company and
its subsidiaries taken as a whole, except for such changes or effects resulting
from, or in connection with general economic, industry-wide or financial market
conditions.
8.13 Performance By Sub. Purchaser hereby agrees to cause Sub to comply
with its obligations hereunder and to cause Sub to consummate the Merger as
contemplated herein.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized on the day and
year first above written.
PURCHASER
---------
U.S. AGGREGATES, INC.
/s/ Xxxxxxx X. Xxxxx
-------------------------------------------
Xxxxxxx X. Xxxxx
Its: Executive Vice President
SUB
---
WESTERN ACQUISITION, INC.
/s/ Xxxxxxx X. Xxxxx
-------------------------------------------
Xxxxxxx X. Xxxxx
Its: Vice President
COMPANY
-------
MONROC, INC.
/s/ Xxxxxx X. Xxxxx
-------------------------------------------
Xxxxxx X. Xxxxx
Its: President and Chief Executive Officer
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