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Exhibit 10.30
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
by and between
XXXXXX-XXXXXXXX CORPORATION
and
COMMERCIAL INTERTECH CORP.
Dated as of January 14, 2000
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of January
14, 2000, by and between Xxxxxx-Xxxxxxxx Corporation, an Ohio corporation
("BUYER"), and Commercial Intertech Corp., an Ohio corporation (the "COMPANY").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of the Company and Buyer
have each approved the merger of the Company with and into Buyer (the "MERGER"),
upon the terms and subject to the conditions set forth in this Agreement and in
accordance with the General Corporation Law of the State of Ohio (the "OGCL"),
whereby each issued and outstanding share of common stock, par value $1.00 per
share, of the Company ("COMPANY COMMON STOCK"), other than Dissenting Shares (as
defined in SECTION 2.1(c)) and any shares of Company Common Stock owned by Buyer
or any direct or indirect subsidiary of Buyer or held in the treasury of the
Company, will be converted, at the option of the holder thereof, into the right
to receive Buyer Common Stock (as defined in the Merger Agreement), cash or a
combination thereof as provided in SECTION 2.1 of this Agreement;
WHEREAS, the Board of Directors of the Company has determined that the
Merger is fair to and in the best interests of the Company and its shareholders;
WHEREAS, the Company and Buyer desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to
prescribe various conditions to the Merger; and
WHEREAS, for federal income tax purposes, it is intended that the
Merger will qualify as a reorganization under the provisions of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "CODE").
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained in this Agreement, the parties
agree as follows:
ARTICLE I
THE MERGER
Section 1.1 THE MERGER. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the OGCL, the Company will
be merged with and into Buyer at the Effective Time (as defined in SECTION 1.3)
and the separate corporate existence of the Company will thereupon cease.
Following the Effective Time, Buyer will be the surviving corporation (the
"SURVIVING CORPORATION").
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Section 1.2 CLOSING. The closing of the Merger (the "CLOSING") will
take place at a time and on a date to be specified by the parties, which is to
be no later than the second Business Day after satisfaction or waiver (subject
to applicable law) of the conditions (excluding
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conditions that, by their terms, cannot be satisfied until the Closing Date) set
forth in ARTICLE VI, unless another time or date is agreed to by the parties to
this Agreement; PROVIDED, HOWEVER, that, notwithstanding anything in this
Agreement to the contrary, in no event shall the Closing occur prior to May 4,
2000 unless the Company and Buyer obtain a waiver or consent, in form and
substance reasonably satisfactory to Buyer, from the appropriate foreign
Governmental Entity that permits the Closing to occur prior to May 4, 2000
without triggering any liability to the Company, Buyer or the Surviving
Corporation under Section 3 of that certain agreement, dated May 3, 1994, by and
among Treuhandanstalt, as seller, the Company, as buyer, Sachsenhydraulik GmbH
Chemnitz, referred to therein as Company No. 1, and Hydraulik Rohlitz GmbH,
referred to therein as Company No. 2. The Closing will be held at the offices of
Xxxxx, Day, Xxxxxx & Xxxxx, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, or such
other location as the parties to this Agreement agree to in writing. The date on
which the Closing occurs is hereinafter referred to as the "CLOSING DATE."
"BUSINESS DAY" means any day other than Saturday, Sunday, or any federal
holiday.
Section 1.3 EFFECTIVE TIME. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date, the parties
shall (i) file a certificate of merger (the "CERTIFICATE OF MERGER") in such
form as is required by and executed in accordance with the relevant provisions
of the OGCL and (ii) make all other filings or recordings required under the
OGCL. The Merger will become effective at such time as the Certificate of Merger
is duly filed with the Secretary of State of the State of Ohio, or at such
subsequent date or time as the Company and Buyer agree and specify in the
Certificate of Merger (the date and time the Merger becomes effective is
hereinafter referred to as the "EFFECTIVE TIME").
Section 1.4 EFFECTS OF THE MERGER. The Merger will have the effects set
forth in the OGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the property, rights, privileges, powers and
franchises of the Company and Buyer will be vested in the Surviving Corporation,
and all debts, liabilities and duties of the Company and Buyer will become the
debts, liabilities and duties of the Surviving Corporation.
Section 1.5 ARTICLES OF INCORPORATION AND CODE OF REGULATIONS. The
Articles of Incorporation and Code of Regulations of Buyer, as in effect
immediately before the Effective Time, will be the Articles of Incorporation and
Code of Regulations, respectively, of the Surviving Corporation (with such
changes thereto as the parties may agree), until thereafter changed or amended
as provided therein or by applicable law.
Section 1.6 DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION. The
directors of Buyer immediately prior to the Effective Time will be the directors
of the Surviving Corporation, until the earlier of their death, resignation or
removal or until their respective successors are duly elected and qualified, as
the case may be. The officers of Buyer immediately prior to the Effective Time
will be the officers of the Surviving Corporation, until the earlier of their
death, resignation or removal or until their respective successors are duly
elected and qualified, as the case may be.
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ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE COMPANY;
SURRENDER OF CERTIFICATES AND PAYMENT
Section 2.1 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any shares of
capital stock of the Company or Buyer:
(a) BUYER COMMON STOCK. Each share of Buyer Common Stock (as defined in
SECTION 2.1(c)) outstanding immediately prior to the Effective Time will remain
an issued and outstanding share of common stock of Buyer and shall not be
affected by the Merger.
(b) CANCELLATION OF TREASURY STOCK AND BUYER OWNED STOCK. Each share of
Company Common Stock that is owned by Buyer or any direct or indirect subsidiary
of Buyer and any Company Common Stock held in the treasury of the Company will
automatically be canceled and retired and will cease to exist, and no
consideration will be delivered in exchange therefor.
(c) CONVERSION OF COMPANY COMMON STOCK. Subject to SECTION 2.2(e), each
issued and outstanding share of Company Common Stock (other than shares to be
canceled in accordance with SECTION 2.1(b) and shares ("DISSENTING Shares") that
are owned by shareholders ("DISSENTING SHAREHOLDERS") that have properly
exercised appraisal rights pursuant to Section 1701.85 of the OGCL) will be
converted, at the option of the holder thereof, into the right to receive (x) a
number of fully paid, non-assessable shares of common stock, par value $.50 per
share, of Buyer including any associated stock purchase rights ("BUYER COMMON
STOCK") equal to the Exchange Ratio (as defined below) (the "STOCK
CONSIDERATION") or (y) upon a valid Cash Election as provided in SECTION 2.1(d)
below, $20.00 in cash from Buyer (the "CASH CONSIDERATION" and, together with
the Stock Consideration, the "MERGER CONSIDERATION"), subject to the limitations
set forth in SECTIONS 2.1(d), (e) and (g). The "EXCHANGE RATIO" shall be equal
to $20.00 divided by the Average Closing Price (as defined below) of Buyer
Common Stock; PROVIDED, HOWEVER, that (A) if the Average Closing Price is less
than $43.375, then the Exchange Ratio shall be .4611, or (B) if the Average
Closing Price is greater than $53.375, then the Exchange Ratio shall be .3747.
"AVERAGE CLOSING PRICE" means the average of the closing prices as reported in
The Wall Street Journal's New York Stock Exchange Composite Transactions Reports
for each of the 20 consecutive Trading Days in the period ending five Trading
Days prior to the Closing Date. "TRADING DAY" means a day on which the New York
Stock Exchange, Inc. ("NYSE") is open for trading and on which the Buyer Common
Stock was traded.
(d) CASH ELECTION. Subject to the immediately following
sentence and to SECTIONS 2.1(e) and 2.1(g), each record holder of shares of
Company Common Stock immediately prior to the Effective Time shall be entitled
to elect to receive cash for all or any part of such Company Common Stock (a
"CASH ELECTION"). Notwithstanding the foregoing, the aggregate number of shares
of Company Common Stock that may be converted into the right to receive cash
consideration (the "CASH ELECTION NUMBER") shall not exceed an amount equal to
the product of 49% multiplied by the aggregate number of shares of Company
Common Stock outstanding at 5:00 p.m. Eastern Time on the second Trading Day
prior to the
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Effective Time; provided that the Cash Election Number shall be adjusted as
provided in SECTION 2.1(g). To the extent not covered by a properly given Cash
Election, all shares of Company Common Stock issued and outstanding immediately
prior to the Effective Time shall, except as provided in SECTION 2.1(b) and
SECTION 2.2(e), be converted solely into shares of Buyer Common Stock.
(e) CASH ELECTION ADJUSTMENTS. If the aggregate number of shares of
Company Common Stock covered by Cash Elections (the "CASH ELECTION SHARES")
exceeds the Cash Election Number, each Cash Election Share shall be converted
into (i) the right to receive an amount in cash, without interest, equal to the
product of (a) $20.00 and (b) a fraction (the "CASH FRACTION"), the numerator of
which shall be the Cash Election Number and the denominator of which shall be
the total number of Cash Election Shares and (ii) a number of shares of Buyer
Common Stock equal to the product of (a) the Exchange Ratio and (b) a fraction
equal to one minus the Cash Fraction.
(f) COMPUTATION OF CONVERSION RATES. The Exchange Agent, in
consultation with Buyer and the Company, will make all computations to give
effect to this SECTION 2.1.
(g) REDUCTION IN CASH ELECTION NUMBER. If, after having made the
calculations under SECTIONS 2.1(d) and (e), the value of the Buyer Common Stock
(excluding fractional shares to be paid in cash) to be issued in the Merger,
valued at the lesser of (i) the Average Closing Price and (ii) the average of
the high and low trading prices of Buyer Common Stock on the day before the
Closing Date (or, if determined to be more appropriate by either Xxxxx, Day,
Xxxxxx & Xxxxx or Xxxxxx Xxxxxx Xxxxx, the trading price as of the time of the
Closing) as reported on the NYSE, minus the aggregate discount, if any, due to
trading restrictions on the value of Buyer Common Stock to be issued in the
Merger, is less than 51% of the total consideration to be paid in exchange for
the shares of Company Common Stock (including, without limitation, the amount of
cash to be paid in lieu of fractional shares or Dissenting Shares and any other
payments required to be considered in determining whether the continuity of
interest requirements applicable to reorganizations under Section 368 of the
Code have been satisfied) (the "TOTAL CONSIDERATION"), then the Cash Election
Number shall be reduced (and the number of shares of Company Common Stock
converted into Buyer Common Stock shall be increased by an amount equal to the
number of shares the Cash Election Number is decreased) to the extent necessary
so that the value of the Buyer Common Stock (as determined pursuant to this
SECTION 2.1(g)) is 51% of the Total Consideration.
Section 2.2 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. National City Bank, or such other national bank or
trust company as will be designated by Buyer prior to the Effective Time, will
act as agent of Buyer for purposes of, among other things, mailing and receiving
transmittal letters and distributing cash and certificates for Buyer Common
Stock, and cash in lieu of fractional shares of Buyer Common Stock, to the
Company shareholders (the "EXCHANGE AGENT"). As of the Effective Time, Buyer and
the Exchange Agent shall enter into an agreement which will provide that Buyer
shall deposit with the Exchange Agent as of the Effective Time, for the benefit
of the holders of shares of Company Common Stock, for exchange in accordance
with this ARTICLE II, through the Exchange Agent, cash and certificates
representing the shares of
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Buyer Common Stock (such cash and shares of Buyer Common Stock, together with
any dividends or distributions with respect thereto with a record date after the
Effective Time, and any cash payable in lieu of any fractional shares of Buyer
Common Stock being hereinafter referred to as the "EXCHANGE FUND") issuable
pursuant to SECTION 2.1 in exchange for outstanding shares of Company Common
Stock.
(b) ELECTION AND EXCHANGE PROCEDURES.
(i) Not fewer than 20 Business Days prior to the
Closing Date, the Exchange Agent will mail a form of election (the
"FORM OF ELECTION"), which will include a Form W-9, to holders of
record of shares of Company Common Stock (as of a record date as close
as practicable to the date of mailing and mutually agreed to by Buyer
and the Company). In addition, the Exchange Agent will use its best
efforts to make the Form of Election available to the persons who
become shareholders of the Company during the period between such
record date and the Election Deadline (as defined below). Any election
to receive Cash Consideration contemplated by SECTION 2.1(d) will have
been properly made only if the Exchange Agent shall have received at
its designated office or offices, by 4:00 p.m. Cleveland, Ohio time, on
the Trading Day that is the fourth Trading Day prior to the Closing
Date (the "ELECTION DEADLINE"), a Form of Election properly completed
and accompanied by a certificate representing shares of Company Common
Stock (a "CERTIFICATE") to which such Form of Election relates, duly
endorsed in blank or otherwise acceptable for transfer on the books of
the Company (or an appropriate guarantee of delivery), as set forth in
such Form of Election. An election may be revoked only by written
notice received by the Exchange Agent prior to 4:00 p.m., Cleveland,
Ohio, time, on the Election Deadline. In addition, all elections shall
automatically be revoked if the Exchange Agent is notified by Buyer and
the Company that the Merger has been abandoned. If an election is so
revoked, the Certificate(s) (or guarantee of delivery, as appropriate)
to which such election relates will be promptly returned to the person
who submitted the same to the Exchange Agent. Buyer shall have the
power, which it may delegate in whole or in part to the Exchange Agent,
to determine, in its reasonable good faith judgment, whether Forms of
Election have been properly completed, signed and submitted or revoked
pursuant to this SECTION 2.2, and to disregard immaterial defects in
Forms of Election. The decision of Buyer (or the Exchange Agent) in
such matters shall be conclusive and binding.
(ii) As soon as reasonably practicable after the
Effective Time, the Exchange Agent will mail to each holder of record
of a Certificate whose shares of Company Common Stock were converted
into the right to receive Merger Consideration (other than with respect
to Certificates subject to a valid Form of Election), (i) a letter of
transmittal (which will specify that delivery will be effected, and
risk of loss and title to the Certificates will pass, only upon proper
delivery of the Certificates to the Exchange Agent and will be in such
form and have such other provisions as Buyer and the Company may
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specify consistent with this Agreement) and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for the
Stock Consideration.
(iii) After the Effective Time, with respect to
properly made elections in accordance with SECTION 2.2(b)(i), and upon
surrender in accordance with SECTION 2.2(b)(ii) of a Certificate for
cancellation to the Exchange Agent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably
be required by the Exchange Agent, the holder of such Certificate will
be entitled to receive in exchange therefor the Merger Consideration
that such holder has the right to receive therefor pursuant to the
provisions of this ARTICLE II, certain dividends or other
distributions, if any, in accordance with SECTION 2.2(c) and cash in
lieu of any fractional share of Buyer Common Stock in accordance with
SECTION 2.2(e), and the Certificate so surrendered will forthwith be
canceled. In the event of a transfer of ownership of shares of Company
Common Stock that are not registered in the transfer records of the
Company payment may be issued to a person other than the person in
whose name the Certificate so surrendered is registered (the
"TRANSFEREE") if such Certificate is properly endorsed or otherwise in
proper form for transfer and the Transferee pays any transfer or other
taxes required by reason of such payment to a person other than the
registered holder of such Certificate or establishes to the
satisfaction of the Exchange Agent that such tax has been paid or is
not applicable. Until surrendered as contemplated by this SECTION 2.2,
each Certificate will be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the Merger
Consideration that the holder thereof has the right to receive in
respect of such Certificate pursuant to the provisions of this ARTICLE
II, certain dividends or other distributions, if any, in accordance
with SECTION 2.2(c) and cash in lieu of any fractional share of Buyer
Common Stock in accordance with SECTION 2.2(e). No interest will be
paid or will accrue on any cash payable to holders of Certificates
pursuant to the provisions of this ARTICLE II.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
dividends or other distributions with respect to Buyer Common Stock with a
record date after the Effective Time will be paid to the holder of any
unsurrendered Certificate with respect to the shares of Buyer Common Stock
represented thereby, and, in the case of Certificates representing Company
Common Stock, no cash payment in lieu of fractional shares will be paid to any
such holder pursuant to SECTION 2.2(e), and all such dividends, other
distributions and cash in lieu of fractional shares of Buyer Common Stock will
be paid by Buyer to the Exchange Agent and will be included in the Exchange
Fund, in each case until the surrender of such Certificate in accordance with
this ARTICLE II. Subject to the effect of applicable escheat or similar laws,
following surrender of any such Certificate, there will be paid to the holder of
the certificate representing whole shares of Buyer Common Stock issued in
exchange therefor, without interest, (i) at the time of such surrender, the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of Buyer
Common Stock and, in the case of Certificates representing Company Common Stock,
the amount of any cash payable in lieu of a fractional share of Buyer Common
Stock to which such holder is entitled pursuant to SECTION 2.2(e) and (ii) at
the appropriate payment date, the
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amount of dividends or other distributions with a record date after the
Effective Time but prior to such surrender and with a payment date subsequent to
such surrender payable with respect to such whole shares of Buyer Common Stock.
(d) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All
shares of Buyer Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms of this ARTICLE II (including any cash
paid pursuant to this ARTICLE II) will be deemed to have been issued (and paid)
in full satisfaction of all rights pertaining to the shares of Company Common
Stock, theretofore represented by such Certificates, subject, however, to
Buyer's obligation to pay any dividends or make any other distributions with a
record date prior to the Effective Time that may have been declared or made by
the Company on such shares of Company Common Stock that remain unpaid at the
Effective Time, and there will be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the shares of Company
Common Stock that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation or the Exchange Agent for any reason, they will be canceled and
exchanged as provided in this ARTICLE II, except as otherwise provided by law.
(e) NO FRACTIONAL SHARES.
(i) No certificates or scrip representing fractional
shares of Buyer Common Stock will be issued upon the surrender for
exchange of Certificates, no dividend or distribution of Buyer will
relate to such fractional share interests and such fractional share
interests will not entitle the owner thereof to vote or to any rights
of a shareholder of Buyer.
(ii) Each holder of Company Common Stock entitled to
receive a fractional share of Buyer Common Stock will receive in lieu
thereof an amount in cash equal to the product obtained by multiplying
(A) the fractional share interest to which such former holder (after
taking into account all shares of Company Common Stock held at the
Effective Time by such holder) would otherwise be entitled by (B) the
Average Closing Price.
(iii) As soon as practicable after the determination
of the amount of cash, if any, to be paid to holders of Certificates
formerly representing Company Common Stock with respect to any
fractional share interests, the Exchange Agent shall make available
such amounts to such holders of Certificates formerly representing
Company Common Stock subject to and in accordance with the terms of
SECTION 2.2(c).
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund that remains undistributed to the holders of the Certificates for nine
months after the Effective Time will be delivered to Buyer, upon demand, and any
holders of the Certificates who have not theretofore complied with this ARTICLE
II may thereafter look only to Buyer for payment of their claim for Stock
Consideration, any dividends or distributions with respect to Buyer Common Stock
and any cash in lieu of fractional shares of Buyer Common Stock.
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(g) NO LIABILITY. None of Buyer, the Surviving Corporation or
the Exchange Agent will be liable to any person in respect of any shares of
Buyer Common Stock, any dividends or distributions with respect thereto, any
cash in lieu of fractional shares of Buyer Common Stock or any cash from the
Exchange Fund, in each case, delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(h) INVESTMENT OF EXCHANGE FUND. The Exchange Agent shall
invest any cash included in the Exchange Fund, as directed by Buyer, on a daily
basis. Any interest and other income resulting from such investments will be
paid to Buyer.
(i) LOST CERTIFICATES. If any Certificate has been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the
Exchange Agent shall issue, in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration and, if applicable, any unpaid dividends
and distributions on shares of Buyer Common Stock deliverable in respect thereof
and any cash in lieu of fractional shares, in each case, due to such person
pursuant to this Agreement.
Section 2.3 CERTAIN ADJUSTMENTS. If after the date of this
Agreement and on or prior to the Effective Time, the outstanding shares of Buyer
Common Stock or Company Common Stock are changed into a different number of
shares by reason of any reclassification, recapitalization, split-up,
combination or exchange of shares, or any dividend payable in stock or other
securities is declared thereon with a record date within such period, or any
similar event occurs (any such action, an "ADJUSTMENT EVENT"), the Exchange
Ratio will be adjusted accordingly to provide to the holders of Company Common
Stock the same economic effect and percentage ownership of Buyer Common Stock as
contemplated by this Agreement prior to such reclassification, recapitalization,
split-up, combination, exchange or dividend or similar event.
Section 2.4 DISSENTERS' RIGHTS. No Dissenting Shareholder will
be entitled to any portion of the Merger Consideration or cash in lieu of
fractional shares thereof or any dividends or other distributions pursuant to
this ARTICLE II unless and until the holder thereof has failed to perfect or has
effectively withdrawn or lost such holder's right to dissent from the Merger
under the OGCL, and any Dissenting Shareholder will be entitled to receive only
the payment provided by Section 1701.85 of the OGCL with respect to shares of
Company Common Stock owned by such Dissenting Shareholder. If any person who
otherwise would be deemed a Dissenting Shareholder has failed to properly
perfect or has effectively withdrawn or lost the right to dissent with respect
to any shares of Company Common Stock, such shares of Company Common Stock will
thereupon be treated as though such shares of Company Common Stock had been
converted into the right to receive the Stock Consideration with respect to such
shares of Company Common Stock as provided in this ARTICLE II. The Company shall
give Buyer prompt notice of any written demands for appraisal, attempted
withdrawals of such demands and any other instruments received by the Company
relating to shareholders' rights of appraisal. Buyer shall conduct all
negotiations and proceedings with respect to demand for appraisal under the OGCL
and the Company will be entitled to
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participate in such negotiations only as and to the extent requested by Buyer.
The Company shall not, except with the prior written consent of Buyer, make any
payment with respect to any demands for appraisals of Dissenting Shares, offer
to settle or settle any such demands or approve any withdrawal of any such
demands.
Section 2.5 FURTHER ASSURANCES. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be authorized
to execute and deliver, in the name and on behalf of the Company or Buyer, any
deeds, bills of sale, assignments or assurances and to take and do, in the name
and on behalf of the Company or Buyer, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets acquired or to be acquired by the Surviving Corporation as a result of,
or in connection with, the Merger.
Section 2.6 WITHHOLDING RIGHTS. The Surviving Corporation,
Buyer or the Exchange Agent, as the case may be, shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any person such amounts as it is required to deduct and withhold with respect to
the making of such payment under the Code, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by the Surviving
Corporation, Buyer or the Exchange Agent, as the case may be, such amounts
withheld shall be treated for purposes of this Agreement as having been paid to
such person in respect of which such deduction and withholding was made by the
Surviving Corporation, Buyer or the Exchange Agent, as the case may be.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 REPRESENTATIONS AND WARRANTIES OF COMPANY. The
Company hereby represents and warrants to Buyer as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. The Company
and each of the Company Subsidiaries (as defined in SECTION 3.1(b)) is a
corporation or other legal entity duly organized, validly existing and in good
standing (with respect to jurisdictions that recognize such concept) under the
laws of the jurisdiction in which it is organized and has the requisite
corporate or other power, as the case may be, and authority to carry on its
business as now being conducted, except for those jurisdictions where the
failure to be so organized, existing or in good standing, individually or in the
aggregate, would not reasonably be expected to have or result in a material
adverse effect on the Company. The Company and each of the Company Subsidiaries
is duly qualified or licensed to do business and is in good standing (with
respect to jurisdictions that recognize such concept) in each jurisdiction in
which the nature of its business or the ownership, leasing or operation of its
properties makes such qualification or licensing necessary, except for those
jurisdictions where the failure to be so qualified or licensed or to be in good
standing, individually or in the aggregate, would not reasonably be expected to
have or result in a material adverse effect on the Company. The Company has made
available to Buyer prior to the execution of this Agreement complete and correct
copies of its Articles of Incorporation and Code of Regulations, each as amended
to date.
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(b) SUBSIDIARIES. SECTION 3.1(b) of the disclosure letter
delivered by the Company to Buyer prior to the execution of this Agreement (the
"COMPANY DISCLOSURE LETTER"), sets forth all the subsidiaries of the Company
(specifying those that as of the date of this Agreement are Significant
Subsidiaries (as defined in Rule 1-02 of Regulation S-X under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT")) (each a "COMPANY
SUBSIDIARY," collectively, the "COMPANY SUBSIDIARIES," and together with the
Company, the "COMPANY ENTITIES"). All outstanding shares of capital stock of, or
other equity interests in, each Company Subsidiary (i) have been validly issued
and are fully paid and nonassessable, (ii) are free and clear of all Liens (as
defined in SECTION 8.3) and (iii) are free of any other restriction (including
any restriction on the right to vote, sell or otherwise dispose of such capital
stock or other ownership interests), except, in the case of clauses (ii) and
(iii), for any Liens or restrictions that, individually or in the aggregate,
would not reasonably be expected to have or result in a material adverse effect
on the Company. All outstanding shares of capital stock (or equivalent equity
interests of entities other than corporations) of each of the Company
Subsidiaries are beneficially owned, directly or indirectly, by the Company. The
Company does not, directly or indirectly, own more than 20% but less than 100%
of the capital stock or other equity interest in any person except as listed on
SECTION 3.1(b) of the Company Disclosure Letter.
(c) CAPITAL STRUCTURE. The authorized capital stock of the
Company consists of 30,000,000 shares of Company Common Stock and 10,000,000
shares of Preferred Stock, no par value per share, ("PREFERRED STOCK"), of which
(i) 200,000 have been designated Series A Participating Preferred Shares (the
"SERIES A PREFERRED") and (ii) 1,074,107 have been designated ESOP Convertible
Preferred Stock Series B (the "SERIES B PREFERRED"). At the close of business on
December 31, 1999: (i) 14,620,812 shares of Company Common Stock were issued and
outstanding (including 154,113 shares of restricted stock and 135,850
performance shares and excluding 1,811,177 shares of Company Common Stock held
in the treasury of the Company); (ii) 893,342 shares of Preferred Stock were
issued or outstanding, of which no shares of Series A Preferred were issued and
outstanding and 893,342 shares of Series B Preferred were issued and outstanding
and (iii) 1,000,279 shares of Company Common Stock were subject to outstanding
employee or director stock options to purchase Company Common Stock or other
common stock awards granted under the Non-Qualified Stock Purchase Plan,
effective January 1, 1989, the Stock Option and Award Plan of 1989, the Stock
Option and Award Plan of 1993, the Stock Option and Award Plan of 1995, the
Non-Employee Directors' Stock Plan, effective January 1, 1997, the Non-Employee
Directors' Performance Share Plan, effective December 1, 1997 (the "COMPANY
STOCK PLANS") (collectively, the "COMPANY STOCK OPTIONS"). SECTION 3.1(c) of the
Company Disclosure Letter sets forth the holders of all outstanding Company
Stock Options, restricted stock, performance shares or units, deferred shares,
stock units and other stock awards and the number, exercise prices, vesting
schedules, performance targets, expiration dates and other forfeiture provisions
of each grant to such holders. Each share of Company Common Stock carries with
it an associated share purchase right issued pursuant to the Rights Agreement
between the Company and Xxxxx Xxxxxx Shareholder Services, L.L.C., as Rights
Agent, dated as of November 23, 1999 (the "COMPANY RIGHTS AGREEMENT"), which
entitles the holder thereof to purchase, on the occurrence of certain events,
Company Common Stock. All outstanding shares of capital stock of the Company
are, and all shares that may be issued will
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be, when issued, duly authorized, validly issued, fully paid and nonassessable
and not subject to or issued in violation of preemptive rights. Except (i) as
set forth in this SECTION 3.1(c) and (ii) as set forth on SECTION 3.1(c) of the
Company Disclosure Letter, (x) there are not issued, reserved for issuance or
outstanding (A) any shares of capital stock or other voting securities of the
Company, (B) any securities convertible into or exchangeable or exercisable for
shares of capital stock or voting securities of the Company, or (C) any
warrants, calls, options or other rights to acquire from the Company or any
Company Subsidiary, and no obligation of the Company or any Company Subsidiary
to issue, any capital stock, voting securities or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of the
Company and (y) there are no outstanding obligations of the Company or any
Company Subsidiary to repurchase, redeem or otherwise acquire any such
securities or to issue, deliver or sell, or cause to be issued, delivered or
sold, any such securities. Neither the Company nor any Company Subsidiary is a
party to any voting agreement with respect to the voting of any such securities.
Except as set forth on SECTION 3.1(c) of the Company Disclosure Letter, there
are not issued, reserved for issuance or outstanding (A) securities convertible
into or exchangeable or exercisable for shares of capital stock or other voting
securities or ownership interests in any Company Subsidiary, (B) warrants,
calls, options or other rights to acquire from the Company or any Company
Subsidiary, and no obligation of the Company or any Company Subsidiary to issue,
any capital stock, voting securities or other ownership interests in, or any
securities convertible into or exchangeable or exercisable for any capital
stock, voting securities or ownership interests in, any Company Subsidiary, or
(C) obligations of the Company or any Company Subsidiary to repurchase, redeem
or otherwise acquire any such outstanding securities of Company Subsidiaries or
to issue, deliver or sell, or cause to be issued, delivered or sold, any such
securities. Except as set forth on SECTION 3.1(c) of the Company Disclosure
Letter, there are no agreements, arrangements or commitments of any character
(contingent or otherwise) pursuant to which any person is or may be entitled to
receive any payment based on the revenues, earnings or financial performance of
the Company or any Company Subsidiary or assets or calculated in accordance
therewith.
(d) AUTHORITY; NONCONTRAVENTION. The Company has all requisite
corporate power and authority to enter into this Agreement, and, subject to the
Shareholder Approval (as defined in SECTION 3.1(k)), to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Company, subject, in the case of the Merger, to the
Shareholder Approval. This Agreement has been duly executed and delivered by the
Company, and, assuming the due authorization, execution and delivery by Buyer,
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws generally affecting the rights of creditors and
subject to general equity principles. Except as set forth on SECTION 3.1(d) of
the Company Disclosure Letter, the execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will not, (i) conflict with the
articles of incorporation or code of regulations (or comparable organizational
documents) of any of the Company Entities, (ii) result in any breach, violation
or default (with or without notice or lapse of time, or both)
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under, or give rise to a right of termination, cancellation or creation or
acceleration of any obligation or right of a third party or loss of a benefit
under, or result in the creation of any Lien (as defined in SECTION 8.3) upon
any of the properties or assets of the Company Entities under, any loan or
credit agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license or other authorization
applicable to the Company Entities or their respective properties or assets or
(iii) subject to the governmental filings and other matters referred to in the
following sentence, conflict with or violate any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company Entities
or their respective properties or assets, other than, in the case of clauses
(ii) and (iii), any such conflicts, violations, defaults, rights, losses or
Liens (as defined in SECTION 8.3) that, individually or in the aggregate, would
not reasonably be expected to have or result in a material adverse effect on the
Company or that would not prevent or materially delay consummation of the
transactions contemplated by this Agreement. No consent, approval, order or
authorization of, action by or in respect of, or registration, declaration or
filing with, any federal, state or local or foreign government, any court,
administrative, regulatory or other governmental agency, commission or authority
or any non-governmental United States or foreign self-regulatory agency,
commission or authority or any arbitral tribunal (each, a "GOVERNMENTAL ENTITY")
is required by the Company in connection with the execution and delivery of this
Agreement by the Company or the consummation by the Company of the transactions
contemplated hereby, except for: (i) the filing with the Securities and Exchange
Commission (the "SEC") of (A) a proxy statement relating to the Shareholders
Meeting (as defined in SECTION 5.1(b)) (such proxy statement, as amended or
supplemented from time to time, the "PROXY STATEMENT") and (B) such reports
under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act, as may be
required in connection with this Agreement and the transactions contemplated
hereby; (ii) the filing of the Certificate of Merger with the Secretary of State
of the State of Ohio; (iii) the filing of a premerger notification and report
form by the Company under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended ("HSR ACT"); (iv) the consents, approvals, orders or
authorizations set forth on SECTION 3.1(d) of the Company Disclosure Letter; (v)
filings required under the antitrust and competition laws of foreign countries
("FOREIGN ANTITRUST LAWS"); and (vi) such consents, approvals, orders or
authorizations the failure of which to be made or obtained, individually or in
the aggregate, would not reasonably be expected to have or result in a material
adverse effect on the Company or would not prevent or materially delay
consummation of the transactions contemplated by this Agreement.
(e) SEC REPORTS AND FINANCIAL STATEMENTS; UNDISCLOSED
LIABILITIES. The Company has timely filed all required reports, schedules,
forms, statements and other documents (including exhibits and all other
information incorporated therein) under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), and the Exchange Act, with the SEC since October 31,
1997 (as such reports, schedules, forms, statements and documents have been
amended since the time of their filing, collectively, the "COMPANY SEC
DOCUMENTS"). As of their respective dates, or if amended prior to the date of
this Agreement, as of the date of the last such amendment, the Company SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such Company SEC
Documents, and none of the Company SEC Documents when filed, or as so
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amended, 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 financial statements of the Company included in the Company
SEC Documents comply as to form, as of their respective date of filing with the
SEC, in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with United States generally accepted accounting
principles ("GAAP") (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto), and fairly present
in all material respects the consolidated financial position of the Company and
its subsidiaries as of the dates thereof and the consolidated statement of
income, cash flows and shareholders' equity for the periods then ended (subject,
in the case of unaudited statements, to normal recurring year-end audit
adjustments). Except (i) as reflected in such financial statements or in the
notes thereto or (ii) for liabilities incurred in connection with this Agreement
or the transactions contemplated hereby, neither the Company nor any Company
Subsidiary has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) which, individually or in the aggregate,
would reasonably be expected to have or result in a material adverse effect on
the Company.
(f) INFORMATION SUPPLIED. None of the information supplied or
to be supplied by the Company specifically for inclusion or incorporation by
reference in (i) the registration statement on Form S-4 to be filed with the SEC
by Buyer in connection with the issuance of Buyer Common Stock in the Merger
(the "FORM S-4") will, at the time the Form S-4 becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the Proxy Statement will, at the date
it is first mailed to the Company's shareholders or at the time of the
Shareholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made by the Company
with respect to statements made or incorporated by reference therein based on
information supplied by Buyer specifically for inclusion or incorporation by
reference in the Proxy Statement.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
on SECTION 3.1(g) of the Company Disclosure Letter, since October 31, 1999, (i)
the Company Entities have conducted their respective operations only in the
ordinary course consistent with past practice, (ii) there has not been a
material adverse change relating to the Company, (iii) the Company Entities have
not taken action that if taken after the date of this Agreement would constitute
a violation of SECTION 4.1(a), (iv) except in connection with or as expressly
permitted in this Agreement, neither the Company nor any Company Subsidiary has
incurred nor will there have arisen any liabilities (direct, contingent or
otherwise) material to the Company and the Company Subsidiaries, taken as a
whole, and (v) neither the Company nor any Company Subsidiary has engaged in any
material transaction or entered into any material agreement or commitments
outside the ordinary course of business (except for the transactions
contemplated by this Agreement).
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(h) COMPLIANCE WITH APPLICABLE LAWS; LITIGATION.
(i) The operations of the Company Entities have not
been and are not being conducted in violation of any law or any Permit
(as defined in SECTION 3.1(h)(ii)), except where such violations,
individually or in the aggregate, would not reasonably be expected to
have or result in a material adverse effect on the Company. None of the
Company Entities has received any written notice, or has knowledge of
any claim, alleging any such violation.
(ii) The Company Entities hold all licenses, permits,
variances, consents, authorizations, waivers, grants, franchises,
concessions, exemptions, orders, registrations and approvals of
Governmental Entities or other persons necessary for the conduct of
their respective businesses as currently conducted ("PERMITS"), except
where the failure to hold such Permits, individually or in the
aggregate, would not reasonably be expected to have or result in a
material adverse effect on the Company. None of the Company Entities
has received written notice that any Permit will be terminated or
modified or cannot be renewed in the ordinary course of business, and
the Company has no knowledge of any reasonable basis for any such
termination, modification or nonrenewal, except for such terminations,
modifications or nonrenewals as, individually or in the aggregate,
would not reasonably be expected to have or result in a material
adverse effect on the Company . The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated
hereby do not and will not violate any Permit, or result in any
termination, modification or nonrenewals thereof, except for such
violations, terminations, modifications or nonrenewals thereof as,
individually or in the aggregate, would not reasonably be expected to
have or result in a material adverse effect on the Company.
(iii) Except as set forth on SECTION 3.1(h)(iii) of
the Company Disclosure Letter, no action, demand, requirement or
investigation by any Governmental Entity and no suit, action or
proceeding by any person, in each case, with respect to the Company or
any Company Subsidiary or any of their respective properties is pending
or, to the knowledge of the Company, threatened as of the date of this
Agreement.
(i) EMPLOYEE BENEFIT PLANS.
(i) SECTION 3.1(i)(i) of the Company Disclosure
Letter sets forth a true and complete list of (A) each United States
bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, employment, disability, death benefit,
hospitalization, medical insurance, life insurance, severance or other
employee benefit plan, agreement, arrangement or understanding
maintained by the Company or any Company Subsidiary or to which the
Company or any Company Subsidiary contributes or is obligated to
contribute, and (B) each change of control agreement providing benefits
to any
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current or former employee, officer or director of the Company or any
Company Subsidiary, to which the Company or any Company Subsidiary is a
party or by which the Company or any Company Subsidiary is bound
(collectively, the "COMPANY BENEFIT PLANS"). For purposes of this
Agreement, the term "FOREIGN PLAN" refers to each plan, agreement,
arrangement or understanding that is subject to or governed by the laws
of any jurisdiction other than the United States and that would have
been treated as a Company Benefit Plan had it been a United States
plan, agreement, arrangement or understanding. SECTION 3.1(i)(i) of the
Company Disclosure Letter sets forth a true and correct list of the
Foreign Plans. With respect to each Company Benefit Plan and Foreign
Plan, no event has occurred and there exists no condition or set of
circumstances in connection with which the Company or any Company
Subsidiary could be subject to any liability that, individually or in
the aggregate, would reasonably be expected to have or result in a
material adverse effect on the Company. Neither the Company nor any
Company Subsidiary has any liability with respect to any plan,
agreement, arrangement or understanding of the type described in this
paragraph other than the Company Benefit Plans and the Foreign Plans.
(ii) Except as set forth on SECTION 3.1(i)(ii) of the
Company Disclosure Letter, each Company Benefit Plan has been
administered in accordance with its terms, all applicable laws,
including the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and the Code, and the terms of all applicable
collective bargaining agreements, except for any failures so to
administer any Company Benefit Plan that, individually or in the
aggregate, would not reasonably be expected to have or result in a
material adverse effect on the Company. The Company and all Company
Benefit Plans are in compliance with the applicable provisions of
ERISA, the Code and all other applicable laws and the terms of all
applicable collective bargaining agreements, except for any failures to
be in such compliance that, individually or in the aggregate, would not
reasonably be expected to have or result in a material adverse effect
on the Company. Each Company Benefit Plan that is intended to be
qualified under Section 401(a), 401(k) or 4975(e)(7) of the Code has
received a favorable determination letter dated after December 31, 1994
from the IRS as to its qualified status and, to the knowledge of the
Company, there exists no facts or circumstances that have caused or
could cause a failure to be so qualified under Section 401(a), 401(k)
or 4975(e)(7) of the Code. No fact or event has occurred which is
reasonably likely to affect adversely the qualified status of any such
Company Benefit Plan or the exempt status of any such trust, except for
any occurrence that, individually or in the aggregate, would not
reasonably be expected to have or result in a material adverse effect
on the Company. All contributions to, and payments from, the Company
Benefit Plans that are required to be made in accordance with such
Company Benefit Plans, ERISA or the Code have been timely made other
than any failures that, individually or in the aggregate, would not
reasonably be expected to have or result in a material adverse effect
on the Company. All
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trusts providing funding for Company Benefit Plans that are intended to
comply with Section 501(c)(9) of the Code are exempt from federal
income taxation and, together with any other welfare benefit funds (as
defined in Section 419(e)(1) of the Code) maintained in connection with
any of the Company Benefit Plans, have been operated and administered
in compliance with all applicable requirements such that neither the
Company, any Company Subsidiary, any Company Benefit Plan nor such
trust or fund is subject to any taxes, penalties or other liabilities
imposed as a consequence of failure to comply with such requirements
which, individually or in the aggregate, would have a material adverse
effect on the Company. No welfare benefit fund (as defined in Section
419(e)(1) of the Code) maintained in connection with any of the Company
Benefit Plans has provided any "disqualified benefit" (as defined in
Section 4976(b)(1) of the Code) for which the Company or any Company
Subsidiary has or had any liability for the excise tax imposed by
Section 4976 of the Code which has not been paid in full.
(iii) Neither the Company nor any trade or business,
whether or not incorporated, which, together with the Company, would be
deemed to be a "single employer" within the meaning of Section 4001(b)
of ERISA (an "ERISA AFFILIATE") has incurred any liability under Title
IV of ERISA (other than for premiums pursuant to Section 4007 of ERISA
which have been timely paid) or Section 4971 of the Code, and no
condition exists that presents a material risk to the Company or any
ERISA Affiliate of the Company of incurring any such liability or
failure. No Company Benefit Plan has or has incurred an accumulated
funding deficiency within the meaning of Section 302 of ERISA or
Section 412 of the Code, nor has any waiver of the minimum funding
standards of Section 302 of ERISA and Section 412 of the Code been
requested of or granted by the Internal Revenue Service with respect to
any Company Benefit Plan, nor has any lien in favor of any Company
Benefit Plan arisen under Section 412(n) of the Code or Section 302(f)
of ERISA. Neither the Company nor any ERISA Affiliate has been required
to provide security to any defined benefit pension plan pursuant to
Section 401(a)(29) of the Code. Except as disclosed on actuarial
reports previously provided to Buyer, with respect to each Company
Benefit Plan that is subject to Title IV or Section 302 of ERISA or
Section 412 or 4971 of the Code, the fair market value of the assets of
such Company Benefit Plan equals or exceeds the actuarial present value
of all accrued benefits under such Company Benefit Plan (whether or not
vested), based upon the actuarial assumptions used to prepare the most
recent actuarial report for such Company Benefit Plan and, to the
knowledge of the Company, no event has occurred which would be
reasonably expected to change any such funded status. There has been no
"reportable event" within the meaning of Section 4043 of ERISA and the
regulations and interpretations thereunder which has not been fully and
accurately reported in a timely fashion, as required, or which, whether
or not reported, would constitute grounds for the Pension Benefit
Guaranty Corporation (the "PBGC") to institute termination proceedings
with respect to any Company Benefit Plan.
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(iv) Except for Company Benefit Plans set forth on
SECTION 3.1(i)(iv) of the Company Disclosure Letter, no Company Benefit
Plan provides medical or life insurance benefits (whether or not
insured) with respect to current or former employees or officers or
directors after retirement or other termination of service, other than
any such coverage required by law, and with respect to any Company
Benefit Plan set forth on SECTION 3.1(i)(iv) of the Company Disclosure
Letter, the Company and the Company Subsidiaries have reserved all
rights necessary to amend or terminate each of such plans without the
consent of any other person.
(v) Except for Company Benefit Plans set forth on
SECTION 3.1(i)(v) of the Company Disclosure Letter, the consummation of
the transactions contemplated by this Agreement will not, either alone
or in combination with another event, (A) entitle any current or former
employee, officer or director of the Company to severance pay,
unemployment compensation or any other payment, except as expressly
provided in this Agreement, or (B) accelerate the time of payment or
vesting, or increase the amount of compensation due any such employee,
officer or director.
(vi) Except for Company Benefit Plans set forth on
SECTION 3.1(i)(vi) of the Company Disclosure Letter, neither the
Company nor any Company Subsidiary is a party to any agreement,
contract or arrangement (including this Agreement) that could result,
separately or in the aggregate, in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code. Except as set
forth on SECTION 3.1(i)(vi) of the Company Disclosure Letter, no
Company Benefit Plan provides for the reimbursement of excise taxes
under Section 4999 of the Code or any income taxes under the Code.
Except as set forth on SECTION 3.1(i)(vi) of the Company Disclosure
Letter, the disallowance of a deduction under Section 162(m) of the
Code for employee remuneration will not apply to any amount paid or
payable by the Company or any Company Subsidiary under any Company
Benefit Plan.
(vii) With respect to each Company Benefit Plan, the
Company has delivered or made available to Buyer a true and complete
copy of: (A) each writing constituting a part of such Company Benefit
Plan, including, without limitation, all Company Benefit Plan documents
and trust agreements; (B) the most recent Annual Report (Form 5500
Series) and accompanying schedule, if any; (C) the most recent annual
financial report, if any; (D) the most recent actuarial report, if any;
(E) the most recent determination letter from the Internal Revenue
Service, if any; and (F) such additional documents or other information
as is reasonably requested by Buyer. Except as set forth on SECTION
3.1(i)(vii) of the Company Disclosure Letter, and except as
specifically provided in the foregoing documents delivered or made
available to Buyer, there are no amendments to any Company Benefit Plan
that have been adopted or approved nor has the Company or any Company
Subsidiary undertaken to make any such amendments or to adopt or
approve any new Company Benefit Plan.
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(viii) Except as set forth on SECTION 3.1(i)(viii) of
the Company Disclosure Letter, no Company Benefit Plan is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA) (a
"MULTIEMPLOYER PLAN") or a plan that has two or more contributing
sponsors at least two of whom are not under common control, within the
meaning of Section 4063 of ERISA (a "MULTIPLE EMPLOYER PLAN"). None of
the Company, the Company Subsidiaries nor any of their respective ERISA
Affiliates has, at any time during the last six years, contributed to
or been obligated to contribute to any Multiemployer Plan or Multiple
Employer Plan. None of the Company, the Company Subsidiaries nor any of
their respective ERISA Affiliates has incurred any material withdrawal
liability under a Multiemployer Plan that has not been satisfied in
full. None of the Company, the Company Subsidiaries nor any of their
respective ERISA Affiliates would incur any withdrawal liability
(within the meaning of Part 1 of Subtitle E of Title I of ERISA) if the
Company, the Company Subsidiaries or any of their respective ERISA
Affiliates withdrew (within the meaning of Part 1 of Subtitle E of
Title I of ERISA) on or prior to the Closing Date from each
Multiemployer Plan to which the Company, the Company Subsidiaries or
any of their respective ERISA Affiliates has an obligation to
contribute on the date of this Agreement. No Multiemployer Plan to
which the Company, the Company Subsidiaries or any of their respective
ERISA Affiliates contributes is in reorganization (within the meaning
of Section 4241 of ERISA) or is reasonably likely to commence
reorganization.
(ix) Except as set forth on SECTION 3.1(i)(ix) of the
Company Disclosure Letter, there are no pending or threatened claims
(other than claims for benefits in the ordinary course), lawsuits or
arbitrations that have been asserted or instituted, or to the Company's
knowledge, no set of circumstances exists that may reasonably give rise
to a claim or lawsuit, against the Company Benefit Plans, any
fiduciaries thereof with respect to their duties to the Company Benefit
Plans or the assets of any of the trusts under any of the Company
Benefit Plans that could reasonably be expected to result in any
material liability of the Company or any Company Subsidiaries to the
PBGC, the United States Department of Treasury, the United States
Department of Labor, any Multiemployer Plan, any Company Benefit Plan
or any participant in a Company Benefit Plan.
(x) There have been no prohibited transactions or
breaches of any of the duties imposed on "fiduciaries" (within the
meaning of Section 3(21) of ERISA) by ERISA with respect to the Company
Benefit Plans that could result in any liability or excise tax under
ERISA or the Code being imposed on the Company or any of the Company
Subsidiaries.
(xi) All contributions, transfers and payments by the
Company and the Company Subsidiaries in respect of any Company Benefit
Plan, other than transfers incident to an incentive stock option plan
within the meaning of Section 422 of the Code, have been or are fully
deductible under the Code.
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(xii) With respect to any insurance policy that has,
or does, provide funding for benefits under any Company Benefit Plan,
no insurance company issuing any such policy is in receivership,
conservatorship, liquidation or similar proceeding and, to the
knowledge of the Company, no such proceedings with respect to any
insurer are imminent.
(xiii) With respect to each Foreign Plan: (A) all
amounts required to be reserved under each book reserved Foreign Plan
have been so reserved in accordance with reasonable accounting
practices prevailing in the country where such Foreign Plan is
established; (B) each Foreign Plan required to be registered with a
Governmental Entity has been registered, has been maintained in good
standing with the appropriate Governmental Entities, and has been
maintained and operated in accordance with its terms and applicable
law; (C) the fair market value of the assets of each funded Foreign
Plan that is a defined benefit pension plan (or termination indemnity
plan), and the liability of each insurer for each Foreign Plan that is
a defined benefit pension plan (or termination indemnity plan) and is
funded through insurance or the book reserve established for each
Foreign Plan that is a defined benefit pension plan (or termination
indemnity plan) that utilizes book reserves, together with any accrued
contributions, is sufficient to procure or provide for the liability
for accrued benefits with respect to those current and former employees
of the Company and the Company Subsidiaries that participate in such
Foreign Plan according to the reasonable actuarial or other applicable
assumptions and valuations most recently used to determine employer
contributions to, or the funded status or book reserve of, such Foreign
Plans; (D) each Foreign Plan complies with all applicable laws, such
that any failure to do so, individually or in the aggregate, will not
result in any material adverse effect on the Company; (E) all
contributions required to be made to such Foreign Plan have been timely
made; and (F) there are no actions, suits or claims pending or
threatened.
(xiv) For purposes of this SECTION 3.1(i), the term
"EMPLOYEE" will be considered to include individuals rendering personal
services to the Company or any Company Subsidiary as independent
contractors.
(j) TAXES. (A) Except as set forth on SECTION 3.1(j) of the
Company Disclosure Letter, the Company and each Company Subsidiary has filed all
tax returns and reports required to be filed by it or requests for extensions to
file such returns or reports have been timely filed, granted and have not
expired, and all such filed returns and reports are materially complete and
accurate; (B) the Company and each Company Subsidiary has paid (or the Company
has paid on its behalf) all taxes shown as due on such returns; (C) except as
set forth on SECTION 3.1(j) of the Company Disclosure Letter, there are no
pending, or threatened in writing, audits, examinations, investigations or other
proceedings in respect of taxes relating to the Company or any Company
Subsidiary; (D) there are no Liens for taxes upon the assets of the Company or
any of the Company Subsidiaries, other than Liens for current taxes not yet due
and Liens for taxes that are being contested in good faith by appropriate
proceedings; (E) neither the Company nor any of the Company Subsidiaries has any
liability for taxes of any person (other than the Company and the Company
Subsidiaries) under Treasury Regulation
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Section 1.1502-6 (or any comparable provision of state or local or foreign law);
(F) neither the Company nor any Company Subsidiary is a party to any agreement
relating to the allocation or sharing of taxes; (G) neither the Company nor any
Company Subsidiary has taken any action or knows of any fact, agreement, plan or
other circumstance that is reasonably likely to prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(H) no deficiencies for any taxes have been proposed, asserted or assessed
against the Company or any Company Subsidiary, for which adequate reserves have
not been created; and (I) neither the Company nor any Company Subsidiary will be
required to include any adjustment in taxable income for any tax period (or
portion thereof) ending after the Closing Date (a "POST-CLOSING TAX PERIOD")
under Section 481(c) of the Code (or any similar provision of the tax laws of
any jurisdiction) as a result of a change in method of accounting for any tax
period (or portion thereof) ending prior to the Closing Date (a "PRE-CLOSING TAX
PERIOD") or pursuant to the provisions of any agreement entered into with any
taxing authority with regard to the tax liability of the Company or any Company
Subsidiary for any Pre-Closing Tax Period. As used in this Agreement, "TAXES"
includes all federal, state or local or foreign net and gross income,
alternative or add-on minimum, environmental, gross receipts, AD VALOREM, value
added, goods and services, capital stock, profits, license, single business,
employment, severance, stamp, unemployment, customs, property, sales, excise,
use, occupation, service, transfer, payroll, franchise, withholding and other
taxes or similar governmental duties, charges, fees, levies or other
assessments, including any interest, penalties or additions with respect
thereto. The consolidated federal income tax returns of the Company and the
Company Subsidiaries have been examined, or the statute of limitations has
closed, with respect to all taxable years through and including 1994.
(k) VOTING REQUIREMENT. The affirmative vote at the
Shareholders Meeting of (i) at least a majority of the votes entitled to be cast
by the holders of outstanding shares of Company Common Stock and the Series B
Preferred, if any, voting together as a single class (with each share of Company
Common Stock and Series B Preferred having one vote per share), is the only vote
of the holders of any class or series of the Company's capital stock necessary
to approve an amendment (the "OPT-OUT AMENDMENT") to the Company's Code of
Regulations to provide that Section 1701.831 of the Ohio Revised Code
(pertaining to control share acquisitions) shall not apply to the Company (the
"OPT-OUT APPROVAL"), and (ii) at least two-thirds of the votes entitled to be
cast by the holders of outstanding shares of Company Common Stock and Series B
Preferred, if any, voting together as a single class (with each share of Company
Common Stock and Series B Preferred having one vote per share), is the only vote
of the holders of any class or series of the Company's capital stock necessary
to adopt and approve this Agreement and the Merger and the transactions
contemplated hereby (other than the Opt-Out Amendment) (the "MERGER APPROVAL"
and together with the Opt-Out Approval, the "SHAREHOLDER APPROVAL").
(l) STATE TAKEOVER STATUTES. The Board of Directors of the
Company has taken all necessary action, subject to obtaining the Opt-Out
Approval, so that no "fair price," "moratorium," "control share acquisition" or
other antitakeover statute or regulation (each, a "TAKEOVER STATUTE") (including
the control share acquisition provisions codified in Sections 1701.83 ET SEQ. of
the OGCL and the moratorium provisions codified in Sections 1704.02 ET SEQ. of
the OGCL) or any anti-takeover provision in the Company's Articles of
Incorporation or Code of Regulations is applicable to the Merger and the
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transactions contemplated by this Agreement. No other Takeover Statute is
applicable to this Agreement, the Merger or the other transactions contemplated
by this Agreement. The Board of Directors of the Company has (A) duly and
validly approved this Agreement, (B) determined that the transactions
contemplated by this Agreement are in the best interests of the Company and its
shareholders, (C) unanimously resolved to recommend to such shareholders that
they vote in favor of the Opt-Out Amendment and the Merger and (D) taken all
corporate action required to be taken by the Board of Directors of the Company
for the consummation of the transactions contemplated by this Agreement.
(m) INTENTIONALLY OMITTED.
(n) BROKERS. Except for Xxxxxxx Xxxxx & Co., no broker,
investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company has furnished to
Buyer true and complete copies of all agreements under which any fees,
commissions or expenses are payable and all indemnification and other agreements
related to the engagement of the persons to whom such fees, commissions or
expenses are payable.
(o) OWNERSHIP OF BUYER COMMON STOCK. Except for shares of
Buyer Common Stock owned by the Company Benefit Plans or shares held or managed
for the account of another person or as to which the Company is required to act
as a fiduciary or in a similar capacity, as of the date of this Agreement,
neither the Company nor, to its knowledge, any of its affiliates, (i)
beneficially owns (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, or (ii) is party to any agreement, arrangement or understanding for
the purpose of acquiring, holding, voting or disposing of, in each case, shares
of Buyer Common Stock.
(p) ENVIRONMENTAL MATTERS.
(i) Except as disclosed in the Company SEC Reports
filed since January 1, 1999 (the "RECENT SEC REPORTS"), or as set forth
on SECTION 3.1(p)(i) of the Company Disclosure Letter, or where
noncompliance, individually or in the aggregate, will not have or
result in a material adverse effect on the Company, the Company
Entities are and have been in compliance with all applicable
Environmental Laws and Environmental Permits.
(ii) Except as disclosed in the Recent SEC Reports,
or as set forth on SECTION 3.1(p)(ii) of the Company Disclosure Letter,
there are no written (or, to the knowledge of the Company, other)
Environmental Claims pending or, to the knowledge of the Company,
threatened, against the Company or any Company Subsidiary and, to the
knowledge of the Company, there are no existing conditions,
circumstances or facts which could give rise to an Environmental Claim.
(iii) The Company has set forth on SECTION
3.1(p)(iii) of the Company Disclosure Letter all material information,
including such studies,
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audits, analyses and test results, in the possession, custody or
control of or otherwise known and available to the Company Entities
relating to (A) the Company Entities' past or present compliance or
noncompliance with Environmental Laws and Environmental Permits, or (B)
Environmental Conditions on, under or about any of the properties or
assets owned, leased, or operated by any of the Company Entities at the
present time or for which any of the Company Entities may be
responsible, except to the extent any failure to provide any such
information, individually or in the aggregate, would not reasonably be
expected to have or result in, or would not have led to the discovery
of, a material adverse effect on the Company.
(iv) Except as disclosed in the Recent SEC Reports,
or as set forth on SECTION 3.1(p)(iv) of the Company Disclosure Letter,
during and, to the knowledge of the Company, prior to, the period of
ownership or operation by the Company or the Company Subsidiaries, no
Hazardous Substance was generated, treated, stored, disposed of, used,
handled or manufactured at, or transported, shipped or disposed of
from, currently or previously owned or leased properties in violation
of applicable Environmental Laws or Environmental Permits that,
individually or in the aggregate, would reasonably be expected to have
or result in a material adverse effect on the Company and there were no
Releases of Hazardous Substance in, on, under, from or affecting any
currently or previously owned or leased properties that, individually
or in the aggregate, would reasonably be expected to have or result in
a material adverse effect on the Company.
(v) Except as disclosed in the Recent SEC Reports, or
as set forth on SECTION 3.1(p)(v) of the Company Disclosure Letter,
none of the Company or the Company Subsidiaries has received from any
Governmental Entity or other third party any written (or, to the
knowledge of the Company, other) notice that any of them or any of
their predecessors is or may be a potentially responsible party in
respect of, or may otherwise bear liability for, any actual or
threatened Release of Hazardous Substance at any site or facility that
is, has been or could reasonably be expected to be listed on the
National Priorities List, the Comprehensive Environmental Response,
Compensation and Liability Information System or any similar or
analogous federal, state, provincial, territorial, municipal, county,
local or other domestic or foreign list, schedule, inventory or
database of Hazardous Substance sites or facilities.
(vi) As used in this Agreement:
(A) the term "ENVIRONMENTAL CLAIM" means any
written or other claim, demand, suit, action, proceeding,
investigation or notice to any of the Company Entities by any
person alleging any potential liability (including, without
limitation, potential liability for investigatory costs, risk
assessment costs, cleanup costs, governmental response costs,
natural resource damages, or penalties) arising out of, based
on,
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or resulting from (i) alleged noncompliance with any
Environmental Law or Environmental Permit, (ii) alleged injury
or damage arising from exposure to Hazardous Substances, or
(iii) the presence, Release or threatened Release into the
environment, of any Hazardous Substance at or from any
location, whether or not owned, leased, operated or used by
the Company or any Company Subsidiary;
(B) the term "ENVIRONMENTAL LAWS" means all
Laws in effect as of the date of this Agreement relating to
(i) pollution or protection of the environment, (ii)
emissions, discharges, Releases or threatened Releases of
Hazardous Substances, (iii) threats to human health or
ecological resources arising from exposure to Hazardous
Substances, or (iv) the manufacture, generation, processing,
distribution, use, sale, treatment, receipt, storage,
disposal, transport or handling of Hazardous Substances, and
includes, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, the Resource
Conversation and Recovery Act, the Clean Air Act, the Clean
Water Act, the Water Pollution Control Act, the Toxic
Substances Control Act, the Occupational Safety and Health Act
and any similar foreign, state or local Laws;
(C) the term "HAZARDOUS SUBSTANCE" means (i)
chemicals, pollutants, contaminants, hazardous wastes, toxic
substances, and oil and petroleum products, (ii) any substance
that is or contains asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls ("PCBS"), petroleum or
petroleum-derived substances or wastes, radon gas or related
materials, (iii) any substance that requires removal or
remediation under any Environmental Law, or is defined, listed
or identified as a "hazardous waste" or "hazardous substance"
thereunder, or (iv) any substance that is regulated under any
Environmental Law due to its actual or potentially toxic,
explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous properties;
(D) the term "RELEASE" means any releasing,
disposing, discharging, injecting, spilling, leaking, pumping,
dumping, emitting, escaping, emptying, migration,
transporting, placing and the like, including into or upon,
any land, soil, sediment, surface water, ground water or air,
or otherwise entering into the environment;
(E) the term "LAW" means any foreign,
federal, state or local law, statute, code, ordinance,
regulation,
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rule, principle of common law or other legally enforceable
obligation imposed by a court or other Governmental Entity;
(F) the term "ENVIRONMENTAL PERMIT" means
all Permits and the timely submission of applications for
Permits, as required under Environmental Laws; and
(G) the term "ENVIRONMENTAL CONDITION" means
any contamination, damage, injury or other condition related
to Hazardous Substances and includes, without limitation, any
present or former Hazardous Substance treatment, storage,
disposal or recycling units, underground storage tanks,
wastewater treatment or management systems, wetlands, sumps,
lagoons, impoundments, landfills, ponds, incinerators, xxxxx,
asbestos containing materials, lead paint or PCB-containing
articles.
(q) REAL PROPERTY; ASSETS.
(i) SECTION 3.1(q)(i) of the Company Disclosure
Letter contains a true and complete list and brief description of each
parcel of real property owned by the Company and the Company
Subsidiaries (the "OWNED REAL PROPERTY"). The Company or a Company
Subsidiary has good and marketable fee simple title to all such Owned
Real Property.
(ii) SECTION 3.1(q)(ii) of the Company Disclosure
Letter contains a true and complete list and brief description of all
real property leased by the Company and the Company Subsidiaries, all
of which are hereinafter referred to as the "LEASED REAL PROPERTY." The
Company or a Company Subsidiary has a valid leasehold interest in or
valid rights to all Leased Real Property. The Company has made
available to Buyer true and complete copies of all leases of the Leased
Real Property (the "LEASES"). No option, extension or renewal has been
exercised under any Lease except options, extensions or renewals whose
exercise has been evidenced by a written document, a true and complete
copy of which has been made available to Buyer with the corresponding
Lease. Each of the Company and the Company Subsidiaries has complied in
all material respects with the terms of all Leases to which it is a
party and under which it is in occupancy, and all such Leases are in
full force and effect. To the knowledge of the Company, the lessors
under the Leases to which the Company or a Company Subsidiary is a
party have complied in all material respects with the terms of their
respective Leases. Each of the Company and the Company Subsidiaries
enjoys peaceful and undisturbed possession under all such Leases,
except where a failure to do so, individually or in the aggregate,
would not reasonably be expected to have or result in a material
adverse effect on the Company.
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(iii) Except as set forth on SECTION 3.1(q)(iii) of
the Company Disclosure Letter, none of the Owned Real Property or
Leased Real Property is subject to any Liens (whether absolute,
accrued, contingent or otherwise).
(iv) Except as set forth on SECTION 3.1(q)(iv) of the
Company Disclosure Letter, the Company has good and valid title to all
material properties, assets and rights relating to or used or held for
use in connection with the business of the Company and such properties,
assets and rights comprise all of the assets required for the conduct
of the business of the Company as now being conducted. Except as set
forth on SECTION 3.1(q)(iv) of the Company Disclosure Letter, all such
properties, assets and rights are in all material respects adequate for
the purposes for which such assets are currently used or held for use,
and are in reasonably good repair and operating condition (subject to
normal wear and tear).
(r) INTELLECTUAL PROPERTY.
(i) The term "INTELLECTUAL PROPERTY" means all of the
following that is owned by, issued or licensed to Company or the
Company Subsidiaries which is used in the business of the Company or
the Company Subsidiaries, including, without limitation, (A) all
patents, trademarks, trade names, trade dress, assumed names, service
marks, logos, copyrights, Internet domain names and corporate names
together with all applications, registrations, renewals and all
goodwill associated therewith; (B) all trade secrets and confidential
information (including, without limitation, customer lists, know-how,
formulae, manufacturing and production processes, research, financial
business information and marketing plans) owned or used by the Company
or the Company Subsidiaries; (C) information technologies (including,
without limitation, software programs, data and related documentation);
and (D) other intellectual property rights and all copies and tangible
embodiments of any of the foregoing in whatever form or medium.
(ii) Except as set forth on SECTION 3.1(r)(ii) of the
Company Disclosure Letter: (A) the Company or the Company Subsidiaries
own and possess all right, title and interest in and to, or have a
valid and enforceable license to use, the Intellectual Property
necessary for the operation of their respective businesses as currently
conducted; (B) no claim by any third party contesting the validity,
enforceability, use or ownership of any of the Intellectual Property
has been made, is currently outstanding or is threatened, and, to the
knowledge of the Company, there are no grounds for the same; (C)
neither the Company nor any of the Company Subsidiaries has received
any written notices of, or is aware of any facts which indicate a
likelihood of, any infringement or misappropriation by, or other
conflict with, any third party with respect to the Intellectual
Property; (D) to the knowledge of the Company, neither the Company nor
the Company Subsidiaries has infringed, misappropriated or otherwise
conflicted with any intellectual property rights or other rights of any
third parties and neither the Company nor any of the Company
Subsidiaries is
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aware of any infringement, misappropriation or conflict which will
occur as a result of the continued operation of the Company's and the
Company Subsidiaries' respective businesses as currently conducted, in
each case except to the extent that such, individually or in the
aggregate, would not have or result in a material adverse effect on the
Company. The Company has delivered to Buyer prior to the date of this
Agreement complete and correct copies of all licenses to use
Intellectual Property.
(iii) (A) The transactions contemplated by this
Agreement will have no material adverse effect on the right, title and
interest of the Company and the Company Subsidiaries in and to the
Intellectual Property; and (B) the Company or each of the Company
Subsidiaries, as the case may be, has taken all necessary and desirable
action to maintain and protect the Intellectual Property and, until the
Effective Time, shall continue to maintain and protect the Intellectual
Property so as to not materially adversely affect the validity or
enforceability of the Intellectual Property.
(s) OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of Xxxxxxx Xxxxx & Co., dated the date of this Agreement, to the effect
that, as of such date, the Merger Consideration is fair from a financial point
of view to holders of shares of Company Common Stock, a signed copy of which
opinion will be made available to Buyer promptly after the date of this
Agreement.
(t) LABOR AGREEMENTS. SECTION 3.1(t) of the Company Disclosure
Letter sets forth a true and complete list of each collective bargaining
agreement or other labor agreement with any union or labor organization to which
the Company or any of the Company Subsidiaries is a party and the Company does
not know of any activity or proceeding of any labor organization (or
representative thereof) to organize any of its or their employees that would,
individually or in the aggregate, reasonably be expected to have or result in a
material adverse effect on the Company. The Company and the Company Subsidiaries
are not, and have not since January 1, 1998 been, subject to any pending, or to
the knowledge of the Company, threatened (i) unfair labor practice, employment
discrimination or other complaint, (ii) strike, lockout or dispute, slowdown or
work stoppage or (iii) claim, suit, action or governmental investigation, in
respect of which any director, officer, employee or agent of the Company or any
of the Company Subsidiaries is or may be entitled to claim indemnification from
the Company or any Company Subsidiary, except for the foregoing which, in the
case of clauses (i) and (ii), would not, individually or in the aggregate,
reasonably be expected to have or result in a material adverse effect on the
Company.
(u) THE COMPANY RIGHTS AGREEMENT. The Company Rights Agreement
has been amended to (i) render the Company Rights Agreement inapplicable to the
Merger and the other transactions contemplated by this Agreement, (ii) ensure
that (x) none of Buyer or any of its wholly owned subsidiaries is an Acquiring
Person (as defined in the Rights Agreement) pursuant to the Rights Agreement,
(y) a Distribution Date, a Triggering Event or a Share Acquisition Date (as such
terms are defined in the Rights Agreement) does not occur solely by reason of
the approval, execution or delivery of this Agreement, the consummation of the
Merger or the consummation of the other transactions contemplated by this
Agreement and (z)
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the Rights Agreement will expire or otherwise terminate immediately prior to the
Effective Time.
(v) CERTAIN CONTRACTS. Except as set forth on SECTION 3.1(v)
of the Company Disclosure Letter or as expressly permitted by SECTION 4.1(a),
neither the Company nor any Company Subsidiary is a party to or bound by any
contract, arrangement, commitment or understanding (i) with respect to the
employment of any directors, executive officers or key employees, or with any
consultants involving the payment of $100,000 or more per annum, (ii) which is a
"material contract" (as such term is defined in Item 601(b)(10) of Regulation
S-K of the SEC) that has not been filed as an exhibit to or incorporated by
reference in the Company SEC Reports, (iii) which limits in any way the ability
of the Company or any Company Subsidiary to compete in any line of business, in
any geographic area or with any person, or which requires referrals of any
business or requires the Company or any of its affiliates to make available
investment opportunities to any person on a priority, equal or exclusive basis,
(iv) with or to a labor union or guild (including any collective bargaining
agreement), (v) any of the benefits of which will be increased, or the vesting
of the benefits of which will be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement, or the value of any of the benefits
of which will be calculated on the basis of any of the transactions contemplated
by this Agreement, (vi) which would prohibit or delay the consummation of any of
the transactions contemplated by this Agreement, (vii) for the distribution or
resale of the products of the Company or any Company Subsidiary, (viii) with
respect to indebtedness for borrowed money, including letters of credit,
guaranties, indentures, swaps and similar agreements, in excess of $250,000, and
(ix) with respect to capital expenditures or commitments for such expenditures
in excess of $250,000. The Company has previously made available to Buyer
complete and accurate copies of all Company Contracts (as defined below). Each
contract, arrangement, commitment or understanding of the type described in this
SECTION 3.1(v), whether or not set forth on SECTION 3.1(v) of the Company
Disclosure Letter, is referred to herein as a "COMPANY CONTRACT," and neither
the Company nor any Company Subsidiary knows of, or has received written notice
of, any violation of the above by any of the other parties thereto. All
contracts, agreements, arrangements or understandings of any kind between any
affiliate of the Company (other than any wholly owned Company Subsidiary), on
the one hand, and the Company or any Subsidiary of Company, on the other hand,
are on terms no less favorable to Company or to such Company Subsidiary than
would be obtained with an unaffiliated third party on an arm's-length basis.
(w) INSURANCE. The Company and each of the Company
Subsidiaries are self-insured, or insured by insurers reasonably believed by the
Company to be of recognized financial responsibility. All material policies of
insurance and fidelity or surety bonds insuring the Company or any of the
Company Subsidiaries or their respective businesses, assets, employees, officers
and directors are in full force and effect.
(x) ACQUISITIONS AND DIVESTITURES. Set forth on SECTION 3.1(X)
of the Company Disclosure Letter is a brief description of each acquisition and
divestiture of a business or product line made by the Company or any Company
Subsidiary since January 1, 1995.
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Section 3.2 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer
hereby represents and warrants to the Company as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Ohio and has the requisite corporate authority to carry on its
business as now being conducted. Buyer is duly qualified or licensed to do
business and is in good standing (with respect to jurisdictions that recognize
such concept) in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification or
licensing necessary, except for those jurisdictions where the failure to be so
qualified or licensed or to be in good standing, individually or in the
aggregate, would not reasonably be expected to prevent or materially delay the
consummation by Buyer of the transactions contemplated by this Agreement.
(b) AUTHORITY; NONCONTRAVENTION. Buyer has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by Buyer, and the consummation by Buyer of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Buyer. This Agreement has been duly executed and delivered by
Buyer, and, assuming the due authorization, execution and delivery by the
Company, constitutes the legal, valid and binding obligation of Buyer
enforceable against Buyer in accordance with its terms, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting the rights of
creditors and subject to general equity principles. The execution and delivery
of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement and compliance with the provisions of this
Agreement will not, (i) conflict with the Articles of Incorporation or Code of
Regulations of Buyer, (ii) result in any breach, violation or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination, cancellation or creation or acceleration of any obligation or loss
of a benefit under, or result in the creation of any Lien (as defined in SECTION
8.3) upon any of the properties or assets of Buyer under any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license or similar authorization
applicable to Buyer or its respective properties or assets, or (iii) subject to
the governmental filings and other matters referred to in the following
sentence, conflict with or violate any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Buyer or its respective properties
or assets, other than, in the case of clauses (ii) and (iii), any such
conflicts, violations, defaults, rights, losses or Liens (as defined in SECTION
8.3) that, individually or in the aggregate, would not reasonably be expected to
have or result in a material adverse effect on Buyer. No consent, approval,
order or authorization of, action by or in respect of, or registration,
declaration or filing with, any Governmental Entity is required by Buyer in
connection with the execution and delivery of this Agreement by Buyer or the
consummation by Buyer of the transactions contemplated hereby, except for (i)
the filing with the SEC of the Form S-4; (ii) the filing of a premerger
notification and report form under the HSR Act; (iii) the filing of the
Certificate of Merger with the Secretary of the State of Ohio; (iv) the
consents, approvals, orders or authorizations set forth on SECTION 3.1(d) of the
Company Disclosure Letter; (v) filings required under the Foreign Antitrust
Laws; and (vi) such consents, approvals, orders or authorizations the failure of
which to be made or obtained,
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individually or in the aggregate, would not reasonably be expected to have or
result in a material adverse effect on Buyer or would not prevent or materially
delay consummation of the transactions contemplated by this Agreement.
(c) SEC REPORTS AND FINANCIAL STATEMENTS. Buyer has filed all
required reports, schedules, forms, statements and other documents (including
exhibits and all other information incorporated therein) under the Securities
Act and the Exchange Act with the SEC since June 30, 1997 (as such reports,
schedules, forms, statements and documents have been amended since the time of
filing, collectively, the "BUYER SEC DOCUMENTS"). As of their respective dates,
or if amended prior to the date of this Agreement, as of the date of the last
such amendment, the Buyer SEC Documents complied in all material respects with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable to
such Buyer SEC Documents, and none of the Buyer SEC Documents when filed, or as
so amended, 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 financial statements of Buyer included in the Buyer
SEC Documents comply as to form, as of their respective dates of filing with the
SEC, in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP (except, in the case of unaudited statements,
as permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto), and fairly
present in all material respects the consolidated financial position of Buyer
and its consolidated subsidiaries as of the dates thereof and the consolidated
statements of income, shareholders' equity and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal recurring
year-end audit adjustments).
(d) OWNERSHIP OF THE COMPANY COMMON STOCK. Except for shares
of Company Common Stock owned by Buyer benefit plans or shares held or managed
for the account of another person or as to which Buyer is required to act as a
fiduciary or in a similar capacity, as of the date of this Agreement, neither
Buyer nor, to its knowledge, any of its affiliates, (i) beneficially owns (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, or (ii)
is party to any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of, in each case, shares of Company
Common Stock.
(e) INFORMATION SUPPLIED. None of the information supplied or
to be supplied by Buyer specifically for inclusion or incorporation by reference
in (i) the Form S-4 will, at the time the Form S-4 becomes effective under the
Securities Act, contain any untrue statement of material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the Proxy Statement will, at the date
it is first mailed to the Company's shareholders or at the time of the
Shareholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Form S-4 and the Proxy Statement will comply as to
form in all material respects with the requirements of the Securities Act and
the Exchange Act, respectively, and the rules and regulations thereunder, except
that no representation or warranty is made by Buyer with respect to statements
made or
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incorporated by reference therein based on information supplied by the Company
specifically for inclusion or incorporation by reference in the Form S-4 or the
Proxy Statement.
(f) BROKERS. Except for Xxxxxxx Xxxxx Xxxxxx, no broker,
investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Buyer.
(g) VOTING REQUIREMENTS. No vote of the holders of the
outstanding shares of Buyer Common Stock is necessary to approve the issuance of
Buyer Common Stock to be issued pursuant to this Agreement.
(h) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 30, 1999,
(i) Buyer and its subsidiaries have conducted their respective operations only
in the ordinary course consistent with past practice, and (ii) there has not
been a material adverse change relating to Buyer.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 CONDUCT OF BUSINESS.
(a) CONDUCT OF BUSINESS BY THE COMPANY. Except as set forth on
SECTION 4.1(a) of the Company Disclosure Letter, except as otherwise
contemplated by this Agreement or except as consented to in writing by Buyer,
during the period from the date of this Agreement to the Effective Time, the
Company shall, and shall cause the Company Subsidiaries to, carry on their
respective businesses in the ordinary course consistent with past practice and
in compliance with all applicable laws and regulations and, to the extent
consistent therewith, use all reasonable efforts to preserve intact their
current business organizations, use all reasonable efforts to keep available the
services of their current officers and other key employees and preserve their
relationships with customers, suppliers, distributors and other persons having
business dealings with them. Without limiting the generality of the foregoing
(but subject to the above exceptions), during the period from the date of this
Agreement to the Effective Time, the Company shall not, and shall not permit any
Company Subsidiary, to:
(i) (x) other than dividends and distributions by a
direct or indirect wholly owned Company Subsidiary to its parent,
declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock and other than
regular quarterly cash dividends with respect to the Company Common
Stock, (y) split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of,
in lieu of, or in substitution for, shares of its capital stock, except
for issuances of Company Common Stock upon the exercise of the Company
Stock Options under the Company Stock Plans or in connection with other
awards under the Company Stock Plans, in each case, outstanding as of
December 31, 1999, and in accordance with their present terms or (z)
except pursuant to agreements entered into with respect to the Company
Stock Plans that are in effect as of the
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close of business on December 31, 1999, purchase, redeem or otherwise
acquire any shares of capital stock of the Company or any of the
Company Subsidiaries or any other securities thereof or any rights,
warrants or options to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise
encumber or subject to any Lien any shares of its capital stock, any
other voting securities or any securities convertible into, or any
rights, warrants or options to acquire, any such shares, voting
securities or convertible securities, other than the issuance of shares
of Company Common Stock upon the exercise of the Company Stock Options
or in connection with other awards under the Company Stock Plans
outstanding as of December 31, 1999 and in accordance with their
present terms;
(iii) (A) except for the Opt-Out Amendment, amend its
Articles of Incorporation, Code of Regulations (or other comparable
organizational documents), (B) amend or take any other action with
respect to the Company Rights Agreement, or (C) merge or consolidate
with any person;
(iv) sell, lease, license, mortgage or otherwise
encumber or subject to any Lien or otherwise dispose of any of its
properties or assets other than dispositions of inventory in the
ordinary course of business consistent with past practice;
(v)G enter into commitments for capital expenditures
involving more than $250,000 in the aggregate except as may be
necessary for the maintenance of existing facilities, machinery and
equipment in good operating condition and repair in the ordinary course
of business, as reflected in the capital plan of the Company previously
provided to Buyer;
(vi)G incur any long-term indebtedness (whether
evidenced by a note or other instrument, pursuant to a financing lease,
sale-leaseback transaction, or otherwise) or incur short-term
indebtedness other than up to $5,000,000 of short-term indebtedness
under lines of credit existing on the date of this Agreement;
(vii)G except as set forth on SECTION 4.1(a)(vii) of
the Company Disclosure Letter, (A) except for normal increases in
salary and wages in the ordinary course of business consistent with
past practice that are not material, grant any increase in the
compensation or benefits payable or to become payable by the Company or
any Company Subsidiary to any current or former director, officer,
employee or consultant; (B) adopt, enter into, amend or otherwise
increase, reprice or accelerate the payment or vesting of the amounts,
benefits or rights payable or accrued or to become payable or accrued
under any Company Benefit Plan or Foreign Plan; (C) enter into or amend
any employment, severance, change in control agreement or any similar
agreement or any collective bargaining agreement or, except as required
in accordance with the existing written policies of the Company or
contracts or agreements entered
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into or approved (and previously disclosed to Buyer) on or prior to the
date of this Agreement, grant any severance or termination pay to any
officer, director, consultant or employee of the Company or any Company
Subsidiaries (except in the ordinary course of business consistent with
past practice and not in excess of one week of severance for every year
of employment and, in the aggregate for all such payments, $250,000);
or (D) pay or award any pension, retirement, allowance or other
non-equity incentive awards, or other employee or director benefit not
required by any outstanding Company Benefit Plan or Foreign Plan;
(viii)G change the accounting principles used by it
unless required by GAAP (or, if applicable with respect to foreign
subsidiaries, foreign generally accepted accounting principles);
(ix)G acquire by merging or consolidating with, by
purchasing any equity interest in or a portion of the assets of, or by
any other manner, any business or any corporation, partnership,
association or other business organization or division thereof, or
otherwise acquire any material amount of assets of any other person
(other than the purchase of assets from suppliers or vendors in the
ordinary course of business consistent with past practice);
(x)G except in the ordinary course of business
consistent with past practice, make or rescind any express or deemed
election or settle or compromise any claim or action relating to U.S.
federal, state or local taxes, or change any of its methods of
accounting or of reporting income or deductions for U.S. federal income
tax purposes;
(xi)G satisfy any claims or liabilities, other than
the satisfaction, in the ordinary course of business consistent with
past practice, in accordance with their terms or in an amount not to
exceed $750,000 in the aggregate, of liabilities reflected or reserved
against in, or contemplated by, the consolidated financial statements
(or the notes thereto) of the Company included in the Recent SEC
Documents or incurred in the ordinary course of business consistent
with past practice;
(xii)G make any loans, advances or capital
contributions to, or investments in, any other person, except for
loans, advances, capital contributions or investments between any
wholly owned Company Subsidiary and the Company or another wholly owned
Company Subsidiary and except for employee advances for expenses in the
ordinary course of business consistent with past practice;
(xiii)G other than in the ordinary course of business
consistent with past practice, (A) modify, amend or terminate any
contract, (B) waive, release, relinquish or assign any contract (or any
of the Company's rights thereunder), right or claim, or (C) cancel or
forgive any indebtedness owed to the Company or any Company
Subsidiaries; PROVIDED, HOWEVER, that, subject to SECTION 5.14, the
Company may not under any circumstance waive or release
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any of its rights under any confidentiality and/or standstill agreement
to which it is a party; or
(xiv)G authorize, or commit or agree to take, any of
the foregoing actions; PROVIDED, HOWEVER, that the limitations set
forth in this SECTION 4.1(a) (other than clause (iii)) do not apply to
any transaction to which the only parties are wholly owned subsidiaries
of the Company.
(b) OTHER ACTIONS. Except as required by law, the Company and
Buyer shall not, and, in the case of the Company, shall not permit any Company
Subsidiary to, voluntarily take any action that would reasonably be expected to
result in any of the conditions to the Merger set forth in ARTICLE VI not being
satisfied.
(c) ADVICE OF CHANGES. The Company and Buyer shall promptly
advise the other party orally and in writing to the extent it has knowledge of
any change or event having, or which, insofar as can reasonably be foreseen
would reasonably be expected to have a material adverse effect on such party or
on the truth of their respective representations and warranties or the ability
of the conditions set forth in ARTICLE VI to be satisfied; PROVIDED, HOWEVER,
that no such notification will affect the representations, warranties, covenants
or agreements of the parties (or remedies with respect thereto) or the
conditions to the obligations of the parties under this Agreement.
Section 4.2 NO SOLICITATION BY COMPANY.
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(a) The Company will immediately cease all existing
activities, discussions and negotiations with any parties conducted heretofore
with respect to any Company Takeover Proposal (as defined below) and request the
return of all confidential information regarding the Company provided to any
such parties prior to the date of this Agreement pursuant to the terms of any
confidentiality agreements or otherwise. From and after the date of this
Agreement, the Company shall not, nor shall it permit any of the Company
Subsidiaries to, nor shall it authorize or permit any of its directors, officers
or employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by it or any of the Company Subsidiaries to,
directly or indirectly through another person, (i) solicit, initiate or
encourage (including by way of furnishing information), or take any other action
designed to facilitate, any inquiries or the making of any proposal that
constitutes, a Company Takeover Proposal or (ii) participate in any discussions
or negotiations regarding any Company Takeover Proposal; provided that, at any
time prior to the Shareholder Approval, the Board of Directors of the Company
may, in the exercise of its fiduciary obligations under the OGCL as determined
by the Board of Directors of the Company in good faith, after consultation with
and receipt of advice from its outside counsel (who may be its regularly engaged
outside counsel), pursuant to a customary confidentiality agreement with terms
not substantially more favorable to such third party than the Confidentiality
Agreement (excluding the standstill provisions contained therein), furnish
information to, and negotiate or otherwise engage in discussions with, any third
party who delivers a written proposal for a Superior Proposal (as defined below)
which was not solicited, initiated, facilitated or encouraged after the date of
this Agreement. As used herein, (i) "SUPERIOR PROPOSAL" means a Company Takeover
Proposal (A) that the Board of Directors of the Company determines in its good
faith judgment after consulting with and receipt of advice from Xxxxxxx Xxxxx &
Co. (or any other nationally recognized investment banking firm), would be more
favorable to the shareholders of the Company from a financial point of view than
the transactions contemplated by this Agreement (including any adjustment to the
terms and conditions proposed by Buyer in response to such Company Takeover
Proposal) and is reasonably capable of being consummated, and (B) for which
financing, to the extent required, is then committed or which, in the good faith
judgment of the Board of Directors of the Company, is reasonably capable of
being obtained by the party making the Company Takeover Proposal, and (ii)
"COMPANY TAKEOVER PROPOSAL" means any inquiry, proposal or offer from any person
relating to any (A) direct or indirect acquisition or purchase of a business
that constitutes 10% or more of the net revenues, net income or the assets of
the Company and the Company Subsidiaries, taken as a whole, or (B) direct or
indirect acquisition or purchase of 10% or more of any class of equity
securities of the Company or any of the Company Subsidiaries, (C) any tender
offer or exchange offer that if consummated would result in any person
beneficially owning 10% or more of any class of equity securities of the Company
or any of the Company Subsidiaries, or (D) any merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of the Company Subsidiaries, other than the
transactions contemplated by this Agreement. In the event that prior to the
Shareholder Approval, the Board of Directors of the Company receives a Superior
Proposal that was not solicited, initiated, facilitated or encouraged after the
date of this Agreement (except as otherwise permitted pursuant to the proviso
contained in the second sentence of this SECTION 4.2(a)), the Board of Directors
of the Company may (subject to this and the following sentences) in the exercise
of its fiduciary obligations under the OGCL as determined by the
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Board of Directors of the Company in good faith, after consultation with and
receipt of advice from its outside counsel (who may be its regularly engaged
outside counsel), withdraw, modify or change, in a manner adverse to Buyer, the
recommendation of the Board of Directors of the Company of this Agreement and/or
the Opt-Out Amendment and/or recommend a Superior Proposal to the shareholders
of the Company and/or comply with Rule 14e-2 promulgated under the Exchange Act
with respect to a Company Takeover Proposal; provided that it (i) gives Buyer
four Business Days prior written notice of its intention to do so (provided that
the foregoing shall in no way limit or otherwise affect Buyer's right to
terminate this Agreement pursuant to SECTION 7.1(e) at such time as the
requirements of such subsection have been met) and (ii) during such four
Business Day period, the Company otherwise cooperates with Buyer with respect to
the Company Takeover Proposal that constitutes a Superior Proposal with the
intent of enabling Buyer to engage in good faith negotiations so that the
transactions contemplated hereby may be consummated. Any such withdrawal,
modification or change of the recommendation of the Board of Directors of the
Company of this Agreement and/or the Opt-Out Amendment shall not change the
approval of the Board of Directors of the Company for purposes of causing any
Takeover Statute or other state law to be inapplicable to the transactions
contemplated hereby, including the Merger. Nothing in this SECTION 4.2(a) shall
(x) permit the Company to terminate this Agreement, (y) permit the Company to
enter into any agreement with respect to any Company Takeover Proposal or (z)
affect any other obligation of the Company under this Agreement.
(b) From and after the date of this Agreement, the Company
shall promptly (but in any event within one calendar day) advise Buyer in
writing of the receipt, directly or indirectly, of any inquiries, discussions,
negotiations or proposals relating to a Company Takeover Proposal (including the
specific terms thereof and the identity of the other party or parties involved)
and promptly furnish to Buyer a copy of any such written proposal and copies of
any information provided to or by any third party relating thereto. In addition,
the Company shall promptly (but in any event within one calendar day) advise
Buyer, in writing, if the Board of Directors of the Company shall make any
determination as to any Company Takeover Proposal as contemplated by the proviso
to the second sentence of SECTION 4.2(a).
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 PREPARATION OF THE FORM S-4 PROXY STATEMENT;
SHAREHOLDERS MEETING.
(a) As soon as practicable following the date of this
Agreement, the Company and Buyer shall prepare and file with the SEC the Proxy
Statement and Buyer shall prepare and file with the SEC the Form S-4, in which
the Proxy Statement will be included as a prospectus. Each of the Company and
Buyer shall use reasonable best efforts to have the Form S-4 declared effective
under the Securities Act as promptly as practicable after such filing. The
Company shall use all reasonable best efforts to cause the Proxy Statement to be
mailed to the Company's shareholders, in each case, as promptly as practicable
after the Form S-4 is declared effective under the Securities Act. Buyer shall
also take any action (other than qualifying to do business in any jurisdiction
in which it is not now so qualified or to file a
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general consent to service of process) required to be taken under any applicable
state securities laws in connection with the issuance of Buyer Common Stock in
the Merger and the Company shall furnish all information concerning the Company
and the holders of the Company Common Stock as may be reasonably requested in
connection with any such action. No filing of, or amendment or supplement to,
the Form S-4 will be made by Buyer, and no filing of, or amendment or supplement
to the Proxy Statement will be made by the Company, in each case, without
providing the other party and its respective counsel the reasonable opportunity
to review and comment thereon. Buyer will advise the Company, promptly after it
receives notice thereof, of the time when the Form S-4 has become effective or
any supplement or amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the Buyer Common Stock issuable in connection
with the Merger for offering or sale in any jurisdiction, or any request by the
SEC for amendment of the Proxy Statement or the Form S-4 or comments thereon and
responses thereto or requests by the SEC for additional information. If at any
time prior to the Effective Time any information relating to the Company or
Buyer, or any of their respective affiliates, officers or directors, should be
discovered by the Company or Buyer which should be set forth in an amendment or
supplement to the Form S-4 or the Proxy Statement, so that any of such documents
would not include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party which
discovers such information shall promptly notify the other party hereto and an
appropriate amendment or supplement describing such information must be promptly
filed with the SEC and, to the extent required by law, disseminated to the
shareholders of the Company.
(b) The Company shall, as soon as practicable following the
date of this Agreement, duly call, give notice of, convene and hold a meeting of
its shareholders (the "SHAREHOLDERS MEETING") in accordance with law, the
Company's Articles of Incorporation and the Company's Code of Regulations for
the purpose of obtaining the Shareholder Approval and shall, through the Board
of Directors of the Company, subject to SECTION 4.2, recommend to its
shareholders the approval and adoption of this Agreement, the Merger, the
Opt-Out Amendment and the other transactions contemplated hereby. Without
limiting the generality of the foregoing but subject to its rights under SECTION
4.2, the Company agrees that its obligations pursuant to this first sentence of
this SECTION 5.1(b) shall not be affected by the commencement, public proposal,
public disclosure or communication to the Company or its shareholders of any
Company Takeover Proposal.
Section 5.2 LETTERS OF THE COMPANY'S ACCOUNTANTS. The Company
shall use reasonable best efforts to cause to be delivered to Buyer two letters
from the Company's independent accountants, one dated a date within two Business
Days before the date on which the Form S-4 will become effective and one dated a
date within two Business Days before the Closing Date, each addressed to Buyer,
in form and substance reasonably satisfactory to Buyer and customary in scope
and substance for comfort letters delivered by independent public accountants in
connection with registration statements similar to the Form S-4.
Section 5.3 LETTERS OF BUYER'S ACCOUNTANTS. Buyer shall use
reasonable best efforts to cause to be delivered to the Company two letters from
Buyer's independent accountants, one dated a date within two Business Days
before the date on which the Form S-4 will become effective and one dated a date
within two Business Days before the Closing Date,
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each addressed to the Company, in form and substance reasonably satisfactory to
the Company and customary in scope and substance for comfort letters delivered
by independent public accountants in connection with registration statements
similar to the Form S-4.
Section 5.4 ACCESS TO INFORMATION; CONFIDENTIALITY. To the
extent permitted by applicable law and subject to the Agreement, dated December
3, 1999, between the Company and Buyer (the "CONFIDENTIALITY AGREEMENT"), each
of the Company and Buyer shall afford to the other party and to the other
party's officers, employees, accountants, counsel, financial advisors and other
representatives, full access, during normal business hours during the period
prior to the Effective Time, to all of its properties, books, contracts,
commitments, personnel and records and all other information concerning its
business, properties and personnel as the other party may reasonably request.
Each of the Company and Buyer shall hold, and shall cause its respective
officers, employees, accountants, counsel, financial advisors and other
representatives and affiliates to hold, any nonpublic information in accordance
with the terms of the Confidentiality Agreement.
Section 5.5 REASONABLE BEST EFFORTS; COOPERATION.
(a) Upon the terms and subject to the conditions set forth in
this Agreement, each of the parties agrees to use reasonable best efforts to
take, or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with the other parties in doing, all things necessary,
proper or advisable to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated by this
Agreement and to obtain satisfaction or waiver of the conditions precedent to
the Merger, including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities and the making of all
necessary registrations and filings and the taking of all steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated
hereby, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed, and (iv)
the execution and delivery of any additional instruments necessary to consummate
the transactions contemplated by, and to fully carry out the purposes of, this
Agreement. Nothing set forth in this SECTION 5.5(a) will limit or affect actions
permitted to be taken pursuant to SECTION 4.2.
(b) In connection with and without limiting the foregoing, the
Company and Buyer shall (i) take all action necessary, including the Company
using its reasonable best efforts to obtain approval of the Opt-Out Amendment,
to ensure that no Takeover Statute or similar statute or regulation is or
becomes applicable to the Merger, this Agreement or any of the other
transactions contemplated hereby and (ii) if any Takeover Statute or similar
statute or regulation becomes applicable to the Merger, this Agreement or any of
the other transactions contemplated hereby, take all action necessary to ensure
that the Merger and the other transactions contemplated hereby may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Merger and the other transactions contemplated by this Agreement. Nothing
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in this Agreement shall be deemed to require Buyer to agree to, or proffer to,
divest or hold separate any assets or any portion of any business of Buyer, the
Company or any of their respective subsidiaries if the Board of Directors of
Buyer determines that so doing would materially impair the benefit intended to
be obtained by Buyer in the Merger.
(c) Buyer and the Company shall cooperate with each other in
obtaining the opinions of Xxxxx, Day, Xxxxxx & Xxxxx, counsel to Buyer, for the
benefit of Buyer, and Xxxxxx Xxxxxx Zavis, counsel to the Company, for the
benefit of the Company's shareholders, respectively, dated as of the Closing
Date, to the effect that the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Code. In connection therewith, each of Buyer
and the Company shall deliver to Xxxxx, Day, Xxxxxx & Xxxxx and Xxxxxx Xxxxxx
Xxxxx customary representation letters in form and substance reasonably
satisfactory to such counsel, and the Company shall obtain any representation
letters from appropriate shareholders and shall deliver any such letters
obtained to Xxxxx, Day, Xxxxxx & Xxxxx and Xxxxxx Xxxxxx Xxxxx (the
representation letters referred to in this sentence are collectively referred to
as the "TAX CERTIFICATES").
(d) The Company shall consult and cooperate with Buyer with
respect to significant developments in its business and shall give reasonable
consideration to the Buyer's views with respect thereto.
(e) Buyer and the Company shall (i) make the filings required
of such party under the HSR Act with respect to the Merger and the other
transactions contemplated by this Agreement within ten days after the date of
this Agreement, (ii) comply at the earliest practicable date with any request
under the HSR Act for additional information, documents or other materials
received by such party from the Federal Trade Commission or the Department of
Justice or any other Governmental Entity in respect of such filings or the
Merger and the other transactions contemplated by this Agreement, and (iii)
cooperate with the other party in connection with making any filing under the
HSR Act and in connection with any filings, conferences or other submissions
related to resolving any investigation or other inquiry by any such Governmental
Authority under the HSR Act with respect to the Merger and the other
transactions contemplated by this Agreement; PROVIDED, HOWEVER, that in no event
will Buyer be required to prosecute any litigation instituted by the Federal
Trade Commission or the Department of Justice or any other Governmental Entity
which seeks to restrain or prohibit the consummation of the Merger or which
seeks to impose material limitations on the ability of Buyer, the Surviving
Corporation or any of their respective affiliates or subsidiaries to acquire,
operate or hold, or to require Buyer, Surviving Corporation or any of their
respective affiliates or subsidiaries to dispose of or hold separate, any
material portion of their assets or business or the Company's assets or
business.
Section 5.6 STOCK OPTIONS AND RESTRICTED STOCK.
(a) As of the Effective Time, (i) each outstanding Company
Stock Option shall be converted into an option (an "ADJUSTED OPTION") to
purchase the number of shares of Buyer Common Stock equal to the number of
shares of Company Common Stock subject to such Company Stock Option immediately
prior to the Effective Time multiplied by the Exchange Ratio (rounded to the
nearest whole number of shares of Buyer Common Stock), at
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an exercise price per share equal to the exercise price for each such share of
Company Common Stock subject to such option divided by the Exchange Ratio
(rounded up to the nearest whole cent), and all references in each such option
to the Company will be deemed to refer to Buyer, where appropriate, and (ii)
Buyer shall assume the obligations of the Company under the Company Stock Plans.
The other terms of each Adjusted Option, and the plans or agreements under which
they were issued, will continue to apply in accordance with their terms. The
date of grant of each Adjusted Option will be the date on which the
corresponding Company Stock Option was granted.
(b) To the extent that there are any outstanding awards
(including restricted stock, deferred stock and performance shares) (each, a
"COMPANY AWARD") under the Company Stock Plans at the Effective Time, then, as
of the Effective Time, (i) each such Company Award will be converted into the
same instrument of Buyer, in each case with such adjustments (and no other
adjustments) to the terms of such Company Awards as are necessary to preserve
the value inherent in such Company Awards with no detrimental effects on the
holder thereof and (ii) Buyer shall assume the obligations of the Company under
the Company Awards. The other terms of each Company Award, and the plans or
agreements under which they were issued, will continue to apply in accordance
with their terms.
(c) The Company and Buyer agree that each of the Company Stock
Plans and all relevant Buyer stock plans will be amended, to the extent
necessary, to reflect the transactions contemplated by this Agreement,
including, without limitation, the conversion of shares of the Company Common
Stock held or to be awarded or paid pursuant to such benefit plans, programs or
arrangements into shares of Buyer Common Stock on a basis consistent with the
transactions contemplated by this Agreement. The Company and Buyer agree to
submit the amendments to the Buyer stock plans or the Company Stock Plans to
their respective shareholders, if such submission is determined to be necessary
by counsel to the Company or Buyer after consultation with one another;
PROVIDED, HOWEVER, that such approval will not be a condition to the
consummation of the Merger.
(d) Buyer shall (i) reserve for issuance the number of shares
of Buyer Common Stock that will become subject to the benefit plans, programs
and arrangements referred to in this SECTION 5.6 and (ii) issue or cause to be
issued the appropriate number of shares of Buyer Common Stock pursuant to
applicable plans, programs and arrangements, upon the exercise or maturation of
rights existing thereunder on the Effective Time or thereafter granted or
awarded. No later than the Effective Time, Buyer shall: (i) prepare and file
with the SEC a registration statement on Form S-8 (or other appropriate form)
registering a number of shares of Buyer Common Stock necessary to fulfill
Buyer's obligations under this SECTION 5.6 and (ii) use its reasonable best
efforts to cause such shares to be approved for listing on the NYSE, subject to
official notice of issuance, as promptly as practicable after the date of this
Agreement. Such registration statement will be kept effective (and the current
status of the prospectus required thereby shall be maintained) for at least as
long as Adjusted Options or the Company Awards remain outstanding.
(e) As soon as practicable after the Effective Time, Buyer
shall deliver to the holders of the Company Stock Options and Company Awards
appropriate notices setting forth such holders' rights pursuant to the Company
Stock Plans and the agreements evidencing
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the grants of such Company Stock Options and Company Awards and that such
Company Stock Options and Company Awards and the related agreements will be
assumed by Buyer and will continue in effect on the same terms and conditions
(subject to the adjustments required by this SECTION 5.6 after giving effect to
the Merger).
Section 5.7 INDEMNIFICATION.
(a) Buyer agrees that all rights to indemnification and
exculpation from liabilities for acts or omissions occurring at or prior to the
Effective Time now existing in favor of the current or former directors or
officers of the Company and the Company Subsidiaries as provided in their
respective articles of incorporation or code of regulations (or comparable
organizational documents) will be assumed by the Surviving Corporation without
further action, as of the Effective Time and will survive the Merger and will
continue in full force and effect in accordance with their terms and such rights
will not be amended, or otherwise modified for a period of six years after the
Effective Time in any manner that would adversely affect the rights of
individuals who on or prior to the Effective Time were directors, officers,
employees or agents of the Company, unless such modification is required by law.
(b) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person and
is not the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers or conveys all or substantially all of its
properties and assets to any person, then, and in each such case, proper
provision will be made so that the successors and assigns of the Surviving
Corporation assume the obligations set forth in this SECTION 5.7.
(c) For six years after the Effective Time, the Surviving
Corporation shall maintain in effect directors' and officers' liability
insurance covering acts or omissions occurring prior to the Effective Time with
respect to those persons who are currently covered by the Company's directors'
and officers' liability insurance policy (a copy of which has been heretofore
delivered to Buyer) (the "INDEMNIFIED PARTIES") on terms with respect to such
coverage and amount no less favorable than those of such current insurance
coverage; PROVIDED, HOWEVER, that in no event will Buyer be required to expend
in any one year an amount in excess of 200% of the annual premiums currently
paid by the Company for such insurance; and PROVIDED, FURTHER, that, if the
annual premiums of such insurance coverage exceed such amount, Buyer will be
obligated to obtain a policy with the greatest coverage available for a cost not
exceeding such amount.
(d) The provisions of this SECTION 5.7 are (i) intended to be
for the benefit of, and will be enforceable by, each Indemnified Party, his or
her heirs and his or her representatives and (ii) in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
Section 5.8 FEES AND EXPENSES.
(a) Except as provided in this SECTION 5.8, all fees and
expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated hereby must be paid by the party incurring such fees
or expenses, whether or not the Merger is consummated, except that each of Buyer
and the Company will bear and pay one-half of (i) the costs and
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expenses incurred in connection with the filing, printing and mailing of the
Form S-4 and the Proxy Statement (including SEC filing fees) and (ii) the filing
fees for the premerger notification and report forms under the HSR Act.
(b) In the event that this Agreement is terminated (i) by
Buyer pursuant to SECTION 7.1(e), or (ii) by either Buyer or the Company
pursuant to SECTION 7.1(b)(ii), if, in the case of this clause (ii) only, prior
to the Shareholders Meeting, a Company Takeover Proposal shall have been made
known to the Company or been made directly to its shareholders generally or any
person shall have publicly announced an intention (whether or not conditional)
to make a Company Takeover Proposal or solicited proxies or consents in
opposition of the Merger, then, in case of either clause (i) or (ii), the
Company shall promptly, but in no event later than two Business Days after the
date of such termination, pay Buyer a fee equal to $18,000,000 (the "TERMINATION
FEE"), payable by wire transfer of same day funds; PROVIDED, HOWEVER, that no
Termination Fee will be payable to Buyer pursuant to clause (ii) of this
paragraph (b) unless and until within 12 months of such termination the Company
or any of the Company Subsidiaries enters into an agreement with respect to, or
consummates, any Company Takeover Proposal, in which event the Termination Fee
will be payable upon the first to occur of such events and shall be paid to
Buyer promptly, but in no event later than two Business Days after the
occurrence of such event. The Company acknowledges that the agreements contained
in this SECTION 5.8(b) are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Buyer would not enter into
this Agreement; accordingly, if the Company fails promptly to pay the amount due
pursuant to this SECTION 5.8(b), and, in order to obtain such payment, Buyer
commences a suit that results in a judgment against the Company for the
Termination Fee, the Company shall pay to Buyer its costs and expenses
(including reasonable attorneys' fees and expenses) in connection with such
suit, together with interest on the amount of the Termination Fee.
Section 5.9 PUBLIC ANNOUNCEMENTS. Buyer and the Company shall
consult with each other before holding any press conferences, analysts calls or
other meetings or discussions and before issuing any press release or other
public announcements with respect to the transactions contemplated by this
Agreement, including the Merger. The parties will provide each other the
opportunity to review and comment upon any press release or other public
announcement or statement with respect to the transactions contemplated by this
Agreement, including the Merger, and shall not issue any such press release or
other public announcement or statement prior to such consultation, except as may
be required by applicable law, court process or by obligations pursuant to any
listing agreement with any national securities exchange. The parties agree that
the initial press release or releases to be issued with respect to the
transactions contemplated by this Agreement shall be mutually agreed upon prior
to the issuance thereof. In addition, Company shall, and shall cause the Company
Subsidiaries to, (a) consult with Buyer regarding communications with customers,
shareholders and employees relating to the transactions contemplated hereby, and
(b) allow and facilitate Buyer contact with shareholders of the Company.
Section 5.10 AFFILIATES. The Company shall deliver to Buyer at
least 30 days prior to the Closing Date a letter identifying all persons who
are, at the time this Agreement is submitted for adoption by the shareholders of
the Company, "affiliates" of the Company for purposes of Rule 145 of the rules
and regulations promulgated under the Securities Act. The
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Company shall use reasonable efforts to cause each such person to deliver to
Buyer at least 30 days prior to the Closing Date a written agreement
substantially in the form attached as EXHIBIT A hereto.
Section 5.11 NYSE LISTING. Buyer shall use its reasonable best
efforts to cause the Buyer Common Stock issuable to the Company's shareholders
as contemplated by this Agreement to be approved for listing on the NYSE,
subject to official notice of issuance, as promptly as practicable after the
date of this Agreement, and in any event prior to the Closing Date.
Section 5.12 SHAREHOLDER LITIGATION. The parties to this
Agreement shall cooperate and consult with one another, to the fullest extent
possible, in connection with any shareholder litigation against any of them or
any of their respective directors or officers with respect to the transactions
contemplated by this Agreement. In furtherance of and without in any way
limiting the foregoing, each of the parties shall use its respective reasonable
best efforts to prevail in such litigation so as to permit the consummation of
the transactions contemplated by this Agreement in the manner contemplated by
this Agreement. Notwithstanding the foregoing, the Company agrees that it will
not compromise or settle any litigation commenced against it or its directors or
officers relating to this Agreement or the transactions contemplated hereby
(including the Merger) without Buyer's prior written consent, which shall not be
unreasonably withheld.
Section 5.13 TAX TREATMENT. Each of Buyer and the Company
shall use its reasonable best efforts to cause the Merger to qualify as a
reorganization under the provisions of Section 368(a) of the Code and to obtain
the opinion of counsel referred to in SECTION 6.2(c), including, without
limitation, forbearing from taking any action that would cause the Merger not to
qualify as a reorganization under the provisions of Section 368(a) of the Code.
Section 5.14 STANDSTILL AGREEMENTS; CONFIDENTIALITY
AGREEMENTS. During the period from the date of this Agreement through the
Effective Time, the Company shall not terminate, amend, modify or waive any
provision of any confidentiality or standstill agreement to which it or any of
the Company Subsidiaries is a party, other than (a) the Confidentiality
Agreement, pursuant to its terms or by written agreement of the parties thereto,
(b) confidentiality agreements under which the Company does not provide any
confidential information to third parties or (c) standstill agreements that do
not relate to the equity securities of the Company or any of the Company
Subsidiaries. During such period, the Company shall enforce, to the fullest
extent permitted under applicable law, the provisions of any such agreement,
including by obtaining injunctions to prevent any breaches of such agreements
and to enforce specifically the terms and provisions thereof in any court of the
United States of America or of any state having jurisdiction.
Section 5.15 CREDIT FACILITY'S SENIOR UNSECURED NOTES. Prior
to the Effective Time, the Company and Buyer shall use their reasonable best
efforts to cause, effective as of the Effective Time, (i) the termination of the
Credit Agreement, dated October 31, 1996, by and among the Company and
Commercial Intertech Limited, as borrowers, the banks party thereto and Mellon
Bank, N.A., as Agent, and all related documents and (ii) the redemption of
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all outstanding 7.61% Senior Unsecured Notes (the "SENIOR NOTES") of the Company
(the "NOTE REDEMPTION").
Section 5.16 POST-MERGER OPERATIONS. For a period of at least
five years after the Effective Time, Buyer and its subsidiaries shall provide
charitable contributions within the service areas of the Company and the Company
Subsidiaries at levels substantially comparable to the levels of charitable
contributions provided by the Company and the Company Subsidiaries within the
five-year period immediately prior to the Effective Time.
Section 5.17 TRANSITION. In order to facilitate an orderly
transition of the management of the business of the Company and the Company
Subsidiaries to Buyer and in order to facilitate the integration of the
operations of the Company and Buyer and its subsidiaries and to permit the
coordination of their related operations on a timely basis, and in an effort to
accelerate to the earliest time possible following the Effective Time the
realization of synergies, operating efficiencies and other benefits expected to
the realized by Buyer and the Company as a result of the Merger, the Company
shall and shall cause the Company Subsidiaries to consult with Buyer on all
strategic and operational matters to the extent such consultation is not in
violation of applicable law, including laws regarding the exchange of
information and other laws regarding competition. The Company shall and shall
cause the Company Subsidiaries to make available to Buyer at the facilities of
the Company and the Company Subsidiaries, where determined by Buyer to be
appropriate and necessary, office space in order to assist it in observing all
operations and reviewing all matters concerning the Company's affairs. Without
in any way limiting the provisions of SECTION 5.5, Buyer, its subsidiaries,
officers, employees, counsel, financial advisors and other representatives
shall, upon reasonable written notice to the Company, be entitled to review the
operations and visit the facilities of the Company and the Company Subsidiaries
at all times as may be deemed reasonably necessary by Buyer in order to
accomplish the foregoing arrangements. Notwithstanding the foregoing, nothing
contained in this Agreement shall give Buyer, directly or indirectly, the right
to control or direct the Company's operations prior to the Effective Time. Prior
to the Effective Time, the Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision over its and the
Company Subsidiaries' respective operations.
Section 5.18 SECTION 16(b). Buyer and the Company shall take
all steps reasonably necessary to cause the transactions contemplated hereby and
any other dispositions of equity securities of the Company (including derivative
securities) or acquisitions of Buyer equity securities (including derivative
securities) in connection with this Agreement by each individual who is a
director or officer of the Company to be exempt under Rule 16b-3 under the
Exchange Act.
Section 5.19 EMPLOYEE BENEFIT MATTERS.
(a) The Company shall adopt such amendments to the Company
Benefit Plans as requested by Buyer and as may be necessary to ensure that
Company Benefit Plans cover only employees and former employees (and their
dependents and beneficiaries) of the Company and the Company Subsidiaries
following the consummation of the transactions contemplated by this Agreement.
With respect to any Company Common Stock held by any
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Company Benefit Plan as of the date of this Agreement or thereafter, the Company
shall take all actions necessary or appropriate (including such actions as are
reasonably requested by Buyer) to ensure that all participant voting procedures
contained in the Company Benefit Plans relating to such shares, and all
applicable provisions of ERISA, are complied with in full.
(b) Buyer agrees that after the Effective Time, it will cause
the Surviving Corporation to honor all obligations under Company Benefit Plans.
For a period of two years following the Effective Time, Buyer intends to cause
the Surviving Corporation to, and upon being so caused, the Surviving
Corporation shall, provide employee benefit plans and programs for the benefit
of the Company's employees who become employees of the Surviving Corporation or
its subsidiaries that are in the aggregate no less favorable to such employees
than the terms of the Company Benefit Plans. Buyer shall cause the Surviving
Corporation to honor and assume the written employment agreements, severance
agreements and other similar agreements with employees of the Company that are
set forth on SCHEDULE 3.1(i)(i) of the Company Disclosure Letter, all as in
effect on the date of this Agreement.
(c) All service of an employee of the Company taken into
account prior to the Effective Time under any Company Benefit Plan, on and after
the Effective Time, shall be taken into account as service with the Surviving
Corporation for purposes of eligibility to participate and vesting benefits
under any similar plan, agreement or arrangement of the type described in the
first sentence of paragraph (i) of SECTION 3.1(i) of this Agreement provided by
the Surviving Corporation (the "SURVIVOR PLANS"). Buyer shall cause all Survivor
Plans to (i) waive any pre-existing condition limitations otherwise applicable
on and after the Effective Time to the extent that such conditions are covered
under the Company Benefit Plans immediately prior to the Effective Time and (ii)
provide that any expenses incurred by the Company's employees (and their
dependents) during the plan year within which the Effective Time occurs shall be
taken into account for purposes of satisfying applicable deductible, coinsurance
and maximum out-of-pocket provisions (and like adjustments or limitations on
coverage) under the Survivor Plans. Subject to any applicable limits under any
plan described in this sentence, any salary reduction elections of employees of
the Company under a flexible spending plan maintained by the Company pursuant to
Section 125 of the Code prior to the Effective Time shall continue in effect
under any similar plan provided by the Surviving Corporation on and after the
Effective Time, and any amounts credited and debited to accounts of such
employees under such Company Benefit Plan as of the Effective Time shall be
credited and debited to such employees' accounts under such Survivor Plan.
Section 5.20 SERIES B PREFERRED. Promptly after the date of
this Agreement, but in no event later than ten Business Days thereafter, the
Company shall initiate the redemption of all of the outstanding shares of Series
B Preferred and shall use its reasonable best efforts to complete such
redemption in accordance with the terms of such preferred stock. At least two
Business Days prior to the Closing Date, no shares of Series B Preferred shall
be issued and outstanding.
Section 5.21 GERMAN TRANSACTION STRUCTURE. After the date of
this Agreement, the Company and Buyers shall use their reasonable best efforts
to determine and proceed to implement the most advantageous transaction
structure to preserve for the benefit of the
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Surviving Corporation and its subsidiaries the net operating loss of
Sachsenhydraulik GmbH Chemnitz.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT
THE MERGER. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) SHAREHOLDER APPROVAL. The Shareholder Approval shall have
been obtained.
(b) GOVERNMENTAL AND REGULATORY APPROVALS. All consents,
approvals and actions of, filings with and notices to any Governmental Entity
required of Buyer, the Company or any Company Subsidiary to consummate the
Merger and the other transactions contemplated hereby, the failure of which to
be obtained or taken is reasonably expected to have or result in, individually
or in the aggregate, a material adverse effect on the Surviving Corporation and
its subsidiaries, taken as a whole, shall have been obtained in form and
substance reasonably satisfactory to Buyer.
(c) NO INJUNCTIONS OR RESTRAINTS. No judgment, order, decree,
statute, law, ordinance, rule or regulation, entered, enacted, promulgated,
enforced or issued by any court or other Governmental Entity of competent
jurisdiction or other legal restraint or prohibition (collectively,
"RESTRAINTS") shall be in effect preventing the consummation of the Merger or
prohibiting or limiting the ownership or operation by Buyer, the Company or any
of their respective subsidiaries of any material portion of the business or
assets of Buyer or the Company and their respective subsidiaries taken as a
whole, or compelling the Company or Buyer and their respective subsidiaries to
dispose of or hold separate any material portion of the business or assets of
the Company or Buyer and their respective subsidiaries, taken as a whole, as a
result of the Merger or any of the other transactions contemplated by this
Agreement or which otherwise is reasonably likely to have or result in,
individually or in the aggregate, a material adverse effect on the Company or
Buyer, as applicable; PROVIDED, HOWEVER, that each of the parties shall have
used its reasonable best efforts to prevent the entry of any such Restraints and
to appeal as promptly as possible any such Restraints that may be entered.
(d) FORM S-4. The Form S-4 shall have become effective under
the Securities Act and will not be the subject of any stop order or proceedings
seeking a stop order.
(e) NYSE LISTING. The shares of Buyer Common Stock issuable to
the Company's shareholders as contemplated by this Agreement shall have been
approved for listing on the NYSE, subject to official notice of issuance.
(f) HSR ACT. The waiting period (including any extension
thereof) applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated.
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Section 6.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligation
of Buyer to effect the Merger is further subject to satisfaction or waiver of
the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in SECTION 3.1(c) shall be true and correct
in all respects both when made and as of the Closing Date as though made on and
as of the Closing Date, and all other representations and warranties of the
Company set forth herein shall be true and correct in all respects (without
giving effect to any materiality or material adverse effect qualifications
contained therein) both when made and at and as of the Closing Date, as if made
at and as of such time (except to the extent expressly made as of an earlier
date, in which case as of such date), except where the failure of such other
representations and warranties to be so true and correct would not reasonably be
expected to have or result in, individually or in the aggregate, a material
adverse effect on the Company.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company
shall have performed in all material respects all of its obligations required to
be performed by it under this Agreement at or prior to the Closing Date.
(c) TAX OPINION. Buyer shall have received from Xxxxx, Day,
Xxxxxx & Xxxxx, counsel to Buyer, an opinion dated as of the Closing Date, to
the effect that the Merger will constitute a "reorganization" within the meaning
of Section 368(a) of the Code, and Buyer and the Company will each be a party to
such reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinion, counsel for Buyer may require delivery of, and rely
upon, the Tax Certificates.
(d) NO MATERIAL ADVERSE CHANGE. At any time after the date of
this Agreement, there shall not have occurred any material adverse change
relating to the Company.
(e) OFFICER'S CERTIFICATE. The Company shall have furnished
Buyer with a certificate dated the Closing Date signed on its behalf by an
executive officer to the effect that the conditions set forth in SECTIONS 6.2(a)
and (b) have been satisfied.
(f) SERIES B PREFERRED. No shares of Series B Preferred shall
be issued and outstanding.
(g) NOTE REDEMPTION. The Note Redemption shall have occurred
and all of the outstanding Senior Notes shall have been redeemed in full.
Section 6.3 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The
obligation of the Company to effect the Merger is further subject to
satisfaction or waiver of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer set forth herein shall be true and correct in all respects
(without giving effect to any materiality or material adverse effect
qualifications contained therein) both when made and at and as of the Closing
Date, as if made at and as of such time (except to the extent expressly made as
of an earlier date, in which case as of such date), except where the failure of
such
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representations and warranties to be so true and correct would not have or
result in, individually or in the aggregate, a material adverse effect on Buyer.
(b) PERFORMANCE OF OBLIGATIONS OF BUYER. Buyer shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date.
(c) OFFICER'S CERTIFICATE. Buyer shall have furnished the
Company with a certificate dated the Closing Date signed on its behalf by an
executive officer to the effect that the conditions set forth in SECTIONS 6.3(a)
and (b) have been satisfied.
Section 6.4 FRUSTRATION OF CLOSING CONDITIONS. Neither Buyer
nor the Company may rely on the failure of any condition set forth in SECTIONS
6.1, 6.2 or 6.3, as the case may be, to be satisfied if such failure was caused
by such party's failure to comply with its obligations to consummate the Merger
and the other transactions contemplated by this Agreement, as required by and
subject to SECTION 5.5.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
Section 7.1 TERMINATION. This Agreement may be terminated at
any time prior to the Effective Time, whether before or after the Shareholder
Approval:
(a) by mutual written consent of Buyer and the Company;
(b) by either Buyer or the Company:
(i) if the Merger has not been consummated by October
31, 2000 or such later date, if any, as Buyer and the Company agree
upon; PROVIDED, HOWEVER, that the right to terminate this Agreement
pursuant to this SECTION 7.1(b)(i) is not available to any party whose
failure to perform any of its obligations under this Agreement results
in the failure of the Merger to be consummated by such time;
(ii) if the Shareholders Meeting (including any
adjournment or postponement thereof) shall have concluded and the
Shareholder Approval shall not have been obtained; or
(iii) if any Restraint having any of the effects set
forth in SECTION 6.1(c) is in effect and has become final and
nonappealable; PROVIDED, HOWEVER, that the right to terminate this
Agreement pursuant to this SECTION 7.1(b)(iii) is not available to any
party whose failure to perform any of its obligations under this
Agreement results in such Restraint;
(c) by Buyer, if the Company has breached or failed to perform
in any material respect any of its representations, warranties, covenants or
other agreements contained in this Agreement, which breach or failure to perform
(i) is not cured within 30 days after written notice thereof or (ii) is
incapable of being cured by the Company;
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(d) by the Company, if Buyer has breached or failed to perform
in any material respect any of its representations, warranties, covenants or
other agreements contained in this Agreement, which breach or failure to perform
(i) is not cured within 30 days after written notice thereof or (ii) is
incapable of being cured by Buyer;
(e) by Buyer, (A) if any person (other than an affiliate of
Buyer) shall acquire 20% or more of the outstanding shares of Company Common
Stock or (B) if the Board of Directors of the Company or any committee thereof
shall (i) withdraw or modify or change, or propose or announce any intention to
withdraw or modify or change, in a manner adverse to Buyer, the approval or
recommendation by the Board of Directors of the Company or committee thereof of
this Agreement or the transactions contemplated hereby, including the Merger,
(ii) approve or recommend, or propose to or announce any intention to approve or
recommend, any Company Takeover Proposal, or (iii) propose or announce any
intention to enter into any agreement (other than a customary confidentiality
agreement in compliance with SECTION 4.2), with respect to any Company Takeover
Proposal, or (C) if the Company shall willfully breach the provisions of SECTION
4.2 or SECTION 5.1(b); or
(f) by Buyer, if any Governmental Entity shall have brought or
threatened to institute an action, suit or proceeding which seeks to restrain or
prohibit the consummation of the Merger or which seeks to impose material
limitations on the ability of Buyer, the Surviving Corporation or any of their
respective affiliates or subsidiaries to acquire, operate or hold, or to require
Buyer, Surviving Corporation or any of their respective affiliates or
subsidiaries to dispose of or hold separate, any material portion of their
assets or business or the Company's assets or business.
Section 7.2 EFFECT OF TERMINATION. In the event of termination
of this Agreement by either the Company or Buyer as provided in SECTION 7.1,
this Agreement will forthwith become void and have no effect, without any
liability or obligation on the part of Buyer or the Company, other than the
provisions of SECTION 5.4, SECTION 5.8, SECTION 5.9, this SECTION 7.2, SECTION
7.3, SECTION 7.4 and ARTICLE VIII, which provisions survive such termination;
PROVIDED, HOWEVER, that nothing herein will relieve any party from any liability
for any willful and material breach by such party of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
Section 7.3 AMENDMENT. This Agreement may be amended by the
parties at any time before or after the Shareholder Approval; PROVIDED, HOWEVER,
that, after the Shareholder Approval, there is not to be made any amendment that
by law requires further approval by the shareholders of the Company without
further approval of such shareholders. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties.
Section 7.4 EXTENSION; WAIVER. At any time prior to the
Effective Time, a party may (a) extend the time for the performance of any of
the obligations or other acts of the other party, (b) waive any inaccuracies in
the representations and warranties of the other party contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) subject
to the proviso of SECTION 7.3, waive compliance by the other party with any of
the agreements or conditions contained in this Agreement. Any agreement on the
part of a party
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to any such extension or waiver will be valid only if set forth in an instrument
in writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise will not
constitute a waiver of such rights.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES.
None of the representations, warranties, covenants and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement will survive
the Effective Time, except the covenants and agreements contained in ARTICLES II
and VIII and in SECTIONS 5.6, 5.7, 5.16 and 5.19, each of which will survive in
accordance with its terms.
Section 8.2 NOTICES. All notices, requests, claims, demands
and other communications under this Agreement must be in writing and will be
deemed given if delivered personally, telecopied (which is confirmed) or sent by
a nationally recognized overnight courier service (providing proof of delivery)
to the parties at the following addresses (or at such other address for a party
as is specified by like notice):
(a) if to the Company, to:
Commercial Intertech Corp.
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Manchester,
Vice President and General Counsel
with a copy to:
Xxxxxx Xxxxxx Zavis
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Xxxxx X. Xxxxxxx, Esq.
(b) if to Buyer, to:
Xxxxxx-Xxxxxxxx Corporation
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
with a copy to:
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Xxxxx, Day, Xxxxxx & Xxxxx
North Point
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Section 8.3 INTERPRETATION. When a reference is made in this
Agreement to an Article, Section or Exhibit, such reference is to an Article or
Section of, or an Exhibit to, this Agreement unless otherwise indicated. The
table of contents, table of defined terms and headings contained in this
Agreement are for reference purposes only and do not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they will be deemed to be
followed by the words "without limitation." The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement will refer
to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement will have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term. Any
agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein. For
purposes of this Agreement, (a) "PERSON" means an individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity (including its permitted successors
and assigns), (b) "KNOWLEDGE" of any person that is not an individual means the
knowledge after due inquiry of such person's executive officers and employees
with direct responsibility for the subject matter to which such knowledge
relates, (c) "AFFILIATE" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person, where "CONTROL" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a person, whether through the ownership
of voting securities, by contract or otherwise, (d) "LIENS" means all pledges,
claims, liens, options, charges, easements, restrictions, covenants, conditions
of record, encroachments, encumbrances and security interests of any kind or
nature whatsoever, (e) "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT"
means, when used in connection with the Company or Buyer, any change, effect,
event, occurrence or state of facts that is, or would reasonably be expected to
be, materially adverse to the business, financial condition or results of
operations of such party and its subsidiaries taken as a whole other than any
change, effect, event or occurrence (i) relating to the economy or securities
markets of the United States or (ii) resulting from entering into this Agreement
or the consummation of the transactions contemplated hereby or the announcement
thereof, and the terms "material" and "materially" have correlative meanings,
and (f) a "SUBSIDIARY" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect
54
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at least a majority of its Board of Directors or other governing body (or, if
there are no such voting interests, 50% or more of the equity interest of which)
is owned directly or indirectly by such first person.
Section 8.4 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, all of which will be considered one and the same
agreement and will become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
Section 8.5 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES.
This Agreement (including the documents and instruments referred to herein) and
the Confidentiality Agreement (a) constitute the entire agreement, and supersede
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter of this Agreement and (b) except for
the provisions of ARTICLE II and SECTION 5.7, are not intended to confer upon
any person other than the parties any rights or remedies.
Section 8.6 GOVERNING LAW. This Agreement is to be governed
by, and construed in accordance with, the laws of the State of Ohio, regardless
of the laws that might otherwise govern under applicable principles of conflict
of laws thereof.
Section 8.7 ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement may be assigned, in whole
or in part, by operation of law or otherwise by any of the parties hereto
without the prior written consent of the other party. Any assignment in
violation of this SECTION 8.7 will be void and of no effect. Subject to the
preceding two sentences, this Agreement is binding upon, inures to the benefit
of, and is enforceable by, the parties and their respective successors and
assigns.
Section 8.8 CONSENT TO JURISDICTION. Each of the parties
hereto (a) consents to submit itself to the personal jurisdiction of any federal
court located in the State of Ohio or any Ohio state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated by
this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court
and (c) agrees that it will not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any court other than a
federal court sitting in the State of Ohio or an Ohio state court.
Section 8.9 SPECIFIC ENFORCEMENT. The parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties will be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any federal
court located in the State of Ohio or an Ohio state court, this being in
addition to any other remedy to which they are entitled at law or in equity.
Section 8.10 SEVERABILITY. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement will
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of
55
54
being enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
extent possible.
56
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement and Plan of Merger to be signed by their respective officers thereunto
duly authorized, all as of the date first written above.
COMMERCIAL INTERTECH CORP.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman, President and Chief
Executive Officer
XXXXXX-XXXXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman, President and Chief
Executive Officer
57
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EXHIBIT A
FORM OF COMPANY AFFILIATE LETTER
Xxxxxx-Xxxxxxxx Corporation
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxx 00000
Commercial Intertech Corp.
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000-0000
Ladies and Gentlemen:
Pursuant to the terms of the Agreement and Plan of Merger,
dated as of January 14, 2000 (the "MERGER AGREEMENT"), between Commercial
Intertech Corp., an Ohio corporation (the "COMPANY"), and Xxxxxx-Xxxxxxxx
Corporation, an Ohio corporation ("BUYER"), the Company will merge with and into
Buyer (the "MERGER"), with Buyer as the surviving corporation. As a result of
the Merger, the undersigned may receive shares of common stock, par value $0.50
per share, of Buyer (the "BUYER COMMON STOCK") in exchange for shares owned by
the undersigned of common stock, par value $1.00 per share, of the Company (the
"COMPANY COMMON STOCK").
The undersigned represents to Buyer that the undersigned owns
______ shares (the "COMPANY AFFILIATE SHARES") of common stock, par value $0.50
per share, of the Company (the "COMPANY COMMON STOCK"). Except in the event that
the Board of Directors of the Company publicly announces a change in its
approval or recommendation of the Merger in a manner adverse to Buyer, the
undersigned hereby irrevocably agrees to (i) attend, in person or by proxy, the
meeting of the Company's shareholders relating to the vote on the Merger
Agreement and the transactions contemplated thereby, and any and all
adjournments thereof, and (ii) vote (or cause to be voted) all of the Company
Affiliate Shares and any other voting securities of the Company, whether issued
heretofore or hereafter, that the undersigned owns or has the right to vote, for
the approval and adoption of the Merger Agreement and the Opt-Out Amendment (as
defined in the Merger Agreement) and the transactions contemplated thereby. The
undersigned confirms that such agreement to attend and vote is coupled with an
interest. The undersigned revokes any and all previous proxies with respect to
the Company Affiliate Shares and/or any other voting securities of the Company
owned by the undersigned.
The undersigned acknowledges that the undersigned may be
deemed an "AFFILIATE" of the Company within the meaning of Rule 145 ("RULE 145")
promulgated under the Securities Act of 1933 (the "SECURITIES ACT") by the
Securities and Exchange Commission (the "SEC"), although nothing contained
herein should be construed as an admission of such
57
fact. If in fact the undersigned is an affiliate of the Company under the
Securities Act, the undersigned's ability to sell, assign or transfer the Buyer
Common Stock received by the undersigned in exchange for any shares of the
Company Common Stock in connection with the Merger may be restricted unless such
transaction is registered under the Securities Act or an exemption from such
registration is available. The undersigned understands that such exemptions are
limited and the undersigned has obtained or will obtain advice of counsel as to
the nature and conditions of such exemptions, including information with respect
to the applicability to the sale of such securities of Rules 144 and 145(d)
promulgated under the Securities Act.
The undersigned hereby represents to and covenants with Buyer
that the undersigned will not sell, assign, transfer or otherwise dispose of any
of the Buyer Common Stock received by the undersigned in exchange for shares of
the Company Common Stock in connection with the Merger except (i) pursuant to an
effective registration statement under the Securities Act, (ii) in conformity
with the volume and other limitations of Rule 145 promulgated under the
Securities Act or (iii) in a transaction which, in the opinion of counsel of
Buyer or as described in a "no-action" or interpretive letter from the Staff of
the SEC specifically issued with respect to a transaction to be engaged in by
the undersigned, is not required to be registered under the Securities Act.
The undersigned understands that Buyer is under no obligation
to register the sale, assignment, transfer or other disposition of the Buyer
Common Stock to be received by the undersigned in the Merger or to take any
other action necessary in order to make compliance with an exemption from such
registration available.
The undersigned acknowledges and agrees that the legend set
forth below will be placed on certificates representing the shares of Buyer
Common Stock received by the undersigned in connection with the Merger or held
by a transferee thereof, which legend will be removed by delivery of substitute
certificates upon evidence of compliance with Rule 145 under the Securities Act
and, if requested by Buyer, receipt of an opinion in form and substance
reasonably satisfactory to Buyer from counsel reasonably satisfactory to Buyer
to the effect that such legend is no longer required for purposes of the
Securities Act.
There will be placed on the certificates for Buyer Common
Stock issued to the undersigned, or any substitutions therefor, a legend stating
in substance:
"The shares represented by this certificate are
issued, in a transaction to which Rule 145 promulgated under
the Securities Act of 1933 applies. The shares have not been
acquired by the holder with a view to, or for resale in
connection with, any distribution thereof within the meaning
of the Securities Act of 1933. The shares may not be sold,
assigned, transferred or otherwise disposed of except in
accordance with an exemption from the registration
requirements of the Securities Act of 1933."
The undersigned acknowledges that (i) the undersigned has carefully
read this letter and understands the requirements hereof and the limitations
imposed upon the sale, assignment,
2
58
transfer or other disposition of the Buyer Common Stock and (ii) the receipt by
Buyer of this letter is an inducement to Buyer's obligations to consummate the
Merger.
Very truly yours,
______________________________
Name:
Dated: _______________, 2000
3
59
TABLE OF CONTENTS
PAGE
ARTICLE I THE MERGER.............................................................................1
Section 1.1 The Merger..............................................................1
Section 1.2 Closing.................................................................1
Section 1.3 Effective Time..........................................................2
Section 1.4 Effects of the Merger...................................................2
Section 1.5 Articles of Incorporation and Code of Regulations.......................2
Section 1.6 Directors and Officers of the Surviving Corporation.....................2
ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
COMPANY; SURRENDER OF CERTIFICATES AND PAYMENT.....................................................3
Section 2.1 Effect on Capital Stock.................................................3
(a) Buyer Common Stock......................................................3
(b) Cancellation of Treasury Stock and Buyer Owned Stock....................3
(c) Conversion of Company Common Stock......................................3
(d) Cash Election...........................................................3
(e) Cash Election Adjustments...............................................4
(f) Computation of Conversion Rates.........................................4
(g) Reduction in Cash Election Number.......................................4
Section 2.2 Exchange of Certificates................................................4
(a) Exchange Agent..........................................................4
(b) Election and Exchange Procedures........................................5
(c) Distributions with Respect to Unexchanged Shares........................6
(d) No Further Ownership Rights in Company Common Stock.....................6
(e) No Fractional Shares....................................................7
(f) Termination of Exchange Fund............................................7
(g) No Liability............................................................7
(h) Investment of Exchange Fund.............................................7
(i) Lost Certificates.......................................................8
Section 2.3 Certain Adjustments.....................................................8
Section 2.4 Dissenters' Rights......................................................8
Section 2.5 Further Assurances......................................................8
Section 2.6 Withholding Rights......................................................9
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................................................9
Section 3.1 Representations and Warranties of Company...............................9
(a) Organization, Standing and Corporate Power..............................9
(b) Subsidiaries............................................................9
(c) Capital Structure......................................................10
(d) Authority; Noncontravention............................................11
(e) SEC Reports and Financial Statements; Undisclosed Liabilities..........12
(f) Information Supplied...................................................12
(g) Absence of Certain Changes or Events...................................13
i
60
(h) Compliance with Applicable Laws; Litigation............................13
(i) Employee Benefit Plans.................................................14
(j) Taxes..................................................................19
(k) Voting Requirement.....................................................19
(l) State Takeover Statutes................................................20
(m) Intentionally omitted..................................................20
(n) Brokers................................................................20
(o) Ownership of Buyer Common Stock........................................20
(p) Environmental Matters..................................................20
(q) Real Property; Assets..................................................23
(r) Intellectual Property..................................................24
(s) Opinion of Financial Advisor...........................................25
(t) Labor Agreements.......................................................25
(u) The Company Rights Agreement...........................................25
(v) Certain Contracts......................................................26
(w) Insurance..............................................................26
(x) Acquisitions and Divestitures..........................................26
Section 3.2 Representations and Warranties of Buyer................................26
(a) Organization, Standing and Corporate Power.............................27
(b) Authority; Noncontravention............................................27
(c) SEC Reports and Financial Statements...................................27
(d) Ownership of the Company Common Stock..................................28
(e) Information Supplied...................................................28
(f) Brokers................................................................28
(g) Voting Requirements....................................................29
(h) Absence of Certain Changes or Events...................................29
ARTICLE IV COVENANTS RELATING TO CONDUCT OF BUSINESS............................................29
Section 4.1 Conduct of Business....................................................29
(a) Conduct of Business by the Company.....................................29
(b) Other Actions..........................................................31
(c) Advice of Changes......................................................32
Section 4.2 No Solicitation by Company.............................................32
ARTICLE V ADDITIONAL AGREEMENTS.................................................................33
Section 5.1 Preparation of the Form S-4 Proxy Statement; Shareholders Meeting......33
Section 5.2 Letters of the Company's Accountants...................................34
Section 5.3 Letters of Buyer's Accountants.........................................35
Section 5.4 Access to Information; Confidentiality.................................35
Section 5.5 Reasonable Best Efforts; Cooperation...................................35
Section 5.6 Stock Options and Restricted Stock.....................................36
Section 5.7 Indemnification........................................................38
Section 5.8 Fees and Expenses......................................................38
Section 5.9 Public Announcements...................................................39
Section 5.10 Affiliates.............................................................39
Section 5.11 NYSE Listing...........................................................40
Section 5.12 Shareholder Litigation.................................................40
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Section 5.13 Tax Treatment..........................................................40
Section 5.14 Standstill Agreements; Confidentiality Agreements......................40
Section 5.15 Credit Facility's Senior Unsecured Notes...............................40
Section 5.16 Post-Merger Operations.................................................41
Section 5.17 Transition.............................................................41
Section 5.18 Section 16(b)..........................................................41
Section 5.19 Employee Benefit Matters...............................................41
Section 5.20 Series B Preferred.....................................................42
Section 5.21 German Transaction Structure...........................................42
ARTICLE VI CONDITIONS PRECEDENT.................................................................43
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger.............43
(a) Shareholder Approval...................................................43
(b) Governmental and Regulatory Approvals..................................43
(c) No Injunctions or Restraints...........................................43
(d) Form S-4...............................................................43
(e) NYSE Listing...........................................................43
(f) HSR Act................................................................43
Section 6.2 Conditions to Obligations of Buyer.....................................43
(a) Representations and Warranties.........................................43
(b) Performance of Obligations of the Company..............................44
(c) Tax Opinion............................................................44
(d) No Material Adverse Change.............................................44
(e) Officer's Certificate..................................................44
(f) Series B Preferred.....................................................44
(g) Note Redemption........................................................44
Section 6.3 Conditions to Obligations of the Company...............................44
(a) Representations and Warranties.........................................44
(b) Performance of Obligations of Buyer....................................44
(c) Officer's Certificate..................................................45
Section 6.4 Frustration of Closing Conditions......................................45
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER...................................................45
Section 7.1 Termination............................................................45
Section 7.2 Effect of Termination..................................................46
Section 7.3 Amendment..............................................................46
Section 7.4 Extension; Waiver......................................................46
ARTICLE VIII GENERAL PROVISIONS.................................................................47
Section 8.1 Nonsurvival of Representations and Warranties..........................47
Section 8.2 Notices................................................................47
Section 8.3 Interpretation.........................................................47
Section 8.4 Counterparts...........................................................48
Section 8.5 Entire Agreement; No Third-Party Beneficiaries.........................48
Section 8.6 Governing Law..........................................................49
Section 8.7 Assignment.............................................................49
Section 8.8 Consent to Jurisdiction................................................49
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Section 8.9 Specific Enforcement...................................................49
Section 8.10 Severability...........................................................49
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PAGE
----
Exhibit A Form of Company Affiliate Letter
v
64
TABLE OF DEFINED TERMS
TERM PAGE
---- ----
Adjusted Option...........................................................36
Adjustment Event...........................................................8
affiliate.................................................................48
Agreement..................................................................1
Average Closing Price......................................................3
Business Day...............................................................2
Buyer......................................................................1
Buyer Common Stock.........................................................3
Buyer SEC Documents.......................................................28
Cash Consideration.........................................................3
Cash Election..............................................................3
Cash Election Number.......................................................3
Cash Election Shares.......................................................4
Cash Fraction..............................................................4
Certificate................................................................5
Certificate of Merger......................................................2
Closing....................................................................1
Closing Date...............................................................2
Code.......................................................................1
Company....................................................................1
Company Award.............................................................37
Company Benefit Plans.....................................................14
Company Common Stock.......................................................1
Company Contract..........................................................26
Company Disclosure Letter..................................................9
Company Entities...........................................................9
Company Rights Agreement..................................................10
Company SEC Documents.....................................................12
Company Stock Options.....................................................10
Company Stock Plans.......................................................10
Company Subsidiaries.......................................................9
Company Subsidiary.........................................................9
Company Takeover Proposal.................................................32
Confidentiality Agreement.................................................35
control...................................................................48
Dissenting Shareholders....................................................3
Dissenting Shares..........................................................3
Effective Time.............................................................2
Election Deadline..........................................................5
employee..................................................................18
Environmental Claim.......................................................22
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65
Environmental Condition...................................................23
Environmental Laws........................................................22
Environmental Permit......................................................23
ERISA.....................................................................14
ERISA Affiliate...........................................................15
Exchange Act...............................................................9
Exchange Agent.............................................................4
Exchange Fund..............................................................5
Exchange Ratio.............................................................3
Foreign Antitrust Laws....................................................12
Foreign Plan..............................................................14
Form of Election...........................................................5
Form S-4..................................................................12
GAAP......................................................................12
Governmental Entity.......................................................11
Hazardous Substance.......................................................22
HSR Act...................................................................12
Indemnified Parties.......................................................38
Intellectual Property.....................................................24
knowledge.................................................................48
Law.......................................................................23
Leased Real Property......................................................23
Leases....................................................................23
Liens.....................................................................48
material adverse change...................................................48
material adverse effect...................................................48
Merger.....................................................................1
Merger Approval...........................................................20
Merger Consideration.......................................................3
Multiemployer Plan........................................................17
Multiple Employer Plan....................................................17
Note Redemption...........................................................40
NYSE.......................................................................3
OGCL.......................................................................1
Opt-Out Amendment.........................................................19
Opt-Out Approval..........................................................19
Owned Real Property.......................................................23
PBGC......................................................................16
PCBs......................................................................22
Permits...................................................................13
person....................................................................48
Post-Closing Tax Period...................................................19
Pre-Closing Tax Period....................................................19
Preferred Stock...........................................................10
Proxy Statement...........................................................12
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66
Recent SEC Reports........................................................20
Release...................................................................22
Restraints................................................................43
SEC.......................................................................11
Securities Act............................................................12
Senior Notes..............................................................40
Series A Preferred........................................................10
Series B Preferred........................................................10
Shareholder Approval......................................................20
Shareholders Meeting......................................................34
Stock Consideration........................................................3
subsidiary................................................................48
Superior Proposal.........................................................32
Surviving Corporation......................................................1
Survivor Plans............................................................42
Takeover Statute..........................................................20
Tax Certificates..........................................................36
taxes.....................................................................19
Termination Fee...........................................................39
Total Consideration........................................................4
Trading Day................................................................3
Transferee.................................................................6
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