EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
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dated as of April 28, 1999
among
COVANCE INC.,
CCJ HOLDING CORP.
and
PAREXEL INTERNATIONAL CORPORATION
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TABLE OF CONTENTS
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ARTICLE I
THE MERGER
1.01. The Merger.................................................2
1.02. Effective Time; Closing....................................2
1.03. Effect of the Merger.......................................2
1.04. Articles of Organization; By-Laws..........................3
1.05. Directors and Officers.....................................3
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
2.01. Conversion of Securities...................................3
2.02. Exchange of Certificates...................................4
2.03. Stock Transfer Books.......................................8
2.04. Company Stock Options......................................8
2.05. Employee Stock Purchase Plan...............................9
2.06. Dissenting Shares.........................................10
2.07. Parent Rights Plan........................................10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.01. Organization and Qualification; Subsidiaries..............11
3.02. Articles of Organization and By-laws......................12
3.03. Capitalization............................................12
3.04. Authority Relative to This Agreement......................13
3.05. No Conflict; Required Filings and Consents................13
3.06. Permits; Compliance.......................................14
3.07. SEC Filings; Financial Statements; Absence of Liabilities.15
3.08. Absence of Certain Changes or Events......................16
3.09. Absence of Litigation.....................................17
3.10. Employee Benefit Plans; Labor Matters.....................18
3.11. Contracts and Commitments.................................19
3.12. Accounting and Tax Matters................................20
3.13. Intellectual Property.....................................20
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3.14. Taxes....................................................21
3.15. Affiliate Transactions...................................22
3.16. Insurance................................................22
3.17. Year 2000 Compliance.....................................23
3.18. Vote Required............................................23
3.19. State Takeover Statutes..................................23
3.20. Opinion of Financial Advisor.............................23
3.21. Brokers..................................................23
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
4.01. Organization and Qualification; Subsidiaries.............24
4.02. Certificate of Incorporation and By-Laws.................25
4.03. Capitalization...........................................25
4.04. Authority Relative to This Agreement.....................26
4.05. No Conflict; Required Filings and Consents...............27
4.06. Permits; Compliance......................................28
4.07. SEC Filings; Financial Statements; Absence of Liabilities28
4.08. Absence of Certain Changes or Events.....................29
4.09. Absence of Litigation....................................30
4.10. Employee Benefit Plans; Labor Matters....................31
4.11. Contracts and Commitments................................32
4.12. Accounting and Tax Matters...............................33
4.13. Intellectual Property....................................33
4.14. Taxes....................................................34
4.15. Affiliate Transactions...................................35
4.16. Insurance................................................35
4.17. Year 2000 Compliance.....................................35
4.18. Vote Required............................................36
4.19. Operations of Merger Sub.................................36
4.20. Opinion of Financial Advisor.............................36
4.21. Brokers..................................................36
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ARTICLE V
CONDUCT OF BUSINESSES PENDING THE MERGER
5.01. Conduct of Business by the Company Pending the Merger..36
5.02. Conduct of Business by Parent Pending the Merger.......39
5.03. Notification of Certain Matters........................41
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01. Registration Statement; Joint Proxy Statement..........41
6.02. Stockholders' Meetings.................................44
6.03. Access to Information; Confidentiality.................44
6.04. No Solicitation of Transactions........................45
6.05. Directors' and Officers' Indemnification and Insurance.47
6.06. Obligations of Merger Sub..............................48
6.07. Affiliates.............................................48
6.08. Pooling................................................49
6.09. Further Action; Consents; Filings......................49
6.10. Plan of Reorganization.................................50
6.11. Public Announcements...................................51
6.12. NYSE Listing...........................................51
6.13. Conveyance Taxes.......................................51
6.14. Office of the Co-Chairmen..............................51
6.15. Post-Merger Board of Directors of Parent...............52
6.16. Employee Benefit Plans.................................53
6.17. Exemption From Liability Under Section 16(b)...........53
ARTICLE VII
CONDITIONS TO THE MERGER
7.01. Conditions to the Obligations of Each Party...........54
7.02. Conditions to the Obligations of Parent and
Merger Sub............................................56
7.03. Conditions to the Obligations of the Company..........56
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.01. Termination......................................57
8.02. Effect of Termination............................58
8.03. Amendment........................................58
8.04. Waiver...........................................58
8.05. Expenses.........................................59
ARTICLE IX
GENERAL PROVISIONS
9.01. Non-Survival of Representations, Warranties and
Agreements.......................................62
9.02. Notices..........................................62
9.03. Certain Definitions..............................64
9.04. Severability.....................................65
9.05. Assignment; Binding Effect; Benefit..............65
9.06. Specific Performance.............................66
9.07. Governing Law; Forum.............................66
9.08. Interpretation...................................66
9.09. Counterparts.....................................67
9.10. Entire Agreement.................................67
9.11. Waiver of Jury Trial.............................67
Exhibit A Parent Charter Amendment
Exhibit 6.07(a) Form of Affiliate Letter for Affiliates of the Company
Exhibit 6.07(b) Form of Affiliate Letter for Affiliates of Parent
Exhibit 6.14(a) Amended Parent By-Laws
Exhibit 6.15(b) Post-Merger Board of Directors
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Glossary of Defined Terms
Location of
Defined Term Definition
Affiliate...............................................ss.6.07(a), ss.9.03(a)
Agreement.........................................................Preamble
Amended Parent By-Laws............................................ss.6.14(a)
Appraisal Rights Provisions.......................................ss.2.06(a)
Articles of Merger...................................................ss.1.02
beneficial owner..................................................ss.9.03(b)
Blue Sky Laws.....................................................ss.3.05(b)
business day......................................................ss.9.03(c)
Certificates......................................................ss.2.02(b)
Claim.............................................................ss.6.05(b)
Code..............................................................Recitals
Company...........................................................Preamble
Company Acquisition Proposal......................................ss.6.04(a)
Company Alternative Transaction Fee..........................ss.8.05(b)(iii)
Company Benefit Plans.............................................ss.3.10(a)
Company Common Stock..............................................Recitals
Company Director..................................................ss.6.15(d)
Company Disclosure Letter......................................Article III
Company ERISA Affiliate...........................................ss.3.10(b)
Company Expense Amount.......................................ss.8.05(c)(iii)
Company Insiders.....................................................ss.6.17
Company Licensed Intellectual Property...............................ss.3.13
Company Material Adverse Effect...................................ss.3.01(a)
Company Material Contracts........................................ss.3.11(a)
Company Option Agreement..........................................Recitals
Company Owned Intellectual Property..................................ss.3.13
Company Permits...................................................ss.3.06(a)
Company Preferred Stock..............................................ss.3.03
Company Products..................................................ss.3.06(c)
Company SEC Reports...............................................ss.3.07(a)
Company Stock Option Plans........................................ss.2.04(a)
Company Stock Options.............................................ss.2.04(a)
Company Stockholders' Meeting.....................................ss.6.01(a)
Company Subsidiaries..............................................ss.3.01(a)
Company Superior Proposal.........................................ss.6.04(a)
Company Systems...................................................ss.3.17(b)
Company Termination Fee......................................ss.8.05(b)(iii)
Company Year 2000 Plan............................................ss.3.17(a)
Confidentiality Agreement.........................................ss.6.03(b)
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Location of
Defined Term Definition
control............................................................ss.9.03(d)
controlled by......................................................ss.9.03(d)
DGCL..................................................................ss.4.04
Dissenting Shares..................................................ss.2.06(a)
Effective Time........................................................ss.1.02
ERISA..............................................................ss.3.10(a)
Excess Shares..................................................ss.2.02(e)(ii)
Exchange Act.......................................................ss.3.05(b)
Exchange Agent.....................................................ss.2.02(a)
Exchange Fund......................................................ss.2.02(a)
Exchange Ratio.....................................................ss.2.01(a)
Expenses...........................................................ss.8.05(a)
GAAP...............................................................ss.3.07(b)
Governmental Entity................................................ss.3.05(b)
HSR Act............................................................ss.3.05(b)
Indemnified Parties................................................ss.6.05(a)
Intellectual Property.................................................ss.3.13
IRS................................................................ss.3.10(a)
knowledge..........................................................ss.9.03(e)
Law................................................................ss.3.05(a)
MBCL...............................................................Recitals
Merger.............................................................Recitals
Merger Consideration...............................................ss.2.01(a)
Merger Sub.........................................................Preamble
NASD...............................................................ss.3.05(b)
NYSE...........................................................ss.2.02(e)(ii)
Order..............................................................ss.7.01(d)
Parent.............................................................Preamble
Parent Acquisition Proposal........................................ss.6.04(b)
Parent Alternative Transaction Fee............................ss.8.05(c)(iii)
Parent Benefit Plans...............................................ss.4.10(a)
Parent By-Laws.....................................................ss.4.03(c)
Parent Charter.....................................................ss.4.03(c)
Parent Common Stock................................................Recitals
Parent Director....................................................ss.6.15(e)
Parent Disclosure Letter.........................................Article IV
Parent ERISA Affiliate.............................................ss.4.10(b)
Parent Expense Amount.........................................ss.8.05(b)(iii)
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Location of
Defined Term Definition
Parent Licensed Intellectual Property...............................ss.4.13
Parent Material Adverse Effect...................................ss.4.01(a)
Parent Material Contracts........................................ss.4.11(a)
Parent Option Agreement..........................................Recitals
Parent Owned Intellectual Property..................................ss.4.13
Parent Permits...................................................ss.4.06(a)
Parent Preferred Stock...........................................ss.4.03(a)
Parent Products and Services.....................................ss.4.06(c)
Parent Proposals.................................................Recitals
Parent Rights Plan..................................................ss.2.07
Parent SEC Reports...............................................ss.4.07(a)
Parent Shareholders' Meeting.....................................ss.6.01(a)
Parent Stock Option Plans........................................ss.4.03(a)
Parent Stock Options.............................................ss.4.03(a)
Parent Subsidiaries..............................................ss.4.01(a)
Parent Superior Proposal.........................................ss.6.04(b)
Parent Systems...................................................ss.4.17(b)
Parent Termination Fee......................................ss.8.05(c)(iii)
Parent Year 2000 Plan............................................ss.4.17(a)
Person...........................................................ss.9.03(f)
Proxy Statement..................................................ss.6.01(a)
Purchase Plan.......................................................ss.2.05
Registration Statement...........................................ss.6.01(a)
Representatives..................................................ss.6.03(a)
SEC..............................................................ss.3.07(a)
Section 16 Information..............................................ss.6.17
Securities Act.........................................ss.3.05(b), ss.3.07(a)
Shareholders' Meetings...........................................ss.6.01(a)
subsidiaries.....................................................ss.9.03(g)
subsidiary.......................................................ss.9.03(g)
Substitute Option................................................ss.2.04(a)
Surviving Corporation...............................................ss.1.01
Taxes...............................................................ss.3.14
Termination Date.................................................ss.8.01(b)
under common control with........................................ss.9.03(d)
Year 2000 Compliant....................................ss.3.17(b), ss.4.17(b)
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AGREEMENT AND PLAN OF MERGER dated as of April 28, 1999 (this
"Agreement") among COVANCE INC., a Delaware corporation ("Parent"), CCJ HOLDING
CORP., a Massachusetts corporation and a wholly owned subsidiary of Parent
("Merger Sub"), and PAREXEL INTERNATIONAL CORPORATION, a Massachusetts
corporation (the "Company").
W I T N E S S E T H
WHEREAS, upon the terms and subject to the conditions of this
Agreement and in accordance with Section 78 of the Massachusetts Business
Corporation Law (the "MBCL"), Merger Sub will merge with and into the Company
(the "Merger");
WHEREAS, the Board of Directors of the Company (i) has determined
that the Merger is consistent with and in furtherance of the long-term business
strategy of the Company and fair to, and in the best interests of, the Company
and its stockholders and has approved and adopted this Agreement, the Merger and
the other transactions contemplated by this Agreement and (ii) has recommended
the approval of this Agreement by the stockholders of the Company;
WHEREAS, the Board of Directors of Parent (i) has determined that
the Merger is consistent with and in furtherance of the long-term business
strategy of Parent and fair to, and in the best interests of, Parent and its
stockholders and has approved and adopted this Agreement, the Merger and the
other transactions contemplated by this Agreement and (ii) has recommended that
the stockholders of Parent vote to approve the following (collectively, the
"Parent Proposals"): (A) the issuance of shares of common stock, par value $0.01
per share, of Parent (the "Parent Common Stock") to the stockholders of the
Company pursuant to the terms of the Merger and (B) the amendments to the
Restated Certificate of Incorporation of Parent (the "Parent Charter") set forth
in Exhibit A hereto (the "Parent Charter Amendment");
WHEREAS, as a condition and inducement to Parent's willingness to
enter into this Agreement, Parent and the Company have entered into a
Termination Option Agreement dated as of the date of this Agreement, pursuant to
which the Company has granted to Parent an option to purchase shares of common
stock, par value $.01 per share, of the Company ("Company Common Stock") under
certain circumstances (the "Company Option Agreement");
WHEREAS, as a condition and inducement to the Company's
willingness to enter into this Agreement, the Company and Parent have entered
into a Termination Option Agreement dated as of the date of this Agreement,
pursuant to which Parent has granted to the Company an option to purchase shares
of Parent Common Stock under certain circumstances (the "Parent Option
Agreement");
WHEREAS, as a condition and inducement to the willingness of the
parties to enter into this Agreement, Parent has entered into an employment
agreement with Xxxxx X. von
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Xxxxxxxxxx, Chairman and Chief Executive Officer of the Company, dated as of the
date hereof and which shall become effective as of the Effective Time (as
defined below);
WHEREAS, for federal income tax purposes, the Merger is intended
to qualify as a reorganization under the provisions of section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the parties intend that the Merger shall be accounted
for as a "pooling of interests" for financial reporting purposes.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Merger Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in Article VII, and in accordance with the MBCL, at the
Effective Time (as defined below in Section 1.02), Merger Sub shall be merged
with and into the Company. As a result of the Merger, the separate corporate
existence of Merger Sub shall cease and the Company shall continue as the
surviving corporation of the Merger (the "Surviving Corporation").
SECTION 1.02. Effective Time; Closing. As promptly as practicable
and in no event later than the first business day following the satisfaction or,
if permissible, waiver of the conditions set forth in Article VII (or such other
date as may be agreed in writing by each of the parties hereto), the parties
hereto shall cause the Merger to be consummated by filing articles of merger
(the "Articles of Merger") with the Secretary of State of the Commonwealth of
Massachusetts in such form as is required by, and executed in accordance with,
the relevant provisions of the MBCL. The term "Effective Time" means the date
and time of the filing of the Articles of Merger with the Secretary of State of
the Commonwealth of Massachusetts (or such later time as may be agreed in
writing by each of the parties hereto and specified in the Articles of Merger).
Immediately prior to the filing of the Articles of Merger, a closing will be
held at the offices of Shearman & Sterling, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (or such other place as the parties may agree).
SECTION 1.03. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of the
MBCL. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time, all the property,
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rights, privileges, powers and franchises of the Company and Merger Sub shall
vest in the Surviving Corporation, and all debts, liabilities, obligations,
restrictions, disabilities and duties of each of the Company and Merger Sub
shall become the debts, liabilities, obligations, restrictions, disabilities and
duties of the Surviving Corporation.
SECTION 1.04. Articles of Organization; By-Laws. (a) At the
Effective Time, the Articles of Organization of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Articles of Organization
of the Surviving Corporation until thereafter amended as provided by law and
such Articles of Organization; provided, however, that, at the Effective Time,
Article I of the Articles of Organization of the Surviving Corporation shall be
amended to read as agreed between the parties hereto prior to the Effective
Time.
(b) At the Effective Time, the By-Laws of Merger Sub, as in
effect immediately prior to the Effective Time, shall be the By-Laws of the
Surviving Corporation until thereafter amended as provided by law, the Articles
of Organization of the Surviving Corporation and such By-Laws (except as
necessary to conform to the name change contemplated by Section 1.04).
SECTION 1.05. Directors and Officers. The directors of Merger Sub
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Articles of
Organization and By-Laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Merger Sub, the
Company or the holders of any of the following securities:
(a) each share of Company Common Stock issued and outstanding
immediately prior to the Effective Time (other than any shares of
Company Common Stock to be cancelled pursuant to Section 2.01(b) and any
Dissenting Shares (as defined in Section 2.06)) shall be canceled and
shall be converted, subject to Section 2.02(e), into the right to
receive 1.184055 shares (the "Exchange Ratio") of Parent Common Stock
(the "Merger Consideration"); provided, however, that, if between the
date of
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this Agreement and the Effective Time the outstanding shares of Parent
Common Stock shall have been changed into a different number of shares
or a different class, by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of
shares, the Exchange Ratio shall be correspondingly adjusted to the
extent appropriate to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of
shares;
(b) each share of Company Common Stock held in the treasury of
the Company and each share of Company Common Stock owned by Parent or
any direct or indirect wholly owned subsidiary of Parent or of the
Company immediately prior to the Effective Time shall be cancelled and
extinguished without any conversion thereof and no payment or
distribution shall be made with respect thereto; and
(c) each share of common stock, par value $0.01 per share, of
Merger Sub issued and outstanding immediately prior to the Effective
Time shall be converted into and exchanged for one validly issued, fully
paid and nonassessable share of common stock, par value $0.01 per share,
of the Surviving Corporation.
SECTION 2.02. Exchange of Certificates. (a) Exchange Agent.
Parent shall deposit, or shall cause to be deposited, with a bank or trust
company designated by Parent and reasonably satisfactory to the Company (the
"Exchange Agent"), for the benefit of the holders of shares of Company Common
Stock, for exchange in accordance with this Article II through the Exchange
Agent, certificates representing the shares of Parent Common Stock issuable
pursuant to Section 2.01(a) as of the Effective Time (such certificates for
shares of Parent Common Stock, together with cash in lieu of fractional shares
and any dividends or distributions with respect thereto, being hereinafter
referred to as the "Exchange Fund"). The Exchange Agent shall, pursuant to
irrevocable instructions, deliver out of the Exchange Fund the Parent Common
Stock contemplated to be issued pursuant to Section 2.01(a) and the cash in lieu
of fractional shares of Parent Common Stock to be paid pursuant to Section
2.02(e). Except as contemplated by Section 2.02(f) hereof, the Exchange Fund
shall not be used for any other purpose.
(b) Exchange Procedures. As promptly as practicable after the
Effective Time, and in any event not later than five (5) business days, Parent
shall cause the Exchange Agent to mail to each holder of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock (the "Certificates") (i) a letter of
transmittal (which shall be in customary form and shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon proper delivery of the Certificates to the Exchange Agent) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for certificates representing shares of Parent Common Stock and cash in lieu of
any fractional shares. Upon surrender to the Exchange Agent of a Certificate
5
for cancellation, together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, and such other documents
as may be reasonably required pursuant to such instructions, the holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Parent Common Stock which such
holder has the right to receive in respect of the shares of Company Common Stock
formerly represented by such Certificate (after taking into account all shares
of Company Common Stock then held by such holder), cash in lieu of any
fractional shares of Parent Common Stock to which such holder is entitled
pursuant to Section 2.02(e) and any dividends or other distributions to which
such holder is entitled pursuant to Section 2.02(c), and the Certificate so
surrendered shall forthwith be cancelled. In the event of a transfer of
ownership of shares of Company Common Stock which is not registered in the
transfer records of the Company, a certificate representing the proper number of
shares of Parent Common Stock, cash in lieu of any fractional shares of Parent
Common Stock to which such holder is entitled pursuant to Section 2.02(e) and
any dividends or other distributions to which such holder is entitled pursuant
to Section 2.02(c) may be issued to a transferee if the Certificate representing
such shares of Company Common Stock is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and
by evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 2.02, each Certificate shall be
deemed at all times after the Effective Time to represent only the right to
receive upon such surrender the certificate representing shares of Parent Common
Stock, cash in lieu of any fractional shares of Parent Common Stock to which
such holder is entitled pursuant to Section 2.02(e) and any dividends or other
distributions to which such holder is entitled pursuant to Section 2.02(c).
(c) Distributions with Respect to Unexchanged Shares of Parent
Common Stock. No dividends or other distributions declared or made after the
Effective Time with respect to the Parent Common Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the shares of Parent Common Stock represented thereby, and no
cash payment in lieu of any fractional shares shall be paid to any such holder
pursuant to Section 2.02(e), until the holder of such Certificate shall
surrender such Certificate. Subject to the effect of escheat, tax or other
applicable Laws (as defined in Section 3.05), following surrender of any such
Certificate, there shall be paid to the holder of the certificates representing
whole shares of Parent Common Stock issued in exchange therefor, without
interest, (i) promptly, the amount of any cash payable with respect to a
fractional share of Parent Common Stock to which such holder is entitled
pursuant to Section 2.02(e) and the amount of dividends or other distributions
with a record date after the Effective Time and theretofore paid with respect to
such whole shares of Parent Common Stock, and (ii) at the appropriate payment
date, the amount of dividends or other distributions, with a record date after
the Effective Time but prior to surrender and a payment date occurring after
surrender, payable with respect to such whole shares of Parent Common Stock.
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(d) No Further Rights in Company Common Stock. All shares of
Parent Common Stock issued upon conversion of shares of Company Common Stock in
accordance with the terms hereof (including any cash paid pursuant to Section
2.02(c) or (e)) shall be deemed to have been issued in full satisfaction of all
rights pertaining to such shares of Company Common Stock.
(e) No Fractional Shares. (i) No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued upon the
surrender for exchange of Certificates, no dividend or distribution with respect
to Parent Common Stock shall be payable on or with respect to any fractional
share and such fractional share interests will not entitle the owner thereof to
any rights of a stockholder of Parent.
(ii) As promptly as practicable following the Effective Time, the
Exchange Agent shall determine the excess of (x) the number of full shares of
Parent Common Stock delivered to the Exchange Agent by Parent pursuant to
Section 2.02(a) over (y) the aggregate number of full shares of Parent Common
Stock to be distributed to holders of Company Common Stock pursuant to Section
2.02(b) (such excess being herein called the "Excess Shares"). As soon after the
Effective Time as practicable, the Exchange Agent, as agent for such holders of
Parent Common Stock, shall sell the Excess Shares at then prevailing prices on
the New York Stock Exchange, Inc. (the "NYSE"), all in the manner provided in
paragraph (iii) of this Section 2.02(e).
(iii) The sale of the Excess Shares by the Exchange Agent shall
be executed on the NYSE through one or more member firms of the NYSE and shall
be executed in round lots to the extent practicable. Until the net proceeds of
any such sale or sales have been distributed to such holders of Company Common
Stock, the Exchange Agent will hold such proceeds in trust for such holders of
Company Common Stock as part of the Exchange Fund. Parent shall pay all
commissions, transfer taxes and other out-of-pocket transaction costs of the
Exchange Agent incurred in connection with such sale or sales of Excess Shares.
In addition, Parent shall pay the Exchange Agent's compensation and expenses in
connection with such sale or sales. The Exchange Agent shall determine the
portion of such net proceeds to which each holder of Company Common Stock shall
be entitled, if any, by multiplying the amount of the aggregate net proceeds by
a fraction the numerator of which is the amount of the fractional share interest
to which such holder of Company Common Stock is entitled (after taking into
account all shares of Company Common Stock then held by such holder) and the
denominator of which is the aggregate amount of fractional share interests to
which all holders of Certificates representing Company Common Stock are
entitled.
(iv) As soon as practicable after the determination of the amount
of cash, if any, to be paid to holders of Company Common Stock with respect to
any fractional share
7
interests, the Exchange Agent shall promptly pay such amounts to such holders of
Company Common Stock subject to and in accordance with the terms of Section
2.02(c).
(f) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of Company Common Stock for six
months after the Effective Time shall be delivered to Parent, upon demand, and
any holders of the Company Common Stock who have not theretofore complied with
this Article II shall thereafter look only to Parent for the shares of Parent
Common Stock, any cash in lieu of fractional shares of Parent Common Stock to
which they are entitled pursuant to Section 2.02(e) and any dividends or other
distributions with respect to the Parent Common Stock to which they are entitled
pursuant to Section 2.02(c). Any portion of the Exchange Fund returned to Parent
pursuant to the preceding sentence and remaining unclaimed by holders of shares
of Company Common Stock as of the third year anniversary of the Effective Time
(or, if earlier, as of a date which is immediately prior to such time as such
amounts would otherwise escheat to or become property of any government entity)
shall, to the extent permitted by applicable Law, become the property of Parent
free and clear of any claims or interest of any Person previously entitled
thereto.
(g) No Liability. Neither Parent nor the Surviving Corporation
shall be liable to any holder of shares of Company Common Stock for any such
shares of Company Common Stock (or dividends or distributions with respect
thereto), or cash lawfully delivered to a public official pursuant to any
abandoned property, escheat or similar Law.
(h) Withholding Rights. Each of the Surviving Corporation and
Parent shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Company Common
Stock 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 or Parent, as the case may be, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
the shares of Company Common Stock in respect of which such deduction and
withholding was made by the Surviving Corporation or Parent, as the case may be.
(i) Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Surviving Corporation, the posting by such Person of a bond, in such
reasonable amount as the Surviving Corporation may direct, as indemnity against
any claim that may be made against it with respect to such Certificate, the
Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the shares of Parent Common Stock, any cash in lieu of fractional
shares of Parent Common Stock to
8
which the holders thereof are entitled pursuant to Section 2.02(e) and any
dividends or other distributions to which the holders thereof are entitled
pursuant to Section 2.02(c).
SECTION 2.03. Stock Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed and there shall be no
further registration of transfers of shares of Company Common Stock thereafter
on the records of the Company. From and after the Effective Time, the holders of
Certificates representing shares of Company Common Stock outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
shares of Company Common Stock, except as otherwise provided in this Agreement
or by Law. On or after the Effective Time, any Certificates presented to the
Exchange Agent or Parent for any reason shall be converted into shares of Parent
Common Stock, any cash in lieu of fractional shares of Parent Common Stock to
which the holders thereof are entitled pursuant to Section 2.02(e) and any
dividends or other distributions to which the holders thereof are entitled
pursuant to Section 2.02(c).
SECTION 2.04. Company Stock Options. (a) All options (the
"Company Stock Options") outstanding, whether or not exercisable and whether or
not vested, at the Effective Time under the Company's Second Amended and
Restated 1995 Stock Plan, the 1995 Non-Employee Director Stock Option Plan, the
1995 Employee Stock Purchase Plan, the 1998 Non-Qualified, Non-Officer Stock
Option Plan, the 1989 Stock Plan, the 1987 Stock Plan and the 1986 Incentive
Stock Option Plan (collectively, the "Company Stock Option Plans"), shall remain
outstanding following the Effective Time. At the Effective Time, the Company
Stock Options shall, by virtue of the Merger and without any further action on
the part of the Company or the holder thereof, be assumed by Parent in such
manner that Parent (i) is a corporation "assuming a stock option in a
transaction to which Section 424(a) applies" within the meaning of Section 424
of the Code and the regulations thereunder or (ii) to the extent that Section
424 of the Code does not apply to any such Company Stock Options, would be such
a corporation were Section 424 of the Code applicable to such Company Stock
Options. From and after the Effective Time, all references to the Company in the
Company Stock Option Plans and the applicable stock option agreements issued
thereunder shall be deemed to refer to Parent, which shall have assumed the
Company Stock Option Plans as of the Effective Time by virtue of this Agreement
and without any further action. Each Company Stock Option assumed by Parent
(each, a "Substitute Option") shall be exercisable upon the same terms and
conditions as under the applicable Company Stock Option Plan and the applicable
option agreement issued thereunder, except that (A) each such Substitute Option
shall be exercisable for, and represent the right to acquire, that whole number
of shares of Parent Common Stock (rounded up or down to the nearest whole share,
except rounded down in the case of incentive stock options) equal to the number
of shares of Company Common Stock subject to such Company Stock Option
multiplied by the Exchange Ratio; (B) the option price per share of Parent
Common Stock shall be an amount equal to the option price per share of Company
Common Stock subject to such Company Stock Option in effect immediately prior to
the
9
Effective Time divided by the Exchange Ratio (the option price per share, as so
determined, being rounded upward to the nearest full cent); and (C) each
Substitute Option with respect to Company Stock Options subject to the
agreements listed in Section 3.03(3) of the Company Disclosure Letter shall be
subject to the terms and provisions of such agreements. Such Substitute Option
shall otherwise be subject to the same terms and conditions as such Company
Stock Options.
(b) As soon as practicable after the Effective Time, Parent shall
deliver to each holder of an outstanding Company Stock Option an appropriate
notice setting forth such holder's rights pursuant thereto and such Company
Stock Option shall continue in effect on the same terms and conditions
(including any antidilution provisions, and subject to the adjustments required
by this Section 2.04 after giving effect to the Merger). Parent shall comply
with the terms of all such Company Stock Options and ensure, to the extent
required by, and subject to the provisions of, the Company Stock Option Plans,
that Company Stock Options which qualified as incentive stock options under
Section 422 of the Code prior to the Effective Time continue to qualify as
incentive stock options after the Effective Time. Parent shall take all
corporate action necessary to reserve for issuance a sufficient number of shares
of Parent Common Stock for delivery upon exercise of Substitute Options pursuant
to the terms set forth in this Section 2.04. As soon as practicable after the
Effective Time, the shares of Parent Common Stock subject to Company Stock
Options (and options under the Stock Purchase Plan) will be covered by an
effective registration statement on Form S-8 (or any successor form) or another
appropriate form, and Parent shall use its reasonable efforts to maintain the
effectiveness of such registration statement or registration statements for so
long as Substitute Options remain outstanding. In addition, Parent shall use all
reasonable efforts to cause the shares of Parent Common Stock subject to Company
Stock Options (and options under the Stock Purchase Plan) to be listed on the
NYSE and such other exchanges as Parent shall determine. Parent and the Company
shall take all actions necessary to ensure that, with respect to persons subject
to the provisions of Section 16 of the Exchange Act (as defined in Section
3.05(b) below), all dispositions of Company Common Stock and Company Stock
Options in connection with the Merger, and all acquisitions of Parent Common
Stock and Substitute Options in connection with the Merger, shall be exempt
transactions pursuant to Rule 16b-3 promulgated under the Exchange Act,
including as set forth in Section 6.17 below.
SECTION 2.05. Employee Stock Purchase Plan. Each option
outstanding under the Company's Employee Stock Purchase Plan (the "Purchase
Plan") shall be terminated by the Company's Board of Directors as of the
Effective Time, and each option outstanding under the Purchase Plan as of the
Effective Time shall be adjusted by the Company's Board of Directors in
accordance with Article 12 of the Purchase Plan so that such option shall apply
to shares of Parent Common Stock. Accordingly, (a) the maximum number of shares
of Parent Common Stock issuable upon the exercise of an outstanding option under
the Purchase Plan shall be 1,000 multiplied by the Exchange Ratio, and (b) the
Option Price (as defined in the
10
Purchase Plan) of any such option shall be the lesser of (i) 85% of the average
market price (as defined in the Purchase Plan) of the Company Common Stock as of
the first business day of the Payment Period which includes the Effective Time,
divided by the Exchange Ratio, and (ii) 85% of the average market price of the
Parent Common Stock as of the last business day of such Payment Period. Nothing
contained in this Section 2.05 shall limit any reserved right in the Purchase
Plan to amend, modify, suspend, revoke or terminate such plan or to continue
such plan in existence after the Effective Time if so determined by Parent.
SECTION 2.06. Dissenting Shares. (a) Notwithstanding anything in
this Agreement to the contrary, any shares of Company Common Stock that are
issued and outstanding immediately prior to the Effective Time and that are held
by stockholders of the Company who have filed with the Company, before the
taking of the vote of the stockholders of the Company to approve this Agreement,
written objections to such approval stating their intention to demand payment
for such shares of Company Common Stock if this Agreement is approved, and who
have not voted such shares of Company Common Stock in favor of the approval of
this Agreement will not be converted as described in Section 2.01 hereof, but
will thereafter constitute only the right to receive payment of the fair value
of such shares of Company Common Stock ("Dissenting Shares") in accordance with
the applicable provisions of the MBCL (the "Appraisal Rights Provisions");
provided, however, that all shares of Company Common Stock held by stockholders
who will have failed to perfect or who effectively will have withdrawn or lost
their rights to appraisal of such Company Common Stock under the Appraisal
Rights Provisions will thereupon be deemed to have been cancelled and retired
and to have been converted, as of the Effective Time, into the right to receive,
without interest thereon, the Merger Consideration pursuant to Section 2.01, any
cash in lieu of fractional shares of Parent Common Stock to which the holders
thereof are entitled pursuant to Section 2.02(e) and any dividends or other
distributions to which the holders thereof are entitled pursuant to Section
2.02(c). Persons who have perfected statutory rights with respect to Dissenting
Shares as aforesaid will not be paid by the Surviving Corporation as provided in
this Agreement and will have only such rights as are provided by the Appraisal
Rights Provisions with respect to such Dissenting Shares.
(b) The Company shall give Parent (i) prompt notice of any
demands for appraisal received by the Company, withdrawals of such demands, and
any other instruments served pursuant to the Appraisal Rights Provisions and
received by the Company and (ii) the opportunity to direct all negotiations and
proceedings with respect to demands for appraisal under the MBCL. The Company
shall not, except with the prior written consent of Parent, make any payment
with respect to any demands for appraisal or offer to settle or settle any such
demands.
SECTION 2.07. Parent Rights Plan. Each Person entitled to receive
shares of Parent Common Stock pursuant to this Article II shall receive,
together with each
11
such share of Parent Common Stock, the number of Parent preferred share purchase
rights (pursuant to the Rights Agreement dated as of December 31, 1996 between
Parent and Xxxxxx Trust and Savings Bank (the "Parent Rights Plan")) associated
with one share of Parent Common Stock at the Effective Time.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Letter of even date
herewith delivered by the Company to the Parent and Merger Sub concurrently with
the execution of this Agreement (the "Company Disclosure Letter") (each section
of which qualifies the correspondingly numbered representation and warranty or
covenant to the extent specified therein), the Company hereby represents and
warrants to Parent and Merger Sub that:
SECTION 3.01. Organization and Qualification; Subsidiaries. (a)
The Company is a corporation duly incorporated, validly existing and in good
standing under the Laws of the Commonwealth of Massachusetts. Except as would
not, individually or in the aggregate, have a Company Material Adverse Effect
(as defined below), the Company has all corporate power and authority to own,
lease and operate its properties and to carry on its business as it is now being
conducted. Except as would not, individually or in the aggregate, have a Company
Material Adverse Effect, each subsidiary of the Company (collectively, the
"Company Subsidiaries") is a corporation duly incorporated, validly existing and
in good standing under the Laws of the jurisdiction of its incorporation and has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted. Each of
the Company and the Company Subsidiaries is duly qualified or licensed as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in good
standing that would not have, individually or in the aggregate, a Company
Material Adverse Effect. The term "Company Material Adverse Effect" means any
change, circumstance or effect that is or is reasonably likely to be materially
adverse to the business, operations, assets, liabilities (including, without
limitation, contingent liabilities), financial condition or results of
operations of the Company and the Company Subsidiaries taken as a whole, but
shall not include (i) any change in the market price or trading volume of
Company Common Stock, (ii) any adverse effect due to attrition, after the date
of this Agreement, of the Company's employees, and (iii) any adverse effect due
to changes, after the date of this Agreement, in conditions affecting (A) the
contract research and medical marketing services market in general, (B) the U.S.
economy as a whole or (C) the European Community as a whole.
12
(b) A true and complete list of all the Company Subsidiaries,
together with the jurisdiction of incorporation of each Company Subsidiary and
the percentage of the outstanding capital stock of each Company Subsidiary owned
by the Company and each other Company Subsidiary, is set forth in Section
3.01(b) of the Company Disclosure Letter. Except for the Company Subsidiaries,
the Company does not directly or indirectly own any equity or similar interest
in, or any interest convertible into or exchangeable or exercisable for any
equity or similar interest in, any corporation, partnership, limited liability
company, joint venture or other business association or entity.
SECTION 3.02. Articles of Organization and By-laws. The Company
has heretofore furnished to Parent complete and correct copies of the Articles
of Organization and the By-Laws, each as amended to the date of this Agreement,
of the Company. Such Articles of Organization and By-Laws are in full force and
effect. Neither the Company nor any Company Subsidiary is in violation of any
provision of its Articles of Organization, By-Laws or equivalent organizational
documents.
SECTION 3.03. Capitalization. The authorized capital stock of the
Company consists of (a) 50,000,000 shares of Company Common Stock and (b)
5,000,000 shares of preferred stock, par value $.01 per share (the "Company
Preferred Stock"). As of April 27, 1999, (i) 25,086,988 shares of Company Common
Stock are issued and outstanding, all of which are validly issued, fully paid
and nonassessable, (ii) no shares of Company Common Stock are held in the
treasury of the Company or by the Company Subsidiaries, and (iii) 4,001,941
shares of Company Common Stock are reserved for future issuance pursuant to the
Company Stock Options (with respect to which Common Stock Options to acquire
2,376,138 shares of Company Common Stock are outstanding). No options to acquire
shares of Company Common Stock have been granted from April 27, 1999 to the date
of this Agreement. As of the date of this Agreement, no shares of the Company
Preferred Stock were issued and outstanding. Except for Company Stock Options
granted pursuant to the Company Stock Option Plans and the Company Option
Agreement, there are no options, warrants or other rights, agreements,
arrangements or commitments of any character relating to the issued or unissued
capital stock of the Company or any Company Subsidiary or obligating the Company
or any Company Subsidiary to issue or sell any shares of capital stock of, or
other equity interests in, the Company or any Company Subsidiary. All shares of
Company Common Stock subject to issuance as aforesaid, upon issuance on the
terms and conditions specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully paid and nonassessable.
There are no outstanding contractual obligations of the Company or any Company
Subsidiary to repurchase, redeem or otherwise acquire any shares of Company
Common Stock or any capital stock of any Company Subsidiary. Each outstanding
share of capital stock of each Company Subsidiary is duly authorized, validly
issued, fully paid and nonassessable and each such share owned by the Company or
another Company Subsidiary is free and clear of all security interests, liens,
claims, pledges, options,
13
rights of first refusal, agreements, limitations on the Company's or such other
Company Subsidiary's voting rights, charges and other encumbrances of any nature
whatsoever. There are no outstanding contractual obligations of the Company or
any Company Subsidiary to provide funds to, or make any investment (in the form
of a loan, capital contribution or otherwise) in, any Company Subsidiary, other
than a Company Subsidiary that is wholly owned by the Company and other Company
Subsidiaries, or any other Person.
SECTION 3.04. Authority Relative to This Agreement. The Company
has all necessary corporate power and authority to execute and deliver this
Agreement and, subject to the terms and conditions of this Agreement and the
approval of this Agreement by the holders of a majority of then outstanding
shares of Company Common Stock, to perform its obligations hereunder and 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 by this Agreement have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the Merger and the other transactions contemplated by this Agreement
(other than, with respect to the Merger, the approval of this Agreement by the
holders of a majority of then outstanding shares of Company Common Stock and the
filing and recordation of appropriate merger documents as required by the MBCL
and subject to the terms and conditions of this Agreement). This Agreement has
been duly and validly executed and delivered by the Company and, assuming the
due authorization, execution and delivery by Parent and Merger Sub, constitutes
a legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights and by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at law).
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Restated Articles of Organization or By-Laws of the Company or any
equivalent organizational documents of any Company Subsidiary, (ii) assuming
that all consents, approvals, authorizations and other actions described in
Section 3.05(b) have been obtained and all filings and obligations described in
Section 3.05(b) have been made, conflict with or violate any federal, state or
local statute, law, ordinance, regulation, rule, code, order, judgment or decree
of the United States of America or any other jurisdiction and any enforceable
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment ("Law") applicable to the
Company or any Company Subsidiary or by which any property or asset of the
Company or any Company Subsidiary is bound or affected, or (iii) result in any
breach of or constitute a default (or an event which with notice or lapse of
14
time or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of the Company
or any Company Subsidiary pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation, except, with respect to clauses (ii) and (iii), for any such
conflicts, violations, breaches, defaults or other occurrences that would not
prevent or materially delay consummation of the Merger or otherwise prevent the
Company from performing its obligations under this Agreement, and would not,
individually or in the aggregate, have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company
do not, and the performance of this Agreement by the Company will not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any domestic or foreign governmental or regulatory authority
("Governmental Entity"), except (i) for applicable requirements, if any, of the
Securities Exchange Act of 1934, as amended (together with the rules and
regulations promulgated thereunder, the "Exchange Act"), the Securities Act of
1933, as amended (together with the rules and regulations promulgated
thereunder, the "Securities Act"), state securities or "blue sky" Laws ("Blue
Sky Laws"), the rules of the National Association of Securities Dealers (the
"NASD"), state takeover Laws, the pre-merger notification requirements of the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the "HSR Act"), filings or approvals required under
the competition laws of foreign jurisdictions, the filing and recordation of
appropriate merger documents as required by the MBCL and (ii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay consummation of the Merger,
or otherwise prevent the Company from performing its obligations under this
Agreement, and would not, individually or in the aggregate, have a Company
Material Adverse Effect.
SECTION 3.06. Permits; Compliance. (a) The Company and the
Company Subsidiaries are in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Entity ("Permits") that
are material to the operation of the business of the Company and the Company
Subsidiaries, taken as a whole, as they are operated on the date hereof (and,
for purposes of Section 7.02(a), as they are operated as of the Closing Date)
(collectively, the "Company Permits"). No suspension or cancellation of any
Company Permit is pending or, to the Knowledge of the Company, threatened,
except with respect to Company Permits the suspension or cancellation of which
would not, individually or in the aggregate, have a Company Material Adverse
Effect. Since July 1, 1998, neither the Company nor any Company Subsidiary has
(i) been denied or failed to receive any Permit that it had sought that would,
if currently possessed by the Company or a Company Subsidiary, be reasonably
likely to be material to the operation of the business of the Company and the
Company Subsidiaries,
15
taken as a whole, as they are operated on the date hereof (and, for purposes of
Section 7.02(a), as they are operated as of the Closing Date), or (ii) had any
Permit suspended or canceled that would, if currently possessed by the Company
or a Company Subsidiary, be reasonably likely to be material to the operation of
the business of the Company and the Company Subsidiaries, taken as a whole, as
they are operated on the date hereof (and, for purposes of Section 7.02(a), as
they are operated as of the Closing Date).
(b) Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, neither the Company nor any Company Subsidiary
is in conflict with, or has violated any provision of, or committed or failed to
perform any act which, with or without notice, lapse of time, or both, would
constitute a default under the provisions of: (i) any Law applicable to the
Company or any Company Subsidiary or by which any property or asset of the
Company or any Company Subsidiary is bound or affected; (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which the Company or any Company Subsidiary is
a party or by which the Company or any Company Subsidiary or any property or
asset of the Company or any Company Subsidiary is bound or affected; or (iii)
any Company Permit.
(c) Except as would not have a Company Material Adverse Effect,
since July 1, 1996, there have been no written notices, citations or decisions
by any governmental or regulatory body that any product or service produced,
provided, manufactured or marketed at any time by the Company or any Company
Subsidiaries (the "Company Products and Services") is defective or fails to meet
any applicable standards promulgated by any such governmental or regulatory
body. Except as would not have a Company Material Adverse Effect, the Company
and the Company Subsidiaries have complied in all material respects with the
Laws applicable to the Company and the Company Subsidiaries with respect to the
Company Products and Services.
SECTION 3.07. SEC Filings; Financial Statements; Absence of
Liabilities. (a) The Company has filed all forms, reports and documents required
to be filed by it with the Securities and Exchange Commission (the "SEC") since
July 1, 1996 (collectively, the "Company SEC Reports"). As of the respective
dates they were filed (or if amended or superseded by a filing prior to the date
of this Agreement, on the date of such amending or superseding filing), (i) the
Company SEC Reports were prepared in all material respects in accordance with
the requirements of the Securities Act or the Exchange Act, as the case may be,
and (ii) none of the Company SEC Reports 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 made therein, in the light of the
circumstances under which they were made, not misleading. No Company Subsidiary
is required to file any form, report or other document with the SEC.
16
(b) Each of the consolidated financial statements (including, in
each case, any notes and schedules thereto) contained in the Company SEC Reports
complied as to form with the applicable accounting requirements and rules and
regulations of the SEC and was prepared in accordance with United States
generally accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods indicated (except as may be indicated in the notes
thereto or, in the case of unaudited financial statements, as permitted by Form
10-Q of the SEC), and each presented fairly, in all material respects, the
consolidated financial position of the Company and the consolidated Company
Subsidiaries as at the respective dates thereof and their results of operations
and cash flows for the respective periods indicated therein, all in accordance
with United States generally accepted accounting principles (subject, in the
case of unaudited statements, to normal and recurring year-end adjustments which
were not and are not expected, individually or in the aggregate, to be material
in amount).
(c) Except for liabilities and obligations reflected on the June
30, 1998 consolidated balance sheet of the Company (including the notes
thereto), liabilities and obligations disclosed in Company SEC Reports filed
prior to the date of this Agreement and other liabilities and obligations
incurred in the ordinary course of business consistent with past practice since
June 30, 1998 and that would not, individually or in the aggregate, have a
Company Material Adverse Effect, neither the Company nor any Company Subsidiary
has any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise).
(d) The Company has heretofore made available to Parent complete
and correct copies of (i) all agreements, documents and other instruments not
yet filed by the Company with the SEC but that are currently in effect and that
the Company expects to file with the SEC after the date of this Agreement and
(ii) all amendments and modifications that have not been filed by the Company
with the SEC to all agreements, documents and other instruments that previously
had been filed by the Company with the SEC and are currently in effect.
SECTION 3.08. Absence of Certain Changes or Events. Since June
30, 1998, except as specifically contemplated by this Agreement or as disclosed
in any Company SEC Report filed prior to the date of this Agreement, the Company
and the Company Subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice and, since such
date, there has not been:
(a) any changes, effects or circumstances, or any events
involving a prospective change or effect, that would, individually or in
the aggregate, constitute a Company Material Adverse Effect; provided,
however, that, for purposes of this Section 3.08(a), the term "Company
Material Adverse Effect" shall also be deemed not to include the adverse
effect on the Company of any delay, reduction, cancellation or change in
the terms of customer agreements resulting from the announcement of this
17
Agreement and the transactions contemplated hereby or from actions
required to be taken by the Company pursuant to the terms hereof;
(b) any change by the Company in its accounting methods,
principles or practices, except changes that were not material,
individually or in the aggregate, and that were required by or permitted
in accordance with GAAP;
(c) any declaration, setting aside or payment of any dividend or
distribution in respect of the shares of Company Common Stock or any
redemption, purchase or other acquisition of any of the Company's
securities;
(d) any entry by the Company or any Company Subsidiary into any
commitment or transaction material to the Company and the Company
Subsidiaries taken as a whole, except in the ordinary course of business
consistent with past practice; or
(e) any increase in or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing,
stock option (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards or restricted
stock awards), stock purchase or other employee benefit plan, or any
other increase in the compensation payable or to become payable to any
executive officers of the Company or any Company Subsidiary, except in
the ordinary course of business consistent with past practice.
SECTION 3.09. Absence of Litigation. (a) There are no
litigations, suits, claims, actions, proceedings or investigations pending or,
to the Knowledge of the Company, threatened against the Company or any Company
Subsidiary, or any property or asset of the Company or any Company Subsidiary,
by or before any court, arbitrator or Governmental Entity, domestic or foreign,
(i) except as would not, individually or in the aggregate, have a Company
Material Adverse Effect or (ii) seeking, as of the date of this Agreement, to
delay or prevent the consummation of the transactions contemplated by this
Agreement.
(b) Except as would not, individually or in the aggregate, have a
Company Material Adverse Effect, neither the Company nor any Company Subsidiary
nor any property or asset of the Company or any Company Subsidiary is subject to
any continuing order of, consent decree, settlement agreement or other similar
written agreement with, or, to the Knowledge of the Company, continuing
investigation by, any Governmental Entity, or any order, writ, judgment,
injunction, decree, determination or award of any Governmental Entity or
arbitrator.
18
SECTION 3.10. Employee Benefit Plans; Labor Matters. (a) With
respect to each employee benefit plan, program, arrangement and contract
(including, without limitation, any "employee benefit plan", as defined in
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) maintained or contributed to by the Company or any Company
Subsidiary, or with respect to which the Company or any Company Subsidiary could
incur liability under section 4069, 4212(c) or 4204 of ERISA (the "Company
Benefit Plans"), the Company has made available to the Parent a true and correct
copy of (i) the most recent annual report (Form 5500) filed with the Internal
Revenue Service (the "IRS"), (ii) a complete copy of such Company Benefit Plan,
(iii) each trust agreement relating to such Company Benefit Plan, (iv) the most
recent summary plan description for each Company Benefit Plan for which a
summary plan description is required, (v) the most recent actuarial report or
valuation relating to a Company Benefit Plan subject to Title IV of ERISA and
(vi) the most recent determination letter, if any, issued by the IRS with
respect to any Company Benefit Plan qualified under section 401(a) of the Code.
(b) Neither the Company nor any "Company ERISA Affiliate" (as
defined below) presently maintains, sponsors or contributes to, nor within the
past six years has ever maintained, sponsored or contributed to a plan that is
subject to Title IV of ERISA. "Company ERISA Affiliate" means each business or
entity which is a member of a "controlled group of corporations," under "common
control" or an "affiliated service group" with the Company within the meaning of
Sections 414(b), (c) or (m) of the Code, or required to be aggregated with the
Company under Section 414(o) of the Code. No Company Benefit Plan is a
"multiemployer plan" (as such term is defined in section 3(37) of ERISA).
(c) With respect to the Company Benefit Plans, no event has
occurred and, to the Knowledge of the Company, there exists no condition or set
of circumstances in connection with which the Company or any Company Subsidiary
could be subject to any liability under the terms of such Company Benefit Plans,
ERISA, the Code or any other applicable Law that would, individually or in the
aggregate, have a Company Material Adverse Effect. Each of the Company Benefit
Plans has been operated and administered in all material respects in accordance
with applicable Laws and administrative or governmental rules and regulations
and terms of all applicable collective bargaining agreements, including, but not
limited to, ERISA and the Code, except where a violation of any such Law would
not, individually or in the aggregate, have a Company Material Adverse Effect.
Each of the Company Benefit Plans intended to be "qualified" within the meaning
of Sections 401(a) or 401(k) of the Code has received a favorable determination
letter as to such qualification from the IRS and each trust established in
connection with any Company Benefit Plan that is intended to be exempt from
federal income taxation under Section 501(a) of the Code has received a
favorable determination letter as to such exemption from the IRS, and no event
has occurred, either by reason of any action or failure to act, which would
cause the loss of any such qualification or exception. All contributions or
other amounts payable by the Company
19
or any Company Subsidiary with respect to each Company Benefit Plan in respect
of current or prior plan years have been paid or accrued in accordance with GAAP
and Section 412 of the Code. Each of the Company Benefit Plans is subject only
to the laws of the United States or a political subdivision thereof.
(d) Neither the Company nor any Company Subsidiary is a party to
any collective bargaining or other labor union contract applicable to persons
employed by the Company or any Company Subsidiary and no collective bargaining
agreement is being negotiated by the Company or any Company Subsidiary. As of
the date of this Agreement, there is no labor dispute, strike or work stoppage
against the Company or any Company Subsidiary pending or threatened in writing
causing, or reasonably likely to cause, any material interference with the
business activities of the Company or any Company Subsidiary. Except as would
not have a Company Material Adverse Effect, (i) none of the Company, any Company
Subsidiary, or, to the Knowledge of the Company, their respective
representatives or employees, has committed any unfair labor practices in
connection with the operation of the business of the Company or any Company
Subsidiary, and (ii) there is no charge or complaint against the Company or any
Company Subsidiary by the National Labor Relations Board or any comparable state
agency pending or threatened in writing.
(e) The Company has made available to Parent prior to the date of
this Agreement (i) copies of all employment agreements with officers of the
Company and each Company Subsidiary; (ii) copies of all severance plans,
agreements, programs and policies of the Company with or relating to its
employees; and (iii) copies of all plans, programs, agreements and other
arrangements of the Company with or relating to its employees which contain
change of control provisions.
(f) No Company Benefit Plan provides benefits, including, without
limitation, death or medical benefits (whether or not insured), with respect to
current or former employees of the Company or any Company Subsidiary for a
period in excess of two years beyond their retirement or other termination of
service, other than (i) coverage mandated by applicable Law, (ii) death benefits
or retirement benefits under any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), (iii) deferred compensation benefits
accrued as liabilities on the books of the Company or any Company Subsidiary or
(iv) the benefits the full cost of which is borne by the current or former
employee (or his beneficiary).
SECTION 3.11. Contracts and Commitments. (a) All contracts listed
or that would be required to be listed as an exhibit to the Company's Annual
Report on Form 10-K under the rules and regulations of the SEC relating to the
business of the Company and the Company Subsidiaries and any contracts that
would be required to be so listed but for the exception with respect to
contracts made in the ordinary course of business (collectively, the "Company
Material Contracts") are valid and in full force and effect, except to the
extent
20
they have previously expired in accordance with their terms. To the Knowledge of
the Company, no counterparty to any such Company Material Contract has violated
any provision of, or committed or failed to perform any act which, with or
without notice, lapse of time, or both, would constitute a default or other
breach under the provisions of, such Company Material Contract, except for
defaults or breaches which, individually or in the aggregate, would not have a
Company Material Adverse Effect.
(b) Neither the Company nor any Company Subsidiary nor any of
their respective affiliates has entered into any agreement or arrangement (i)
limiting or otherwise restricting the Company or any Company Subsidiary or any
of their respective successors from engaging or competing in any line of
business or in any geographic area or (ii) that would, after the Effective Time,
limit or otherwise restrict Parent or any Parent Subsidiary from engaging or
competing in any line of business or in any geographical area.
SECTION 3.12. Accounting and Tax Matters. To the Knowledge of the
Company, neither the Company nor any of its affiliates has taken or agreed to
take any action that would prevent the Merger from being accounted for under the
pooling of interests accounting method or would prevent the Merger from
constituting a transaction qualifying as a reorganization under Section 368(a)
of the Code. To the Knowledge of the Company, there are no agreements, plans or
other circumstances that would prevent the Merger from qualifying under Section
368(a) of the Code.
SECTION 3.13. Intellectual Property. "Intellectual Property"
means (a) patents, patent applications and statutory invention registrations,
(b) trademarks, service marks, trade dress, logos, trade names, corporate names,
and other source identifiers, and registrations and applications for
registration thereof, (c) copyrightable works, copyrights, and registrations and
applications for registration thereof, and (d) confidential and proprietary
information, including trade secrets and know-how. Except as would not,
individually or in the aggregate, have a Company Material Adverse Effect, (a) to
the Knowledge of the Company, the conduct of the business of the Company and the
Company Subsidiaries as currently conducted does not infringe upon or
misappropriate the Intellectual Property rights of any third party, and no claim
has been asserted to the Company that the conduct of the business of the Company
and the Company Subsidiaries as currently conducted infringes upon or may
infringe upon or misappropriates the Intellectual Property rights of any third
party, (b) with respect to each item of Intellectual Property owned by the
Company and the Company Subsidiaries and material to the businesses of the
Company and the Company Subsidiaries as currently conducted ("Company Owned
Intellectual Property"), the Company or a Company Subsidiary is the owner of the
entire right, title and interest in and to such Intellectual Property and is
entitled to use such Intellectual Property in the continued operation of its
respective business, (c) with respect to each item of Intellectual Property
licensed to the Company or a Company Subsidiary that is material to the
businesses of the Company and the Company
21
Subsidiaries as currently conducted ("Company Licensed Intellectual Property"),
the Company or a Company Subsidiary has the right to use such Company Licensed
Intellectual Property in the continued operation of its respective business in
accordance with the terms of the license agreement governing such Company
Licensed Intellectual Property, (d) to the Knowledge of the Company, the Company
Owned Intellectual Property is valid and enforceable, and has not been adjudged
invalid or unenforceable in whole or part, (e) to the Knowledge of the Company,
no person is engaging in any activity that infringes upon the Company Owned
Intellectual Property, (f) to the Knowledge of the Company, each license of the
Company Licensed Intellectual Property is valid and enforceable, is binding on
all parties to such license, and is in full force and effect, except to the
extent that they have previously expired in accordance with their respective
terms, and (g) to the Knowledge of the Company, no party to any license of the
Company Licensed Intellectual Property is in breach thereof or default
thereunder.
SECTION 3.14. Taxes. (a) Except as would not, individually or in
the aggregate, have a Company Material Adverse Effect, (i) the Company and each
of the Company Subsidiaries have timely filed or will timely file all returns
and reports required to be filed by them with any taxing authority with respect
to Taxes for any period ending on or before the Effective Time, taking into
account any extension of time to file granted to or obtained on behalf of the
Company and the Company Subsidiaries, (ii) all Taxes that are due prior to the
Effective Time have been paid or will be paid (other than Taxes which (A) are
not yet delinquent or (B) are being contested in good faith and have not been
finally determined), (iii) as of the date of this Agreement, no deficiency for
any Tax has been asserted or assessed by a taxing authority against the Company
or any of the Company Subsidiaries and (iv) the Company and each of the Company
Subsidiaries have provided adequate reserves in accordance with generally
accepted accounting principles in their financial statements for any Taxes that
have not been paid, whether or not shown as being due on any returns. As used in
this Agreement, "Taxes" shall mean any and all taxes, fees, levies, duties,
tariffs, imposts and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added or gains taxes;
license, registration and documentation fees; and customers' duties, tariffs and
similar charges.
(b) To the Knowledge of the Company, there are no material
disputes pending, or claims asserted in writing for, Taxes or assessments upon
the Company or any of the Company Subsidiaries, nor has the Company or any of
the Company Subsidiaries been requested in writing to give any currently
effective waivers extending the statutory period of
22
limitation applicable to any federal or state income tax return for any period
which disputes, claims, assessments or waivers are reasonably likely to have a
Company Material Adverse Effect.
(c) There are no Tax liens upon any property or assets of the
Company or any of the Company Subsidiaries except liens for current Taxes not
yet due and except for liens which have not had and are not reasonably likely to
have a Company Material Adverse Effect.
(d) Neither the Company nor any of the Company Subsidiaries has
been required to include in income any adjustment pursuant to Section 481 of the
Code by reason of a voluntary change in accounting method initiated by the
Company or any of the Company Subsidiaries, and the IRS has not initiated or
proposed any such adjustment or change in accounting method, in either case
which adjustment or change has had or is reasonably likely to have a Company
Material Adverse Effect.
(e) Except as set forth in the financial statements described in
Section 3.07, neither the Company nor any of the Company Subsidiaries has
entered into a transaction which is being accounted for under the installment
method of Section 453 of the Code, which would be reasonably likely to have a
Company Material Adverse Effect.
SECTION 3.15. Affiliate Transactions. Except as set forth in the
Company SEC Reports filed prior to the date of this Agreement, as of the date of
this Agreement, there are no material contracts, commitments, agreements,
arrangements, obligations, or other transactions between the Company or any of
the Company Subsidiaries, on the one hand, and any (i) officer or director of
the Company or any of the Company Subsidiaries, (ii) record or beneficial owner
of at least five percent of the voting securities of the Company or (iii)
affiliate (as such term is defined in Regulation 12b-2 promulgated under the
Exchange Act) of any such officer, director or beneficial owner, on the other
hand.
SECTION 3.16. Insurance. The Company and the Company Subsidiaries
have obtained and maintained in full force and effect insurance with responsible
and reputable insurance companies or associations in such amounts, on such
terms, with such deductibles, and covering such risks, including fire and other
risks insured against by extended coverage, as is customarily carried by
reasonably prudent Persons conducting businesses or owning assets similar to
those of the Company and the Company Subsidiaries, and each has maintained in
full force and effect public liability insurance, insurance against claims for
personal injury or death or property damage occurring in connection with the
activities of the Company and the Company Subsidiaries or any properties owned,
occupied or controlled by the Company or any Company Subsidiary, in such amount
as is customarily carried by reasonably prudent Persons conducting businesses or
owning assets similar to those of the Company and the Company Subsidiaries.
23
SECTION 3.17. Year 2000 Compliance. (a) The Company hereby
represents and warrants that it has adopted a written plan that it believes will
cause the Company Systems (as defined below) to be Year 2000 Compliant (as
defined below) (such plan, as it may be amended, modified or supplemented from
time to time being, the "Company Year 2000 Plan") in all material respects. The
Company has taken, and between the date of this Agreement and the Effective Time
will continue to take, all reasonable steps to implement the Company Year 2000
Plan with respect to the Company Systems. Notwithstanding anything in this
Section 3.17 to the contrary, the Company does not represent or warrant that the
Company Systems (or any other operations, systems, equipment or software of the
Company or the Company Subsidiaries or any of their respective affiliates) are
or will be Year 2000 Compliant after, at or prior to the Effective Time,
regardless of whether the Company Year 2000 Plan has or has not been implemented
or complied with.
(b) For purposes of this Section 3.17, (i) "Company Systems"
shall mean all computer, hardware, software, systems, and equipment (including
embedded microcontrollers in non-computer equipment) embedded within or required
to operate the current products of the Company and the Company Subsidiaries,
and/or material to or necessary for the Company and the Company Subsidiaries to
carry on their businesses as currently conducted; and (ii) "Year 2000 Compliant"
means that the Company Systems will (A) manage, accept, process, store and
output data involving 4-digit year dates and (B) accurately process date data
from, into and between the 20th and 21st centuries and the years 1999 and 2000
and leap year calculation.
SECTION 3.18. Vote Required. The only vote of the holders of any
class or series of capital stock of the Company necessary to approve this
Agreement, the Merger and the other transactions contemplated by this Agreement
is the affirmative vote of the holders of a majority of the outstanding shares
of Company Common Stock in favor of the approval of this Agreement.
SECTION 3.19. State Takeover Statutes. The Board of Directors of
the Company has approved this Agreement and the transactions contemplated hereby
(including the Company Option Agreement), and neither the provisions of Chapter
110C, 110D, or 100F of the Massachusetts General Laws nor any other antitakeover
or similar statute or regulation applies to the transactions contemplated by
this Agreement or the Company Option Agreement.
SECTION 3.20. Opinion of Financial Advisor. The Company has
received the opinion of Xxxxxxxxx & Xxxxx, LLC dated April 28, 1999 that, as of
such date, the Exchange Ratio is fair, from a financial point of view, to the
stockholders of the Company.
SECTION 3.21. Brokers. No broker, finder or investment banker
(other than Xxxxxxxxx & Xxxxx, LLC and Chestnut Partners, Inc.) is entitled to
any brokerage,
24
finder's or other fee or commission in connection with the Merger or the other
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company. The Company has heretofore made available to Parent a
complete and correct copy of all agreements between the Company and each of
Xxxxxxxxx & Xxxxx, LLC and Chestnut Partners, Inc. pursuant to which the
respective firms would be entitled to any payment relating to the Merger or any
other transactions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Except as set forth in the Disclosure Letter of even date
herewith delivered by Parent and Merger Sub to the Company concurrently with the
execution of this Agreement (the "Parent Disclosure Letter") (each section of
which qualifies the correspondingly numbered representation and warranty or
covenant to the extent specified therein), Parent and Merger Sub hereby jointly
and severally represent and warrant to the Company that:
SECTION 4.01. Organization and Qualification; Subsidiaries. (a)
Parent is a corporation duly incorporated, validly existing and in good standing
under the Laws of the State of Delaware. Except as would not, individually or in
the aggregate, have a Parent Material Adverse Effect (as defined below), Parent
has all corporate power and authority to own, lease and operate its properties
and to carry on its business as it is now being conducted. Except as would not,
individually or in the aggregate, have a Parent Material Adverse Effect, each
subsidiary of Parent (collectively, the "Parent Subsidiaries") is a corporation
duly incorporated, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted. Each of Parent and the Parent Subsidiaries is duly
qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary, except for such failures to be so qualified or licensed
and in good standing that would not have, individually or in the aggregate, a
Parent Material Adverse Effect. The term "Parent Material Adverse Effect" means
any change, circumstance or effect that is or is reasonably likely to be
materially adverse to the business, operations, assets, liabilities (including,
without limitation, contingent liabilities), financial condition or results of
operations of Parent and the Parent Subsidiaries taken as a whole, but shall not
include (i) any change in the market price or trading volume of Parent Common
Stock, (ii) any adverse effect due to attrition, after the date of this
Agreement, of Parent's employees, and (iii) any adverse effect due to changes,
after the date of this Agreement, in conditions affecting (A) the contract
research and medical marketing
25
services market in general, (B) the U.S. economy as a whole or (C) the European
Community as a whole.
(b) A true and complete list of all the Parent Subsidiaries,
together with the jurisdiction of incorporation of each Parent Subsidiary and
the percentage of the outstanding capital stock of each Parent Subsidiary owned
by Parent and each other Parent Subsidiary, is set forth in Section 4.01(b) of
the Parent Disclosure Letter. Except for the Parent Subsidiaries, Parent does
not directly or indirectly own any equity or similar interest in, or any
interest convertible into or exchangeable or exercisable for any equity or
similar interest in, any corporation, partnership, limited liability company,
joint venture or other business association or entity.
SECTION 4.02. Certificate of Incorporation and By-Laws. Parent
has heretofore furnished to the Company complete and correct copies of the
Parent Charter and the Parent By-Laws (as defined below) and of the Certificate
of Incorporation and the By-Laws of Merger Sub, each as amended to the date of
this Agreement. Such Certificates of Incorporation and By-Laws are in full force
and effect. Neither Parent nor any Parent Subsidiary is in violation of any
provision of its Certificate of Incorporation, By-Laws or equivalent
organizational documents.
SECTION 4.03. Capitalization. (a) The authorized capital stock of
Parent consists of (i) 140,000,000 shares of Parent Common Stock and (ii)
10,000,000 shares of preferred stock, par value $1.00 per share (the "Parent
Preferred Stock"). As of the date of this Agreement, (A) 58,670,765 shares of
the Parent Common Stock are issued and outstanding, all of which are validly
issued, fully paid and non-assessable, (B) no shares of Parent Common Stock are
held in the treasury of Parent or by Parent Subsidiaries, and (C) 7,178,839
shares are reserved for future issuance pursuant to stock options or restricted
share grants ("Parent Stock Options") under the Parent Stock Option Plans (as
defined below) (with respect to which options to acquire 5,177,275 shares of
Parent Common Stock are outstanding. As of the date of this Agreement, no shares
of Parent Preferred Stock were issued and outstanding and 1,000,000 shares of
Parent Preferred Stock have been designated as Series A Junior Participating
Preferred Stock and reserved for issuance pursuant to the Parent Rights Plan (as
defined in Section 2.07). Except for the Parent Option Agreement and Parent
Stock Options, there are no options, warrants or other rights, agreements,
arrangements or commitments of any character relating to the issued or unissued
capital stock of Parent or any Parent Subsidiary or obligating Parent or any
Parent Subsidiary to issue or sell any shares of capital stock of, or other
equity interests in, Parent or any Parent Subsidiary. All shares of Parent
Common Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and non-assessable. There
are no outstanding contractual obligations of Parent or any Parent Subsidiary to
repurchase, redeem or otherwise acquire any
26
shares of Parent Common Stock or any capital stock of any Parent Subsidiary.
Each outstanding share of capital stock of each Parent Subsidiary is duly
authorized, validly issued, fully paid and non-assessable and each such share
owned by Parent or another Parent Subsidiary is free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
limitations on Parent's or such other Parent Subsidiary's voting rights, charges
and other encumbrances of any nature whatsoever. There are no outstanding
contractual obligations of Parent or any Parent Subsidiary to provide funds to,
or make any investment (in the form of a loan, capital contribution or
otherwise) in, any Parent Subsidiary, other than a Parent Subsidiary that is
wholly owned by Parent and other Parent Subsidiaries, or any other Person.
"Parent Stock Option Plans" means the Plans listed in Schedule 4.03(I)(A) of the
Parent Disclosure Letter.
(b) The authorized capital stock of Merger Sub consists of 1,000
shares of common stock, par value $.01 per share, all of which are duly
authorized, validly issued, fully paid and non-assessable and free of any
preemptive rights in respect thereof and all of which are owned by Parent.
(c) The shares of Parent Common Stock to be issued in the Merger
pursuant to Section 2.01(a) will be duly authorized, validly issued, fully paid
and non-assessable and not subject to preemptive rights created by statute, the
Parent Charter or Amended and Restated By-Laws of Parent (the "Parent By-Laws")
or any agreement to which the Parent is a party or is bound.
SECTION 4.04. Authority Relative to This Agreement. Each of
Parent and Merger Sub has all necessary corporate power and authority to execute
and deliver this Agreement, and, subject to the terms and conditions of this
Agreement and obtaining the necessary approvals of Parent's stockholders, to
perform its obligations hereunder and to consummate the Merger and the other
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by each of Parent and Merger Sub and the consummation by each of
Parent and Merger Sub of the Merger and the other transactions contemplated by
this Agreement have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of Parent are necessary to
authorize this Agreement or to consummate the Merger and the other transactions
contemplated by this Agreement other than: (a) the filing and recordation of
appropriate merger documents as required by the MBCL; (b) the approval of the
issuance of shares of Parent Common Stock pursuant to the Merger by the holders
of a majority of the votes cast at the Parent Stockholders' Meeting (as defined
in Section 6.01) as required by the rules of the NYSE; (c) the approval of the
Parent Proposals by the requisite votes of the holders of Parent Common Stock at
the Parent Stockholders' Meeting; and (d) the filing and recordation of the
Parent Charter Amendment, as required by the Delaware General Corporation Law
(the "DGCL") and subject to the terms and conditions of this Agreement. This
Agreement has been
27
duly and validly executed and delivered by each of Parent and Merger Sub and,
assuming the due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of each of Parent and Merger
Sub, enforceable against each of Parent and Merger Sub in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law).
SECTION 4.05. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by each of Parent and Merger Sub do
not, and the performance of this Agreement by each of Parent and Merger Sub will
not, (i) conflict with or violate the Parent Charter or the Parent By-Laws or
any equivalent organizational documents of Merger Sub or any other Parent
Subsidiary, (ii) assuming that all consents, approvals, authorizations and other
actions described in Section 4.05(b) have been obtained and all filings and
obligations described in Section 4.05(b) have been made, conflict with or
violate any Law applicable to Parent or any Parent Subsidiary or by which any
property or asset of Parent or any Parent Subsidiary is bound or affected, or
(iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any right of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien or other encumbrance on any property or asset of
Parent or any Parent Subsidiary pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation, except, with respect to clauses (ii) and (iii), for
any such conflicts, violations, breaches, defaults, or other occurrences that
would not prevent or materially delay consummation of the Merger or otherwise
prevent Parent and Merger Sub from performing their obligations under this
Agreement, and would not, individually or in the aggregate, have a Parent
Material Adverse Effect.
(b) The execution and delivery of this Agreement by each of
Parent and Merger Sub do not, and the performance of this Agreement by each of
Parent and Merger Sub will not, require any consent, approval, authorization or
permit of, or filing with or notification to, any Governmental Entity, except
(i) for applicable requirements, if any, of the Exchange Act, Blue Sky Laws, the
Securities Act, the NYSE, state takeover Laws, the HSR Act, filings or approvals
required under the competition laws of foreign jurisdictions, the filing and
recordation of appropriate merger documents as required by the MBCL, the filing
and recordation of the Parent Charter Amendment as required by the DGCL and (ii)
where failure to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not prevent or delay consummation
of the Merger, or otherwise prevent Parent and Merger Sub from performing their
obligations under this Agreement, and would not, individually or in the
aggregate, have a Parent Material Adverse Effect.
28
SECTION 4.06. Permits; Compliance. (a) Parent and the Parent
Subsidiaries are in possession of all Permits that are material to the operation
of the business of Parent and the Parent Subsidiaries, taken as a whole, as they
are operated on the date hereof (and, for purposes of Section 7.03(a), as they
are operated as of the Closing Date) (collectively, the "Parent Permits"). No
suspension or cancellation of any Parent Permit is pending or, to the Knowledge
of Parent, threatened, except with respect to Parent Permits the suspension or
cancellation of which would not, individually or in the aggregate, have a Parent
Material Adverse Effect. Since July 1, 1998, neither Parent nor any Parent
Subsidiary has (i) been denied or failed to receive any Permit that it had
sought that would, if currently possessed by Parent or a Parent Subsidiary, be
reasonably likely to be material to the operation of the business of the Parent
and the Parent Subsidiaries, taken as a whole, as they are operated on the date
hereof (and, for purposes of Section 7.03(a), as they are operated as of the
Closing Date), or (ii) had any Permit suspended or canceled that would, if
currently possessed by Parent or a Parent Subsidiary, be reasonably likely to be
material to the operation of the business of Parent and the Parent Subsidiaries,
taken as a whole, as they are operated on the date hereof (and, for purposes of
Section 7.03(a), as they are operated as of the Closing Date).
(b) Except as would not, individually or in the aggregate, have a
Parent Material Adverse Effect, neither Parent nor any Parent Subsidiary is in
conflict with, or has violated any provision of, or committed or failed to
perform any act which, with or without notice, lapse of time, or both, would
constitute a default under the provisions of: (i) any Law applicable to Parent
or any Parent Subsidiary or by which any property or asset of Parent or any
Parent Subsidiary is bound or affected; (ii) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or any Parent Subsidiary is a party or
by which Parent or any Parent Subsidiary or any property or asset of Parent or
any Parent Subsidiary is bound or affected; or (iii) any Parent Permit.
(c) Except as would not have a Parent Material Adverse Effect,
since July 1, 1996, there have been no written notices, citations or decisions
by any governmental or regulatory body that any product or service produced,
provided, manufactured or marketed at any time by Parent or any Parent
Subsidiaries (the "Parent Products and Services") is defective or fails to meet
any applicable standards promulgated by any such governmental or regulatory
body. Except as would not have a Parent Material Adverse Effect, Parent and the
Parent Subsidiaries have complied in all material respects with the Laws
applicable to Parent and the Parent Subsidiaries with respect to the Parent
Products and Services.
SECTION 4.07. SEC Filings; Financial Statements; Absence of
Liabilities. (a) Parent has filed all forms, reports and documents required to
be filed by it with the SEC since January 1, 1997 (collectively, the "Parent SEC
Reports"). As of the respective dates they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, on
29
the date of such amending or superseding filing), (i) the Parent SEC Reports
were prepared in all material respects in accordance with the requirements of
the Securities Act or the Exchange Act, as the case may be, and (ii) none of the
Parent SEC Reports 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 made therein, in the light of the circumstances under which
they were made, not misleading. No Parent Subsidiary is required to file any
form, report or other document with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any notes and schedules thereto) contained in the Parent SEC Reports
complied as to form with the applicable accounting requirements and rules and
regulations of the SEC and was prepared in accordance with GAAP applied on a
consistent basis throughout the periods indicated (except as may be indicated in
the notes thereto or, in the case of unaudited financial statements, as
permitted by Form 10-Q of the SEC), and each presented fairly, in all material
respects, the consolidated financial position of Parent and the consolidated
Parent Subsidiaries as at the respective dates thereof and their results of
operations and cash flows for the respective periods indicated therein, all in
accordance with United States generally accepted accounting principles (subject,
in the case of unaudited statements, to normal and recurring year-end
adjustments which were not and are not expected, individually or in the
aggregate, to be material in amount).
(c) Except for liabilities and obligations reflected on the
December 31, 1998 consolidated balance sheet of Parent (including the notes
thereto), liabilities and obligations disclosed in Parent SEC Reports filed
prior to the date of this Agreement and other liabilities and obligations
incurred in the ordinary course of business consistent with past practice since
December 31, 1998 and that would not, individually or in the aggregate, have a
Parent Material Adverse Effect, neither Parent nor any Parent Subsidiary has any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise).
(d) Parent has heretofore made available to the Company complete
and correct copies of (i) all agreements, documents and other instruments not
yet filed by Parent with the SEC but that are currently in effect and that
Parent expects to file with the SEC after the date of this Agreement and (ii)
all amendments and modifications that have not been filed by Parent with the SEC
to all agreements, documents and other instruments that previously had been
filed by Parent with the SEC and are currently in effect.
SECTION 4.08. Absence of Certain Changes or Events. Since
December 31, 1998, except as specifically contemplated by this Agreement or as
disclosed in any Parent SEC Report filed prior to the date of this Agreement,
Parent and the Parent Subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice and, since such
date, there has not been:
30
(a) any changes, effects or circumstances, or any events
involving a prospective change or effect, that would, individually or in
the aggregate, constitute a Parent Material Adverse Effect; provided,
however, that, for purposes of this Section 4.08(a), the term "Parent
Material Adverse Effect" shall also be deemed not to include the adverse
effect on Parent of any delay, reduction, cancellation or change in the
terms of customer agreements resulting from the announcement of this
Agreement and the transactions contemplated hereby or from actions
required to be taken by Parent pursuant to the terms hereof;
(b) any change by Parent in its accounting methods, principles or
practices, except changes that were not material, individually or in the
aggregate, and that were required by or permitted in accordance with
GAAP;
(c) any declaration, setting aside or payment of any dividend or
distribution in respect of the shares of Parent Common Stock or any
redemption, purchase or other acquisition of any of Parent's securities;
(d) any entry by Parent or any Parent Subsidiary into any
commitment or transaction material to Parent and the Parent Subsidiaries
taken as a whole, except in the ordinary course of business consistent
with past practice; or
(e) any increase in or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing,
stock option (including, without limitation, the granting of stock
options, stock appreciation rights, performance awards or restricted
stock awards), stock purchase or other employee benefit plan, or any
other increase in the compensation payable or to become payable to any
executive officers of Parent or any Parent Subsidiary, except in the
ordinary course of business consistent with past practice.
SECTION 4.09. Absence of Litigation. (a) There are no
litigations, suits, claims, actions, proceedings or investigations pending or,
to the Knowledge of Parent, threatened against Parent or any Parent Subsidiary,
or any property or asset of Parent or any Parent Subsidiary, by or before any
court, arbitrator or Governmental Entity, domestic or foreign, (i) except as
would not, individually or in the aggregate, have a Parent Material Adverse
Effect or (ii) seeking, as of the date of this Agreement, to delay or prevent
the consummation of the transactions contemplated by this Agreement.
(b) Except as would not, individually or in the aggregate, have a
Parent Material Adverse Effect, neither Parent nor any Parent Subsidiary nor any
property or asset of Parent or any Parent Subsidiary is subject to any
continuing order of, consent decree, settlement agreement or other similar
written agreement with, or, to the Knowledge of Parent,
31
continuing investigation by, any Governmental Entity, or any order, writ,
judgment, injunction, decree, determination or award of any Governmental Entity
or arbitrator.
SECTION 4.10. Employee Benefit Plans; Labor Matters. (a) With
respect to each employee benefit plan, program, arrangement and contract
(including, without limitation, any "employee benefit plan", as defined in
section 3(3) of ERISA, maintained or contributed to by Parent or any Parent
Subsidiary, or with respect to which Parent or any Parent Subsidiary could incur
liability under section 4069, 4212(c) or 4204 of ERISA (the "Parent Benefit
Plans"), Parent has made available to the Company a true and correct copy of (i)
the most recent annual report (Form 5500) filed with the IRS, (ii) a complete
copy of such Parent Benefit Plan, (iii) each trust agreement relating to such
Parent Benefit Plan, (iv) the most recent summary plan description for each
Parent Benefit Plan for which a summary plan description is required, (v) the
most recent actuarial report or valuation relating to a Parent Benefit Plan
subject to Title IV of ERISA and (vi) the most recent determination letter, if
any, issued by the IRS with respect to any Parent Benefit Plan qualified under
section 401(a) of the Code.
(b) Neither the Parent nor any "Parent ERISA Affiliate" (as
defined below) presently maintains, sponsors or contributes to, nor within the
past six years has ever maintained, sponsored or contributed to a plan that is
subject to Title IV of ERISA. "Parent ERISA Affiliate" means each business or
entity which is a member of a "controlled group of corporations," under "common
control" or an "affiliated service group" with the Parent within the meaning of
Sections 414(b), (c) or (m) of the Code, or required to be aggregated with the
Parent under Section 414(o) of the Code. No Parent Benefit Plan is a
"multiemployer plan" (as such term is defined in section 3(37) of ERISA).
(c) With respect to the Parent Benefit Plans, no event has
occurred and, to the Knowledge of Parent, there exists no condition or set of
circumstances in connection with which Parent or any Parent Subsidiary could be
subject to any liability under the terms of such Parent Benefit Plans, ERISA,
the Code or any other applicable Law that would, individually or in the
aggregate, have a Parent Material Adverse Effect. Each of the Parent Benefit
Plans has been operated and administered in all material respects in accordance
with all applicable Laws and administrative or governmental rules and
regulations and terms of all applicable collective bargaining agreements,
including, but not limited to, ERISA and the Code, except where a violation of
any such Law, rule or regulation would not, individually or in the aggregate,
have a Parent Material Adverse Effect. Each of the Parent Benefit Plans intended
to be "qualified" within the meaning of Sections 401(a) or 401(k) of the Code
has received a favorable determination letter as to such qualification from the
IRS and each trust established in connection with any Parent Benefit Plan that
is intended to be exempt from federal income taxation under Section 501(a) of
the Code has received a favorable determination letter as to such exemption from
the IRS, and no event has occurred, either by reason of any action or
32
failure to act, which would cause the loss of any such qualification or
exception. All contributions or other amounts payable by the Parent or any
Parent Subsidiary with respect to each Parent Benefit Plan in respect of current
or prior plan years have been paid or accrued in accordance with GAAP and
Section 412 of the Code. Each of the Parent Benefit Plans is subject only to the
laws of the United States or a political subdivision thereof.
(d) Neither Parent nor any Parent Subsidiary is a party to any
collective bargaining or other labor union contract applicable to persons
employed by Parent or any Parent Subsidiary and no collective bargaining
agreement is being negotiated by Parent or any Parent Subsidiary. As of the date
of this Agreement, there is no labor dispute, strike or work stoppage against
Parent or any Parent Subsidiary pending or threatened in writing causing, or
reasonably likely to cause, any material interference with the business
activities of Parent or any Parent Subsidiary. Except as would not have a Parent
Material Adverse Effect, (i) none of Parent, any Parent Subsidiary, or, to the
Knowledge of Parent, their respective representatives or employees, has
committed any unfair labor practices in connection with the operation of the
business of Parent or any Parent Subsidiary, and (ii) there is no charge or
complaint against Parent or any Parent Subsidiary by the National Labor
Relations Board or any comparable state agency pending or threatened in writing.
(e) Parent has made available to the Company prior to the date of
this Agreement (i) copies of all employment agreements with officers of Parent,
(ii) copies of all severance plans, agreements, programs and policies of Parent
with or relating to its employees; and (iii) copies of all plans, programs,
agreements and other arrangements of Parent with or relating to its employees
which contain change of control provisions.
(f) No Parent Benefit Plan provides benefits, including, without
limitation, death or medical benefits (whether or not insured), with respect to
current or former employees of the Parent or any Parent Subsidiary for a period
in excess of two years beyond their retirement or other termination of service,
other than (i) coverage mandated by applicable Law, (ii) death benefits or
retirement benefits under any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), (iii) deferred compensation benefits accrued
as liabilities on the books of the Company or any Company Subsidiary, (iv) the
benefits the full cost of which is borne by the current or former employee (or
his beneficiary) or (v) the benefits available under the Covance Inc. Welfare
Plan.
SECTION 4.11. Contracts and Commitments. (a) All contracts listed
or that would be required to be listed as an exhibit to Parent's Annual Report
on Form 10-K under the rules and regulations of the SEC relating to the business
of Parent and Parent Subsidiaries and any contracts that would be required to be
so listed but for the exception with respect to contracts made in the ordinary
course of business (collectively, the "Parent Material Contracts") are valid and
in full force and effect, except to the extent they have previously
33
expired in accordance with their terms. To the Knowledge of Parent, no
counterparty to any such Parent Material Contract has violated any provision of,
or committed or failed to perform any act which, with or without notice, lapse
of time, or both, would constitute a default or other breach under the
provisions of, such Parent Material Contract, except for defaults or breaches
which, individually or in the aggregate, would not have a Parent Material
Adverse Effect.
(b) Neither Parent nor any Parent Subsidiary nor any of their
respective affiliates has entered into any agreement or arrangement (i) limiting
or otherwise restricting Parent or any Parent Subsidiary or any of their
respective successors from engaging or competing in any line of business or in
any geographic area or (ii) that would, after the Effective Time, limit or
otherwise restrict the Company or any Company Subsidiary from engaging or
competing in any line of business or in any geographical area.
SECTION 4.12. Accounting and Tax Matters. To the Knowledge of
Parent, neither Parent nor any of its affiliates has taken or agreed to take any
action that would prevent the Merger from being accounted for under the pooling
of interests accounting method or would prevent the Merger from constituting a
transaction qualifying as a reorganization under Section 368(a) of the Code. To
the Knowledge of Parent, there are no agreements, plans or other circumstances
that would prevent the Merger from qualifying under Section 368(a) of the Code.
SECTION 4.13. Intellectual Property. Except as would not,
individually or in the aggregate, have a Parent Material Adverse Effect, (a) to
the Knowledge of Parent, the conduct of the business of Parent and the Parent
Subsidiaries as currently conducted does not infringe upon or misappropriate the
Intellectual Property rights of any third party, and no claim has been asserted
to Parent that the conduct of the business of Parent and the Parent Subsidiaries
as currently conducted infringes upon or may infringe upon or misappropriates
the Intellectual Property rights of any third party, (b) with respect to each
item of Intellectual Property owned by Parent and the Parent Subsidiaries and
material to the businesses of Parent and the Parent Subsidiaries as currently
conducted ("Parent Owned Intellectual Property"), Parent or a Parent Subsidiary
is the owner of the entire right, title and interest in and to such Intellectual
Property and is entitled to use such Intellectual Property in the continued
operation of its respective business, (c) with respect to each item of
Intellectual Property licensed to Parent or a Parent Subsidiary that is material
to the businesses of Parent and the Parent Subsidiaries as currently conducted
("Parent Licensed Intellectual Property"), Parent or a Parent Subsidiary has the
right to use such Parent Licensed Intellectual Property in the continued
operation of its respective business in accordance with the terms of the license
agreement governing such Parent Licensed Intellectual Property, (d) to the
Knowledge of Parent, the Parent Owned Intellectual Property is valid and
enforceable, and has not been adjudged invalid or unenforceable in whole or
part, (e) to the Knowledge of Parent, no person
34
is engaging in any activity that infringes upon the Parent Owned Intellectual
Property, (f) to the Knowledge of Parent, each license of the Parent Licensed
Intellectual Property is valid and enforceable, is binding on all parties to
such license, and is in full force and effect, except to the extent that they
have previously expired in accordance with their respective terms, and (g) to
the Knowledge of Parent, no party to any license of the Licensed Intellectual
Property is in breach thereof or default thereunder.
SECTION 4.14. Taxes. (a) Except as would not, individually or in
the aggregate, have a Parent Material Adverse Effect, (i) Parent and each of the
Parent Subsidiaries have timely filed or will timely file all returns and
reports required to be filed by them with any taxing authority with respect to
Taxes for any period ending on or before the Effective Time, taking into account
any extension of time to file granted to or obtained on behalf of Parent and the
Parent Subsidiaries, (ii) all Taxes that are due prior to the Effective Time
have been paid or will be paid (other than Taxes which (1) are not yet
delinquent or (2) are being contested in good faith and have not been finally
determined), (iii) as of the date of this Agreement, no deficiency for any
material amount of Tax has been asserted or assessed by a taxing authority
against Parent or any of the Parent Subsidiaries and (iv) Parent and each of the
Parent Subsidiaries have provided adequate reserves in accordance with generally
accepted accounting principles in their financial statements for any Taxes that
have not been paid, whether or not shown as being due on any returns.
(b) To the Knowledge of Parent, there are no material disputes
pending, or claims asserted in writing for, Taxes or assessments upon Parent or
any of the Parent Subsidiaries, nor has Parent or any of the Parent Subsidiaries
been requested in writing to give any currently effective waivers extending the
statutory period of limitation applicable to any federal or state income tax
return for any period which disputes, claims, assessments or waivers are
reasonably likely to have a Parent Material Adverse Effect.
(c) There are no Tax liens upon any property or assets of Parent
or any of the Parent Subsidiaries except liens for current Taxes not yet due and
except for liens which have not had and are not reasonably likely to have a
Parent Material Adverse Effect.
(d) Neither Parent nor any of the Parent Subsidiaries has been
required to include in income any adjustment pursuant to Section 481 of the Code
by reason of a voluntary change in accounting method initiated by Parent or any
of the Parent Subsidiaries, and the IRS has not initiated or proposed any such
adjustment or change in accounting method, in either case which adjustment or
change has had or is reasonably likely to have a Parent Material Adverse Effect.
(e) Except as set forth in the financial statements described in
Section 3.07, neither Parent nor any of the Parent Subsidiaries has entered into
a transaction which is being
35
accounted for under the installment method of Section 453 of the Code, which
would be reasonably likely to have a Parent Material Adverse Effect.
SECTION 4.15. Affiliate Transactions. Except as set forth in the
Parent SEC Reports filed prior to the date of this Agreement, as of the date of
this Agreement, there are no material contracts, commitments, agreements,
arrangements, obligations, or other transactions between Parent or any of the
Parent Subsidiaries, on the one hand, and any (i) officer or director of Parent
or any of the Parent Subsidiaries, (ii) record or beneficial owner of at least
five percent of the voting securities of Parent or (iii) affiliate (as such term
is defined in Regulation 12b-2 promulgated under the Exchange Act) of any such
officer, director or beneficial owner, on the other hand.
SECTION 4.16. Insurance. Parent and the Parent Subsidiaries have
obtained and maintained in full force and effect insurance with responsible and
reputable insurance companies or associations in such amounts, on such terms,
with such deductibles, and covering such risks, including fire and other risks
insured against by extended coverage, as is customarily carried by reasonably
prudent Persons conducting businesses or owning assets similar to those of
Parent and the Parent Subsidiaries, and each has maintained in full force and
effect public liability insurance, insurance against claims for personal injury
or death or property damage occurring in connection with the activities of
Parent and the Parent Subsidiaries or any properties owned, occupied or
controlled by Parent or any Parent Subsidiary, in such amount as is customarily
carried by reasonably prudent Persons conducting businesses or owning assets
similar to those of Parent and the Parent Subsidiaries.
SECTION 4.17. Year 2000 Compliance. (a) Parent hereby represents
and warrants that it has adopted a written plan that it believes will cause the
Parent Systems (as defined below) to be Year 2000 Compliant (as defined below)
(such plan, as it may be amended, modified or supplemented from time to time
being, the "Parent Year 2000 Plan") in all material respects. Parent has taken,
and between the date of this Agreement and the Effective Time will continue to
take, all reasonable steps to implement the Parent Year 2000 Plan with respect
to the Parent Systems. Notwithstanding anything in this Section 4.17 to the
contrary, Parent does not represent or warrant that the Parent Systems (or any
other operations, systems, equipment or software of Parent or the Parent
Subsidiaries or any of their respective affiliates) are or will be Year 2000
Compliant after, at or prior to the Effective Time, regardless of whether the
Parent Year 2000 Plan has or has not been implemented or complied with.
(b) For purposes of this Section 4.17, (i) "Parent Systems" shall
mean all computer, hardware, software, systems, and equipment (including
embedded microcontrollers in non-computer equipment) embedded within or required
to operate the current products of the Parent and the Parent Subsidiaries,
and/or material to or necessary for Parent and the
36
Parent Subsidiaries to carry on their businesses as currently conducted; and
(ii) "Year 2000 Compliant" means that the Parent Systems will (A) manage,
accept, process, store and output data involving 4-digit year dates and (B)
accurately process date data from, into and between the 20th and 21st centuries
and the years 1999 and 2000 and leap year calculation.
SECTION 4.18. Vote Required. The affirmative vote of a majority
of the shares of Parent Common Stock present in person or represented by proxy
at the Parent Stockholders' Meeting (as defined below) is required to approve
the issuance of shares of Parent Common Stock by Parent pursuant to the Merger.
The affirmative vote of a majority of the outstanding shares of Parent Common
Stock is required to approve the Parent Charter Amendment. No other vote of the
stockholders of Parent is required by Law, the Parent Charter, the Parent
By-Laws or otherwise in order for Parent and Merger Sub to consummate the Merger
and the transactions contemplated hereby.
SECTION 4.19. Operations of Merger Sub. Merger Sub is a direct,
wholly owned subsidiary of Parent, was formed solely for the purpose of engaging
in the transactions contemplated by this Agreement, has engaged in no other
business activities and has conducted its operations only as contemplated by
this Agreement.
SECTION 4.20. Opinion of Financial Advisor. Parent has received
the opinion of Lazard Freres & Co. LLC dated April 28, 1999 that, as of such
date, the Exchange Ratio is fair, from a financial point of view, to Parent.
SECTION 4.21. Brokers. No broker, finder or investment banker
(other than Lazard Freres & Co. LLC) is entitled to any brokerage, finder's or
other fee or commission in connection with the Merger or the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent. Parent has heretofore made available to the Company a complete and
correct copy of all agreements between Parent and Lazard Freres & Co. LLC
pursuant to which such firm would be entitled to any payment relating to the
Merger or any other transactions.
ARTICLE V
CONDUCT OF BUSINESSES PENDING THE MERGER
SECTION 5.01. Conduct of Business by the Company Pending the
Merger. The Company covenants and agrees that, between the date of this
Agreement and the Effective Time, except as specifically contemplated by any
other provision of this Agreement, unless Parent shall otherwise agree in
writing (such agreement not to be unreasonably withheld):
37
(a) the Company and the Company Subsidiaries shall carry on their
respective businesses in the usual, regular and ordinary course in all
material respects, in substantially the same manner as heretofore
conducted, and shall use all reasonable efforts to preserve intact their
present lines of business, maintain their rights and franchises and
preserve their relationships with employees, customers, suppliers and
others having business dealings with them; provided, however, that no
action by the Company or any Company Subsidiary with respect to matters
specifically addressed by any other provision of this Section 5.01 shall
be deemed a breach of this Section 5.01(a) unless such action would
constitute a breach of one or more of such other provisions;
(b) neither the Company nor any Company Subsidiary shall amend or
otherwise change its Certificate of Incorporation or By-Laws or
equivalent organizational documents;
(c) neither the Company nor any Company Subsidiary shall issue,
sell, pledge, dispose of, grant or encumber, or authorize the issuance,
sale, pledge, disposition, grant or encumbrance of, any shares of
capital stock of the Company or any Company Subsidiary of any class, or
any options, warrants, convertible securities or other rights of any
kind to acquire any shares of such capital stock, or any other ownership
interest (including, without limitation, any phantom interest), of the
Company or any Company Subsidiary, except for (i) the issuance of a
maximum of 2,376,138 shares of Company Common Stock issuable pursuant to
Company Stock Options outstanding on the date hereof or pursuant to the
Purchase Plan in accordance with the respective terms thereof and (ii)
the issuance, in the ordinary course of business and consistent with
past practice, of Company Stock Options to purchase a maximum of 500,000
shares of Company Common Stock pursuant to Company Stock Option Plans in
effect on the date of this Agreement and the shares of Company Common
Stock issuable pursuant to such Company Stock Options, in accordance
with the terms of the Company Stock Option Plans and (iii) issuances by
a direct or indirect wholly owned subsidiary of the Company of capital
stock to such subsidiary's parent;
(d) neither the Company nor any Company Subsidiary shall declare,
set aside, make or pay any dividend or other distribution, payable in
cash, stock, property or otherwise, with respect to any of its capital
stock, other than dividends by a direct or indirect wholly owned
subsidiary of the Company to such subsidiary's parent;
(e) neither the Company nor any Company Subsidiary shall
reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock, except for
any such transaction by a wholly owned
38
subsidiary of the Company that remains a wholly owned subsidiary of the
Company after the consummation of such transaction;
(f) neither the Company nor any Company Subsidiary shall: (i)
acquire or dispose of (including, without limitation, by merger,
consolidation, or acquisition or disposition of stock or assets) any
interest in any corporation, partnership, other business organization or
any division thereof or any assets, other than (A) pursuant to the
definitive agreements listed in Section 5.01(f) of the Company
Disclosure Letter, (B) the acquisition or disposition of assets in the
ordinary course of business consistent with past practice not in
connection with acquiring a business, (C) other such acquisitions
involving the payment solely of cash consideration, such cash
consideration not to exceed $25,000,000 in the aggregate, and (D) other
such dispositions involving the receipt solely of cash consideration,
such cash consideration not to exceed $2,000,000 in the aggregate; (ii)
incur any indebtedness for borrowed money or issue any debt securities
or assume, guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any Person, or make any loans or
advances, except for (A) indebtedness incurred in the ordinary course of
business and consistent with past practice and (B) indebtedness of the
Company to a direct or indirect wholly owned Company Subsidiary or
indebtedness of a direct or indirect wholly owned Company Subsidiary to
the Company or another direct or indirect wholly owned Company
Subsidiary; (iii) authorize any capital expenditure, other than capital
expenditures, for the Company and the Company Subsidiaries as a whole,
in an aggregate amount not exceeding $15,000,000; or (iv) pledge or
encumber assets of the Company or any Company Subsidiary, except in the
ordinary course of business and in a manner consistent with past
practice;
(g) neither the Company nor any Company Subsidiary shall change
its method of accounting in effect at June 30, 1998, except as required
by changes in GAAP or the accounting rules and regulations of the SEC;
(h) neither the Company nor any Company Subsidiary shall make any
material tax election or settle or compromise any material federal,
state, local or foreign income tax liability;
(i) neither the Company nor any Company Subsidiary shall take any
action that would result in (i) any of the representations or warranties
of the Company set forth in this Agreement that are qualified as to
materiality becoming untrue, (ii) any of such representations or
warranties that are not so qualified becoming untrue in any material
respect or (iii) except as otherwise permitted by Section 6.04, any of
the conditions to the Merger set forth in Article VII not being
satisfied; and
39
(j) neither the Company nor any Company Subsidiary shall
authorize or enter into any agreement to do anything prohibited by
Sections 5.01(b) through (i).
SECTION 5.02. Conduct of Business by Parent Pending the Merger.
Parent agrees that, between the date of this Agreement and the Effective Time,
except as specifically contemplated by any other provision of this Agreement,
unless the Company shall otherwise agree in writing (such agreement not to be
unreasonably withheld):
(a) Parent and the Parent Subsidiaries shall carry on their
respective businesses in the usual, regular and ordinary course in all
material respects, in substantially the same manner as heretofore
conducted, and shall use all reasonable efforts to preserve intact their
present lines of business, maintain their rights and franchises and
preserve their relationships with employees, customers, suppliers and
others having business dealings with them; provided, however, that no
action by Parent or any Parent Subsidiary with respect to matters
specifically addressed by any other provision of this Section 5.02 shall
be deemed a breach of this Section 5.02(a) unless such action would
constitute a breach of one or more of such other provisions;
(b) neither Parent nor any Parent Subsidiary shall amend or
otherwise change its Certificate of Incorporation or By-Laws or
equivalent organizational documents;
(c) neither Parent nor any Parent Subsidiary shall issue, sell,
pledge, dispose of, grant or encumber, or authorize the issuance, sale,
pledge, disposition, grant or encumbrance of, any shares of capital
stock of Parent or any Parent Subsidiary of any class, or any options,
warrants, convertible securities or other rights of any kind to acquire
any shares of such capital stock, or any other ownership interest
(including, without limitation, any phantom interest), of Parent or any
Parent Subsidiary, except for (i) the issuance of a maximum of 5,177,275
shares of Parent Common Stock issuable pursuant to Parent Stock Options
outstanding on the date hereof in accordance with the terms thereof,
(ii) the issuance, in the ordinary course of business and consistent
with past practice, of Parent Stock Options to purchase a maximum of
500,000 shares of Parent Common Stock pursuant to Parent Stock Option
Plans in effect on the date of this Agreement and the shares of Parent
Common Stock issuable pursuant to such Parent Stock Options, in
accordance with the terms of the Parent Stock Option Plans, (iii)
issuances for Parent's Stock Purchase Savings Plan, (iv) issuances for
Parent's Employee Stock Purchase Plan and (v) issuances by a direct or
indirect wholly owned subsidiary of Parent of capital stock to such
subsidiary's parent;
(d) neither Parent nor any Parent Subsidiary shall declare, set
aside, make or pay any dividend or other distribution, payable in cash,
stock, property or otherwise,
40
with respect to any of its capital stock, other than dividends by a
direct or indirect wholly owned subsidiary of Parent to such
subsidiary's parent;
(e) neither Parent nor any Parent Subsidiary shall reclassify,
combine, split, subdivide or redeem, purchase or otherwise acquire,
directly or indirectly, any of its capital stock, except for (i) any
such transaction by a wholly owned subsidiary of Parent that remains a
wholly owned subsidiary of Parent after the consummation of such
transaction and (ii) ordinary course purchases for use in connection
with Parent's Stock Purchase Savings Plan;
(f) neither Parent nor any Parent Subsidiary shall (i) acquire or
dispose of (including, without limitation, by merger, consolidation, or
acquisition or disposition of stock or assets) any interest in any
corporation, partnership, other business organization or any division
thereof or any assets, other than (A) pursuant to the definitive
agreements listed in Section 5.02(f) of the Parent Disclosure Letter,
(B) the acquisition or disposition of assets in the ordinary course of
business consistent with past practice not in connection with acquiring
a business, (C) other such acquisitions involving the payment solely of
cash consideration, such cash consideration not to exceed $50,000,000 in
the aggregate, and (D) other such dispositions involving the receipt
solely of cash consideration, such cash consideration not to exceed
$10,000,000 in the aggregate, (ii) incur any indebtedness for borrowed
money or issue any debt securities or assume, guarantee or endorse, or
otherwise as an accommodation become responsible for, the obligations of
any Person, or make any loans or advances, except for (A) indebtedness
incurred in the ordinary course of business and consistent with past
practice and (B) indebtedness of Parent to a direct or indirect wholly
owned Parent Subsidiary or indebtedness of a direct or indirect wholly
owned Parent Subsidiary to Parent or another direct or indirect wholly
owned Parent Subsidiary; (iii) authorize any capital expenditure, other
than capital expenditures, for Parent and the Parent Subsidiaries as a
whole, in an aggregate amount not exceeding the sum of (A) $95,000,000,
the amount budgeted by Parent for 1999, and (B) $10,000,000; or (iv)
pledge or encumber assets of Parent or any Parent Subsidiary, except in
the ordinary course of business and in a manner consistent with past
practice;
(g) neither Parent nor any Parent Subsidiary shall change its
methods of accounting in effect at December 31, 1998, except as required
by changes in GAAP or the accounting rules and regulations of the SEC;
(h) neither Parent nor any Parent Subsidiary shall take any
action that would result in (i) any of the representations or warranties
of Parent set forth in this Agreement that are qualified as to
materiality becoming untrue, (ii) any of such representations or
warranties that are not so qualified becoming untrue in any material
41
respect or (iii) except as otherwise permitted by Section 6.04, any of
the conditions to the Merger set forth in Article VII not being
satisfied; and
(i) neither Parent nor any Parent Subsidiary shall authorize or
enter into any agreement to do anything prohibited by Sections 5.02(b)
through (h).
SECTION 5.03. Notification of Certain Matters. (a) The Company
shall give prompt notice to Parent of (i) the occurrence, or non-occurrence, of
any event the occurrence, or non-occurrence, of which would be likely to cause
(x) any representation or warranty of the Company contained in this Agreement
that is qualified as to materiality to be untrue or inaccurate or any such
representation or warranty that is not so qualified to be untrue or inaccurate
in any material respect or (y) the Company to be unable to comply in any
material respect with any of its covenants or agreements contained in this
Agreement or (z) any condition to the obligations of Parent to consummate the
transactions contemplated by this Agreement becoming incapable of being
satisfied and (ii) any failure of the Company to comply with any covenant or
agreement to be complied with by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 5.03(a) shall not limit or
otherwise affect the remedies available to Parent under this Agreement.
(b) Parent shall give prompt notice to the Company of (i) the
occurrence, or non-occurrence, of any event the occurrence, or non-occurrence,
of which would be likely to cause (x) any representation or warranty of Parent
or Merger Sub contained in this Agreement that is qualified as to materiality to
be untrue or inaccurate or any such representation or warranty that is not so
qualified to be untrue or inaccurate in any material respect or (y) Parent or
Merger Sub to be unable to comply in any material respect with any of its
covenants or agreements contained in this Agreement or (z) any condition to the
obligations of the Company to consummate the transactions contemplated by this
Agreement becoming incapable of being satisfied and (ii) any failure of Parent
or Merger Sub to comply with any covenant or agreement to be complied with by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 5.03(b) shall not limit or otherwise affect the remedies available to
the Company under this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Registration Statement; Joint Proxy Statement. (a)
As promptly as practicable after the execution of this Agreement, (i) Parent and
the Company shall prepare and file with the SEC a joint proxy statement
(together with any amendments thereof or supplements thereto, the "Proxy
Statement") relating to the meetings of the
42
Company's stockholders (the "Company Stockholders' Meeting") and Parent's
stockholders (the "Parent Stockholders' Meeting" and, together with the Company
Stockholders' Meeting, the "Stockholders' Meetings") to be held to consider
approval of this Agreement and the issuance of shares of Parent Common Stock
pursuant to the terms of the Merger and (ii) Parent shall prepare and file with
the SEC a registration statement on Form S-4 (together with all amendments
thereto, the "Registration Statement") in which the Proxy Statement shall be
included as a prospectus, in connection with the registration under the
Securities Act of the shares of Parent Common Stock to be issued to the
stockholders of the Company pursuant to the Merger. Parent and the Company each
shall use their reasonable best efforts to cause the Registration Statement to
become effective as promptly as practicable, and, prior to the effective date of
the Registration Statement, Parent shall take all or any action required under
any applicable federal or state securities Laws in connection with the issuance
of shares of Parent Common Stock pursuant to the Merger. The Company shall
furnish all information concerning the Company as Parent may reasonably request
in connection with such actions and the preparation of the Registration
Statement and Proxy Statement. As promptly as practicable after the Registration
Statement shall have become effective, each of Parent and the Company shall mail
the Proxy Statement to its stockholders.
(b) (i) The Proxy Statement shall include the recommendation of
the Board of Directors of the Company to the holders of Company Common Stock in
favor of approval of this Agreement; provided, however, that the Board of
Directors of the Company may, at any time prior to the Effective Time, withdraw,
modify or change any such recommendation to the extent that the Board of
Directors of the Company determines in good faith after consultation with
independent legal counsel (who may be the Company's regularly engaged
independent legal counsel) that the failure to so withdraw, modify or change its
recommendation could reasonably be deemed to cause the Board of Directors of the
Company to breach its fiduciary duties to the holders of Company Common Stock
under applicable Law and, notwithstanding anything to the contrary contained in
this Agreement, such a withdrawal, modification or change in such recommendation
shall not constitute a breach of this Agreement by the Company.
(ii) The Proxy Statement shall include the recommendation of the
Board of Directors of Parent to the holders of Parent Common Stock in favor of
approval of the Parent Proposals; provided, however, that the Board of Directors
of Parent may, at any time prior to the Effective Time, withdraw, modify or
change any such recommendation to the extent that the Board of Directors of
Parent determines in good faith after consultation with independent legal
counsel (who may be Parent's regularly engaged independent legal counsel) that
the failure to so withdraw, modify or change its recommendation could reasonably
be deemed to cause the Board of Directors of Parent to breach its fiduciary
duties to the holders of Parent Common Stock under applicable Law and,
notwithstanding anything to the contrary contained
43
in this Agreement, such a withdrawal, modification or change in such
recommendation shall not constitute a breach of this Agreement by Parent.
(c) No amendment or supplement to the Proxy Statement or the
Registration Statement will be made by Parent or the Company without the
approval of the other party (such approval not to be unreasonably withheld or
delayed). Parent and the Company shall each advise the other, promptly after the
receipt of notice thereof, of the time when the Registration Statement has
become effective or any supplement or amendment has been filed, of the issuance
of any stop order, of the suspension of the qualification of the Parent Common
Stock issuable in connection with the Merger for offering or sale in any
jurisdiction, or of any request by the SEC for amendment of the Proxy Statement
or the Registration Statement or comments thereon and responses thereto or
requests by the SEC for additional information.
(d) The information supplied by Parent for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the time the
Registration Statement is declared effective, (ii) the time the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to the
stockholders of the Parent and the Company, (iii) the time of each of the
Stockholders' Meetings and (iv) the Effective Time, contain any untrue statement
of a material fact or fail to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If, at any time prior
to the Effective Time, any event or circumstance relating to Parent or any
Parent Subsidiary, or their respective officers or directors, should be
discovered by Parent which should be set forth in an amendment or a supplement
to the Registration Statement or Proxy Statement, Parent shall promptly inform
the Company. All documents that Parent is responsible for filing with the SEC in
connection with the Merger or the other transactions contemplated by this
Agreement will comply as to form in all material respects with the applicable
requirements of the Securities Act and the rules and regulations thereunder and
the Exchange Act and the rules and regulations thereunder.
(e) The information supplied by the Company for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the time the
Registration Statement is declared effective, (ii) the time the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to the
stockholders of the Company and Parent, (iii) the time of each of the
Stockholders' Meetings and (iv) the Effective Time, contain any untrue statement
of a material fact or fail to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. If, at any time prior
to the Effective Time, any event or circumstance relating to the Company or any
Company Subsidiary, or their respective officers or directors, should be
discovered by the Company which should be set forth in an amendment or a
supplement to the Registration Statement or Proxy Statement, the Company shall
promptly inform Parent. All documents that the Company is responsible for filing
with the SEC in
44
connection with the Merger or the other transactions contemplated by this
Agreement will comply as to form in all material respects with the applicable
requirements of the Securities Act and the rules and regulations thereunder and
the Exchange Act and the rules and regulations thereunder.
SECTION 6.02. Stockholders' Meetings. The Company shall call and
hold the Company Stockholders' Meeting, and Parent shall call and hold the
Parent Stockholders' Meeting, as promptly as practicable for the purpose of
voting upon the approval of this Agreement and the approval of the Parent
Proposals, as the case may be, and Parent and the Company shall use their
reasonable best efforts to hold the Stockholders' Meetings on the same day and
as soon as practicable after the date on which the Registration Statement
becomes effective. Parent shall use its reasonable best efforts to solicit from
holders of Parent Common Stock proxies in favor of approval of the Parent
Proposals, and shall take all other action necessary or advisable to secure the
vote or consent of holders of Parent Common Stock required by the rules of the
NYSE or the DGCL to obtain approval of the Parent Proposals, except to the
extent that the Board of Directors of Parent determines in good faith after
consultation with independent legal counsel (who may be Parent's regularly
engaged independent legal counsel) that doing so could reasonably be deemed to
cause the Board of Directors of Parent to breach its fiduciary duties to the
holders of Parent Common Stock under applicable Law and, notwithstanding
anything to the contrary contained in this Agreement, any such failure to
solicit proxies or take other solicitation action under this sentence to secure
the vote or consent of holders of Parent Common Stock shall not constitute a
breach of this Agreement by Parent or Merger Sub. The Company shall use its
reasonable best efforts to solicit from holders of Company Common Stock proxies
in favor of approval of this Agreement, and shall take all other action
necessary or advisable to secure the vote or consent of holders of Company
Common Stock required by the rules of the NASD or the MBCL to obtain approval of
this Agreement, except to the extent that the Board of Directors of the Company
determines in good faith after consultation with independent legal counsel (who
may be the Company's regularly engaged independent legal counsel) that doing so
could reasonably be deemed to cause the Board of Directors of the Company to
breach its fiduciary duties to the holders of Company Common Stock under
applicable Law and, notwithstanding anything to the contrary contained in this
Agreement, any such failure to solicit proxies or take other solicitation action
under this sentence to secure the vote or consent of holders of Company Common
Stock shall not constitute a breach of this Agreement by the Company.
SECTION 6.03. Access to Information; Confidentiality. (a) Except
as required pursuant to any confidentiality agreement or similar agreement or
arrangement to which Parent or the Company or any of their respective
subsidiaries is a party or pursuant to applicable Law, from the date of this
Agreement to the Effective Time, Parent and the Company shall (and shall cause
their respective subsidiaries to): (i) provide to the other (and its officers,
directors, employees, accountants, consultants, legal counsel, agents and other
45
representatives, collectively, "Representatives") access at reasonable times
upon prior notice to the officers, employees, agents, properties, offices and
other facilities of the other and its subsidiaries and to the books and records
thereof and (ii) furnish promptly such information concerning the business,
properties, contracts, assets, liabilities, personnel and other aspects of the
other party and its subsidiaries as the other party or its Representatives may
reasonably request.
(b) With respect to information that is made available by one
party to another pursuant to Section 6.03(a) or pursuant to any other provision
of this Agreement, the receiving party shall comply with, and shall cause its
Representatives to comply with, the provisions relating to confidentiality
contained in the Confidentiality Agreement dated March 30, 1999 (the
"Confidentiality Agreement") between the Company and Parent.
(c) No investigation by either the Company or Parent and Merger
Sub shall affect the representations and warranties of the other.
SECTION 6.04. No Solicitation of Transactions. (a) The Company
agrees that, from and after the date hereof until the earlier of the Effective
Time or the termination of this Agreement in accordance with Article VIII,
neither it nor any Company Subsidiary shall, and that it shall cause its and
each Company Subsidiary's Representatives not to, directly or indirectly,
initiate, solicit or encourage any inquiries or the making of any proposal, or
offer with respect to a merger, reorganization, share exchange, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving, or any purchase or sale of all or any significant portion
of the assets or 20% or more of the equity securities of, the Company or any
Company Subsidiary (any such proposal or offer being hereinafter referred to as
a "Company Acquisition Proposal"). The Company further agrees that neither it
nor any Company Subsidiaries shall, and that it shall cause its and each Company
Subsidiary's Representatives not to, directly or indirectly, have any discussion
with or provide any confidential information or data relating to the Company or
any Company Subsidiary to any Person relating to a Company Acquisition Proposal
or engage in any negotiations concerning a Company Acquisition Proposal, or
otherwise facilitate any effort or attempt to make or implement a Company
Acquisition Proposal or accept a Company Acquisition Proposal; provided,
however, that nothing contained in this Section 6.04(a) shall prevent the
Company or the Company Board from (i) complying with Rule 14d-9 or Rule 14e-2
promulgated under the Exchange Act with regard to a Company Acquisition
Proposal; (ii) engaging in any discussions or negotiations with, or providing
any information to, any Person in response to an unsolicited written Company
Acquisition Proposal by any such Person; or (iii) recommending such an
unsolicited written Company Acquisition Proposal to the holders of Company
Common Stock if, in any such case as is referred to in clause (ii) or (iii), (A)
the Company Board concludes in good faith (after consultation with its financial
advisors) that such Company Acquisition Proposal would, if consummated, result
in a transaction more favorable to holders of Company
46
Common Stock than the transaction contemplated by this Agreement (any such more
favorable Company Acquisition Proposal being referred to in this Agreement as a
"Company Superior Proposal"), (B) the Company Board determines in good faith
after consultation with independent legal counsel (who may be the Company's
regularly engaged independent legal counsel) that such action could reasonably
be deemed to be necessary for it to act in a manner consistent with its
fiduciary duties under applicable Law, (C) prior to providing any information or
data regarding the Company or any Company Subsidiary to any Person or any of
such Person's Representatives in connection with a Company Superior Proposal by
such Person, the Company receives from such Person an executed confidentiality
agreement on terms at least as restrictive on such Person as those contained in
the Confidentiality Agreement and (D) prior to providing any information or data
to any Person or any of such Person's Representatives or entering into
discussions or negotiations with any Person or any of such Person's
Representatives in connection with a Company Superior Proposal by such Person,
the Company notifies Parent promptly of the receipt of such Company Superior
Proposal indicating, in connection with such notice, the name of such Person and
attaching a copy of the proposal or offer or providing a complete written
summary thereof. The Company agrees that it will immediately cease and cause to
be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any Company Acquisition Proposal.
The Company agrees that it shall keep Parent informed, on a current basis, of
the status and terms of any such proposals or offers and the status of any such
discussions or negotiations. The Company agrees that it will take the necessary
steps to promptly inform each Company Subsidiary and each Representative of the
Company or any Company Subsidiary of the obligations undertaken in this Section
6.04(a).
(b) Parent agrees that, from and after the date hereof until the
earlier of the Effective Time or the termination of this Agreement in accordance
with Article VIII, neither it nor any Parent Subsidiary shall, and that it shall
cause its and each Parent Subsidiary's Representatives not to, directly or
indirectly, initiate, solicit or encourage any inquiries or the making of any
proposal, or offer with respect to a merger, reorganization, share exchange,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving, or any purchase or sale of all or any
significant portion of the assets or 20% or more of the equity securities of,
Parent or any Parent Subsidiary that, in any such case, could reasonably be
expected to interfere with the completion of the Merger or the other
transactions contemplated by this Agreement (any such proposal or offer being
hereinafter referred to as an "Parent Acquisition Proposal"). Parent further
agrees that neither it nor any Parent Subsidiaries shall, and that it shall
cause its and each Parent Subsidiary's Representatives not to, directly or
indirectly, have any discussion with or provide any confidential information or
data relating to Parent or any Parent Subsidiary to any Person relating to a
Parent Acquisition Proposal or engage in any negotiations concerning a Parent
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement a Parent Acquisition Proposal or accept a Parent Acquisition Proposal;
provided, however, that
47
nothing contained in this Section 6.04(b) shall prevent Parent or the Parent
Board from (i) complying with Rule 14d-9 or Rule 14e-2 promulgated under the
Exchange Act with regard to a Parent Acquisition Proposal; (ii) engaging in any
discussions or negotiations with, or providing any information to, any Person in
response to an unsolicited written Parent Acquisition Proposal by any such
Person; or (iii) recommending such an unsolicited written Parent Acquisition
Proposal to the holders of Parent Common Stock if, in any such case as is
referred to in clause (ii) or (iii), (A) the Parent Board concludes in good
faith (after consultation with its financial advisors) that such Parent
Acquisition Proposal would, if consummated, result in a transaction more
favorable to holders of Parent Common Stock than the transaction contemplated by
this Agreement (any such more favorable Parent Acquisition Proposal being
referred to in this Agreement as a "Parent Superior Proposal"), (B) the Parent
Board determines in good faith after consultation with independent legal counsel
(who may be Parent's regularly engaged independent legal counsel) that such
action could reasonably be deemed to be necessary for it to act in a manner
consistent with its fiduciary duties under applicable Law, (C) prior to
providing any information or data regarding Parent or any Parent Subsidiary to
any Person or any of such Person's Representatives in connection with a Parent
Superior Proposal by such Person, Parent receives from such Person an executed
confidentiality agreement on terms at least as restrictive on such Person as
those contained in the Confidentiality Agreement and (D) prior to providing any
information or data to any Person or any of such Person's Representatives or
entering into discussions or negotiations with any Person or any of such
Person's Representatives in connection with a Parent Superior Proposal by such
Person, Parent notifies the Company promptly of the receipt of such Parent
Superior Proposal indicating, in connection with such notice, the name of such
Person and attaching a copy of the proposal or offer or providing a complete
written summary thereof. Parent agrees that it will immediately cease and cause
to be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any Parent Acquisition Proposal.
Parent agrees that it shall keep the Company informed, on a current basis, of
the status and terms of any such proposals or offers and the status of any such
discussions or negotiations. Parent agrees that it will take the necessary steps
to promptly inform each Parent Subsidiary and each Representative of Parent or
any Parent Subsidiary of the obligations undertaken in this Section 6.04(b).
SECTION 6.05. Directors' and Officers' Indemnification and
Insurance. (a) From and after the Effective Time, Parent shall, and shall cause
the Surviving Corporation to, indemnify and hold harmless each present and
former director and officer of the Company and each person who served at the
request of the Company as a director, officer or trustee of another corporation,
partnership, joint venture, trust, pension or other employee benefit plan or
enterprise (collectively, the "Indemnified Parties"), to the fullest extent
permitted under applicable Law, against all costs and expenses (including
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in connection with any claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time),
48
whether civil, criminal, administrative or investigative, arising out of or
pertaining to any action or omission in their capacity as an officer, director,
employee or fiduciary, including, without limitation, the transactions
contemplated by this Agreement (and shall also advance, or cause to be advanced,
expenses as incurred to the fullest extent permitted under applicable Law).
Parent and Merger Sub agree that all rights to indemnification existing in favor
of the Indemnified Parties as provided in the Company's Articles of Organization
and By-Laws, as in effect as of the date hereof, with respect to matters
occurring through the Effective Time, shall survive the Merger and shall
continue in full force and effect for a period of not less than six years from
the Effective Time.
(b) Without limiting or expanding the foregoing, in the event any
claim, action, suit, proceeding or investigation (a "Claim") that is subject to
Section 6.05(a) is brought against any Indemnified Party at or after the
Effective Time, (i) the Indemnified Parties may retain counsel satisfactory to
them and reasonably satisfactory to Parent and the Surviving Corporation, (ii)
Parent and the Surviving Corporation shall pay all reasonable fees and expenses
of such counsel for the Indemnified Parties promptly as statements therefor are
received, and (iii) Parent and the Surviving Corporation will use all reasonable
efforts to assist in the vigorous defense of any such matter, provided that
neither Parent nor the Surviving Corporation shall be liable for any settlement
of any Claim effected without its written consent, which consent, however, shall
not be unreasonably withheld. Any Indemnified Party wishing to claim
indemnification under this Section 6.05, upon learning of any such Claim, shall
notify Parent (but the failure so to notify Parent shall not relieve Parent and
the Surviving Corporation from any liability that either may have under this
Section 6.05 except to the extent such failure materially prejudices them). The
Indemnified Parties as a group may retain only one law firm to represent them
with respect to each such matter unless, under applicable standards of
professional conduct, there is or would reasonably be expected to be a conflict
on any significant issue between the positions of any two or more Indemnified
Parties.
(c) For a period of six years after the Effective Time, Parent
shall cause to be maintained in effect the current directors' and officers'
liability insurance policies maintained by the Company (provided that Parent may
substitute therefor policies of at least the same coverage containing terms and
conditions which are no less advantageous) with respect to claims arising from
facts or events that occurred prior to the Effective Time.
SECTION 6.06. Obligations of Merger Sub. Parent shall take all
action necessary to cause Merger Sub to perform its obligations under this
Agreement and to consummate the Merger on the terms and subject to the
conditions set forth in this Agreement.
SECTION 6.07. Affiliates. (a) No later than 30 days after the
date of this Agreement, the Company shall deliver to Parent a list of names and
addresses of those Persons who were, in the Company's reasonable judgment, on
such date, affiliates (within the meaning
49
of Rule 145 of the rules and regulations promulgated under the Securities Act or
applicable SEC accounting releases with respect to pooling-of-interests
accounting treatment (each such Person being an "Affiliate")) of the Company.
The Company shall provide Parent with such information and documents as Parent
shall reasonably request for purposes of reviewing such list. The Company shall
use its reasonable best efforts to deliver or cause to be delivered to Parent,
prior to the Effective Time, an affiliate letter in the form attached hereto as
Exhibit 6.07(a), executed by each of the Affiliates of the Company identified in
the foregoing list and any Person who shall, to the Knowledge of the Company,
have become an Affiliate of the Company subsequent to the delivery of such list.
(b) No later than 30 days after the date of this Agreement,
Parent shall deliver to the Company a list of names and addresses of those
Persons who were, in Parent's reasonable judgment, on such date, Affiliates of
Parent. Parent shall provide the Company such information and documents as the
Company shall reasonably request for purposes of reviewing such list. Parent
shall use its reasonable best efforts to deliver or cause to be delivered to the
Company, prior to the Effective Time, an affiliate letter in the form attached
hereto as Exhibit 6.07(b), executed by each of the Affiliates of Parent
identified in the foregoing list and by any Person who shall have become an
Affiliate of Parent subsequent to the delivery of such list.
SECTION 6.08. Pooling. From and after the date of this Agreement
and until the Effective Time, neither Parent nor the Company, nor any of their
respective subsidiaries or other affiliates, shall knowingly take any action, or
knowingly fail to take any action, that is reasonably likely to jeopardize the
treatment of the Merger as a "pooling of interests" for accounting purposes.
Following the Effective Time, Parent shall not knowingly take any action, or
fail to take any action, that would jeopardize the characterization of the
Merger as a "pooling of interests" for accounting purposes.
SECTION 6.09. Further Action; Consents; Filings. (a) Upon the
terms and subject to the conditions hereof, each of the parties hereto shall (i)
take, or cause to be taken, all reasonable actions necessary, proper or
advisable under applicable Law or otherwise to consummate and make effective the
Merger and the other transactions contemplated by this Agreement, (ii) use all
reasonable efforts to obtain from Governmental Entities any consents, licenses,
permits, waivers, approvals, authorizations or orders required to be obtained or
made by Parent or the Company or any of their subsidiaries in connection with
the authorization, execution and delivery of this Agreement and the consummation
of the Merger and the other transactions contemplated by this Agreement and
(iii) make all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement, the Merger and the other
transactions contemplated by this Agreement required under (A) the Exchange Act
and the Securities Act and the rules and regulations thereunder and any other
applicable federal or state securities Laws, (B) the HSR Act and (C) any other
applicable Law. The parties hereto
50
shall cooperate with each other in connection with the making of all such
filings, including by providing copies of all such documents to the nonfiling
party and its advisors prior to filing and, if requested, by accepting all
reasonable additions, deletions or changes suggested in connection therewith.
(b) Parent and the Company shall file as soon as practicable (but
not sooner than 10 days) after the date of this Agreement notifications under
the HSR Act and shall respond as promptly as practicable to all inquiries or
requests received from the Federal Trade Commission or the Antitrust Division of
the Department of Justice for additional information or documentation and shall
respond as promptly as practicable to all inquiries and requests received from
any State Attorney General or other Governmental Entity in connection with
antitrust matters. The parties shall cooperate with each other in connection
with the making of all such filings or responses, including providing copies of
all such documents to the other party and its advisors prior to filing or
responding.
SECTION 6.10. Plan of Reorganization. (a) This Agreement is
intended to constitute a "plan of reorganization" within the meaning of section
1.368-2(g) of the income tax regulations promulgated under the Code. From and
after the date of this Agreement and until the Effective Time, each party hereto
shall use its reasonable best efforts to cause the Merger to qualify, and will
not knowingly take any action, cause any action to be taken, fail to take any
action or cause any action to fail to be taken which action or failure to act
could prevent the Merger from qualifying as a reorganization under the
provisions of section 368(a) of the Code. Following the Effective Time, neither
the Surviving Corporation, Parent nor any of their affiliates shall knowingly
take any action, cause any action to be taken, fail to take any action or cause
any action to fail to be taken, which action or failure to act could cause the
Merger to fail to qualify as a reorganization under section 368(a) of the Code.
(b) As of the date hereof, to the Company's Knowledge, there is
no reason (i) why it would not be able to deliver to Company's counsel or
Parent's counsel, at the date of the legal opinions referred to below,
certificates substantially in compliance with IRS published advance ruling
guidelines, with customary exceptions and modifications thereto, to enable such
firms to deliver the legal opinions contemplated by Section 7.01(k) or (ii) why
Company's counsel or Parent's counsel would not be able to deliver the opinions
required by Section 7.01(k).
(c) As of the date hereof, to Parent's Knowledge, there is no
reason (i) why it would not be able to deliver to Company's counsel or Parent's
counsel, at the date of the legal opinions referred to below, certificates
substantially in compliance with IRS published advance ruling guidelines, with
customary exceptions and modifications thereto, to enable such firms to deliver
the legal opinions contemplated by Section 7.01(k) or (ii) why Company's
51
counsel or Parent's counsel would not be able to deliver the opinions required
by Section 7.01(k).
SECTION 6.11. Public Announcements. The initial press release
relating to this Agreement shall be a joint press release, the text of which has
been agreed to by each of Parent and the Company. Unless otherwise required by
applicable Law or by obligations pursuant to any listing agreement with or rules
of any securities exchange, the parties hereto shall consult with each other
before issuing any press release or otherwise making any public statement with
respect to this Agreement or the transactions contemplated hereby and shall not
issue any such release or make any such statement without the prior written
consent of the other party (such consent not to be unreasonably withheld or
delayed).
SECTION 6.12. NYSE Listing. Parent shall promptly prepare and
submit to the NYSE a listing application covering the shares of Parent Common
Stock to be issued in the Merger and pursuant to Substitute Options, and shall
use its reasonable efforts to obtain, prior to the Effective Time, approval for
the listing of such Parent Common Stock, subject to official notice to the NYSE
of issuance, and the Company shall cooperate with Parent with respect to such
listing. Parent and the Company shall mutually agree upon a new trading symbol
to be used for Parent Common Stock after the Effective Time and shall use
reasonable efforts to obtain approval thereof from the NYSE prior to the
Effective Time.
SECTION 6.13. Conveyance Taxes. Parent shall be liable for and
shall hold the Company and the holders of shares of Company Common Stock who are
holders of the shares of Company Common Stock immediately prior to the Effective
Time harmless against any real property transfer or gains, sales, use, transfer,
value added, stock transfer or stamp taxes, any transfer, recording
registration, and other fees, and any similar Taxes which become payable in
connection with the transactions contemplated by this Agreement. The parties
acknowledge that this Section 6.13 is specifically intended to benefit the
holders of shares of Company Common Stock who are holders of the shares of
Company Common Stock immediately prior to the Effective Time.
SECTION. 6.14. Office of the Co-Chairmen. (a) Immediately
following the Effective Time, pursuant to the terms of the Amended Parent
By-Laws (as defined below), (i) Xxxxxxxxxxx X. Xxxxxxx shall hold the position
of Co-Chairman of the Board and Chief Executive Officer of Parent and (ii) Xxxxx
X. xxx Xxxxxxxxxx shall hold the position of Co- Chairman of the Board and
President of Parent. If either of such persons is unwilling or unable to hold
such offices as set forth above, his successor, if any, shall be selected by the
Board of Directors of Parent in accordance with the Parent By-Laws, as amended
and restated to read as set forth in Exhibit 6.14(a) (the "Amended Parent
By-Laws").
(b) The authority, duties and responsibilities of the Co-Chairman
and Chief Executive Officer and of the Co-Chairman and President shall be as set
forth in the Amended
52
Parent By-Laws and in the respective employment agreements entered into between
each of Xxxxxxxxxxx X. Xxxxxxx and Xxxxx X. xxx Xxxxxxxxxx and Parent, as in
effect at the Effective Time.
SECTION 6.15. Post-Merger Board of Directors of Parent. (a)
Immediately following the Effective Time, the total number of persons serving on
the Board of Directors of Parent shall be 13, eight of whom shall be Parent
Directors (as defined below) and five of whom shall be Company Directors (as
defined below).
(b) Subject to Section 6.15(c), (i) the initial Parent Directors
immediately following the Effective Time shall be as set forth in Exhibit
6.15(b) hereto and each such person shall continue to serve in the same class of
the Board of Directors of Parent that such person serves in as of the date of
this Agreement; and (ii) the initial Company Directors immediately following the
Effective Time shall be as set forth in Exhibit 6.15(b) hereto and the class of
the Board of Directors of Parent in which each such Company Director shall serve
shall be as mutually agreed by Parent and the Company prior to the Effective
time.
(c) In the event that, prior to the Effective Time, any Parent
Director designated pursuant to Section 6.15(b) of this Agreement to serve on
the Board of Directors of Parent after the Effective Time shall cease to be a
director of Parent or shall be unable or unwilling to serve in such position
after the Effective Time, the Board of Directors of Parent shall designate
another person to serve in such person's stead, such person to be selected
solely by and at the absolute discretion of the Board of Directors of Parent
prior to the Effective Time. In the event that, prior to the Effective Time, any
Company Director designated pursuant to Section 6.15(b) to serve on the Board of
Directors of Parent after the Effective Time shall be unable or unwilling to
serve in such position, the Board of Directors of the Company shall designate
another person to serve in such person's stead, such person to be selected
solely by and at the absolute discretion of the Board of Directors of the
Company prior to the Effective Time. Notwithstanding anything to the contrary in
the foregoing provisions of this Section 6.15(c), the Co-Chairmen shall be the
only such directors of Parent at the Effective Time who are employees of Parent
or the Company or any of their respective affiliates.
(d) The term "Company Director" means (i) any person serving as a
director of the Company on the date hereof who becomes a director of Parent at
the Effective Time pursuant to Section 6.15(b) or (ii) any person who becomes a
director of Parent at the Effective Time and was designated by Company Directors
pursuant to Section 6.15(c).
(e) The term "Parent Director" means (i) any person serving as a
director of Parent on the date hereof who continues as a director of Parent
after the Effective Time pursuant to Section 6.15(b) or (ii) any person serving
in any such director's stead who was designated by the Parent Directors pursuant
to Section 6.15(c).
53
(f) Immediately following the Effective Time, at least two
Company Directors shall serve on the Corporate Governance Committee of the Board
of Directors of Parent and at least one Company Director shall serve on each
other committee of the Board of Directors of Parent.
(g) Each of Parent and the Company shall take such action as
shall reasonably be requested by the other in order to give effect to the
provisions set forth in this Section 6.15.
SECTION 6.16. Employee Benefit Plans. (a) It is the intention of
the parties that, for the eighteen month period commencing at the Effective
Time, the pension and welfare benefits provided to the employees of the Company
and the Company Subsidiaries shall be no less favorable, in the aggregate, than
those pension and welfare benefits in effect immediately prior to the Effective
Time under the terms of the Company Benefit Plans.
(b) Following the Effective Time, to the extent that Parent
arranges for any employees of the Company or any Company Subsidiary to
participate in any counterpart Parent Benefit Plans in accordance with the
eligibility criteria thereof, (i) such participants shall receive full credit
for years of service with the Company or any Company Subsidiary (and service
otherwise credited by the Company or any Company Subsidiary) prior to the
Effective Time for purposes of eligibility to participate and vesting and (ii)
to the extent permitted under the terms of the relevant Parent Benefit Plan,
Parent shall cause any and all pre-existing condition limitations, eligibility
waiting periods and evidence of insurability requirements under any group plans
to be waived with respect to such participants and their eligible dependents and
shall provide each such participant with credit for any co-payments and
deductibles paid prior to the Effective Time for purposes of satisfying any
applicable deductible, out-of-pocket, or similar requirements under any health
plans in which such participants are eligible to participate after the Effective
Time. Notwithstanding any of the foregoing to the contrary, none of the
provisions contained herein shall operate to duplicate any benefit provided to
any employee of the Company or the funding of any such benefit.
(c) Following the Effective Time, Parent shall cause the
Surviving Corporation to honor and perform, pursuant to their terms, all
employee benefit obligations to current and former employees and directors of
the Company under any Company Benefit Plans; provided, however, that nothing
contained herein shall limit any reserved right in any Company Benefit Plan to
amend, modify, suspend, revoke or terminate any such plan.
SECTION 6.17. Exemption From Liability Under Section 16(b).
Assuming that the Company delivers to Parent the Section 16 Information (defined
below) in a timely fashion, the Board of Directors of Parent, or a committee of
two or more Non-Employee Directors thereof (as such item is defined for purposes
of Rule 16b-3 under the Exchange Act),
54
shall adopt resolutions prior to the consummation of the Merger, providing that
the receipt by the Company Insiders (as defined below) of Parent Common Stock in
exchange for shares of the Company Common Stock, and of options for Parent
Common Stock upon conversion of options for the Company Common Stock, in each
case pursuant to the transactions contemplated hereby and to the extent such
securities are listed in the Section 16 Information, are intended to be exempt
from liability pursuant to Section 16(b) under the Exchange Act. Such
resolutions shall comply with the approval conditions of Rule 16b-3 under the
Exchange Act for purposes of such Section 16(b) exemption, including, but not
limited to, specifying the name of the Company Insiders, the number of
securities to be acquired or disposed of for each such person, the material
terms of any derivative securities, and that the approval is intended to make
the receipt of such securities exempt pursuant to Rule 16b-3(d). "Section 16
Information" shall mean information accurate in all respects regarding the
Company Insiders, the number of shares of the Company Common Stock held by each
such Company Insider and expected to be exchanged for Parent Common Stock in the
Merger, and the number and description of the options on the Company Common
Stock held by each such Company Insider are expected to be converted into
options on Parent Common Stock in connection with the Merger. "Company Insiders"
shall mean those officers and directors of the Company who will be subject to
the reporting requirements of Section 16(b) of the Exchange Act with respect to
Parent and who are listed in the Section 16 Information.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.01. Conditions to the Obligations of Each Party. The
obligations of the Company, Parent and Merger Sub to consummate the Merger are
subject to the satisfaction of the following conditions:
(a) the Registration Statement shall have been declared effective
by the SEC under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued by
the SEC and no proceeding for that purpose shall have been initiated by
the SEC;
(b) this Agreement shall have been approved and adopted by the
requisite affirmative vote of the stockholders of the Company in
accordance with the MBCL and the Company's Restated Articles of
Organization and the Company's Amended and Restated By-Laws;
55
(c) the Parent Proposals shall have been approved by the
requisite affirmative vote of the stockholders of Parent in accordance
with the rules of the NYSE, the DGCL, the Parent Charter and the Parent
By-Laws;
(d) no Governmental Entity or court of competent jurisdiction
located or having jurisdiction in the United States shall have enacted,
issued, promulgated, enforced or entered any Law, judgment, decree,
executive order or award (an "Order") which is then in effect and has
the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger;
(e) any waiting period (and any extension thereof) applicable to
the consummation of the Merger under the HSR Act shall have expired or
been terminated;
(f) all consents, waivers, approvals and authorizations required
to be obtained, and all filings or notices required to be made, with any
Governmental Entity prior to the consummation of the Merger under
antitrust or competition Laws of any foreign jurisdiction shall have
been obtained from and made with the applicable Governmental Entities
and all applicable waiting periods (and any extension thereof) under
such Laws shall have expired, other than any such consents, waivers,
authorizations or expirations the failure of which to make or occur
would not be reasonably likely to have a material adverse effect on
Parent and its subsidiaries, taken as a whole, after the Effective Time
or be reasonably likely to subject the parties or any of their
respective officers or directors to substantial penalties or criminal
liability;
(g) not more than 7.5% of the outstanding shares of Company
Common Stock shall be Dissenting Shares;
(h) Parent and the Company shall have each received from
PricewaterhouseCoopers LLP (Florham Park, NJ office), independent
auditors of Parent, and PricewaterhouseCoopers LLP (Boston, MA office),
independent auditors of the Company, an opinion addressed to each of
Parent and the Company and dated the date the Registration Statement
shall have become effective and confirmed in writing as of the Effective
Time to the effect that the Merger will be treated as a "pooling of
interests" under applicable accounting standards;
(j) the shares of Parent Common Stock to be issued in the Merger
shall have been authorized for listing on the NYSE, subject to official
notice of issuance; and
(k) Parent and the Company shall have received written opinions
of Shearman & Sterling, legal counsel to the Parent, and Xxxxx, Xxxxxxx
& Xxxxxxxxx, LLP, legal counsel to the Company, in form and substance
reasonably satisfactory to
56
each of Parent and the Company, which shall be to the effect that the
Merger will constitute a reorganization within the meaning of Section
368(a) of the Code, and such opinions shall not have been withdrawn. In
rendering such opinions, legal counsel shall be entitled to rely upon,
among other things, reasonable and customary assumptions as well as
representations of Parent, Merger Sub and the Company and others.
SECTION 7.02. Conditions to the Obligations of Parent and Merger
Sub. The obligations of Parent and Merger Sub to consummate the Merger are
subject to the satisfaction of the following additional conditions:
(a) the representations and warranties of the Company set forth
in this Agreement that are qualified as to materiality (including,
without limitation, by use of the term "Company Material Adverse
Effect") shall be true and correct on and as of the Closing Date as if
made on and as of such date (other than representations and warranties
which address matters only as of a certain date which shall be true and
correct as of such certain date), and the representations and warranties
of the Company set forth in this Agreement that are not so qualified
shall be true and correct in all material respects on and as of the
Closing Date as if made on and as of such date (other than
representations and warranties which address matters only as of a
certain date which shall be true and correct in all material respects as
of such certain date), and Parent shall have received a certificate of
the Chief Executive Officer or the Chief Financial Officer of the
Company to such effect; and
(b) the Company shall have performed or complied in all material
respects with all agreements and covenants required by this Agreement to
be performed or complied with by it on or prior to the Effective Time
and Parent shall have received a certificate of the Chief Executive
Officer or Chief Financial Officer of the Company to such effect.
SECTION 7.03. Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Merger are subject to the
satisfaction of the following additional conditions:
(a) the representations and warranties of Parent and Merger Sub
set forth in this Agreement that are qualified as to materiality
(including, without limitation, by use of the term "Parent Material
Adverse Effect") shall be true and correct on and as of the Closing Date
as if made on and as of such date (other than representations and
warranties which address matters only as of a certain date which shall
be true and correct as of such certain date), and the representations
and warranties of Parent and Merger Sub set forth in this Agreement that
are not so qualified shall be true and
57
correct in all material respects on and as of the Closing Date as if
made on and as of such date (other than representations and warranties
which address matters only as of a certain date which shall be true and
correct in all material respects as of such certain date), and the
Company shall have received a certificate of the Chief Executive Officer
or the Chief Financial Officer of Parent to such effect;
(b) Parent and Merger Sub shall have performed or complied in all
material respects with all agreements and covenants required by this
Agreement to be performed or complied with by them on or prior to the
Effective Time and the Company shall have received a certificate of the
Chief Executive Officer or Chief Financial Officer of Parent to such
effect; and
(c) Parent shall have taken all such actions as shall be
necessary so that (i) the Parent Charter Amendment and the Amended
Parent By-laws shall become effective not later than the Effective Time
and (ii) at the Effective Time, the composition of Parent's Board of
Directors shall comply with the provisions of Section 6.15 hereof.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated and
the Merger and the other transactions contemplated by this Agreement may be
abandoned at any time prior to the Effective Time, notwithstanding any requisite
approval and adoption of this Agreement and the transactions contemplated by
this Agreement, as follows:
(a) by mutual written consent duly authorized by the Boards of
Directors of each of Parent and the Company;
(b) by either Parent or the Company if the Effective Time shall
not have occurred on or before December 31, 1999 (the "Termination
Date"); provided, however, that the right to terminate this Agreement
under this Section 8.01(b) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Effective Time to occur on
or before the Termination Date;
(c) by either Parent or the Company, if any Governmental Entity
(i) shall have issued an Order or taken any other action permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such Order
58
or other action shall have become final and nonappealable or (ii) shall
have failed to issue an Order or to take any other action necessary to
fulfill the conditions to the Closing of the Merger and such denial of a
request to issue such Order or take such other action shall have become
final and nonappealable;
(d) by Parent if (i) the Board of Directors of the Company
withdraws, modifies or changes its recommendation of this Agreement or
the transactions contemplated hereby in a manner adverse to Parent or
shall have resolved to do so, or (ii) the Board of Directors of the
Company shall have recommended to the stockholders of the Company a
Company Acquisition Proposal or shall have resolved to do so;
(e) by the Company, if (i) the Board of Directors of Parent
withdraws, modifies or changes its recommendation of this Agreement and
the issuance of shares of Parent Common Stock thereunder in a manner
adverse to the Company or shall have resolved to do so or (ii) the Board
of Directors of Parent shall have recommended to the stockholders of
Parent a Parent Acquisition Proposal or shall have resolved to do so;
(f) by either Parent or the Company, if this Agreement shall fail
to receive the requisite vote for approval at the Company Stockholders'
Meeting; or
(g) by either Parent or the Company, if the approval of the
Parent Proposals shall fail to receive the requisite vote at the Parent
Stockholders' Meeting.
SECTION 8.02. Effect of Termination. In the event of termination
of this Agreement pursuant to Section 8.01, this Agreement shall forthwith
become void and there shall be no liability under this Agreement on the part of
Parent, Merger Sub or the Company or any of their respective officers or
directors and all rights and obligations of each party hereto shall cease,
except (a) as provided in Sections 8.05 and 9.01 and (b) nothing herein shall
relieve any party from liability for any willful breach of any representation,
warranty, covenant or other agreement in this Agreement occurring prior to
termination.
SECTION 8.03. Amendment. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time; provided, however, that,
after the approval of this Agreement by the stockholders of the Company, no
amendment may be made which would reduce the amount or change the type of
consideration into which each share of Company Common Stock shall be converted
upon consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time,
any party hereto may (a) extend the time for the performance of any obligation
or other act of any
59
other party hereto, (b) waive any inaccuracy in the representations and
warranties contained herein or in any document delivered pursuant hereto and (c)
waive compliance with any agreement or condition contained herein. Any such
extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
SECTION 8.05. Expenses. (a) Except as set forth in this Section
8.05, all Expenses (as defined below) incurred in connection with this Agreement
and the transactions contemplated by this Agreement shall be paid by the party
incurring such expenses, whether or not the Merger or any other transaction is
consummated, except that the Company and Parent each shall pay one-half of all
Expenses relating to printing, filing and mailing the Registration Statement and
the Proxy Statement and all SEC and other regulatory filing fees incurred in
connection with the Registration Statement and the Proxy Statement. "Expenses"
as used in this Agreement shall include all reasonable out-of-pocket expenses
(including, without limitation, all fees and expenses of counsel, accountants,
investment bankers, experts and consultants to a party hereto and its
affiliates) incurred by a party or on its behalf in connection with or related
to the authorization, preparation, negotiation, execution and performance of
this Agreement, the preparation, printing, filing and mailing of the
Registration Statement and the Proxy Statement, the solicitation of stockholder
approvals, the filing of any required notices under the HSR Act or other similar
regulations and all other matters related to the closing of the Merger and the
other transactions contemplated by this Agreement.
(b) The Company agrees that:
(i) if (A) Parent shall terminate this Agreement pursuant
to Section 8.01(d) and (B) at the time of the occurrence of the
circumstance permitting termination pursuant to such Section, there
shall exist a Company Acquisition Proposal and (C) within 9 months of
the termination of this Agreement, the Company enters into a definitive
agreement with any third party with respect to a Company Acquisition
Proposal or a transaction with respect to a Company Acquisition Proposal
is consummated by any third party, or
(ii) if (A) Parent or the Company shall terminate this
Agreement pursuant to Section 8.01(f) due to the failure of the
Company's stockholders to approve this Agreement and (B) at or prior to
the time of such failure to so approve this Agreement a Company
Acquisition Proposal shall have been made public and (C) within 9 months
of the termination of this Agreement, the Company enters into a
definitive agreement with any third party with respect to a Company
Acquisition Proposal or a transaction with respect to a Company
Acquisition Proposal is consummated by any third party,
60
then the Company shall pay to Parent an amount equal to the sum of $24,000,000
(the "Company Alternative Transaction Fee") and all of Parent's Expenses, up to
a maximum of $5,000,000 (the "Parent Expense Amount"). The Company and Parent
agree that if, in circumstances in which the Company Alternative Transaction Fee
is not payable, Parent shall terminate this Agreement pursuant to Section
8.01(d) or the Company or Parent shall terminate this Agreement pursuant to
Section 8.01(f), then the Company shall pay to Parent an amount equal to the sum
of (y) $8,000,000 (the "Company Termination Fee") and (z) all of Parent's
Expenses up to an amount equal to the Parent Expense Amount; provided, however,
that Parent shall not, upon a termination pursuant to Section 8.01(d) by Parent
or pursuant to Section 8.01(f) by Parent or the Company, be entitled to receive
the Company Termination Fee or any of the Parent's Expenses pursuant to this
Section 8.05(b) if (1) the Board of Directors of the Company shall, prior to
such termination, have withdrawn, modified or changed its recommendation of this
Agreement or the transactions contemplated hereby in a manner adverse to Parent
due solely to a breach by Parent, that is not curable, of any representation,
warranty, covenant or agreement on the part of Parent set forth in this
Agreement, such that the conditions set forth in Sections 7.03(a) and 7.03(b)
would not be satisfied and (2) there shall not have been, at any time prior to
such termination, a Company Acquisition Proposal.
(c) Parent agrees that:
(i) if (A) the Company shall terminate this Agreement
pursuant to Section 8.01(e) and (B) at the time of the occurrence of the
circumstance permitting termination pursuant to such Section, there
shall exist a Parent Acquisition Proposal and (C) within 9 months of the
termination of this Agreement, Parent enters into a definitive agreement
with any third party with respect to a Parent Acquisition Proposal or a
transaction with respect to a Company Acquisition Proposal is
consummated by any third party, or
(ii) if (A) the Company or Parent shall terminate this
Agreement pursuant to Section 8.01(g) due to the failure of Parent's
stockholders to approve this Agreement and (B) at or prior to the time
of such failure to so approve this Agreement a Parent Acquisition
Proposal shall have been made public and (C) within 9 months of the
termination of this Agreement, Parent enters into a definitive agreement
with any third party with respect to a Parent Acquisition Proposal or a
transaction with respect to a Parent Acquisition Proposal is consummated
by any third party,
then Parent shall pay to the Company an amount equal to the sum of $45,000,000
(the "Parent Alternative Transaction Fee") and all of the Company's Expenses, up
to a maximum of $5,000,000 (the "Company Expense Amount"). Parent and the
Company agree that if, in circumstances in which the Parent Alternative
Transaction Fee is not payable, the Company shall terminate this Agreement
pursuant to Section 8.01(e) or Parent or the Company shall
61
terminate this Agreement pursuant to Section 8.01(g), then Parent shall pay to
the Company an amount equal to the sum of (y) $8,000,000 (the "Parent
Termination Fee") and (z) all of the Company's Expenses up to an amount equal to
the Company Expense Amount; provided, however, that the Company shall not, upon
a termination pursuant to Section 8.01(e) by the Company or pursuant to Section
8.01(g) by the Company or Parent, be entitled to receive the Parent Termination
Fee or any of the Company's Expenses pursuant to this Section 8.05(c) if (1) the
Board of Directors of Parent shall, prior to such termination, have withdrawn,
modified or changed its recommendation of this Agreement or the transactions
contemplated hereby in a manner adverse to the Company due solely to a breach by
the Company, that is not curable, of any representation, warranty, covenant or
agreement on the part of the Company set forth in this Agreement, such that the
conditions set forth in Sections 7.02(a) and 7.02(b) would not be satisfied and
(2) there shall not have been, at any time prior to such termination, a Parent
Acquisition Proposal.
(d) Each of the Company and Parent agrees that the agreements
contained in Sections 8.05(b) and (c) are an integral part of the transactions
contemplated by this Agreement and constitute liquidated damages and not a
penalty. Each of the Company and Parent agrees that the payments provided for in
Sections 8.05(b) and (c) shall be the sole and exclusive remedies of the parties
upon a termination of this Agreement pursuant to Sections 8.01(d), (e), (f) and
(g), as the case may be, and such remedies shall be limited to the sums
stipulated in Sections 8.05(b) and (c), regardless of the circumstances giving
rise to such termination; provided, however, that nothing herein shall relieve
any party from liability for any willful breach of any representation, warranty,
covenant or other agreement in this Agreement occurring prior to termination.
(e) Any payment of a Company Alternative Transaction Fee pursuant
to Section 8.05(b) shall be made to Parent on the next business day after a
definitive agreement is entered into with a third party with respect to a
Company Acquisition Proposal. Any prior payment of a Company Termination Fee
shall be credited against such payment of a Company Alternative Transaction Fee.
Any payment of a Company Termination Fee required to be made pursuant to Section
8.05(b) shall be made to Parent not later than two business days after
termination of this Agreement. Payment of Expenses pursuant to Section 8.05(b)
shall be made not later than two business days after delivery to the Company by
Parent of notice of demand for payment and an itemization setting forth in
reasonable detail all Expenses of Parent (which itemization may be supplemented
and updated from time to time by Parent until the 60th day after Parent delivers
such notice of demand for payment). All payments to Parent under this Section
8.05 shall be made by wire transfer of immediately available funds to an account
designated by Parent.
(f) Any payment of a Parent Alternative Transaction Fee required
to be made pursuant to Section 8.05(c) shall be made to the Company on the next
business day after
62
a definitive agreement is entered into with a third party with respect to a
Parent Acquisition Proposal. Any prior payment of a Parent Termination Fee shall
be credited against such payment of a Parent Alternative Transaction Fee. Any
payment of a Parent Termination Fee required to be made pursuant to Section
8.05(c) shall be made to Parent not later than two business days after
termination of this Agreement. Payment of Expenses pursuant to Section 8.05(c)
shall be made not later than two business days after delivery to Parent by the
Company by notice of demand for payment and an itemization setting forth in
reasonable detail all Expenses of the Company (which itemization may be
supplemented and updated from time to time by Parent until the 60th day after
the Company delivers such notice of demand for payment). All payments to the
Company under this Section 8.05 shall be made by wire transfer of immediately
available funds to an account designated by the Company.
(g) In the event that the Company or Parent, as the case may be,
shall fail to pay any amount payable pursuant to this Section 8.05 when due, the
other party's "Expenses" shall be deemed to include (i) the costs and expenses
actually incurred or accrued by such other party (including, without limitation,
fees and expenses of counsel) in connection with the collection under and
enforcement of this Section 8.05, together with (ii) interest on such unpaid
amounts, commencing on the date that such amounts became due, at a rate equal to
the rate of interest publicly announced by Citibank, N.A., from time to time, in
The City of New York, as such bank's Base Rate plus 2.00%.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.01, as the case may be, except that (a) those covenants
and agreements that by their terms apply or are to be performed in whole or in
part after the Effective Time and this Article IX shall survive the Effective
Time for the respective periods set forth therein or, if no such period is
specified, for six years and (b) the representations, warranties and agreements
set forth in Sections 3.21, 4.21, 6.03(b), 8.02 and 8.05 and this Article IX
shall survive termination for the respective periods set forth therein or, if no
such period is specified, for six years. Nothing in this Section 9.01 shall
relieve any party for any willful breach of any representation, warranty,
covenant or other agreement in this Agreement occurring prior to termination.
SECTION 9.02. Notices. All notices and other communications given
or made pursuant to this Agreement shall be in writing and shall be sent by an
overnight courier
63
service that provides proof of receipt, mailed by registered or certified mail
(postage prepaid, return receipt requested) or telecopied to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
if to the Company:
PAREXEL International Corporation
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxxx, Vice President and
General Counsel
with a copy to:
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
if to Parent or Merger Sub:
Covance Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Corporate Senior
Vice President
and General Counsel
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxxx O'X. Xxxxxx
(b) If this Agreement provides for a designated period after a
notice within which to perform an act, such period shall commence on the date of
receipt or refusal of the notice.
64
(c) If this Agreement requires the exercise of a right by notice
on or before a certain date or within a designated period, such right shall be
deemed exercised on the date of delivery to the courier service, telecopying or
mailing of the notice pursuant to which such right is exercised.
(d) Notices of changes of address shall be effective only upon
receipt.
SECTION 9.03. Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" of a specified Person means a Person who directly
or indirectly through one or more intermediaries controls, is controlled
by, or is under common control with such specified Person;
(b) "beneficial owner" with respect to any shares means a Person
who shall be deemed to be the beneficial owner of such shares (i) which
such Person or any of its affiliates or associates (as such term is
defined in Rule 12b-2 promulgated under the Exchange Act) beneficially
owns, directly or indirectly, (ii) which such Person or any of its
affiliates or associates has, directly or indirectly, (A) the right to
acquire (whether such right is exercisable immediately or subject only
to the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of consideration rights, exchange
rights, warrants or options, or otherwise or (B) the right to vote
pursuant to any agreement, arrangement or understanding or (iii) which
are beneficially owned, directly or indirectly, by any other Persons
with whom such Person or any of its affiliates or associates or Person
with whom such Person or any of its affiliates or associates has any
agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Company Common Stock;
(c) "business day" means any day on which the principal offices
of the SEC in Washington, D.C. are open to accept filings, or, in the
case of determining a date when any payment is due, any day on which
banks are not required or authorized to close in The City of New York;
(d) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership
of voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
(e) "Knowledge" means, with respect to any matter in question,
(i) in the case of the Company, if any of the executive officers of the
Company has actual
65
knowledge of such matter after making reasonable inquiry of officers and
employees charged with senior administrative or operational
responsibility of such matters and (ii) in the case of Parent, if any of
the executive officers of Parent has actual knowledge of such matter
after making reasonable inquiry of officers and employees charged with
senior administrative or operational responsibility of such matters;
(f) "Person" means an individual, corporation, partnership,
limited partnership, syndicate, person (including, without limitation, a
"person" as defined in section 13(d)(3) of the Exchange Act), trust,
association or entity or government, political subdivision, agency or
instrumentality of a government; and
(g) "subsidiary" or "subsidiaries" of any Person means any
corporation, partnership, joint venture or other legal entity of which
such Person (either alone or through or together with any other
subsidiary) owns, directly or indirectly, more than 50% of the stock or
other equity interests, the holders of which are generally entitled to
vote for the election of the board of directors or other governing body
of such corporation or other legal entity.
SECTION 9.04. 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
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid, illegal or incapable of 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 in a mutually acceptable manner in order that the transactions
contemplated by this Agreement be consummated as originally contemplated to the
fullest extent possible.
SECTION 9.05. Assignment; Binding Effect; Benefit. (a) Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of Law or
otherwise) without the prior written consent of the other parties.
(b) This Agreement shall be binding upon and inure solely to the
benefit of the parties hereto and their respective successors and permitted
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than Article II (which
may be enforced by the beneficiaries thereof) and Section 6.05 (which is
intended to be for the benefit of the Persons covered thereby and their
respective heirs and representatives and may be enforced by such Persons).
66
SECTION 9.06. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
SECTION 9.07. Governing Law; Forum. (a) Except to the extent that
the Merger is mandatorily governed by the MBCL, this Agreement shall be governed
by, and construed in accordance with, the Laws of the State of New York
applicable to contracts executed in and to be performed in that state.
(b) Each of the parties hereto irrevocably agrees that all legal
actions or proceedings with respect to this Agreement shall be brought and
determined in the Supreme Court of the State of New York in New York County or
in the United States District Court for the Southern District of New York, and
each of the parties hereto hereby irrevocably submits with regard to any such
action or proceeding for itself and in respect to its property, generally and
unconditionally, to the jurisdiction of the aforesaid courts. Each of the
parties hereto hereby irrevocably waives, and agrees not to assert, by way of
motion, as a defense, counterclaim or otherwise, in any action or proceeding
with respect to this Agreement, (i) any claim that it is not personally subject
to the jurisdiction of the above-named courts for any reason other than the
failure to serve process in accordance with applicable Law, (ii) that it or its
property is exempt or immune from jurisdiction of any such court or from any
legal process commenced in such courts and (iii) to the fullest extent permitted
by applicable Law, that (A) the suit, action or proceeding in any such court is
brought in an inconvenient forum, (B) the venue of such suit, action or
proceeding is improper and (C) this Agreement, or the subject matter hereof, may
not be enforced in or by such courts.
SECTION 9.08. Interpretation. (a) If a reference is made in this
Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of or Exhibit or Schedule to this Agreement unless otherwise indicated.
The table of contents, glossary of defined terms and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". The phrases "the date of this
Agreement" and "the date hereof" shall be deemed to refer to April 28, 1999.
(b) The parties hereto acknowledge that certain matters set forth
in the Company Disclosure Letter and certain matters set forth in the Parent
Disclosure Letter are included for informational purposes only, notwithstanding
the fact that, because they do not rise above applicable materiality thresholds
or otherwise, they would not be required to be set forth therein by the terms of
this Agreement. The parties agree that disclosure of such matters shall not be
taken as an admission by the Company or Parent, as the case may be, that such
67
disclosure is required to be made under the terms of any provision of this
Agreement and in no event shall the disclosure of such matters be deemed or
interpreted to broaden or otherwise amplify the representations and warranties
contained in this Agreement or to imply that such matters are or are not
material and neither party shall use, in any dispute between the parties, the
fact of any such disclosure as evidence of what is or is not material for
purposes of this Agreement.
SECTION 9.09. Counterparts. This Agreement may be executed and
delivered in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed and delivered shall be deemed
to be an original but all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.10. Entire Agreement. This Agreement constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
other than the Confidentiality Agreement, the Parent Option Agreement and the
Company Option Agreement, which shall survive the execution and delivery of this
Agreement.
SECTION 9.11. Waiver of Jury Trial. Each of Parent, Merger Sub
and the Company hereby irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement or the actions of
Parent, Merger Sub and the Company in the negotiation, administration,
performance and enforcement thereof.
68
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
COVANCE INC.
By /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Corporate Senior Vice President
CCJ HOLDING CORP.
By /s/ Xxxxxxxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: President
By /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
PAREXEL INTERNATIONAL CORPORATION
By /s/ Xxxxx X. xxx Xxxxxxxxxx
--------------------------------------------
Name: Xxxxx X. xxx Xxxxxxxxxx
Title: Chief Executive Officer and President
By /s/ Xxxxxxx X. Xxxx, Xx.
--------------------------------------------
Name: Xxxxxxx X. Xxxx, Xx.
Title: Chief Financial Officer and Treasurer
EXHIBIT A
PROPOSED AMENDMENTS
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
COVANCE INC.
1. Paragraph 1 shall be amended to read as follows:
1. Name. The name of the Corporation is Covance PAREXEL Inc.
2. The first paragraph of Paragraph 5(a) shall be amended to read as
follows:
5. Directors. (a) The business and affairs of the Corporation
shall be managed by a Board of Directors consisting of not less than three nor
more than fifteen persons. The exact number of directors within the minimum and
maximum limitations specified in the preceding sentence shall be fixed from time
to time by the Board of Directors pursuant to a resolution adopted by the
affirmative vote of a majority of the entire Board of Directors; and such exact
number shall be thirteen (13) unless otherwise determined by a resolution so
adopted by a majority of the entire Board of Directors. As used in this Restated
Certificate of Incorporation, the term "entire Board of Directors" means the
number of directors adopted by resolution in accordance with the preceding
sentence or, if no such resolution has been adopted, thirteen (13), regardless
of whether any vacancies may have resulted from the resignation of one or more
directors.
EXHIBIT 6.07(a)
FORM OF AFFILIATE LETTER FOR
AFFILIATES OF THE COMPANY
[____________], 1999
Covance Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "affiliate" of PAREXEL International Corporation, a
Massachusetts corporation (the "Company"), as the term "affiliate" is (i)
defined for purposes of paragraphs (c) and (d) of Rule 145 of the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Act"), and/or (ii) used in and for purposes of Accounting Series Releases 130
and 135, as amended, of the Commission. Pursuant to the terms of the Agreement
and Plan of Merger dated as of April 28, 1999 (the "Merger Agreement") among
Covance, Inc., a Delaware corporation ("Parent"), CCJ Holding Corp., a
Massachusetts corporation ("Merger Sub"), and the Company, Merger Sub will be
merged with and into the Company (the "Merger"). Capitalized terms used in this
letter agreement without definition shall have the meanings assigned to them in
the Merger Agreement.
As a result of the Merger, I may receive shares of common stock,
par value $0.01 per share, of Parent (the "Parent Shares"). I would receive such
Parent Shares in exchange for shares (or upon exercise of options for shares)
owned by me of common stock, par value $0.01 per share, of the Company (the
"Company Shares").
1. I represent, warrant and covenant to Parent that in the event I
receive any Parent Shares as a result of the Merger:
A. I shall not make any sale, transfer or other disposition of
the Parent Shares in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and discussed the
requirements of this document and other applicable limitations upon my ability
to sell, transfer or otherwise dispose of the Parent Shares, to the extent I
felt necessary, with my counsel or counsel for the Company.
2
C. I have been advised that the issuance of the Parent Shares to
me pursuant to the Merger will be registered with the Commission under the Act
on a Registration Statement on Form S-4. However, I have also been advised that,
because at the time the Merger is submitted for a vote of the stockholders of
the Company, (a) I may be deemed to be an affiliate of the Company and (b) the
distribution by me of the Parent Shares has not been registered under the Act, I
may not sell, transfer or otherwise dispose of the Parent Shares issued to me in
the Merger unless (i) such sale, transfer or other disposition is made in
conformity with the volume and other limitations of Rule 145 promulgated by the
Commission under the Act, (ii) such sale, transfer or other disposition has been
registered under the Act or (iii) in the opinion of counsel reasonably
acceptable to Parent, such sale, transfer or other disposition is otherwise
exempt from registration under the Act.
D. I understand that Parent is under no obligation to register
the sale, transfer or other disposition of the Parent Shares by me or on my
behalf under the Act or, except as provided in paragraph 2(A) below, to take any
other action necessary in order to make compliance with an exemption from such
registration available.
E. I understand that there will be placed on the certificates for
the Parent Shares issued to me, or any substitutions therefor, a legend stating
in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES
ACT OF 1933 APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE
MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE TERMS OF AN
AGREEMENT DATED APRIL 28, 1999 BETWEEN THE REGISTERED HOLDER
HEREOF AND COVANCE INC., A COPY OF WHICH AGREEMENT IS ON FILE AT
THE PRINCIPAL OFFICES OF COVANCE INC."
F. I understand that unless a sale or transfer is made in
conformity with the provisions of Rule 145, or pursuant to a registration
statement, Parent reserves the right to put the following legend on the
certificates issued to my transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED
FROM A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH
RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES.
THE SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH A VIEW TO,
OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN
THE MEANING OF THE SECURITIES ACT OF 1933 AND MAY NOT BE
3
SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933."
G. I further represent to, and covenant with, Parent that I will
not, during the 30 days prior to the Effective Time, sell, transfer or otherwise
dispose of or reduce my risk (as contemplated by SEC Accounting Series Release
No. 135) with respect to the Company Shares or shares of the capital stock of
Parent that I may hold and, furthermore, that I will not sell, transfer or
otherwise dispose of or reduce my risk (as contemplated by SEC Accounting Series
Release No. 135) with respect to the Parent Shares received by me in the Merger
or any other shares of the capital stock of Parent until after such time as
results covering at least 30 days of combined operations of the Company and
Parent have been published by Parent, in the form of a quarterly earnings
report, an effective registration statement filed with the Commission, a report
to the Commission on Form 10-K, 10-Q or 8-K, or any other public filing or
announcement which includes the combined results of operations (the "Pooling
Period"). Parent shall promptly notify the "affiliates" of the publication of
such results.
H. Execution of this letter should not be considered an admission
on my part that I am an "affiliate" of the Company as described in the first
paragraph of this letter, nor as a waiver of any rights I may have to object to
any claim that I am such an affiliate on or after the date of this letter.
2. By Parent's acceptance of this letter, Parent hereby agrees with me
as follows:
A. For so long as and to the extent necessary to permit me to
sell the Parent Shares pursuant to Rule 145 and, to the extent applicable, Rule
144 under the Act, Parent shall (a) use its reasonable efforts to (i) file, on a
timely basis, all reports and data required to be filed with the Commission by
it pursuant to Section 13 of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), and (ii) furnish to me upon request a written statement as to
whether Parent has complied with such reporting requirements during the 12
months preceding any proposed sale of the Parent Shares by me under Rule 145,
and (b) otherwise use its reasonable efforts to permit such sales pursuant to
Rule 145 and Rule 144. Parent hereby represents to me that it has filed all
reports required to be filed with the Commission under Section 13 of the 1934
Act during the preceding 12 months.
B. It is understood and agreed that certificates with the legends
set forth in paragraphs 1(E) and 1(F) above will be substituted by delivery of
certificates without such legends if (i) one year shall have elapsed from the
date the undersigned acquired the Parent Shares received in the Merger and the
provisions of Rule 145(d)(2) are then available to the undersigned, (ii) two
years shall have elapsed from the date the undersigned acquired the Parent
Shares received in the Merger and the provisions of Rule 145(d)(3) are then
applicable
4
to the undersigned, or (iii) Parent has received either an opinion of counsel,
which opinion and counsel shall be reasonably satisfactory to Parent, or a "no
action" letter obtained by the undersigned from the staff of the Commission, to
the effect that the restrictions imposed by Rule 145 under the Act no longer
apply to the undersigned.
3. The parties hereto acknowledge and agree that notwithstanding
anything to the contrary contained herein, the undersigned will be permitted,
during the Pooling Period, to sell, transfer, exchange, pledge, distribute or
otherwise dispose of or grant any option, establish any "short" or
put-equivalent position with respect to or enter into any similar transaction
(through derivatives or otherwise) intended to have or having the effect,
directly or indirectly, of reducing the undersigned's risk relative to any
Company Shares or Parent Shares received by the undersigned in connection with
the Merger an amount of such shares not more than the de minimus amount
permitted by the Commission in its rules and releases relating to
pooling-of-interests accounting treatment, subject to advance concurrence of
Parent and its independent auditors.
4. This agreement and all obligations hereunder shall terminate upon the
termination of the Merger Agreement in accordance with its terms.
Very truly yours,
-----------------------------
Name:
Agreed and accepted this [__] day
of [_______], [____], by
COVANCE INC.
By:
------------------------------
Name:
Title:
EXHIBIT 6.07(b)
FORM OF AFFILIATE LETTER FOR
AFFILIATES OF PARENT
[____________], 0000
XXXXXXX International Corporation
000 Xxxx Xxxxxx
Xxxxxxx, XX 00000
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "affiliate" of Covance Inc., a Delaware corporation ("Parent"),
as the term "affiliate" is defined for purposes of Accounting Series Releases
130 and 135, as amended, of the Securities and Exchange Commission (the
"Commission"). Pursuant to the terms of the Agreement and Plan of Merger dated
as of April 28, 1999 (the "Merger Agreement") among Parent, CCJ Holding Corp., a
Massachusetts corporation ("Merger Sub"), and PAREXEL International Corporation,
a Massachusetts corporation (the "Company"), Merger Sub will be merged with and
into the Company (the "Merger"). Capitalized terms used in this letter agreement
without definition shall have the meanings assigned to them in the Merger
Agreement.
I represent to, and covenant with, the Company that I will not,
during the period beginning 30 days prior to the Effective Time (as defined in
the Merger Agreement) until after such time as results covering at least 30 days
of combined operations of the Company and Parent have been published by Parent,
in the form of a quarterly earnings report, an effective registration statement
filed with the Commission, a report to the Commission on Form 10-K, 10-Q or 8-K,
or any other public filing or announcement which includes the combined results
of operations, sell, transfer or otherwise dispose of or reduce my risk with
respect to any shares of the capital stock of Parent ("Parent Shares") or the
Company that I may hold. I understand that Parent shall promptly notify the
"affiliates" of the publication of such results.
Execution of this letter should not be considered an admission on
my part that I am an "affiliate" of Parent as described in the first paragraph
of this letter, nor as a waiver of
2
any rights I may have to object to any claim that I am such an affiliate on or
after the date of this letter.
The parties hereto acknowledge and agree that notwithstanding
anything to the contrary contained herein, the undersigned will be permitted,
during the Pooling Period, to sell, transfer, exchange, pledge, distribute or
otherwise dispose of or grant any option, establish any "short" or
put-equivalent position with respect to or enter into any similar transaction
(through derivatives or otherwise) intended to have or having the effect,
directly or indirectly, of reducing the undersigned's risk relative to any
Company Shares or Parent Shares received by the undersigned in connection with
the Merger an amount of such shares not more than the de minimus amount
permitted by the Commission in its rules and releases relating to
pooling-of-interests accounting treatment, subject to advance concurrence of
Parent and its independent auditors.
This agreement and all obligations hereunder shall terminate upon
the termination of the Merger Agreement in accordance with its terms.
Very truly yours,
---------------------------
Name:
Agreed and accepted this [__] day
of [____________], [____], by
PAREXEL INTERNATIONAL CORPORATION
By:-----------------------------------
Name:
Title:
EXHIBIT 6.14(a)
COVANCE PAREXEL INC.
A Delaware corporation
AMENDED AND RESTATED BY-LAWS
Effective [______], 1999
COVANCE PAREXEL INC.
A Delaware corporation
AMENDED AND RESTATED BY-LAWS
TABLE OF CONTENTS
ARTICLE I
STOCKHOLDERS
Section 1.01. Annual Meetings..............................................1
Section 1.02. Special Meetings.............................................1
Section 1.03. Notice of Meetings...........................................1
Section 1.04. Business Transacted at Special Meetings of Stockholders......1
Section 1.05. Quorum.......................................................1
Section 1.06. Nominations and Stockholder Business.........................2
ARTICLE II
BOARD OF DIRECTORS
Section 2.01. General Powers...............................................4
Section 2.02. Number and Term of Office....................................4
Section 2.03. Annual and Regular Meetings..................................4
Section 2.04. Special Meetings; Notice.....................................4
Section 2.05. Telephonic Meetings..........................................5
Section 2.06. Quorum and Vote..............................................5
Section 2.07. Action Without a Meeting.....................................5
Section 2.08. Manner of Acting.............................................5
Section 2.09. Resignations.................................................5
Section 2.10. Reliance on Accounts and Reports, etc........................5
Section 2.11. Committees...................................................6
Section 2.12. Special Representation Provisions............................6
ARTICLE III
OFFICERS
Section 3.01. Number and Designation.......................................7
i
Section 3.02. Additional Officers..........................................8
Section 3.03. Election.....................................................8
Section 3.04. Removal and Vacancies........................................8
Section 3.05. Duties of the Chairman of the Board..........................9
Section 3.06. Duties of the Chief Executive Officer........................9
Section 3.07. Duties of the President......................................9
Section 3.08. Duties of the Vice President.................................9
Section 3.09. Duties of the Secretary......................................9
Section 3.10. Duties of the Treasurer.....................................10
Section 3.11. Duties of the Controller....................................10
Section 3.12. Duties of the Assistant Secretary...........................10
Section 3.13. Duties of the Assistant Controller..........................10
Section 3.14. Duties of the Assistant Treasurer...........................10
ARTICLE IV
EXECUTION OF INSTRUMENTS; DEPOSITS; FINANCES
Section 4.01. General.....................................................10
Section 4.02. Corporate Indebtedness......................................11
Section 4.03. Checks, Drafts, etc.........................................11
Section 4.04. Deposits....................................................11
Section 4.05. Dividends...................................................11
Section 4.06. Fiscal Year.................................................12
ARTICLE V
CAPITAL STOCK
Section 5.01. Certificates of Stock.......................................12
ARTICLE VI
SEAL; OFFICES; NAME
Section 6.01. Seal .......................................................12
Section 6.02. Offices.....................................................12
Section 6.03. Name........................................................12
ii
ARTICLE VII
INDEMNIFICATION
Section 7.01 Indemnification.............................................13
ARTICLE VIII
AMENDMENTS
Section 8.01. Amendments..................................................14
iii
AMENDED AND RESTATED BY-LAWS
OF
COVANCE PAREXEL INC.
ARTICLE I
STOCKHOLDERS
Section 1.01. Annual Meetings. The annual meeting of the
stockholders of the Corporation for the election of directors and for the
transaction of such other business as properly may come before such meeting
shall be held at such place either within or outside the State of Delaware, at
such time and date as shall be fixed from time to time by resolution of the
Board of Directors and as set forth in the notice of the meeting.
Section 1.02. Special Meetings. Special meetings of the
stockholders may be called at any time by the Chairman of the Board or the Chief
Executive Officer (or, in the absence or disability of the Chairman of the Board
and the Chief Executive Officer, by the President), or by the Board of
Directors. Such special meetings of the stockholders shall be held at such
places, within or outside the State of Delaware, as shall be specified in the
respective notices or waivers of notice thereof.
Section 1.03. Notice of Meetings. The Secretary or any
Assistant Secretary shall cause written notice of the date, time and place of
each meeting of the stockholders to be given, at least ten but not more than
fifty days prior to the meeting, to each stockholder of record entitled to vote.
Such notice shall be given either personally or by mail or other means of
written communication, addressed to each stockholder at the address of such
stockholder appearing on the books of the Corporation at the time such notice is
dispatched. Such further notice shall be given as may be required by law. Notice
of any meeting of stockholders need not be given to any stockholder who shall
sign a waiver of such notice in writing, whether before or after the time of
such meeting. Notice of any adjourned meeting of the stockholders of the
Corporation need not be given.
Section 1.04. Business Transacted at Special Meetings of
Stockholders. Business transacted at any special meeting of stockholders shall
be limited to the purposes stated in the notice thereof.
Section 1.05. Quorum. Except as at the time otherwise required
by statute or by the Restated Certificate of Incorporation, the presence at any
stockholders meeting, in person or by proxy, of the holders of record of shares
of stock (of any class) entitled to vote at the meeting,
aggregating a majority of the total number of shares of stock of all classes
then issued and outstanding and entitled to vote at the meeting, shall be
necessary and sufficient to constitute a quorum for the transaction of business.
Section 1.06. Nominations and Stockholder Business.
(a) Annual Meeting of Stockholders.
(1) Nominations of persons for election to the Board of
Directors of the Corporation and the proposal of business to be considered by
the stockholders may be made at an annual meeting of stockholders (i) pursuant
to the Corporation's notice of meeting, (ii) by or at the direction of the Board
of Directors or (iii) by any stockholder of the Corporation who was a
stockholder of record at the time of giving of notice provided for in this
Section 1.06, who is entitled to vote at the meeting and who complied with the
notice procedures set forth in this Section 1.06
(2) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (iii) of paragraph
(a)(1) of this Section 1.06, the stockholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be timely, a
stockholder's notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not less than 60 days nor more than 90 days
prior to the first anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is advanced by
more than 30 days or delayed by more than 60 days from such anniversary date,
notice by the stockholder to be timely must be so delivered not earlier than the
90th day prior to such annual meeting and not later than the close of business
on the later of the 60th day prior to such annual meeting or the 10th day
following the day on which public announcement of the date of such meeting is
first made. Such stockholder's notice shall set forth (i) as to each person whom
the stockholder proposes to nominate for election or reelection as a director
all information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") (including such person's written Consent to
being named in the proxy statement as a nominee and to serving as a director if
elected); (ii) as to any other business that the stockholder proposes to bring
before the meeting, a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the meeting and
any material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (iii) as to the
stockholder giving the notice and the beneficial owner, if any, on whose behalf
the nomination or proposal is made (A) the name and address of such stockholder,
as they appear on the Corporation's books, and of such beneficial owner and (B)
the class and number of shares of the Corporation which are owned beneficially
and of record by such stockholder and such beneficial owner.
2
(3) Notwithstanding anything in the second sentence of
paragraph (a)(2) of this Section 1.06 to the contrary, in the event that the
number of directors to be elected to the Board of Directors of the Corporation
is increased and there is no public announcement naming all of the nominees for
Director or specifying the size of the increased Board of Directors made by the
Corporation at least 70 days prior to the first anniversary of the preceding
year's annual meeting, a stockholder's notice required by this Section 1.06
shall also be considered timely, but only with respect to nominees for any new
position created by such increase, if it shall be delivered to the Secretary at
the principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which such public announcement is
first made by the Corporation.
(b) Special Meetings of Stockholders. Only such business shall
be conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting. Nominations
of persons for election to the Board of Directors may be made at a special
meeting of stockholders at which directors are to be elected pursuant to the
Corporation's notice of meeting (i) by or at the direction of the Board of
Directors or (ii) by any stockholder of the Corporation who is a stockholder of
record at the time of giving of notice provided for in this Section 1.06, who
shall be entitled to vote at the meeting and who complies with the notice
procedures set forth in this Section 1.06. Nominations by stockholders of
persons for election to the Board of Directors may be made at such a special
meeting of stockholders if the stockholder's notice required by paragraph (a)(2)
of this Section 1.06 shall be delivered to the Secretary at the principal
executive offices of the Corporation not earlier than the 90th day prior to such
special meeting, and not later than the close of business on the later of the
60th day prior to such special meeting or the 10th day following the day on
which public announcement is first made of the date of the special meeting and
of the nominees proposed by the Board of Directors to be elected at such
meeting.
(c) General.
(1) Only such persons who are nominated in accordance with the
procedures set forth in this Section 1.06 shall be eligible to serve as
directors and only such business shall be conducted at a meeting of stockholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 1.06. The Chairman of the meeting shall have the power
and duty to determine whether a nomination or any business proposed to be
brought before the meeting, was made in accordance with the procedures set forth
in this Section 1.06 and, if any proposed nomination or business is not in
compliance with this Section 1.06, to declare that such defective proposal shall
be disregarded.
(2) For purposes of this Section 1.06, "public announcement"
shall mean disclosure in a press release reported by the Dow Xxxxx News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant to
Sections 13, 14 or 15(d) of the Exchange Act.
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(3) Notwithstanding the foregoing provisions of this Section
1.06, a stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Section 1.06. Nothing in this Section 1.06 shall be
deemed to affect any rights of stockholders to request inclusion of proposals in
the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act.
ARTICLE II
BOARD OF DIRECTORS
Section 2.01. General Powers. The property, affairs and
business of the Corporation shall be managed by the Board of Directors. The
Board of Directors may exercise all the powers of the Corporation, whether
derived from law or the Restated Certificate of Incorporation, except such
powers as are, by statute, by the Restated Certificate of Incorporation or by
these By-Laws, vested solely in the stockholders of the Corporation. No Director
need be a stockholder of the Corporation.
Section 2.02. Number and Term of Office. The number of
Directors shall be determined in accordance with the Restated Certificate of
Incorporation. Each Director (whenever elected) shall hold office until his or
her successor shall have been elected and shall have qualified, or until his or
her death, or until he or she shall have resigned in the manner provided in
Section 2.09 hereof or shall have been removed in accordance with the Restated
Certificate of Incorporation.
Section 2.03. Annual and Regular Meetings. The annual meeting
of the Board of Directors, for the choosing of officers and for the transaction
of such other business as may come before the meeting, shall be held in each
year as soon as possible after the annual meeting of the stockholders at the
place of such annual meeting of the stockholders, and notice of such annual
meeting of the Board of Directors shall not be required to be given. The Board
of Directors from time to time may provide by resolution for the holding of
regular meetings and fix the time and place (which may be within or outside the
State of Delaware) thereof. Notice of such regular meetings need not be given;
provided, however, that in case the Board of Directors shall fix or change the
time or place of regular meetings, notice of such action shall be given
personally or by mail, facsimile or similar means of communication promptly to
each Director who shall not have been present at the meeting at which such
action was taken.
Section 2.04. Special Meetings; Notice. Special meetings of
the Board of Directors shall be held whenever called by the Chairman of the
Board or by the Chief Executive Officer (or, in the absence or disability of the
Chairman of the Board and the Chief Executive Officer, by the President), or by
any two Directors, at such time and place (which may be within or outside of the
State of Delaware) as may be specified in the respective notices or waivers of
notice thereof. Special meetings of the Board of Directors may be called on two
days' notice to each
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Director, personally or by telephone or facsimile or on four days' notice by
mail. Notice of any special meeting need not be given to any Director who shall
be present at such meeting, or to any Director who shall waive notice of such
meeting in writing, whether before or after the time of such meeting, and any
business may be transacted thereat. No notice need be given of any adjourned
meeting.
Section 2.05. Telephonic Meetings. Directors may participate
in a meeting of the Board of Directors, or a meeting of any committee designated
by the Board of Directors, by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
ByLaw shall constitute presence in person at such meeting.
Section 2.06. Quorum and Vote. At all meetings of the Board of
Directors, the presence of a majority of the total authorized number of
Directors under Section 2.02 hereof shall be necessary and sufficient to
constitute a quorum for the transaction of business. Except when otherwise
required by statute, by the Restated Certificate of Incorporation or by these
By-Laws, the vote of a majority of the total number of Directors present and
acting at a meeting at which a quorum is present shall be the act of the Board
of Directors. In the absence of a quorum, a majority of the Directors present
may adjourn the meeting from time to time, until a quorum shall be present.
Section 2.07. Action Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or any meeting of
a Committee of the Board of Directors may be taken without a meeting, if written
consents thereto are signed by all members of the Board of Directors or
Committee and such written consents are filed with the minutes of proceedings of
the Board of Directors.
Section 2.08. Manner of Acting. The Directors shall act only
as a Board, and the individual Directors shall have no power as such, except as
permitted by statute.
Section 2.09. Resignations. Any Director may resign at any
time by delivering a written resignation to the Chairman of the Board, the Chief
Executive Officer, the President, a Vice President, the Secretary or any
Assistant Secretary. Unless otherwise specified therein, such resignation shall
take effect upon delivery.
Section 2.10. Reliance on Accounts and Reports, etc. A
Director, or a member of any committee designated by the Board of Directors, in
the performance of his or her duties, shall be fully protected in relying in
good faith on the records of the Corporation and upon such information,
opinions, reports or statements presented to the Corporation by any of its
officers or employees, or committees of the Board of Directors or by any other
person as to matters the Director or member reasonably believes are within such
other person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Corporation.
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Section 2.11. Committees.
(a) The Board of Directors may establish such committees
having such responsibilities and composition as it shall from time to time by
resolution determine.
(b) Until the second anniversary of the Effective Time of the
Covance/PAREXEL Merger (as defined below), (i) the Corporate Governance
Committee of the Board of Directors shall, subject to applicable laws and the
rules of any stock exchange on which securities of the Corporation may be
listed, include at least two PAREXEL Directors (as defined in Section 2.12
below) and (ii) each other committee of the Board of Directors shall, subject to
applicable laws and the rules of any stock exchange on which securities of the
Corporation may be listed, include at least one PAREXEL Director. This Section
2.11(b) shall, without any further act or action, terminate and cease to have
any effect immediately following the second anniversary of the Effective Time of
the Covance/PAREXEL Merger (as defined in Section 2.12 below).
Section 2.12. Special Representation Provisions.
(a) In the event that any Covance Director (as defined below)
shall, at any time prior to the Annual Meeting of Stockholders of the
Corporation to be held in 2001 (the "2001 Annual Meeting"), cease to be a
Director of the Corporation, the Board of Directors and any nominating committee
thereof shall, subject to the fiduciary duties of the Directors, be required to
fill the vacancy created thereby with a person designated by a majority of the
remaining Covance Directors (any such person to be reasonably satisfactory to
the PAREXEL Directors (as defined below) then in office). In the event that any
PAREXEL Director shall, at any time prior to the 2001 Annual Meeting, cease to
be a Director of the Corporation, the Board of Directors and any nominating
committee thereof shall, subject to the fiduciary duties of the Directors, be
required to fill the vacancy created thereby with a person designated by a
majority of the remaining PAREXEL Directors (any such person to be reasonably
satisfactory to the Covance Directors then in office).
(b) The Board of Directors and any nominating committee
thereof shall, subject to the fiduciary duties of the Directors, be required to
nominate for election at the Annual Meetings of Stockholders of the Corporation
to be held in 2000 and 2001: (i) the Covance Directors and PAREXEL Directors
then in office whose terms end at the respective Annual Meetings, (ii) if any
such person who is a Covance Director shall not stand for election and shall not
yet have been replaced by a Covance Director, such person as may be designated
by a majority of the remaining Covance Directors (any such person to be
reasonably satisfactory to the PAREXEL Directors then in office), and (iii) if
any such person who is a PAREXEL Director shall not stand for election and shall
not yet have been replaced by a PAREXEL Director, such person as may be
designated by a majority of the remaining PAREXEL Directors (any such person to
be reasonably satisfactory to the Covance Directors then in office).
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(c) The term "Covance Director" means (i) any person serving
as a Director of the Corporation at the Effective Time of the Covance/PAREXEL
Merger (as defined below) who continues as a Director of the Corporation after
the Effective Time of the Covance/PAREXEL Merger and (ii) any person who becomes
a Director of the Corporation who is designated by a majority of the Covance
Directors pursuant to Section 2.12(a) or 2.12(b) of these By-laws. The term
"Effective Time of the Covance/PAREXEL Merger" means the "Effective Time", as
defined in the Agreement and Plan of Merger (the "Covance/PAREXEL Merger
Agreement") dated as of April 28, 1999 among Covance Inc., CCJ Holding Corp. and
PAREXEL International Corporation ("PAREXEL").
(d) The term "PAREXEL Director" means (i) any member of the
Board of Directors of PAREXEL or person designated by the Board of Directors of
PAREXEL who becomes a Director of the Corporation at the Effective Time of the
Covance/PAREXEL Merger pursuant to Section 6.15 of the Covance/PAREXEL Merger
Agreement and (ii) any person who becomes a Director of the Corporation who is
designated by a majority of the PAREXEL Directors pursuant to Section 2.12(a) or
2.12(b) of these By-laws.
(e) Sections 2.12(a) and 2.12(b) shall, without any further
act or action, terminate and cease to have any effect immediately following the
2001 Annual Meeting.
ARTICLE III
OFFICERS
Section 3.01. Number and Designation. (a) The officers of the
Corporation shall be chosen by the Board of Directors and may include one or
more Chairmen of the Board, a Chief Executive Officer, a President, a Secretary,
a Controller and a Treasurer who shall hold office until their successors are
chosen and qualify or their earlier resignation or removal. The Board of
Directors may also choose one or more Corporate Vice Presidents, Vice
Presidents, Assistant Secretaries, Assistant Controllers and Assistant
Treasurers. Any one or more of such Corporate Vice Presidents and Vice
Presidents may be designated as Corporate Executive Vice President, Executive
Vice President, Corporate Senior Vice President or Senior Vice President. Any
number of offices may be held by the same person, except that no person shall
simultaneously hold the offices of Chairman of the Board, Chief Executive
Officer or President and Secretary, Treasurer or Controller. The Chairman of the
Board shall be a member of the Board of Directors. The Board of Directors may
also designate any Vice Presidents as Chief Financial Officer and as General
Counsel.
(b) Notwithstanding anything to the contrary contained in
Section 3.01(a), immediately following the Effective Time of the Covance/PAREXEL
Merger, the elected officers of the Corporation shall include two Chairmen of
the Board, Xxxxxxxxxxx X. Xxxxxxx and Xxxxx X. xxx Xxxxxxxxxx each of whom shall
have the title "Co-Chairman of the Board" (all references in
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these By-laws to the "Chairman of the Board" being understood to permit either
of the Co-Chairmen of the Board to take actions to be taken by the Chairman of
the Board and all restrictions on and obligations of the Chairman of the Board
to apply to each of the Co-Chairmen of the Board), and Xxxxxxxxxxx X. Xxxxxxx
shall also be the Chief Executive Officer of the Corporation and Xxxxx X. xxx
Xxxxxxxxxx shall also be the President of the Corporation. Until the third
anniversary of the Effective Time of the Covance/PAREXEL Merger: (i) except as
provided in clauses (ii) and (iii) of this sentence, the affirmative vote of not
less than 75% of the members of the Board of Directors (a "75% Board Vote")
shall be required (A) to remove the Co-Chairman of the Board and Chief Executive
Officer or the Co-Chairman of the Board and President, (B) to change their
respective titles, (C) to alter, in any material respect, their respective
duties without their prior written consent; or (D) to materially reduce their
respective compensation or benefits (including, without limitation, salary and
bonus potential); (ii) the termination of the Co-Chairman of the Board and Chief
Executive Officer for "Cause" or as a result of such person becoming "disabled"
(in each case, as defined in the employment agreement between such person and
the Corporation) shall require the affirmative vote of a majority of the members
of the Board of Directors (other than such person); and (iii) the termination of
the Co-Chairman of the Board and President for "Cause" or as a result of such
person becoming "disabled"(in each case, as defined in the employment agreement
between such person and the Corporation), shall require the affirmative vote of
a majority of the members of the Board of Directors (other than such person),
which must include the affirmative vote of at least one PAREXEL Director. This
Subsection 3.01(b) shall, without any further act or action, terminate and cease
to have any effect on the earlier of: (i) the third anniversary of the Effective
Time of the Covance/PAREXEL Merger and (ii) immediately following Xxxxx X. xxx
Xxxxxxxxxx ceasing to be an officer of the Corporation.
Section 3.02. Additional Officers. The Board of Directors may
appoint such other officers and agents as it shall deem necessary who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors. The
Board of Directors may also delegate authority to the Chief Executive Officer or
the President to appoint and remove such additional officers as the Chief
Executive Officer or the President shall designate in writing, with such limited
authority as shall be set forth in writing, and such appointments shall be
reported to the Board of Directors.
Section 3.03. Election. The Board of Directors at its first
meeting or such subsequent meetings as shall be held prior to its first annual
meeting, and thereafter annually at its annual meeting, shall choose the
officers of the Corporation. If any officers are not chosen at an annual
meeting, such officers may be chosen at any subsequent regular or special
meeting.
Section 3.04. Removal and Vacancies. Except as provided in
Section 3.01(b) above, any officer elected or appointed by the Board of
Directors may be removed at any time by the affirmative vote of a majority of
the Board of Directors, either with or without cause. Any vacancy occurring in
any office of the Corporation shall be filled by the Board of Directors.
8
Section 3.05. Duties of the Chairman of the Board. The
Chairman of the Board, if present, shall preside at all stockholders' meetings
and all meetings of the Board of Directors at which he or she is present, shall
have such other duties as shall be assigned to him or her by the Board of
Directors and, in his or her capacity as Chairman of the Board, shall report to
the Board of Directors.
Section 3.06. Duties of the Chief Executive Officer. The Chief
Executive Officer shall have direct charge of the business of the Corporation,
subject to the general control of the Board of Directors, and shall have general
authority to sign all certificates, contracts, obligations and other instruments
of the Corporation.
Section 3.07. Duties of the President. In the event of the
absence or disability of the Chief Executive Officer, the President shall
perform all the duties of the Chief Executive Officer, and when so acting, shall
have all the powers of, and be subject to all the restrictions upon, the Chief
Executive Officer. Except where by law the signature of the Chief Executive
Officer is required, the President shall possess the same power, as an officer
of the Corporation, as the Chief Executive Officer to sign all certificates,
contracts, obligations and other instruments of the Corporation. The President
shall report to the Chief Executive Officer. The President shall perform such
other duties and may exercise such other powers as from time to time may be
assigned to him or her by these By-Laws, by the Board of Directors or by the
Chief Executive Officer. The President may be the Chief Operating Officer of the
Corporation
Section 3.08. Duties of the Vice President. In the event of
the absence or disability of the Chief Executive Officer and the President, the
Corporate Executive Vice President, Executive Vice President, Corporate Senior
Vice President or Senior Vice President, if any, or if absent, any Vice
President designated by the Board of Directors, shall perform all the duties of
the Chief Executive Officer and the President, and when so acting, shall have
all the powers of, and be subject to all the restrictions upon, the Chief
Executive Officer and the President. Except where by law the signature of the
Chief Executive Officer or the President is required, each Corporate Executive
Vice President, Executive Vice President, Corporate Senior Vice President,
Senior Vice President and Vice President shall possess the same power, as an
officer of the Corporation, as the Chief Executive Officer and the President to
sign all certificates, contracts, obligations and other instruments of the
Corporation. Each Corporate Executive Vice President, Executive Vice President,
Corporate Senior Vice President, Senior Vice President and Vice President shall
perform such other duties and may exercise such other powers as from time to
time may be assigned to him or her by these By-Laws, by the Board of Directors,
by the Chief Executive Officer or by the President. A Corporate Executive Vice
President or an Executive Vice President may be the Chief Operating Officer of
the Corporation.
Section 3.09. Duties of the Secretary. The Secretary shall, if
present, act as Secretary of, and keep the minutes of, all the proceedings of
the meetings of the stockholders and of the Board of Directors and of any
committee of the Board of Directors in one or more books to be kept for that
purpose; shall perform such other duties as shall be assigned to him or her by
the
9
Chief Executive Officer, the President or the Board of Directors; and, in
general, shall perform all duties incident to the office of Secretary.
Section 3.10. Duties of the Treasurer. The Treasurer shall
keep or cause to be kept full and accurate records of all receipts and
disbursements in the books of the Corporation and shall have the care and
custody of all funds and securities of the Corporation. He or she shall disburse
the funds of the Corporation as may be ordered by the Board of Directors, shall
render to the Chief Executive Officer, the President and the Board of Directors,
whenever they request it, an account of all of his or her transactions as
Treasurer and shall perform such other duties as may be assigned to him or her
by the Chief Executive Officer, the President or the Board of Directors; and, in
general, shall perform all, duties incident to the office of Treasurer.
Section 3.11. Duties of the Controller. The Controller shall
be the chief accounting officer of the Corporation. The Controller shall keep or
cause to be kept all books of account and accounting records of the Corporation
and shall keep and maintain, or cause to be kept and maintained, adequate and
correct accounts of the properties and business transactions of the Corporation.
The Controller shall prepare or cause to be prepared appropriate financial
statements for the Corporation and shall perform such other duties as may be
assigned to him or her by the Chief Executive Officer, the President or the
Board of Directors; and, in general, shall perform all duties incident to the
office of Controller.
Section 3.12. Duties of the Assistant Secretary. The Assistant
Secretary, if any, shall, in the absence or disability of the Secretary,
exercise the powers and perform the duties of the Secretary, and shall perform
such other duties as shall be assigned to him or her by the Chief Executive
Officer, the President or the Board of Directors.
Section 3.13. Duties of the Assistant Controller. The
Assistant Controller, if any, shall, in the absence or disability of the
Controller, exercise the powers and perform the duties of the Controller, and
shall perform such other duties as shall be assigned to him or her by the Chief
Executive Officer, the President or the Board of Directors.
Section 3.14. Duties of the Assistant Treasurer. The Assistant
Treasurer, if any, shall, in the absence or disability of the Treasurer,
exercise the powers and perform the duties of the Treasurer, and shall perform
such other duties as shall be assigned to him or her by the Chief Executive
Officer, the President or the Board of Directors.
ARTICLE IV
EXECUTION OF INSTRUMENTS; DEPOSITS; FINANCES
Section 4.01. General. Subject to the provisions of Sections
4.02, 4.03 and 4.04 hereof, all deeds, documents, transfers, contracts, and
agreements and other instruments requiring
10
execution by the Corporation shall be signed by the Chairman of the Board, the
Chief Executive Officer, the President, a Vice President or the Treasurer, or as
the Board of Directors may otherwise from time to time authorize by resolution.
Any such authorization may be general or confined to specific instances.
Section 4.02. Corporate Indebtedness. No loan shall be
contracted on behalf of the Corporation, and no evidences of indebtedness shall
be issued in its name, unless authorized by the Board of Directors. Such
authorizations of the Board of Directors may be general or confined to specific
instances. Loans authorized by the Board of Directors may be effected at any
time for the Corporation from any bank, trust company or other institution, or
from any firm, corporation or individual. All bonds, debentures, notes and other
obligations or evidences of indebtedness of the Corporation issued for such
loans as the Board of Directors shall authorize shall be made, executed and
delivered as the Board of Directors shall authorize. All notes and other
obligations or evidences of indebtedness permitted hereunder without
authorization of the Board of Directors shall be signed by the Chief Executive
Officer, the President, a Vice President or the Treasurer. When so authorized by
the Board of Directors, any part of or all the properties, including contract
rights, assets, business or goodwill of the Corporation, whether then owned or
thereafter acquired, may be mortgaged, pledged, hypothecated or conveyed or
assigned in trust as security for the payment of such bonds, debentures, notes
and other obligations or evidences of indebtedness to the Corporation, and of
the interest thereon, by instruments executed and delivered in the name of the
Corporation.
Section 4.03. Checks, Drafts, etc. All checks, drafts, bills
of exchange or orders for the payment of money, issued in the name of the
Corporation, shall be signed only by the Treasurer or such other person or
persons and in such manner as may from time to time be designated by the Board
of Directors, which designation may be general or confined to specific
instances; and unless so designated, no person shall have any power or authority
thereby to bind the Corporation or to pledge its credit or to render it liable.
Section 4.04. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositories as the Board of
Directors may select. The Board of Directors may make such special rules and
regulations with respect to such bank accounts, not inconsistent with the
provisions of these By-Laws, as it may deem expedient. For the purpose of
deposit and for the purpose of collection for the account of the Corporation,
checks, drafts and other orders for the payment of money which are payable to
the order of the Corporation shall be endorsed, assigned and delivered by the
Treasurer or such other person or persons and in such manner as may from time to
time be designated by the Board of Directors.
Section 4.05. Dividends. Dividends upon the stock of the
Corporation, subject to the provisions of the Restated Certificate of
Incorporation, if any, may be declared by the Board of Directors at any regular
or special meeting, pursuant to law. Such declaration may be continuing
11
or limited to a specific payment or distribution. Dividends may be paid in cash,
in property, or in shares of stock, subject to the provisions of the Restated
Certificate of Incorporation.
Section 4.06. Fiscal Year. The fiscal year of the Corporation
shall be the calendar year, unless otherwise, fixed by resolution of the Board
of Directors.
ARTICLE V
CAPITAL STOCK
Section 5.01. Certificates of Stock. Every holder of stock in
the Corporation shall be entitled to have a certificate signed by, or in the
name of the Corporation by, the Chairman of the Board, the Chief Executive
Officer, the President or a Vice President, and by the Treasurer or an Assistant
Treasurer, or by the Secretary or an Assistant Secretary of the Corporation,
certifying the number of shares owned by such holder in the Corporation.
ARTICLE VI
SEAL; OFFICES; NAME
Section 6.01. Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its incorporation and the words
"Corporate Seal, Delaware." The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
Section 6.02. Offices. The Corporation may have offices at
such other places both within or outside the State of Delaware as the Board of
Directors may from time to time determine or as the business of the Corporation
may require.
Section 6.03. Name. The Board of Directors may not, prior to
the second anniversary of the Effective Time of the Covance/PAREXEL Merger,
adopt a resolution to change the name of the Corporation, unless such resolution
shall have received a 75% Board Vote.
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ARTICLE VII
INDEMNIFICATION
Section 7.01 Indemnification.
(a) No director of the Corporation shall have any personal
liability to the Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that this provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General Corporation Law
of the State of Delaware, or (iv) for any transaction from which the director
derived an improper personal benefit.
(b) Each person who was or is made a party or is threatened to
be made a party to or is involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she is or was a director or officer of the
Corporation or is or was serving at the request of the Corporation as a director
or officer of another corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action either in an official
capacity as a director or officer or in any other capacity while serving as a
director or officer, shall be indemnified and held harmless by the Corporation
to the fullest extent authorized by the General Corporation Law of the State of
Delaware, as the same exists or may hereafter be amended (but, in the case of
any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment), against all expenses,
liability and loss (including attorneys' fees, judgments, fines, excise taxes
pursuant to the Employee Retirement Income Security Act of 1974, as amended, or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of his or her heirs, executors and administrators;
provided, however, that the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) was authorized by the
Board of Directors of the Corporation. The right to be indemnified conferred in
this Section 7.01 shall be a contract right and shall include the right to be
paid by the Corporation the expenses incurred in defending any such proceeding
in advance of its final disposition; provided, however, that the payment of such
expenses incurred by the director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is to
be rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan), in advance of the final
disposition of proceeding, shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Article or otherwise. The
Corporation may, by action of its
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Directors, provide indemnification to employees and agents of the Corporation
with the same scope and effect as the foregoing indemnification of directors and
officers.
(c) The indemnification provided by this Section 7.01 shall
not limit or exclude any rights, indemnities or limitations of liability to
which any person may be entitled, whether as a matter of law, under the Restated
Certificate of Incorporation of the Corporation, by agreement, vote of the
stockholders or disinterested directors of the Corporation or otherwise.
(d) If a claim under paragraph (b) of this Section 7.01 is not
paid in full by the Corporation within sixty (60) days after a written claim has
been received by the Corporation, the claimant may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation) that the
claimant has not met the standards of conduct which make it permissible under
the General Corporation Law of the State of Delaware for the Corporation to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard or conduct set forth in the
General Corporation Law of the State of Delaware, nor an actual determination by
the Corporation (including its Board of Directors, independent legal counsel, or
its stockholders) that the claimant has not met such applicable standard of
conduct, shall create a presumption that the claimant has not met the applicable
standard of conduct.
(e) The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability or
loss under the General Corporation Law of the State of Delaware.
ARTICLE VIII
AMENDMENTS
Section 8.01. Amendments. (a) Except as may be provided in the
Restated Certificate of Incorporation, these By-laws may be amended or repealed
in whole or in part only (i) by the stockholders of the Corporation or (ii) by
resolution of the Board of Directors.
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(b) Notwithstanding anything to the contrary contained in
Section 8.01(a) the Board of Directors may not amend, repeal or adopt any
provision inconsistent with the provisions of Sections 2.11(b), 2.12, 3.01(b),
3.05, 3.06, 3.07, 6.03 or 8.01(c) or this Section 8.01(b) of these By-laws
during the respective Effective Periods (as defined below) of such sections,
unless such amendment, repeal or adoption shall receive a 75% Board Vote.
(c) "Effective Period" means the period beginning immediately
following the Effective Time of the Covance/PAREXEL Merger and ending: (i) in
the case of Sections 2.11(b) and 6.03, on the second anniversary of the
Effective Time of the Covance/PAREXEL Merger; (ii) in the case of Sections
3.01(b), 3.05, 3.06 and 3.07, on the earlier of (A) the third anniversary of the
Effective Time of the Covance/PAREXEL Merger and (B) immediately following Xxxxx
X. xxx Xxxxxxxxxx ceasing to be an officer of the Corporation; (iii) in the case
of Section 2.12, on the day immediately following the date of the 2001 Annual
Meeting; and (iv) in the case of Section 8.01(b) and this Section 8.01(c), at
the end of the last to end of the time periods ending as specified in clauses
(i) through (iii) of this Section 8.01(c).
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EXHIBIT 6.15(b)
Post-Merger Board of Directors
1. Initial Parent Directors:
Xxxxxx X. Xxxxxx
Van X. Xxxxxxxx
Xxxxxxxxxxx X. Xxxxxxx
Xxxxx Xxxxxx
J. Xxxxxxx XxxXxxxxx
Xxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
2. Initial Company Directors:
A. Xxxx Xxxxxx, Xx.
Xxxxxxx X. Xxxxxxx
Xxxxx Xxxx
Xxxxx X. Xxxxxxxxx
Xxxxx X. xxx Xxxxxxxxxx
