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AGREEMENT AND PLAN OF MERGER
by and among
XXXXXXX CORPORATION,
TORQUE ACQUISITION CO., L.L.C.
and
TORQUE MERGER SUB, INC.
Dated as of December 8, 1999
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TABLE OF CONTENTS
PAGE
----
ARTICLE I
THE OFFER............................................................. 2
Section 1.1 The Offer........................................... 2
Section 1.2 Company Actions..................................... 4
Section 1.3 Directors........................................... 6
ARTICLE II
THE MERGER............................................................ 7
Section 2.1 The Merger.......................................... 7
Section 2.2 Closing............................................. 7
Section 2.3 Effective Time...................................... 7
Section 2.4 Effects of the Merger............................... 7
Section 2.5 Certificate of Incorporation and By-laws............ 7
Section 2.6 Directors and Officers of the Surviving Corporation. 8
Section 2.7 Stockholders' Meeting............................... 8
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE COMPANY
AND MERGER SUBSIDIARY................................................. 9
Section 3.1 Effect on Capital Stock............................. 9
Section 3.2 Payment for Shares.................................. 11
Section 3.3 Dissenting Shares................................... 13
Section 3.4 Company Options..................................... 13
Section 3.5 Director Fee Deferral Plan.......................... 14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................... 14
Section 4.1 Organization, Standing and Qualification............ 14
Section 4.2 Subsidiaries........................................ 15
Section 4.3 Capitalization...................................... 15
Section 4.4 Authorization....................................... 16
Section 4.5 Non-Contravention................................... 16
Section 4.6 Compliance with Applicable Law...................... 17
Section 4.7 SEC Reports; Financial Statement.................... 17
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Section 4.8 No Undisclosed Material Liabilities................ 18
Section 4.9 Absence of Certain Changes or Events............... 18
Section 4.10 Litigation......................................... 18
Section 4.11 Information in Disclosure Documents................ 19
Section 4.12 Tax Matters........................................ 19
Section 4.13 Employee Matters; ERISA............................ 20
Section 4.14 Environmental Matters.............................. 21
Section 4.15 Real Property...................................... 22
Section 4.16 Brokers or Finders................................. 22
Section 4.17 Opinion of Financial Advisor....................... 22
Section 4.18 Vote Required...................................... 23
Section 4.19 State Takeover Statutes............................ 23
Section 4.20 Bank Commitment Letter............................. 23
Section 4.21 Rights Agreement................................... 23
Section 4.22 Year 2000 Compliance............................... 23
Section 4.23 Material Contracts................................. 23
Section 4.24 Insurance.......................................... 24
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ACQUISITION COMPANY AND
MERGER SUBSIDIARY..................................................... 24
Section 5.1 Organization, Standing and Qualification............ 25
Section 5.2 Authorization....................................... 25
Section 5.3 Non-Contravention................................... 26
Section 5.4 Information in Disclosure Documents................. 26
Section 5.5 Brokers or Finders.................................. 27
Section 5.6 Sufficient Funds.................................... 27
Section 5.7 Merger Subsidiary's Operations...................... 27
Section 5.8 Certain Agreements with Acquisition Company......... 28
ARTICLE VI
COVENANTS............................................................. 28
Section 6.1 Interim Operations of the Company................... 28
Section 6.2 Access To Information............................... 30
Section 6.3 Indemnification of Directors and Officers of the
Company............................................. 30
Section 6.4 Publicity........................................... 32
Section 6.5 Employee Matters.................................... 32
Section 6.6 No Solicitation..................................... 33
Section 6.7 Approvals and Consents; Cooperation; Notification... 35
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Section 6.8 Further Assurances................................. 35
Section 6.9 Stockholder Litigation............................. 36
Section 6.10 Matters Relating to the Bank Commitment Letter..... 36
Section 6.11 Sale of Additional Series A Preferred/Warrant
Consideration to Acquisition Company............... 36
Section 6.12 Certain Board Actions Pending the Effective Time... 37
ARTICLE VII
CONDITIONS............................................................ 37
Section 7.1 Conditions to Each Party's Obligation to Effect the
Merger............................................. 37
Section 7.2 Additional Condition to the Company's Obligation to
Effect the Merger.................................. 37
ARTICLE VIII
TERMINATION........................................................... 38
Section 8.1 Termination........................................ 38
Section 8.2 Effect of Termination.............................. 40
Section 8.3 Fees, Expenses and Other Payments.................. 40
ARTICLE IX
MISCELLANEOUS......................................................... 42
Section 9.1 Amendment and Modification......................... 42
Section 9.2 Nonsurvival of Representations and Warranties...... 42
Section 9.3 Notices............................................ 43
Section 9.4 Interpretation..................................... 44
Section 9.5 Counterparts....................................... 44
Section 9.6 Entire Agreement; Third Party Beneficiaries........ 44
Section 9.7 Severability....................................... 45
Section 9.8 Governing Law...................................... 45
Section 9.9 Specific Performance............................... 45
Section 9.10 Assignment......................................... 45
Section 9.11 Headings........................................... 45
Section 9.12 Waivers............................................ 45
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Annexes
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Annex A--Conditions to the Offer
Annex B--Form of Amended and Restated Certificate of Incorporation
Annex C--Form of Amended and Restated Bylaws
Annex D--Warrant Agreement Term Sheet
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INDEX OF PRINCIPAL TERMS
TERM PAGE
---- ----
Acquisition Company ................................................... 1
Acquisition Company Directors ......................................... 6
Acquisition Company Disclosure Schedule ............................... 24
Acquisition Company Material Adverse Effect ........................... 25
Acquisition Proposal .................................................. 33
affiliate(s) .......................................................... 44
Agreement ............................................................. 47
Amended Charter ....................................................... 7
Bank .................................................................. 23
Bank Commitment Letter ................................................ 23
blue sky .............................................................. 16
Cash Account .......................................................... 14
Certificate of Merger ................................................. 7
Certificates .......................................................... 11
Change in Control ..................................................... 33
Claim ................................................................. 30
Closing ............................................................... 7
Closing Date .......................................................... 7
Code .................................................................. 20
Company ............................................................... 1
Company Common Stock .................................................. 1
Company Disclosure Schedule ........................................... 14
Company Material Adverse Effect ....................................... 15
Company Option Plans .................................................. 13
Company Options ....................................................... 13
Company Preferred Stock ............................................... 15
Company SEC Reports ................................................... 17
Company Voting Securities ............................................. 42
Confidentiality Agreement ............................................. 6
Continuing Stockholders ............................................... 9
Deferral Plan ......................................................... 14
Definitive Financing Agreements ....................................... 36
DGCL .................................................................. 1
Dissenting Shares ..................................................... 13
Effective Time ........................................................ 7
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employee benefit plan ................................................. 32
Environmental Laws .................................................... 21
ERISA ................................................................. 20
ERISA Affiliate ....................................................... 20
Excess Shares ......................................................... 38
Exchange Act .......................................................... 16
Exchange Agent ........................................................ 11
Executive Agreements .................................................. 29
Expenses .............................................................. 41
Financial Statements .................................................. 18
Financing ............................................................. 23
Foundation ............................................................ 2
Foundation Agreement .................................................. 28
GAAP .................................................................. 18
Governmental Authority ................................................ 17
Hazardous Materials ................................................... 22
herein ................................................................ 44
hereof ................................................................ 44
herewith .............................................................. 44
HSR Act ............................................................... 16
include ............................................................... 44
includes .............................................................. 44
including ............................................................. 44
Indemnified Party ..................................................... 30
Independent Directors ................................................. 6
Letter of Transmittal ................................................. 11
Liens ................................................................. 15
Material Contracts .................................................... 23
materiality ........................................................... 40
Merger ................................................................ 1
Merger Consideration .................................................. 9
Merger Subsidiary ..................................................... 1
Minimum Condition ..................................................... 2
multiemployer pension plan ............................................ 21
New Third Party Acquirer .............................................. 42
Offer ................................................................. 1
Offer Documents ....................................................... 4
Offer Price ........................................................... 1
Offer to Purchase ..................................................... 3
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TERM PAGE
---- ----
Other Contracts ....................................................... 24
Participant ........................................................... 14
Permits ............................................................... 17
Person ................................................................ 12
Plans ................................................................. 20
Proxy Statement ....................................................... 8
Remaining Shares ...................................................... 10
Retained Options ...................................................... 14
Retained Share ........................................................ 9
Rights ................................................................ 1
Rights Agreement ...................................................... 1
Schedule 13E-3 ........................................................ 4
Schedule 13E-4 ........................................................ 4
Schedule 14D-1 ........................................................ 4
Schedule 14D-9 ........................................................ 5
SEC ................................................................... 4
Securities Act ........................................................ 16
Series A Preferred .................................................... 10
Series A Preferred/Warrant Consideration .............................. 10
Shares ................................................................ 1
Significant Contracts ................................................. 24
Software .............................................................. 23
Special Committee ..................................................... 1
Stock Account ......................................................... 14
Stockholders' Agreement ............................................... 9
Stockholders' Approval ................................................ 23
Stockholders' Meeting ................................................. 8
Subsidiary ............................................................ 15
Surviving Corporation ................................................. 7
Surviving Corporation Common Stock .................................... 9
tail .................................................................. 31
Tax Return ............................................................ 20
Taxes ................................................................. 20
Termination Fee ....................................................... 41
Third Party Acquirer .................................................. 41
Unit Purchase ......................................................... 3
Unit Purchase Agreement ............................................... 3
Vestar ................................................................ 1
Warrant Agreement ..................................................... 10
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TERM PAGE
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Warrants .............................................................. 10
without limitation .................................................... 44
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 8, 1999, by and
among Xxxxxxx Corporation, a Delaware corporation (the "Company"), Torque
Acquisition Co., L.L.C. ("Acquisition Company"), a Delaware limited liability
company and a wholly-owned subsidiary of Vestar Capital Partners IV, L.P.
("Vestar"), and Torque Merger Sub, Inc., a Delaware corporation and a
wholly-owned subsidiary of Acquisition Company ("Merger Subsidiary").
WHEREAS, upon the terms and subject to the conditions of this
Agreement, Merger Subsidiary shall merge with and into the Company (the
"Merger") in accordance with the General Corporation Law of the State of
Delaware (the "DGCL");
WHEREAS, the Board of Directors of the Company, based on the
unanimous recommendation of the Special Committee of the Board of Directors of
the Company (the "Special Committee"), has determined that the Merger is
advisable, fair to and in the best interests of the Company and its stockholders
(other than Acquisition Company, Merger Subsidiary and their respective
affiliates, and certain stockholders (defined herein as the Continuing
Stockholders), Xx. Xxxxx X. Xxxxxxx and the Foundation (as defined herein)) upon
the terms and subject to the conditions set forth herein, has approved the
Merger, the Offer, this Agreement and the other transactions contemplated hereby
and has recommended approval of the Merger and this Agreement by the
stockholders of the Company;
WHEREAS, the Boards of Managers or Directors, as the case may be, of
Acquisition Company and Merger Subsidiary have each approved the Merger in
accordance with the DGCL, upon the terms and subject to the conditions set forth
herein;
WHEREAS, in accordance with the terms hereof, the Company and
Acquisition Company shall jointly commence a tender offer (the "Offer") to
purchase for cash all of the issued and outstanding shares of common stock, par
value $1.00 per share, of the Company, together with the rights (the "Rights")
attached thereto issued pursuant to the Rights Agreement, dated as of May 4,
1999 (the "Rights Agreement"), between the Company and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent (collectively, the "Shares" or the "Company
Common Stock"), at a price of $23.00 per Share, net to the seller in cash (such
price, or such higher price per Share as may be paid in the Offer, being
referred to herein as the "Offer Price"), upon the terms and subject to the
conditions of this Agreement and the Offer;
WHEREAS, the Offer shall be a joint third party tender offer by
Acquisition Company and a self-tender offer by the Company to purchase at the
Offer Price all Shares
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tendered pursuant to the Offer, with Acquisition Company agreeing to pay for and
purchase the first 2,318,126 Shares tendered pursuant to the Offer and the
Company agreeing to pay for and purchase all Shares tendered in excess of such
2,318,126 Shares paid for and purchased by Acquisition Company;
WHEREAS, the Board of Directors of the Company (acting with the
recommendation of the Special Committee) and the Board of Managers of
Acquisition Company have approved the making of the Offer, and the Board of
Directors of the Company (acting with the recommendation of the Special
Committee) has determined to recommend that stockholders of the Company tender
their Shares pursuant to the Offer; and
WHEREAS, the parties hereto intend that the Merger be treated as a
recapitalization for financial accounting purposes.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer. (a) On the fifth business day following the
public announcement of the execution hereof, the Company and Acquisition Company
shall jointly commence the Offer to purchase all of the issued and outstanding
Shares at the Offer Price per Share. The Company and Acquisition Company shall,
on the terms and subject to the prior satisfaction or waiver of the conditions
of the Offer, accept for payment and pay for Shares validly tendered as soon as
they are legally permitted to do so under applicable law, with Acquisition
Company agreeing to pay for and purchase the first 2,318,126 Shares tendered
pursuant to the Offer and the Company agreeing to pay for and purchase all
Shares tendered in excess of such 2,318,126 Shares paid for and purchased by
Acquisition Company. The obligations of the Company and Acquisition Company to
accept for payment and to pay for Shares validly tendered on or prior to the
expiration of the Offer and not withdrawn shall be subject only to (i) there
being validly tendered and not withdrawn prior to the expiration of the Offer
that number of Shares which would result in Acquisition Company, the Continuing
Stockholders, Mr. Xxxxx Xxxxxxx, and the Xxxxxxx Foundation (the "Foundation")
owning in the aggregate at least two-thirds of the Shares outstanding on a fully
diluted basis after giving effect to the repurchase of Shares by the Company in
the Offer and assuming the cancellation of such Shares (the "Minimum Condition")
and (ii) the other conditions set forth in Annex A hereto. For purposes of
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the Offer, "on a fully diluted basis" means, as of any date, the number of
Shares that are actually issued and outstanding plus the number of Shares that
the Company is required to issue pursuant to currently exercisable obligations
outstanding as of the applicable date under convertible securities, stock
options and otherwise. The Offer shall be made by means of an offer to purchase
(the "Offer to Purchase") containing the terms set forth in this Agreement, the
Minimum Condition and the other conditions set forth in Annex A hereto. Other
than as set forth in the second paragraph in Annex A hereto, Acquisition
Company, after consulting with the Company (acting through the Special
Committee), shall make all determinations with respect to the terms and
conditions (including, without limitation, with respect to the satisfaction or
waiver of conditions) of the Offer, provided, that Acquisition Company shall not
(i) decrease the Offer Price or change the form of consideration payable
pursuant to the Offer (other than by adding consideration), (ii) decrease the
number of Shares sought, (iii) waive the Minimum Condition or the condition set
forth in subparagraph (f) of Annex A attached hereto, (iv) impose any additional
conditions or amend any other term or condition of the Offer (other than by
increasing the Offer Price) or (v) extend the expiration date of the Offer
beyond March 15, 2000, in each case without the prior written consent of the
Company (acting through the Special Committee). Notwithstanding the foregoing,
Acquisition Company may, in its sole discretion (and, at the direction of
Acquisition Company, the Company shall), extend the Offer from time to time
until March 15, 2000 if, and to the extent that, at the initial expiration date
of the Offer, or any extension thereof, all conditions to the Offer have not
been satisfied or waived. The initial expiration date of the Offer shall be
January 27, 2000. In addition, Acquisition Company may, in its sole discretion
(and, at the direction of Acquisition Company and provided that the
representations set forth in Section 5.6 shall remain true and correct, the
Company shall), increase the Offer Price and extend the Offer to the extent
required by law in connection with such increase. Subject to the terms and
conditions of the Offer, Acquisition Company shall use its commercially
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate the Offer. Notwithstanding the foregoing, the
Company shall not be required to consummate the Offer or pay the Offer Price for
any Shares tendered unless the purchase of securities of Acquisition Company by
Vestar for a minimum purchase price of $53,316,898, as contemplated by Section 1
of the Unit Purchase Agreement, dated as of November 29, 1999 (the "Unit
Purchase Agreement"), by and between Vestar and Acquisition Company (the "Unit
Purchase"), shall have occurred and the Company shall be reasonably satisfied
that the proceeds from the Unit Purchase shall be deposited with the depositary
for the Offer promptly following the expiration of the Offer. Acquisition
Company shall not amend, modify or terminate the Unit Purchase Agreement in a
manner adverse to the Company without the prior written consent of the Company
(acting through the Board of Directors of the Company acting with the
recommendation of the Special Committee).
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(b) As soon as practicable on the date the Offer is commenced,
with respect to the Offer (i) the Company, Acquisition Company and Merger
Subsidiary, together with such other persons as shall be required to be included
as parties to such filing, shall file with the Securities and Exchange
Commission (the "SEC") a Rule 13E-3 Transaction Statement on Schedule 13E-3
(together with any amendments and supplements thereto and including the exhibits
thereto, the "Schedule 13E-3"), (ii) the Company shall file with the SEC an
Issuer Tender Offer Statement on Schedule 13E-4 (together with any amendments
and supplements thereto and including the exhibits thereto, the "Schedule
13E-4"), and (iii) Acquisition Company and Merger Subsidiary shall file with the
SEC a Tender Offer Statement on Schedule 14D-1 (together with any amendments and
supplements thereto and including the exhibits thereto, the "Schedule 14D-1").
The Schedule 13E-3, Schedule 13E-4 and Schedule 14D-1 shall each contain or
incorporate by reference the Offer to Purchase and a form of letter of
transmittal and any other documents related to the Offer (the Schedule 13E-3,
Schedule 13E-4, Schedule 14D-1, the Offer to Purchase, the letter of transmittal
and such other documents, together with any amendments and supplements thereto,
shall be collectively referred to herein as the "Offer Documents"). The Offer
Documents shall comply in all material respects with the provisions of
applicable federal securities laws. Each of the parties hereto shall take all
steps necessary to cause the Offer Documents to be filed with the SEC and to be
disseminated to the stockholders of the Company, in each case as and to the
extent required by applicable federal securities laws. Each of the Company, on
the one hand, and Acquisition Company and Merger Subsidiary, on the other hand,
shall promptly correct any information provided by it for use in the Offer
Documents if and to the extent that such information shall become false or
misleading in any material respect, and shall take all steps necessary to cause
the Offer Documents, as so corrected, to be filed with the SEC and to be
disseminated to the stockholders of the Company, in each case as and to the
extent required by applicable federal securities laws. Each of the Company and
its counsel, on the one hand, and Acquisition Company and Merger Subsidiary and
their counsel, on the other hand, shall be given a reasonable opportunity to
review the Offer Documents before they are filed with the SEC. In addition, each
of the Company, on the one hand, and Acquisition Company and Merger Subsidiary,
on the other hand, shall provide the other party and its counsel in writing with
any comments or other communications that such party or its counsel may receive
from time to time from the SEC or its staff with respect to the Offer Documents
promptly after the receipt of such comments or other communications.
Section 1.2 Company Actions. (a) The Company hereby approves of,
consents to and agrees to undertake the Offer and represents that its Board of
Directors, based on the unanimous recommendation of the Special Committee, at a
meeting duly called and held, has unanimously (i) determined that this Agreement
and the transactions contemplated hereby, including the Offer and the Merger,
are advisable, fair to and in the best interests of the Company's stockholders
(other than Acquisition Company, Merger Subsidiary and their respective
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affiliates, and the Continuing Stockholders, Mr. Xxxxx Xxxxxxx and the
Foundation), (ii) approved this Agreement and the transactions contemplated
hereby, including the Offer and the Merger, (iii) resolved to recommend that the
stockholders of the Company accept the Offer and tender their Shares thereunder
and approve the Merger and this Agreement; provided, that such recommendation
may be withdrawn, modified or amended as provided in Section 6.6 hereof, (iv)
approved this Agreement and the Stockholder Documents and the transactions
contemplated hereby and thereby for purposes of Section 203 of the DGCL, and (v)
resolved to amend the Rights Agreement as contemplated by Section 4.21 hereof.
(b) As soon as practicable on the date the Offer is commenced,
the Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with any amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-9") which shall, subject to
the fiduciary duties of the Company's directors under applicable law and to the
provisions of this Agreement, contain the recommendation referred to in Section
1.2(a)(iii) hereof. The Schedule 14D-9 shall comply in all material respects
with the provisions of applicable federal securities laws. The Company shall
take all steps necessary to cause the Schedule 14D-9 to be filed with the SEC
and to be disseminated to the stockholders of the Company, in each case as and
to the extent required by applicable federal securities laws. Each of the
Company, on the one hand, and Acquisition Company and Merger Subsidiary, on the
other hand, shall promptly correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that such information shall have become
false or misleading in any material respect, and the Company shall take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and to be disseminated to the stockholders of the Company, in each case as
and to the extent required by applicable federal securities laws. Acquisition
Company and Merger Subsidiary and their counsel shall be given a reasonable
opportunity to review the Schedule 14D-9 before it is filed with the SEC. In
addition, the Company shall provide Acquisition Company and Merger Subsidiary
and their counsel in writing with any comments or other communications that the
Company or its counsel may receive from time to time from the SEC or its staff
with respect to the Schedule 14D-9 promptly after the receipt of such comments
or other communications.
(c) In connection with the Offer, if requested by Acquisition
Company in writing, the Company shall promptly furnish or cause to be furnished
to Acquisition Company mailing labels, security position listings and any
available listing or computer file containing the names and addresses of the
record holders of the Shares as of a recent date, and shall furnish Acquisition
Company with such additional information (including updated lists of holders of
Shares and their addresses, mailing labels and lists of security positions) and
such other assistance as Acquisition Company or its agents may reasonably
request in writing in communicating the Offer to the record and beneficial
stockholders of the Company. Except for such steps
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as are necessary to disseminate the Offer Documents, Acquisition Company agrees
that the information contained in any of such labels and lists and the
additional information referred to in the preceding sentence shall be subject to
the terms of the Confidentiality Agreement, dated as of June 18, 1999, between
the Company and Vestar (the "Confidentiality Agreement"), shall use such
information only in connection with the Offer and, if this Agreement is
terminated, shall deliver or cause to be delivered to the Company all copies or
extracts of such information then in its possession or control and shall use its
best efforts to cause its affiliates, agents or representatives to so deliver
such information in their possession or control.
Section 1.3 Directors. (a) Promptly upon the purchase of and payment
for Shares by Acquisition Company pursuant to the Offer, Acquisition Company
shall be entitled to designate two additional directors (the "Acquisition
Company Directors") on the Board of Directors of the Company. Notwithstanding
the foregoing, until the Effective Time (as defined in Section 2.3 hereof), the
Company shall use its commercially reasonable efforts to ensure that all of the
members of the Special Committee on the date hereof shall continue as members of
the Board of Directors (the "Independent Directors") until the Effective Time.
In the event there is only one Independent Director, such Independent Director
shall have the right to designate a person to become an Independent Director. In
the event no Independent Director remains, the other directors who were
directors prior to the date hereof shall designate two persons to fill such
vacancies who shall not be employees or affiliates of the Company or any of its
Subsidiaries or employees, stockholders, members or affiliates of Vestar,
Acquisition Company, Merger Subsidiary or the Foundation, and such persons shall
be deemed to be Independent Directors hereunder. The Company shall use its
commercially reasonable efforts promptly to secure the resignations of three
incumbent directors in order to enable Acquisition Company's designees to be so
elected to the Company's Board of Directors and shall cause Acquisition
Company's designees to be so elected.
(b) Except as otherwise expressly contemplated hereby,
following the election or appointment of the Acquisition Company Directors
pursuant to this Section 1.3 and prior to the Effective Time, any amendment of
this Agreement, any termination of this Agreement by the Company, any extension
by the Company of the time for the performance of any of the obligations or
other acts of Acquisition Company or Merger Subsidiary, any consent of the
Company contemplated hereby, any waiver of any of the Company's rights
hereunder, any amendment to the Company's certificate of incorporation, by-laws
or the Rights Agreement or any action proposed to be taken by the Company that
would be reasonably likely to materially adversely affect the interests of the
stockholders of the Company (other than the Continuing Stockholders, Acquisition
Company, Mr. Xxxxx Xxxxxxx and the Foundation) with respect to the transactions
contemplated hereby, will require the concurrence of a majority of the
Independent Directors.
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ARTICLE II
THE MERGER
Section 2.1 The Merger. At the Effective Time, Merger Subsidiary
shall be merged with and into the Company in accordance with the DGCL, whereupon
the separate existence of Merger Subsidiary shall cease, and the Company shall
be the surviving corporation (the "Surviving Corporation").
Section 2.2 Closing. The closing of the Merger (the "Closing") shall
take place at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, at 0
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 10:00 a.m., local time, on a date to be
specified by the parties hereto, which shall be no later than the second
business day after satisfaction or waiver of all of the conditions set forth in
Article VII hereof (the "Closing Date"), unless another date or place is agreed
to in writing by the parties thereto.
Section 2.3 Effective Time. As soon as practicable on or after the
Closing Date, the parties hereto shall file a certificate of merger or other
appropriate documents (in any such case, the "Certificate of Merger") with the
Secretary of State of the State of Delaware and shall make all other filings or
recordings required by the DGCL with respect to the Merger. The Merger shall
become effective on the date specified in the Certificate of Merger (the
"Effective Time").
Section 2.4 Effects of the Merger. The Merger shall have the effects
set forth in the DGCL. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all of the properties, rights,
privileges, powers and franchises of the Company and Merger Subsidiary shall
vest in the Surviving Corporation, and all debts, liabilities and duties of the
Company and Merger Subsidiary shall become the debts, liabilities and duties of
the Surviving Corporation, and may be enforced against it to the same extent as
if said debts and liabilities had been incurred or contracted by it.
Section 2.5 Certificate of Incorporation and By-laws. At the
Effective Time, (i) the certificate of incorporation of the Company shall be
amended and restated in its entirety to read as set forth on Annex B hereto (the
"Amended Charter") (which certificate of incorporation shall include the
provisions required by Section 6.3(b)), and such amended and restated
certificate of incorporation shall be the certificate of incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law, and (ii) the by-laws of the Company shall be amended and
restated in its entirety to read as set forth on Annex C hereof,
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and such amended and restated by-laws shall be the by-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
Section 2.6 Directors and Officers of the Surviving Corporation.
From and after the Effective Time, the board of directors of the Surviving
Corporation shall be: Mr. Xxxxx Xxxxxxx, Xxxxx X. Xxxxx, Xxxx X. Xxxxxxxx,
Xxxxxx X. Xxxxx and Xxxxxx X. Xxxx, and the officers of the Surviving
Corporation shall be the officers of the Company immediately prior to the
Effective Time, in each case until their respective successors are duly elected
or appointed and qualified or until their earlier death, resignation or removal
in accordance with the Surviving Corporation's certificate of incorporation and
by-laws.
Section 2.7 Stockholders' Meeting.
(a) As soon as practicable following the consummation of the
Offer, the Company, acting through its Board of Directors, shall, in accordance
with applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Stockholders' Meeting") as soon as
practicable for the purpose of considering and taking action upon this
Agreement and approving the Merger;
(ii) prepare and file with the SEC a preliminary proxy or
information statement (including any required amendments to the Schedule
13E-3) relating to the Merger and this Agreement and use its reasonable
best efforts to obtain and furnish the information required by the SEC to
be included in the Proxy Statement (as defined herein) and, after
consultation with Acquisition Company, to respond promptly to any comments
made by the SEC with respect to the preliminary proxy or information
statement and cause a definitive proxy or information statement (the
"Proxy Statement") to be mailed to its stockholders; and
(iii) subject to its fiduciary obligations under applicable
law, include in the Proxy Statement the recommendation of the Company's
Board of Directors that stockholders of the Company vote in favor of the
adoption of this Agreement.
(b) Acquisition Company shall provide or cause to be provided
to the Company the information concerning Vestar, Acquisition Company, Merger
Subsidiary and the Financing (as defined herein) required to be included in the
Proxy Statement and shall vote, or cause to be voted, all of the Shares owned by
it, Merger Subsidiary or any of its other affiliates in favor of the adoption of
this Agreement and approval of the Merger.
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ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE COMPANY AND MERGER SUBSIDIARY
Section 3.1 Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the Company,
Acquisition Company or Merger Subsidiary, or any holder of any shares of Company
Common Stock or capital stock of Acquisition Company or Merger Subsidiary:
(a) Cancellation of Common Stock of Merger Subsidiary. Each
issued and outstanding share of common stock, par value $.01 per share, of
Merger Subsidiary shall automatically be cancelled and retired and shall cease
to exist, and no consideration shall be delivered in exchange therefor.
(b) Cancellation of Treasury Stock. Each share of Company
Common Stock that is owned by the Company as treasury stock shall automatically
be cancelled and retired and shall cease to exist, and no consideration shall be
delivered in exchange therefor.
(c) Treatment of Company Common Stock. Each issued and
outstanding share of Company Common Stock (other than Shares to be cancelled in
accordance with Section 3.1(b) hereof and any Dissenting Shares (as defined in
Section 3.3 hereof)) shall be treated as follows:
(i) except as otherwise provided in clauses (ii), (iii) and
(iv) of this Section 3.1(c), each share of Company Common Stock
outstanding at the Effective Time shall be converted into the right to
receive the Offer Price, without interest thereon (the "Merger
Consideration"), upon surrender of the certificate formerly representing
such share of Company Common Stock in accordance with Section 3.2 hereof;
(ii) the shares of Company Common Stock held by the
stockholders of the Company who have entered into a Stockholders'
Agreement (the "Stockholders' Agreement") with the Company as of the
Effective Time (other than Acquisition Company, the Foundation and Mr.
Xxxxx Xxxxxxx) (the "Continuing Stockholders"), and 138,455 shares of
Company Common Stock held by Mr. Xxxxx Xxxxxxx, each shall be converted
into the right to retain one fully paid and nonassessable share (a
"Retained Share") of common stock, par value $1.00 per share, of the
Surviving Corporation (the "Surviving Corporation Common Stock");
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(iii) the shares of Company Common Stock purchased in the
Offer and held by Acquisition Company shall be treated as follows:
(A) 484,334 shares each shall be converted into the
right to receive one Retained Share; and
(B) subject to Section 6.11 hereof, 1,833,792 shares
each shall be converted into the right to receive the following
consideration (collectively, the "Series A Preferred/Warrant
Consideration"):
(x) one share of the Surviving Corporation's
13.17% Series A Cumulative Redeemable Preferred Stock (the
"Series A Preferred"), such Series A Preferred having the
terms set forth in the Amended Charter, and
(y) one warrant to acquire shares of Surviving
Corporation Common Stock (collectively the "Warrants"), such
Warrants having the terms set forth in a warrant agreement
(the "Warrant Agreement") term sheet attached hereto as Annex
D, which Warrant Agreement shall be executed by the Company as
of the Effective Time; and
(iv) the shares of Company Common Stock held by the Foundation
shall be treated as follows:
(A) 202,000 shares each shall be converted into the
right to receive one Retained Share;
(B) 60,000 shares each shall be converted into the right
to receive the Series A Preferred/Warrant Consideration; and
(C) 935,346 shares (the "Remaining Shares") each shall
be, at the Foundation's election, which election shall be made in
accordance with the procedures and time periods as set forth in the
Foundation Agreement (as defined in Section 5.8 hereof), treated in
one of the following ways: (1) each Remaining Share shall be
converted into the right to receive the Merger Consideration, or (2)
as shall be specified by the Foundation, up to 485,000 of the
Remaining Shares each shall be converted into the right to receive
the Series A Preferred/Warrant Consideration and the rest of the
Remaining Shares each shall be converted into the right to receive
the Merger Consideration. In the event that the Foundation
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does not make its election in accordance with the Foundation
Agreement, the Foundation shall be deemed to have elected to receive
the Merger Consideration with respect to each of its Remaining
Shares.
(d) Cancellation and Retirement of Certain Company Common
Stock. Each share of Company Common Stock to be converted into the right to
receive either the Merger Consideration, the Retained Shares or the Series A
Preferred/Warrant Consideration pursuant to Section 3.1(c) hereof, when so
converted, shall no longer be outstanding and shall automatically be cancelled
and retired and shall cease to exist, and each holder of a certificate
representing any such Shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration, the Retained
Shares or the Series A Preferred/Warrant Consideration, as the case may be,
therefor upon the surrender of such certificate in accordance with Section 3.2
hereof.
Section 3.2 Payment for Shares.
(a) Exchange Agent. The Company shall designate a bank or
trust company reasonably acceptable to Acquisition Company to act as agent for
the holders of shares of Company Common Stock in connection with the Merger (the
"Exchange Agent") to receive the Merger Consideration to which such holders
shall become entitled pursuant to Section 3.1(c) hereof. At the Effective Time,
the Company shall take all steps necessary to deposit or cause to be deposited
with the Exchange Agent the Merger Consideration for timely payment hereunder.
The Merger Consideration so deposited with the Exchange Agent shall be invested
by the Exchange Agent as directed by the Surviving Corporation, provided that
such investment shall be in obligations of or guaranteed by the United States of
America, in commercial paper obligations rated A-1 or P-1 or better by Xxxxx'x
Investors Service, Inc. or Standard & Poor's Ratings Service, respectively, or
in certificates of deposit, bank repurchase agreements or banker's acceptances
of commercial banks with capital exceeding $500 million.
(b) Exchange Procedures. As soon as reasonably practicable
(and in any event not later than five (5) business days) after the Effective
Time, the Company and Acquisition Company shall, or shall cause, the Exchange
Agent, to mail to each holder of record of a certificate or certificates, which
immediately prior to the Effective Time represented outstanding shares of
Company Common Stock, other than holders of Shares which shall become entitled
to receive Retained Shares or the Series A Preferred/Warrant Consideration
pursuant to Section 3.1(c) hereof (the "Certificates") (i) a letter of
transmittal (the "Letter of Transmittal") (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as the Surviving Corporation may
reasonably
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specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for payment of the Merger Consideration. Upon surrender
of a Certificate for cancellation to the Exchange Agent, together with such
Letter of Transmittal, duly executed, the holder of such Certificate shall be
entitled to receive in exchange therefor the Merger Consideration for each share
of Company Common Stock formerly represented by such Certificate, and the
Certificate so surrendered shall forthwith be cancelled. No interest shall be
paid or shall accrue for the benefit of holders of Certificates on the Merger
Consideration upon the surrender of the Certificates. If payment of the Merger
Consideration is to be made to a Person (as defined herein) other than the
Person in whose name the surrendered Certificate is registered, it shall be a
condition of payment that the Certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and that the Person
requesting such payment shall have paid any transfer and other taxes required by
reason of the payment of the Merger Consideration to a Person other than the
registered holder of the Certificate surrendered or shall have established to
the satisfaction of the Surviving Corporation that such tax either has been paid
or is not applicable. For purposes of this Agreement, "Person" shall mean any
natural person, corporation, general or limited partnership, limited liability
company, joint venture, trust, association or entity of any kind. Until
surrendered as contemplated by this Section 3.2(b), each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the Merger Consideration, without interest thereon.
(c) Termination of Fund; No Liability. At any time following
one year after the Effective Time, the Surviving Corporation shall be entitled
to require the Exchange Agent to deliver to it any funds (including any interest
received with respect thereto) which had been made available to the Exchange
Agent and which have not been disbursed to holders of Certificates, and
thereafter such holders shall be entitled to look to the Surviving Corporation
(subject to abandoned property, escheat or other similar laws) only as general
creditors thereof with respect to the Merger Consideration payable upon due
surrender of their Certificates, without any interest thereon. Notwithstanding
the foregoing, neither the Surviving Corporation nor the Exchange Agent shall be
liable to any holder of a Certificate for Merger Consideration delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
(d) Transfer Books; No Further Ownership Rights by Holders of
Certificates in Company Common Stock. At the Effective Time, the stock transfer
books of the Company shall be closed and thereafter there shall be no further
registration of transfers of shares of Company Common Stock represented by
Certificates on the records of the Company. From and after the Effective Time,
the holders of Certificates evidencing ownership of shares of Company Common
Stock outstanding immediately prior to the Effective Time shall cease to have
any rights with respect to such Shares, except as otherwise provided herein or
by applicable
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law. If, after the Effective Time, Certificates are presented to the Surviving
Corporation for any reason, they shall be cancelled and exchanged as provided in
this Article III.
(e) Lost, Stolen or Destroyed Certificates. If any Certificate
has been lost, stolen or destroyed, upon the making of an affidavit of that fact
by the Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent shall issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration due to such Person pursuant to this
Agreement.
Section 3.3 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Shares outstanding immediately prior to the Effective
Time and held by a holder who has not voted in favor of the Merger and who has
delivered a written demand for appraisal of such Shares in accordance with
Section 262 of the DGCL (the "Dissenting Shares") shall not be converted into
the right to receive the Merger Consideration as provided in Section 3.1 hereof,
unless and until such holder fails to perfect or effectively withdraws or
otherwise loses such holder's right to appraisal and payment under the DGCL.
Such holder shall be entitled to receive payment of the appraised value of such
Shares in accordance with the provisions of the DGCL, provided that such holder
complies with the provisions of Section 262 of the DGCL. If, after the Effective
Time, any such holder fails to perfect or effectively withdraws or otherwise
loses such holder's right to appraisal, such Dissenting Shares shall thereupon
be treated as if they had been converted as of the Effective Time into the right
to receive the Merger Consideration, without interest thereon. The Company shall
give Acquisition Company prompt notice of any demands received by the Company
for appraisal of Shares, and, prior to the Effective Time, Acquisition Company
shall have the right to participate in all negotiations and proceedings with
respect to such demands. Prior to the Effective Time, the Company shall not,
except with the prior written consent of Acquisition Company, make any payment
with respect to, or settle or offer to settle, any such demands.
Section 3.4 Company Options. (a) The Company shall take all actions
necessary and appropriate to provide that, except as set forth in Section 3.4(b)
hereof, upon the Effective Time, each outstanding option and related rights to
purchase shares of Company Common Stock or other similar interest (collectively,
the "Company Options") granted under any of the Company's stock option plans or
under any other plan or arrangement (the "Company Option Plans"), whether or not
then exercisable or vested, shall be cancelled and, in exchange therefor, each
holder of such Company Option shall receive an amount in cash in respect
thereof, if any, equal to the product of (i) the excess, if any, of the Merger
Consideration over the per
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Share exercise price thereof and (ii) the number of shares of Company Common
Stock subject thereto (such payment to be net of applicable withholding taxes).
(b) Notwithstanding the foregoing, at the Effective Time, each
outstanding Company Option, whether or not then exercisable or vested, held by
the persons listed on Schedule 3.4(b) hereto (collectively, the "Retained
Options") shall, as of the Effective Time, continue to represent an option to
acquire the same number of shares of Surviving Corporation Common Stock at the
same exercise price per share. Except as otherwise provided by the Board of
Directors with respect to the extension of the term thereof, after the Effective
Time, each such Retained Option shall continue to be exercisable upon the same
terms and conditions as were applicable immediately prior to the Effective Time.
Section 3.5 Director Fee Deferral Plan. The Company shall take all
actions necessary and appropriate to provide that upon the Effective Time, all
shares of Company Common Stock credited to the "Stock Account" of each
"Participant" under the Xxxxxxx Corporation Plan for Deferral of Directors' Fees
(the "Deferral Plan") shall be cancelled, and a cash amount equal to the product
of (i) the Merger Consideration and (ii) the number of shares of Company Common
Stock so cancelled shall be credited to each such Participant's "Cash Account"
under the Deferral Plan. No further shares of Company Common Stock shall be
credited to a Participant's Stock Account following the date hereof, and any
outstanding elections of Participants to be credited with shares of Company
Common Stock shall be converted into elections to have cash credited to such
Participant's Cash Account.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise disclosed in the Company SEC Reports (as defined
in Section 4.7 hereof) or as set forth in the schedule delivered by the Company
to Acquisition Company and Merger Subsidiary upon execution of this Agreement
(the "Company Disclosure Schedule") and making reference to the particular
section of this Agreement to which exception is being taken, the Company
represents and warrants to Acquisition Company and Merger Subsidiary as follows:
Section 4.1 Organization, Standing and Qualification. Each of the
Company and its Subsidiaries (as defined herein) (i) is a corporation or other
legal entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization; (ii) has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted, except where the failure to
have
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such power and authority would not reasonably be expected to have a Company
Material Adverse Effect (as defined herein); (iii) is duly qualified or licensed
to do business and is in good standing in each jurisdiction in which the nature
of the business conducted by it makes such qualification or licensing necessary,
except where the failure to be so qualified, licensed and in good standing would
not reasonably be expected to have a Company Material Adverse Effect; and (iv)
has obtained all governmental licenses, permits, franchises and authorizations
necessary to carry on its business as now being conducted, except where the
failure to have obtained such licenses, permits, franchises or authorizations
would not reasonably be expected to have a Company Material Adverse Effect. The
Company has heretofore made available to Acquisition Company complete and
correct copies of its certificate of incorporation and by-laws as currently in
effect. For purposes of this Agreement, (x) "Company Material Adverse Effect"
shall mean any event, change, occurrence, effect, fact or circumstance (which
shall in no event include events, changes, occurrences, effects, facts or
circumstances resulting from general economic conditions or conditions affecting
companies in the Company's industry generally) having, or which would reasonably
be expected to have, a material adverse effect on (1) the ability of the Company
to perform its obligations under this Agreement or to consummate the
transactions contemplated hereby or (2) the condition (financial or otherwise),
assets, liabilities (actual or contingent), properties, results of operations,
cash flows or business of the Company and its Subsidiaries, taken as a whole,
and (y) a "Subsidiary" of any Person shall mean another Person of which the
first Person owns, directly or indirectly, an amount of the voting securities,
other voting ownership or voting partnership interests which is sufficient to
elect at least a majority of such other Person's board of directors or other
governing body.
Section 4.2 Subsidiaries. Section 4.2 of the Company Disclosure
Schedule sets forth the name, jurisdiction of incorporation and percentages of
outstanding capital stock owned, directly or indirectly, by the Company, with
respect to each corporation of which the Company owns, directly or indirectly, a
majority of the outstanding capital stock. All of the outstanding shares of
capital stock of each of the Company's Subsidiaries have been validly issued and
are fully paid and nonassessable and are owned, directly or indirectly, by the
Company, free and clear of any liens, pledges, security interests, claims or
other encumbrances (collectively, "Liens").
Section 4.3 Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of 20,000,000 shares of Company Common
Stock and 500,000 shares of preferred stock, par value $1.00 per share (the
"Company Preferred Stock"). As of November 30, 1999, (i) 9,589,195 shares
(including restricted stock) of Company Common Stock were issued and
outstanding, (ii) 2,004,945 shares of Company Common Stock were held by the
Company in its treasury, (iii) no shares of Company Preferred Stock were issued
and outstanding, and (iv) 879,552 shares of Company Common Stock were reserved
for issuance pursuant to
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the Company Option Plans, of which 755,582 such Shares are subject to
outstanding Company Options. All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth in this Section 4.3 and except for changes
since November 30, 1999 resulting from the exercise of Company Options
outstanding on such date, there are no outstanding (i) shares of capital stock
or voting securities of the Company, (ii) securities of the Company convertible
into or exchangeable for shares of capital stock or voting securities of the
Company, (iii) options, restricted stock, other stock-based compensation awards
or other rights to acquire from the Company, or, except as provided for in the
Deferral Plan, other obligation of the Company to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company or (iv) stock appreciation rights.
Section 4.4 Authorization. The Company has all requisite corporate
power and authority to execute and deliver this Agreement and, subject to
obtaining the Stockholders' Approval (as defined in Section 4.18 hereof), to
consummate the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by the Company, and the consummation by the
Company of the transactions contemplated hereby, have been duly authorized by
its Board of Directors and, except for those actions contemplated by Section
1.2(a) hereof and obtaining the Stockholders' Approval, no other corporate
action on the part of the Company is necessary to authorize the execution and
delivery by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by the Company and, subject to obtaining the
Stockholders' Approval and assuming the due and valid authorization, execution
and delivery hereof by each of Acquisition Company and Merger Subsidiary,
constitutes a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except that (i) such enforcement may
be subject to applicable bankruptcy, insolvency, reorganization or other similar
laws now or hereafter in effect affecting the rights of creditors generally, and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
Section 4.5 Non-Contravention. Except for (A) filings, if required,
pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), and any applicable foreign antitrust law, regulation or rule,
(B) filings required in connection with or in compliance with the provisions of
the Securities Act of 1933, as amended (the "Securities Act"), the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the DGCL, (C)
applicable requirements under corporation or "blue sky" laws of various states,
(D) filings with the New York Stock Exchange, Inc. and (E) matters specifically
described in this Agreement, neither the execution, delivery and performance of
this Agreement by the Company nor the
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consummation by the Company of the transactions contemplated hereby shall (i)
violate any provision of the certificate of incorporation or by-laws of the
Company or any of its Subsidiaries, (ii) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default under, or
give rise to any right of termination, cancellation or acceleration of any
obligation under, or result in the creation of any Lien upon any property or
asset of the Company or any of its Subsidiaries under, any provision of any
Material Contract (as defined in Section 4.23 hereof) to which the Company or
any of its Subsidiaries is a party or by which any of them or their properties
or assets may be bound, (iii) violate any law, rule, regulation, judgment,
injunction, order or decree applicable to the Company or any of its Subsidiaries
or any of their properties or assets, or (iv) require on the part of the Company
any filing or registration with, notification to, or authorization, consent or
approval of, any court, legislative, executive or regulatory authority or agency
(each, a "Governmental Authority"), except in the case of the foregoing clauses
(ii), (iii) or (iv) for such violations, breaches, defaults, terminations,
cancellations, accelerations or Liens which, or filings, registrations,
notifications, authorizations, consents or approvals the failure of which to
obtain, would not reasonably be expected to have a Company Material Adverse
Effect.
Section 4.6 Compliance with Applicable Law. The Company and its
Subsidiaries are in compliance in all respects with all applicable statutes,
laws, ordinances, rules, orders and regulations of any Governmental Authority,
except for such non-compliance which would not reasonably be expected to have a
Company Material Adverse Effect, and neither the Company nor any of its
Subsidiaries has received notification of any asserted present or past failure
to so comply. No investigation, review, inquiry or proceeding by any
Governmental Authority with respect to the Company and its Subsidiaries is, to
the knowledge of the Company, pending or threatened, except those, the outcome
of which would not reasonably be expected to have a Company Material Adverse
Effect. The Company and its Subsidiaries hold all permits, licenses, variances,
exemptions, orders, registrations and approvals of all Governmental Authorities
which are necessary for the operation of their respective businesses (the
"Permits"), except where the failure to hold any such Permits would not
reasonably be expected to have a Company Material Adverse Effect. The Company
and its Significant Subsidiaries (as defined herein) are in substantial
compliance with the material terms of the Permits. For purposes of this
Agreement, a "Significant Subsidiary" of the Company shall have the meaning set
forth in Rule 1-02(w) of Regulation S-X.
Section 4.7 SEC Reports; Financial Statements. The Company has filed
all reports required to be filed by it with the SEC pursuant to the Exchange Act
and the Securities Act since January 1, 1997 (as such documents have been
amended since the date of their filing, collectively, the "Company SEC
Reports"). The Company SEC Reports, as of their respective filing dates, or if
amended, as of the date of the last such amendment, did not contain any untrue
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statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the Company SEC Reports
(collectively, the "Financial Statements") complied as to form, as of their
respective dates of filing with the SEC, in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with United
States generally accepted accounting principles ("GAAP") (except as may be
indicated in the notes thereto) applied on a consistent basis and fairly present
in all material respects the consolidated financial position of Company and its
Subsidiaries as of the respective dates thereof and the results of their
consolidated operations and cash flows for the respective periods or as of the
respective dates set forth therein (subject, in the case of the unaudited
financial statements, to normal recurring year-end audit adjustments).
Section 4.8 No Undisclosed Material Liabilities. Except as disclosed
in the Company SEC Reports and liabilities incurred in the ordinary course of
business consistent with past practice since the date of the most recent
financial statements included in the Company SEC Reports, there are no
liabilities of the Company or its Subsidiaries of any kind whatsoever, whether
accrued, contingent, absolute, due, to become due, determined, determinable or
otherwise, having or which could reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect.
Section 4.9 Absence of Certain Changes or Events. Except as
contemplated by this Agreement, since December 31, 1998, the Company and its
Subsidiaries have not (i) suffered any change constituting a Company Material
Adverse Effect; (ii) amended its certificate of incorporation or by-laws (other
than the Amended Charter, the Rights Agreement and immaterial amendments to the
organizational documents of the Company's Subsidiaries); (iii) split, combined
or reclassified the Company Common Stock or any capital stock of any of the
Company's Subsidiaries; (iv) declared or set aside or paid any dividend or other
distribution with respect to the Company Common Stock, other than the Company's
regular quarterly dividends; or (v) materially changed the Company's accounting
methods, except as required by GAAP or applicable law.
Section 4.10 Litigation. There is no action, suit or proceeding
(other than any action, suit or proceeding resulting from or arising out of this
Agreement or the transactions contemplated hereby) pending or, to the knowledge
of the Company, threatened, involving the Company or any of its Subsidiaries, by
or before any court or Governmental Authority that would reasonably be expected
to have a Company Material Adverse Effect.
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Section 4.11 Information in Disclosure Documents. None of the
information supplied or to be supplied in writing by the Company, or any of its
officers, directors, employees, representatives or agents, specifically for
inclusion or incorporation by reference in the Offer Documents, the Schedule
14D-9 or the Proxy Statement, including any amendments or supplements thereto,
shall, at the respective times the Offer Documents and the Schedule 14D-9 are
filed with the SEC or first published, sent or given to the Company's
stockholders, or, in the case of the Proxy Statement, at the date the Proxy
Statement is first mailed to the Company's stockholders or at the time of the
Stockholders' Meeting, contain any statement which, at such time and in light of
the circumstances under which it is made, is false or misleading with respect to
any material fact, or omit to state any material fact necessary in order to make
the statements therein not false or misleading. Notwithstanding the foregoing,
the Company does not make any representation or warranty with respect to the
information that has been supplied by Vestar, Acquisition Company or Merger
Subsidiary or their officers, directors, employees, representatives or agents
for inclusion or incorporation by reference in any of the foregoing documents.
Section 4.12 Tax Matters. (a) The Company and each of its
Subsidiaries has (i) timely filed all material Tax Returns (taking into account
all valid extensions of time to file such Tax Returns), and all such returns are
true, correct and complete in all material respects, and (ii) paid or accrued
(in accordance with GAAP) all Taxes shown to be due on such Tax Returns other
than such Taxes as are being contested in good faith by the Company or any of
its Subsidiaries.
(b) There are no ongoing or, to the knowledge of the Company,
threatened in writing, audits or examinations of any Tax Return (as defined
herein) of the Company or its Subsidiaries, except where any such audit or
examination would not reasonably be expected to have a Company Material Adverse
Effect.
(c) There are no outstanding written requests, agreements,
consents or waivers to extend the statutory period of limitations applicable to
the assessment of any material Taxes or deficiencies against the Company or any
of its Subsidiaries, and no power of attorney granted by either the Company or
any of its Subsidiaries with respect to any Taxes is currently in force, other
than powers of attorney granted by the Company or any of its Subsidiaries to an
advisor or other third party with whom the Company or any of its Subsidiaries
has a contractual relationship with respect to immaterial Taxes assessed by or
payable to a foreign governmental agency or department.
(d) Neither the Company nor any of its Subsidiaries is a party
to any agreement providing for the allocation or sharing of Taxes, except for
any such agreements between the Company and any of its Subsidiaries.
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(e) There are no material Liens for Taxes upon the assets of
the Company or any of its Subsidiaries which are not provided for in the
financial statements included in the Company SEC Reports or the Financial
Statements, except Liens for Taxes not yet due and payable.
For purposes of this Agreement, "Taxes" shall mean any and all taxes, charges,
fees, levies or other assessments, including, without limitation, income, gross
receipts, excise, real or personal property, sales, withholding, social
security, occupation, use, service, service use, value added, license, net
worth, payroll, franchise, transfer and recording taxes, fees and charges,
imposed by the United States Internal Revenue Service or any taxing authority
(whether domestic or foreign including, without limitation, any state, local or
foreign government or any subdivision or taxing agency thereof (including a
United States possession)), whether computed on a separate, consolidated,
unitary, combined or any other basis; and such term shall include any interest,
penalties or additional amounts attributable to, or imposed upon, or with
respect to, any such taxes, charges, fees, levies or other assessments. "Tax
Return" shall mean any report, return, document, declaration or other
information or filing required to be supplied to any taxing authority or
jurisdiction (foreign or domestic) with respect to Taxes.
Section 4.13 Employee Matters; ERISA. (a) Section 4.13 of the
Company Disclosure Schedule sets forth a list of each employee benefit plan,
arrangement or agreement, including each employment, severance or similar
agreement, that is maintained as of the date hereof (the "Plans") by the Company
or by any trade or business, whether or not incorporated (an "ERISA Affiliate")
which, together with the Company, would be deemed a "single employer" within the
meaning of Section 4001 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), for the benefit of any current or former employee,
officer, director or independent contractor of the Company and, prior to the
date hereof, the Company has provided Acquisition Company or its representatives
with a copy of each material Plan.
(b) (i) Each of the Plans has been operated and administered
in compliance in all material respects with applicable law, including but not
limited to ERISA and the Internal Revenue Code of 1986, as amended (the "Code"),
(ii) each of the Plans intended to be "qualified" within the meaning of Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service to such effect and the Company knows of no event that
would cause the disqualification of any such Plan, (iii) no Plan is subject to
Title IV of ERISA, (iv) other than the Company's retiree medical plan and
retiree death benefit plan and the Alliance Tool Corporation health care plan,
no Plan provides welfare benefits (whether or not insured) with respect to
current or former employees of the Company beyond their retirement or other
termination of service, other than coverage mandated by applicable law or
benefits the full cost of which is borne by the current or former employee (or
such employee's beneficiary), (v) no
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liability under Title IV of ERISA or Section 412 of the Code has been incurred
(directly or indirectly) in connection with any Plan that has not been satisfied
in full, (vi) no Plan is a "multiemployer pension plan," as such term is defined
in Section 3(37) of ERISA, or a plan described in Section 4063 of ERISA, (vii)
all contributions or other amounts payable by the Company or any ERISA Affiliate
as of the Effective Time with respect to any Plan in respect of current or prior
plan years which are required to be reflected in the Company's or the ERISA
Affiliate's financial statements in accordance with GAAP have been paid or
accrued in accordance with GAAP and Section 412 of the Code, (viii) neither the
Company nor an ERISA Affiliate has engaged in a transaction in connection with
which the Company, its Subsidiaries or any ERISA Affiliate would be subject to
either a material civil penalty assessed pursuant to Sections 502(i) or 502(e)
of ERISA or a material tax imposed pursuant to Section 4975 or 4976 of the Code,
and (ix) to the knowledge of the Company, there are no pending, threatened or
anticipated material claims (other than routine claims for benefits) by, on
behalf of or against any of the Plans or any trusts related thereto.
(c) Except as provided pursuant to this Agreement and except
with respect to the Plans set forth in Schedule 6.5(c) of the Company Disclosure
Schedule, neither the execution, delivery and performance of this Agreement by
the Company nor the consummation by the Company of the transactions contemplated
hereby shall (i) result in any material payment becoming due to any director or
employee of the Company, (ii) materially increase any benefits otherwise payable
under any Plan or (iii) result in any acceleration of the time of payment or
vesting of any benefits under any Plan to any material extent.
(d) The funded status as of December 31, 1998 of the
retirement plans and the post-retiree medical liabilities of the Company and its
Subsidiaries are correct in all material respects based on the assumptions
disclosed in the Company's Form 10-K for the fiscal year ended December 31,
1998, and since December 31, 1998, there have been no material changes in or
amendments to the Company's foreign defined benefit plans.
Section 4.14 Environmental Matters. (a) The Company and its
Subsidiaries are in material compliance with all Environmental Laws (as defined
herein), except for non-compliance which would not reasonably be expected to
have a Company Material Adverse Effect. For purposes of this Agreement,
"Environmental Laws" shall mean all federal, state and local law (including,
without limitation, common law), judicial decisions, regulations, rules,
judgments, orders and decrees which pertain to pollution or protection of human
health or the environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata).
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(b) Except as would not reasonably be expected to have a
Company Material Adverse Effect, during the period beginning five years prior to
the date hereof, the Company and its Subsidiaries have not received any notice
from any Governmental Authority or any written notice by any other Person
alleging potential liability (including, without limitation, potential liability
for investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damage, personal injuries, or penalties) arising out
of, based on or resulting from (i) the presence or release into the environment
of any Hazardous Material (as defined herein) at any location, whether or not
owned or operated by the Company or any of its Subsidiaries or (ii)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law. For purposes of this Agreement, "Hazardous Materials" shall
mean chemicals, pollutants, contaminants, wastes, toxic substances, petroleum
and petroleum products.
(c) Except as would not reasonably be expected to have a
Company Material Adverse Effect, there has been no release, emission, discharge,
disposal or presence of Hazardous Materials at any facility owned or operated by
the Company or its Subsidiaries under circumstances or at levels at which
investigation or cleanup would be required under applicable Environmental Laws
which has not been remediated and all material liabilities with respect thereto
satisfied or discharged.
Section 4.15 Real Property. The Company and its Subsidiaries, as the
case may be, have sufficient title, leaseholds or rights to real property to
conduct their respective businesses as currently conducted in all material
respects.
Section 4.16 Brokers or Finders. The Company represents, as to
itself, its Subsidiaries and its affiliates, that no agent, broker, investment
banker, financial advisor or other firm or Person is or shall be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement, except Bear,
Xxxxxxx & Co. Inc., financial advisor to the Special Committee, whose fees and
expenses shall be paid by the Company in accordance with the Company's agreement
with such firm, a true and complete copy of which has heretofore been furnished
to Acquisition Company or Merger Subsidiary.
Section 4.17 Opinion of Financial Advisor. The Special Committee has
received the opinion of Bear, Xxxxxxx & Co. Inc., dated the date of this
Agreement, to the effect that, as of such date, the Offer Price is fair, from a
financial point of view, to the stockholders of the Company (other than
Acquisition Company, Merger Subsidiary and their respective affiliates, and the
Continuing Stockholders, Mr. Xxxxx Xxxxxxx and the Foundation). A written copy
of such opinion has been delivered by the Company to Acquisition Company.
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Section 4.18 Vote Required. The affirmative vote of two-thirds of
the outstanding shares of Company Common Stock entitled to vote thereon (the
"Stockholders' Approval") is the only vote of the holders of the Company's
capital stock necessary to adopt this Agreement and the transactions
contemplated hereby and to approve the Merger.
Section 4.19 State Takeover Statutes. The Board of Directors of the
Company (acting with the recommendation of the Special Committee) has
unanimously approved the terms of this Agreement and the consummation of the
Offer, the Merger and the other transactions contemplated by this Agreement, and
such approval constitutes approval of this Agreement and the transactions
contemplated hereby by such Board under the provisions of Section 203 of the
DGCL and represents all the action necessary to ensure that such Section 203
does not apply to Acquisition Company, Mr. Xxxxx Xxxxxxx, the Continuing
Stockholders or the Foundation in connection with the Offer, the Merger and the
other transactions contemplated by this Agreement. To the knowledge of the
Company, no other state takeover statute is applicable to the Offer, the Merger
or the other transactions contemplated hereby.
Section 4.20 Bank Commitment Letter. The Company has entered into a
letter (the "Bank Commitment Letter") executed by Bankers Trust Company (the
"Bank") describing the sources of financing (the "Financing") for the purchase
of such portion of the Shares which the Company is agreeing to pay for and
purchase pursuant to the Offer and for the payment of the Merger Consideration
pursuant to the Merger.
Section 4.21 Rights Agreement. The Company has taken all actions
necessary to render the Rights issued pursuant to the terms of the Rights
Agreement inapplicable to the Offer, the Merger, this Agreement and the other
transactions contemplated hereby.
Section 4.22 Year 2000 Compliance. To the extent materially
necessary to operate the business of the Company, all computer hardware,
software, databases, systems and other computer equipment (collectively,
"Software") used by the Company or the Significant Subsidiaries can be used
prior to, during and after the calendar year 2000, and shall operate during each
such time period, without error relating to the processing, calculating,
comparing, sequencing or other use of date data, except to the extent that a
failure to do so would not reasonably be expected to have a Company Material
Adverse Effect.
Section 4.23 Material Contracts. Section 4.23 of the Company
Disclosure Schedule sets forth a list of all written contracts of the Company
and its Significant Subsidiaries that are material to the business, financial
condition or results of operations of the Company and its Significant
Subsidiaries, taken as a whole, entered into in connection with and related to
the business and operations of the Company and its Significant Subsidiaries (the
"Material Con-
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tracts" and, together with the Other Contracts (as defined herein), the
"Significant Contracts"), and, prior to the date hereof, the Company has made
available to Acquisition Company true copies of each Material Contract. For
purposes of this Agreement, the term "Other Contracts" shall mean: (a) all
contracts required to be disclosed pursuant to Items 401 or 601 of Regulation
S-K of the SEC, (b) all material contracts for the future purchase of materials,
supplies, merchandise or equipment, (c) all material contracts for the sale or
lease of any of the assets of Company, other than sales of inventory in the
ordinary course of business, (d) all mortgages, pledges, conditional sales
contracts, security agreements, factoring agreements or other similar agreements
with respect to any material assets of Company, (e) all consulting agreements
providing for annual payments thereunder in excess of $150,000 and (f) all
non-competition or similar agreements which restrict or may hereafter restrict
the geographic or operational scope of the Company's business or the ability of
the Company to enter into new lines of business. To the knowledge of Company,
all of such written Significant Contracts are valid, binding and enforceable in
accordance with their terms (assuming the other parties thereto are bound) and
are in full force and effect, except where such invalidity or unenforceability
would not reasonably be expected to have a Company Material Adverse Effect. No
payment default, breach or violation by the Company or its Subsidiaries exists
under such material written Significant Contracts, except for defaults, breaches
or violations which would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, and no payment would be
accelerated or be due as a result of any change-in-control provisions in any
Significant Contracts as a result of the transactions contemplated by this
Agreement or would otherwise trigger any 280(g) liability under the Code with
respect to any agreement of the Company or its Subsidiaries.
Section 4.24 Insurance. Section 4.24 of the Company Disclosure
Schedule sets forth a complete and correct list of all material insurance
policies (other than welfare benefit insurance policies) which are owned by the
Company or which name the Company as an insured (or loss payee). Except as set
forth in Section 4.24 of the Company Disclosure Schedule, all such insurance
policies are in full force and effect and the Company has not received written
notice of cancellation of any such insurance policies, other than those policies
the absence or termination of which would not reasonably be expected to have a
Company Material Adverse Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
ACQUISITION COMPANY AND MERGER SUBSIDIARY
Except as set forth in the schedule delivered by Acquisition Company
to the Company prior to the execution of this Agreement (the "Acquisition
Company Disclosure Schedule") and making reference to the particular section of
this Agreement to which exception
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is being taken, Acquisition Company and Merger Subsidiary represent and warrant
to the Company as follows:
Section 5.1 Organization, Standing and Qualification. Each of
Acquisition Company and Merger Subsidiary (i) is a corporation or other legal
entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization; (ii) has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted, except where the failure to have
such power and authority would not reasonably be expected to have an Acquisition
Company Material Adverse Effect (as defined herein); (iii) is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so qualified, licensed and in good
standing would not reasonably be expected to have an Acquisition Company
Material Adverse Effect; and (iv) has obtained all governmental licenses,
permits, franchises and authorizations necessary to carry on its business as now
being conducted, except where the failure to have obtained such licenses,
permits, franchises or authorizations would not reasonably be expected to have
an Acquisition Company Material Adverse Effect. Acquisition Company has
heretofore delivered to the Company complete and correct copies of the
certificate of formation or certificate of incorporation, as the case may be,
and by-laws or similar constituent documents of each of Acquisition Company and
Merger Subsidiary as currently in effect. For purposes of this Agreement,
"Acquisition Company Material Adverse Effect" shall mean any event, change,
occurrence, effect, fact or circumstance having, or which would reasonably be
expected to have, a material adverse effect on (1) the ability of Acquisition
Company or Merger Subsidiary to perform their respective obligations under this
Agreement or to consummate the transactions contemplated hereby or (2) the
condition (financial or otherwise), assets, liabilities (actual or contingent),
properties, results of operations, cash flows, value or business of Acquisition
Company and its Subsidiaries, taken as a whole.
Section 5.2 Authorization. Each of Acquisition Company and Merger
Subsidiary has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by Acquisition
Company and Merger Subsidiary, and the consummation by Acquisition Company and
Merger Subsidiary of the transactions contemplated hereby, have been duly
authorized by their Board of Managers or Directors, as the case may be, and no
other corporate or other action on the part of Acquisition Company or Merger
Subsidiary is necessary to authorize the execution and delivery by Acquisition
Company and Merger Subsidiary of this Agreement and the consummation by them of
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Acquisition Company and Merger Subsidiary, as the case
may be, and, assuming the due and valid authorization, execution
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and delivery hereof by the Company, constitutes a valid and binding obligation
of each of Acquisition Company and Merger Subsidiary, as the case may be,
enforceable against them in accordance with its terms, except that (i) such
enforcement may be subject to applicable bankruptcy, insolvency, reorganization
or other similar laws now or hereafter in effect affecting the rights of
creditors generally, and (ii) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought.
Section 5.3 Non-Contravention. Except for (A) filings, if required,
pursuant to the HSR Act and any applicable foreign antitrust law, regulation or
rule, (B) filings required in connection with or in compliance with the
provisions of the Securities Act, the Exchange Act and the DGCL, (C) applicable
requirements under corporation or "blue sky" laws of various states, and (D)
matters specifically described in this Agreement, neither the execution,
delivery and performance of this Agreement by Acquisition Company and Merger
Subsidiary, nor the consummation by Acquisition Company and Merger Subsidiary of
the transactions contemplated hereby, shall (i) violate any provision of the
certificate of formation or certificate of incorporation, as applicable, or
by-laws or similar constituent documents of Acquisition Company or Merger
Subsidiary, (ii) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default under, or give rise to any
right of termination, cancellation or acceleration of any obligation, or result
in the creation of any Lien upon any property or asset of Acquisition Company or
Merger Subsidiary under, any provision of any material note, bond, indenture,
mortgage, lease, contract, agreement, instrument, license or other obligation to
which Acquisition Company or Merger Subsidiary is a party or by which any of
them or their properties or assets may be bound, (iii) violate any law, rule,
regulation, judgment, injunction, order or decree applicable to Acquisition
Company or Merger Subsidiary or any of their properties or assets, or (iv)
require on the part of Acquisition Company or Merger Subsidiary any filing or
registration with, notification to, or authorization, consent or approval of,
any Governmental Authority, except in the cases of (ii), (iii) or (iv) for such
violations, breaches or defaults which, or filings, registrations,
notifications, authorizations, consents or approvals the failure of which to
obtain, would not reasonably be expected to have an Acquisition Company Material
Adverse Effect.
Section 5.4 Information in Disclosure Documents. None of the
information supplied or to be supplied by Vestar, Acquisition Company or Merger
Subsidiary, or any of their respective officers, directors, employees,
representatives or agents in writing, for inclusion or incorporation by
reference in the Offer Documents, the Schedule 14D-9 or the Proxy Statement,
including any amendments or supplements thereto, shall, in the case of the Offer
Documents and the Schedule 14D-9, at the respective times the Offer Documents
and the Schedule 14D-9 are filed with the SEC or first published, sent or given
to the Company's stockholders, or, in the case
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of the Proxy Statement, at the date the Proxy Statement is first mailed to the
Company's stockholders or at the time of the Stockholders' Meeting, contain any
statement which, at such time and in light of the circumstances under which it
is made, is false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements therein not
false or misleading. Notwithstanding the foregoing, Acquisition Company and
Merger Subsidiary do not make any representation or warranty with respect to the
information that has been supplied by the Company or its officers, directors,
employees, representatives or agents for inclusion or incorporation by reference
in any of the foregoing documents.
Section 5.5 Brokers or Finders. Acquisition Company represents, as
to itself, its Subsidiaries and its affiliates, that no agent, broker,
investment banker, financial advisor or other firm or Person is or shall be
entitled to any broker's or finder's fee or any other commission or similar fee
in connection with any of the transactions contemplated by this Agreement,
except Vestar, whose fees and expenses shall be paid by Merger Subsidiary (or
the Surviving Corporation) in accordance with Merger Subsidiary's agreement
with such firm, a true and complete copy of which has heretofore been furnished
to the Company.
Section 5.6 Sufficient Funds. Acquisition Company is a newly formed
limited liability company which has conducted no business other than in
connection with the transactions contemplated by this Agreement. Acquisition
Company has entered into the Bank Commitment Letter pursuant to which the
Company shall obtain, subject to the terms and conditions therein, funds which,
together with the funds received and to be received by Acquisition Company
pursuant to the Unit Purchase Agreement, shall be sufficient to consummate the
transactions contemplated hereby and to pay all related fees and expenses.
Acquisition Company has delivered true, correct and complete copies of the Bank
Commitment Letter and the Unit Purchase Agreement to the Company. Each of the
Bank Commitment Letter and the Unit Purchase Agreement is in full force and
effect and has not been amended or terminated in any manner adverse to the
Company. Acquisition Company has taken all other actions required to cause the
Bank Commitment Letter and the Unit Purchase Agreement to be effective, and each
of the Bank Commitment Letter and the Unit Purchase Agreement is a valid and
binding commitment of Acquisition Company. Acquisition Company is not, as of
the date hereof, aware of any fact, occurrence or condition that makes any of
the assumptions or statements therein inaccurate in any material respect or that
would cause the commitment provided in the Bank Commitment Letter to be
terminated or ineffective or any of the conditions contained therein not to be
met.
Section 5.7 Merger Subsidiary's Operations. Merger Subsidiary was
formed solely for the purpose of engaging in the transactions contemplated
hereby and has not engaged in any business activities or conducted any
operations other than in connection with the transactions contemplated hereby.
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Section 5.8 Certain Agreements with Acquisition Company. Acquisition
Company has delivered to the Company true, correct and complete copies of (i)
the letter agreements, each dated as of November 29, 1999, by and among
Acquisition Company, the Company and each of Mr. Xxxxx Xxxxxxx and the
Continuing Stockholders, and (ii) an agreement by and between Acquisition
Company and the Foundation (the "Foundation Agreement").
ARTICLE VI
COVENANTS
Section 6.1 Interim Operations of the Company. The Company covenants
and agrees that, except (i) as contemplated by this Agreement, (ii) as disclosed
in Section 6.1 of the Company Disclosure Schedule or (iii) as consented to in
writing by Acquisition Company, after the date hereof and prior to the purchase
of Shares pursuant to the Offer:
(a) the business of the Company and its Subsidiaries shall be
con ducted only in the ordinary and usual course of business and, to the extent
consistent therewith, each of the Company and its Subsidiaries shall use its
commercially reasonable efforts to preserve in all material respects its
business organization intact and maintain its existing relations with customers,
suppliers, employees and business associates;
(b) the Company shall not, directly or indirectly, (i) amend
its certificate of incorporation, by-laws or similar organizational documents,
(ii) amend the Rights Agreement or redeem the rights issued thereunder or (iii)
split, combine or reclassify the outstanding Company Common Stock or any
outstanding capital stock of any of the Subsidiaries of the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i)
declare, set aside or pay any dividend or other distribution payable in cash,
stock or property with respect to its capital stock (other than regular
quarterly dividends not in excess of $.0625 per share of Company Common Stock
made in the ordinary course consistent with past practice or dividends from any
Subsidiary of the Company to the Company or any other Subsidiary of the
Company), (ii) issue or sell any additional shares of, or securities convertible
into or exchangeable for, or options, warrants, calls, commitments or rights of
any kind to acquire, any shares of capital stock of any class of the Company or
its Subsidiaries, other than issuances pursuant to the exercise of Company Stock
Options outstanding on the date hereof and issuances pursuant to the Rights
Agreement, (iii) acquire, sell, lease or dispose of any assets in excess of $1
million, other than in the ordinary and usual course of business, (iv) incur or
modify any material debt, other than in
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the ordinary and usual course of business or (v) redeem, purchase or otherwise
acquire directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall,
except as may be required or contemplated by this Agreement or in the ordinary
and usual course of business, terminate or amend any of its Plans;
(e) except (i) for amendments to or terminations of the
existing executive agreements with certain executives of the Company (the
"Executive Agreements"), (ii) for new severance agreements with certain
executives of the Company who are parties to such Executive Agreements, and
(iii) as otherwise contemplated by this Agreement or as required by applicable
law, neither the Company nor any of its Subsidiaries shall enter into, adopt or
amend any employee benefit plans or amend or enter into any employment or
severance agreement or (except for normal increases in the ordinary and usual
course of business consistent with past practice (but not in excess of 6%))
increase in any manner the compensation of any employees;
(f) neither the Company nor any of its Subsidiaries shall (i)
except as may be required or contemplated by this Agreement, assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the material obligations of any other Person
(other than Subsidiaries of the Company), except in the ordinary and usual
course of business, (ii) make any material loans, advances or capital
contributions to, or investments in, any other Person (other than to
Subsidiaries of the Company), other than in the ordinary and usual course of
business or (iii) make capital expenditures in excess of an aggregate of $5
million;
(g) neither the Company nor any of its Subsidiaries shall
materially change any of the financial accounting methods used by it unless
required by GAAP or applicable law;
(h) neither the Company nor any of its Subsidiaries shall make
any Tax election that would reasonably be expected to have a Company Material
Adverse Effect or settle or compromise any material Tax liability;
(i) the Company shall not settle or compromise any claim
(including arbitration) or litigation involving payments by the Company in
excess of $250,000 individually, or $1 million in the aggregate, which is not
subject to insurance reimbursement without the prior written consent of
Acquisition Company, which consent shall not be unreasonably withheld or
delayed; and
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(j) neither the Company nor any of its Subsidiaries shall
authorize or enter into an agreement to do any of the foregoing.
Section 6.2 Access To Information. Upon reasonable notice, the
Company shall, and shall cause each of its Subsidiaries to, afford to the
officers, employees, accountants, counsel, financing sources and other
representatives of Acquisition Company, access, during normal business hours
during the period prior to the Effective Time, to all of its properties, books,
contracts, commitments and records and during such period, the Company shall,
and shall cause each of its Subsidiaries to, furnish promptly to Acquisition
Company (i) a copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to the requirements
of federal securities laws and (ii) all other information concerning its
business, properties and personnel as Acquisition Company may reasonably
request. Unless otherwise required by law, Acquisition Company and its officers,
employees, accountants, counsel, financing sources and other representatives
shall hold any such information which is nonpublic in confidence in accordance
with the provisions of the Confidentiality Agreement.
Section 6.3 Indemnification of Directors and Officers of the
Company. (a) From and after the Effective Time, the Surviving Corporation shall
indemnify, defend and hold harmless any person who is now, or has been at any
time prior to the date hereof, or who becomes prior to the Effective Time, an
officer, director, employee or agent (the "Indemnified Party") of the Company or
any of its Subsidiaries against all losses, claims, damages, liabilities, costs
and expenses (including attorney's fees and expenses), judgments, fines, losses,
and amounts paid in settlement in connection with any actual or threatened
action, suit, claim, proceeding or investigation, (whether arising before or
after the Effective Time) (each, a "Claim") to the extent that any such Claim is
based on, or arises out of, (i) the fact that such person is or was a director,
officer, employee or agent of the Company or any of its Subsidiaries or is or
was serving at the request of the Company or any of its Subsidiaries as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, or (ii) this Agreement, or any of the
transactions contemplated hereby, in each case to the extent that any such Claim
pertains to any matter or fact arising, existing, or occurring prior to or at
the Effective Time, regardless of whether such Claim is asserted or claimed
prior to, at or after the Effective Time, to the full extent permitted under
applicable law or the Company's certificate of incorporation, by-laws or
indemnification agreements in effect at the date hereof, including provisions
relating to advancement of expenses incurred in the defense of any action or
suit. Without limiting the foregoing, in the event any Indemnified Party becomes
involved in any capacity in any Claim, then from and after the Effective Time,
the Surviving Corporation shall periodically advance to such Indemnified Party
its legal and other expenses (including the cost of any investigation and
preparation incurred in connection therewith), subject to the provision by
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such Indemnified Party of an undertaking to reimburse the amounts so advanced in
the event of a final non-appealable determination by a court of competent
jurisdiction that such Indemnified Party is not entitled thereto.
(b) All rights to indemnification and all limitations on
liability existing in favor of an Indemnified Party as provided in the Company's
certificate of incorporation, by-laws or indemnification agreements as in effect
as of the date hereof shall survive the Merger and shall continue in full force
and effect, without any amendment thereto, for a period of six years from the
Effective Time to the extent such rights are consistent with applicable law;
provided, that in the event any claim or claims are asserted or made within such
six-year period, all rights to indemnification in respect of any such claim or
claims shall continue until disposition of any and all such claims; provided,
further, that any determination required to be made with respect to whether an
Indemnified Party's conduct complies with the standards set forth under Delaware
law, the Company's certificate of incorporation or by-laws or such agreements,
as the case may be, shall be made by independent legal counsel selected by the
Indemnified Party and reasonably acceptable to the Surviving Corporation; and
provided, further, that nothing in this Section 6.3 shall impair any rights or
obligations of any present or former directors or officers of the Company.
(c) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other Person and
shall not be the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially all of
its properties and assets to any Person, then, and in each such case, to the
extent necessary to effectuate the purposes of this Section 6.3, proper
provision shall be made so that the successors and assigns of the Surviving
Corporation assume the obligations set forth in this Section 6.3 and none of the
actions described in the foregoing clauses (i) or (ii) shall be taken until such
provision is made.
(d) For a period of six years after the Effective Time, the
Surviving Corporation shall cause to be maintained in effect, without any lapses
in coverage, policies of directors' and officers' liability insurance (or a
"tail" policy), for the benefit of those persons who are covered by the
Company's directors' and officers' liability insurance policies at the Effective
Time, providing coverage with respect to matters occurring prior to the
Effective Time that is at least equal to the coverage provided under the
Company's current directors' and officers' liability insurance policies, to the
extent that such liability insurance can be maintained at an annual cost to the
Surviving Corporation of not greater than 200 percent of the premium for the
current Company directors' and officers' liability insurance, provided that if
such insurance (or "tail" policy) cannot be so maintained at such cost, the
Surviving Corporation shall maintain as much
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of such insurance as can be so maintained at a cost equal to 200 percent of the
current annual premiums of the Company for such insurance.
(e) This Section 6.3 is intended to be for the benefit of, and
shall be enforceable by, the Indemnified Parties, their heirs and personal
representatives, and shall be binding on the Surviving Corporation and its
successors and assigns.
Section 6.4 Publicity. The initial press releases with respect to
the execution of this Agreement shall be acceptable to Acquisition Company and
the Company. Thereafter, so long as this Agreement is in effect, neither the
Company, Acquisition Company nor any of their respective affiliates shall issue
or cause the publication of any press release with respect to the Merger, the
Offer, this Agreement or the other transactions contemplated hereby without the
prior consultation of the other party, except as may be required by law or by
any listing agreement with a national securities exchange.
Section 6.5 Employee Matters.
(a) Prior to the Effective Time, the Company shall take such
steps as may be required to cause the transactions contemplated hereby and any
other dispositions of equity securities (including derivative securities) of the
Company in connection with this Agreement or the transactions contemplated
hereby by each individual who is a director or officer of the Company, to be
exempt under Rule 16b-3 promulgated under the Exchange Act, such steps to be
taken in accordance with the interpretive letter, dated January 12, 1999, issued
by the SEC to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP.
(b) With respect to any "employee benefit plan" (as such term
is defined in Section 3(3) of ERISA) established or maintained by the Surviving
Corporation, an employee's service with the Company and any of its Subsidiaries
prior to the Effective Time shall be treated as service with the Surviving
Corporation for purposes of eligibility, vesting and benefit accruals (but
excluding benefit accrual purposes under any defined benefit pension plan which
initially becomes effective as of or after the Effective Time); provided,
however, that nothing in this Section 6.5(b) shall obligate the Surviving
Corporation to (i) make any particular benefit plan or benefit available to any
such employee, (ii) continue any particular benefit plan or benefit or (iii)
refrain from terminating or amending any particular benefit plan or benefit.
(c) The Surviving Corporation shall honor, in accordance with
their terms, and shall make required payments when due under, all Plans
maintained or contributed to by the Company or any of its Subsidiaries or to
which the Company or any of its Subsidiaries is a party (including, but not
limited to, employment, incentive and severance agreements and
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arrangements), that are applicable with respect to any employee, director or
stockholders of the Company or any of its Subsidiaries (whether current, former
or retired) or their beneficiaries; provided, however, that the foregoing shall
not preclude the Surviving Corporation from amending or terminating any such
Plan in accordance with its terms. Acquisition Company, Merger Subsidiary and
the Company each acknowledge that consummation of the Offer shall constitute a
"Change in Control" for purposes of each Plan in which such concept is relevant,
as set forth in Section 6.5(c) of the Company Disclosure Schedule,
notwithstanding any provision of any such Plan to the contrary.
(d) With respect to any welfare plans in which employees of
the Company and any of its Subsidiaries are eligible to participate after the
Effective Time, the Surviving Corporation shall (i) waive all limitations as to
preexisting conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to such employees and (ii)
provide each such employee with credit for any co-payments and deductibles paid
prior to the Effective Time in satisfying any applicable deductible or
out-of-pocket requirements under any plan.
(e) As of the date hereof, employees of the Company shall no
longer be given the opportunity to purchase shares of Company Common Stock
pursuant to the Company's employee stock purchase plan, dated on or about April
15, 1996. The Company shall provide its employees with any requisite notices of
the termination of such opportunity on a timely basis.
Section 6.6 No Solicitation. (a) The Company shall not, and shall
not authorize or permit any of its Subsidiaries or any of its or its
Subsidiaries' officers, directors, employees or agents to, directly or
indirectly, solicit, knowingly encourage, participate in or initiate discussions
or negotiations with, or provide any non-public information to any Person (other
than Acquisition Company, Merger Subsidiary or any of their affiliates or
representatives, the Continuing Stockholders, Mr. Xxxxx Xxxxxxx or the
Foundation) concerning, other than the transactions contemplated by this
Agreement, any proposal or inquiry relating to any merger, consolidation, tender
offer, exchange offer, sale of all or substantially all of the Company's assets,
sale of shares of capital stock or similar business combination transaction
involving the Company or any principal operating or business unit of the Company
or its Subsidiaries (an "Acquisition Proposal"). Notwithstanding the foregoing,
if, after the date of this Agreement, the Special Committee receives an
unsolicited written Acquisition Proposal from any Person and the Special
Committee reasonably concludes (except with respect to any written Acquisition
Proposal submitted to the Company by a Person who had submitted an Acquisition
Proposal after January 1, 1999 and prior to the date of this Agreement, as to
which such conclusion shall not be required), after consultation with its legal
counsel, that the failure to engage in discussions
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or negotiations with such Person would be inconsistent with the Special
Committee's (and the Board of Directors') fiduciary duties to the Company's
stockholders under applicable law, then (i) the Company or the Special Committee
may, directly or indirectly, provide access to or furnish or cause to be
furnished information concerning the Company's business, properties or assets to
such Person pursuant to an appropriate confidentiality agreement and the Company
or the Special Committee may engage in discussions related thereto, and (ii) the
Company or the Special Committee may participate in and engage in discussions
and negotiations with such Person regarding such Acquisition Proposal. In the
event that, after the date of this Agreement and prior to the expiration of the
Offer, the Special Committee receives an unsolicited written Acquisition
Proposal and the Special Committee determines, in good faith and after
consultation with its financial advisor and legal counsel, that the failure to
do so would be inconsistent with the Special Committee's (and the Board of
Directors') fiduciary duties to the Company's stockholders under applicable law,
the Board of Directors (acting on the recommendation of the Special Committee)
may do any or all of the following: (x) withdraw, modify or change the Board of
Directors' approval or recommendation of this Agreement, the Offer or the
Merger, (y) approve or recommend to the Company's stockholders an Acquisition
Proposal and (z) terminate this Agreement. The Board of Directors shall not take
the action described in clause (z) above prior to three business days after the
Board of Directors shall have given Acquisition Company written notice stating
that the Board of Directors intends to terminate this Agreement and setting
forth the information specified in Section 6.6(c) hereof with respect to any
Acquisition Proposal which the Board of Directors or the Special Committee
intends to accept or recommend. Notwithstanding anything contained in this
Agreement to the contrary, the exercise of the Company's or its Board of
Directors' (or the Special Committee's) rights under this Section 6.6 shall not
constitute a breach of this Agreement by the Company.
(b) Subject to Section 6.6(a) hereof, nothing contained in
this Section 6.6 shall prohibit the Company or its Board of Directors, upon the
recommendation of the Special Committee, from taking and disclosing to the
Company's stockholders a position with respect to a tender or exchange offer by
a third party pursuant to Rules 14d-9 and 14e-2(a) promulgated under the
Exchange Act or from making such disclosure to the Company's stockholders or
otherwise which, in the judgment of the Special Committee, after consultation
with its legal counsel, is necessary under applicable law or the rules of any
stock exchange or failure so to disclose would be inconsistent with its
fiduciary duties to the Company's stockholders under applicable law.
(c) The Company shall promptly, but in any event within one
business day, advise Acquisition Company in writing of any Acquisition Proposal
or any inquiry regarding the making of an Acquisition Proposal, including any
request for information, the material terms and conditions of such request,
Acquisition Proposal or inquiry and the identity of
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the Person making such request, Acquisition Proposal or inquiry. The Company
shall keep Acquisition Company reasonably informed of the status and details,
including any amendments or proposed amendments, of any such request,
Acquisition Proposal or inquiry.
Section 6.7 Approvals and Consents; Cooperation; Notification. (a)
The parties hereto shall use their respective reasonable best efforts, and
cooperate with each other, to obtain as promptly as practicable all governmental
and third party authorizations, approvals, consents or waivers, including,
without limitation, pursuant to the HSR Act, required in order to consummate the
transactions contemplated by this Agreement, including, without limitation, the
Offer and the Merger.
(b) The parties hereto shall take all actions necessary to
file as soon as practicable all notifications, filings, and other documents
required to obtain all governmental authorizations, approvals, consents or
waivers, including, without limitation, under the HSR Act, and to respond as
promptly as practicable to any inquiries received from the Federal Trade
Commission, the Antitrust Division of the Department of Justice and any other
Governmental Authority for additional information or documentation in connection
therewith.
(c) The Company shall give prompt notice to Acquisition
Company of the occurrence of any Company Material Adverse Effect. Each of the
Company and Acquisition Company shall give prompt notice to the other of the
occurrence or failure to occur of an event that would, or, with the lapse of
time would cause, any condition to the consummation of the Offer or the Merger
not to be satisfied.
Section 6.8 Further Assurances. Each of the parties hereto shall use
its reasonable best efforts to take, or cause to be taken, all action, and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated hereby, including, without limitation, the Offer and
the Merger, which efforts shall include, without limitation, the Company using
its commercially reasonable efforts to enter into definitive financing
arrangements with respect to the Financing described in the Bank Commitment
Letter; provided, that without Acquisition Company's prior written consent, the
Company shall not enter into any definitive financing agreement which contains
terms that differ in any material respect from those terms expressly set forth
in Annex A to the Bank Commitment Letter. If at any time after the Effective
Time any other action is necessary or desirable to carry out the purposes of
this Agreement, the parties hereto shall take or cause to be taken all such
necessary action, including, without limitation, the execution and delivery of
such further instruments and documents as may be reasonably requested by the
other party for such purposes or otherwise to consummate and make effective the
transactions contemplated hereby.
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Section 6.9 Stockholder Litigation. In connection with any
litigation which may be brought against the Company or its directors relating to
the transactions contemplated hereby, the Company shall keep Acquisition
Company, and any counsel which Acquisition Company may retain at its own
expense, informed of the status of such litigation and will provide Acquisition
Company's counsel the right to participate in the defense of such litigation to
the extent Acquisition Company is not otherwise a party thereto, and the Company
shall not enter into any settlement or compromise of any such stockholder
litigation without Acquisition Company's prior written consent, which consent
shall not be unreasonably withheld or delayed.
Section 6.10 Matters Relating to the Bank Commitment Letter. (a)
Acquisition Company shall be primarily responsible for any negotiations with
respect to any definitive agreements regarding the Financing (the "Definitive
Financing Agreements"); provided, however, that (i) the Company shall have
received prior notice of, and shall be kept reasonably informed of the ongoing
status of, any such negotiations, (ii) the Company shall take all such actions
as are reasonably requested by Acquisition Company in connection with any such
negotiations, and (iii) Acquisition Company shall conduct any such negotiations
reasonably and in good faith. Acquisition Company shall use its commercially
reasonable efforts to close the Financing on terms consistent with Annex A of
the Bank Commitment Letter and to execute and deliver the Definitive Financing
Agreements on or before the expiration of the Offer. Acquisition Company shall
use its commercially reasonable efforts to satisfy on or before the expiration
of the Offer all requirements of the Definitive Financing Agreements which are
conditions to closing the transactions constituting the Financing and to drawing
the cash proceeds thereunder.
(b) Following receipt by either the Company or any of its
affiliates, on the one hand, or Acquisition Company or any of its affiliates, on
the other hand, of any written or oral communication to the effect that Bankers
Trust Company is contemplating not providing the Financing or is terminating or
canceling or modifying in any material respect the Bank Commitment Letter, or
that the Financing is unlikely to be obtained, the Company or Acquisition
Company, as the case may be, shall immediately communicate such event to the
other party and provide such other party with a true and complete copy of any
such written communication.
Section 6.11 Sale of Additional Series A Preferred/Warrant
Consideration to Acquisition Company. In the event that additional shares of
Series A Preferred and Warrants shall be sold to Acquisition Company at the
Effective Time, either as a result of (i) the Foundation's election (including
a failure to make an election) to receive Merger Consideration with respect to
each of its Remaining Shares pursuant to Section 3.1(c)(iv)(C)(1) hereof, or
(ii) the Foundation's election pursuant to Section 3.1(c)(iv)(C)(2) to receive
the Series A Preferred/Warrant Consideration with respect to less than 450,346
of the Remaining Shares, the
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Surviving Corporation shall sell to Acquisition Company concurrently with the
consummation of the Merger additional Series A Preferred/Warrant Consideration
at a rate of one share of Series A Preferred and one Warrant for each $23.00 in
cash payable by Acquisition Company.
Section 6.12 Certain Board Actions Pending the Effective Time.
Following the consummation of the Offer and prior to the Effective Time, the
affirmative vote of at least one of the Acquisition Company Directors shall be
required for the Company to approve and authorize any of the actions set forth
in Section 3(d) of the Stockholders' Agreement, a copy of which section has been
furnished to the Company.
ARTICLE VII
CONDITIONS
Section 7.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) the Company and Acquisition Company shall have accepted
for payment and paid for all Shares validly tendered pursuant to the Offer and
not withdrawn; provided, however, that neither the Company nor Acquisition
Company may invoke this condition if it shall have been the cause of the failure
to purchase Shares so tendered and not withdrawn in violation of the terms of
this Agreement or the Offer;
(b) the Stockholders' Approval shall have been obtained;
(c) all necessary waiting periods applicable to the Merger
under the HSR Act shall have expired or been earlier terminated; and
(d) no temporary restraining order, preliminary or permanent
injunction or other order issued by any Governmental Authority or other legal
restraint or prohibition preventing the consummation of the Merger shall be in
effect; provided, however, that prior to invoking this condition, the party so
invoking this condition shall have complied with its obligations under Section
6.8 hereof and the parties hereto shall have used reasonable best efforts to
lift or remove such order, injunction, restraint or prohibition.
Section 7.2 Additional Condition to the Company's Obligation to
Effect the Merger. The obligations of the Company to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
additional condition:
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(a) if the Foundation elects to receive Merger Consideration
with respect to more than 450,346 of its Remaining Shares (such Remaining
Shares in excess of 450,346 Remaining Shares are referred to as the "Excess
Shares") pursuant to Section 3.1(c)(iv)(C)(1) hereof, (i) Vestar shall have made
the capital contribution to Acquisition Company in an aggregate amount equal to
such Merger Consideration in respect of all such Excess Shares in accordance
with Section 2 of the Unit Purchase Agreement, (ii) Acquisition Company shall
have contributed the amount of such capital contribution to Merger Subsidiary
and (iii) at the Effective Time, Merger Subsidiary shall have cash in an amount
not less than the amount of the capital contribution from Acquisition Company
contemplated in clause (ii).
ARTICLE VIII
TERMINATION
Section 8.1 Termination. This Agreement may be terminated and the
Merger contemplated herein may be abandoned at any time prior to the Effective
Time, whether before or after the Stockholders' Approval is obtained:
(a) By mutual written consent of the Company (acting through
the Special Committee), Acquisition Company and Merger Subsidiary.
(b) By either the Company (acting through the Special
Committee), on the one hand, or Acquisition Company, on the other hand:
(i) if shares of Company Common Stock shall not have been
purchased pursuant to the Offer on or prior to March 15, 2000; provided,
however, that the right to terminate this Agreement under this Section
8.1(b)(i) 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 to purchase shares of Company Common Stock pursuant to the Offer
on or prior to such date; or
(ii) if any Governmental Authority shall have issued an order,
decree or ruling or taken any other action, in each case permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree or ruling shall have
become final and nonappealable.
(c) By the Company (acting through the Special Committee)
prior to the purchase of shares of Company Common Stock pursuant to the Offer,
as provided in Section
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6.6(a) hereof; provided, that in order for the termination of this Agreement
pursuant to this Section 8.1(c) to be deemed effective, the Company shall have
complied with all provisions of Section 6.6 hereof, including the notice
provisions therein, and with the applicable requirements, including the payment
of the Termination Fee and confirmation of the agreement to pay Expenses, of
Section 8.3 hereof.
(d) By the Company (acting through the Special Committee):
(i) in the event that the Offer expires or is terminated in
accordance with its terms without any Shares being purchased thereunder,
provided, that the failure of the Company to fulfill any obligation under
this Agreement has not been the cause of, or resulted in, the failure to
purchase shares of Company Common Stock pursuant to the Offer; or
(ii) if there shall have been a breach or failure to perform
on the part of Acquisition Company or Merger Subsidiary of any of their
representations, warranties, covenants or agreements contained in this
Agreement and such breach or failure to perform has a material adverse
effect on the ability of Acquisition Company or Merger Subsidiary to
consummate the Offer or the Merger, and, with respect to any such breach
or failure to perform that is reasonably capable of being remedied within
the time periods set forth below, the breach or failure to perform is not
remedied prior to the earlier of (x) 10 days after the Company has
furnished Acquisition Company with written notice of such breach or
failure to perform or (y) two business days prior to the date on which the
Offer expires.
(e) By Acquisition Company or Merger Subsidiary:
(i) if the Board of Directors of the Company or the Special
Committee (A) shall withdraw, modify or change its recommendation so that
it is not in favor of this Agreement, the Offer or the Merger or shall
have resolved to do any of the foregoing, (B) shall have recommended to
the Company's stockholders an Acquisition Proposal, or (C) shall terminate
this Agreement as provided in Section 6.6(a) hereof;
(ii) if the Company shall have materially breached any of its
obligations under Section 6.6 hereof;
(iii) in the event that the Offer expires or is terminated in
accordance with its terms without any Shares being purchased thereunder,
provided, that the failure of Acquisition Company to fulfill any
obligation under this Agreement has not been the
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cause of, or resulted in, the failure to purchase shares of Company Common
Stock pursuant to the Offer; or
(iv) if, prior to the purchase of Shares in the Offer, the
representations and warranties of the Company set forth in this Agreement
which are not qualified by "materiality" or "Company Material Adverse
Effect" shall not be true and accurate in all material respects, and the
representations and warranties that are qualified by "materiality" or
"Company Material Adverse Effect" shall not be true in any respect, at any
time after the date hereof (except for those representations and
warranties that address matters only as of a particular date or only with
respect to a specific period of time which need only be true and accurate
as of such date or with respect to such period), or the Company shall have
breached or failed to perform or comply in any material respect with any
obligation, agreement or covenant required by this Agreement to be
performed or complied with by it, and, with respect to any such breach or
failure to perform that is reasonably capable of being remedied within the
time periods set forth below, the breach or failure to perform is not
remedied prior to the earlier of (x) 10 days after Acquisition Company has
furnished the Company with written notice of such breach or failure to
perform or (y) two business days prior to the date on which the Offer
expires.
Section 8.2 Effect of Termination. In the event of the termination
of this Agreement pursuant to Section 8.1 hereof, written notice thereof shall
forthwith be given to the other party or parties specifying the provision hereof
pursuant to which such termination is made and this Agreement shall forthwith
become null and void, and there shall be no liability on the part of the
Company, Acquisition Company or Merger Subsidiary or their respective directors,
officers, employees, stockholders, representatives, agents or advisors other
than, with respect to the Company, Acquisition Company or Merger Subsidiary, the
obligations pursuant to this Section 8.2, Section 8.3, Article IX and the last
sentence of Section 6.2. Nothing contained in this Section 8.2 shall relieve the
Company, Acquisition Company or Merger Subsidiary from liability for willful
breach of this Agreement.
Section 8.3 Fees, Expenses and Other Payments. (a) Subject to
Section 8.3(b) hereof, all costs and expenses (including any expenses related to
any claims or litigation in connection with the transactions contemplated by
this Agreement, or any settlement thereof), including, without limitation, fees
and disbursements of counsel, financial advisors and accountants and other
out-of-pocket expenses, incurred or to be incurred by the parties hereto in
connection with the Offer, the Merger, this Agreement and the other transactions
contemplated hereby, shall be borne solely and entirely by the party which has
incurred such costs and expenses; provided, however, that all costs and expenses
related to the filing, printing and
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mailing of the Offer Documents, the Schedule 14D-9 and the Proxy Statement shall
be borne by the Company.
(b) In the event that this Agreement is terminated by the
Company (acting through the Special Committee) pursuant to Section 8.1(c) hereof
or by Acquisition Company pursuant to Section 8.1(e)(i) or Section 8.1(e)(ii)
hereof, the Company shall pay to Acquisition Company by certified check or wire
transfer to an account designated by Acquisition Company, immediately following
receipt of a request therefor, an amount equal to $4 million (the "Termination
Fee"). In addition, in the event that this Agreement is terminated for any
reason other than (x) by the Company pursuant to Section 8.1(d)(ii) hereof or
(y) by the Company or Acquisition Company because the Company or Acquisition
Company has been advised by the Bank that it will not provide the debt financing
contemplated by the Bank Commitment Letter (other than as a result of the
occurrence of a Company Material Adverse Effect), then the Company shall pay to
Acquisition Company, promptly upon receipt, but in no event later than two
business days following receipt, of reasonable supporting documentation, all
actual and reasonably documented out-of-pocket expenses incurred by or on behalf
of Acquisition Company or its member (including expenses incurred by or on
behalf of the Continuing Stockholders, Mr. Xxxxx Xxxxxxx and the Foundation) in
connection with or in anticipation of the Offer, the Merger, this Agreement and
the consummation of the transactions contemplated hereby in an amount not to
exceed $2.5 million (or $1.25 million if this Agreement is terminated by reason
of the termination of the Offer as a result of the occurrence of any of the
events set forth in clause (g) of Annex A hereto) (the "Expenses"). In addition,
the Company shall pay in cash to Acquisition Company the Termination Fee if this
Agreement is terminated (A) by the Company (acting through the Special
Committee) pursuant to Section 8.1(d)(i) if the Offer expires or is terminated
in accordance with its terms without any Shares being purchased thereunder
solely as a result of the Minimum Condition failing to be satisfied by the
expiration date of the Offer as it may have been extended pursuant hereto (other
than as a result of a material or a willful breach by Acquisition Company or
Merger Subsidiary of their obligations hereunder) or (B) by Acquisition Company
pursuant to Section 8.1(e)(iii) if the Offer expires or is terminated in
accordance with its terms without any Shares being purchased thereunder solely
as a result of the Minimum Condition failing to be satisfied by the expiration
date of the Offer as it may have been extended pursuant hereto (other than as a
result of a material or a willful breach by the Company of its obligations
hereunder), in each case at any time after an Acquisition Proposal has been made
by a third party (such third party, together with its affiliates and other
Persons acting in concert with such third party are hereafter referred to as a
"Third Party Acquirer"), which Acquisition Proposal has been publicly disclosed
prior to the termination of this Agreement, and, within one year after such a
termination, the Company enters into a definitive agreement with respect to, or
consummates (i) a merger, consolidation or other business combination with any
such Third Party Acquirer (or another party who makes an
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Acquisition Proposal at a time when the Company is in discussions with any such
Third Party Acquirer (such other party, together with its affiliates and other
Persons acting in concert with such other party are hereafter referred to as the
"New Third Party Acquirer")), (ii) the sale or transfer to such Third Party
Acquirer (or any New Third Party Acquirer) of, or the acquisition of beneficial
ownership by such Third Party Acquirer (or any New Third Party Acquirer) of, 40%
or more of the Company Voting Securities (as defined herein) or (iii) the sale
or transfer of 40% or more (in market value) of the assets of the Company and
its Subsidiaries, on a consolidated basis, to any such Third Party Acquirer (or
any New Third Party Acquirer), upon which event the Termination Fee and Expenses
shall become immediately payable in cash. For purposes of this Agreement,
"Company Voting Securities" shall mean Company Common Stock or securities or
similar interests, warrants, options or other rights to acquire Company Common
Stock or securities convertible or exchangeable into shares of capital stock of
the Company which entitles the holder to vote generally in the election of
directors. If requested by Acquisition Company, at the consummation of the Offer
and/or the Closing, the Company shall pay in cash all expenses incurred by or on
behalf of Acquisition Company, including a transaction fee payable to Vestar
Capital Partners in an amount equal to $1 million in cash.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendment and Modification. Subject to applicable law,
this Agreement may be amended, modified and supplemented in any and all
respects, whether before or after any vote of the stockholders of the Company
contemplated hereby, by written agreement of the parties hereto, by action taken
by their respective Boards of Directors or Managers, in the case of Acquisition
Company and Merger Subsidiary, and by action taken by the Board of Directors of
the Company (acting with the recommendation of the Special Committee) in the
case of the Company, at any time prior to the Closing Date with respect to any
of the terms contained herein; provided, however, that after the approval of
this Agreement by the stockholders of the Company, no such amendment,
modification or supplement shall reduce or change the Merger Consideration or
adversely affect the rights of the Company's stockholders hereunder without the
approval of such stockholders.
Section 9.2 Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the Effective Time or the termination of this Agreement. This Section 9.2 shall
not limit any covenant or agreement contained in this Agreement which by its
terms contemplates performance after the Effective Time.
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Section 9.3 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Acquisition Company or Merger Subsidiary, to:
c/o Vestar Capital Partners IV, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Sander X. Xxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
If after January 14, 2000, to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.:
Telecopy No.:
Attention: Xxxxxx X. Xxxx, Esq.
(b) if to the Company, to:
Xxxxxxx Corporation
0000 Xxxxxxxxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
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Telecopy No.: (000) 000-0000
Attention: Secretary
with a copy to:
Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Section 9.4 Interpretation. The words "hereof", "herein" and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless otherwise specified. 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 words describing
the singular number shall include the plural and vice versa, and words denoting
any gender shall include all genders. The phrases "the date of this Agreement",
"the date hereof" and terms of similar import, unless the context otherwise
requires, shall be deemed to refer to December 8, 1999. As used in this
Agreement, the term "affiliate(s)" shall have the meaning set forth in Rule
l2b-2 of the Exchange Act. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.
Section 9.5 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties, it being understood that
all parties need not sign the same counterpart.
Section 9.6 Entire Agreement; Third Party Beneficiaries. This
Agreement, the Stockholder Documents and the Confidentiality Agreement
(including the documents and the instruments referred to herein and therein) (i)
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (ii) except for the provisions of Section 6.3 hereof,
are not intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder.
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Section 9.7 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 9.8 Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
Section 9.9 Specific Performance. Each of the parties hereto
acknowledges and agrees that in the event of any breach of this Agreement, each
non-breaching party would be irreparably and immediately harmed and could not be
made whole by monetary damages. It is accordingly agreed that the parties hereto
(i) shall waive, in any action for specific performance, the defense of adequacy
of a remedy at law and (ii) shall be entitled, in addition to any other remedy
to which they may be entitled at law or in equity, to compel specific
performance of this Agreement in any action instituted in a court of competent
jurisdiction.
Section 9.10 Assignment. 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. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties and their respective permitted successors and assigns.
Section 9.11 Headings. Headings of the articles and sections of this
Agreement are for convenience of the parties only and shall be given no
substantive or interpretative effect whatsoever.
Section 9.12 Waivers. At any time prior to the Effective Time,
either the Company (acting through the Board of Directors of the Company acting
with the recommendation of the Special Committee), on the one hand, or
Acquisition Company and Merger Subsidiary, on the other hand, may waive any
failure of the other party to comply with any obligation, covenant, agreement or
condition herein by a written instrument signed by the party granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
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IN WITNESS WHEREOF, the Company, Acquisition Company and Merger
Subsidiary have caused this Agreement to be signed by their respective officers
thereunto duly authorized as of the date first written above.
XXXXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
______________________________
Name: Xxxxx X. Xxxxxxx
Title: Chairman and Chief
Executive Officer
TORQUE ACQUISITION CO., L.L.C.
By: /s/ Sander X. Xxxx
______________________________
Name: Sander X. Xxxx
Title: President
TORQUE MERGER SUB, INC.
By: /s/ Sander X. Xxxx
______________________________
Name: Sander X. Xxxx
Title: President
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ANNEX A
CONDITIONS TO THE OFFER
Capitalized terms used but not defined in this Annex A shall have
the meanings set forth in the Agreement and Plan of Merger (the "Agreement") of
which this Annex A is a part.
Notwithstanding any other provision of the Offer, subject to the
provisions of the Agreement, the Company shall not be required to accept for
payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to the obligation of
the Company to pay for, or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for any Shares pursuant to the Offer, and the
Company may delay its acceptance for payment of or, subject to the restriction
referred to above, its payment for, any tendered Shares, and, subject to the
provisions of the Agreement, the Company may amend or terminate the Offer and
not accept for payment any tendered Shares, if the Unit Purchase shall not have
occurred or if the Company is not reasonably satisfied that the proceeds from
the Unit Purchase will be promptly deposited with the Depositary following the
Expiration Date. The foregoing condition is for the sole benefit of the Company
and may be waived by the Company.
The following conditions are for the sole benefit of Acquisition
Company and the Company, and Acquisition Company and the Company have agreed
that all determinations with respect to the satisfaction or waiver of the
following conditions shall be made by Acquisition Company on its behalf and on
behalf of the Company. Notwithstanding any other provision of the Offer, subject
to the provisions of the Agreement, other than the Company's agreement described
below to permit Acquisition Company to waive certain conditions on the Company's
behalf, neither Acquisition Company nor the Company shall be required to accept
for payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to the obligation of
Acquisition Company and the Company to pay for, or return tendered Shares
promptly after termination or withdrawal of the Offer), pay for any Shares
pursuant to the Offer, and Acquisition Company may delay its and the Company's
acceptance for payment of or, subject to the restriction referred to above, its
and the Company's payment for, any tendered Shares, and, subject to the
provisions of the Agreement, Acquisition Company may amend or terminate the
Offer and not accept and cause the Company not to accept for payment any
tendered Shares, if (i) any applicable waiting period or approval under the HSR
Act and any applicable foreign antitrust law, regulation or rule has not expired
or been terminated or obtained, (ii) the Minimum Condition has not been
satisfied, (iii) the Company has not received the proceeds of the Financing
contemplated by the Bank Commitment Letter or other financing which is on
terms substantially similar to those set forth in the Bank Commitment Letter
sufficient to finance
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(x) the purchase of such portion of the Shares which the Company is agreeing to
pay for and purchase pursuant to the Offer, (y) the payment of the Merger
Consideration pursuant to the Merger, and (z) the fees and expenses required to
be paid by the Company in connection with the transactions contemplated by the
Agreement, or (iv) at any time on or after the date of the Agreement, and prior
to the acceptance of Shares for payment pursuant to the Offer, any of the
following events shall occur:
(a) there shall be instituted or pending or threatened in
writing by any Governmental Authority any suit, action or proceeding which (i)
seeks to prohibit or impose any material limitations on Acquisition Company's or
the Continuing Stockholders' ownership or operation (or that of any of their
affiliates) of all or a material portion of the Company's business or assets,
(ii) seeks to compel Acquisition Company or any of its Subsidiaries or
affiliates or the Company to dispose of or hold separate any material portion of
the business or assets of the Company and its Subsidiaries, taken as a whole,
(iii) seeks to impose material limitations on the ability of either Acquisition
Company or the Company to, or render either Acquisition Company or the Company
unable to, accept for payment, pay for or purchase some or all of the Shares
pursuant to the Offer and the Merger, (iv) seeks to restrain or prohibit the
making or consummation of the Offer or the Merger or the performance of any of
the transactions contemplated by the Agreement or the Stockholder Documents, (v)
seeks to obtain from the Company any damages (including damages against the
Company's directors or officers for which they may seek indemnification from the
Company) that would reasonably be expected to have a Company Material Adverse
Effect or seeks to obtain a material amount of damages from Acquisition Company
or Merger Subsidiary, (vi) challenges the acquisition by either Acquisition
Company or the Company of any Shares pursuant to the Offer, or (vii) seeks to
impose material limitations on the ability of Acquisition Company, the
Continuing Stockholders, Xxxxx X. Xxxxxxx or the Foundation effectively to
exercise full rights of ownership of the Shares including, without limitation,
the right to vote the Shares purchased by it on all matters properly presented
to the Company's stockholders;
(b) there shall have been any statute, rule, regulation,
judgment, order or injunction promulgated, entered, enforced, enacted or issued
by any Governmental Authority applicable to the Offer or the Merger other than
the application of the waiting period provision of the HSR Act to the Offer or
the Merger which is reasonably likely to result, directly or indirectly, in any
of the consequences referred to in clauses (i) through (vii) of paragraph (a)
above;
(c) the representations and warranties of the Company set
forth in the Agreement which are not qualified by "materiality" or "Company
Material Adverse Effect" shall not be true and accurate in all material
respects, and the representations and warranties that are qualified by
"materiality" or "Company Material Adverse Effect" shall not be true and
accurate
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in all respects, in each case as of the date of consummation of the Offer as
though made on or as of such date (except for those representations and
warranties that address matters only as of a particular date or only with
respect to a specific period of time which need only be true and accurate as of
such date or with respect to such period), or the Company shall have breached or
failed to perform or comply in any material respect with any obligation,
agreement or covenant required by the Agreement to be performed or complied with
by it and, with respect to any such breach or failure to perform that is
reasonably capable of being remedied within the time periods set forth below,
the breach or failure to perform is not remedied prior to the earlier of (x) 10
days after Acquisition Company has furnished the Company with written notice of
such breach or failure to perform or (y) two business days prior to the date on
which the Offer expires.
(d) the Agreement shall have been terminated in accordance
with its terms;
(e) the Board of Directors of the Company or the Special
Committee (i) shall withdraw, modify or change its recommendation so that it is
not in favor of this Agreement, the Offer or the Merger or shall have resolved
to do any of the foregoing, (ii) shall have recommended to the Company's
stockholders an Acquisition Proposal, or (iii) shall terminate the Agreement as
provided in Section 6.6(a) of the Agreement;
(f) the Company shall not have received by the expiration date
of the Offer such certificates of officers of the Company and/or opinions of
nationally recognized valuation and/or appraisal firms (in form and substance
reasonably satisfactory to the Company) as the Special Committee and the Board
of Directors may reasonably require, substantially to the effect that the value
of the Company's assets shall exceed its liabilities following the consummation
of the Offer and the Merger and that the Offer and the Merger shall not impair
the Company's capital within the meaning of Section 160 of the DGCL or impair
the ability of the Company to pay its obligations as they come due; or
(g) there shall have occurred (i) any general suspension of
trading in securities on the New York Stock Exchange, which suspension or
limitation shall continue for at least three consecutive trading days, (ii) a
declaration of a banking moratorium or any suspension of payments in respect of
banks in the United States (whether or not mandatory), (iii) a commencement of
a war, armed hostilities or other international or national calamity directly or
indirectly involving the United States that would reasonably be expected to have
a material adverse impact on the capital markets of the United States, (iv) any
limitation (whether or not mandatory) by any United States Governmental
Authority on the extension of credit generally by banks or other lending
institutions, (v) a change in general financial, bank or capital market
conditions which materially and adversely affects the ability of financial
institutions in the
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United States to extend credit or syndicate loans, (vi) a decline of at least
30% in the Standard & Poor's 500 Index from the close of business on the date of
the Agreement, or (vii) in the case of any of the foregoing existing at the time
of the execution of the Agreement, a material acceleration or worsening
thereof;
which, in the good faith judgment of Acquisition Company, in any such case, and
regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment or
payments for Shares.
The foregoing conditions are for the sole benefit of Acquisition
Company and the Company, and, subject to the provisions of the Agreement, may be
waived by Acquisition Company on its behalf and on behalf of the Company. The
failure by Acquisition Company at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any right, and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
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ANNEX B
As Amended ____, 2000
AMENDED AND RESTATED BY-LAWS
OF
XXXXXXX CORPORATION
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
Corporation shall be in the City of WILMINGTON, County of NEW CASTLE, State of
Delaware.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.
ARTICLE II
STOCKHOLDERS
Section 1. Annual Meetings. The annual meeting of the stockholders
for the election of directors and the transaction of other proper business shall
be held on such date and at such time and place as the Board of Directors may
designate.
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Section 2. Special Meetings. Special meetings of the stockholders
may be called at any time by the Board of Directors.
Section 3. Place of Meetings. Meetings of stockholders of the
Corporation shall be held at such place, either within or without the State of
Delaware, as shall be fixed by the Board of Directors and specified in the
notice of said meeting. Unless otherwise provided by action of the Board of
Directors, all meetings of stockholders shall be held at the principal office of
the Corporation.
Section 4. Notice of Meetings.
(a) Notice of each meeting of stockholders shall be in writing and
shall state the place, date, and hour of the meeting. Notice of a special
meeting shall state the purpose or purposes for which the meeting is being
called and shall indicate that the notice is being issued by or at the direction
of the person or persons calling the meeting. If, at any meeting, action is
proposed to be taken which would, if taken, entitle stockholders to the
appraisal rights of Section 262 of the Delaware General Corporation Law, the
notice of such meeting shall indicate that appraisal rights are available and
shall include a copy of Section 262 of the Delaware General Corporation Law.
(b) A copy of the notice of any meeting shall be given personally or
by mail not less than ten (10) (not less than twenty (20) if action is proposed
to be taken which would, if taken, entitle stockholders to the appraisal rights
of Section
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262 of the Delaware General Corporation Law) nor more than sixty (60) days
before the date of the meeting to each stockholder entitled to vote at the
meeting. If mailed, such notice is given when deposited in the United States
mail, postage prepaid, directed to the stockholder at his address as it appears
on the records of the Corporation.
(c) Notice of meetings need not be given to any stockholder who
submits a signed waiver of notice in person or by proxy whether before or after
the meeting. The attendance of any stockholder at a meeting in person or by
proxy shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened.
Section 5. Quorum. At any annual or special meeting of the stock
holders, except where otherwise provided by law or the Certificate of
Incorporation, the holders of a majority of the shares entitled to vote thereat,
present in person or by proxy, shall constitute a quorum for the transaction of
any business. When a quorum is once present to organize a meeting, it is not
broken by the subsequent withdrawal of any stockholders.
Section 6. Adjourned Meetings. The stockholders present at a meeting
in person or by proxy may adjourn the meeting to another time and place, despite
the absence of a quorum, and it shall not be necessary to give any notice of
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the adjourned meeting, if the time and place to which the meeting is adjourned
are announced at the meeting at which the adjournment is taken. However, if the
adjournment is for more than thirty days, or if after the adjournment the Board
fixes a new record date for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record on the new record date
entitled to notice under Section 4 of this Article II. At the adjourned meeting
any business may be transacted that might have been transacted on the original
date of the meeting.
Section 7. Proxies.
(a) Every stockholder entitled to vote at a meeting of stockholders
may authorize another person or persons to act for him by proxy, but no such
proxy shall be voted or acted upon after three years from its date, unless the
proxy provides for a longer period.
(b) Without limiting the manner in which a stockholder may authorize
another person or persons to act for him as proxy pursuant to Subsection (a) of
this Section, the following shall constitute a valid means by which a stock
holder may grant such authority:
(i) A stockholder may execute a writing authorizing another
person or persons to act for him as proxy, execution thereof being
accomplished by the stockholder or his authorized officer, director,
employee or agent signing such writing or causing his or her signature to
be affixed to
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such writing by any reasonable means including, but not limited to, by
facsimile signature.
(ii) A stockholder may authorize another person or persons to
act for him as proxy by transmitting or authorizing the transmission of a
telegram, cablegram, or other means of electronic transmission to the
person who will be the holder of the proxy or to a proxy solicitation
firm, proxy support service organization or like agent duly authorized by
the person who will be the holder of the proxy to receive such
transmission, provided that any such telegram, cablegram or other means of
electronic transmission must either set forth or be submitted with
information from which it can be deter mined that the telegram, cablegram
or other electronic transmission was authorized by the stockholder. If it
is determined that such telegrams, cablegrams or other electronic
transmissions are valid, the inspectors shall specify the information upon
which they relied.
(c) Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission created pursuant to Subsection (b)
of this Section may be substituted or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or
transmission could be used, provided that such copy, facsimile telecommunication
or other reproduction shall be a complete reproduction of the entire original
writing or transmission.
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Section 8. Organization. At every meeting of stockholders, the Chief
Executive Officer or, in his absence, the Chairman of the Board or the President
or, in the absence of all of them, such person as the Board of Directors shall
designate shall act as chairman of the meeting, unless the stockholders shall
appoint another chairman. The Secretary or, in his absence, an Assistant
Secretary, shall act as secretary of the meeting, and, in the absence of both
the Secretary and an Assistant Secretary, a person selected by the chairman of
the meeting shall act as secretary of the meeting.
Section 9. Voting.
(a) At each meeting of stockholders each stockholder of record of
the Corporation entitled to vote at the meeting shall be entitled to cast one
vote for each share of stock of the Corporation registered in his name on the
books of the Corporation on the record date for the meeting. Whenever any
corporate action, other than the election of directors, is to be taken by a vote
of the stockholders, it shall, except as otherwise required by law, the
Certificate of Incorporation, these Bylaws or the Stockholders' Agreement, dated
as of November 29, 1999, by and among Torque Acquisition Co., L.L.C. and certain
stockholders of the Company (the "Stockholders' Agreement"), be authorized by a
majority of the votes cast at a meeting of stockholders by the holders of shares
entitled to vote thereon. Such votes may be cast in person or by proxy.
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(b) The Board of Directors, or the Chief Executive Officer, or such
other officer as will in his absence preside at the meeting, shall, in advance
of any meeting of stockholders, appoint one or more inspectors to act at the
meeting and to make a written report thereof, and may designate one or more
persons as alternate inspectors to replace any inspector who fails to act. If no
inspector or alternate is able to act at a meeting of stockholders, the person
presiding at the meeting shall appoint one or more inspectors to act at the
meeting. Each inspector, before entering upon the discharge of his duties, shall
take and sign an oath faithfully to execute the duties of an inspector with
strict impartiality and according to the best of his ability.
(c) The inspectors shall (i) ascertain the number of shares out
standing and the voting power of each, (ii) determine the shares represented at
a meeting and the validity of proxies and ballots, (iii) count all votes and
ballots, (iv) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the inspectors, and
(v) certify their determination of the number of shares represented at the
meeting, and their count of all votes and ballots. The inspectors may appoint or
retain other persons or entities to assist them in the performance of their
duties as inspectors.
(d) The time of the opening and the closing of the polls for each
matter upon which the stockholders will vote at a meeting shall be announced at
the
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meeting. No ballot, proxies or votes, nor any revocations thereof or changes
thereto, shall be accepted by the inspectors after the closing of the polls.
(e) In determining the validity and counting of proxies and ballots,
the inspectors shall be limited to an examination of the proxies, any envelopes
submitted with those proxies, and information provided in accordance with
Section 7(b)(2) of this Article II, ballots and the regular books and records of
the Corporation, except that the inspectors may consider other reliable
information for the limited purpose of reconciling proxies and ballots submitted
by or on behalf of banks, brokers, their nominees or similar persons which
represent more votes than the holder of a proxy is authorized by the record
owner to cast or more votes than the stockholder holds of record. If the
inspectors consider other reliable information for the limited purpose permitted
herein, they shall at the time they make their certification pursuant to
Subsection (c)(v) of this Section 9 specify the precise information considered
by them including the person or persons from whom they obtained the information,
when the information was obtained, the means by which the information was
obtained and the basis for the inspectors' belief that such information is
accurate and reliable.
Section 10. List of Stockholders. It shall be the duty of the
Secretary or other officer of the Corporation who shall have charge of its stock
ledger, either directly or through another officer of the Corporation designated
by him or through a
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transfer agent or transfer clerk appointed by the Board of Directors, to prepare
and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote thereat, arranged in
alphabetical order and showing the address of each stockholder and the number of
shares registered in the name of each stockholder and the number of shares
registered in the name of each stock holder. Such list shall be open to the
examination of any stockholder, for a purpose germane to the meeting, during
ordinary business hours, for said ten (10) days, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of meeting, or, if not so specified, at the place where the meeting is to
be held. This list shall be produced and kept at the time and place of the
meeting during the whole time thereof and may be inspected by any stockholder
who is present thereat. The original or duplicate stock ledger shall be the only
evidence as to who are the stockholders entitled to examine the stock ledger,
such list or the books of the Corporation, or to vote in person or by proxy at
such meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Power of Board and Qualification of Directors. The
business and affairs of the Corporation shall be managed under the direction of
its Board of Directors which may exercise all such powers of the Corporation and
do all such lawful acts and things as are not by statute or by the Certificate
of Incorporation
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or these By-laws required to be exercised or done by the stockholders. A
director need not be a stockholder.
Section 2. Number and Term. The Board of Directors shall consist of
not less than five nor more than seven members, the number of directors within
such limits to be determined from time to time by resolution of a majority of
the entire Board of Directors, provided that no decrease in the number of
directors shall shorten the term of any incumbent director, except as provided
by the Stockholders' Agreement.
Section 3. Election. Directors shall, except as otherwise required
by law or by the Stockholders' Agreement, be elected by a plurality of the votes
cast at a meeting of stockholders by the holders of shares entitled to vote in
the election.
Section 4. Resignation and Removal. Any director may resign at any
time by giving written notice to the Corporation. Such resignation shall take
effect at the time specified in such notice or, if no time is specified, on
delivery. Subject to the terms of the Stockholders' Agreement, directors may be
removed for cause.
Section 5. Newly Created Directorships and Vacancies. Subject to the
terms of the Stockholders' Agreement, newly created directorships and vacancies
occurring in the Board of Directors for any reason may be filled by a majority
of the directors then in office, although less than a quorum or by a sole
remaining director, and the directors so chosen shall hold office until the next
annual election and until
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their successors have been elected and qualified, or until their earlier death,
resignation or removal.
Section 6. Organizational and Regular Meetings. As soon as practical
after each annual election of directors, the Board of Directors shall meet for
the purposes of organization, the election of officers and the transaction of
other business. Regular meetings of the Board of Directors shall be held at such
place or places and on such days and at such hours as the Board of Directors may
by resolution appoint. Notice of organizational meetings and regular meetings
need not be given.
Section 7. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board or President or by any two
directors. Notice of a special meeting shall state the date, place and time of
such meeting, and shall be deemed sufficient if given orally, delivered in
writing (including by facsimile) or sent by telegram not less than twelve (12)
hours before the meeting or mailed not less than forty-eight (48) hours before
the meeting.
Section 8. Waiver of Notice. Notice of a meeting need not be given
to any director if waived by him in writing or by telegraph, cable, wireless, or
other form of recorded communication, whether before or after the meeting or who
attends the meeting.
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Section 9. Quorum and Action by the Board.
(a) Except as otherwise provided by law, the Certificate of
Incorporation or these By-Laws, a majority of the entire Board of Directors
shall constitute a quorum for the transaction of business; provided, however,
that at least one of each of the Acquisition Company Directors and Voting Trust
Directors (as such terms are defined in the Stockholders' Agreement) must be
present in order to constitute a quorum. Subject to the provisions of the
Stockholders' Agreement, the affirmative vote of a majority of directors present
at the time of the vote if a quorum, as defined in this Section 9(a), is present
shall be the act of the Board.
(b) Any action required or permitted to be taken by the Board of
Directors, or any committee thereof, may be taken without a meeting if all
members of the Board or committee, as the case may be, consent thereto in
writing and such writing or writings are filed with the minutes of the
proceedings of the Board or committee.
(c) Any one or more members of the Board of Directors, or any
committee thereof, may participate in a meeting of the Board or such committee
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 by such means shall constitute presence in person at
a meeting.
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Section 10. Adjourned Meetings. A majority of the directors present
at a meeting, whether or not a quorum is present, may adjourn the meeting to
another time and place without notice to any director, except that such notice
shall be given to all directors not present at the time of adjournment if such
adjournment is to a time more than forty-eight (48) hours subsequent.
Section 11. Compensation. The Board of Directors shall have
authority to fix the compensation of directors for services in any capacity and
shall fix the compensation of the Chairman of the Board and President.
Section 12. Interested Directors.
(a) No contract or other transaction between the Corporation and one
or more of its directors or officers, or between the Corporation and any other
corporation, firm, association or other organization in which one or more of its
directors or officers are directors or officers or have a financial interest,
shall be void or voidable solely for this reason or solely because such director
or officer is present at or participates in the meeting of the Board of
Directors or committee thereof, which authorizes such contract or transaction,
or solely because his or their votes are counted for such purpose, if:
(i) The material facts as to his relationship or interest and
as to the contract or transaction are disclosed or are known to the Board
or committee, and the Board or committee in good faith authorizes such
contract
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or transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum,
or
(ii) The material facts as to his relationship or interest and
as to the contract or transaction are disclosed or known to the
stockholders entitled to vote thereon, and such contract or transaction is
specifically approved in good faith by vote of the stockholders, or
(iii)The contract or transaction is fair as to the Corporation
at the time it is authorized, approved, or ratified by the Board, a
committee thereof, or the stockholders.
ARTICLE IV
COMMITTEES
Section 1. Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate from among its members one or
more committees each of which shall consist of three or more directors and shall
serve at the pleasure of the Board. The Board may designate one or more
directors as alternate members of any such committee who may replace any absent
or disqualified member at any meeting of such committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board to
act at the meeting in the place
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of any such absent or disqualified member. Each committee shall have such powers
and authority as provided in the resolution of the Board establishing such
committee, but no committee shall have power or authority in reference to:
(i) Amending the Certificate of Incorporation (except that a
committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board of
Directors as provided in Section 151(a) of the Delaware General
Corporation Law, fix any of the preferences or rights of such shares
relating to dividends, redemption, dissolution, any distribution of assets
of the Corporation or the conversion into, or the exchange of such shares
for, shares of any other class or classes or any other series of the same
or any other class or classes of stock of the Corporation).
(ii) Amending the By-laws of the Corporation.
(iii)Adopting an agreement of merger or consolidation.
(iv) Recommending to the stockholders the sale, lease or
exchange of all or substantially all of the Corporation's property and
assets.
(v) Recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution.
Unless a resolution of the Board expressly so provides, no committee shall have
the power or authority to declare a dividend, to authorize the issuance of
stock, or to adopt a certificate of ownership and merger pursuant to Section 253
of the Delaware General Corporation Law.
Section 2. Rules of Procedure. Except to the extent otherwise
determined by the Board of Directors, each committee shall fix its own rules of
procedure. Regular meetings of each committee shall be held at such times as may
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be fixed from time to time by resolution of the Board or the committee. Special
meetings shall be held whenever called by the Chief Executive Officer or the
chairman of the committee. No notice need be given of regular meetings. Notice
of special meetings shall comply with Article III, Section 7, of the By-laws. At
all meetings of committees a majority of the members of the committee shall
constitute a quorum.
ARTICLE V
OFFICERS
Section 1. Officers Enumerated. The officers of the Corporation
shall be a Chairman of the Board, President, one or more Vice Presidents, a
Secretary and a Treasurer, and such other officers as the Board of Directors may
in its discretion elect or appoint. Any two or more offices may be held by the
same person.
Section 2. Chairman of the Board. The Chairman of the Board of
Directors, if there is one, shall preside at all meetings of the Board of
Directors at which he is present, and shall, if he is not the Chief Executive
Officer, perform such other duties and exercise such other powers which may from
time to time be as signed to him by the Chief Executive Officer or the Board of
Directors.
Section 3. President. The President shall, in the absence of the
Chairman of the Board, preside at all meetings of the Board of Directors at
which he is present, and shall, if he is not the Chief Executive Officer,
perform such other
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duties and exercise such other powers which may from time to time be assigned to
him by the Chief Executive Officer or the Board of Directors.
Section 4. Chief Executive Officer. The Chief Executive Officer
shall be either the Chairman of the Board or the President, as the Board of
Directors shall from time to time determine, and shall have general powers and
duties of management of the Corporation's business and affairs, subject to the
control of the Board of Directors, shall preside at meetings of stockholders and
shall perform such duties which may from time to time be assigned to him by the
Board of Directors. The duties of the Chief Executive Officer shall in the event
of his absence or disability be performed by such other officer as he or the
Board of Directors shall designate.
Section 5. Vice Presidents. The Vice President or, if there be more
than one, Vice Presidents may be designated by such title or titles as the Board
of Directors may determine, and each Vice President shall perform such duties as
may be assigned to him from time to time by the Chief Executive Officer or the
Board of Directors.
Section 6. Treasurer. The Treasurer shall have the care and custody
of the funds and securities of the Corporation, shall deposit such funds in the
name of the Corporation in such banks, trust companies or other depositories as
are designated by the Board of Directors, shall have supervision over the
accounts of receipts and disbursements of the Corporation, shall sign such
instruments as require his
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signature, and shall perform such other duties as usually pertain to his office
or as may be assigned to him by the Chief Executive Officer or the Board of
Directors.
Section 7. Secretary. The Secretary, when authorized by the Board of
Directors, shall issue notices of all meetings of stockholders, and, when
authorized by the Chairman of the Board, the President or any two directors,
shall issue notices of meetings of the Board of Directors where notice is
required, shall keep the minutes of all meetings of stockholders and the Board
of Directors, shall sign such instruments as require his signature, shall be
custodian of the corporate seal and shall affix it to documents on which it is
duly required, and shall perform such other duties as usually pertain to his
office or as may be assigned to him by the Chief Executive Officer or the Board
of Directors.
Section 8. Other Officers. The Board of Directors may elect or
appoint such other officers as from time to time it may determine, which
officers shall perform such duties as may be assigned to them by the Chief
Executive Officer or the Board of Directors.
Section 9. Term of Offices. The officers required by Section 1 of
this Article V shall be elected or appointed annually by the Board of Directors
at its organizational meeting following the annual meeting of stockholders.
Unless a shorter term is provided by the Board when electing or appointing each
officer, each officer shall hold office until the organizational meeting of the
Board following the
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next annual meeting of stockholders and until his successor, if one is required,
has been elected or appointed and qualified.
Section 10. Removal of Officers. Subject to the terms of the Stock
holders' Agreement, any officer may be removed by the Board of Directors, with
or without cause, at any time. Removal of an officer without cause shall be
without prejudice to his contract rights, if any, but his election as an officer
shall not of itself create contract rights.
Section 11. Resignations. Any officer may, subject to any contract
rights of the Corporation, resign at any time by giving written notice to the
Secretary. Such resignation shall take effect at the time specified in such
notice or, if no time is specified, on delivery.
Section 12. Proxies in Respect of Securities of Other Corporations.
Unless otherwise provided by resolution adopted by the Board of Directors, the
Chairman of the Board, the President, a Vice President, or the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer, or any one of
them, may exercise or appoint an attorney or attorneys, or an agent or agents,
to exercise in the name and on behalf of the corporation the powers and rights
which the Corporation may have as the holder of stock or other securities in
any other corporation to vote or to consent in respect of such stock or other
securities; may instruct the person or persons so appointed as to the manner of
exercising such powers and rights; and
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may execute or cause to be executed in the name and on behalf of the Corporation
and under its corporate seal, or otherwise, all such ballots, consents, proxies,
powers of attorney or other written instruments as they or any of them may deem
necessary in order that the Corporation may exercise such powers and rights. Any
stock or other securities in any other corporation which may from time to time
be owned by or stand in the name of the Corporation may, without further action,
be endorsed for sale or transfer or sold or transferred by the Chairman of the
Board, the President or a Vice President, or the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer of the Corporation.
ARTICLE VI
STOCK CERTIFICATES AND THEIR TRANSFER
Section 1. Stock Certificates. The shares of the Corporation shall
be represented by certificates. Every stockholder shall be entitled to have a
certificate in such form as approved from time to time by the Board of Directors
representing the shares of stock of the Corporation owned by him, signed in the
name of the Corporation by the Chairman of the Board, the President or a Vice
President and by the Treasurer or an Assistant Treasurer or by the Secretary or
an Assistant Secretary. Any or all of the signatures on the certificate may be a
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed on a certificate shall have ceased to
be such officer, transfer agent or registrar
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before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
Section 2. Transfer of Shares. Shares of the Corporation shall be
transferred on the books of the Corporation only upon surrender to the
Corporation or its authorized transfer agent of the certificate duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer. Every certificate surrendered to the Corporation shall be cancelled,
and no new certificate shall be issued in exchange therefor until the old
certificate has been surrendered and cancel led. The Board of Directors shall
have power and authority to make all such rules and regulations as it may deem
expedient, not inconsistent with this section of the By-Laws, concerning the
issue, registration and transfer of certificates for shares, and may appoint
transfer agents and registrars thereof.
Section 3. Registered Stockholders. Except as otherwise provided by
law, the Corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends or
other distributions, and to vote as such owner, and shall not be bound to
recognize any equitable or legal claim to or interest in such share or shares on
the part of any person.
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Section 4. Record Date.
(a) For the purpose of determining the stockholders entitled to
notice of, or vote at, any meeting of stockholders or any adjournment thereof,
or determining stockholders entitled to receive payment of any dividend or other
distribution or the allotment or any rights, or entitled to exercise any rights
in respect of any change, conversion or exchange of stock or for the purpose of
any other lawful action, the Board of Directors may fix in advance a record date
which shall be not more than sixty (60) nor less than ten (10) days before the
date of any such meeting, nor more than sixty (60) days prior to any other such
action.
(b) In each such case, except as otherwise provided by law, only
such persons as shall be stockholders of record on the date so fixed shall be
entitled to notice of, and to vote at, such meeting and any adjournment thereof,
or to receive payment of such dividend or such allotment of rights, or otherwise
to be recognized as stockholders for the purpose of any other action affecting
the interests of stock holders, notwithstanding any registration of transfer of
shares on the books of the Corporation after any such record date so fixed.
Section 5. Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct a new certificate for shares to be issued in place of any
certificate theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the
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certificate to be lost, stolen or destroyed. When authorizing such issue of a
new certificate, the Board may, in its discretion and as a condition precedent
to the issuance thereof, require the owner of such allegedly lost, stolen or
destroyed certificate, or his legal representative, to give the Corporation a
bond sufficient to indemnify it against any claim that may be made against the
Corporation on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends on the outstanding shares of the
Corporation may be declared and paid out of the surplus or in the case there
shall be no such surplus, out of its net profits for the fiscal year in which
the dividend is declared and/or the preceding fiscal year, as often and in such
amounts as the Board of Directors may determine.
Section 2. Obligations. All checks, drafts and other orders for the
payment of money out of the funds of the Corporation and all notes or other
evidence of indebtedness of the Corporation shall be signed on behalf of the
Corporation by such officer or officers or other person or persons as shall be
designated by the Board of Directors.
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Section 3. Seal. The seal of the Corporation shall be in the form
approved by the Board of Directors and shall at least bear the name of the
Corporation and its year of incorporation.
Section 4. Fiscal Year. The fiscal year of the Corporation shall end
on December 31 of each year.
ARTICLE VIII
INDEMNIFICATION
Section 1. Indemnification. To the full extent authorized by law,
the Corporation shall indemnify any person made, or threatened to be made, a
party in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director or officer of the Corporation, or is serving or
served any other corporation, or any partnership, joint venture, trust, employee
benefit plan or other enterprise, in any such capacity at the request of the
Corporation, ("indemnitee") against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection therewith.
Section 2. Advancement of Expenses. Expenses actually and reasonably
incurred by an indemnitee in defending a civil or criminal action, suit or
proceeding shall be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding upon an undertaking by or on behalf of such
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indemnitee to repay such amount if it shall ultimately be determined, by final
judicial decision from which there is no further right of appeal, that he is not
entitled to be indemnified by the Corporation. The indemnitee shall, however,
cooperate in good faith with any request by the Corporation that common counsel
be used by parties to such action or proceeding who are similarly situated
unless it would be inappropriate to do so because of actual or potential
conflicts between the interests of such parties.
Section 3. Suit for Indemnification. If a claim for indemnification
under Section 1 is not paid in full within sixty days, or if a claim for
advancement of expenses under Section 2 is not paid in full within twenty days,
after receipt of the written claim by the Corporation, the indemnitee may at any
time thereafter prior to such payment bring suit against the Corporation to
recover the unpaid amount of the claim. If successful in whole or in part in
such suit, the indemnitee shall be entitled also to recover from the Corporation
that proportion of the expenses (including attorneys' fees) actually and
reasonably incurred by him in such suit as the amount recovered therein bears to
the amount of his unpaid claim or claims sued upon. Neither the failure of the
Board of Directors, legal counsel or the stockholders of the Corporation to make
a determination that the indemnitee is entitled to indemnification, nor a
determination by any of them that he is not entitled to indemnification, for
whatever reason, shall create a presumption in such a suit that the indemnitee
has not met the applicable standard of conduct or be a defense to such suit. In
any such suit
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the burden of establishing that the indemnitee is not entitled to
indemnification or advancement of expenses shall be on the Corporation.
Section 4. Contract Right. This Article shall be deemed to
constitute a contract between the Corporation and each person who serves as a
director or officer at any time while this Article is in effect. No repeal or
amendment of this Article, insofar as it reduces the extent of the
indemnification of any such person shall without his written consent be
effective as to such person with respect to any event, act or omission occurring
or allegedly occurring prior to (a) the date of such repeal or amendment if on
that date he is not serving as a director or officer, or (b) the thirtieth day
following delivery to him of written notice of such amendment as to any such
capacity in which he is then serving for any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise at
the Corporation's request, or (c) the later of the thirtieth day following
delivery to him of such notice or the end of the term of any office (for
whatever reason) he is serving as director or officer of the Corporation on the
date of such repeal or amendment, with respect to service in that capacity. This
Article shall be binding on any successor to the Corporation. The right to
indemnification and advancement of expenses provided by this Article shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of the heirs, executors and administrators of such person.
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Section 5. Indemnification of Employees and Agents. The Corporation
may, to the extent authorized by the Board of Directors, grant rights of
indemnification and advancement of expenses to any employee or agent of the
Corporation to the full extent of the provisions of this Article with respect to
indemnification and advancement of expenses of directors and officers of the
Corporation.
Section 6. Non-exclusivity. The indemnification provided by this
Article shall not be deemed exclusive of any other rights to which any person
covered hereby may be entitled other than pursuant to this Article.
ARTICLE IX
AMENDMENTS
Section 1. Amendments. Subject to the terms of the Stockholders'
Agreement, the By-laws of the Corporation may be amended, repealed or adopted by
vote of the holders of the shares entitled to vote or by the Board of Directors.
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ANNEX C
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF XXXXXXX CORPORATION
------------------------------------------------------------------------------
Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware
------------------------------------------------------------------------------
Xxxxxxx Corporation (the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware (the "GCL"),
does hereby certify as follows:
(1) The name of the Corporation is Xxxxxxx Corporation.
(2) This Amended and Restated Certificate of Incorporation was duly
adopted by the Board of Directors of the Corporation (the "Board of Directors")
in accordance with Sections 242 and 245 of the GCL and was duly adopted by the
stockholders of the Corporation at a duly convened meeting held on _____, 2000.
(3) This Amended and Restated Certificate of Incorporation restates
and integrates and further amends the Certificate of Incorporation of the
Corporation, as heretofore amended or supplemented.
(4) The text of the Certificate of Incorporation is amended and
restated in its entirety as follows:
FIRST: The name of the corporation is Xxxxxxx Corporation (the
"Corporation").
SECOND: The address of the registered office of the Corporation in
the State of Delaware is 0000 Xxxxxx Xxxxxx, in the City of Wilmington, County
of New Castle. The name of its registered agent at that address is The
Corporation Trust Company.
88
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of the State of Delaware (the "GCL").
FOURTH:
Section 1. Authorized Capital Stock. The total number of shares of
stock which the Corporation shall have authority to issue is [ ]*
( ), consisting of (i) [ ] ( ) shares of Voting Common
Stock, par value One Dollar ($1.00) per share (the "Voting Common Stock"), (ii)
[ ] ( ) shares of Non-Voting Common Stock, par value One
Dollar ($1.00) per share (the "Non-Voting Common Stock" and, together with the
Voting Common Stock, the "Common Stock"), and (iii) [ ] ( )
shares of Preferred Stock, par value One Dollar ($1.00) per share (the
"Preferred Stock").
Part I. COMMON STOCK
The powers, preferences and rights, and the qualifications,
limitations and restrictions, of each class of the Common Stock are as follows:
(a) Except as otherwise expressly provided herein, the powers,
preferences and rights of the shares of Voting Common Stock and the shares
of Non-Voting Common Stock, and the qualifications, limitations and
restrictions thereof, shall be in all respects identical.
(b) Except as otherwise expressly required by law or provided
herein, and subject to any voting rights provided to holders of Preferred
Stock at any time outstanding, the holders of any outstanding shares of
Voting Common Stock shall be entitled to one vote for each share of Common
Stock held of record by such holder and shall be entitled to vote with
respect to all matters as to which a stockholder of a Delaware corporation
would be entitled to vote. Holders of shares of Non-Voting Common Stock
shall not be entitled to vote on any matters which come before the
stockholders except
--------
* The Corporation's charter currently provides for 20,500,000 authorized
shares (20,000,000 shares of Common Stock and 500,000 shares of Preferred
Stock).
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as otherwise expressly provided by law, in which case, each holder of
shares of Non-Voting Common Stock shall be entitled to one vote for each
share of Non-Voting Common Stock held and shall, unless otherwise provided
by law, vote together as a single class with the Voting Common Stock.
(c) Subject to the rights of the holders of Preferred Stock, and
subject to any other provisions hereof, holders of shares of Common Stock
shall be entitled to receive dividends and other distributions in cash,
stock or property of the Corporation when, as and if declared thereon by
the Board of Directors of the Corporation (the "Board of Directors") from
time to time out of assets or funds of the Corporation legally available
therefor.
(d) In the event of any dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, the holders of shares
of Common Stock shall be entitled to receive the assets and funds of the
Corporation available for distribution after payments to creditors and to
the holders of any Preferred Stock that may at the time be outstanding, in
proportion to the number of shares held by them, respectively.
(e) (i) Except and to the extent as set forth in Section (f) hereof,
the holder of each outstanding share of Non-Voting Common Stock shall have
the right at any time, or from time to time, at such holder's option to
convert such share into one fully paid and non-assessable share of Voting
Common Stock, on and subject to the terms and conditions hereinafter set
forth and, subject to the terms of that certain Foundation Agreement,
dated as of December 8, 1999, by and between Xxxxxxx Foundation and Torque
Acquisition Co., L.L.C., any share of Voting Common Stock owned by Xxxxxxx
Foundation may, from time to time, at Xxxxxxx Foundation's option, be
converted into one fully paid and non-assessable share of Non-Voting
Common Stock, on and subject to the terms and conditions hereinafter set
forth.
(ii) In order to exercise the conversion privilege set forth
in Section (e)(i) hereof, the holder of any shares of Voting Common Stock
or Non-Voting Common Stock, as applicable, to be converted shall present
and surrender the certificate representing such shares during normal
business hours at any office or agency of the Corporation maintained for
the transfer of Voting Common Stock or Non-Voting Common Stock, as
applicable, and shall deliver a written notice of the election of such
holder to convert the
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shares represented by such certificate or any portion thereof specified in
such notice. Such notice shall also state the name and address in which
the certificate or certificates for shares of Voting Common Stock or
Non-Voting Common Stock, as applicable, which shall be issuable on such
conversion shall be issued. If so required by the Corporation, any
certificate for shares surrendered for conversion shall be accompanied by
instruments of transfer, in form satisfactory to the Corporation, duly
executed by the holder of such shares or his duly authorized
representative. Each conversion of shares of Voting Common Stock or
Non-Voting Common Stock, as applicable, shall be deemed to have been
effected on the date (the "Conversion Date") on which the certificate or
certificates representing such shares shall have been surrendered and such
notice and any required instruments of transfer shall have been received
as set forth above, and the person or persons in whose name or names any
certificate or certificates for shares of Voting Common Stock or
Non-Voting Common Stock, as applicable, shall be issuable on such
conversion shall be deemed, immediately prior to the close of business on
the Conversion Date, to have become the holder or holders of record of the
shares of Voting Common Stock or Non-Voting Common Stock, as applicable,
represented thereby.
(iii) As promptly as practicable following the presentation
and surrender for conversion, as herein provided, of any certificate for
shares of Voting Common Stock or Non-Voting Common Stock, as applicable,
the Corporation shall issue and deliver at such office or agency, to or
upon the written order of the holder thereof, certificates for the number
of shares of Voting Common Stock or Non-Voting Common Stock, as
applicable, issuable upon such conversion. In case any certificate for
shares of Voting Common Stock or Non-Voting Common Stock, as applicable,
shall be surrendered for conversion of only a portion of the shares
represented thereby, the Corporation shall deliver at such office or
agency, to or upon the written order of the holder thereof, a certificate
or certificates for the number of shares of Voting Common Stock or
Non-Voting Common Stock, as applicable, represented by such surrendered
certificate, which are not being converted. The issuance of certificates
for shares of Voting Common Stock or Non-Voting Common Stock, as
applicable, issuable upon the conversion of shares of Non-Voting Common
Stock or Voting Common Stock, respectively, shall be made without charge
to the converting holder for any tax imposed on the Corporation in respect
of the issue thereof. The Corporation shall not, however, be required to
pay any tax which may be payable with
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respect to any transfer involved in the issue and delivery of any
certificate in a name other than that of the holder of the shares being
converted, and the Corporation shall not be required to issue or deliver
any such certificate unless and until the person requesting the issuance
thereof shall have paid to the Corporation the amount of such tax or has
established to the satisfaction of the Corporation that such tax has been
paid.
(f) Notwithstanding the foregoing, no holder of shares of NonVoting
Common Stock issued upon the exercise of warrants pursuant to the terms
and conditions of the Warrant Agreement, dated as of ____________, 2000,
by and among the Corporation, Torque Acquisition Co., L.L.C. and Xxxxxxx
Foundation, may convert all or any portion of such holder's shares into
Voting Common Stock until the earliest to occur of (i) an initial offering
of equity securities of the Corporation registered under the Securities
Act of 1933, as amended, after __________, 2000*, (ii) a Sale of the
Corporation (as defined in the Stockholders' Agreement (the "Stockholders'
Agreement"), dated as of November 29, 1999, by and among the Corporation,
Torque Acquisition Co., L.L.C. and certain stockholders of the
Corporation), and (iii) a Change of Control (as defined in Section 19 of
Part II of this Article FOURTH).
(g) Except as set forth in the Stockholders' Agreement, no holder of
shares of Common Stock shall be entitled to preemptive or subscription
rights.
Part II. PREFERRED STOCK
The powers, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations and restrictions, of
the shares of Preferred Stock consisting of the series designated the "13.17%
Series A Cumulative Redeemable Preferred Stock" are as follows:
Section 1. Designation; Number of Shares. The Preferred Stock is
designated as the "13.17% Series A Cumulative Redeemable Preferred Stock."
--------
* Should be the Closing Date.
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The number of shares constituting such series shall be [ ] and are referred to
herein as the "Series A Preferred." The original issue price of the Series A
Preferred is $20.70 per share (the "Issue Price").
Section 2. Rank. The Series A Preferred shall, with respect to
dividend distributions and distributions upon liquidation, winding-up and
dissolution of the Corporation, rank (i) senior (to the extent set forth herein)
to all classes of Common Stock, and to each other class of Capital Stock or
series of Preferred Stock hereafter created the terms of which do not expressly
provide that it ranks senior to, or on a parity with, the Series A Preferred as
to dividend distributions and distributions upon liquidation, winding-up and
dissolution of the Corporation (collectively, together with all classes of
Common Stock, the "Junior Securities"); (ii) on a parity with any class of
Capital Stock or series of Preferred Stock hereafter created the terms of which
expressly provide that such class or series will rank on a parity with the
Series A Preferred as to dividend distributions and distributions upon
liquidation, winding-up and dissolution of the Corporation (collectively, the
"Parity Securities"); and (iii) junior to each other class of Capital Stock or
series of Preferred Stock hereafter created the terms of which expressly provide
that such class or series will rank senior to the Series A Preferred as to
dividend distributions and distributions upon liquidation, winding-up and
dissolution of the Corporation (collectively, the "Senior Securities").
Section 3. Dividends.
(a) Each Holder (as defined herein) of the outstanding shares of
Series A Preferred shall be entitled to receive, when, as and if declared
by the Board of Directors, out of funds legally available therefor,
dividends on each share of Series A Preferred (i) until _________, 2005*,
at a rate per annum equal to 13.17% of the Issue Price thereof, payable in
cash, and (ii) after _________, 2005*, at a rate per annum equal to 11% of
the Issue Price thereof, payable in cash; provided, however, that in the
event of any Dividend Default (as defined herein) or Redemption Default
(as defined herein), such rate shall immediately increase to 400 basis
points above the dividend rate per annum in effect immediately prior to
such event until such Dividend Default or Redemption Default, as
applicable, is cured or waived by the affirmative vote or consent of the
Holders of at least a majority of the then
--------
* Fifth anniversary of the Issue Date.
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outstanding shares of Series A Preferred. All dividends shall be fully
cumulative, shall accumulate (whether or not earned or declared and
whether or not there are funds legally available for the payment thereof)
daily from the Issue Date and shall be payable in arrears, in whole or in
part, on each Dividend Payment Date, if any, fixed by the Corporation,
commencing on the first Dividend Payment Date, if any, fixed after the
date of the Issue Date. All undeclared dividends and declared but unpaid
dividends shall compound on a quarterly basis from the Issue Date at a
rate per annum equal to the dividend rate per annum then applicable as set
forth in clauses (i) and (ii) above in this Section 3(a). No interest
shall be payable in respect of any dividend payment on the Series A
Preferred which may be in arrears.
(b) The dividend payment period for any dividend payable on a
Dividend Payment Date shall be the period beginning on the immediately
preceding Dividend Payment Date (or on the Issue Date in the case of the
first dividend payment period) and ending on the day preceding such later
Dividend Payment Date.
(c) Dividends payable on any Dividend Payment Date shall be payable
to the Holders of record as they appear on the stock books of the
Corporation at the close of business on such record dates as are fixed by
the Board of Directors, provided that no record date shall be less than 10
nor more than 45 days prior to the applicable Dividend Payment Date.
Dividends shall cease to accumulate in respect of the Series A Preferred
on the date of their earlier redemption unless the Corporation shall have
failed to pay the relevant redemption price on the Series A Preferred to
be redeemed on the date fixed for redemption.
(d) All dividends paid with respect to shares of the Series A
Preferred shall be paid pro rata to the Holders entitled thereto.
(e) Nothing contained herein shall in any way or under any
circumstances be construed or deemed to require the Board of Directors to
declare, or the Corporation to pay or set apart for payment, any dividends
on any shares of the Series A Preferred at any time. The Board of
Directors shall, in its sole discretion, determine the timing of the
actual declaration and payment of the dividends.
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(f) (i) No full dividends shall be declared by the Board of
Directors or paid or set apart for payment by the Corporation on any
Parity Securities for any period unless full accumulated dividends have
been or contemporaneously are declared and paid (or are deemed declared
and paid) in full, or declared and a sum in cash is set apart sufficient
for such payment, on the Series A Preferred for all dividends which have
accumulated up to the date of payment of such full dividends on such
Parity Securities. If any dividends are not so paid, all dividends
declared upon shares of the Series A Preferred and any other Parity
Securities shall be declared pro rata so that the amount of dividends
declared per share on the Series A Preferred and such Parity Securities
shall in all cases bear to each other the same ratio that accrued
dividends per share on the Series A Preferred and such Parity Securities
bear to each other.
(ii) So long as any share of the Series A Preferred is
outstanding, the Corporation shall not declare, pay or set apart for
payment any dividend on any Junior Securities (other than dividends
in Junior Securities to the holders of Junior Securities) unless
full cumulative dividends determined in accordance herewith on the
Series A Preferred have been paid (or are deemed paid) in full for
all full quarterly dividend periods ended prior to the date of such
payment in respect of Junior Securities.
(g) Dividends payable on the Series A Preferred for any period less
than a year shall be computed on the basis of a 360-day year of twelve
30-day months and, for periods not involving a full calendar month, the
actual number of days elapsed (not to exceed 30 days).
(h) A reference in this Amended and Restated Certificate of
Incorporation to dividends "deemed to have been paid" or words of similar
meaning shall mean that, in respect of a particular dividend, such
dividend has been declared and funds sufficient for the payment thereof
have been segregated and irrevocably set apart and that there exists no
legal or contractual impediment to the payment of such dividends.
Section 4. Liquidation Preference.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Corporation, the Holders
of
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shares of Series A Preferred then outstanding shall be entitled to be
paid, out of the assets of the Corporation available for distribution to
its stockholders, an amount in cash equal to the applicable Redemption
Price thereof set forth in Section 5(a) hereof for each share outstanding,
before any distribution shall be made or any assets distributed in respect
of Junior Securities to the holders of any Junior Securities including,
without limitation, Common Stock. If, upon any voluntary or involuntary
liquidation, dissolution or winding-up of the affairs of the Corporation,
the amounts payable with respect to the Series A Preferred and all other
Parity Securities are not paid in full, the holders of the Series A
Preferred and the Parity Securities shall share equally and ratably in any
distribution of assets of the Corporation first in proportion to the full
liquidation preference (which, in the case of the Series A Preferred, is
equal to the applicable Redemption Price) to which each is entitled until
such preferences are paid in full, and then in proportion to their
respective amounts of accumulated but unpaid dividends. After payment of
the full amount of the liquidation preferences and all accumulated and
unpaid dividends to which they are entitled, the Holders shall not be
entitled to any further participation in any distribution of assets of the
Corporation.
(b) For purposes of this Section 4, neither the sale, conveyance,
exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of
the Corporation, nor the consolidation or merger of the Corporation with
or into one or more entities, shall be deemed to be a liquidation,
dissolution or winding-up of the affairs of the Corporation.
Section 5. Redemption.
(a) Optional Redemption. The Corporation may, at its option, redeem
at any time or from time to time on or after the Issue Date (any such
time, the "Optional Redemption Date"), from any source of funds legally
available therefor, in whole or in part, in the manner provided for in
Section 5(e) hereof, any or all of the shares of Series A Preferred then
outstanding, at a price per share in cash equal to the Redemption Price
(calculated as (A) a percentage of the sum of the Issue Price and all
accumulated and unpaid dividends (assuming that no dividends had been paid
with respect to the Series A Preferred), including any amount for any
prorated dividend for the period from any Dividend Payment Date
immediately prior to any Optional Redemption Date to such Optional
Redemption Date and (B) then reducing
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such amount calculated in clause (A) by the sum of the amount of any cash
dividends paid with respect to the Series A Preferred and an interest
factor with respect to any such cash dividends accrued at the rate of 11%
per annum from the date of payment of such cash dividend to the Redemption
Date) if redeemed during the quarterly period beginning [ ]* of each of
the years set forth below:
If Redeemed: Redemption Price
------------ ----------------
2000 Prior to [end of first quarter date]............................ 111.111%
On or after [end of first quarter date] but
prior to [end of second quarter date]........................... 110.527%
On or after [end of second quarter date] but prior to
[end of third quarter date]..................................... 109.947%
On or after [end of third quarter date] but prior to
[end of fourth quarter date].................................... 109.369%
2001
Prior to [end of first quarter date]............................ 108.794%
On or after [end of first quarter date] but
prior to [end of second quarter date]........................... 108.223 %
On or after [end of second quarter date] but prior to
[end of third quarter date]..................................... 107.654 %
On or after [end of third quarter date] but prior to
[end of fourth quarter date].................................... 107.088 %
2002
Prior to [end of first quarter date]............................ 106.526%
On or after [end of first quarter date] but prior to
[end of second quarter date].................................... 105.966 %
On or after [end of second quarter date] but prior to
[end of third quarter date]..................................... 105.409 %
On or after [end of third quarter date] but prior to
[end of fourth quarter date].................................... 104.855 %
--------
* Month and day of Issue Date.
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If Redeemed: Redemption Price
------------ ----------------
2003
Prior to [end of first quarter date]............................ 104.304 %
On or after [end of first quarter date] but prior to
[end of second quarter date].................................... 103.756 %
On or after [end of second quarter date] but prior to
[end of third quarter date]..................................... 103.211 %
On or after [end of third quarter date] but prior to
[end of fourth quarter date].................................... 102.669 %
2004
Prior to [end of first quarter date]............................ 102.130 %
On or after [end of first quarter date] but prior to
[end of second quarter date].................................... 101.593 %
On or after [end of second quarter date] but prior to
[end of third quarter date]..................................... 101.059 %
On or after [end of third quarter date] but prior to
[end of fourth quarter date].................................... 100.528 %
and thereafter.................................................. 100.000%
; provided, however, that no redemption of any shares of Series A
Preferred held by Acquisition Company shall be made pursuant to this
Section 5(a) unless prior thereto the Corporation has received a written
legal opinion of a nationally recognized law firm to the effect that the
proceeds from any such redemption, to the extent of the liquidation
preference of the Series A Preferred (exclusive of any and all
accumulated but unpaid dividends thereon), should be treated as a
distribution in part or full payment of such Series A Preferred in
accordance with Section 302(a) of the Internal Revenue Code of 1986, as
amended.
(b) Event of Initial Public Offering. On the date (the "IPO
Redemption Date") of the consummation of an initial public offering of
Common Stock (the "Initial Public Offering") that is registered under the
Securities Act (as defined herein), the Corporation shall, at the election
of the Holders of a majority of the shares of Series A Preferred then
outstanding, written notice of which shall be given to the Corporation at
least 15 days prior to the IPO Redemption Date in accordance with Section
16 hereof, either (i) redeem for cash out of funds legally available
therefor, in the manner provided in Section 5(e) hereof, a number of
shares of Series A Preferred having an aggregate liquidation preference
(based upon the applicable Redemption Price) equal to 50% of the Net
Proceeds of the Initial Public
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Offering, at a price per share equal to the applicable Redemption Price
thereof set forth in Section 5(a) hereof, and/or (ii) redeem, in the
manner provided in Section 5(e) hereof, a number of shares of Series A
Preferred which have been designated by such Holders in exchange for and
through the delivery of a number of shares of Common Stock equal to (A)
the aggregate applicable Redemption Price of such shares of Series A
Preferred as set forth in Section 5(a) hereof, divided by (B) the public
offering price per share of Common Stock in the Initial Public Offering.
No fractional shares of Common Stock shall be delivered to any Holder
hereunder, but the Corporation instead shall pay an amount in cash
(rounded to the nearest whole cent) equal to the same fraction of such
public offering price per share of Common Stock.
(c) Periodic Redemption at the Option of the Holders. (i) Upon the
election of the Holders of a majority of the outstanding shares of Series
A Preferred, the Corporation shall, within four months after the delivery
of written notice (a "Periodic Redemption Notice") of such election in
accordance with Section 16 hereof (any such redemption date, a "Periodic
Redemption Date"), redeem in cash, to the extent of funds legally
available therefor, at a price per share equal to the applicable
Redemption Price set forth in Section 5(a) hereof, (A) up to [ ]* of the
shares of Series A Preferred outstanding on the date of delivery of any
such Periodic Redemption Notice (the "Periodic Redemption Notice Date")
at any time on or after [ ]**, subject to Section 5(c)(ii) hereof, (B) up
to [ ] of the shares of Series A Preferred outstanding on the applicable
Periodic Redemption Notice Date at any time on or after [ ]***, subject
to Section 5(c)(ii) hereof, and (C) any and all of the shares of Series A
Preferred out standing on or after [ ]**** (in any event, a "Periodic
Redemption").
--------
* The numbers in subparagraphs (A) and (B) should be one-third and
two-thirds, respectively, of the shares of Series A Preferred issued
on the Issue Date.
** The end of the fifth anniversary of the Issue Date.
*** The end of the sixth anniversary of the Issue Date.
**** The end of the seventh anniversary of the Issue Date.
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(ii) Notwithstanding the foregoing, the aggregate number of
shares of Series A Preferred which may be required to be redeemed by the
Corporation from any Holder pursuant to Sections 5(c)(i)(A) or (B) hereof
shall be reduced by such number of shares of Series A Preferred as may
have been previously sold by such Holder to any transferee who is not a
Permitted Transferee (as such term is defined in the Stockholders'
Agreement) of such Holder.
(iii) Any Holder may elect to waive any right to require the
Corporation to redeem its shares of Series A Preferred pursuant to Section
5(c) hereof.
(d) Pro Rata. Subject to Section 5(c)(iii) hereof, in the event of a
redemption pursuant to Sections 5(a), (b) or (c) hereof of only a portion
of the then outstanding shares of Series A Preferred, the Corporation
shall effect such redemption on a pro rata basis according to the number
of shares of Series A Preferred held by each Holder.
(e) Procedures for Redemption. (i) At least 30 days and not more
than 60 days prior to the date fixed for any redemption of the Series A
Preferred pursuant to Section 5(a) or (c) hereof, and at least 5 days and
not more than 10 days prior to the date fixed for any redemption of the
Series A Preferred pursuant to Section 5(b) hereof, the Corporation shall
provide written notice (the "Redemption Notice") by first-class mail,
postage prepaid, to each Holder of record on the record date fixed for
such redemption of the Series A Preferred at such Holder's address as it
appears on the stock books of the Corporation, provided, that no failure
to give such notice nor any deficiency therein shall affect the validity
of the procedure for the redemption of any shares of Series A Preferred to
be redeemed except as to the Holder or Holders to whom the Corporation has
failed to give such notice or except as to the Holder or Holders whose
notice was defective. The Redemption Notice shall state:
(A) the specific provision hereof pursuant to which such
redemption is to be made;
(B) whether all or less than all of the outstanding shares of
Series A Preferred are to be redeemed and the total number of shares
of Series A Preferred being redeemed;
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(C) the date fixed for redemption;
(D) the applicable Redemption Price set forth in Section 5(a)
hereof;
(E) if the Corporation is required to exchange and deliver
shares of Common Stock in payment of the Redemption Price in
accordance with Section 5(b)(ii) hereof, the Corporation's
computation of the number of shares of Common Stock exchangeable and
deliverable as provided in Section 5(b)(ii) hereof;
(F) that the Holder is to surrender to the Corporation, in the
manner, at the place or places and at the price designated, such
Holder's certificate or certificates representing the shares of
Series A Preferred to be redeemed; and
(G) that dividends on the shares of Series A Preferred to be
redeemed shall cease to accrue on such redemption date unless the
Corporation defaults in the payment of the Redemption Price.
(ii) Each Holder shall surrender the certificate or
certificates representing such Holder's shares of Series A Preferred
being redeemed pursuant to this Section 5 to the Corporation, duly
endorsed (or otherwise in proper form for transfer, as determined by
the Corporation), in the manner and at the place designated in the
Redemption Notice, and on the Optional Redemption Date, IPO
Redemption Date or Periodic Redemption Date, as applicable, the full
redemption price for such shares shall be payable to the Person
whose name appears on such certificate or certificates as the owner
thereof, and each surrendered certificate shall be canceled and
retired. In the event that less than all of the shares represented
by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares. Holders of shares of
Series A Preferred that are redeemed on the IPO Redemption Date in
accordance with Section 5(b)(ii) hereof shall not be entitled to
receive dividends declared and paid on any shares of Common Stock
exchangeable and deliverable in payment of the redemption price for
such shares of Series A Preferred, and such shares of Common Stock
shall not be entitled to vote, until such shares of Common Stock are
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delivered upon the surrender of the certificates representing such
shares of Series A Preferred. Upon such surrender, such Holders
shall be entitled to receive such dividends declared and paid
subsequent to such IPO Redemption Date and prior to the delivery of
the Common Stock.
Section 6. Voting Rights.
(a) The Holders, except as otherwise required under Delaware law or
as set forth in this Section 6, shall not be entitled or permitted to vote
on any matter required or permitted to be voted upon by the stockholders
of the Corporation.
(b) Neither the creation, authorization or issuance of any shares of
Senior Securities, Parity Securities or Junior Securities nor the increase
or decrease in the amount of authorized Capital Stock of any class,
including any Preferred Stock, shall require the consent of the Holders,
nor shall any such action be deemed to affect adversely the rights,
preferences, privileges or voting rights of the Holders.
(c) The Corporation shall not, without the affirmative vote or
consent of the Holders of at least a majority of the then outstanding
shares of Series A Preferred, in each case, as the case may be, voting as
a single class, given in person or by proxy, either in writing or by
resolution adopted at a meeting of Holders:
(i) directly or indirectly, declare or pay any dividend or
make any other distribution in respect of Capital Stock, other than
the Series A Preferred, and other than dividends in respect of
Junior Securities payable solely in Junior Securities;
(ii) directly or indirectly, redeem, repurchase or otherwise
acquire any shares of Capital Stock, other than redemptions of the
Series A Preferred in accordance with this Amended and Restated
Certificate of Incorporation and other than pursuant to the Common
Put, the JG Put and the Call (as such terms are defined in the Stock
holders' Agreement), puts and calls of Common Stock owned by
Management (as defined in the Management Subscription Agreement) to
the extent provided in the Management Subscription Agreement, and
calls of options to acquire Common Stock held by certain stock-
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holders of the Corporation to the extent provided in the New
Management Option Plan;
(iii) amend the Amended and Restated Certificate of
Incorporation or by-laws of the Corporation if such amendment would
adversely alter or change the rights, preferences or privileges of
the Series A Preferred or otherwise so as to adversely effect the
Series A Preferred;
(iv) enter into or permit any of its subsidiaries to enter
into any transaction (other than matters relating to compensation
and terms and conditions of employment and any tax loans by the
Corporation to certain stockholders of the Corporation (which loans
shall not exceed $350,000 in the aggregate), and other than
transactions between the Corporation and any of its Wholly Owned
Subsidiaries (as defined in Section 18 of the Stockholders'
Agreement), including, without limitation, any purchase, sale, lease
or exchange of property, the rendering of any service or the payment
of any management, advisory or similar fee, with any Affiliate
unless (A) such transaction is determined by the Board of Directors
to be on terms no less favor able to the Corporation and its
subsidiaries than they would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate, and (B) if, as
determined by the Board of Directors, such transaction has a value
in excess of $5 million, the Corporation has obtained an opinion
from an independent expert selected by the Board of Directors that
such transaction is fair to the Corporation and its stockholders; or
(v) merge, consolidate, sell substantially all of its assets
or enter into any similar business combination if, as a result
thereof, the Series A Preferred would continue to be outstanding and
the Corporation's leverage following such transaction would be
increased when compared to its leverage immediately prior to such
transaction.
(d) (i) If (A) any dividends on the Series A Preferred which have
been declared and remain unpaid (regardless of whether any contractual or
other restrictions apply to such payments or whether funds are legally
available therefor) (a "Dividend Default") or (B) the Corporation fails to
redeem the Series A Preferred as may be required in accordance with Sec-
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tions 5(b) or (c) or Section 7(a) hereof (regardless of whether any
contractual or other restrictions apply to such redemption or whether
funds are legally available therefor) or fails to make payment under any
Optional Redemption pursuant to Section 5(a) hereof (a "Redemption
Default"), and, in each case, such Dividend Default or Redemption Default,
as applicable, shall not have been cured or waived by the Holders of at
least a majority of the then out standing shares of Series A Preferred for
two consecutive quarterly periods (a "Voting Rights Triggering Event"),
then the Holders of at least a majority of the shares of Series A
Preferred then outstanding, voting separately and as a single class, shall
have the right to elect one director to the Board of Directors, provided,
that, in the event that more than one of the foregoing defaults occurs, at
the same or at different times, the maximum number of directors that such
Holders shall be entitled to elect is one.
(ii) Holders shall have the exclusive right to elect one
director to the Board of Directors as provided in Section 6(d)(i)
hereof at a meeting therefor called upon occurrence of such Voting
Rights Triggering Event, and at every subsequent meeting at which
the terms of office of the director so elected by the Holders expire
(other than as described in Section 6(d)(iii) hereof). Except as
otherwise provided in this Amended and Restated Certificate of
Incorporation the voting rights provided herein shall be the
exclusive remedy at law or in equity of the Holders for any Voting
Rights Triggering Event.
(iii) Any director elected by the Holders pursuant to Section
6(d)(i) hereof may be removed from office at any time, but only for
cause, and only by the affirmative vote of the Holders of at least a
majority of the shares of Series A Preferred then outstanding.
(iv) The right of the Holders, voting together as a separate
class, to elect a director to the Board of Directors as set forth in
Section 6(d)(i) hereof shall continue until such time as (A) in the
event such right arises due to a Dividend Default, all declared and
unpaid dividends that are in arrears on the Series A Preferred are
paid in full in cash, and (B) in the event such right arises due to
a Redemption Default, the Corporation remedies any such failure,
breach or default giving rise to such Redemption Default, at which
time (1) the special right of the Holders so to vote as a class for
the election of a director and (2) the term of office of the
director elected by the Hold-
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ers shall each terminate. At any time after voting power to elect a
director shall have become vested and be continuing in the Holders
pursuant to Section 6(d)(i) hereof, if a vacancy shall exist in the
office of the director elected by the Holders, a proper officer of
the Corporation may, and upon the written request of the Holders of
record of at least 25% of the shares of Series A Preferred then
outstanding ad dressed to the secretary of the Corporation shall,
call a special meeting of the Holders for the purpose of electing
the director which such Holders are entitled to elect. If such
meeting shall not be called by a proper officer of the Corporation
within 20 days after personal service of such written request upon
the Secretary of the Corporation, or within 20 days after mailing
such notice within the United States by certified mail, addressed to
the Secretary of the Corporation at its principal executive offices,
than the Holders of record of at least 25% of the outstanding shares
of Series A Preferred may designate in writing a Holder to call such
meeting at the expense of the Corporation, and such meeting may be
called by the Holder so designated, upon the notice required for the
annual meetings of stockholders of the Corporation, and shall be
held at the place for holding the annual meetings of stockholders.
Any Holder so designated shall have, and the Corporation shall
provide, access to the lists of stockholders to be called pursuant
to the provisions hereof.
(v) At any meeting held for the purpose of electing directors
at which the Holders shall have the right, voting together as a
separate class, to elect a director as provided above, (A) the
presence in person or by proxy of the Holders of at least a majority
of the outstanding shares of Series A Preferred entitled to vote
thereat shall be required to constitute a quorum of such Series A
Preferred and (B) the election of a director by Holders pursuant to
Section 6(d)(i) hereof shall require the affirmative vote of at
least a majority of the then outstanding shares of Series A
Preferred.
(e) In any case in which the Holders shall be entitled to vote
pursuant to this Section 6 or pursuant to Delaware law, each Holder
entitled to vote with respect to any matter shall be entitled to one vote
for each share of Series A Preferred owned by such Holder.
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Section 7. Change of Control; Sale of the Corporation.
(a) Immediately following the occurrence of (i) a Change of Control
(the date of such occurrence being the "Change of Control Date") or (ii) a
Sale of the Corporation (the date of such occurrence being the "Sale
Date"), the Corporation shall redeem (the "Change of Control Redemption"
or the "Sale Redemption," as applicable) all of the outstanding Series A
Preferred at a cash price per share equal to the applicable Redemption
Price set forth in Section 5(a) hereof (the "Change of Control Redemption
Price" or the "Sale Redemption Price," as applicable).
(b) If practicable, within 5 Business Days prior to the Change of
Control Date or the Sale Date, as applicable, the Corporation shall send
by first-class mail, postage prepaid, to each Holder of record on the
record date fixed for such redemption at such Holder's address as it
appears on the stock books of the Corporation, a notice stating:
(i) that the Change of Control Redemption or the Sale
Redemption, as applicable, is being or will be made pursuant to this
Section 7 and that all shares of Series A Preferred shall be subject
to the terms and conditions set forth herein;
(ii) the Change of Control Redemption Price or the Sale
Redemption Price, as applicable, and the redemption date (which
shall be the Change of Control Date or the Sale Date, as
applicable);
(iii) the number of shares of Series A Preferred held, as of
the appropriate redemption date, by the Holder that the Corporation
shall redeem;
(iv) that, unless the Corporation defaults in the payment of
the Change of Control Redemption Price or the Sale Redemption Price,
as applicable, dividends on the shares of Series A Preferred shall
cease to accumulate on the applicable redemption date, and all
rights of Holders of such redeemed shares shall terminate, except
for the right to receive payment therefor, on the applicable
redemption date;
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(v) that the Holder is to surrender to the Corporation
certificates representing all of the shares of Series A Preferred
held by such Holder, properly endorsed for transfer, together with
such customary documents as the Corporation and the transfer agent,
if any, may reasonably require, in the manner and at the address
specified in the notice prior to the close of business on the
Business Day preceding the Change of Control Redemption Date or the
Sale Redemption Date, as applicable; and
(vi) a summary of any other procedures that a Holder must
follow in connection with the Change of Control Redemption or the
Sale Redemption, as applicable.
(c) On the applicable redemption date, the Corporation shall (i)
redeem the shares of Series A Preferred redeemed pursuant to the Change of
Control Redemption or the Sale Redemption, as applicable, in accordance
with the terms set forth in this Section 7, (ii) promptly mail, or cause
the transfer agent, if any, to mail, to the Holders of shares so redeemed
the Change of Control Redemption Price or the Sale Redemption Price, as
applicable, therefor in cash, and (iii) cancel and retire each surrendered
certificate. Unless the Corporation defaults in the payment of the Change
of Control Redemption Price or the Sale Redemption Price, as applicable,
dividends shall cease to accumulate with respect to the shares of Series A
Preferred redeemed, and all rights of the Holders of such shares shall
terminate, except for the right to receive payment therefor, on the
Change of Control Redemption Date or the Sale Redemption Date, as
applicable.
Section 8. No Preemptive Rights. No shares of Series A Preferred
shall have any rights of preemption whatsoever as to any securities of the
Corporation, or any warrants, rights or options issued or granted with respect
thereto, regardless of how such securities or such warrants, rights or options
may be designated, issued or granted.
Section 9. Reissuance of Series A Preferred. Shares of Series A
Preferred that have been issued and reacquired in any manner, including shares
purchased or redeemed, shall (upon compliance with any applicable provisions of
the laws of Delaware) have the status of authorized and unissued shares of
Preferred Stock undesignated as to series and may be redesignated and reissued
as part of any series of Preferred Stock.
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Section 10. Business Day. If any payment or redemption shall be
required by the terms hereof to be made on a day that is not a Business Day,
such payment or redemption shall be made on the immediately succeeding Business
Day.
Section 11. Mutilated or Missing Series A Preferred Certificates. If
any of the Series A Preferred certificates shall be mutilated, lost, stolen or
destroyed, the Corporation shall issue, in exchange and in substitution for and
upon cancellation of the mutilated Series A Preferred certificate, or in lieu of
and substitution for the Series A Preferred certificate lost, stolen or
destroyed, a new Series A Preferred certificate of like tenor and representing
an equivalent amount of shares of Series A Preferred, but only upon receipt of
evidence of such loss, theft or destruction of such Series A Preferred
certificate and indemnity, if requested, satisfactory to the Corporation and the
transfer agent, if any.
Section 12. Section Headings, Construction. The headings of Sections
in this Amended and Restated Certificate of Incorporation are provided for
convenience only and shall not affect the construction or interpretation of any
of the provisions hereof. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Part II of Article FOURTH of this
Amended and Restated Certificate of Incorporation unless specifically noted
otherwise.
Section 13. Restrictions on Transfer. The shares of Series A
Preferred are transferable subject to the provisions of the Stockholders'
Agreement. The Corporation shall cooperate with the request of the Holders of a
majority of the shares of Series A Preferred in connection with any transfer of
shares of Series A Preferred.
Section 14. Waiver. Any provision of this Part II of Article FOURTH
of this Amended and Restated Certificate of Incorporation which, for the benefit
of the Holders, prohibits, limits or restricts actions by the Corporation may be
waived in whole or in part, or the application of all or any part of such
provision in any particular circumstance or generally may be waived, in each
case with the consent of the Holders of at least a majority of the shares of
Series A Preferred then outstanding, either in writing or by vote at a meeting
called for such purpose at which the Holders shall vote as a separate class.
Section 15. Severability of Provisions. If any right, preference or
limitation of the Series A Preferred set forth in this Amended and Restated
Certifi-
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cate of Incorporation filed pursuant hereto (as this Amended and Restated
Certificate of Incorporation may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule or law or public
policy, all other rights, preferences and limitations set forth in this Amended
and Restated Certificate of Incorporation, as amended, which can be given effect
without the invalid, unlawful or unenforceable right, preference or limitation
shall, nevertheless, remain in full force and effect. No right, preference or
limitation herein set forth shall be deemed dependent upon any other such right,
preference or limitation unless so expressed herein.
Section 16. Notice of the Corporation. All notices and other
communications required or permitted to be given to the Corporation hereunder
shall be made by first-class mail, postage prepaid, to the Corporation at its
principal executive offices (currently located on the date of the adoption of
this Amended and Restated Certificate of Incorporation at the following address:
Xxxxxxx Corporation, 0000 Xxxxxxxxxx Xxxxxx, X.X. Xxx 00000, Xxxxxxxxx, Xxx Xxxx
00000-0000, Attention: Secretary). Minor imperfections in any such notice shall
not affect the validity thereof.
Section 17. Limitations. Except as may otherwise be required by law,
the shares of Series A Preferred shall not have any powers, preferences or
relative, participating, optional or other special rights other than those
specifically set forth in this Amended and Restated Certificate of Incorporation
(as may be amended from time to time).
Section 18. Annual and Quarterly Information Rights.
(a) Quarterly Reports. As soon as available, but not later than 45
days after the end of each quarterly accounting period (other than the
fourth quarter of any fiscal year), the Corporation shall furnish to each
Holder a consolidated balance sheet of the Corporation as of the end of
such period and consolidated statements of income, cash flows and changes
in stockholders' equity for such quarterly accounting period and for the
period commencing at the end of the previous fiscal year and ending with
the end of such period, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding fiscal
year, all prepared in accordance with generally accepted accounting
principals consistently applied, subject to normal year-end adjustments
and the absence of footnote disclosure.
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(b) Annual Audit. As soon as available, but not later than 90 days
after the end of each fiscal year of the Corporation, the Corporation
shall furnish to each Holder audited consolidated financial statements of
the Corporation, which shall include statements of income, cash flows and
changes in stockholders' equity for such fiscal year and a balance sheet
as of the last day thereof, each prepared in accordance with generally
accepted accounting principals consistently applied, and accompanied by
the report of an independent accounting firm of recognized national
standing selected by the Board of Directors (the "Accountants"). The
Corporation and its subsidiaries shall maintain a system of accounting
sufficient to enable the Accountants to render the report referred to in
this Section 18(b).
Section 19. Definitions. As used in this Part II of Article FOURTH
of this Amended and Restated Certificate of Incorporation the following terms
shall have the following meanings (with terms defined in the singular having
comparable meanings when used in the plural and vice versa), unless the context
otherwise requires:
"Acquisition Company" means Torque Acquisition Co., L.L.C., a
Delaware limited liability company.
"Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
"Board of Directors" shall have the meaning provided in the first
paragraph hereof.
"Business Day" means any day except a Saturday, a Sunday or any day
on which banking institutions in New York, New York are required or
authorized by law or other governmental action to be closed.
"Capital Stock" means all equity securities of the Corporation.
"Change of Control" means the occurrence of one or more of the
following events: (i) the approval by the holders of the Capital Stock of
the Corporation of any plan or proposal for the liquidation, winding-up or
dissolution of the Corporation; (ii) any "person" or "group" (within the
meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any
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successor provision to either of the foregoing, including any group acting
for the purpose of acquiring, holding or disposing of securities within
the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than
Acquisition Company and its Affiliates and the Voting Trust (as defined in
the Stockholders' Agreement), becomes the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of shares
representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding voting stock of the Corporation
or any successor to all or substantially all of the Corporation's assets;
or (iii) the first day on which a majority of the members of the Board of
Directors are not Continuing Directors.
"Change of Control Date" shall have the meaning provided in Section
7(a) hereof.
"Change of Control Redemption" shall have the meaning provided in
Section 7(a) hereof.
"Change of Control Redemption Price" shall have the meaning provided
in Section 7(a) hereof.
"Common Stock" means the voting and non-voting common stock, par
value $1.00 per share, of the Corporation.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of
Directors immediately following the Issue Date or (ii) was nominated for
election to such Board of Directors by Acquisition Company or the Voting
Trust (as defined in the Stockholders' Agreement) or with the approval of
a majority of the Continuing Directors who were members of such Board of
Directors at the time of such nomination or election.
"Corporation" shall have the meaning provided in the first paragraph
hereof.
"Dividend Default" shall have the meaning provided in Section
6(d)(i) hereof.
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"Dividend Payment Date" means any date on which the Board of
Directors shall, in its sole discretion, set for the payment of dividends.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Holder" means a holder of shares of Series A Preferred as reflected
in the stock books of the Corporation.
"Initial Public Offering" shall have the meaning provided in Section
5(b) hereof.
"IPO Redemption Date" shall have the meaning provided in Section
5(b) hereof.
"Issue Date" means [ ], 2000.*
"Junior Securities" shall have the meaning provided in Section 2
hereof.
"Management Subscription Agreement" means the Management
Subscription Agreement, dated as of ___________, 2000, by and among the
Corporation and certain members of management of the Corporation.
"New Management Option Plan" means the New Management Option Plan,
dated as of ___________, 2000, as adopted by the Board of Directors.
"Net Proceeds" means the aggregate proceeds to the Corporation from
an Initial Public Offering, less any underwriter commissions and related
expenses.
"Optional Redemption Date" shall have the meaning provided in
Section 5(a) hereof.
"Parity Securities" shall have the meaning provided in Section 2
hereof.
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* Would be the Closing Date of the Merger.
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"Periodic Redemption" shall have the meaning provided in Section
5(c)(i) hereof.
"Periodic Redemption Date" shall have the meaning provided in
Section 5(c)(i) hereof.
"Periodic Redemption Notice" shall have the meaning provided in
Section 5(c)(i) hereof.
"Periodic Redemption Notice Date" shall have the meaning provided in
Section 5(c)(i) hereof.
"Person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company,
trust, unincorporated organization or government or agency or political
subdivision thereof.
"Preferred Stock" means the preferred stock, par value $1.00 per
share, of the Corporation.
"Redemption Date" shall mean an Optional Redemption Date or Periodic
Redemption Date, as the case may be.
"Redemption Default" shall have the meaning provided in Section
6(d)(i) hereof.
"Redemption Notice" shall have the meaning provided in Section
5(e)(i) hereof.
"Redemption Price" means, with respect to a share of Series A
Preferred, a price equal to the applicable Redemption Price calculated in
the manner set forth in Section 5(a) hereof.
"Resolution" shall have the meaning provided in the first paragraph
hereof.
"Sale Date" shall have the meaning provided in Section 7(a) hereof.
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"Sale of the Corporation" means (i) a sale of all or substantially
all of the consolidated assets of the Corporation or (ii) the transfer or
other disposition of more than 50% of the outstanding Common Stock, in
each case with respect to clauses (i) and (ii), in a single transaction or
series of related transactions, whether accomplished by stock purchase,
asset purchase, merger, recapitalization, reorganization or other
transaction.
"Sale Redemption" shall have the meaning provided in Section 7(a)
hereof.
"Sale Redemption Price" shall have the meaning provided in Section
7(a) hereof.
"Securities Act" means the Securities Exchange Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Senior Securities" shall have the meaning provided in Section 2
hereof.
"Series A Preferred" shall have the meaning provided in Section 1
hereof.
"Stockholders' Agreement" means the Stockholders' Agreement, dated
as of November 29, 1999, by and among the Corporation, Torque Acquisition
Co., L.L.C., a Delaware limited liability company and a wholly-owned
subsidiary of Vestar Capital Partners IV, L.P., Xxxxxxx Foundation and
certain stockholders of the Corporation.
"Voting Rights Triggering Event" shall have the meaning provided in
Section 6(d)(i) hereof.
FIFTH: In furtherance and not in limitation of the powers conferred
upon it by the laws of the State of Delaware, the Board of Directors is
expressly authorized to adopt, amend, alter or repeal from time to time the
By-laws of the Corporation in any manner not inconsistent with the GCL or this
Amended and Restated Certificate of Incorporation.
SIXTH: The Corporation reserves the right at any time and from time
to time to amend, alter or repeal any provision contained in this Amended and
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Restated Certificate of Incorporation in the manner now or as hereafter
prescribed by law or this Amended and Restated Certificate of Incorporation, and
all rights, preferences and privileges conferred upon stockholders, directors
and officers by and pursuant to this Amended and Restated Certificate of
Incorporation in its present form or as hereafter amended are subject to the
rights reserved in this Article SIXTH.
SEVENTH: No director of the Corporation shall be held personally
liable to the Corporation or any of its stockholders for monetary damages for
breach of fiduciary duty as a director, except (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 GCL or (iv) for any
transaction from which the director derived an improper personal benefit. Any
repeal of this Article SEVENTH, or any amendment of this Article SEVENTH insofar
as it would in any way enlarge the liability of any director of the Corporation,
shall be ineffective with respect to any acts or omissions occurring prior to
the date of such repeal or amendment.
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IN WITNESS WHEREOF, the undersigned has signed this Amended and
Restated Certificate of Incorporation this ____ day of ___________, 2000.
_______________________________________________________________________________
ATTEST:
_________________________
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ANNEX D
TERMS OF WARRANTS
================================================================================
Terms not otherwise defined herein have the meaning given to them in that
certain Stockholders Agreement dated as of November 29, 1999 among Xxxxxxx
Corporation and certain of its Stockholders (the "Stockholders Agreement").
Issuer: Xxxxxxx Corporation ("Company").
Holders: Each party who receives a Warrant pursuant to the
terms of the Merger Agreement is referred to as an
"Initial Holder." To the extent, such Initial
Holder is the Xxxxxxx Foundation ("Foundation
Holder"), the Foundation Holder and the Foundation
Holder's Permitted Transferees are each referred
to as a "Foundation Original Holder," and, the
Foundation Holder and the Foundation Holder's
Permitted Transferees are collectively referred to
as the "Foundation Holder Group." To the extent
such Initial Holder is Torque Acquisition Co.,
L.L.C. ("Acquisition Holder"), the Acquisition
Holder and the Acquisition Holder's Permitted
Transferees are each referred to as an
"Acquisition Original Holder,"and, the Acquisition
Holder and the Acquisition Holder's Permitted
Transferees are collectively referred to as the
"Acquisition Holder Group." Foundation Original
Holders and Acquisition Original Holders are
collectively referred to as "Original Holders."
Investment: An aggregate amount equal to 10% of the aggregate
investment by the Initial Holders at the time of
the Closing in respect of the Warrants and
Preferred Stock.
Warrants: The number of detachable Warrants to be issued by
the Company in connection with the Merger (as
defined in the Merger Agreement) is equal to the
aggregate number of shares of Common Stock which
has been converted into the Series A
Preferred/Warrant Consideration (as such term is
defined in the Merger Agreement). Each Warrant
shall initially entitle the holder to acquire one
share of Common Stock, subject in each case to
anti-dilution adjustments, as described below. In
the event that additional shares of Preferred
Stock and Warrants are to be sold pursuant to
Section 6.12 of the Merger Agreement, the number
of detachable Warrants to be
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issued by the Company pursuant to such Section
6.12 shall be equal to the aggregate cash
consideration paid in respect of such Preferred
Stock and Warrants divided by the Offer Price.
Merger Consideration
Adjustment:(1) The Merger consideration with respect to each
Warrant shall be adjusted as follows: (i) upon the
achievement by the Foundation Original Holder
Group of the Initial Hurdle Rate (as defined
below) or the Acquisition Original Holder Group of
the Initial Hurdle Rate (as defined below), as the
case may be, each Foundation Original Holder or
Acquisition Original Holder, as the case may be,
shall be obligated to promptly pay the Company as
a contribution to capital an amount equal to its
Pro Rata Share (as defined below) of the Initial
Adjustment Amount (as defined below), and (ii)
upon the achievement by the Foundation Original
Holder Group of the Final Hurdle Rate (as defined
below) or the Acquisition Original Holder Group of
the Final Hurdle Rate (as defined below), as the
case may be, each Foundation Original Holder or
Acquisition Original Holder, as the case may be,
shall be obligated to promptly pay to the Company
as a contribution to capital an amount equal to
its Pro Rata Share of the Final Adjustment Amount
(as defined below). In the case of Acquisition
Holder Group, the obligations of Acquisition
Holder and its Permitted Transferees to make the
foregoing capital contributions shall be the
obligation of Acquisition Holder on behalf of
itself and any such transferee, the payment of
which shall be guaranteed by Vestar Capital
Partners IV, L.P. In the case of the Foundation
Holder Group, the obligations of the Foundation
Holder and its Permitted Transferees to make the
foregoing capital contributions shall be the
obligation of the Foundation Holder on behalf of
itself and any such transferee. To the extent an
Original Holder receives freely tradeable
marketable securities in the achievement of its
respective Initial Hurdle Rate or Final Hurdle
Rate, as the case may be, such Original Holder may
satisfy its respective obligations to the Company
by delivering to the Company an amount of such
freely tradeable marketable securities having a
Fair Market Value (which is the same Fair Market
Value that was determined in calculating the
achievement of the Initial Hurdle Rate or the
Final Hurdle Rate, as the case may be) equal to
the Initial
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(1) To be included in a letter agreement by and among the Acquisition Holder,
the Foundation Holder, the Company and Vestar Capital Partners IV, L.P.,
which will be executed simultaneously with the Warrant Agreement.
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Adjustment Amount or Final Adjustment Amount, as
the case may be, provided that if such Original
Holder receives a combination of cash and freely
tradeable marketable securities in the achievement
of either the Initial Hurdle Rate or the Final
Hurdle Rate, it may satisfy its obligation to the
Company by delivery of a combination of such
freely tradeable marketable securities (based on
such Fair Market Value) and cash.
"Fair Market Value" means the average of the
closing prices of the sales of such security on
all securities exchanges on which such security
may at the time be listed, or, if there have been
no sales on any such exchange on any day, the
average of the highest bid and lowest asked prices
on all such exchanges at the end of such day, or,
if on any day such security is not so listed, the
average of the representative bid and asked prices
quoted in the NASDAQ System as of 4:00 PM, Eastern
Time, or, if on any day such security is not
quoted in the NASDAQ System, the average of the
highest bid and lowest asked prices on such day in
the domestic over-the-counter market as reported
by the National Quotation Bureau Incorporated, or
any similar successor organization, in each such
case averaged over a period of 21 days consisting
of the day as of which the fair market value is
being determined and the 20 consecutive trading
days prior to such day; provided, however, that if
such holder holds more than 5% of the aggregate
outstanding amount of such securities, the fair
market value of such securities shall be
determined by an Appraiser employing a methodology
that takes into account lack of liquidity and any
other discount factors such Appraiser deems
appropriate.
"Final Adjustment Amount" means, with respect to
the Foundation Holder Group or Acquisition Holder
Group, as the case may be, an amount equal to the
excess, if any, of (x) the actual amount that the
Foundation Holder Group or Acquisition Holder
Group, as the case may be (and, with respect to
any shares of Preferred Stock transferred by any
Foundation Original Holder or Acquisition Original
Holder, as the case may be, any and all
transferees of such Foundation Original Holder or
Acquisition Original Holder, as the case may be)
has been paid by the Company in respect of its
shares of Preferred Stock over (y) the sum of (I)
the amount that the Foundation Holder Group or
Acquisition Holder Group, as
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the case may be (and, with respect to any shares
of Preferred Stock transferred by any Foundation
Original Holder or Acquisition Original Holder, as
the case may be, any and all transferees of such
Foundation Original Holder or Acquisition Original
Holder, as the case may be) would have been paid
by the Company in respect of its shares of
Preferred Stock if (i) the Liquidation Value of
such shares of Preferred Stock was equal to the
aggregate investment by such Foundation Holder
Group or Acquisition Holder Group, as the case may
be, in shares of Preferred Stock and Warrants at
the time of the Closing, (ii) the Redemption Price
was at all times equal to 100% of such Liquidation
Value and (iii) the dividend rate per annum
thereon was calculated at a rate per annum equal
to 4%, plus (II) the Initial Adjustment Amount.
"Final Hurdle Rate" means the rate of return which
would cause the Foundation Holder Group or
Acquisition Holder Group, as the case may be, to
realize in respect of securities of the Company
owned by such Foundation Holder Group or
Acquisition Holder Group, as the case may be (but
not including any transactional fees, management
fees or similar fees) in cash or freely tradeable
marketable securities (other than securities of
the Company or its Subsidiaries) (valued at Fair
Market Value measured at the time of receipt) of
an Internal Rate of Return equal to or greater
than 30% in respect of the aggregate amount
invested by such Foundation Holder Group or
Acquisition Holder Group, as the case may be, in
all securities of the Company and all capital
contributions to the Company (after taking into
account the payment by such Foundation Holder
Group or Acquisition Holder Group, as the case may
be, to the Company of such Final Adjustment Amount
and the payment of any Initial Adjustment Amount).
"Initial Adjustment Amount" means, with respect to
the Foundation Holder Group or Acquisition Holder
Group, as the case may be, an amount equal to the
excess, if any, of (x) the actual amount that the
Foundation Holder Group or Acquisition Holder
Group, as the case may be (and, with respect to
any shares of Preferred Stock transferred by any
Foundation Original Holder or Acquisition Original
Holder, as the case may be, any and all
transferees of such Foundation Original Holder or
Acquisition Original Holder, as the case
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may be) has been paid by the Company in respect of
its shares of Preferred Stock over (y) the amount
that the Foundation Holder Group or Acquisition
Holder Group, as the case may be (and, with
respect to any shares of Preferred Stock
transferred by any Foundation Original Holder or
Acquisition Original Holder, as the case may be,
any and all transferees of such Foundation
Original Holder or Acquisition Original Holder, as
the case may be) would have been paid by the
Company in respect of its shares of Preferred
Stock if (i) the Liquidation Value of such shares
of Preferred Stock was equal to the aggregate
investment by the Foundation Holder Group or
Acquisition Holder Group, as the case may be, in
shares of Preferred Stock and Warrants at the time
of the Closing, (ii) the Redemption Price was at
all times equal to 100% of such Liquidation Value
and (iii) the dividend rate per annum thereon was
calculated at a rate per annum equal to 7.5%.
"Initial Hurdle Rate" means the rate of return
which will cause the Foundation Holder Group or
Acquisition Holder Group, as the case may be, to
realize in respect of securities of the Company
owned by such Foundation Holder Group or
Acquisition Holder Group, as the case may be (but
not including any transactional fees, management
fees or similar fees) in cash or freely tradeable
marketable securities (other than securities of
the Company or its Subsidiaries) (valued at Fair
Market Value measured at the time of receipt) an
Internal Rate of Return equal to or greater than
20%, in respect of the aggregate amount invested
by such Foundation Holder Group or Acquisition
Holder Group, as the case may be, in all
securities of the Company including capital
contributions to the Company (after taking into
account the payment by such Foundation Holder
Group or Acquisition Holder Group, as the case may
be, to the Company of such Initial Adjustment
Amount).
"Internal Rate of Return" means with respect to
any determination of achieving a certain hurdle
rate, an annual internal rate of return based upon
the actual timing of investment inflows and
outflows, aggregated monthly. In determining the
achievement of a particular Internal Rate of
Return, any consideration paid in connection with
any transfer by and among the Initial Holders and
their respective Permitted Transferees shall be
ignored. In addition,
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121
notwithstanding the foregoing, any distribution of
securities of the Company by Vestar Capital
Partners IV, L.P. to its limited partners shall be
deemed to be a transfer to a Person other than its
Permitted Transferees for this purpose, and the
value attributed to such distributed securities
shall be that value ascribed thereto under the
terms of the Agreement of Limited Partnership of
Vestar Capital Partners IV, L.P. in effect at the
time of such distribution. Further, in determining
the Internal Rate of Return with respect to
Foundation Original Holders, their investment for
purposes of this calculation shall be deemed to be
(i) the value (i.e., the product of (x) the Offer
Price and (y) the number of shares of Common Stock
converted by the Foundation Holder into Series A
Preferred/Warrant Consideration) at Closing of the
Series A Preferred/Warrant Consideration received
by the Foundation Original Holder and (ii) with
respect to any shares of Common Stock retained by
the Foundation immediately following the Closing,
the value of each such share of Common Stock shall
be the Offer Price.
"Pro Rata Share" means (i) with respect to a
Foundation Original Holder, (a) the Initial
Adjustment Amount or Final Adjustment Amount, as
applicable, with respect to such Foundation
Original Holder over (b) the Initial Adjustment
Amount or Final Adjustment Amount, as applicable,
of all Foundation Original Holders, and (ii) with
respect to an Acquisition Original Holder, (a) the
Initial Adjustment Amount or Final Adjustment
Amount, as applicable, with respect to such
Acquisition Original Holder over (b) the Initial
Adjustment Amount or Final Adjustment Amount, as
applicable, of all Acquisition Original Holders.
Exercise Price: An amount per share equal to the Offer Price per
share of Common Stock, subject to anti-dilution
adjustments, as described below. The exercise
price for the Warrants may be paid by delivery for
cancellation of Warrants with a fair market value
(as determined under Section 8(e) of the
Stockholders Agreement) equal to the exercise
price for the shares of Common Stock underlying
the Warrants which are the subject of such
exercise.
Exercise Period: Exercisable into non-voting common stock of the
Company by the holder at any time, in whole or in
part (provided that such
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non-voting common stock shall not be convertible
into voting Common Stock until after the first to
occur of (i), (ii) and (iii) of this paragraph)
and exercisable into voting Common Stock in whole
or in part, at any time on or after the first to
occur of (i) an initial underwritten offering of
equity securities of the Company registered under
the Securities Act after the Closing, (ii) a Sale
of the Company, or (iii) a Change in Control (as
defined in the Certificate of Designation of the
Company with respect to the Preferred Stock).
Anti-Dilution Rights: The Warrants will be entitled to (i)
customary adjustments for stock splits, dividends,
etc. and (ii) standard weighted anti- dilution
protection (i.e., issuances of Common Stock or
rights to acquire Common Stock for less than the
Exercise Price (described above) will result in an
adjustment to the number of shares and such
Exercise Price of the Warrants to make up the
difference in the dilution caused by the number of
shares sold at a price per share below the then
Exercise Price).
7
