EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
by and among
MW HOLDING CORPORATION,
XXXXXXX MERGER SUB CORPORATION,
XXXXXXX MERGER SUB CORPORATION,
THE XXXX CORPORATION
AND
WESTVACO CORPORATION
Dated as of August 28, 2001
TABLE OF CONTENTS
Page
ARTICLE I
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THE MERGERS...................................................................2
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SECTION 1.1 The Xxxx Merger..............................................2
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SECTION 1.2 The Westvaco Merger..........................................2
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SECTION 1.3 Closing......................................................2
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SECTION 1.4 Effective Time...............................................2
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SECTION 1.5 Effects of the Mergers.......................................3
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ARTICLE II
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CERTAIN GOVERNANCE MATTERS....................................................3
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SECTION 2.1 Parent Name Change...........................................3
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SECTION 2.2 Parent Board of Directors; Committees; CEO...................3
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SECTION 2.3 Corporate Headquarters.......................................4
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SECTION 2.4 Integration..................................................4
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SECTION 2.5 Charters and By-laws of the Surviving Corporations...........5
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SECTION 2.6 Directors of Surviving Corporations..........................5
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SECTION 2.7 Stockholder Rights Plan......................................5
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SECTION 2.8 Trading Symbol...............................................5
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ARTICLE III
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EFFECTS OF THE MERGERS ON THE CAPITAL STOCK OF XXXX AND WESTVACO;
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EXCHANGE OF CERTIFICATES......................................6
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SECTION 3.1 Effect on Capital Stock of Xxxx and Xxxxxxx Merger Sub.......6
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SECTION 3.2 Effect on Capital Stock of Westvaco and Xxxxxxx Merger Sub...8
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SECTION 3.3 Exchange of Shares and Certificates.........................10
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SECTION 3.4 Certain Adjustments.........................................13
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ARTICLE IV
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REPRESENTATIONS AND WARRANTIES...............................................13
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SECTION 4.1 Representations and Warranties of Xxxx......................14
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SECTION 4.2 Representations and Warranties of Westvaco..................27
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ARTICLE V
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COVENANTS RELATING TO CONDUCT OF BUSINESS....................................40
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SECTION 5.1 Conduct of Business.........................................40
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SECTION 5.2 No Solicitation by Xxxx.....................................45
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SECTION 5.3 No Solicitation by Westvaco.................................47
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ARTICLE VI
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ADDITIONAL AGREEMENTS........................................................49
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SECTION 6.1 Preparation of the Form S-4 and the Joint Proxy Statement;
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Stockholders Meetings.......................................49
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SECTION 6.2 Access to Information; Confidentiality......................50
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SECTION 6.3 Reasonable Best Efforts.....................................50
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SECTION 6.4 Indemnification, Exculpation and Insurance..................51
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SECTION 6.5 Fees and Expenses...........................................52
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SECTION 6.6 Public Announcements........................................53
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SECTION 6.7 Affiliates..................................................53
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SECTION 6.8 NYSE Listing................................................53
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SECTION 6.9 Tax Treatment...............................................53
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SECTION 6.10 Takeover Statutes...........................................54
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SECTION 6.11 Conveyance Taxes............................................54
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SECTION 6.12 Employee Benefits...........................................54
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SECTION 6.13 Consents of Accountants.....................................55
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SECTION 6.14 Rights Agreements...........................................56
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SECTION 6.15 Transfer Statutes...........................................56
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SECTION 6.16 Section 16(b)...............................................56
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SECTION 6.17 Payment of Dividends........................................56
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SECTION 6.18 Employment Agreements.......................................57
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SECTION 6.19 Share Repurchase............................................57
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SECTION 6.20 Parent Taxable Year.........................................57
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ARTICLE VII
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CONDITIONS PRECEDENT.........................................................57
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SECTION 7.1 Conditions to Each Party's Obligation to Effect The Merger..57
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SECTION 7.2 Conditions to Obligations of Westvaco.......................58
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SECTION 7.3 Conditions to Obligations of Xxxx...........................59
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ARTICLE VIII
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TERMINATION, AMENDMENT AND WAIVER............................................59
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SECTION 8.1 Termination.................................................59
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SECTION 8.2 Effect of Termination.......................................61
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SECTION 8.3 Amendment...................................................63
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SECTION 8.4 Extension; Waiver...........................................63
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ARTICLE IX
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GENERAL PROVISIONS...........................................................64
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SECTION 9.1 Nonsurvival of Representations and Warranties...............64
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SECTION 9.2 Notices.....................................................64
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SECTION 9.3 Definitions.................................................65
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SECTION 9.4 Interpretation..............................................66
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SECTION 9.5 Counterparts................................................66
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SECTION 9.6 Entire Agreement; No Third-Party Beneficiaries..............66
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SECTION 9.7 Governing Law...............................................66
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SECTION 9.8 Assignment..................................................66
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SECTION 9.9 Consent to Jurisdiction.....................................67
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SECTION 9.10 Headings, etc..............................................67
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SECTION 9.11 Severability...............................................67
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EXHIBITS
EXHIBIT A --Form of Certificate of Incorporation and By-laws of Parent
EXHIBIT B --Certain Officers
EXHIBIT C --Form of Rights Agreement
EXHIBIT D --Form of Affiliate Rule 145 Letter
EXHIBIT E --Form of Employment Agreement for Xxxxxx X. Xxxxx
EXHIBIT F --Form of Employment Agreement for Xxxx X. Xxxx, Xx.
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of August 28, 2001, by and
among MW HOLDING CORPORATION, a Delaware corporation ("PARENT"), XXXXXXX MERGER
SUB CORPORATION, an Ohio corporation ("XXXXXXX MERGER SUB"), XXXXXXX MERGER SUB
CORPORATION, a Delaware corporation ("XXXXXXX MERGER SUB"), THE XXXX
CORPORATION, an Ohio corporation ("XXXX"), and WESTVACO CORPORATION, a Delaware
corporation ("WESTVACO").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Xxxx and Westvaco deem
it advisable and in the best interests of their respective corporations and
stockholders that Xxxx and Westvaco engage in a business combination in a merger
of equals in order to advance the long-term strategic business interests of Xxxx
and Westvaco; and
WHEREAS, Parent is a newly formed corporation all of the outstanding
capital stock of which is owned by Xxxx; and
WHEREAS, Xxxx has caused Parent to form Xxxxxxx Merger Sub and Xxxxxxx
Merger Sub, and all of the outstanding capital stock of each of Xxxxxxx Merger
Sub and Xxxxxxx Merger Sub is owned by Parent; and
WHEREAS, the respective Boards of Directors of Xxxx and Xxxxxxx Merger
Sub have approved this Agreement and the merger of Xxxxxxx Merger Sub with and
into Xxxx with Xxxx continuing as the surviving corporation (the "XXXX MERGER"),
upon the terms and subject to the conditions set forth in this Agreement; and
WHEREAS, the respective Boards of Directors of Westvaco and Xxxxxxx
Merger Sub have approved this Agreement and the merger of Xxxxxxx Merger Sub
with and into Westvaco with Westvaco continuing as the surviving corporation
(the "WESTVACO MERGER" and, together with the Xxxx Merger, the "MERGERS"), upon
the terms and subject to the conditions set forth in this Agreement; and
WHEREAS, the respective Boards of Directors of Xxxx and Westvaco,
having determined that the Xxxx Merger, the Westvaco Merger and the other
transactions contemplated hereby are advisable and in the best interests of
their respective corporations and stockholders, have approved the transactions
contemplated by this Agreement; and
WHEREAS, for United States federal income tax purposes, it is intended
that the Xxxx Merger and the Westvaco Merger will each qualify as a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "CODE"), and that the Mergers, taken together, will
qualify as a transaction described in Section 351 of the Code.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements set forth herein, the parties agree as follows:
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ARTICLE I
THE MERGERS
SECTION 1.1. The Xxxx Merger.
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(a) Upon the terms and subject to the conditions set forth in
this Agreement and in accordance with the Ohio General Corporation Law (the
"OGCL"), Xxxxxxx Merger Sub shall be merged with and into Xxxx at the Effective
Time (as defined in Section 1.4). Following the Effective Time, the separate
corporate existence of Xxxxxxx Merger Sub shall cease, and Xxxx shall continue
as the surviving corporation (the "XXXX SURVIVING CORPORATION") in the Xxxx
Merger and shall succeed to and assume all the rights, privileges, immunities,
properties, powers and franchises of Xxxxxxx Merger Sub in accordance with the
OGCL.
(b) In connection with the Xxxx Merger, Xxxx shall take such
actions as may be necessary to cause Parent to reserve, prior to the Xxxx
Merger, a sufficient number of shares of common stock, par value $0.01 per
share, of Parent ("PARENT COMMON STOCK") to permit the issuance of shares of
Parent Common Stock to the holders of common stock, without par value, of Xxxx
(the "XXXX COMMON STOCK") as of the Effective Time in accordance with the terms
of this Agreement.
SECTION 1.2. The Westvaco Merger.
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(a) Upon the terms and subject to the conditions set forth in this
Agreement and in accordance with the Delaware General Corporation Law (the
"DGCL"), Xxxxxxx Merger Sub shall be merged with and into Westvaco at the
Effective Time. Following the Effective Time, the separate corporate existence
of Xxxxxxx Merger Sub shall cease, and Westvaco shall continue as the surviving
corporation (the "WESTVACO SURVIVING CORPORATION") in the Westvaco Merger and
shall succeed to and assume all the rights, privileges, immunities, properties,
powers and franchises of Xxxxxxx Merger Sub in accordance with the DGCL.
(b) In connection with the Westvaco Merger, Xxxx shall take such
actions as may be necessary to cause Parent to reserve, prior to the Westvaco
Merger, a sufficient number of shares of Parent Common Stock to permit the
issuance of shares of Parent Common Stock to the holders of common stock, par
value $5.00 per share, of Westvaco (the "WESTVACO COMMON STOCK") as of the
Effective Time in accordance with the terms of this Agreement.
SECTION 1.3. Closing.
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The closing of the Mergers (the "CLOSING") shall take place at 10:00
a.m., New York time, on a date to be specified by the parties, which shall be no
later than the second business day after satisfaction or waiver of all of the
conditions set forth in Article VII (other than those conditions that by their
nature are to be fulfilled at the Closing, but subject to the fulfillment or
waiver of such conditions), at the offices of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP, Four Times Square, New York, New York, unless another time, date or
place is agreed to in writing by the parties hereto (the date of the Closing,
the "CLOSING DATE").
SECTION 1.4. Effective Time.
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Subject to the provisions of this Agreement, as soon as practicable on
the Closing Date, (a) Xxxx and Xxxxxxx Merger Sub shall file with the Secretary
of State of the State of Ohio a Certificate of Merger (the "XXXX CERTIFICATE OF
MERGER") with respect to the Xxxx Merger, duly executed and completed in
accordance with the relevant provisions of the OGCL, and shall make all other
filings or recordings required under the OGCL and (b) Westvaco shall file with
the Secretary of State of the State of Delaware a Certificate of Merger (the
"WESTVACO CERTIFICATE OF MERGER") with respect to the Westvaco Merger, duly
executed and completed in accordance with the relevant provisions of the DGCL,
and shall make all other filings or recordings required under the DGCL. The
Mergers shall become effective at such time as both the Xxxx Certificate of
Merger and the Westvaco Certificate of Merger have been duly filed with the
Secretaries of State of the States of Ohio and Delaware, respectively, or at
such subsequent date or time as Xxxx and Westvaco shall agree and specify in
each such Certificate of Merger (the time the Mergers become effective being
hereinafter referred to as the "EFFECTIVE TIME").
SECTION 1.5. Effects of the Mergers.
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(a) The Xxxx Merger shall have the effects set forth in Section
1701.82 of the OGCL.
(b) The Westvaco Merger shall have the effects set forth in Secion
259 of the DGCL.
ARTICLE II
CERTAIN GOVERNANCE MATTERS
SECTION 2.1 Parent Name Change.
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At the Effective Time, Parent shall cause its name to be changed to
"MEADWESTVACO CORPORATION." Parent shall cause its Certificate of Incorporation
and By-laws to be amended as of the Effective Time to read as set forth on
Exhibit A hereto.
SECTION 2.2. Parent Board of Directors; Committees; CEO.
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(a) Prior to the Effective Time, the Board of Directors of Parent
shall take all action necessary to cause the Board of Directors of Parent to
consist, as of the Effective Time, of an even number of directors, (i) 50% of
whom shall be persons designated by Xxxx who were directors of Xxxx immediately
prior to the Effective Time and (ii) 50% of whom shall be persons designated by
Westvaco who were directors of Westvaco immediately prior to the Effective Time.
No more than one person who is an officer of Xxxx shall be designated by Xxxx,
and no more than one person who is an officer of Westvaco shall be designated by
Westvaco, in each case pursuant to the immediately preceding sentence. If any
such person is not able to serve as a director, the party hereto on whose Board
of Directors such person presently sits shall designate a replacement. Xxxx and
Westvaco shall mutually agree upon which directors shall be members of which
class, with the intent that each class shall, to the extent reasonably
practicable, have an equal number of directors designated by each party.
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(b) To the extent mutually agreed upon prior to the Effective Time,
the Board of Directors of Parent shall take all action necessary to cause to
exist as of the Effective Time such committees of the Board of Directors of
Parent, with such members and chairpersons as shall have been mutually agreed
upon by Xxxx and Westvaco. It is the intention of the parties that the members
of the committees and the chairpersons thereof should approximate equal
representation between Xxxx and Westvaco directors. Each of Xxxxxx X. Xxxxx and
Xxxx X. Xxxx, Xx. will be members of the class with the longest term.
(c) Prior to the Effective Time, the Board of Directors of Parent
shall take all action necessary (i) to cause Xxxxxx X. Xxxxx to be designated as
Chairman of Parent as of the Effective Time, (ii) to cause Xxxx X. Xxxx, Xx. to
be appointed as Chief Executive Officer and President of Parent as of the
Effective Time and (iii) to cause the individuals identified on Exhibit B and
such other persons as are mutually agreed to by Xxxx and Westvaco to be officers
of Parent as of the Effective Time. The roles of the Chairman of Parent and the
Chief Executive Officer of Parent shall be as set forth in the Bylaws of Parent
and in their respective employment agreements with Parent.
SECTION 2.3. Corporate Headquarters.
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(a) After the Effective Time, Parent shall maintain (x) its principal
executive offices at the corporate headquarters of Westvaco in Stamford,
Connecticut and (y) the headquarters of the paper division and the consumer and
office products division at the place of the existing corporate headquarters of
Xxxx. It is also the intention of the parties that the place of the existing
corporate headquarters of Xxxx shall, over time, become the principal location
for staff functions of Parent.
(b) Xxxx and Westvaco acknowledge the long-standing, mutually
beneficial relationship between Xxxx and the Dayton, Ohio community. In
recognition of this, Xxxx and Westvaco hereby confirm their mutual intention to
have Parent maintain this relationship following the Effective Time, including
by continuing, following the Effective Time, to provide funding to The Xxxx
Corporation Foundation and to otherwise maintain Xxxx'x charitable and communal
endeavors in the Dayton, Ohio community. Xxxx and Westvaco also confirm their
mutual intention, following the Effective Time, to have Parent explore
opportunities to minimize the effects, if any, on the headquarters community
served by Xxxx that the provisions of Section 2.3(a) may have.
SECTION 2.4. Integration.
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Prior to the Effective Time, Xxxx and Westvaco shall appoint an
integration team (the "INTEGRATION TEAM"), half the members of which shall be
persons designated by Xxxx and half the members of which shall be persons
designated by Westvaco. The Integration Team shall have one chairperson. The
Integration Team shall report to the persons to be appointed pursuant to Section
2.2(c)(i) and (ii).
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SECTION 2.5. Charters and By-laws of the Surviving Corporations.
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(a) At the Effective Time, the Articles of Incorporation and
regulations of Xxxx, as in effect immediately prior to the Effective Time, shall
be the Articles of Incorporation and regulations of the Xxxx Surviving
Corporation, in each case until thereafter amended in accordance with applicable
law.
(b) At the Effective Time, the Certificate of Incorporation and the
by-laws of Westvaco, as in effect immediately prior to the Effective Time, shall
be the Certificate of Incorporation and by-laws of the Westvaco Surviving
Corporation, in each case until thereafter amended in accordance with applicable
law.
SECTION 2.6. Directors of Surviving Corporations.
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(a) The directors of Xxxxxxx Merger Sub and officers of Xxxx at the
Effective Time shall, from and after the Effective Time, be the directors and
officers of the Xxxx Surviving Corporation until their successors shall have
been duly elected or qualified or until their earlier death, resignation or
removal in accordance with the Xxxx Surviving Corporation's Articles of
Incorporation and regulations.
(b) The directors of Xxxxxxx Merger Sub and officers of Westvaco at
the Effective Time shall, from and after the Effective Time, be the directors
and officers of the Westvaco Surviving Corporation until their successors shall
have been duly elected or qualified or until their earlier death, resignation or
removal in accordance with the Westvaco Surviving Corporation's Certificate of
Incorporation and by-laws.
(c) Xxxx shall cause such persons as shall be mutually agreed upon
with Westvaco to be appointed directors of Xxxxxxx Merger Sub and Xxxxxxx Merger
Sub, respectively, as of immediately prior to the Effective Time.
SECTION 2.7. Stockholder Rights Plan.
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Parent shall adopt prior to the Effective Time a stockholder rights
plan, in substantially the form set forth in Exhibit C, so that each share of
Parent Common Stock issued in the Mergers will have one right issued pursuant to
such plan attached to it. The initial purchase price for each such right shall
be jointly agreed to by Xxxx and Westvaco prior to filing the Form S-4 (as
defined herein).
SECTION 2.8. Trading Symbol.
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The ticker symbol for Parent Common Stock following the Mergers shall
be as mutually agreed upon by Xxxx and Westvaco prior to the Effective Time.
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ARTICLE III
EFFECTS OF THE MERGERS ON THE CAPITAL STOCK OF
XXXX AND WESTVACO; EXCHANGE OF CERTIFICATES
SECTION 3.1. Effect on Capital Stock of Xxxx and Xxxxxxx Merger Sub.
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As of the Effective Time, by virtue of the Xxxx Merger and without any
action on the part of Xxxx, Xxxxxxx Merger Sub, Parent or the holders of any
shares of Xxxx Common Stock (or options thereon) or any shares of common stock
of Xxxxxxx Merger Sub:
(a) Conversion of Xxxx Common Stock. Each issued and outstanding share
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of Xxxx Common Stock (other than any shares of Xxxx Common Stock to be canceled
pursuant to Section 3.1(c) and other than the Dissenting Shares (as defined
below)) shall be converted into the right to receive (i) the amount of $1.20 in
cash (the "CASH CONSIDERATION") and (ii) one fully paid and nonassessable share
of Parent Common Stock. Notwithstanding anything in this Agreement to the
contrary, it shall be the obligation of Xxxx to pay the Cash Consideration to
each holder of Xxxx Common Stock as of the Effective Time. As of the Effective
Time, all such shares of Xxxx Common Stock shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist. As of the
Effective Time, each holder of a certificate representing any shares of Xxxx
Common Stock shall cease to have any rights with respect thereto, except the
right to receive, upon the surrender of any such certificates, (i) the Cash
Consideration for each share of Xxxx Common Stock so represented and (ii)
certificates representing the shares of Parent Common Stock to be issued or paid
in consideration therefor upon surrender of such certificate in accordance with
Section 3.3 without interest. The Cash Consideration and shares of Parent Common
Stock to be received as consideration pursuant to the Xxxx Merger with respect
to shares of Xxxx Common Stock is referred to herein as the "XXXX MERGER
CONSIDERATION."
(b) Conversion of Common Stock of Xxxxxxx Merger Sub. Each issued and
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outstanding share of common stock, without par value, of Xxxxxxx Merger Sub
shall be converted into one fully paid and nonassessable share of common stock,
without par value, of the Xxxx Surviving Corporation.
(c) Cancellation of Treasury Shares. Each share of Xxxx Common Stock
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or Parent Common Stock held in the treasury of, or owned by, Xxxx or Parent
immediately prior to the Effective Time shall automatically be canceled and
retired and shall cease to exist, and no consideration shall be delivered in
exchange thereof.
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(d) Assumption and Conversion of Xxxx Options.
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(i) As of the Effective Time, each option to purchase Xxxx Common
Stock issued under each Xxxx Stock Plan (as defined in Section 4.1(c))
(collectively, the "XXXX OPTIONS") that is outstanding immediately prior to the
Effective Time and each Limited Right issued under each Xxxx Stock Plan
(collectively, the "XXXX LIMITED RIGHTS") that is outstanding immediately prior
to the Effective Time shall be converted into an option (a "PARENT OPTION") or a
Limited Right (a "PARENT LIMITED RIGHT"), as applicable, with respect to the
greatest number of whole shares of Parent Common Stock that does not exceed the
number of shares of Xxxx Common Stock with respect to the Xxxx Option or Xxxx
Limited Right, as applicable, immediately prior to the Effective Time multiplied
by the "XXXX EXCHANGE RATIO". The Xxxx Exchange Ratio shall be the sum of (x)
plus (y), where (x) is one and (y) is the number equal to the quotient of $1.20
divided by the Parent Closing Share Value. "PARENT CLOSING SHARE VALUE" shall
mean the average of the high and low trading prices of a whole share of Parent
Common Stock on the New York Stock Exchange on the Closing Date, or, if there
shall be no such trading of Parent Common Stock on the Closing Date, on the
first trading date thereafter. The exercise price per share of Parent Common
Stock under the Parent Option or Parent Limited Right, as applicable, shall be
the exercise price per share of Xxxx Common Stock with respect to the
corresponding Xxxx Option or Xxxx Limited Right, as applicable, immediately
prior to the Effective Time divided by the Xxxx Exchange Ratio (and rounded up
to the nearest xxxxx). The parties hereto acknowledge that (i) each unvested
Xxxx Option issued under each Xxxx Stock Plan that is outstanding both on the
date hereof and immediately prior to shareholder approval of the Xxxx Merger and
each Xxxx Option which is hereafter issued upon the exercise of a currently
outstanding Xxxx Option that includes an automatic reload feature and is
outstanding immediately prior to shareholder approval shall become fully vested
and exercisable immediately prior to the approval date in accordance with its
terms, and (ii) each Xxxx Limited Right that is outstanding upon the date of
shareholder approval of this Agreement shall become fully vested and exercisable
on that date subject to any applicable limitation in its terms. Notwithstanding
the foregoing provisions of this Section 3.1(d)(i), (i) an opportunity to
purchase Xxxx Common Stock under the Xxxx Employees Stock Purchase Plan shall
not be considered a Xxxx Option, and (ii) the conversion and assumption provided
in this Section 3.1(d) with respect to any Xxxx Option which qualifies as an
"incentive stock option" (as defined in section 422 of the Code) shall be
effected in a manner consistent with the requirements of section 424(a) of the
Code.
(ii) As of the Effective Time, Parent shall assume in full each
Xxxx Option and Xxxx Limited Right and all of the other rights and obligations
of Xxxx under the Xxxx Stock Plans as provided herein. The assumption of a Xxxx
Option or Xxxx Limited Right by Parent shall not terminate or modify (except as
required hereunder) any of the terms thereof. After such assumption, Parent
shall issue, upon any partial or total exercise of any Xxxx Option, in lieu of
shares of Xxxx Common Stock, the number of shares of Parent Common Stock to
which the holder of the Xxxx Option is entitled pursuant to this Agreement. The
assumption by Parent of Xxxx Options and Xxxx Limited Rights shall not give
holders of Xxxx Options and Xxxx Limited Rights any additional benefits that
they did not have immediately prior to the Effective Time. Parent shall file
with the Securities and Exchange Commission (the "SEC"), within a reasonable
period of time following the Effective Time, a registration statement on Form
S-8 under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
covering, to the extent applicable, the shares of Parent Common Stock to be
issued upon the exercise of Xxxx Options
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assumed by Parent pursuant hereto. Prior to the Effective Time, Xxxx shall make
such amendments, if any, to the Xxxx Stock Plans, and any option or rights award
agreements (subject to the consent of agreement holders, if necessary), as shall
be necessary to permit such assumption in accordance with this Section 3.1(d)
and to provide that holders of such options, following the Effective Time, will
not have any rights to acquire Xxxx Common Stock.
SECTION 3.2. Effect on Capital Stock of Westvaco and Xxxxxxx Merger Sub.
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As of the Effective Time, by virtue of the Westvaco Merger and without
any action on the part of Westvaco, Xxxxxxx Merger Sub, Parent or the holders of
any shares of Westvaco Common Stock (or options thereon) or any shares of common
stock of Xxxxxxx Merger Sub:
(a) Conversion of Westvaco Common Stock. Each issued and outstanding
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share of Westvaco Common Stock (other than any shares of Westvaco Common Stock
to be canceled pursuant to Section 3.2(c)) shall be converted into the right to
receive .97 (the "WESTVACO EXCHANGE RATIO") fully paid and nonassessable shares
of Parent Common Stock. As of the Effective Time, all such shares of Westvaco
Common Stock shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist. As of the Effective Time, each holder of a
certificate representing any shares of Westvaco Common Stock shall cease to have
any rights with respect thereto, except the right to receive, upon the surrender
of any such certificates, certificates representing the shares of Parent Common
Stock to be issued or paid in consideration therefor upon surrender of such
certificate in accordance with Section 3.3 without interest. The shares of
Parent Common Stock to be received as consideration pursuant to the Westvaco
Merger with respect to shares of Westvaco Common Stock (together with cash in
lieu of fractional shares of Parent Common Stock as specified below) is referred
to herein as the "WESTVACO MERGER CONSIDERATION."
(b) Conversion of Common Stock of Xxxxxxx Merger Sub. Each issued and
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outstanding share of common stock, par value $0.01 per share, of Xxxxxxx Merger
Sub shall be converted into one fully paid and nonassessable share of common
stock, par value $0.01 per share, of the Westvaco Surviving Corporation.
(c) Cancellation of Treasury Shares. Each share of Westvaco Common
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Stock held in the treasury of Westvaco immediately prior to the Effective Time
shall automatically be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange thereof.
(d) Assumption and Conversion of Westvaco Options.
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(i) As of the Effective Time, each option to purchase Westvaco
Common Stock issued under each Westvaco Stock Plan (as defined in Section
4.2(c)) (collectively, the "WESTVACO OPTIONS") that is outstanding immediately
prior to the Effective Time, each stock appreciation right issued under each
Westvaco Stock Plan (collectively, the "WESTVACO SARS") that is outstanding
immediately prior to the Effective Time and each limited stock appreciation
right issued under each Westvaco Stock Plan that is outstanding immediately
prior to the Effective Time shall be converted into an option (a "PARENT
OPTION"), a stock
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appreciation right (a "PARENT SAR"), or a limited stock appreciation right (a
"PARENT LSAR"), as applicable, with respect to the greatest number of whole
shares of Parent Common Stock that does not exceed the number of shares of
Westvaco Common Stock with respect to the Westvaco Option, the Westvaco SAR or
the Westvaco LSAR, as applicable, immediately prior to the Effective Time
multiplied by the Westvaco Exchange Ratio. The exercise price per share of
Parent Common Stock under the Parent Option, Parent SAR or Parent LSAR, as
applicable, shall be the exercise price per share of Westvaco Common Stock under
the corresponding Westvaco Option, Westvaco SAR or Westvaco LSAR, as applicable,
immediately prior to the Effective Time divided by the Westvaco Exchange Ratio
(and rounded up to the nearest xxxxx). The parties hereto acknowledge that each
Westvaco Option, each Westvaco SAR and each Westvaco LSAR that is outstanding
both on the date hereof and immediately prior to the Effective Time shall become
fully vested and exercisable at the Effective Time in accordance with its terms.
Notwithstanding the foregoing provisions of this Section 3.2(d)(i), the
conversion and assumption provided in this Section 3.2(d) with respect to any
Westvaco Option which qualifies as an "incentive stock option" (as defined in
section 422 of the Code) shall be effected in a manner consistent with the
requirements of section 424(a) of the Code.
(ii) As of the Effective Time, Parent shall assume in full each
Westvaco Option, Westvaco SAR and Westvaco LSAR and all of the other rights and
obligations of Westvaco under the Westvaco Stock Plans as provided herein. The
assumption of a Westvaco Option, Westvaco SAR or Westvaco LSAR by Parent shall
not terminate or modify (except as required hereunder) any of the terms thereof.
After such assumption, Parent shall issue, upon any partial or total exercise of
any Westvaco Option, in lieu of shares of Westvaco Common Stock, the number of
shares of Parent Common Stock to which the holder of the Westvaco Option is
entitled pursuant to this Agreement. The assumption by Parent of Westvaco
Options, Westvaco SARs and Westvaco LSARs shall not give holders of Westvaco
Options, Westvaco SARs and Westvaco LSARs any additional benefits that they did
not have immediately prior to the Effective Time. Parent shall file with the
SEC, within a reasonable period of time following the Effective Time, a
registration statement on Form S-8 under the Securities Act, covering, to the
extent applicable, the shares of Parent Common Stock to be issued upon the
exercise of Westvaco Options assumed by Parent pursuant hereto. Prior to the
Effective Time, Westvaco shall make such amendments, if any, to the Westvaco
Stock Plans, and any option or rights award agreement (subject to the consent of
agreement holders, if necessary), as shall be necessary to permit such
assumption in accordance with this Section 3.2(d) and to provide that holders of
such options, SARs and LSARs, following the Effective Time, will not have any
rights to acquire Westvaco Common Stock.
9
SECTION 3.3. Exchange of Shares and Certificates.
--------------------------------------------------
(a) Exchange Agent. As of the Effective Time, Xxxx and Westvaco shall
--------------
mutually designate a bank, trust company or nationally recognized shareholder
services provider (the "EXCHANGE AGENT") for the purpose of exchanging, in
accordance with this Article III, Certificates (as defined in Section 3.3(b))
for the Xxxx Merger Consideration and the Westvaco Merger Consideration. Parent
(and, in the case of the Cash Consideration, Xxxx) shall make available to the
Exchange Agent, as needed, the Xxxx Merger Consideration and the Westvaco Merger
Consideration to be delivered in respect of the shares of Xxxx Common Stock and
Westvaco Common Stock.
(b) Exchange Procedures. As soon as reasonably practicable after the
-------------------
Effective Time, the Exchange Agent shall mail to each holder of record of a
certificate or certificates that immediately prior to the Effective Time
represented outstanding shares of Xxxx Common Stock or Westvaco Common Stock
(the "CERTIFICATES") whose shares were converted into the right to the Xxxx
Merger Consideration or the Westvaco Merger Consideration, as the case may be,
the (i) a letter of transmittal (which shall specify that delivery will be
effected, and risk of loss and title to the Certificates will pass, only upon
delivery of the Certificates to the Exchange Agent and which shall be in such
form and have such other provisions as Parent may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the Xxxx Merger Consideration or the Westvaco Merger Consideration, as the
case may be. Upon surrender of a Certificate for cancellation to the Exchange
Agent or to such other agent or agents as may be appointed by Parent, together
with such letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor a certificate representing
that number of whole shares of Parent Common Stock that such holder has the
right to receive pursuant to the provisions of this Article III and, in the case
of holders of Certificates that immediately prior to the Effective Time
represented outstanding shares of Xxxx Common Stock, the Cash Consideration in
respect of each such share of Xxxx Common Stock so represented, and the
Certificate so surrendered shall forthwith be canceled. If any portion of the
Xxxx Merger Consideration or the Westvaco Merger Consideration is to be
registered in the name of a person other than the person in whose name the
applicable surrendered Certificate is registered, it shall be a condition to the
registration of such Xxxx Merger Consideration or Westvaco Merger Consideration,
as the case may be, that the surrendered Certificate shall be properly endorsed
or otherwise be in proper form for transfer and the person requesting such
delivery of the Xxxx Merger Consideration or the Westvaco Merger Consideration
shall pay to the Exchange Agent any transfer or other taxes required by reason
of such registration in the name of a person other than the registered holder of
such Certificate or establish to the reasonable satisfaction of the Exchange
Agent that such tax has been paid or is not applicable. Until surrendered as
contemplated by this Section 3.3, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the Xxxx Merger Consideration or the Westvaco Merger Consideration, as
the case may be. No interest shall be paid or shall accrue on any cash payable
in lieu of any fractional shares of Parent Common Stock.
(c) Distributions with respect to Unexchanged Shares. No dividends or
------------------------------------------------
other distributions with respect to Parent Common Stock with a record date after
the Effective Time
10
shall be paid to the holder of any unsurrendered Certificate with respect to the
shares of Parent Common Stock represented thereby, and no cash payment in lieu
of fractional shares shall be paid to any such holder pursuant to Section 3.3(e)
until the surrender of such Certificate in accordance with this Article III.
Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the certificate representing
whole shares of Parent Common Stock issued in exchange therefor, without
interest, (i) at the time of such surrender, the amount of any cash payable in
lieu of a fractional share of Parent Common Stock to which such holder is
entitled pursuant to Section 3.3(e) and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole shares of Parent Common Stock and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to such surrender and a payment date
subsequent to such surrender payable with respect to such whole shares of
Parent Common Stock.
(d) No Further Ownership Rights in Xxxx Common Stock or Westvaco
------------------------------------------------------------
Common Stock. All shares of Parent Common Stock issued upon the surrender for
------------
exchange of Certificates in accordance with the terms of this Article III
(including any cash paid pursuant to Section 3.3(c) or 3.3(e)) shall be deemed
to have been issued (and paid) in full satisfaction of all rights pertaining to
the shares of Xxxx Common Stock or Westvaco Common Stock theretofore represented
by such Certificates, subject, however, to the obligation of the Xxxx Surviving
Corporation or the Westvaco Surviving Corporation, as the case may be and as
applicable, to pay any dividends or make any other distributions with a record
date prior to the Effective Time that may have been declared or made by Xxxx and
Westvaco on such shares of Xxxx Common Stock and Westvaco Common Stock,
respectively, in accordance with the terms of this Agreement and that remain
unpaid at the Effective Time, and there shall be no further registration of
transfers on the stock transfer books of the Xxxx Surviving Corporation or the
Westvaco Surviving Corporation of the shares of Xxxx Common Stock and Westvaco
Common Stock that were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates are presented to the Xxxx Surviving
Corporation, the Westvaco Surviving Corporation or the Exchange Agent for any
reason, they shall be canceled and exchanged as provided in this Article III,
except as otherwise provided by law.
(e) Fractional Shares.
-----------------
(i) No certificates representing fractional shares of Parent
Common Stock shall be issued upon the surrender for exchange of Certificates,
and such fractional share interests shall not entitle the owner thereof to vote
or to any other rights of a stockholder of Parent.
(ii) Notwithstanding any other provision of this Agreement, each
holder of shares of Westvaco Common Stock converted pursuant to the Westvaco
Merger who would otherwise have been entitled to receive a fraction of a share
of Parent Common Stock (after taking into account all Certificates delivered by
such holder) shall receive, in lieu thereof, cash (without interest) in an
amount equal to such fraction as determined below. As promptly as practicable
following the Effective Time, the Exchange Agent shall determine the excess of
(i) the number of full shares of Parent Common Stock delivered to the Exchange
Agent by Parent for issuance to holders of Certificates of Westvaco Common Stock
over (ii) the aggregate number of
11
full shares of Parent Common Stock to be distributed to holders of Certificates
of Westvaco Common Stock (such excess being herein referred to as the "EXCESS
WESTVACO SHARES"). As soon as practicable after the Effective Time, the Exchange
Agent, as agent for such holders of Certificates of Westvaco Common Stock, shall
sell the Excess Westvaco Shares at then prevailing prices on the NYSE, all in
the manner provided herein.
(iii) The sale of the Excess Westvaco Shares by the Exchange
Agent shall be executed on the NYSE through one or more member firms of the NYSE
and shall be executed in round lots to the extent practicable. Until the net
proceeds of any such sale or sales have been distributed to the holders of
Certificates of Westvaco Common Stock, the Exchange Agent will hold such
proceeds in trust for such holders. Westvaco shall pay all commissions, transfer
taxes and other out-of-pocket transaction costs of the Exchange Agent incurred
in connection with such sale or sales of Excess Westvaco Shares and the Exchange
Agent's compensation and expenses in connection with such sale or sales. The
Exchange Agent shall determine the portion of such net proceeds to which each
holder of Certificates of Westvaco Common Stock shall be entitled, if any, by
multiplying the amount of the aggregate net proceeds by a fraction, the
numerator of which is the amount of the fractional share interest to which such
holder of Certificates of Westvaco Common Stock is entitled (after taking into
account all Certificates then held by such holder) and the denominator of which
is the aggregate amount of fractional share interests to which all holders of
Certificates of Westvaco Common Stock are entitled. As soon as practicable after
the determination of the amount of cash, if any, to be paid to holders of
Certificates with respect to any fractional share interests, the Exchange Agent
shall promptly pay such amounts to such holders of Certificates of Westvaco
Common Stock subject to and in accordance with this Section 3.3(e).
(f) Return of Merger Consideration. Any portion of the Xxxx Merger
------------------------------
Consideration or the Westvaco Merger Consideration made available to the
Exchange Agent pursuant to Section 3.3(a) that remains undistributed to the
holders of the Certificates for one year after the Effective Time shall be
delivered to Parent (other than the Cash Consideration which shall be delivered
to Xxxx), upon demand, and any holders of the Certificates who have not
theretofore complied with this Article III shall thereafter be entitled to look
only to Parent or Xxxx, as the case may be, for payment of their claim for any
cash, any shares of Parent Common Stock, any cash in lieu of fractional shares
of Parent Common Stock and any dividends or distributions with respect to Parent
Common Stock.
(g) No Liability. None of Parent, Xxxx, Xxxxxxx Merger Sub, Westvaco,
------------
Xxxxxxx Merger Sub or the Exchange Agent shall be liable to any person in
respect of any shares of Parent Common Stock (or dividends or distributions with
respect thereto) or cash from the Xxxx Merger Consideration or Westvaco Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificate will not have
been surrendered prior to seven years after the Effective Time, or immediately
prior to such earlier date on which any cash, any shares of Parent Common Stock,
any cash in lieu of fractional shares of Parent Common Stock or any dividends or
distributions with respect to Parent Common Stock in respect of such Certificate
would otherwise escheat to or become the property of any Governmental Entity (as
defined in Section 4.1(b)), any such shares, cash, dividends or distributions in
respect of such Certificate shall, to the extent permitted by applicable law,
become the property of the Xxxx Surviving Corporation or the Westvaco
12
Surviving Corporation, as the case may be, free and clear of all claims or
interest of any person previously entitled thereto.
(h) Investment of Merger Consideration. The Exchange Agent shall
----------------------------------
invest any cash included in the Xxxx Merger Consideration or the Westvaco Merger
Consideration made available to the Exchange Agent pursuant to Section 3.3(a),
as directed by Parent, on a daily basis. Any interest and other income resulting
from such investments shall be paid to Parent, except for interest and other
income from investment of the Cash Consideration which shall be paid to Xxxx.
(i) Dissenting Shares.
-----------------
(i) Notwithstanding any provision of this Agreement to the
contrary, any shares of Xxxx Common Stock that are outstanding immediately prior
to the Effective Time and that are held by persons who will have properly
delivered a written demand for payment of the fair cash value of such shares of
Xxxx Common Stock in accordance with Section 1701.85 of the OGCL (collectively,
the "DISSENTING SHARES") shall not be converted into or represent the right to
receive the Xxxx Merger Consideration as provided in Section 3.1(a). Such
persons shall be entitled only to such rights as are granted under Section
1701.85 of the OGCL, except that all Dissenting Shares held by persons who will
have failed to perfect or who will have effectively withdrawn or lost their
rights as dissenting shareholders in respect of such shares under Section
1701.85 of the OGCL shall thereupon be deemed to have been converted into, as of
the Effective Time, the Xxxx Merger Consideration upon surrender of the
Certificate therefor in the manner provided in Section 3.3(b).
(ii) Xxxx shall give Westvaco (i) prompt notice of any demands by
dissenting shareholders received by Xxxx, withdrawals of such demands and any
other instruments served pursuant to the OGCL and received by Xxxx in connection
with such demands and (ii) the opportunity to participate in all negotiations
and proceedings with respect to such demands occurring prior to the Effective
Time. Prior to the Effective Time, Xxxx shall not, except with the prior written
consent of Westvaco, make any payment with respect to any demands for appraisal
or offer to settle or settle any such demands.
SECTION 3.4. Certain Adjustments.
----------------------------------
If between the date hereof and the Effective Time, the outstanding
shares of Xxxx Common Stock, Westvaco Common Stock or Parent Common Stock will
be changed into a different number of shares by reason of any reclassification,
recapitalization, split-up, combination or exchange of shares, or any dividend
payable in stock or other securities will be declared thereon with a record date
within such period, the Westvaco Exchange Ratio and/or the Xxxx Merger
Consideration and related provisions shall be adjusted accordingly to provide to
the holders of Xxxx Common Stock and Westvaco Common Stock or Xxxx Options and
Westvaco Options the same economic effect as contemplated by this Agreement
prior to such reclassification, recapitalization, split-up, combination,
exchange or dividend.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
13
SECTION 4.1. Representations and Warranties of Xxxx.
-----------------------------------------------------
Except as disclosed in the disclosure schedule delivered by Xxxx to
Westvaco prior to the execution of this Agreement (the "XXXX DISCLOSURE
SCHEDULE") and making reference to the particular subsection of this Agreement
to which exception is being taken (subject to the second paragraph of the cover
page of the Xxxx Disclosure Schedules), Xxxx represents and warrants to Westvaco
as follows:
(a) Organization, Standing and Corporate Power. Each of Xxxx and its
------------------------------------------
subsidiaries (as defined in Section 9.3) is a corporation or other legal entity
duly organized, validly existing and in good standing (with respect to
jurisdictions which recognize such concept) under the laws of the jurisdiction
in which it is organized and has the requisite corporate or other power, as the
case may be, and authority to carry on its business as now being conducted,
except, as to subsidiaries, for those jurisdictions where the failure to be so
organized, existing or in good standing individually or in the aggregate would
not have a material adverse effect (as defined in Section 9.3) on Xxxx. Each of
Xxxx and its subsidiaries is duly qualified or licensed to do business and is in
good standing (with respect to jurisdictions which recognize such concept) in
each jurisdiction in which the nature of its business or the ownership, leasing
or operation of its properties makes such qualification or licensing necessary,
except for those jurisdictions where the failure to be so qualified or licensed
or to be in good standing individually or in the aggregate would not have a
material adverse effect on Xxxx. Xxxx has delivered to or made available to
Westvaco prior to the execution of this Agreement true and complete copies of
any amendments to the Articles of Incorporation of Xxxx (the "XXXX ARTICLES")
and the regulations of Xxxx not filed as of the date hereof with the Xxxx Filed
SEC Documents (as defined in Section 4.1(g)).
(b) Corporate Authority; Non-contravention.
--------------------------------------
(i) Each of Xxxx, Parent, Xxxxxxx Merger Sub and Xxxxxxx Merger
Sub has all requisite corporate power and authority to enter into this
Agreement, subject to the Xxxx Shareholder Approval (as defined in Section
4.1(m)), to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Xxxx, Parent, Xxxxxxx Merger Sub and Xxxxxxx
Merger Sub and the consummation by Xxxx, Parent, Xxxxxxx Merger Sub and Xxxxxxx
Merger Sub of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of Xxxx, Parent, Xxxxxxx Merger Sub
and Xxxxxxx Merger Sub, subject in the case of the Xxxx Merger to the Xxxx
Shareholder Approval. This Agreement has been duly executed and delivered by
Xxxx, Parent, Xxxxxxx Merger Sub and Xxxxxxx Merger Sub and, assuming the due
authorization, execution and delivery of this Agreement by Westvaco, constitutes
the legal, valid and binding obligation of Xxxx, Parent, Xxxxxxx Merger Sub and
Xxxxxxx Merger Sub, enforceable against Xxxx, Parent, Xxxxxxx Merger Sub and
Xxxxxxx Merger Sub in accordance with its terms.
(ii) The execution and delivery of this Agreement does not, and
the consummation of the transactions contemplated hereby and compliance with the
provisions of this Agreement shall not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of a benefit under, or result in the creation of any
pledge,
14
claim, lien, charge, encumbrance or security interest of any kind or
nature whatsoever (collectively, "LIENS") upon any of the properties or assets
of Xxxx or any of its subsidiaries or in any restriction on the conduct of
Xxxx'x business or operations under, (A) the Xxxx Articles or the regulations of
Xxxx or the comparable organizational documents of any of its subsidiaries, (B)
any loan or credit agreement, note, bond, mortgage, indenture, trust document,
lease or other agreement, instrument, permit, concession, franchise, license or
similar authorization applicable to Xxxx or any of its subsidiaries or their
respective properties or assets or (C) subject to the governmental filings and
other matters referred to in clause (iii) below, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Xxxx or any of its
subsidiaries or their respective properties or assets, other than, in the case
of clauses (B) and (C), any such conflicts, violations, defaults, rights,
losses, restrictions or Liens that individually or in the aggregate would not
(x) have a material adverse effect on Xxxx or (y) reasonably be expected to
impair the ability of any of Xxxx, Parent, Xxxxxxx Merger Sub or Xxxxxxx Merger
Sub to perform its respective obligations under this Agreement.
(iii) No consent, approval, order or authorization of, action by
or in respect of, or registration, declaration or filing with, any federal,
state, local, foreign or supranational government, any court, administrative,
regulatory or other governmental agency, commission or authority or any
non-governmental self-regulatory agency, commission or authority (a
"GOVERNMENTAL ENTITY") is required by or with respect to Xxxx or any of its
subsidiaries in connection with the execution and delivery of this Agreement by
Xxxx, Parent, Xxxxxxx Merger Sub and Xxxxxxx Merger Sub or the consummation by
Xxxx, Parent, Xxxxxxx Merger Sub and Xxxxxxx Merger Sub of the transactions
contemplated hereby, except for (A) compliance with any applicable requirements
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the
"HSR ACT"), with Council Regulation No. 4064/89 of the European Community, as
amended (the "EC MERGER REGULATION"), and with the antitrust, merger control,
competition, investment or similar laws of any other foreign jurisdiction
("FOREIGN LAWS", and together with the HSR Act and EC Merger Regulation, the
"ANTITRUST LAWS"); (B) the filing with the SEC of (x) a proxy statement relating
to the Xxxx Shareholders Meeting (as defined in Section 6.1(b)) (such proxy
statement, together with the proxy statement relating to the Westvaco
Stockholders Meeting (as defined in Section 6.1(c)), in each case as amended or
supplemented from time to time, the "JOINT PROXY STATEMENT"), (y) the
registration statement on Form S-4 to be filed with the SEC by Parent in
connection with the issuance of shares of Parent Common Stock in the Mergers
(the "FORM S-4"), and (z) such reports under Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), as may be
required in connection with this Agreement and the transactions contemplated
hereby; (C) the filing of the Xxxx and Westvaco Certificates of Merger with the
appropriate Secretaries of State and appropriate documents with the relevant
authorities of other states in which Xxxx and Westvaco are qualified to do
business; (D) such filing with and approvals of the New York Stock Exchange (the
"NYSE") to permit the shares of Parent Common Stock that are to be issued in the
Mergers to be listed on the NYSE; and (E) such other consents, approvals, orders
or authorizations the failure of which to be made or obtained individually or in
the aggregate would not (x) have a material adverse effect on Xxxx or (y)
reasonably be expected to impair the ability of any of Xxxx, Parent, Xxxxxxx
Merger Sub and Xxxxxxx Merger Sub to perform its obligations under this
Agreement.
(c) Capital Structure.
-----------------
15
(i) The authorized capital stock of Xxxx consists of 300,000,000
shares of Xxxx Common Stock, 61,500 shares of undesignated non-voting cumulative
preferred stock, par value $100.00 per share, 20,000,000 shares of undesignated
voting cumulative preferred stock, without par value, 20,000,000 shares of
cumulative preferred stock, without par value, and 295,540 shares of cumulative
second preferred stock, par value $50.00 per share (all of such preferred stock,
collectively, "XXXX PREFERRED STOCK"). At the close of business on August 24,
2001, (A) 99,172,162 shares of Xxxx Common Stock were issued and outstanding,
(B) no shares of Xxxx Common Stock were held by Xxxx in its treasury, (C) no
shares of Xxxx Preferred Stock were issued and outstanding, (D) there were
options, warrants, agreements or other arrangements outstanding to acquire no
more than 9,980,417 shares of Xxxx Common Stock pursuant to stock option, or
other stock-based compensation, benefits or savings plans, agreements or
arrangements in which current or former employees or directors of Xxxx or its
subsidiaries participate as of the date hereof, true and complete copies of
which, in each case as amended as of the date hereof, have been filed as
exhibits to the Xxxx Filed SEC Documents (as defined below) or delivered to
Westvaco (such plans, collectively, the "XXXX STOCK PLANS"), (E) 4,088,595
Limited Rights were outstanding under the Xxxx Stock Plans, with a weighted
average exercise price of $28.06; and (F) the number of shares of Xxxx Common
Stock with respect to unexercised options to which there exist automatic rights
to the grant of "reload options" within the meaning of the applicable Xxxx Stock
Plans was 1,042,938 and each share of Xxxx Common Stock has attached one common
share purchase right (collectively, the "XXXX RIGHTS") exercisable pursuant to
the Restated Rights Agreement, as amended and restated as of February 16, 2000,
by and between Xxxx and BankBoston, N.A., as rights agent (the "XXXX RIGHTS
AGREEMENT"). Section 4.1(c) of the Xxxx Disclosure Schedule sets forth a list
summarizing all Xxxx Options outstanding as of August 24, 2001 under all of the
Xxxx Stock Plans, including the term and the exercise price of each Xxxx Option
and whether such Xxxx Option has a Limited Right or right to automatic grants of
reload options associated with it.
(ii) The authorized capital stock of Parent, as of the date
hereof, consists of 100 shares of common stock, par value $0.01 per share, of
which 100 shares are issued and outstanding. The authorized capital stock of
Xxxxxxx Merger Sub consists of 100 shares of common stock, par value $0.01 per
share, of which 100 shares are issued and outstanding. The authorized capital
stock of Xxxxxxx Merger Sub consists of 100 shares of common stock, without par
value, of which 100 shares are issued and outstanding. Xxxx is the sole
stockholder of Parent and is the legal and beneficial owner of all 100 issued
and outstanding shares. Parent is the sole stockholder of Xxxxxxx Merger Sub and
Xxxxxxx Merger Sub and is the legal and beneficial owner of all 100 issued and
outstanding shares of each. Parent, Xxxxxxx Merger Sub and Xxxxxxx Merger Sub
were recently formed by Xxxx solely for the purpose of effecting the Mergers and
the other transactions contemplated by this Agreement. Except as contemplated by
this Agreement, none of Parent, Xxxxxxx Merger Sub or Xxxxxxx Merger Sub holds
or has held any material assets or incurred any material liabilities, or has
carried on any business activities other than in connection with the Mergers and
the other transactions contemplated by this Agreement.
(iii) All outstanding shares of capital stock of Xxxx, Parent,
Xxxxxxx Merger Sub and Xxxxxxx Merger Sub are, and all shares of capital stock
of Xxxx that may be issued as permitted by this Agreement or otherwise shall be,
when issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights. Except as set forth in this Section 4.1(c) and
except for changes since August 24, 2001 resulting from the issuance of
16
shares of Xxxx Common Stock pursuant to Xxxx Options or as expressly permitted
by Section 5.1(a)(ii) of this Agreement (including by being set forth in Section
5.1(a)(ii) of the Xxxx Disclosure Schedule), (A) there are not issued or
outstanding (x) any shares of capital stock or other voting securities of Xxxx,
(y) any securities of Xxxx or any Xxxx subsidiary convertible into or
exchangeable or exercisable for, or based upon the value of, shares of capital
stock or voting securities of Xxxx or (z) any warrants, calls, options or other
rights to acquire from Xxxx or any Xxxx subsidiary (including any subsidiary
trust), or obligations of Xxxx or any Xxxx subsidiary to issue, any capital
stock, voting securities or securities convertible into or exchangeable or
exercisable for, or based upon the value of, capital stock or voting securities
of Xxxx, and (B) there are no outstanding obligations of Xxxx or any Xxxx
subsidiary to repurchase, redeem or otherwise acquire any such securities or to
issue, deliver or sell, or cause to be issued, delivered or sold, any such
securities.
(d) Subsidiaries.
------------
(i) Exhibit 21 to Xxxx'x Annual Report on Form 10-K for the
fiscal year ended December 31, 2000, includes all the subsidiaries of Xxxx which
as of the date of this Agreement are Significant Subsidiaries (as defined in
Rule 1-02 of Regulation S-X of the SEC). Except as set forth on such Exhibit and
for director qualifying shares, all outstanding shares of capital stock of, or
other equity interests in, each such Significant Subsidiary have been validly
issued and are fully paid and nonassessable and are owned directly or indirectly
by Xxxx, free and clear of any Liens and free of any other restriction,
including any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other ownership interests.
(ii) There are no outstanding (A) securities of Xxxx or any Xxxx
subsidiary convertible into or exchangeable or exercisable for shares of capital
stock or other voting securities or ownership interests in any Xxxx subsidiary,
(B) warrants, calls, options or other rights to acquire from Xxxx or any Xxxx
subsidiary, or any obligation of Xxxx or any Xxxx subsidiary to issue, any
capital stock, voting securities or other ownership interests in, or any
securities convertible into or exchangeable or exercisable for any capital
stock, voting securities or ownership interests in, any Xxxx subsidiary or (C)
obligations of Xxxx or any Xxxx subsidiary to repurchase, redeem or otherwise
acquire any such outstanding securities of Xxxx subsidiaries or to issue,
deliver or sell, or cause to be issued, delivered or sold, any such securities.
(iii) Other than the Xxxx subsidiaries, Xxxx does not directly or
indirectly beneficially own any securities or other beneficial ownership
interests in any other entity except for non-controlling investments made in the
ordinary course of business in entities which are not individually or in the
aggregate material to Xxxx and its subsidiaries as a whole.
(e) SEC Documents; Undisclosed Liabilities.
--------------------------------------
(i) Xxxx and its subsidiaries have filed all required
registration statements, prospectuses, reports, schedules, forms, statements and
other documents (including exhibits and all other information incorporated
therein) with the SEC since January 1, 1999 (the "XXXX SEC DOCUMENTS"). As of
their respective dates, the Xxxx SEC Documents complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case
17
may be, and the rules and regulations of the SEC promulgated thereunder
applicable to the Xxxx SEC Documents, and none of the Xxxx SEC Documents when
filed and at their respective effective times, if applicable, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(ii) The financial statements of Xxxx included in the Xxxx SEC
Documents comply as to form, as of their respective dates of filing with the
SEC, in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles ("GAAP")
(except, in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of Xxxx and its consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments which are not material).
(iii) Except (A) as reflected in such financial statements or in
the notes thereto, (B) for liabilities incurred in connection with this
Agreement or the transactions contemplated hereby and (C) for liabilities
incurred since July 1, 2001 in the ordinary course of business consistent with
past practice, neither Xxxx nor any of its subsidiaries has any liabilities or
obligations of any nature that, individually or in the aggregate, are reasonably
likely to have a material adverse effect on Xxxx.
(f) Information Supplied. None of the information supplied or to be
--------------------
supplied by Xxxx specifically for inclusion or incorporation by reference in (i)
the Form S-4 will, at the time the Form S-4 is filed with the SEC, at any time
it is amended or supplemented or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading or (ii) the Joint Proxy Statement will, at the date it is
first mailed to Xxxx'x shareholders or at the time of the Xxxx Shareholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The Form S-4 and the Joint Proxy Statement will comply as to form in
all material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by Xxxx with respect to statements made or
incorporated by reference therein based on information supplied by Westvaco
specifically for inclusion or incorporation by reference in the Form S-4 or the
Joint Proxy Statement.
(g) Absence of Certain Changes or Events. Except for liabilities
------------------------------------
incurred in connection with this Agreement or the transactions contemplated
hereby, and except as would be permitted by Section 5.1(a) as if Section 5.1(a)
were applicable as of July 1, 2001 (including by being set forth in Section
5.1(a) of the Xxxx Disclosure Schedule), since July 1, 2001, Xxxx and its
subsidiaries have conducted their businesses only in the ordinary course
consistent with past practice or as disclosed in any Xxxx SEC Document filed
since such date and prior to the date
18
hereof, and since July 1, 2001 and, with respect to clauses (ii) through (vi),
prior to the date hereof, there has not been: (i) any material adverse change in
Xxxx, (ii) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of the
capital stock of Xxxx or any of its subsidiaries (other than regular quarterly
dividends of $0.17 per share of Xxxx Common Stock), (iii) any split, combination
or reclassification of any of the capital stock of Xxxx or any of its
subsidiaries or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of, or in substitution for shares of the
capital stock of Xxxx or any of its subsidiaries, except for issuances of Xxxx
Common Stock upon exercise of Xxxx Options, in each case awarded prior to the
date hereof in accordance with their present terms or issued pursuant to Section
5.1(a)(taking into account Section 5.1(a) of the Xxxx Disclosure Schedule) or to
the extent required upon the exercise of a currently outstanding Xxxx Option
that includes an automatic reload feature, (iv) except insofar as may have been
disclosed in Xxxx SEC Documents filed and publicly available prior to the date
of this Agreement (as amended to the date hereof, the "XXXX FILED SEC
DOCUMENTS") or required by a change in GAAP, any change in accounting methods,
principles or practices by Xxxx materially affecting its assets, liabilities or
business, (v) except insofar as may have been disclosed in the Xxxx Filed SEC
Documents, any tax election that individually or in the aggregate would have a
material adverse effect on Xxxx or any of its tax attributes or any settlement
or compromise of any material income tax liability, or (vi) any action taken by
Xxxx or any of the Xxxx subsidiaries during the period from July 1, 2001,
through the date of this Agreement that, if taken during the period from the
date of this Agreement through the Effective Time, would constitute a breach of
Section 5.1(a) (taking into account Section 5.1(a) of the Xxxx Disclosure
Schedule).
(h) Compliance with Applicable Laws; Outstanding Orders.
---------------------------------------------------
(i) Xxxx, its subsidiaries and employees hold all permits,
licenses, variances, exemptions, orders, registrations and approvals of all
Governmental Entities that are required for the operation of the businesses of
Xxxx and its subsidiaries (the "XXXX PERMITS"), except where the failure to have
any such Xxxx Permits, individually or in the aggregate, would not have a
material adverse effect on Xxxx. Except as specifically disclosed in the Xxxx
Filed SEC Documents, Xxxx and its subsidiaries are in compliance with the terms
of the Xxxx Permits and all applicable laws, statutes, orders, rules,
regulations, policies or guidelines promulgated, or judgments, decisions or
orders entered by any Governmental Entity (all such laws, statutes, orders,
rules, regulations, policies, guidelines, judgments, decisions and orders,
collectively, "APPLICABLE LAWS") relating to Xxxx and its subsidiaries or their
respective businesses or properties, except where the failure to be in
compliance with such Applicable Laws individually or in the aggregate would not
have a material adverse effect on Xxxx. Except as disclosed in the Xxxx Filed
SEC Documents, no action, demand, requirement or investigation by any
Governmental Entity and no suit, action, investigation or proceeding by any
person, in each case with respect to Xxxx or any of its subsidiaries or any of
their respective properties, is pending or, to the knowledge (as defined in
Section 9.3) of Xxxx, threatened, other than, in each case, those the outcome of
which individually or in the aggregate would not reasonably be expected to (A)
have a material adverse effect on Xxxx or (B) impair the ability of any of Xxxx,
Parent, Xxxxxxx Merger Sub or Xxxxxxx Merger Sub to perform its respective
obligations under this Agreement or (C) prevent or materially delay the
consummation of any of the transactions contemplated hereby.
19
(ii) Neither Xxxx nor any Xxxx subsidiary is subject to any
outstanding order, injunction or decree that has had or would, individually or
in the aggregate, reasonably be expected to have a material adverse effect on
Xxxx or prevent or materially delay the consummation of the transactions
contemplated hereby.
(i) Litigation. There is no action, suit, investigation or proceeding
----------
(each, an "ACTION") pending against or, to the knowledge of Xxxx, threatened
against or affecting Xxxx or any of its subsidiaries or any of their respective
properties or any of their respective officers or directors before any court or
arbitrator or any Governmental Entity except as would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on Xxxx,
materially impair the ability of Xxxx, Parent, Xxxxxxx Merger Sub or Xxxxxxx
Merger Sub to perform its obligations under this Agreement or prevent or
materially delay the consummation of the transactions contemplated hereby.
(j) Absence of Changes in Benefit Plans. Xxxx has delivered to
-----------------------------------
Westvaco or made available to Westvaco for review true and complete copies of
(i) all severance and employment agreements between Xxxx, on the one hand, and
any of its directors, executive officers or key employees, on the other hand,
(ii) all severance programs and policies of each of Xxxx and each Xxxx
subsidiary affecting U.S. employees, and (iii) all plans or arrangements of Xxxx
and each Xxxx subsidiary relating to its employees that contain change in
control provisions and, in each case, that has not been filed as an exhibit to a
Xxxx Filed SEC Document. With respect to each Xxxx Benefit Plan (as defined in
this Section 4.1(j)) that covers individuals employed in the United States, Xxxx
has delivered or made available to Westvaco a true, correct and complete copy
of: (i) the most recent annual report (Form 5500 Series) and accompanying
schedule, if any; (ii) the current summary plan description and any material
modifications thereto, if any (in each case, whether or not required to be
furnished under ERISA); (iii) the most recent annual financial report, if any;
and (iv) the most recent actuarial report, if any. Since July 1, 2001, except as
would be permitted by Section 5.1(a) as if Section 5.1(a) were applicable as of
July 1, 2001 (including by being set forth in Section 5.1(a) of the Xxxx
Disclosure Schedule) there has not been any adoption or amendment by Xxxx or any
of its subsidiaries of any Xxxx Benefit Plan or Xxxx Collective Bargaining
Agreement that, when aggregated with other such adoptions or amendments
materially increases the obligations and liabilities of Xxxx and its
subsidiaries under the Xxxx Collective Bargaining Agreements and the Xxxx
Benefit Plans. "XXXX BENEFIT PLANS" shall mean, with respect to current or
former directors, officers or employees of Xxxx or any of its subsidiaries, any
material bonus, pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom stock,
retirement, vacation, severance, disability, death benefit, hospitalization,
medical or other plan, arrangement or understanding in each case, with respect
to which Xxxx or any of its subsidiaries could have any liability. Since July 1,
2001, there has not been any material change in any actuarial or other
assumption used to calculate funding obligations with respect to any Xxxx
pension plans, or any material change in the manner in which contributions to
any Xxxx pension plans are made or the basis on which such contributions are
determined. Since July 1, 2001, neither Xxxx nor any Xxxx subsidiary has amended
any Xxxx Options or any Xxxx Stock Plans to accelerate the vesting of, or
release restrictions on, awards thereunder, or to provide for such acceleration
in the event of a change in control.
20
(k) Benefit Plans.
-------------
(i) Each Xxxx Benefit Plan has been administered in accordance
with its terms, except for any failures so to administer any Xxxx Benefit Plan
that individually or in the aggregate would not have a material adverse effect
on Xxxx. To the knowledge of Xxxx, the Xxxx Benefit Plans have been operated,
and are, in compliance with the applicable provisions of ERISA, the Code and all
other applicable laws and the terms of all applicable Xxxx Collective Bargaining
Agreements (as defined in this Section 4.1(k)), except for any failures to be in
such compliance that individually or in the aggregate would not have a material
adverse effect on Xxxx. Each Xxxx Benefit Plan that is intended to be qualified
under section 401(a) or 401(k) of the Code has received a favorable
determination letter from the Internal Revenue Service ("IRS") that it is so
qualified and each trust established in connection with any Xxxx Benefit Plan
that is intended to be exempt from federal income taxation under section 501(a)
of the Code has received a determination letter from the IRS that such trust is
so exempt. To the knowledge of Xxxx, no fact or event has occurred since the
date of any determination letter from the IRS that could affect adversely the
qualified status of any such Xxxx Benefit Plan or the exempt status of any such
trust except for facts or events that can be cured without any material
liability on the part of Xxxx and its subsidiaries.
(ii) With respect to each of the Xxxx Benefit Plans which is
subject to Title IV of ERISA, the present value of accrued benefits under such
plan, based upon the actuarial assumptions used for funding purposes in the most
recent actuarial report prepared by such plan's actuary with respect to such
plan, did not, as of its latest valuation date, exceed the then current value of
the assets of such plan allocable to such accrued benefits. No Xxxx Benefit Plan
nor any trust established under a Xxxx Benefit Plan has incurred any
"accumulated funding deficiency" (as defined in section 302 of ERISA and section
412 of the Code), whether or not waived, as of the last day of the most recent
fiscal year of each of the Xxxx Benefit Plans ended prior to the date of this
Agreement.
(iii) No Xxxx Benefit Plan provides medical benefits (whether or
not insured) with respect to current or former employees after 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)
other than individual arrangements the amounts of which are not material.
(iv) Xxxx has previously provided to Westvaco a list of each
collective bargaining or other labor union contract applicable to persons
employed by Xxxx or any of its subsidiaries to which Xxxx or any of its
subsidiaries is a party (each a "XXXX COLLECTIVE BARGAINING AGREEMENT"). No Xxxx
Collective Bargaining Agreement is being negotiated or renegotiated by Xxxx or
any of its subsidiaries. As of the date of this Agreement, there is no labor
dispute, strike or work stoppage against Xxxx or any of its subsidiaries pending
or, to the knowledge of Xxxx, threatened that may interfere with the respective
business activities of Xxxx or any of its subsidiaries, except where such
dispute, strike or work stoppage individually or in the aggregate would not have
a material adverse effect on Xxxx. As of the date of this Agreement, to the
knowledge of Xxxx, none of Xxxx, any of its subsidiaries or any of their
respective representatives or employees has committed any material unfair labor
practice in connection with the operation of the respective businesses of Xxxx
or any of its subsidiaries, and
21
there is no material charge or complaint against Xxxx or any of its subsidiaries
by the National Labor Relations Board or any comparable Governmental Entity
pending or threatened in writing.
(v) No employee of Xxxx or any Xxxx subsidiary will be entitled
to any material payment, additional benefits or any acceleration of the time of
funding (through a grantor trust or otherwise), payment or vesting of any
benefits under any Xxxx Benefit Plan as a result of the transactions
contemplated by this Agreement by virtue of their status as a "CHANGE IN
CONTROL" (including equivalent terms such as "SIGNIFICANT CHANGE") within the
meaning of Xxxx Benefit Plans (either alone or in conjunction with any other
event such as a termination of employment).
(vi) Except such as would not have a material adverse effect on
Xxxx, there are no material unresolved claims or disputes under the terms of, or
in connection with, any Xxxx Benefit Plan (other than routine undisputed claims
for benefits), and no action, legal or otherwise, has been commenced with
respect to any material claim.
(vii) To the knowledge of Xxxx, no non-exempt "prohibited
transaction" (within the meaning of section 4975(c) of the Code) involving any
Xxxx Benefit Plan has occurred that could subject Xxxx to any material tax
penalty or other cost or liability (by indemnification or otherwise).
(viii) No liability under Title IV of ERISA has been incurred and
not yet satisfied by Xxxx or any of its subsidiaries, or any trade or business
(whether or not incorporated) that together with Xxxx or such subsidiary would
have been deemed a "single employer" within the meaning of section 4001(b) of
ERISA at any time within the six-year period ending on the Closing Date (a "XXXX
ERISA AFFILIATE") since the effective date of ERISA that has not been satisfied
in full. No condition exists that presents a material risk to Xxxx or any of its
subsidiaries of incurring a liability under such Title, other than liability for
premiums due the Pension Benefit Guaranty Corporation. To the extent this
representation applies to section 4064, 4069 or 4204 of Title IV of ERISA, it is
made not only with respect to the Xxxx Benefit Plans, but also with respect to
any employee benefit plan, program, agreement or arrangement subject to Title IV
of ERISA to which Xxxx or any of its subsidiaries or a Xxxx ERISA Affiliate
made, or was required to make, contributions during the six-year period ending
on the Closing Date.
(ix) To the knowledge of Xxxx, all Xxxx Benefit Plans subject to
the laws of any jurisdiction outside of the United States (i) have been
maintained in accordance with all applicable requirements, (ii) if they are
intended to qualify for special tax treatment meet all requirements for such
treatment, and (iii) if they are intended to be funded and/or book-reserved are
fully funded and/or book reserved, as appropriate, based upon reasonable
actuarial assumptions.
(l) Taxes.
-----
(i) Each of Xxxx and its subsidiaries has timely filed or has
caused to be timely filed all material Tax Returns required to be filed by, or
with respect to, Xxxx and its subsidiaries and all such Tax Returns are true,
complete, and correct in all material respects. Xxxx and each of its
subsidiaries have paid (or Xxxx has paid or caused to be paid on its behalf)
22
all Taxes shown as due on such Tax Returns, and the most recent financial
statements contained in the Xxxx Filed SEC Documents reflect an adequate reserve
in accordance with GAAP for all Tax liabilities of Xxxx and its subsidiaries for
all taxable periods and portions thereof accrued through the date of such
financial statements.
(ii) No deficiencies for any Taxes have been proposed, asserted
or assessed in writing against Xxxx or any of its subsidiaries that are not
adequately reserved for, except for deficiencies that individually or in the
aggregate would not have a material adverse effect on Xxxx.
(iii) Neither Xxxx nor any of its subsidiaries has taken any
action or knows of any fact, agreement, plan or other circumstance that is
reasonably likely to preclude (A) the Mergers, taken together, from qualifying
as a transaction described in Section 351 of the Code or (B) either of the
Mergers from qualifying as a "reorganization" within the meaning of Section
368(a) of the Code.
(iv) There is no audit, assessment, deficiency, claim,
investigation, examination, matter in controversy, proposed adjustment, refund
litigation or other proceeding (judicial or administrative) currently pending
with regard to any Taxes or Tax Returns of Xxxx or its subsidiaries the adverse
outcome of which, individually or in the aggregate, is reasonably likely to have
a material adverse effect on Xxxx.
(v) Neither Xxxx nor any of its subsidiaries is liable for any
Tax imposed on any other entity, except as the result of the application of
Treasury Regulations Section 1.1502-6 (and any comparable provision of the tax
laws of any state, local or foreign jurisdiction) to the affiliated group of
which Xxxx is the common parent.
(vi) There are no liens for Taxes on any of the assets of Xxxx or
its subsidiaries, except for statutory liens for Taxes that are not yet due and
payable.
(vii) Neither Xxxx nor any of its subsidiaries is a party to any
agreement, plan, contract or arrangement that could result, individually or in
aggregate, in a payment of any "excess parachute payments" within the meaning of
Section 280G of the Code.
(viii) Neither Xxxx nor any of its subsidiaries has been included
in any "consolidated," "unitary" or "combined" Tax Return (other than Tax
Returns which include only Xxxx and subsidiaries of Xxxx) provided for under the
laws of the United States, any foreign jurisdiction or any state or locality
with respect to material Taxes for any taxable period for which the statute of
limitations has not expired (taking into account all applicable extensions).
(ix) No election under section 341(f) of the Code has been made
or shall be made prior to the Closing Date to treat Xxxx or any of its
subsidiaries as a consenting corporation, as defined in section 341 of the Code.
(x) "TAX" or "TAXES" means all taxes, charges, levies or other
like assessments imposed by any governmental authority, including any income,
gross receipts, license, severance, occupation, premium, environmental
(including taxes under Code Section 59A), customs, duties, profits, disability,
alternative or add-on minimum, estimated, withholding,
23
payroll, employment, unemployment insurance, social security (or similar),
excise, sales, use, value-added, occupancy, franchise, real property, personal
property, business and occupation, mercantile, windfall profits, capital stock,
stamp, transfer, workmen's compensation or other taxes, charges, levies or other
like assessments of any kind whatsoever, together with any interest, penalties,
additions to tax or additional amounts imposed by any Governmental Entity,
whether disputed or not. "TAX AUTHORITY" means any Governmental Entity
responsible for the administration of any Taxes. "TAX RETURN" means any returns,
declarations, statements, claim for refund, election, estimate, reports, forms
and information returns and any schedules or amendments thereto relating to
Taxes.
(m) Voting Requirements. The affirmative vote at the Xxxx Shareholders
-------------------
Meeting (the "XXXX SHAREHOLDER APPROVAL") of the holders of two-thirds of all
outstanding shares of Xxxx Common Stock is necessary to approve this Agreement,
the Merger and the other transactions contemplated. The Xxxx Shareholder
Approval is the only vote necessary to approve the transactions contemplated by
this Agreement.
(n) Rights Agreement. The Board of Directors of Xxxx has resolved to,
----------------
and promptly after the execution hereof Xxxx shall, take all action necessary to
render the Xxxx Rights inapplicable to this Agreement, the Mergers and the other
transactions contemplated hereby and to cause the Xxxx Rights to expire
immediately prior to the Effective Time.
(o) Takeover Statutes and Charter Provisions. Assuming that Westvaco
-----------------------------------------
does not own, directly or indirectly, 10% or more of the Xxxx Common Stock, the
Board of Directors of Xxxx has taken all action necessary to render any
potentially applicable anti-takeover or similar statute or regulation
inapplicable to this Agreement and the transactions contemplated hereby.
(p) Intellectual Property.
---------------------
(i) Xxxx and its subsidiaries own, free and clear of all Liens,
or have the right to use pursuant to valid license, sublicense, agreement or
permission all items of Intellectual Property necessary for their operations, as
currently conducted or as contemplated by them to be conducted, except where the
failure to own or have such rights, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on Xxxx. The conduct of
Xxxx'x and its subsidiaries' businesses, as currently conducted or contemplated
by them to be conducted, does not interfere, infringe, misappropriate, dilute or
violate any of the Intellectual Property rights of any third party, except for
interferences, infringements, misappropriations, dilutions or violations which,
individually or in the aggregate, would not be reasonably expected to have a
material adverse effect on Xxxx. To the knowledge of Xxxx, no third party has
interfered with, infringed upon, misappropriated, diluted, violated or otherwise
come into conflict with any Intellectual Property rights of Xxxx or any of its
subsidiaries, except for interferences, infringements, misappropriations,
dilutions or violations that, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on Xxxx.
(ii) As used in this Agreement, "INTELLECTUAL PROPERTY" means,
collectively, patents, trademarks, service marks, trade dress, logos, trade
names, Internet domain names, designs, slogans and general intangibles of like
nature, copyrights and all registrations,
24
applications, reissuances, continuations, continuations-in-part, revisions,
extensions, reexaminations and associated goodwill with respect to each of the
foregoing, computer software (including source and object codes), computer
programs, computer databases and related documentation and materials, data,
documentation, technology, trade secrets, confidential business information
(including ideas, formulae, algorithms, models, methodologies, compositions,
know-how, manufacturing and production processes and techniques, research and
development information, drawings, designs, plans, proposals and technical data,
financial, marketing and business data and pricing and cost information) and
other intellectual property rights (in whatever form or medium).
(q) Certain Contracts. Except as set forth in the Xxxx Filed SEC
-----------------
Documents, neither Xxxx nor any of its subsidiaries is a party to or bound by
(i) any "material contract" (as such term is defined in Item 601(b)(10) of
Regulation S-K of the SEC), or (ii) any non-competition agreement or any other
agreement or obligation which purports to limit in any material respect the
manner in which, or the localities in which, all or any material portion of the
businesses of Xxxx and its subsidiaries (including, for purposes of this Section
4.1(q), Parent, Westvaco and its subsidiaries, assuming the Mergers have taken
place), taken as a whole, is or would be conducted (all contracts of the types
described in clauses (i) and (ii), collectively, the "XXXX MATERIAL CONTRACTS").
Xxxx has delivered to Westvaco or provided to Westvaco for review, prior to the
execution of this Agreement, true and complete copies of all Xxxx Material
Contracts not filed as exhibits to the Xxxx Filed SEC Documents. Each Xxxx
Material Contract is valid and binding on Xxxx (or, to the extent a Xxxx
subsidiary is a party, such subsidiary) and is in full force and effect, and
Xxxx and each Xxxx subsidiary have in all material respects performed all
obligations required to be performed by them to date under each Xxxx Material
Contract, except where such noncompliance, individually or in the aggregate,
would not have a material adverse effect on Xxxx. Neither Xxxx nor any Xxxx
subsidiary knows of, or has received notice of, any violation or default under
(nor, to the knowledge of Xxxx, does there exist any condition that with the
passage of time or the giving of notice or both would result in such a violation
or default under) any Xxxx Material Contract.
(r) Environmental Protection. Environmental Protection.
------------------------
(i) Except as set forth in the Xxxx Filed SEC Documents:
(1) Xxxx and each of the Xxxx subsidiaries are in compliance
with all applicable Environmental Laws (as defined in Section
4.1(r)(ii)(2)) and neither Xxxx nor any of the Xxxx subsidiaries has
received any communication (written or oral) from any person or
Governmental Authority that alleges that Xxxx or any of the Xxxx
subsidiaries is not in such compliance with applicable Environmental
Laws, except where the failure to so comply or where such alleged
non-compliance would not have a material adverse effect on Xxxx. To
the knowledge of Xxxx, compliance with all applicable Environmental
Laws will not require Xxxx or any Xxxx subsidiary to incur costs,
beyond those currently budgeted for the three Xxxx fiscal years
beginning with January 1, 2001, that will be reasonably likely to
result in a material adverse effect on Xxxx, including, but not
limited to, the costs of pollution control equipment that are known or
anticipated to be required in the future.
25
(2) Xxxx and each of the Xxxx subsidiaries have obtained or
have applied for all environmental, health and safety permits and
governmental authorizations (collectively, the "ENVIRONMENTAL
PERMITS") necessary for the construction of their facilities or the
conduct of their operations except where the failure to so obtain
would not have a material adverse effect on Xxxx, and all such
Environmental Permits are in good standing or, where applicable, a
renewal application has been timely filed and is pending agency
approval, and Xxxx and the Xxxx subsidiaries are in material
compliance with all terms and conditions of the Environmental Permits,
except where failure to so comply would not reasonably likely have a
material adverse effect on Xxxx.
(3) To the best knowledge of Xxxx, there are no
Environmental Claims (as defined in Section 4.1(r)(ii)(1)),
individually or in the aggregate, that would have a material adverse
effect on Xxxx pending (A) against Xxxx or any of the Xxxx
subsidiaries, (B) against any person or entity whose liability for any
Environmental Claim Xxxx or any of the Xxxx subsidiaries has or may
have retained or assumed either contractually or by operation of law,
or (C) against any real or personal property or operations which Xxxx
or any of the Xxxx subsidiaries owns, leases or manages, in whole or
in part.
(4) Xxxx has no knowledge of any Releases (as defined in
Section 4.1(r)(ii)(4)) of any Hazardous Material (as defined in
Section 4.1(r)(ii)(3)) that would be reasonably likely to form the
basis of any Environmental Claim against Xxxx or any of the Xxxx
subsidiaries, or against any person or entity whose liability for any
Environmental Claim Xxxx or any of the Xxxx subsidiaries has or may
have retained or assumed either contractually or by operation of law
except for any Environmental Claims, individually or in the aggregate,
that would not reasonably likely have a material adverse effect on
Xxxx.
(ii) Definitions. As used in this Agreement:
(1) "ENVIRONMENTAL CLAIM" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters,
directives, claims, liens, investigations, proceedings or notices of
noncompliance or violation (written or oral) by any person or entity
(including any Governmental Authority), alleging potential liability
(including, without limitation, potential responsibility for or
liability for enforcement, investigatory costs, cleanup costs,
governmental response costs, removal costs, remedial costs, natural
resources damages, property damages, personal injuries or penalties)
arising out of, based on or resulting from (A) the presence, Release
or threatened Release into the environment of any Hazardous Materials
at any location, whether or not owned, operated, leased or managed by
Xxxx or any of the Xxxx subsidiaries (for purposes of this Section
4.1(r)) or by Westvaco or any of the Westvaco subsidiaries (for
purposes of Section 4.2(r)); or (B) circumstances forming the basis of
any violation or alleged violation of any Environmental Law; or (C)
any and all claims by any third party seeking damages, contribution,
indemnification,
26
cost recovery, compensation or injunctive relief resulting from the
presence or Release of any Hazardous Materials.
(2) "ENVIRONMENTAL LAWS" means all federal, state and local
laws, rules and regulations relating to pollution, the environment
(including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or protection of human
health as it relates to the environment including, without limitation,
laws and regulations relating to Releases or threatened Releases of
Hazardous Materials, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials.
(3) "HAZARDOUS MATERIALS" means (A) any petroleum or
petroleum products, radioactive materials, asbestos in any form that
is or could become friable, urea formaldehyde foam insulation and
transformers or other equipment that contain dielectric fluid
containing polychlorinated biphenyls ("PCBs"); (B) any chemicals,
materials or substances which are now defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous
wastes," "toxic substances," "toxic pollutants," or words of similar
import under any Environmental Law and (C) any other chemical,
material, substance or waste, exposure to which is now prohibited,
limited or regulated under any Environmental Law in a jurisdiction in
which Xxxx or any of the Xxxx subsidiaries operates (for purposes of
this Section 4.1(r)) or in which Westvaco or any of the Westvaco
subsidiaries operates (for purposes of Section 4.2(r)).
(4) "RELEASE" means any release, spill, emission, leaking,
injection, deposit, disposal, discharge, dispersal, leaching or
migration into the atmosphere, soil, surface water, groundwater or
property.
(s) Opinion of Financial Advisors. Xxxx has received the opinion of
-----------------------------
Xxxxxxx, Xxxxx & Co. ("XXXXXXX SACHS"), dated the date of this Agreement, to the
effect that, as of such date, the Xxxx Merger Consideration is fair from a
financial point of view to Xxxx shareholders.
(t) Brokers. Except for fees payable to Xxxxxxx Xxxxx pursuant to an
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engagement letter, dated as of April 9, 2001, no broker, investment banker,
financial advisor or other person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Xxxx.
SECTION 4.2 Representations and Warranties of Westvaco.
-------------------------------------------------------
Except as disclosed in the disclosure schedule delivered by Westvaco
to Xxxx prior to the execution of this Agreement (the "WESTVACO DISCLOSURE
SCHEDULE") and making reference to the particular subsection of this Agreement
to which exception is being taken
27
(subject to the second paragraph of the cover page of the Westvaco Disclosure
Schedules), Westvaco represents and warrants to Xxxx as follows:
(a) Organization, Standing and Corporate Power. Each of Westvaco and
------------------------------------------
its subsidiaries is a corporation or other legal entity duly organized, validly
existing and in good standing (with respect to jurisdictions which recognize
such concept) under the laws of the jurisdiction in which it is organized and
has the requisite corporate or other power, as the case may be, and authority to
carry on its business as now being conducted, except, as to subsidiaries, for
those jurisdictions where the failure to be so organized, existing or in good
standing individually or in the aggregate would not have a material adverse
effect on Westvaco. Each of Westvaco and its subsidiaries is duly qualified or
licensed to do business and is in good standing (with respect to jurisdictions
which recognize such concept) in each jurisdiction in which the nature of its
business or the ownership, leasing or operation of its properties makes such
qualification or licensing necessary, except for those jurisdictions where the
failure to be so qualified or licensed or to be in good standing individually or
in the aggregate would not have a material adverse effect on Westvaco. Westvaco
has delivered to or made available to Xxxx prior to the execution of this
Agreement true and complete copies of any amendments to the Certificate of
Incorporation of Westvaco (the "WESTVACO CERTIFICATE") and by-laws not filed as
of the date hereof with the Westvaco SEC Filed Documents (as defined in Section
4.2(g)).
(b) Corporate Authority; Non-contravention.
--------------------------------------
(i) Westvaco has all requisite corporate power and authority to enter
into this Agreement. Subject to the Westvaco Stockholder Approval (as defined in
Section 4.2(m)), Westvaco has all requisite corporate power and authority to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Westvaco, subject in the case of the Westvaco Merger to the Westvaco
Stockholder Approval. This Agreement has been duly executed and delivered by
Westvaco and, assuming the due authorization, execution and delivery of this
Agreement by the other parties hereto, constitutes the legal, valid and binding
obligation of Westvaco enforceable against Westvaco in accordance with its
terms.
(ii) The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance with the
provisions of this Agreement shall not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of a benefit under, or result in the creation of any Lien
upon any of the properties or assets of Westvaco or any of its subsidiaries or
any restriction on the conduct of Westvaco's business or operations under, (A)
the Westvaco Certificate or the by-laws of Westvaco or the comparable
organizational documents of any of its subsidiaries, (B) any loan or credit
agreement, note, bond, mortgage, indenture, trust document, lease or other
agreement, instrument, permit, concession, franchise, license or similar
authorization applicable to Westvaco or any of its subsidiaries or their
respective properties or assets or (C) subject to the governmental filings and
other matters referred to in clause (iii) below, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Westvaco or any of its
subsidiaries or their respective properties or assets, other than, in the case
of clauses (B) and (C),
28
any such conflicts, violations, defaults, rights, losses, restrictions or Liens
that individually or in the aggregate would not (x) have a material adverse
effect on Westvaco or (y) reasonably be expected to impair the ability of
Westvaco to perform its obligations under this Agreement.
(iii) No consent, approval, order or authorization of, action by, or
in respect of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to Westvaco or any of its subsidiaries in
connection with the execution and delivery of this Agreement by Westvaco or the
consummation by Westvaco of the transactions contemplated hereby, except for (A)
compliance with any applicable requirements of the HSR Act, with the EC Merger
Regulation and with the antitrust, competition or similar laws of any other
foreign jurisdiction; (B) the filing with the SEC of (x) the Joint Proxy
Statement relating to the Westvaco Stockholders Meeting and (y) such reports
under Section 13(a) or 15(d) of the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated hereby; (C) the
filing of the Westvaco Certificate of Merger with the Secretary of State of the
State of Delaware and appropriate documents with the relevant authorities of
other states in which Westvaco is qualified to do business; and (D) such other
consents, approvals, orders or authorizations the failure of which to be made or
obtained individually or in the aggregate would not (x) have a material adverse
effect on Westvaco or (y) reasonably be expected to impair the ability of
Westvaco to perform its obligations under this Agreement.
(c) Capital Structure.
-----------------
(i) The authorized capital stock of Westvaco consists of
300,000,000 shares of Westvaco Common Stock, 10,000,000 shares of preferred
stock, without par value ("WESTVACO PREFERRED STOCK") and 44,170 shares of
Cumulative Preferred Stock, par value $100 per share ("WESTVACO CUMULATIVE
PREFERRED STOCK"). At the close of business on July 31, 2001, (A) 102,297,220
shares of Westvaco Common Stock were issued and outstanding, (B) 873,447 shares
of Westvaco Common Stock were held by Westvaco in its treasury, (C) no shares of
Westvaco Preferred Stock or Westvaco Cumulative Preferred Stock were issued and
outstanding, (D) there were Westvaco Options outstanding to acquire no more than
7,329,515 shares of Westvaco Common Stock pursuant to stock option or other
stock-based compensation, benefits or savings plans, agreements or arrangements
in which current or former employees or directors of Westvaco or its
subsidiaries participate as of the date hereof, true and complete copies of
which, in each case as amended as of the date hereof, have been filed as
exhibits to the Westvaco Filed SEC Documents or delivered to Xxxx (such plans,
collectively, the "WESTVACO STOCK PLANS"); (E) 41,000 Westvaco SARs outstanding,
with a weighted average exercise price of $28.5122; (F) 486,136 Westvaco LSARs
outstanding, with a weighted average exercise price of $27.579 and (G) 1,500,000
shares of Westvaco cumulative preferred stock, no par value, designated as
Cumulative Preferred Stock, are reserved for issuance upon the exercise of
preferred stock purchase rights (the "WESTVACO RIGHTS") issuable pursuant to the
Rights Agreement, dated as of September 23, 1997, between Westvaco and The Bank
of New York, as rights agent (the "WESTVACO RIGHTS AGREEMENT"). Section 4.2(c)
of the Westvaco Disclosure Schedule sets forth a list summarizing all Westvaco
Options, Westvaco SARs, and Westvaco LSARs outstanding as of July 31, 2001 under
all of the Westvaco Stock Plans, including the term and the exercise price of
each Westvaco Option.
29
(ii) All outstanding shares of capital stock of Westvaco are, and
all shares that may be issued as permitted by this Agreement or otherwise shall
be, when issued, duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive rights. Except as set forth in this Section
4.2(c), and except for changes since July 31, 2001 resulting from the issuance
of shares of Westvaco Common Stock pursuant to Westvaco Options or as expressly
permitted by Section 5.1(b)(ii) of this Agreement (including by being set forth
in Section 5.1(b)(ii) of the Westvaco Disclosure Schedule), (A) there are not
issued or outstanding (x) any shares of capital stock or other voting securities
of Westvaco, (y) any securities of Westvaco or any Westvaco subsidiary
convertible into or exchangeable or exercisable for, or based upon the value of,
shares of capital stock or voting securities of Westvaco or (z) any warrants,
calls, options or other rights to acquire from Westvaco or any Westvaco
subsidiary (including any subsidiary trust), or obligations of Westvaco or any
Westvaco subsidiary to issue, any capital stock, voting securities or securities
convertible into or exchangeable or exercisable for, or based upon the value of,
capital stock or voting securities of Westvaco, and (B) there are no outstanding
obligations of Westvaco or any Westvaco subsidiary to repurchase, redeem or
otherwise acquire any such securities or to issue, deliver or sell, or cause to
be issued, delivered or sold, any such securities.
(d) Subsidiaries.
------------
(i) Exhibit 21 to Westvaco's Annual Report on Form 10-K for the
fiscal year ended October 31, 2000 includes all the subsidiaries of Westvaco
which as of the date of this Agreement are Significant Subsidiaries (as defined
in Rule 1-02 of Regulation S-X of the SEC. Except as set forth on such Exhibit
and for director qualifying shares, all outstanding shares of capital stock of,
or other equity interests in, each such subsidiary have been validly issued and
are fully paid and nonassessable and are owned directly or indirectly by
Westvaco, free and clear of all Liens and free of any other restriction,
including any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other ownership interests.
(ii) There are no outstanding (A) securities of Westvaco or any
Westvaco subsidiary convertible into or exchangeable or exercisable for shares
of capital stock or other voting securities or ownership interests in any
Westvaco subsidiary, (B) warrants, calls, options or other rights to acquire
from Westvaco or any Westvaco subsidiary, or obligations of Westvaco or any
Westvaco subsidiary to issue, any capital stock, voting securities or other
ownership interests in, or any securities convertible into or exchangeable or
exercisable for any capital stock, voting securities or ownership interests in,
any Westvaco subsidiary or (C) obligations of Westvaco or any Westvaco
subsidiary to repurchase, redeem or otherwise acquire any such outstanding
securities of Westvaco subsidiaries or to issue, deliver or sell, or cause to be
issued, delivered or sold, any such securities.
(iii) Other than the Westvaco subsidiaries, Westvaco does not
directly or indirectly beneficially own any securities or other beneficial
ownership interests in any other entity except for non-controlling investments
made in the ordinary course of business in entities which are not individually
or in the aggregate material to Westvaco and its subsidiaries as a whole.
(e) SEC Documents; Undisclosed Liabilities.
--------------------------------------
30
(i) Westvaco and its subsidiaries have filed all required
registration statements, prospectuses, reports, schedules, forms, statements and
other documents (including exhibits and all other information incorporated
therein) with the SEC since May 1, 1999 (the "WESTVACO SEC DOCUMENTS"). As of
their respective dates, the Westvaco SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to such Westvaco SEC Documents, and none of the Westvaco SEC
Documents when filed and at their respective effective times, if applicable,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(ii) The financial statements of Westvaco included in the
Westvaco SEC Documents comply as to form, as of their respective dates of filing
with the SEC, in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with GAAP (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto)
and fairly present the consolidated financial position of Westvaco and its
consolidated subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments which are not
material).
(iii) Except (A) as reflected in such financial statements or in
the notes thereto, (B) for liabilities incurred in connection with this
Agreement or the transactions contemplated hereby and (C) for liabilities
incurred since May 1, 2001 in the ordinary course of business consistent with
past practice, neither Westvaco nor any of its subsidiaries has any liabilities
or obligations of any nature which, individually or in the aggregate, are
reasonably likely to have a material adverse effect on Westvaco.
(f) Information Supplied. None of the information supplied or to be
--------------------
supplied by Westvaco specifically for inclusion or incorporation by reference in
(i) the Form S- 4 will, at the time the Form S-4 is filed with the SEC, at any
time it is amended or supplemented or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading or (ii) the Joint Proxy Statement will, at the date it is
first mailed to Westvaco's stockholders or at the time of the Westvaco
Stockholders Meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
are made, not misleading. The Joint Proxy Statement and the Form S-4 will comply
as to form in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by Westvaco with respect to statements made
or incorporated by reference therein based on information supplied by Xxxx
specifically for inclusion or incorporation by reference in the Joint Proxy
Statement or the Form S-4.
31
(g) Absence of Certain Changes or Events. Except for liabilities
------------------------------------
incurred in connection with this Agreement or the transactions contemplated
hereby, and except as would be permitted by Section 5.1(b) as if Section 5.1(b)
were applicable as of May 1, 2001 (including by being set forth in Section
5.1(b) of the Westvaco Disclosure Schedule), since May 1, 2001, Westvaco and its
subsidiaries have conducted their businesses only in the ordinary course
consistent with past practice or as disclosed in any Westvaco SEC Document filed
since such date and prior to the date hereof, and since May 1, 2001 and, with
respect to clauses (ii) through (vi), prior to the date hereof, there has not
been: (i) any material adverse change in Westvaco, (ii) any declaration, setting
aside or payment of any dividend or other distribution (whether in cash, stock
or property) with respect to any of the capital stock of Westvaco or any of its
subsidiaries (other than regular quarterly dividends of $0.22 per share of
Westvaco Common Stock), (iii) any split, combination or reclassification of any
of the capital stock of Westvaco or any of its subsidiaries or any issuance or
the authorization of any issuance of any other securities in respect of, in lieu
of or in substitution for shares of the capital stock of Westvaco or any of its
subsidiaries, except for issuances of Westvaco Common Stock in connection with
Westvaco's Investor Services Plan or upon exercise of Westvaco Options, in each
case awarded prior to the date hereof in accordance with their present terms or
issued pursuant to Section 5.1(b) (taking into account Section 5.1(b) of the
Westvaco Disclosure Schedule), (iv) except insofar as may have been disclosed in
Westvaco SEC Documents filed and publicly available prior to the date of this
Agreement (as amended to the date hereof, the "WESTVACO FILED SEC DOCUMENTS") or
required by a change in GAAP, any change in accounting methods, principles or
practices by Westvaco materially affecting its assets, liabilities or business,
(v) except insofar as may have been disclosed in the Westvaco Filed SEC
Documents, any tax election that individually or in the aggregate would have a
material adverse effect on Westvaco or any of its tax attributes or any
settlement or compromise of any material income tax liability or (vi) any action
taken by Westvaco or any of the Westvaco subsidiaries during the period from May
1, 2001, through the date of this Agreement that, if taken during the period
from the date of this Agreement through the Effective Time, would constitute a
breach of Section 5.1(b) (taking into account Section 5.1(b) of the Westvaco
Disclosure Schedule).
32
(h) Compliance with Applicable Laws; Outstanding Orders.
---------------------------------------------------
(i) Westvaco, its subsidiaries and employees hold all permits,
licenses, variances, exemptions, orders, registrations and approvals of all
Governmental Entities that are required for the operation of the businesses of
Westvaco and its subsidiaries (the "WESTVACO PERMITS") except where the failure
to have any such Westvaco Permits, individually or in the aggregate, would not
have a material adverse effect on Westvaco. Except as specifically disclosed in
the Westvaco Filed SEC Documents, Westvaco and its subsidiaries are in
compliance with the terms of the Westvaco Permits and all Applicable Laws
relating to Westvaco and its subsidiaries or their respective business or
properties, except where the failure to be in compliance with such Applicable
Laws individually or in the aggregate would not have a material adverse effect
on Westvaco. Except as disclosed in the Westvaco Filed SEC Documents, no action,
demand, requirement or investigation by any Governmental Entity and no suit,
action, investigation or proceeding by any person, in each case with respect to
Westvaco or any of its subsidiaries or any of their respective properties, is
pending or, to the knowledge of Westvaco, threatened, other than, in each case,
those the outcome of which individually or in the aggregate would not reasonably
be expected to (A) have a material adverse effect on Westvaco or (B) impair the
ability of Westvaco to perform its obligations under this Agreement or (C)
prevent or materially delay the consummation of any of the transactions
contemplated hereby.
(ii) Neither Westvaco nor any Westvaco subsidiary is subject to
any outstanding order, injunction or decree that has had or would, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
Westvaco or prevent or materially delay the consummation of the transactions
contemplated hereby.
(i) Litigation. There is no Action pending against or, to the
----------
knowledge of Westvaco, threatened against or affecting Westvaco or any of its
subsidiaries or any of their respective properties or any of their respective
officers or directors before any court or arbitrator or any Governmental Entity
except as would not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on Westvaco, materially impair the ability of
Westvaco to perform its obligations under this Agreement or prevent or
materially delay the consummation of the transactions contemplated hereby.
(j) Absence of Changes in Benefit Plans. Westvaco has delivered
-----------------------------------
to Xxxx or made available to Xxxx for review true and complete copies of (i) all
severance and employment agreements between Westvaco, on the one hand, and of
its directors, executive officers or key employees, on the other hand, (ii) all
severance programs and policies of each of Westvaco and each Westvaco subsidiary
affecting U.S. employees, and (iii) all plans or arrangements of Westvaco and
each Westvaco subsidiary relating to its employees that contain change in
control provisions and, in each case, that has not been filed as an exhibit to a
Westvaco Filed SEC Document. With respect to each Westvaco Benefit Plan (as
defined in this Section 4.2(j)) that covers individuals employed in the United
States, Westvaco has delivered or made available to Xxxx a true, correct and
complete copy of: (i) the most recent annual report (Form 5500 Series) and
accompanying schedule, if any; (ii) the current summary plan description and any
material modifications thereto, if any (in each case, whether or not required to
be furnished under ERISA); (iii) the most recent annual financial report, if
any; and (iv) the most recent actuarial report, if any. Since May 1, 2001,
except as would be permitted by Section 5.1(b) as if Section
33
5.1(b) were applicable as of May 1, 2001 (including by being set forth in
Section 5.1(b) of the Westvaco Disclosure Schedule), there has not been any
adoption or amendment by Westvaco or any of its subsidiaries of any Westvaco
Benefit Plan or Westvaco Collective Bargaining Agreement that, when aggregated
with other such adoptions or amendments, materially increases the obligations
and liabilities of Westvaco and its subsidiaries under the Westvaco Collective
Bargaining Agreements and the Westvaco Benefit Plans. "WESTVACO BENEFIT PLANS"
shall mean, with respect to current or former directors, officers or employees
of Westvaco or any of its subsidiaries, any material bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock ownership, stock
purchase, stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or other plan, arrangement
or understanding, in each case, with respect to which Westvaco or any of its
subsidiaries could have any liability. Since May 1, 2001, there has not been any
material change in any actuarial or other assumption used to calculate funding
obligations with respect to any Westvaco pension plans, or any material change
in the manner in which contributions to any Westvaco pension plans are made or
the basis on which such contributions are determined. Since May 1, 2001, neither
Westvaco nor any Westvaco subsidiary has amended any Westvaco Options or any
Westvaco Stock Plans to accelerate the vesting of, or release restrictions on,
awards thereunder, or to provide for such acceleration in the event of a change
in control.
(k) Benefit Plans.
-------------
(i) Each Westvaco Benefit Plan has been administered in
accordance with its terms, except for any failures so to administer any Westvaco
Benefit Plan that individually or in the aggregate would not have a material
adverse effect on Westvaco. To the knowledge of Westvaco, the Westvaco Benefit
Plans have been operated, and are, in compliance with the applicable provisions
of ERISA, the Code and all other applicable laws and the terms of all Westvaco
Collective Bargaining Agreements (as defined in this Section 4.2(k)), except for
any failures to be in such compliance that individually or in the aggregate
would not have a material adverse effect on Westvaco. Each Westvaco Benefit Plan
that is intended to be qualified under section 401(a) or 401(k) of the Code has
received a favorable determination letter from the IRS that it is so qualified
and each trust established in connection with any Westvaco Benefit Plan that is
intended to be exempt from federal income taxation under section 501(a) of the
Code has received a determination letter from the IRS that such trust is so
exempt. To the knowledge of Westvaco, no fact or event has occurred since the
date of any determination letter from the IRS that could affect adversely the
qualified status of any such Westvaco Benefit Plan or the exempt status of any
such trust except for facts or events that can be cured without any material
liability on the part of Westvaco and its subsidiaries.
(ii) With respect to each of the Westvaco Benefit Plans which is
subject to Title IV of ERISA, the present value of accrued benefits under such
plan, based upon the actuarial assumptions used for funding purposes in the most
recent actuarial report prepared by such plan's actuary with respect to such
plan, did not, as of its latest valuation date, exceed the then current value of
the assets of such plan allocable to such accrued benefits. No Westvaco Benefit
Plan nor any trust established under a Westvaco Benefit Plan has incurred any
"accumulated funding deficiency" (as defined in section 302 of ERISA and section
412 of the Code), whether or not waived, as of the last day of the most recent
fiscal year of each of the Westvaco Benefit Plans ended prior to the date of
this Agreement.
34
(iii) No Westvaco Benefit Plan provides medical benefits (whether
or not insured) with respect to current or former employees after 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)
other than individual arrangements the amounts of which are not material.
(iv) Westvaco has previously provided to Xxxx a list of each
collective bargaining or other labor union contract applicable to persons
employed by Westvaco or any of its subsidiaries to which Westvaco or any of its
subsidiaries is a party (each a "WESTVACO COLLECTIVE BARGAINING AGREEMENT"). No
Westvaco Collective Bargaining Agreement is being negotiated or renegotiated by
Westvaco or any of its subsidiaries. As of the date of this Agreement, there is
no labor dispute, strike or work stoppage against Westvaco or any of its
subsidiaries pending or, to the knowledge of Westvaco, threatened that may
interfere with the respective business activities of Westvaco or any of its
subsidiaries, except where such dispute, strike or work stoppage individually or
in the aggregate would not have a material adverse effect on Westvaco. As of the
date of this Agreement, to the knowledge of Westvaco, none of Westvaco, any of
its subsidiaries or any of their respective representatives or employees has
committed any material unfair labor practice in connection with the operation of
the respective businesses of Westvaco or any of its subsidiaries, and there is
no material charge or complaint against Westvaco or any of its subsidiaries by
the National Labor Relations Board or any comparable Governmental Entity pending
or threatened in writing.
(v) No employee of Westvaco or any Westvaco subsidiary will be
entitled to any material payment, additional benefits or any acceleration of the
time of funding (through a grantor trust or otherwise), payment or vesting of
any benefits under any Westvaco Benefit Plan as a result of the transactions
contemplated by this Agreement by virtue of their status as a "Change in
Control" (including equivalent terms such as "Significant Change") within the
meaning of the Westvaco Benefit Plans (either alone or in conjunction with any
other event such as a termination of employment).
(vi) Except as would not have a material adverse effect on
Westvaco, there are no material unresolved claims or disputes under the terms
of, or in connection with, any Westvaco Benefit Plan (other than routine
undisputed claims for benefits), and no action, legal or otherwise, has been
commenced with respect to any material claim.
(vii) To the knowledge of Westvaco, no non-exempt "prohibited
transaction" (within the meaning of section 4975(c) of the Code) involving any
Westvaco Benefit Plan has occurred that could subject Westvaco to any material
tax penalty or other cost or liability (by indemnification or otherwise).
(viii) No liability under Title IV of ERISA has been incurred and
not yet satisfied by Westvaco or any of its subsidiaries, or any trade or
business (whether or not incorporated) that together with Westvaco or such
subsidiary would have been deemed a "single employer" within the meaning of
section 4001(b) of ERISA at any time within the six-year period ending on the
Closing Date (a "WESTVACO ERISA AFFILIATE") since the effective date of ERISA
that has not been satisfied in full. No condition exists that presents a
material risk to Westvaco or any of its subsidiaries of incurring a liability
under such Title, other than liability for premiums
35
due the Pension Benefit Guaranty Corporation. To the extent this representation
applies to section 4064, 4069 or 4204 of Title IV of ERISA, it is made not only
with respect to the Westvaco Benefit Plans, but also with respect to any
employee benefit plan, program, agreement or arrangement subject to Title IV of
ERISA to which Westvaco or any of its subsidiaries or a Westvaco ERISA Affiliate
made, or was required to make, contributions during the six-year period ending
on the Closing Date.
(ix) To the knowledge of Westvaco, all Westvaco Benefit Plans
subject to the laws of any jurisdiction outside of the United States (i) have
been maintained in accordance with all applicable requirements, (ii) if they are
intended to qualify for special tax treatment meet all requirements for such
treatment, and (iii) if they are intended to be funded and/or book-reserved are
fully funded and/or book reserved, as appropriate, based upon reasonable
actuarial assumptions.
(x) Westvaco has taken such actions as are necessary to assure
that no funding of any Westvaco grantor trust is required to occur in connection
with the execution of this Agreement or the consummation of the transactions
contemplated hereby.
(l) Taxes.
-----
(i) Each of Westvaco and its subsidiaries has timely filed or has
caused to be timely filed all material Tax Returns required to be filed by, or
with respect to, Westvaco and its subsidiaries and all such Tax Returns are
true, complete, and correct in all material respects. Westvaco and each of its
subsidiaries have paid (or Westvaco has paid or caused to be paid on its behalf)
all Taxes shown as due on such Tax Returns, and the most recent financial
statements contained in the Westvaco Filed SEC Documents reflect an adequate
reserve in accordance with GAAP for all Tax liabilities of Westvaco and its
subsidiaries for all taxable periods and portions thereof accrued through the
date of such financial statements.
(ii) No deficiencies for any Taxes have been proposed, asserted
or assessed in writing against Westvaco or any of its subsidiaries that are not
adequately reserved for, except for deficiencies that individually or in the
aggregate would not have a material adverse effect on Westvaco.
(iii) Neither Westvaco nor any of its subsidiaries has taken any
action or knows of any fact, agreement, plan or other circumstance that is
reasonably likely to preclude (A) the Mergers, taken together, from qualifying
as a transaction described in Section 351 of the Code or (B) either of the
Mergers from qualifying as a "reorganization" within the meaning of Section
368(a) of the Code.
(iv) There is no audit, assessment, deficiency, claim,
investigation, examination, matter in controversy, proposed adjustment, refund
litigation or other proceeding (judicial or administrative) currently pending
with regard to any Taxes or Tax Returns of Westvaco or its subsidiaries the
adverse outcome of which, individually or in the aggregate, is reasonably likely
to have a material adverse effect on Westvaco.
36
(v) Neither Westvaco nor any of its subsidiaries is liable for
any Tax imposed on any other entity, except as the result of the application of
Treasury Regulations Section 1.1502-6 (and any comparable provision of the tax
laws of any state, local or foreign jurisdiction) to the affiliated group of
which Westvaco is the common parent.
(vi) There are no liens for Taxes on any of the assets of
Westvaco or its subsidiaries, except for statutory liens for Taxes that are not
yet due and payable.
(vii) Neither Westvaco nor any of its subsidiaries is a party to
any agreement, plan, contract or arrangement that could result, individually or
in aggregate, in a payment of any "excess parachute payments" within the meaning
of Section 280G of the Code.
(viii) Neither Westvaco nor any of its subsidiaries has been
included in any "consolidated," "unitary" or "combined" Tax Return (other than
Tax Returns which include only Westvaco and subsidiaries of Westvaco) provided
for under the laws of the United States, any foreign jurisdiction or any state
or locality with respect to material Taxes for any taxable period for which the
statute of limitations has not expired (taking into account all applicable
extensions).
(ix) No election under section 341(f) of the Code has been made
or shall be made prior to the Closing Date to treat Westvaco or any of its
subsidiaries as a consenting corporation, as defined in section 341 of the Code.
(m) Voting Requirements.
-------------------
The affirmative vote at the Westvaco Stockholders Meeting (the
"WESTVACO STOCKHOLDER APPROVAL") of the holders of a majority of all outstanding
shares of Westvaco Common Stock entitled to vote at a duly convened and held
meeting of Westvaco stockholders is the only vote of the holders of any class or
series of Westvaco's capital stock necessary to approve and adopt this Agreement
and the transactions contemplated hereby, including the Westvaco Merger.
(n) Rights Agreement. The Board of Directors of Westvaco has resolved
----------------
to, and promptly after the execution hereof Westvaco shall, take all action
necessary to render the Westvaco Rights inapplicable to this Agreement, the
Mergers and the other transactions contemplated hereby and to cause the Westvaco
Rights to expire immediately prior to the Effective Time.
(o) Takeover Statutes and Charter Provisions. The Board of Directors
----------------------------------------
of Westvaco has taken all action necessary to render Section 203 of the DGCL,
any other potentially applicable anti-takeover or similar statute or regulation
and the provisions of Article Eleventh of the Westvaco Certificate inapplicable
to this Agreement and the transactions contemplated hereby.
(p) Intellectual Property. Westvaco and its subsidiaries own, free and
---------------------
clear of all Liens, or have the right to use pursuant to valid license,
sublicense, agreement or permission all items of Intellectual Property necessary
for their operations, as currently conducted or as contemplated by them to be
conducted, except where the failure to own or have such rights,
37
individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on Westvaco. The conduct of Westvaco's and its
subsidiaries' businesses, as currently conducted or contemplated by them to be
conducted, does not interfere, infringe, misappropriate, dilute or violate any
of the Intellectual Property rights of any third party, except for
interferences, infringements, misappropriations, dilutions or violations which,
individually or in the aggregate, would not be reasonably expected to have a
material adverse effect on Westvaco. To the knowledge of Westvaco, no third
party has interfered with, infringed upon, misappropriated, diluted, violated or
otherwise come into conflict with any Intellectual Property rights of Westvaco
or any of its subsidiaries, except for interferences, infringements,
misappropriations, dilutions or violations that, individually or in the
aggregate, would not reasonably be expected to have a material adverse effect on
Westvaco.
(q) Certain Contracts. Except as set forth in the Westvaco Filed SEC
-----------------
Documents, neither Westvaco nor any of its subsidiaries is a party to or bound
by (i) any "material contract" (as such term is defined in Item 601(b)(10) of
Regulation S-K of the SEC), or (ii) any non- competition agreement or any other
agreement or obligation which purports to limit in any material respect the
manner in which, or the localities in which, all or any material portion of the
businesses of Westvaco and its subsidiaries (including, for purposes of this
Section 4.2(q), Parent, Xxxx and its subsidiaries, assuming the Mergers have
taken place), taken as a whole, is or would be conducted (all contracts of the
types described in clauses (i) and (ii), collectively, the "WESTVACO MATERIAL
CONTRACTS"). Westvaco has delivered to Xxxx or provided to Xxxx for review,
prior to the execution of this Agreement, true and complete copies of all
Westvaco Material Contracts not filed as exhibits to the Westvaco Filed SEC
Documents. Each Westvaco Material Contract is valid and binding on Westvaco (or,
to the extent a Westvaco subsidiary is a party, such subsidiary) and is in full
force and effect, and Westvaco and each Westvaco subsidiary have in all material
respects performed all obligations required to be performed by them to date
under each Westvaco Material Contract, except where such noncompliance,
individually or in the aggregate, would not have a material adverse effect on
Westvaco. Neither Westvaco nor any Westvaco subsidiary knows of, or has received
notice of, any violation or default under (nor, to the knowledge of Westvaco,
does there exist any condition that with the passage of time or the giving of
notice or both would result in such a violation or default under) any Westvaco
Material Contract.
(r) Environmental Protection.
------------------------
(i) Except as set forth in the Westvaco Filed SEC Documents:
(1) Westvaco and each of the Westvaco subsidiaries are in
compliance with all applicable Environmental Laws (as defined in
Section 4.1(r)(ii)(2)) and neither Westvaco nor any of the Westvaco
subsidiaries has received any communication (written or oral) from any
person or Governmental Authority that alleges that Westvaco or any of
the Westvaco subsidiaries is not in such compliance with applicable
Environmental Laws, except where the failure to so comply or where
such alleged non-compliance would not have a material adverse effect
on Westvaco. To the knowledge of Westvaco, compliance with all
applicable Environmental Laws will not require Westvaco or any
Westvaco subsidiary to incur costs, beyond those currently
38
budgeted for the three Westvaco fiscal years beginning with November
1, 2000, that will be reasonably likely to result in a material
adverse effect on Westvaco, including, but not limited to, the costs
of pollution control equipment that are known or anticipated to be
required in the future.
(2) Westvaco and each of the Westvaco subsidiaries have
obtained or have applied for all Environmental Permits necessary for
the construction of their facilities or the conduct of their
operations except where the failure to so obtain would not have a
material adverse effect on Westvaco, and all such Environmental
Permits are in good standing or, where applicable, a renewal
application has been timely filed and is pending agency approval, and
Westvaco and the Westvaco subsidiaries are in material compliance with
all terms and conditions of the Environmental Permits, except where
failure to so comply would not reasonably likely have a material
adverse effect on Westvaco.
(3) To the best knowledge of Westvaco, there are no
Environmental Claims (as defined in Section 4.1(r)(ii)(1)),
individually or in the aggregate, that would have a material adverse
effect on Westvaco pending (A) against Westvaco or any of the Westvaco
subsidiaries, (B) against any person or entity whose liability for any
Environmental Claim Westvaco or any of the Westvaco subsidiaries has
or may have retained or assumed either contractually or by operation
of law, or (C) against any real or personal property or operations
which Westvaco or any of the Westvaco subsidiaries owns, leases or
manages, in whole or in part.
(4) Westvaco has no knowledge of any Releases (as defined in
Section 4.1(r)(ii)(4)) of any Hazardous Material (as defined in
Section 4.1(r)(ii)(3)) that would be reasonably likely to form the
basis of any Environmental Claim against Westvaco or any of the
Westvaco subsidiaries, or against any person or entity whose liability
for any Environmental Claim Westvaco or any of the Westvaco
subsidiaries has or may have retained or assumed either contractually
or by operation of law except for any Environmental Claims,
individually or in the aggregate, that would not reasonably likely
have a material adverse effect on Westvaco.
(s) Opinion of Financial Advisors. Westvaco has received the opinion
-----------------------------
of Xxxxxxxxx & Co., LLC and Xxxxxx Xxxxxxx & Co. Incorporated, dated the date of
this Agreement, to the effect that, as of such date, the Westvaco Exchange Ratio
is fair from a financial point of view to Westvaco's stockholders.
(t) Brokers. Except for fees payable to Xxxxxxxxx & Co., LLC and
-------
Xxxxxx Xxxxxxx & Co. Incorporated, pursuant to engagement letters, dated as of
August 20, 2001 and August 28, 2001, respectively, no broker, investment banker,
financial advisor or other person, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Westvaco.
39
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 5.1 Conduct of Business.
--------------------------------
(a) Conduct of Business by Xxxx. Except as set forth in Section 5.1(a)
---------------------------
of the Xxxx Disclosure Schedule, as otherwise expressly contemplated by this
Agreement or as consented to by Westvaco in writing, such consent not to be
unreasonably withheld or delayed, during the period from the date of this
Agreement to the Effective Time, Xxxx shall, and shall cause its subsidiaries
to, carry on their respective businesses in the ordinary course consistent with
past practice and, to the extent consistent therewith, use all reasonable
efforts to preserve intact their current business organizations, use reasonable
efforts to keep available the services of their current officers and other key
employees and preserve their relationships with those persons having business
dealings with them to the end that their goodwill and ongoing businesses shall
be unimpaired at the Effective Time. Without limiting the generality of the
foregoing (but subject to the above exceptions, including those exceptions set
forth on Section 5.1(a) of the Xxxx Disclosure Schedule), during the period from
the date of this Agreement to the Effective Time, Xxxx shall not, and shall not
permit any of its subsidiaries to, in either instance without the written
consent of Westvaco, which consent shall not be unreasonably withheld or
delayed:
(i) (A) other than dividends and distributions by a direct or
indirect wholly owned subsidiary of Xxxx to its parent or by a subsidiary that
is partially owned by Xxxx or any of its subsidiaries, provided that Xxxx or any
such subsidiary receives or is to receive its proportionate share thereof and
regular quarterly cash dividends of $0.17 per share payable by Xxxx on shares of
Xxxx Common Stock consistent with past practice, declare, set aside or pay any
dividends on, make any other distributions in respect of, or enter into any
agreement with respect to the voting of, any of its capital stock, (B) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock, or (C) purchase, redeem or otherwise acquire
any shares of capital stock of Xxxx or any of its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any such shares
or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber or
subject to any Lien any shares of its capital stock, any other voting securities
or any securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities (other
than (1) the issuance of Xxxx Common Stock upon the exercise of Xxxx Options
outstanding as of the date hereof in accordance with their present terms, (2)
the issuance of new Xxxx Options, to the extent required, upon the exercise of
Xxxx Options outstanding as of the date hereof that include an automatic reload
feature, or (3) the issuance of Xxxx Common Stock upon the exercise of such new
Xxxx Options);
(iii) except as contemplated hereby, amend the Xxxx Articles, its
regulations or other comparable organizational documents;
40
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets or equity or other
securities of, or by any other manner, any business or any person;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its material properties or
assets other than in the ordinary course of business consistent with past
practice;
(vi) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse or otherwise as an accommodation
become responsible for the obligations of any person for borrowed money, other
than pursuant to a revolving credit facility or receivables facility or
commercial paper facility in effect as of the date hereof (including any
replacement facilities) in the ordinary course of business consistent with past
practice;
(vii) settle or compromise any material claim, action or
proceeding (including any material claim, action or proceeding relating to
Taxes) involving money damages, except in the ordinary course of business
consistent with past practice;
(viii) make any material Tax election except in the ordinary
course of business consistent with past practice;
(ix) other than in the ordinary course of business, enter into or
terminate any material contract or agreement or make any change in any material
lease or contract, other than amendments or renewals of contracts and leases
without material adverse changes of terms;
(x) grant to any current or former director, officer or other
employee of Xxxx or its subsidiaries any increase in compensation, bonus or
other benefits, except for normal increases as a result of promotions or normal
increases of base pay, bonuses, compensation or benefits, in each case, (1) in
the ordinary course of business or (2) as required under any employment
agreement or Xxxx Collective Bargaining Agreement as in effect on the date
hereof or (3) as required by applicable law or (4) in the course of a collective
bargaining process required by applicable law and conducted in the ordinary
course of business; commit itself to, or enter into, any employment agreement
involving base salary of more than $200,000 per year or a term of more than one
year; accelerate the timing or funding (through a grantor trust or otherwise) of
payments or vesting under any Xxxx Benefit Plans; or adopt or commit itself to
any new Xxxx Benefit Plan or other benefit, compensation or stock option plan or
arrangement or otherwise amend or supplement any Xxxx Benefit Plan (other than
as may be required by applicable law, an employment agreement as in effect on
the date hereof, or by a Xxxx Collective Bargaining Agreement or in the course
of a collective bargaining process required by applicable law and conducted in
the ordinary course of business) in such a manner as would, when aggregated with
other such actions, materially increase Xxxx'x obligations (including
obligations to fund benefits) under the Xxxx Benefit Plans;
(xi) enter into any agreements or arrangements that limit or
otherwise restrict Xxxx or any of its subsidiaries, or that would, after the
Effective Time, limit or restrict
41
Parent or any of its subsidiaries, from engaging or competing in any line of
business or in any geographic area;
(xii) change any of the accounting methods used by Xxxx or any of
its subsidiaries, unless required by GAAP; or
(xiii) authorize, or commit or agree to take, any of the
foregoing actions; PROVIDED, HOWEVER, that the limitations set forth in this
Section 5.1(a) (other than clause (iii)) shall not apply to any transaction
between Xxxx and any wholly owned subsidiary of Xxxx or between any wholly owned
subsidiaries of Xxxx.
Notwithstanding the foregoing, from the date hereof until the Effective Time,
Xxxx and its subsidiaries may (x) make acquisitions of property, assets or any
business (other than pursuant to a merger or consolidation with or into Xxxx) so
long as no one acquisition or series of related acquisitions involves the
payment of consideration in an amount in excess of $50 million, and all
acquisitions pursuant to this clause (x) do not involve the payment of
consideration in excess of $150 million, in the aggregate, and (y) sell,
transfer or otherwise dispose of assets or property so long as Xxxx and its
subsidiaries do not sell, transfer and otherwise dispose of assets and property
pursuant to this clause (y) having a fair market value in excess of $50 million,
individually or $150 million, in the aggregate.
(b) Conduct of Business by Westvaco. Except as set forth in Section
-------------------------------
5.1(b) of the Westvaco Disclosure Schedule, as otherwise expressly contemplated
by this Agreement or as consented to by Xxxx in writing, such consent not to be
unreasonably withheld or delayed, during the period from the date of this
Agreement to the Effective Time, Westvaco shall, and shall cause its
subsidiaries to, carry on their respective businesses in the ordinary course
consistent with past practice and, to the extent consistent therewith, use all
reasonable efforts to preserve intact their current business organizations, use
reasonable efforts to keep available the services of their current officers and
other key employees and preserve their relationships with those persons having
business dealings with them to the end that their goodwill and ongoing
businesses shall be unimpaired at the Effective Time. Without limiting the
generality of the foregoing (but subject to the above exceptions, including
those exceptions set forth on Section 5.1(b) of the Westvaco Disclosure
Schedule), during the period from the date of this Agreement to the Effective
Time, Westvaco shall not, and shall not permit any of its subsidiaries to, in
either instance without the written consent of Xxxx, which consent shall not be
unreasonably withheld or delayed:
(i) (A) other than dividends and distributions by a direct or
indirect wholly owned subsidiary of Westvaco to its parent or by a subsidiary
that is partially owned by Westvaco or any of its subsidiaries, provided that
Westvaco or any such subsidiary receives or is to receive its proportionate
share thereof and regular quarterly cash dividends of $0.22 per share payable by
Westvaco on shares of Westvaco Common Stock consistent with past practices,
declare, set aside or pay any dividends on, make any other distributions in
respect of, or enter into any agreement with respect to the voting of, any of
its capital stock or the capital stock of any of its subsidiaries, (B) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or the capital stock of any of its subsidiaries,
or (C) purchase, redeem or otherwise acquire
42
any shares of capital stock of Westvaco or any of its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any such shares
or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber or
subject to any Lien any shares of its capital stock, any other voting securities
or any securities convertible into, or any rights, warrants or options to
acquire, any such share s, voting securities or convertible securities (other
than the issuance of Westvaco Common Stock upon the exercise of Westvaco Options
outstanding as of the date hereof in accordance with their present terms or the
issuance of Westvaco Options);
(iii) except as contemplated hereby, amend the Westvaco
Certificate, its by-laws or other comparable
organizational documents;
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets or equity or other
securities of, or by any other manner, any business or any person;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its material properties or
assets other than in the ordinary course of business consistent with past
practice;
(vi) incur any indebtedness for borrowed money or issue any debt
securities or assume, guarantee or endorse or otherwise as an accommodation
become responsible for the obligations of any person for borrowed money, other
than pursuant to a revolving credit facility or receivables facility or
commercial paper facility in effect as of the date hereof (including any
replacement facilities) in the ordinary course of business consistent with past
practice;
(vii) settle or compromise any material claim, action or
proceeding (including any material claim, action or proceeding relating to
Taxes) involving money damages, except in the ordinary course of business
consistent with past practice;
(viii) make any material Tax election except in the ordinary
course of business consistent with past practice;
(ix) other than in the ordinary course of business, enter into or
terminate any material contract or agreement or make any change in any material
lease or contract, other than amendments or renewals of contracts and leases
without material adverse changes of terms;
(x) grant to any current or former director, officer or other
employee of Westvaco or its subsidiaries any increase in compensation, bonus or
other benefits, except for normal increases as a result of promotions, normal
increases of base pay, bonuses, compensation or benefits, in each case, (1) in
the ordinary course of business or (2) as required under any employment
agreement or Westvaco Collective Bargaining Agreement as in effect on the date
hereof or (3) as required by applicable law or (4) in the course of a collective
bargaining process required by applicable law and conducted in the ordinary
course of business; commit itself to, or enter into, any employment agreement
involving base salary of more than $200,000 per year or a
43
term of more than one year; accelerate the timing or funding (through a grantor
trust or otherwise) of payments or vesting under any Westvaco Benefit Plan; or
adopt or commit itself to any new Westvaco Benefit Plan or other benefit,
compensation or stock option plan or arrangement or otherwise amend or
supplement any Westvaco Benefit Plan (other than as may be required by
applicable law, an employment agreement as in effect on the date hereof, or by a
Westvaco Collective Bargaining Agreement or in the course of a collective
bargaining process required by applicable law and conducted in the ordinary
course of business) in such a manner as would, when aggregated with other such
actions, materially increase Westvaco's obligations (including obligations to
fund benefits) under the Westvaco Benefit Plans.
(xi) enter into any agreements or arrangements that limit or
otherwise restrict Westvaco or any of its subsidiaries, or that would, after the
Effective Time, limit or restrict Parent or any of its subsidiaries, from
engaging or competing in any line of business or in any geographic area
(xii) change any of the accounting methods used by Westvaco or
any of its subsidiaries, unless required by GAAP; or
(xiii) authorize, or commit or agree to take, any of the
foregoing actions; provided that the limitations set forth in this Section
5.1(b) (other than clause (iii)) shall not apply to any transaction between
Westvaco and any wholly owned subsidiary of Westvaco or between any wholly owned
subsidiaries of Westvaco.
Notwithstanding the foregoing, from the date hereof until the Effective Time,
Westvaco and its subsidiaries may (x) make acquisitions of property, assets or
any business (other than pursuant to a merger or consolidation with or into
Westvaco) so long as no one acquisition or series of related acquisitions
involves the payment of consideration in an amount in excess of $50 million, and
all acquisitions pursuant to this clause (x) do not involve the payment of
consideration in excess of $150 million, in the aggregate, and (y) sell,
transfer or otherwise dispose of assets or property so long as Westvaco and its
subsidiaries do not sell, transfer and otherwise dispose of assets and property
pursuant to this clause (y) having a fair market value in excess of $50 million,
individually or $150 million, in the aggregate.
(c) Other Actions. Except as required by law, during the period from
-------------
the date of this Agreement to the Effective Time, none of Xxxx, Parent, Xxxxxxx
Merger Sub, Xxxxxxx Merger Sub or Westvaco shall, or shall it permit any of its
subsidiaries to, take any action that would, or that could reasonably be
expected to, result in (i) any of the representations and warranties of such
party set forth in this Agreement that are qualified as to materiality becoming
untrue at the Effective Time, (ii) any of such representations and warranties
that are not so qualified becoming untrue in any material respect at the
Effective Time or (iii) any of the conditions to the Xxxx Merger or the Westvaco
Merger set forth in Article VII not being satisfied.
(d) Advice of Changes. During the period from the date of this
-----------------
Agreement to the Effective Time, each of Xxxx and Westvaco shall promptly advise
the other orally and in writing to the extent it has knowledge of (i) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect
44
or any such representation or warranty that is not so qualified becoming untrue
or inaccurate in any material respect, (ii) the failure by it to comply in any
material respect with or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfied by it under this Agreement and
(iii) any change or event having, or which, insofar as can reasonably be
foreseen, could reasonably be expected to have a material adverse effect on such
party or on the truth of such party's representations and warranties or the
ability of the conditions set forth in Article VII to be satisfied; PROVIDED,
HOWEVER, that no such notification shall affect the representations, warranties,
covenants or agreements of the parties (or remedies with respect thereto) or the
conditions to the obligations of the parties under this Agreement.
SECTION 5.2 No Solicitation by Xxxx.
------------------------------------
(a) Xxxx shall not, nor shall it permit any of its subsidiaries to,
nor shall it authorize or permit any of its officers, directors or employees or
any investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its subsidiaries to, directly or
indirectly through another person, (i) solicit, initiate or encourage (including
by way of furnishing information), or take any other action designed to
facilitate, any inquiries or the making of any proposal the consummation of
which would constitute an Alternative Transaction (as hereinafter defined) or
(ii) participate in any substantive discussions or negotiations regarding any
Alternative Transaction; PROVIDED, HOWEVER, that (x) if, at any time prior to
obtaining the Xxxx Shareholder Approval, the Board of Directors of Xxxx
determines in good faith, after receipt of advice from outside counsel, that the
failure to provide such information or participate in such negotiations or
discussions could reasonably be expected to constitute a breach by Xxxx'x Board
of Directors of its fiduciary duties to Xxxx'x shareholders under applicable law
and (y) after giving two business days' notice to Westvaco of its intention to
do so, Xxxx may, in response to any such proposal that was not solicited by it
and that did not otherwise result from a breach of this Section 5.2(a), and
subject to compliance with Section 5.2(c), (A) furnish information with respect
to Xxxx and its subsidiaries to any person pursuant to a customary
confidentiality agreement containing terms as to confidentiality generally no
less restrictive than the terms of the confidentiality agreement, dated August
7, 2001, entered into between Westvaco and Xxxx (the "CONFIDENTIALITY
AGREEMENT") and (B) participate in substantive discussions or negotiations
regarding such proposal. For purposes of this Agreement, "ALTERNATIVE
TRANSACTION" means any of (i) a transaction or series of transactions pursuant
to which any person (or group of persons) other than Westvaco and its
subsidiaries and other than Xxxx and its subsidiaries (a "THIRD PARTY") acquires
or would acquire, directly or indirectly, beneficial ownership (as defined in
Rule 13d-3 under the Exchange Act) of more than 20% of the outstanding shares of
Westvaco or Xxxx, as the case may be, whether from Westvaco or Xxxx or pursuant
to a tender offer or exchange offer or otherwise, (ii) any acquisition or
proposed acquisition of Westvaco or any of its significant subsidiaries or Xxxx
or any of its significant subsidiaries, as the case may be, by a merger or other
business combination (including any so-called "merger of equals" and whether or
not Westvaco or any of its significant subsidiaries or Xxxx or any of its
significant subsidiaries, as the case may be, is the entity surviving any such
merger or business combination) or (iii) any other transaction pursuant to which
any Third Party acquires or would acquire, directly or indirectly, control of
assets (including for this purpose the outstanding equity securities of
subsidiaries of Westvaco or Xxxx, as the case may be, and any entity surviving
any merger or combination including any of them) of Westvaco or any of its
subsidiaries or Xxxx or any of its subsidiaries, as the case may be, for
consideration equal to 20% or more of the fair
45
market value of all of the outstanding shares of Westvaco Common Stock or all of
the outstanding shares of Xxxx Common Stock, as the case may be, on the date
prior to the date hereof.
(b) Neither the Board of Directors of Xxxx nor any committee thereof
shall (i) except as determined in good faith by the Board of Directors of Xxxx
that such action is required to satisfy its fiduciary duties under applicable
law or, if in response to a Xxxx Superior Proposal, in compliance with the
following sentence, withdraw, qualify or modify, or propose publicly to
withdraw, qualify or modify, in a manner adverse to Westvaco, the approval or
recommendation by such Board of Directors or such committee of the Xxxx Merger
or this Agreement, (ii) approve or recommend, or propose publicly to approve or
recommend, any Alternative Transaction or (iii) cause Xxxx to enter into any
letter of intent, agreement in principle, acquisition agreement or other similar
agreement related to any Alternative Transaction. Notwithstanding the foregoing,
in the event that prior to obtaining the Xxxx Shareholder Approval, the Board of
Directors of Xxxx determines in good faith, after it has received a Xxxx
Superior Proposal (as defined below) and after receipt of advice from outside
counsel, that the failure to do so could reasonably be expected to constitute a
breach by the Board of Directors of Xxxx of its fiduciary duties to Xxxx'x
shareholders under applicable law, the Board of Directors of Xxxx may (subject
to this and the following sentences) inform Xxxx'x shareholders that it no
longer believes that the Xxxx Merger or this Agreement is advisable and no
longer recommends adoption and/or approval (a "XXXX SUBSEQUENT DETERMINATION"),
but only at a time that is after the fifth business day following Westvaco's
receipt of written notice from Xxxx advising Westvaco that the Board of
Directors of Xxxx has received a Xxxx Superior Proposal specifying the material
terms and conditions of such Xxxx Superior Proposal, identifying the person
making such Xxxx Superior Proposal and stating that it intends to make a Xxxx
Subsequent Determination. For purposes of this Agreement, a "XXXX SUPERIOR
PROPOSAL" means any proposal (on its most recently amended or modified terms, if
amended or modified) made by a Third Party to enter into an Alternative
Transaction that has not been solicited or facilitated in breach of Section
5.2(a) and on terms that the Board of Directors of Xxxx determines in its good
faith judgment (after obtaining advice from a financial advisor of nationally
recognized reputation) to be more favorable to Xxxx'x shareholders than the
Mergers, taking into account all relevant factors (including (i) whether, in the
good faith judgment of the Board of Directors of Xxxx, after obtaining advice
from a financial advisor of nationally recognized reputation, the Third Party is
reasonably able to finance the transaction and (ii) any proposed changes to this
Agreement that may be proposed by Westvaco in response to such Alternative
Transaction). Notwithstanding any other provision of this Agreement, Xxxx shall
submit this Agreement to its shareholders whether or not the Board of Directors
of Xxxx makes a Xxxx Subsequent Determination, assuming such a shareholder vote
would be effective under the OGCL.
(c) In addition to the obligations of Xxxx set forth in Sections
5.2(a) and (b), Xxxx shall promptly advise Westvaco orally and in writing of any
request for information or of any proposal in connection with an Alternative
Transaction, the material terms and conditions of such request or proposal and
the identity of the person making such request or proposal. Xxxx shall keep
Westvaco reasonably informed of the status and details (including amendments or
proposed amendments) of any such request or proposal on a current basis.
46
(d) Nothing contained in this Section 5.2 shall prohibit Xxxx (i) from
taking and disclosing to its shareholders a position contemplated by Rule 14d-9
or Rule 14e-2(a) promulgated under the Exchange Act or (ii) from making any
disclosure to its shareholders if, in the good faith judgment of the Board of
Directors of Xxxx, after receipt of advice from outside counsel, failure so to
disclose would be inconsistent with its fiduciary duties to Xxxx'x shareholders
under applicable law.
SECTION 5.3 No Solicitation by Westvaco.
-----------------------------------------
(a) Westvaco shall not, nor shall it permit any of its subsidiaries
to, nor shall it authorize or permit any of its officers, directors or employees
or any investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its subsidiaries to, directly or
indirectly through another person, (i) solicit, initiate or encourage (including
by way of furnishing information), or take any other action designed to
facilitate, any inquiries or the making of any proposal the consummation of
which would constitute an Alternative Transaction or (ii) participate in any
substantive discussions or negotiations regarding any Alternative Transaction;
PROVIDED, HOWEVER, that (x) if, at any time prior to obtaining the Westvaco
Stockholder Approval, the Board of Directors of Westvaco determines in good
faith, after receipt of advice from outside counsel, that the failure to provide
such information or participate in such negotiations or discussions could
reasonably be expected to constitute a breach by the Board of Directors of
Westvaco of its fiduciary duties to Westvaco's stockholders under applicable law
and (y) after giving two business days' notice to Xxxx of its intention to do
so, Westvaco may, in response to any such proposal that was not solicited by it
and that did not otherwise result from a breach of this Section 5.3(a), and
subject to compliance with Section 5.3(c), (A) furnish information with respect
to Westvaco and its subsidiaries to any person pursuant to a customary
confidentiality agreement containing terms as to confidentiality generally no
less restrictive than the terms of the Confidentiality Agreement and (B)
participate in substantive discussions and negotiations regarding such proposal.
(b) Neither the Board of Directors of Westvaco nor any committee
thereof shall (i) except as determined in good faith by the Board of Directors
of Westvaco that such action is required to satisfy its fiduciary duties under
applicable law or, if in response to a Westvaco Superior Proposal, in compliance
with the following sentence, withdraw, qualify or modify, or propose publicly to
withdraw, qualify or modify, in a manner adverse to Xxxx, the approval or
recommendation by such Board of Directors or such committee of the Westvaco
Merger or this Agreement, (ii) approve or recommend, or propose publicly to
approve or recommend, any Alternative Transaction or (iii) cause Westvaco to
enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement related to any Alternative Transaction.
Notwithstanding the foregoing, in the event that prior to obtaining the Westvaco
Stockholder Approval, the Board of Directors of Westvaco determines in good
faith, after it has received a Westvaco Superior Proposal (as defined below) and
after receipt of advice from outside counsel, that the failure to do so could
reasonably be expected to constitute a breach by the Board of Directors of
Westvaco of its fiduciary duties to Westvaco's stockholders under applicable
law, the Board of Directors of Westvaco may (subject to this and the following
sentences) inform Westvaco stockholders that it no longer believes that the
Westvaco Merger or this Agreement is advisable and no longer recommends adoption
and/or approval (a "WESTVACO SUBSEQUENT DETERMINATION"), but only at a time that
is after the fifth business day following
47
Xxxx'x receipt of written notice from Westvaco advising Xxxx that the Board of
Directors of Westvaco has received a Westvaco Superior Proposal, specifying the
material terms and conditions of such Westvaco Superior Proposal, identifying
the person making such Westvaco Superior Proposal and stating that it intends to
make a Westvaco Subsequent Determination. For purposes of this Agreement, a
"WESTVACO SUPERIOR PROPOSAL" means any proposal (on its most recently amended or
modified terms, if amended or modified) made by a Third Party to enter into an
Alternative Transaction that has not been solicited or facilitated in breach of
Section 5.3(a) and on terms that the Board of Directors of Westvaco determines
in its good faith judgment (after obtaining advice from a financial advisor of
nationally recognized reputation) to be more favorable to Westvaco's
stockholders than the Mergers, taking into account all relevant factors
(including (i) whether, in the good faith judgment of the Board of Directors of
Westvaco, after obtaining advice from a financial advisor of nationally
recognized reputation, the Third Party is reasonably able to finance the
transaction and (ii) any proposed changes to this Agreement that may be proposed
by Xxxx in response to such Alternative Transaction). Notwithstanding any other
provision of this Agreement, Westvaco shall submit this Agreement to its
stockholders whether or not the Board of Directors of Westvaco makes a Westvaco
Subsequent Determination.
(c) In addition to the obligations of Westvaco set forth in paragraphs
(a) and (b) of this Section 5.3, Westvaco shall promptly advise Xxxx orally and
in writing of any request for information or of any proposal in connection with
an Alternative Transaction, the material terms and conditions of such request or
proposal and the identity of the person making such request or proposal.
Westvaco shall keep Xxxx reasonably informed of the status and details
(including amendments or proposed amendments) of any such request or proposal on
a current basis.
(d) Nothing contained in this Section 5.3 shall prohibit Westvaco from
(i) taking and disclosing to its stockholders a position contemplated by Rule
14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or (ii) from making
any disclosure to its stockholders if, in the good faith judgment of the Board
of Directors of Westvaco, after receipt of advice from outside counsel, failure
so to disclose would be inconsistent with its fiduciary duties to Westvaco's
stockholders under applicable law.
48
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 Preparation of the Form S-4 and the Joint Proxy Statement;
-----------------------------------------------------------------------
Stockholders Meetings.
----------------------
(a) As soon as practicable following the date of this Agreement, Xxxx
and Westvaco shall prepare and file with the SEC the Joint Proxy Statement, and
Xxxx shall prepare and cause Parent to file with the SEC the Form S-4, in which
the Joint Proxy Statement will be included as a prospectus. Each of Xxxx and
Westvaco shall use reasonable best efforts to have the Form S-4 declared
effective under the Securities Act as promptly as practicable after such filing.
Xxxx and Westvaco shall, as promptly as practicable after receipt thereof,
provide the other party copies of any written comments and advise the other
party of any oral comments, with respect to the Joint Proxy Statement/Prospectus
received from the SEC. Xxxx and Parent shall provide Westvaco with a reasonable
opportunity to review and comment on any amendment or supplement to the Form S-4
prior to filing such with the SEC, and with a copy of all such filings made with
the SEC. Notwithstanding any other provision herein to the contrary, no
amendment or supplement (including by incorporation by reference) to the Joint
Proxy Statement/ Prospectus or the Form S-4 shall be made without the approval
of both Xxxx and Westvaco, which approval shall not be unreasonably withheld or
delayed; provided that with respect to documents filed by a party which are
incorporated by reference in the Form S-4 or Joint Proxy Statement/Prospectus,
this right of approval shall apply only with respect to information relating to
the other party or its business, financial condition or results of operations,
or the combined entity; and provided further that this approval right shall not
apply with respect to information relating to a Xxxx Subsequent Determination or
a Westvaco Subsequent Determination. Xxxx shall use reasonable best efforts to
cause the Joint Proxy Statement to be mailed to Xxxx'x shareholders, and
Westvaco shall use reasonable best efforts to cause the Joint Proxy Statement to
be mailed to Westvaco's stockholders, in each case as promptly as practicable
after the Form S-4 is declared effective under the Securities Act. Xxxx shall
advise Westvaco promptly after it receives notice thereof, of the time when the
Form S-4 has become effective or any supplement or amendment has been filed, the
issuance of any stop order, the suspension of the qualification of the Parent
Common Stock issuable in connection with the Mergers for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Joint Proxy
Statement or the Form S-4 or comments thereon and responses thereto or requests
by the SEC for additional information. If at any time prior to the Effective
Time any information relating to Xxxx or Westvaco, or any of their respective
affiliates, officers or directors, should be discovered by Xxxx or Westvaco that
should be set forth in an amendment or supplement to any of the Form S-4 or the
Joint Proxy Statement, so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, the party which discovers such information shall promptly
notify the other parties hereto and an appropriate amendment or supplement
describing such information shall be promptly filed with the SEC and, to the
extent required by law, disseminated to the stockholders of Xxxx and Westvaco.
49
(b) Xxxx shall, as promptly as practicable after the Form S-4 is
declared effective under the Securities Act, duly give notice of, convene and
hold a meeting of its shareholders (the "XXXX SHAREHOLDERS MEETING") in
accordance with the OGCL for the purpose of obtaining the Xxxx Shareholder
Approval and shall, subject to the provisions of Section 5.2(b), through its
Board of Directors, recommend to its shareholders the approval and/or adoption
of this Agreement, the Xxxx Merger and the other transactions contemplated
hereby.
(c) Westvaco shall, as promptly as practicable after the Form S-4 is
declared effective under the Securities Act, duly give notice of, convene and
hold a meeting of its stockholders (the "WESTVACO STOCKHOLDERS MEETING") in
accordance with the DGCL for the purpose of obtaining the Westvaco Stockholder
Approval and shall, subject to the provisions of Section 5.3(b), through its
Board of Directors, recommend to its stockholders the approval and adoption of
this Agreement, the Westvaco Merger and the other transactions contemplated
hereby.
(d) Westvaco and Xxxx shall use reasonable best efforts to hold the
Xxxx Shareholders Meeting and the Westvaco Stockholders Meeting on the same date
and as soon as reasonably practicable after the date hereof.
SECTION 6.2 Access to Information; Confidentiality.
---------------------------------------------------
Subject to the Confidentiality Agreement and subject to applicable
law, each of Xxxx and Westvaco shall, and shall cause each of its respective
subsidiaries to, afford to the other party and to the officers, employees,
accountants, counsel, financial advisors and other representatives of such other
party, reasonable access, during normal business hours during the period from
the date of this Agreement to the Effective Time, to all their respective
properties, books, contracts, commitments, personnel and records (provided that
such access shall not unreasonably interfere with the business or operations of
such party), and during such period, each of Xxxx and Westvaco shall, and shall
cause each of its respective subsidiaries to, furnish promptly to the other
party all information concerning its business, properties and personnel as such
other party may reasonably request. No review pursuant to this Section 6.2 shall
affect any representation or warranty given by the other party hereto. Each of
Xxxx and Westvaco shall hold, and shall cause its respective officers,
employees, accountants, counsel, financial advisors and other representatives
and affiliates to hold, any nonpublic information in accordance with the terms
of the Confidentiality Agreement.
SECTION 6.3 Reasonable Best Efforts.
-----------------------------------
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use reasonable best efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Mergers and the other transactions contemplated by this
Agreement, including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from Governmental Entities, including any
required action or non-action under the Antitrust Laws (the "REQUIRED CONSENTS")
prior to the Effective Time, and the making of all necessary registrations and
filings and the taking of all steps as may be necessary to obtain a
50
Required Consent from, or to avoid an action or proceeding by, any Governmental
Entity, (ii) the obtaining of all necessary consents, approvals or waivers, and
any necessary or appropriate financing arrangements, from third parties, (iii)
the defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated by this Agreement, including seeking to have any stay
or temporary restraining order entered by any court or other Governmental Entity
vacated or reversed, and (iv) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by, and to
fully carry out the purposes of, this Agreement. In furtherance and not in
limitation of the foregoing, each party hereto agrees to make (i) an appropriate
filing of a Notification and Report Form pursuant to the HSR Act with respect to
the transactions contemplated hereby as promptly as practicable after the date
hereof, (ii) appropriate filings, if any are required, pursuant to the EC Merger
Regulation and/or other foreign regulatory authorities in accordance with
applicable Foreign Laws, and (iii) all other necessary filings with other
Governmental Entities relating to the Merger, and, in each case, to supply as
promptly as practicable any additional information and documentary material that
may be formally or informally requested pursuant to the Antitrust Laws or by
such authorities and to use reasonable best efforts to cause the expiration or
termination of any applicable waiting periods under the Antitrust Laws and the
receipt of the Required Consents as soon as practicable. Notwithstanding
anything to the contrary in this Agreement, neither Xxxx nor Westvaco shall be
required to hold separate (including by trust or otherwise) or divest any of its
businesses or assets or enter into any consent decree or other agreement that
would restrict it in the conduct of its business as heretofore conducted if such
action is reasonably likely to have a material adverse effect on Parent (after
giving effect to the Mergers), including a material adverse effect on the total
benefits expected to be realized by Parent after completion of the Mergers.
(b) Each of the parties will consult and cooperate with one another,
and consider in good faith the views of one another, in connection with any
analyses, appearances, presentations, memoranda, briefs, arguments, opinions and
proposals made or submitted by or on behalf of any party, hereto in connection
with proceedings under or relating to any Antitrust Law. Each of the parties
will (i) promptly notify the other party of any communication received by that
party from, or given by it to, any Governmental Entity and, subject to
applicable law, if practicable, permit the other party to review in advance any
proposed written communication to any such Governmental Entity and incorporate
the other party's reasonable comments, (ii) not agree to participate in any
substantive meeting or discussion with any such Governmental Entity in respect
of any filing, investigation or inquiry concerning this Agreement or the Merger
unless, to the extent reasonably practicable, it consults with the other party
in advance and, to the extent permitted by such Governmental Entity, gives the
other party the opportunity to attend and (iii) furnish the other party with
copies of all correspondence, filings and written communications between them
and their affiliates and their respective officers, directors, employees,
agents, representatives, consultants, financial advisors, attorneys, accountants
and other agents on one hand, and any such Governmental Entity or its respective
staff on the other hand, with respect to this Agreement and the Merger.
SECTION 6.4 Indemnification, Exculpation and Insurance.
-------------------------------------------------------
(a) Parent agrees that at all times after the Effective Time, it shall
indemnify, or shall cause the Westvaco Surviving Corporation to indemnify, each
person who is now, or has
51
been at any time prior to the date of this Agreement, a director or officer of
Westvaco, any of its subsidiaries or affiliates, or of any of its successors and
assigns (individually a "WESTVACO INDEMNIFIED PARTY" and collectively the
"WESTVACO INDEMNIFIED PARTIES"), to the same extent and in the same manner as is
now provided in the Westvaco Certificate or its by-laws or otherwise in effect
on the date hereof (pursuant to an indemnification agreement or otherwise), with
respect to any claim, liability, loss, damage, cost or expense (whenever
asserted or claimed) based in whole or in part on, or arising in whole or in
part out of, any matter existing or occurring at or prior to the Effective Time.
Parent shall, or shall cause the Westvaco Surviving Corporation to, maintain in
effect for not less than six years after the Effective Time the current policies
of directors' and officers' liability insurance maintained by Westvaco on the
date hereof; PROVIDED, HOWEVER, that Parent or the Westvaco Surviving
Corporation may substitute therefor policies having at least the same coverage
and containing terms and conditions which are no less advantageous to the
persons currently covered by such policies as insured) with respect to matters
existing or occurring at or prior to the Effective Time; and PROVIDED, FURTHER,
that if the aggregate annual premiums for such policies at any time during such
period will exceed 150% of the per annum premium rate paid by Westvaco and its
subsidiaries as of the date hereof for such policies, then Parent shall, or
shall cause the Westvaco Surviving Corporation to, provide only such coverage as
will then be available at an annual premium equal to 150% of such rate (or, if
greater, the amount paid for insurance pursuant to Section 6.4(b)).
(b) Parent agrees that at all times after the Effective Time, it shall
indemnify, or shall cause the Xxxx Surviving Corporation to indemnify, each
person who is now, or has been at any time prior to the date of this Agreement,
a director or officer of Xxxx, any of its subsidiaries or affiliates, or of any
of its successors and assigns (individually an "XXXX INDEMNIFIED PARTY" and
collectively the "XXXX INDEMNIFIED PARTIES"), to the same extent and in the same
manner as is now provided in the Xxxx Articles or its code of regulations or
otherwise in effect on the date hereof (pursuant to an indemnification agreement
or otherwise), with respect to any claim, liability, loss, damage, cost or
expense (whenever asserted or claimed) based in whole or in part on, or arising
in whole or in part out of, any matter existing or occurring at or prior to the
Effective Time. Parent shall, or shall cause the Xxxx Surviving Corporation to,
maintain in effect for not less than six years after the Effective Time the
current policies of directors' and officers' liability insurance maintained by
Xxxx on the date hereof ; PROVIDED, HOWEVER, that Parent or the Xxxx Surviving
Corporation may substitute therefor policies having at least the same coverage
and containing terms and conditions which are no less advantageous to the
persons currently covered by such policies as insured) with respect to matters
existing or occurring at or prior to the Effective Time; and PROVIDED, FURTHER,
that if the aggregate annual premiums for such policies at any time during such
period will exceed 150% of the per annum premium rate paid by Xxxx and its
subsidiaries as of the date hereof for such policies, then Parent shall, or
shall cause the Xxxx Surviving Corporation to, provide only such coverage as
will then be available at an annual premium equal to 150% of such rate (or, if
greater, the amount paid for insurance pursuant to Section 6.4(a)).
SECTION 6.5 Fees and Expenses.
------------------------------
Except as set forth in this Section 6.5 and in Section 8.2, all fees
and expenses incurred in connection with the Mergers, this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such fees or expenses, whether or not the
52
Mergers are consummated, except that each of Westvaco and Xxxx shall bear and
pay one-half of the costs and expenses (other than the fees and expenses of each
party's attorneys and accountants, which shall be borne by the party incurring
such expenses) incurred by the parties hereto in connection with (i) the filing,
printing and mailing of the Form S-4 and the Joint Proxy Statement (including
SEC filing fees) and (ii) the filings of the premerger notification and report
forms under the HSR Act and similar laws of other jurisdictions (including
filing fees).
SECTION 6.6 Public Announcements.
---------------------------------
The initial press release relating to the Mergers shall be a joint
press release, to be agreed upon by Xxxx and Westvaco. Thereafter, Xxxx and
Westvaco shall consult with each other before issuing any press release or
making any public statement with respect to this Agreement or the transactions
contemplated hereby and shall not issue any such press release or make any such
public statement without the prior consent of the other party, unless such
consent will have been unreasonably withheld. Notwithstanding the foregoing, any
such press release or public statement as may be required by applicable law or
any listing agreement with any national securities exchange may be issued prior
to such consultation if the party making the release or statement has used its
reasonable efforts to consult with the other party.
SECTION 6.7 Affiliates.
-----------------------
As soon as practicable after the date hereof, each of Westvaco and
Xxxx shall deliver to the other a letter identifying all persons who may be
deemed to be, at the time this Agreement is submitted for approval and adoption
by stockholders, "affiliates" of it for purposes of Rule 145 under the
Securities Act, and such list shall be updated as necessary to reflect changes
from the date hereof. Each of Westvaco and Xxxx shall use reasonable best
efforts to cause each person identified on its list to deliver to the other, on
or before the date immediately preceding the date of filing the Form S-4, a
written agreement substantially in the form attached as Exhibit D and, in the
event any other person becomes an affiliate of it thereafter, to cause such
person to deliver such an agreement to the other as soon as practicable but in
any event at the Closing.
SECTION 6.8 NYSE Listing.
--------------------------
Xxxx shall use reasonable best efforts to cause the Parent Common
Stock issuable under Article III to be approved for listing on the NYSE, subject
to official notice of issuance, as promptly as practicable after the date
hereof, and in any event prior to the Closing Date.
SECTION 6.9 Tax Treatment.
--------------------------
Each of Xxxx, Westvaco and their respective subsidiaries shall use all
reasonable efforts to cause (a) the Mergers, taken together, to qualify as a
transaction described in Section 351 of the Code, (b) each of the Mergers to
qualify as a reorganization within the meaning of Section 368(a) of the Code and
(c) the delivery of the opinions of counsel referred to in Sections 7.2(d) and
7.3(d). None of Xxxx, Westvaco or any of their respective subsidiaries shall
take any action, or allow any affiliate to take any action, reasonably likely to
preclude any of the foregoing.
53
SECTION 6.10 Takeover Statutes.
--------------------------------
If any anti-takeover or similar statute or regulation is or may become
applicable to the transactions contemplated by this Agreement, each of the
parties hereto and its respective Board of Directors shall (i) grant such
approvals and take all such actions as are legally permissible so that the
transactions contemplated hereby may be consummated as promptly as practicable
on the terms contemplated hereby and (ii) otherwise act to eliminate or minimize
the effects of any such statute or regulation on the transactions contemplated
hereby.
SECTION 6.11 Conveyance Taxes.
------------------------------
Westvaco and Xxxx shall cooperate in the preparation, execution and
filing of all Tax Returns, questionnaires, applications or other documents
regarding any real property transfer or gains, sales, use, transfer, value
added, stock transfer and stamp taxes, any transfer, recording, registration and
other fees or any similar Taxes which become payable in connection with the
transactions contemplated by this Agreement that are required or permitted to be
filed on or before the Effective Time. Westvaco and Xxxx shall pay on behalf of
those persons holding Westvaco Common Stock and Xxxx Common Stock, respectively,
immediately prior to the Effective Time any real estate transfer Taxes payable
by such persons in connection with the Mergers.
SECTION 6.12 Employee Benefits.
-------------------------------
(a) From and after the Effective Time, (i) Parent shall assume and
honor all agreements and commitments listed in Section 6.12(a)(i) of the
Westvaco Disclosure Schedule and Section 6.12(a)(i)(A) of the Xxxx Disclosure
Schedule, (ii) Parent shall cause Xxxx to honor all agreements and commitments
listed in Sections 6.12(a)(i)(B) and 6.12(a)(i)(C) of the Xxxx Disclosure
Schedule, and (iii) Parent shall assume and honor all Westvaco Stock Plans and
all Xxxx Stock Plans, taking such actions as are necessary to ensure that shares
of Parent Common Stock may be subject to awards granted under such plans. The
foregoing shall not be construed to prevent the termination of employment of any
Employee (as defined below) or the amendment or termination of any particular
Xxxx Benefit Plan or Westvaco Benefit Plan to the extent permitted by its terms
as in effect immediately before the Effective Time.
(b) For all purposes under the employee benefit plans of Parent and
its affiliates providing benefits to any current or former director, officer or
employee of Xxxx or Westvaco or any of their respective affiliates, as the case
may be (each an "EMPLOYEE") after the Effective Time (the "NEW PLANS"), and
subject to applicable law and obligations under applicable collective bargaining
agreements, each Employee shall be credited with his or her years of service
with Xxxx or Westvaco or any of their respective affiliates, as the case may be,
before the Effective Time, to the same extent as such Employee was entitled,
before the Effective Time, to credit for such service under any similar Xxxx
Benefit Plans or Westvaco Benefit Plans, as applicable, except to the extent
such credit would result in a duplication of benefits. In addition, and without
limiting the generality of the foregoing, and subject to applicable law and
obligations under applicable collective bargaining agreements: (i) each Employee
shall be immediately eligible to participate, without any waiting time, in any
and all New Plans which are welfare benefit plans to the extent coverage under
such New Plan replaces coverage under a
54
comparable Xxxx Benefit Plan or Westvaco Benefit Plan, as applicable, in which
such Employee participated immediately before the Effective Time (such plans,
collectively, the "OLD PLANS"); and (ii) for purposes of each New Plan providing
medical, dental, pharmaceutical and/or vision benefits to any Employee, Parent
shall cause all pre-existing condition exclusions and actively-at-work
requirements of such New Plan to be waived for such Employee and his or her
covered dependents, and Parent shall cause any eligible expenses incurred by
such Employee and his or her covered dependents during the portion of the plan
year of the Old Plan ending on the date such Employee's participation in the
corresponding New Plan begins to be taken into account under such New Plan for
purposes of satisfying all deductible, coinsurance and maximum out-of-pocket
requirements applicable to such Employee and his or her covered dependents for
the applicable plan year as if such amounts had been paid in accordance with
such New Plan.
(c) The parties agree that the consummation of the transactions
contemplated by this Agreement (in the case of Westvaco) and the shareholder
approval of this Agreement (in the case of Xxxx) shall constitute a "CHANGE IN
CONTROL" for all purposes of all compensation and benefit plans of Westvaco and
Xxxx (except for any tax-qualified defined benefit pension plan of Xxxx). The
parties further agree that for purposes of this Section 6.12(c), the term
"CHANGE IN CONTROL" shall include all equivalent terms as required by context
(by way of illustration and not limitation, "SIGNIFICANT CHANGE").
(d) Xxxx shall take (or cause to be taken) such actions with respect
to benefit matters as are set forth in Section 6.12(d) of the Xxxx Disclosure
Schedule.
(e) Xxxx shall take (or shall cause to be taken) such actions as are
necessary to assure that no funding of any Xxxx grantor trust is required to
occur in connection with the execution of this Agreement or the consummation of
the transactions contemplated hereby.
(f) Xxxx shall amend its 2001 Annual Incentive Plan, its Long Term
Incentive Plan covering 2000-2001 and its Long Term Incentive Plan covering
2001-2002 to change the respective pro-rata payments of the then current target
incentives which would otherwise become payable upon a Change in Control to
pro-rata payments based on the level of actual achievement of the respective
performance goals through the Effective Time.
(g) Parent shall cause Xxxx to continue to provide retiree medical
benefits to Xxxx employees who meet the requirements for such benefits, in
accordance with the terms and conditions thereof in effect as of the date
hereof, until at least the first anniversary of the Effective Time. During such
one-year period the Chairman and the Chief Executive Officer shall discuss the
retiree medical benefits program in good faith, seeking to agree on the most
appropriate long-term approach to such benefits.
SECTION 6.13 Consents of Accountants.
-------------------------------------
Xxxx and Westvaco shall use reasonable best efforts to cause to be
delivered to each other consents from their respective independent auditors,
dated the date on which the Form S-4 will become effective, in form reasonably
satisfactory to the recipient and customary in scope and substance for consents
delivered by independent public accountants in connection with registration
statements on Form S-4 under the Securities Act.
55
SECTION 6.14 Rights Agreements.
-------------------------------
(a) Prior to the Effective Time, Xxxx shall not redeem the Xxxx
Rights, or amend, modify (other than to delay any "distribution date" therein or
to render the Xxxx Rights inapplicable to the Merger or any action permitted
under this Agreement) or terminate the Xxxx Rights Agreement, unless required to
do so by order of a court of competent jurisdiction.
(b) Prior to the Effective Time, Westvaco shall not redeem the
Westvaco Rights or amend, modify (other than to delay any "distribution date"
therein or to render the Westvaco Rights inapplicable to the Merger or any
action permitted under this Agreement) or terminate the Westvaco Rights
Agreement, unless required to do so by order of a court of competent
jurisdiction.
SECTION 6.15 Transfer Statutes.
-------------------------------
Each of Xxxx and Westvaco agrees to use reasonable best efforts
to comply promptly with all requirements of state property transfer statutes to
the extent applicable to the transactions contemplated by this Agreement and to
take all actions necessary to cause the transactions contemplated hereby to be
effected in compliance with such statutes. Xxxx and Westvaco agree that they
will consult with each other to determine what, if any, actions must be taken
prior to or after the Effective Time to ensure compliance with such statutes.
Each of Xxxx and Westvaco agrees to provide the other with any documents to be
submitted to the relevant state agencies prior to submission.
SECTION 6.16 Section 16(b).
---------------------------
Xxxx and Westvaco shall take all such steps as are reasonably
necessary to cause the transactions contemplated by this Agreement and any other
dispositions of equity securities of Xxxx or Westvaco (including derivative
securities) or acquisitions of equity securities of Parent (including derivative
securities) in connection herewith by any individual who (a) is a director or
officer of Xxxx or Westvaco or (b), at the Effective Time, will become a
director or officer of Parent to be exempt under Rule 16b-3 promulgated under
the Exchange Act.
SECTION 6.17 Payment of Dividends.
----------------------------------
(a) From the date of the Agreement until the Effective Time, Westvaco
and Xxxx shall coordinate with each other regarding the declaration of dividends
in respect of the shares of Westvaco Common Stock and the shares of Xxxx Common
Stock and the record dates and payment dates relating thereto, it being the
intention of the parties that holders of shares of Westvaco Common Stock or Xxxx
Common Stock will not receive two dividends, or fail to receive one dividend,
for any single calendar quarter with respect to their shares of Westvaco Common
Stock or Xxxx Common Stock and the shares of Parent Common Stock any holder of
shares of Westvaco Common Stock or Xxxx Common Stock receives in exchange
therefor in connection with the Mergers.
(b) It is the intention of Xxxx and Westvaco that the initial annual
dividend rate on the shares of Parent Common Stock following the Mergers shall
be $0.92 per share.
56
SECTION 6.18 Employment Agreements.
-----------------------------------
At the Effective Time, Parent shall enter into employment agreements
with each of Xxxxxx X. Xxxxx and Xxxx X. Xxxx, Xx. in the form of Exhibit E and
F, respectively.
SECTION 6.19 Share Repurchase. Westvaco shall, prior to the Effective Time,
------------------------------
repurchase from holders of Westvaco Common Stock at least 800,000
shares of Westvaco Common Stock, such repurchases to be made at such times prior
to the Effective Time and upon such terms as determined by Westvaco.
SECTION 6.20 Parent Taxable Year. Xxxx, Westvaco and Parent confirm their
---------------------------------
intention to seek to have the taxable year of Parent immediately after
the Mergers be, for federal income tax purposes, the year ending on December 31
of each year. In furtherance of the foregoing, Xxxx, Westvaco and Parent shall,
and shall cause their respective affiliates to, cooperate and consider in good
faith taking appropriate actions (including seeking a ruling or other
confirmation from the Internal Revenue Service) necessary to ensure that, for
federal income tax purposes, the taxable year of Parent immediately after the
Mergers shall be the year ending on December 31 of each year.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.1 Conditions to Each Party's Obligation to Effect The Merger.
-------------------------------------------------------------------------
The respective obligation of each party to effect the Mergers is
subject to the satisfaction or waiver on or prior to the Closing Date of the
following conditions:
(a) Stockholder Approvals. Each of the Xxxx Shareholder Approval and
---------------------
the Westvaco Stockholder Approval will have been obtained.
(b) HSR Act. The waiting period (and any extension thereof) applicable
-------
to the Mergers under the HSR Act will have been terminated or will have expired.
(c) EU Approval. The approval by the European Commission of the
-----------
Mergers and the other transactions contemplated by this Agreement will have been
obtained pursuant to the EC Merger Regulation.
(d) Governmental, Regulatory and Other Approvals. (i) All required
--------------------------------------------
approvals and consents of any Governmental Entity in connection with the Mergers
and the consummation of the other transactions contemplated hereby (together
with the matters contemplated by Sections 7.1(b) and 7.1(c), the "REQUISITE
REGULATORY APPROVALS") will have been obtained (and all relevant statutory,
regulatory or other waiting periods of any Governmental Entity will have
expired) unless the failure to receive any such approval or consent would not,
and would not be reasonably expected to, have a material adverse effect on
Parent (after giving effect to the Mergers) at or after the Effective Time and
(ii) all such approvals and consents that have been obtained will be on terms
that would not, and would not
57
be reasonably expected to, have a material adverse effect on Parent (after
giving effect to the Mergers) at or after the Effective Time.
(e) No Injunctions or Restraints. No judgment, order, decree, statute,
----------------------------
law, ordinance, rule or regulation, entered, enacted, promulgated, enforced or
issued by any court or other Governmental Entity of competent jurisdiction or
other legal restraint or prohibition (collectively, "RESTRAINTS") will be in
effect (i) preventing the consummation of the Mergers, or (ii) that otherwise is
reasonably likely to have a material adverse effect on Xxxx or Westvaco, as
applicable, or the effective operation of their respective businesses following
consummation of the Mergers; PROVIDED, HOWEVER, that each of Xxxx and Westvaco
will have used reasonable best efforts to prevent the entry of any such
Restraints and to appeal as promptly as possible any such Restraints that may be
entered.
(f) Form S-4. The Form S-4 will have become effective under the
--------
Securities Act prior to the mailing of the Joint Proxy Statement by each of Xxxx
and Westvaco to their respective stockholders, and no stop order or proceedings
seeking a stop order will be threatened by the SEC or will have been initiated
by the SEC.
(g) NYSE Listing. The shares of Parent Common Stock issuable to the
------------
stockholders of Xxxx and Westvaco as contemplated by Article III will have been
approved for listing on the NYSE, subject to official notice of issuance.
SECTION 7.2 Conditions to Obligations of Westvaco.
---------------------------------------------------
The obligation of Westvaco to effect the Westvaco Merger is further
subject to satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations and warranties
------------------------------
of Xxxx set forth herein will be true and correct both when made and at and as
of the Closing Date, as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such date), except
where the failure of such representations and warranties (other than those set
forth in Section 4.1(c)) to be so true and correct (without giving effect to any
limitation as to "materiality" or "material adverse effect" set forth therein)
does not have, and is not likely to have, individually or in the aggregate, a
"material adverse effect" on Xxxx.
(b) Performance of Obligations of Xxxx. Xxxx will have performed in
----------------------------------
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date.
(c) Officer's Certificate. Westvaco will have received an officer's
---------------------
certificate duly executed by each of the Chief Executive Officer and Chief
Financial Officer of Xxxx to the effect that the conditions set forth in
Sections 7.2(a) and 7.2(b) have been satisfied.
(d) Tax Opinion. Westvaco will have received an opinion of Wachtell,
-----------
Lipton, Xxxxx & Xxxx, in form and substance reasonably satisfactory to Westvaco,
dated the date of the Effective Time, substantially to the effect that, on the
basis of facts, representations and assumptions set forth in such opinion, for
United States federal income tax purposes (i) the Mergers, taken together, will
constitute a transaction described in Section 351 of the Code and/or
58
(ii) the Westvaco Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code, each of Parent, Westvaco and Xxxxxxx Merger Sub will
be a party to the reorganization within the meaning of section 368(b) of the
Code and no gain or loss will be recognized by Westvaco as a result of the
Westvaco Merger. In rendering such opinion, Wachtell, Lipton, Xxxxx & Xxxx may
receive and rely upon representations contained in certificates of Parent,
Westvaco, Xxxx and others, and the parties hereto agree to provide Wachtell,
Lipton, Xxxxx & Xxxx with such certificates as it may reasonably request in
connection with rendering its opinion.
SECTION 7.3 Conditions to Obligations of Xxxx.
-----------------------------------------------
The obligations of Xxxx to effect the Mergers are further subject to
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations and warranties
------------------------------
of Westvaco set forth herein will be true and correct both when made and at and
as of the Closing Date, as if made at and as of such time (except to the extent
expressly made as of an earlier date, in which case as of such date), except
where the failure of such representations and warranties (other than those set
forth in Section 4.2(c)) to be so true and correct (without giving effect to any
limitation as to "materiality," or "material adverse effect" set forth therein)
does not have, and is not likely to have, individually or in the aggregate, a
material adverse effect on Westvaco.
(b) Performance of Obligations of Westvaco. Westvaco will have
--------------------------------------
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date.
(c) Officer's Certificate. Xxxx will have received an officer's
---------------------
certificate duly executed by each of the Chief Executive Officer and Chief
Financial Officer of Westvaco to the effect that the conditions set forth in
Sections 7.3(a) and 7.3(b) have been satisfied.
(d) Tax Opinion. Xxxx will have received an opinion of Skadden, Arps,
-----------
Slate, Xxxxxxx & Xxxx LLP, in form and substance reasonably satisfactory to
Xxxx, dated the date of the Effective Time, substantially to the effect that, on
the basis of facts, representations and assumptions set forth in such opinion,
for United States federal income tax purposes (i) the Mergers, taken together,
will constitute a transaction described in Section 351 of the Code and/or (ii)
the Xxxx Merger will constitute a reorganization within the meaning of Section
368(a) of the Code, each of Parent, Xxxx and Xxxxxxx Merger Sub will be a party
to the reorganization within the meaning of Section 368(b) of the Code and no
gain or loss will be recognized by Xxxx as a result of the Xxxx Merger. In
rendering such opinion, Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP may receive and
rely upon representations contained in certificates of Parent, Westvaco, Xxxx
and others, and the parties hereto agree to provide Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP with such certificates as it may reasonably request in
connection with rendering its opinion.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination.
------------------------
59
This Agreement may be terminated at any time prior to the Effective
Time, and (except in the case of 8.1(e) or 8.1(f)) whether before or after the
Xxxx Shareholder Approval or the Westvaco Stockholder Approval:
(a) by mutual written consent of Westvaco and Xxxx;
(b) by either Westvaco or Xxxx:
(i) if the Mergers will not have been consummated by February 28,
2002 (the "OUTSIDE DATE"); PROVIDED, HOWEVER, that the right to terminate this
Agreement pursuant to this Section 8.1(b)(i) shall not be available to any party
whose failure to perform any of its obligations under this Agreement results in
the failure of the Mergers to be consummated by such time; PROVIDED, FURTHER,
HOWEVER, that in the event any of the conditions set forth in Section 7.1(b),
Section 7.1(c) or Section 7.1(d) shall not have been satisfied by such date, the
Outside Date shall be extended to May 31, 2002;
(ii) if the Xxxx Shareholder Approval will not have been obtained
by reason of the failure to obtain the required vote at a Xxxx Shareholders
Meeting duly convened therefor or at any adjournment or postponement thereof;
(iii) if the Westvaco Stockholder Approval will not have been
obtained by reason of the failure to obtain the required vote at a Westvaco
Stockholders Meeting duly convened therefor or at any adjournment or
postponement thereof;
(iv) if any Restraint having any of the effects set forth in
Section 7.1(e) will be in effect and will have become final and nonappealable,
or if any Governmental Entity that must grant a Requisite Regulatory Approval
has denied approval of the Mergers and such denial has become final and
nonappealable, provided that the party seeking to terminate this Agreement
pursuant to this Section 8.1(b)(iv) will have used reasonable best efforts to
prevent the entry of and to remove such Restraint or to obtain such Requisite
Regulatory Approval, as the case may be;
(c) by Westvaco if Xxxx will have breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform (i)
would give rise to the failure of a condition set forth in Section 7.2(a) or
7.2(b) and (ii) is incapable of being cured by Xxxx or is not cured within 30
days of written notice thereof;
(d) by Xxxx if Westvaco will have breached or failed to perform in any
material respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform (i)
would give rise to the failure of a condition set forth in Section 7.3(a) or
7.3(b) and (ii) is incapable of being cured by Westvaco or is not cured within
30 days of written notice thereof;
(e) by Westvaco, (x) at any time prior to the Xxxx Shareholders
Meeting, if the Board of Directors of Xxxx will have (i) failed to include in
the Joint Proxy Statement to the shareholders of Xxxx, its recommendation
without modification or qualification that such shareholders approve and/or
adopt this Agreement and the transactions contemplated hereby, (ii)
60
subsequently withdrawn such recommendation or (iii) modified or qualified such
recommendation in a manner adverse to the interests of Westvaco, or (y) if the
Board of Directors of Xxxx shall have failed to call the Xxxx Shareholders
Meeting in breach of Section 6.1(b) and Xxxx shall have failed to cure such
breach on 30 days' notice from Westvaco;
(f) by Xxxx, (x) at any time prior to the Westvaco Stockholders
Meeting, if the Board of Directors of Westvaco will have (i) failed to include
in the Joint Proxy Statement to the stockholders of Westvaco, its recommendation
without modification or qualification that such stockholders adopt this
Agreement and the transactions contemplated hereby, (ii) subsequently withdrawn
such recommendation or (iii) modified or qualified such recommendation in a
manner adverse to the interests of Xxxx or (y) if the Board of Directors of
Westvaco shall have failed to call the Westvaco Stockholders Meeting in breach
of Section 6.1(c) and Westvaco shall have failed to cure such breach on 30 days'
notice from Xxxx;
(g) by Westvaco, if (i) the Board of Directors of Westvaco authorizes
Westvaco, subject to complying with the terms of this Agreement, to enter into a
binding written agreement concerning a transaction that constitutes a Westvaco
Superior Proposal and Westvaco notifies Xxxx in writing that it intends to enter
into such an agreement, attaching the most current version of such agreement (or
a description of all material terms and conditions thereof) to such notice, (ii)
Xxxx does not make, within five business days of receipt of Westvaco's written
notification of its intention to enter into a binding agreement for a Westvaco
Superior Proposal, an offer that the Board of Directors of Westvaco determines,
in good faith after consultation with a financial advisor of nationally
recognized reputation, is at least as favorable to Westvaco's stockholders as
the Westvaco Superior Proposal, it being understood that Westvaco shall not
enter into any such binding agreement during such five-day period, and (iii)
Westvaco, at or prior to any termination pursuant to this Section 8.1(g), pays
to Xxxx the Termination Fee (as defined below) set forth in Section 8.2(c); or
(h) by Xxxx, if (i) the Board of Directors of Xxxx authorizes Xxxx,
subject to complying with the terms of this Agreement, to enter into a binding
written agreement concerning a transaction that constitutes a Xxxx Superior
Proposal and Xxxx notifies Westvaco in writing that it intends to enter into
such an agreement, attaching the most current version of such agreement (or a
description of all material terms and conditions thereof) to such notice, (ii)
Westvaco does not make, within five business days of receipt of Xxxx'x written
notification of its intention to enter into a binding agreement for a Xxxx
Superior Proposal, an offer that the Board of Directors of Xxxx determines, in
good faith after consultation with a financial advisor of nationally recognized
reputation, is at least as favorable to Xxxx'x stockholders as the Xxxx Superior
Proposal, it being understood that Xxxx shall not enter into any such binding
agreement during such five-day period, and (iii) Xxxx, at or prior to any
termination pursuant to this Section 8.1(h), pays to Westvaco the Termination
Fee set forth in Section 8.2(b).
SECTION 8.2 Effect of Termination.
----------------------------------
(a) In the event of termination of this Agreement as provided in
Section 8.1, and subject to the provisions of Section 9.1, this Agreement shall
forthwith become void, and there shall be no liability or obligation on the part
of any of the parties, except (i) as set forth in
61
this Section 8.2 and in Sections 4.1(t), 4.2(t), 6.2 and 6.5, and (ii) nothing
contained herein shall relieve any party from liability for any willful breach
hereof.
(b) If this Agreement is terminated (i) by Westvaco pursuant to
Section 8.1(e), (ii) by Westvaco or Xxxx pursuant to Section 8.1(b)(ii) because
of the failure to obtain the Xxxx Shareholder Approval and prior to the Xxxx
Shareholders Meeting there will have been an offer or proposal for, or an
announcement of any intention with respect to (including the filing of a
statement of beneficial ownership on Schedule 13D discussing the possibility of
or reserving the right to engage in), a transaction that would constitute a
Business Combination involving Xxxx (whether or not such offer, proposal,
announcement or agreement will have been rejected or withdrawn prior to the time
of such meeting), (iii) by Xxxx or Westvaco pursuant to Section 8.1(b)(i)
because the Mergers shall not have been consummated at or prior to the Outside
Date, and at the time of the termination the Xxxx Shareholder Approval shall not
have been obtained and there shall have been an offer or proposal for, or an
announcement of any intention with respect to (including the filing of a
statement of beneficial ownership on Schedule 13D discussing the possibility of
or reserving the right to engage in), a transaction that would constitute a
Business Combination involving Xxxx (whether or not such offer, proposal,
announcement or agreement will have been rejected or withdrawn prior to the
Outside Date); or (iv) by Xxxx pursuant to Section 8.1(h), then (A) in the case
of clauses (b)(i), (b)(ii) and (b)(iii), if within nine months of termination of
this Agreement, Xxxx or its subsidiaries enters into a definitive agreement with
any Third Party with respect to a Business Combination or any Business
Combination with respect to Xxxx or its subsidiaries is consummated, then Xxxx
shall pay to Westvaco, not later than one business day after the earlier of the
date such agreement is entered into or such Business Combination is consummated,
a termination fee of $95,000,000 (the "TERMINATION FEE") and (B) in the case of
clause (b)(iv), Xxxx shall pay to Westvaco, at or prior to such termination
pursuant to Section 8.1(h), the Termination Fee. Notwithstanding the foregoing,
no Termination Fee shall be payable by Xxxx to Westvaco in any circumstance in
which the Westvaco shareholders vote to disapprove this Agreement or the
transactions contemplated hereby. For purposes of this Agreement a "BUSINESS
COMBINATION" shall mean a transaction that would constitute an Alternative
Transaction, except that for purposes of clauses (i) and (iii) of the definition
of Alternative Transaction, the applicable percentages shall be 50%.
(c) If this Agreement is terminated (i) by Xxxx pursuant to Section
8.1(f), (ii) by Westvaco or Xxxx pursuant to Section 8.1(b)(iii) because of the
failure to obtain the Westvaco Stockholder Approval and prior to the Westvaco
Stockholders Meeting there will have been an offer or proposal for, or an
announcement of any intention with respect to (including the filing of a
statement of beneficial ownership on Schedule 13D discussing the possibility of
or reserving the right to engage in), a transaction that would constitute a
Business Combination involving Westvaco (whether or not such offer, proposal,
announcement or agreement will have been rejected or withdrawn prior to the time
of such meeting), (iii) by Xxxx or Westvaco pursuant to Section 8.1(b)(i)
because the Mergers shall not have been consummated at or prior to the Outside
Date, and at the time of the termination the Westvaco Stockholder Approval shall
not have been obtained and there shall have been an offer or proposal for, or an
announcement of any intention with respect to (including the filing of a
statement of beneficial ownership on Schedule 13D discussing the possibility of
or reserving the right to engage in), a transaction that would constitute a
Business Combination involving Westvaco (whether or not such offer, proposal,
announcement or agreement will have been rejected or withdrawn prior to the
Outside
62
Date); or (iv) by Westvaco pursuant to Section 8.1(g), then (A) in the
case of clauses (c)(i), (c)(ii) and (c)(iii), if within nine months of
termination of this Agreement, Westvaco or its subsidiaries enters into a
definitive agreement with any Third Party with respect to a Business Combination
or any Business Combination with respect to Westvaco or its subsidiaries is
consummated, then Westvaco shall pay to Xxxx, not later than one business day
after the earlier of the date such agreement is entered into or such Business
Combination is consummated, the Termination Fee and (B) in the case of clause
(c)(iv), Westvaco shall pay to Xxxx, at or prior to such termination pursuant to
Section 8.1(g), the Termination Fee. Notwithstanding the foregoing, no
Termination Fee shall be payable by Westvaco to Xxxx in any circumstance in
which the Xxxx shareholders vote to disapprove this Agreement or the
transactions contemplated hereby.
(d) Each Termination Fee payable under Sections 8.2(b) and 8.2(c)
shall be payable in immediately available funds no later than the applicable
date set forth in Sections 8.2(b) and 8.2(c).
(e) Westvaco and Xxxx agree that the agreements contained in Sections
8.2(b) and 8.2(c) are an integral part of the transaction contemplated by this
Agreement and constitute liquidated damages and not a penalty. If one party
fails to promptly pay to the other any fee due under such Sections 8.2(b) and
8.2(c), the defaulting party shall pay the costs and expenses (including legal
fees and expenses) in connection with any action, including the filing of any
lawsuit or other legal action, taken to collect payment.
SECTION 8.3 Amendment.
----------------------
Subject to compliance with applicable law, this Agreement may be
amended by the parties hereto at any time before or after the Xxxx Shareholder
Approval or the Westvaco Stockholder Approval; PROVIDED, HOWEVER, that after any
such approval, there may not be, without further approval of the shareholders of
Xxxx (in the case of the Xxxx Shareholder Approval) and the stockholders of
Westvaco (in the case of the Westvaco Stockholder Approval), any amendment of
this Agreement that changes the amount or the form of the consideration to be
delivered to the holders of Xxxx Common Stock or Westvaco Common Stock hereunder
or that by law otherwise expressly requires the further approval of the
shareholders of Xxxx or the stockholders of Westvaco, as the case may be. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto and duly approved by the parties' respective
Boards of Directors or a duly authorized committee thereof.
SECTION 8.4 Extension; Waiver.
------------------------------
At any time prior to the Effective Time, a party hereto may, subject
to the proviso of Section 8.3 (and for this purpose treating any waiver referred
to below as an amendment), (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) waive
compliance by the other party with any of the agreements or conditions contained
in this Agreement. Any agreement on the part of a party hereto to any such
extension or waiver shall be
63
valid only if set forth in an instrument in writing signed on behalf of such
party. Any extension or waiver given in compliance with this Section 8.4 or
failure to insist on strict compliance with an obligation, covenant, agreement
or condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Nonsurvival of Representations and Warranties.
----------------------------------------------------------
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 9.1 shall not limit any covenant or agreement of the parties
that, by its terms, contemplates performance after the Effective Time.
SECTION 9.2 Notices.
----------------------
All notices, requests, claims, demands and other communications under
this Agreement shall be in writing and shall be deemed given if delivered
personally, telecopied or faxed (which is confirmed) or sent by overnight
courier (providing proof of delivery) 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 Westvaco, to:
Xxx Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Fax: No: (000) 000-0000
Attention: General Counsel
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
(b) if to Parent or Xxxx, to:
Xxxx World Xxxxxxxxxxxx
Xxxxxxxxxx Xxxxx Xxxxxxxxx
Xxxxxx, Xxxx 00000
Fax: No: (000) 000-0000
Attention: General Counsel
64
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
SECTION 9.3 Definitions.
---------------------------
For purposes of this Agreement:
(a) An "AFFILIATE" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person, where "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a person, whether through the ownership
of voting securities, by contract, as trustee or executor, or otherwise;
(b) "MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means, when
used in connection with Xxxx or Westvaco, any change, effect, event, occurrence
or state of facts that is or could reasonably be expected to be materially
adverse to the business, financial condition or results of operations of Xxxx or
Westvaco, as the case may be, and its subsidiaries taken as a whole, it being
understood that none of the following shall be deemed by itself or by
themselves, either alone or in combination, to constitute a material adverse
effect: (i) any change in the market price or trading volume of Xxxx Common
Stock or Westvaco Common Stock, as the case may be, (ii) any changes resulting
from the announcement of the Mergers or the transactions contemplated hereby or
from any action required to be taken by the terms hereof, (iii) any changes in
general economic conditions in industries in which Xxxx or Westvaco, as the case
may be, operates, which conditions do not affect Xxxx or Westvaco, as the case
may be, disproportionately relative to other entities operating in such
industries, and (iv) any changes in the United States or global economy as a
whole;
(c) "PERSON" means a natural person, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity;
(d) a "SUBSIDIARY" of any person means another person, an amount of
the voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person; and
(e) "KNOWLEDGE" of any person that is not a natural person means the
knowledge of such person's executive officers, including without limitation, its
Chief Executive Officer, Chief Financial Officer, general counsel and head of
human resources.
65
SECTION 9.4 Interpretation.
---------------------------
When a reference is made in this Agreement to an Article, Section or
Exhibit, such reference shall be to an Article or Section of, or an Exhibit to,
this Agreement, unless otherwise indicated. 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 "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such term. Any
agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
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 one or more counterparts have been signed by each of the parties hereto and
delivered to the other parties.
SECTION 9.6 Entire Agreement; No Third-Party Beneficiaries.
-------------------------------------------------------------
This Agreement (including the documents, exhibits, schedules and
instruments referred to herein), the other agreements entered into between Xxxx
and Westvaco on the date hereof relating to this Agreement and the transactions
contemplated hereby, and the Confidentiality Agreement (a) constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of this Agreement
and (b) except for the provisions of Section 6.4 and Section 6.12(a)(i), are not
intended to confer upon any person other than the parties any rights or
remedies. Any covenants of the parties hereto appearing in the Xxxx Disclosure
Schedule or the Westvaco Disclosure Schedule, as the case may be, shall have the
same binding effect on the parties hereto as if set forth herein.
SECTION 9.7 Governing Law.
--------------------------
Except to the extent the Xxxx Merger may be required to be governed by
the laws of the State of Ohio, this Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, regardless of the laws
that might otherwise govern under applicable principles of conflict of laws
thereof.
SECTION 9.8 Assignment.
------------------------
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Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned, in whole or in part, by operation of law
or otherwise by any of the parties hereto without the prior written consent of
the other parties. Any assignment in violation of the preceding sentence shall
be void. Subject to the preceding two sentences, this Agreement will be binding
upon, inure to the benefit of, and be enforceable by the parties hereto and
their respective successors and assigns.
SECTION 9.9 Consent to Jurisdiction.
-------------------------------------
Each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any federal court located in the State of New York or
any New York state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated by this Agreement, (b) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, and (c) agrees that it will not bring any
action relating to this Agreement or any of the transactions contemplated by
this Agreement in any court other than a federal court sitting in the State of
New York or a New York state court.
SECTION 9.10 Headings, etc.
----------------------------
The headings and table of contents contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.11 Severability.
----------------------------
If any term or other provision of this Agreement is invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect insofar as the foregoing can be accomplished without materially
affecting the economic benefits anticipated by the parties to this Agreement.
Upon a determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible to the fullest extent permitted by applicable law in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized representatives as of the day and year
first above written.
MW HOLDING CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------
Name: Xxxxxx X. Xxxxx
Title: President
XXXXXXX MERGER SUB CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------
Name: Xxxxxx X. Xxxxx
Title: President
XXXXXXX MERGER SUB CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------
Name: Xxxxxx X. Xxxxx
Title: President
THE XXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman, CEO and President
WESTVACO CORPORATION
By: /s/ Xxxx X. Xxxx, Xx.
-----------------------
Name: Xxxx X. Xxxx, Xx.
Title: Chairman, CEO and President
