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AGREEMENT AND PLAN OF MERGER
among
ASARCO INCORPORATED
GRUPO MEXICO, S.A. DE C.V.
and
ASMEX CORPORATION
Dated as of October 25, 1999
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TABLE OF CONTENTS
ARTICLE I
THE TENDER OFFER
AND THE ASARCO MERGER
Section 1.1 The Tender Offer...........................2
Section 1.2 ASARCO Actions.............................4
Section 1.3 Directors..................................6
Section 1.4 The ASARCO Merger..........................7
Section 1.5 Effective Time.............................7
Section 1.6 Effects of the ASARCO Merger...............8
Section 1.7 Certificate of Incorporation...............8
Section 1.8 Bylaws.....................................8
Section 1.9 Directors and Officers.....................8
Section 1.10 ASARCO Shareholders' Meeting...............8
Section 1.11 ASARCO Merger Without
Meeting of Shareholders ..................10
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.1 Conversion of Securities..................10
Section 2.2 Stock Options; Payment Rights.............11
Section 2.3 Exchange of Certificates and Cash.........12
Section 2.4 Stock Transfer Books......................14
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Organization, Qualification, Etc..........15
Section 3.2 Capital Stock.............................16
Section 3.3 Corporate Authority Relative to this
Agreement.................................17
Section 3.4 Non-Contravention; Consents and Approvals.18
Section 3.5 Reports and Financial Statements..........19
Section 3.6 Environmental Matters.....................20
Section 3.7 Employee Benefit Plans; ERISA.............22
Section 3.8 Schedule 14D-9; Proxy Statement;
Schedule 14D-1; Other Information.........25
Section 3.9 ASARCO Rights Plan........................26
Section 3.10 Tax Matters...............................26
Section 3.11 Required Vote.............................27
Section 3.12 Opinion of Financial Advisor..............28
Section 3.13 Absence of Certain Changes................28
Section 3.14 No Undisclosed Material Liabilities.......30
Section 3.15 Labor Relations...........................30
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND THE PURCHASER
Section 4.1 Organization, Qualification, Etc..........30
Section 4.2 Authority Relative to This Agreement......31
Section 4.3 No Conflict; Required Filings and
Consents.................................31
Section 4.4 Financial Capability......................32
Section 4.5 Capitalization of the Purchaser...........32
Section 4.6 No Prior Activities.......................32
Section 4.7 Tender Offer Documents....................33
ARTICLE V
COVENANTS AND AGREEMENTS
Section 5.1 Conduct of Business Pending the
Effective Time..........................33
Section 5.2 Investigation.............................36
Section 5.3 ASARCO Employee Stock Options,
Incentive and Benefit Plans.............37
Section 5.4 Filings; Other Action.....................39
Section 5.5 Other Cooperation and Further Assurances..41
Section 5.6 Takeover Statute..........................41
Section 5.7 No Solicitation...........................41
Section 5.8 Public Announcements......................43
Section 5.9 Indemnification and Insurance.............43
Section 5.10 Additional Reports........................44
Section 5.11 Disclosure Schedule Supplements...........44
Section 5.12 Shareholder Litigation....................44
Section 5.13 Change of Control Agreements..............44
ARTICLE VI
CONDITIONS TO THE ASARCO MERGER
Section 6.1 Conditions to Each Party's Obligation
to Effect the ASARCO Merger...............46
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
Section 7.1 Termination or Abandonment................47
Section 7.2 Effect of Termination.....................49
Section 7.3 Amendment or Supplement...................49
Section 7.4 Termination Fees. ........................49
Section 7.5 Extension of Time, Waiver, Etc............50
ARTICLE VIII
MISCELLANEOUS
Section 8.1 No Survival of Representations and
Warranties..............................51
Section 8.2 Expenses..................................51
Section 8.3 Counterparts; Effectiveness...............51
Section 8.4 Governing Law.............................51
Section 8.5 Notices...................................51
Section 8.6 Assignment; Binding Effect................52
Section 8.7 Severability..............................53
Section 8.8 Enforcement of Agreement..................53
Section 8.9 Entire Agreement; Third-Party
Beneficiaries............................53
Section 8.10 Headings.................................53
Section 8.11 Definitions..............................53
Section 8.12 Finders or Brokers.......................54
ANNEX A: CONDITIONS TO THE TENDER OFFER...........................A-1
INDEX OF DEFINED TERMS
Defined Term Section
------------ -------
affiliates.......................................................8.11
Agreement................................................Introduction
Antitrust Laws.................................................5.4(b)
ASARCO...................................................Introduction
ASARCO Affiliated Group.......................................3.10(a)
ASARCO Acquisition Agreement...................................5.7(b)
ASARCO Common Stock......................................Introduction
ASARCO Contracts...............................................3.4(a)
ASARCO Designees...............................................1.3(a)
ASARCO Disclosure Schedule................................Article III
ASARCO Employees...............................................5.3(b)
ASARCO Equity Awards..............................................2.2
ASARCO Indemnified Parties.....................................5.9(a)
ASARCO Merger.....................................................1.4
ASARCO Option Plans...............................................2.2
ASARCO Policy..................................................5.9(b)
ASARCO Required Statutory Approvals............................3.4(b)
ASARCO Required Third Party Consents...........................3.4(b)
ASARCO Shareholder Approval......................................3.11
ASARCO Shareholders Meeting...................................1.10(a)
ASARCO Takeover Proposal.......................................5.7(a)
Certificates...................................................2.3(b)
Certificates of Merger............................................1.5
Closing...........................................................1.5
Code...........................................................2.3(e)
control..........................................................8.11
Credit Facilities..............................................5.2(a)
Current ASARCO Group..........................................3.10(a)
Cyprus Amax..............................................Introduction
Cyprus Amax Merger Agreement.............................Introduction
Delaware Certificate of Merger....................................1.5
Delaware Secretary................................................1.5
DGCL..............................................................1.5
Effective Time....................................................1.5
Employee Benefit Plan..........................................3.7(g)
Encumbrance....................................................3.1(c)
Environmental Claim............................................3.6(d)
Environmental Law..............................................3.6(d)
Environmental Permits..........................................3.6(a)
ERISA..........................................................3.7(g)
ERISA Affiliate................................................3.7(g)
Exchange Act...................................................1.3(a)
Exchange Agent.................................................2.3(a)
Exchange Agent Agreement.......................................2.3(a)
Exchange Fund..................................................2.3(a)
Exercise Period...................................................2.2
Expiration Date................................................1.1(a)
Foreign Plan...................................................3.7(g)
GAAP..............................................................3.5
Governmental Entity............................................3.4(a)
Hazardous Materials............................................3.6(d)
HSR Act........................................................5.4(b)
IRS............................................................3.7(b)
Law............................................................3.4(a)
Material Adverse Effect........................................3.1(a)
Merger Consideration...........................................2.1(a)
Minimum Condition..............................................1.1(a)
Multiemployer Plan.............................................3.7(a)
Neutral Statement..............................................7.1(e)
NJBCA.............................................................1.5
New Jersey Certificate of Merger..................................1.5
New Jersey Secretary..............................................1.5
Offer Price..............................................Introduction
Parent...................................................Introduction
Parent Common Stock............................................5.3(a)
Parent Contracts...............................................4.3(a)
Parent Disclosure Schedule.................................Article IV
Parent Required Statutory Approvals............................4.3(b)
Parent Required Third Party Consents...........................4.3(b)
Past ASARCO Group.............................................3.10(a)
PD Merger Agreement......................................Introduction
person...........................................................8.11
Xxxxxx Dodge.............................................Introduction
Plan...........................................................3.7(g)
Proxy Statement...............................................1.10(a)
Purchaser................................................Introduction
Purchaser Common Stock.........................................2.1(c)
Schedule 14D-1...........................................Introduction
Schedule 14D-9.................................................1.2(b)
SEC............................................................1.1(c)
SEC Reports.......................................................3.5
Securities Act....................................................3.5
Shares...................................................Introduction
Significant Subsidiaries.........................................8.11
Subsidiaries.....................................................8.11
Surviving Certificate.............................................1.7
Surviving Corporation.............................................1.4
Syndication Materials..........................................5.2(a)
Tax Return.......................................................3.10
Taxes............................................................3.10
Tender Offer.............................................Introduction
Tender Offer Documents.........................................1.1(a)
Termination Date..................................................5.1
Termination Fee...................................................7.4
Transactions...................................................5.9(c)
Transmittal Documents..........................................2.3(b)
THIS AGREEMENT AND PLAN OF MERGER, dated as of October 25, 1999 (the
"Agreement"), among ASARCO INCORPORATED, a New Jersey corporation
("ASARCO"), GRUPO MEXICO, S.A. DE C.V., a Mexican corporation ("Parent"),
and ASMEX CORPORATION, a Delaware corporation and wholly owned subsidiary
of Parent (the "Purchaser").
WHEREAS, it is proposed that the Purchaser shall amend its Tender
Offer Statement on Schedule 14D-1 filed by Parent and the Purchaser on
September 27, 1999 (together with all amendments, supplements and exhibits
thereto, the "Schedule 14D-1") with respect to the Purchaser's offer (the
"Tender Offer") to purchase all outstanding shares of common stock, no par
value per share (including the associated junior participating preferred
stock purchase rights issued pursuant to the Rights Agreement dated as of
January 28, 1998, as amended as of July 15, 1999, and October 5, 1999,
between ASARCO and The Bank of New York, as Rights Agent, referred to
herein as either the "Shares" or the "ASARCO Common Stock"), of ASARCO at a
price of $29.75 in cash per share (such amount, or any greater amount per
share paid pursuant to the Tender Offer, being hereinafter referred to as
the "Offer Price"), net to the seller in cash, without interest thereon, in
accordance with the terms and subject to the conditions provided herein;
WHEREAS, the ASARCO Board of Directors has determined that each of
the Tender Offer and the ASARCO Merger is fair to and in the best interests
of ASARCO and its shareholders and has approved and adopted this Agreement,
the Tender Offer, the ASARCO Merger and the other transactions contemplated
hereby and has resolved to recommend acceptance of the Tender Offer and
approval and adoption of this Agreement by the shareholders of ASARCO;
WHEREAS, the Agreement and Plan of Merger, dated as of July 15, 1999,
as amended as of September 27, 1999 (the "Cyprus Amax Merger Agreement"),
among Asarco Cyprus Incorporated, a Delaware corporation ("Cyprus Amax"),
ACO Acquisition Corp., a New Jersey corporation, CAM Acquisition Corp., a
Delaware corporation, ASARCO and Cyprus Amax Minerals Company, a Delaware
corporation, has been terminated; and
WHEREAS, the Agreement and Plan of Merger, dated as of October 5,
1999 (the "PD Merger Agreement"), among Xxxxxx Dodge Corporation, a New
York corporation ("Xxxxxx Dodge"), AAV Corporation, a Delaware corporation,
and ASARCO has been terminated.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, and fully intending
to be legally bound hereby, the parties agree as follows:
ARTICLE I
THE TENDER OFFER
AND THE ASARCO MERGER
Section 1.1 The Tender Offer. (a) As promptly as practicable (but in
no event later than three business days after the public announcement of
the transactions contemplated by this Agreement), the Purchaser shall amend
the Tender Offer to reflect the existence of this Agreement and amend the
conditions to the Tender Offer in accordance herewith. The expiration date
of the Tender Offer (the "Expiration Date") shall be the tenth business day
from and after the date the Tender Offer is amended to provide for the
purchase of all of the outstanding shares of ASARCO Common Stock in
accordance with the terms hereof. The Tender Offer shall be made pursuant
to a supplement to the Purchaser's Offer to Purchase dated September 27,
1999 and related letter of transmittal (together with any supplements or
amendments thereto, collectively the "Tender Offer Documents") containing
the terms and conditions set forth in this Agreement and in form reasonably
satisfactory to ASARCO. The obligation of the Purchaser to accept for
payment and to pay for any Shares validly tendered in the Tender Offer
shall be subject only to (i) the condition that there shall be validly
tendered prior to the Expiration Date of the Tender Offer and not withdrawn
a number of Shares which, together with the Shares then owned by Parent or
the Purchaser, represents at least 80% of the total issued and outstanding
Shares on the date such Shares are purchased pursuant to the Tender Offer
(the "Minimum Condition") and (ii) the satisfaction of the other conditions
set forth in Annex A hereto. The Purchaser shall, on the terms and subject
to the prior satisfaction or waiver (except that the Minimum Condition may
not be waived) of the conditions of the Tender Offer, accept for payment
and pay for all Shares validly tendered and not withdrawn as soon as it is
legally permitted to do so under applicable Law.
(b) The Purchaser shall not amend or waive the Minimum Condition and
shall not decrease the Offer Price or decrease the number of Shares sought,
or amend any other condition of the Tender Offer in any manner adverse to
the holders of the Shares (other than with respect to insignificant changes
or amendments) without the prior written consent of ASARCO (such consent to
be authorized by the ASARCO Board of Directors). Notwithstanding the
foregoing, the Purchaser shall, and Parent agrees to cause the Purchaser
to, extend the Tender Offer at any time up to February 29, 2000 for one or
more periods of not more than 10 business days each, if at the Expiration
Date of the Tender Offer, or any extension thereof, the Minimum Condition
or any of the conditions to the Tender Offer set forth in clauses (a), (b)
or (e) of Annex A hereto are not satisfied or waived; provided, however, if
all of the conditions to the Tender Offer are satisfied or waived but the
number of shares of ASARCO Common Stock tendered (together with the Shares
then owned by Parent and Purchaser) constitutes 80% or more, but less than
90%, of the then outstanding number of shares of ASARCO Common Stock, then
the Purchaser shall extend the Tender Offer for an aggregate period of not
more than three business days beyond the Expiration Date. In addition, the
Offer Price may be increased and the Tender Offer may be extended to the
extent required by Law in connection with such increase in each case
without the consent of ASARCO.
(c) As promptly as practicable (but in no event later than three
business days after the public announcement of the transactions
contemplated by this Agreement), Parent and the Purchaser shall file with
the United States Securities and Exchange Commission (the "SEC") an
amendment to the Schedule 14D-1. The Schedule 14D-1 shall reflect the
existence of this Agreement, amend the conditions to the Tender Offer in
accordance herewith and contain the Tender Offer Documents. The Tender
Offer Documents will comply in all material respects with the provisions of
applicable federal securities Laws and, on the date filed with the SEC and
on the date first published, sent or given to ASARCO shareholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by Parent or
the Purchaser with respect to information supplied by ASARCO in writing for
inclusion in the Tender Offer Documents. Each of Parent and the Purchaser
further agrees to take all steps necessary to cause the Tender Offer
Documents to be filed with the SEC and to be disseminated to holders of
Shares, in each case as and to the extent required by applicable federal
securities laws. Each of Parent and the Purchaser, on the one hand, and
ASARCO, on the other hand, agrees promptly to correct any information
provided by it for use in the Tender Offer Documents if and to the extent
that it shall have become false and misleading in any material respect and
each of Parent and the Purchaser further agrees to take all steps necessary
to cause the Tender Offer Documents as so corrected to be filed with the
SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. ASARCO and its
counsel shall be given the opportunity to review the amendment to the
Schedule 14D-1 before it is filed with the SEC. In addition, Parent and the
Purchaser agree to provide ASARCO and its counsel in writing with any
comments or other communications that Parent, the Purchaser or their
counsel may receive from time to time from the SEC or its staff with
respect to the Tender Offer Documents promptly after the receipt of such
comments or other communications.
Section 1.2 ASARCO Actions. (a) ASARCO hereby approves of and consents
to the Tender Offer and represents and warrants that (i) the ASARCO Board
of Directors, at a meeting duly called and held on October 23, 1999, has
unanimously (A) determined that this Agreement and the transactions
contemplated hereby, including each of the Tender Offer and the ASARCO
Merger, are fair to and in the best interests of the holders of ASARCO
Common Stock, (B) approved and adopted this Agreement and the transactions
contemplated hereby, including, without limitation, for purposes of Article
10 of ASARCO's Restated Certificate of Incorporation and the NJBCA and (C)
recommended that the shareholders of ASARCO accept the Tender Offer and
approve and adopt this Agreement and the transactions contemplated hereby;
provided, that such recommendation may be withdrawn, modified or amended
if, in the opinion of the ASARCO Board of Directors, after consultation
with outside legal counsel, such recommendation would be inconsistent with
its fiduciary duties to ASARCO shareholders under applicable Law and
otherwise in accordance with Section 5.7, (ii) Credit Suisse First Boston
Corporation has delivered to the ASARCO Board of Directors its written
opinion dated October 23, 1999, to the effect that as of such date and
based upon and subject to the matters stated therein, the consideration to
be received by the holders of ASARCO Common Stock pursuant to the Tender
Offer and the ASARCO Merger, taken together, is fair to the holders of
ASARCO Common Stock from a financial point of view, (iii) the Cyprus Amax
Merger Agreement has been terminated pursuant to the Notice of Termination,
dated September 30, 1999, delivered by Cyprus Amax to ASARCO, a copy of
which ASARCO has delivered to Parent and Purchaser, and (iv) the PD Merger
Agreement has been terminated pursuant to the Notice of Termination, dated
the date of this Agreement, delivered by ASARCO to Xxxxxx Dodge, a copy of
which ASARCO has delivered to Parent and Purchaser, which Notice of
Termination was accompanied by the wire transfer to Xxxxxx Dodge by ASARCO
of the ASARCO Termination Fee (as defined in the PD Merger Agreement).
ASARCO hereby consents to the inclusion in the Tender Offer Documents of
the recommendation of the ASARCO Board of Directors described in the
immediately preceding sentence. ASARCO has been advised by each of its
directors and executive officers that they intend either to tender all
shares of ASARCO Common Stock beneficially owned by them to the Purchaser
pursuant to the Tender Offer or to vote such shares of ASARCO Common Stock
in favor of the approval and adoption by the shareholders of ASARCO of this
Agreement and the transactions contemplated hereby.
(b) As promptly as practicable on the date of the filing of the
amendment to the Schedule 14D-1 referred to in Section 1.1(c) by Parent and
the Purchaser, ASARCO shall file with the SEC an amendment to the
Solicitation/Recommendation Statement on Schedule 14D-9 filed by ASARCO on
October 5, 1999 (together with all amendments and supplements thereto and
including the exhibits thereto, the "Schedule 14D-9") which shall, subject
to the fiduciary duties of ASARCO's directors under applicable Law
determined after consultation with outside legal counsel and to the
provisions of this Agreement, contain the recommendation referred to in
clause (i) of Section 1.2(a) hereof. The Schedule 14D-9 shall comply in all
material respects with the provisions of applicable federal securities laws
and, on the date filed with the SEC and on the date first published, sent
or given to ASARCO shareholders, shall not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that
no representation is made by ASARCO with respect to information supplied by
Parent or the Purchaser in writing for inclusion in the Schedule 14D-9.
ASARCO further agrees to take all steps necessary to cause the Schedule
14D-9 to be filed with the SEC and to be disseminated to holders of Shares,
in each case as and to the extent required by applicable federal securities
laws. Each of ASARCO, on the one hand, and Parent and the Purchaser, on the
other hand, agrees promptly to correct any information provided by it for
use in the Schedule 14D-9 if and to the extent that it shall have become
false and misleading in any material respect and ASARCO further agrees to
take all steps necessary to cause the Schedule 14D-9 as so corrected to be
filed with the SEC and to be disseminated to holders of the Shares, in each
case as and to the extent required by applicable federal securities laws.
Parent and its counsel shall be given the opportunity to review the
Schedule 14D-9 before it is filed with the SEC. In addition, ASARCO agrees
to provide Parent, the Purchaser and their counsel in writing with any
comments or other communications that ASARCO or its counsel may receive
from time to time from the SEC or its staff with respect to the Schedule
14D-9 promptly after the receipt of such comments or other communications.
Notwithstanding anything to the contrary contained herein, if the members
of the ASARCO Board of Directors determine in the exercise of their
fiduciary duties to withdraw, modify or amend the recommendation referred
to in clause (i) of Section 1.2(a) hereof in accordance with Section 5.7
hereof, such withdrawal, modification or amendment shall not constitute a
breach of this Agreement.
(c) In connection with the Tender Offer, ASARCO will promptly furnish
or cause to be furnished to the Purchaser mailing labels, security position
listings and any available listing or computer file containing the names
and addresses of the record holders of the Shares as of a recent date, and
shall furnish the Purchaser with such information and assistance as the
Purchaser or its agents may reasonably request in communicating the Tender
Offer to the shareholders of ASARCO. Except for such steps as are necessary
to disseminate the Tender Offer Documents, Parent and the Purchaser (i)
shall hold in confidence the information contained in any of such labels
and lists and the additional information referred to in the preceding
sentence, (ii) shall use such information only in connection with the
Tender Offer, and, (iii) if this Agreement is terminated, will upon request
of ASARCO deliver or cause to be delivered to ASARCO all copies of such
information then in its possession or the possession of its agents or
representatives.
Section 1.3 Directors. (a) Promptly upon the purchase of and payment
for Shares by Parent or any of its Subsidiaries which, when taken together
with Shares owned by Parent and the Purchaser, represent at least 80% of
the then outstanding shares of ASARCO Common Stock pursuant to the Tender
Offer, Parent shall be entitled to designate such number of directors,
rounded up to the next whole number, on the ASARCO Board of Directors as is
equal to the product of the total number of directors on such Board (giving
effect to the directors designated by Parent pursuant to this sentence)
multiplied by the percentage that the aggregate number of Shares
beneficially owned by the Purchaser, Parent and any other wholly-owned
subsidiary of Parent bears to the total number of shares of ASARCO Common
Stock then outstanding. ASARCO shall, upon request of the Purchaser, use
all reasonable efforts promptly either to increase the size of its Board of
Directors or, at ASARCO's election, secure the resignations of such number
of its incumbent directors as is necessary to enable Parent's designees to
be so elected to the ASARCO Board of Directors, and shall cause Parent's
designees to be so elected. Notwithstanding the foregoing, until the
Effective Time, ASARCO shall retain as members of its Board of Directors at
least two directors who are directors of ASARCO on the date hereof (the
"ASARCO Designees"); provided, that subsequent to the purchase of and
payment for Shares pursuant to the Tender Offer, Parent shall always have
its designees represent at least a majority of the entire Board of
Directors. ASARCO's obligations under this Section 1.3(a) shall be subject
to Section 14(f) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Rule 14f-1 promulgated thereunder. ASARCO shall
promptly take all actions required pursuant to such Section 14(f) and Rule
14f-1 in order to fulfill its obligations under this Section 1.3(a),
including mailing to shareholders the information required by such Section
14(f) and Rule 14f-1 as is necessary to enable Parent's designees to be
elected to the ASARCO Board of Directors. Parent or the Purchaser will
supply ASARCO any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f)
and Rule 14f-1. The provisions of this Section 1.3 are in addition to and
shall not limit any rights which the Purchaser or Parent or any of their
affiliates may have as a holder or beneficial owner of Shares as a matter
of Law with respect to the election of directors or otherwise.
(b) From and after the time, if any, that Parent's designees
constitute a majority of the ASARCO Board of Directors, any amendment of
this Agreement, any termination of this Agreement by ASARCO, any extension
of time for performance of any of the obligations of Parent or the
Purchaser hereunder, any waiver of any condition or any of ASARCO's rights
hereunder or other action by ASARCO hereunder may be effected only by the
action of a majority of the directors of ASARCO then in office who were
directors of ASARCO on the date hereof, which action shall be deemed to
constitute the action of the full Board of Directors; provided, that if
there shall be no such directors, such actions may be effected by majority
vote of the entire ASARCO Board of Directors.
Section 1.4 The ASARCO Merger. Subject to the terms and conditions of
this Agreement, at the Effective Time, ASARCO and the Purchaser shall
consummate a merger (the "ASARCO Merger") pursuant to which (a) the
Purchaser shall be merged with and into ASARCO and the separate corporate
existence of the Purchaser shall thereupon cease, (b) ASARCO shall be the
successor or surviving corporation in the ASARCO Merger (the "Surviving
Corporation") and shall continue to be governed by the laws of the State of
New Jersey, and (c) the separate corporate existence of ASARCO with all its
rights, privileges, immunities, powers and franchises shall continue
unaffected by the ASARCO Merger.
Section 1.5 Effective Time. As soon as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in
Article VI, the parties hereto shall cause the ASARCO Merger to be
consummated by filing (i) a certificate of merger (the "New Jersey
Certificate of Merger") with the Secretary of State of the State of New
Jersey (the "New Jersey Secretary") as provided in Section 14A:10-4.1 of
the New Jersey Business Corporation Act ("NJBCA") and by making any related
filings required under the NJBCA in connection with the ASARCO Merger and
(ii) a certificate of merger (the "Delaware Certificate of Merger" and
together with the New Jersey Certificate of Merger, the "Certificates of
Merger") with the Secretary of State of the State of Delaware (the
"Delaware Secretary") as provided in Section 252 of the Delaware General
Corporation Law ("DGCL") and by making any related filings required under
the DGCL in connection with the ASARCO Merger. The ASARCO Merger shall
become effective at such time as the Certificates of Merger are duly filed
with the New Jersey Secretary and the Delaware Secretary or at such later
time as is agreed to by the parties hereto and as is specified in the
Certificates of Merger (the "Effective Time" or the "Closing").
Section 1.6 Effects of the ASARCO Merger. From and after the Effective
Time, the ASARCO Merger shall have the effects set forth in the NJBCA
(including, without limitation, Section 14A:10-6 thereof). Without limiting
the generality of the foregoing, and subject thereto, at the Effective
Time, all the properties, rights, privileges, powers and franchises of
ASARCO and the Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities and duties of ASARCO and the Purchaser shall become the
debts, liabilities and duties of the Surviving Corporation.
Section 1.7 Certificate of Incorporation. The certificate of
incorporation of ASARCO immediately prior to the Effective Time shall be
the certificate of incorporation of the Surviving Corporation (the
"Surviving Certificate") and the name of the Surviving Corporation shall
continue to be ASARCO Incorporated until thereafter amended in accordance
with the NJBCA.
Section 1.8 Bylaws. The bylaws of the Purchaser immediately prior to
the Effective Time shall be the bylaws of the Surviving Corporation until
thereafter amended in accordance with the Surviving Certificate and the
NJBCA.
Section 1.9 Directors and Officers. From and after the Effective Time,
until their respective successors are duly elected or appointed and
qualified in accordance with applicable Law, (a) the directors of the
Purchaser at the Effective Time shall be the directors of the Surviving
Corporation and (b) the officers of ASARCO at the Effective Time shall be
the officers of the Surviving Corporation.
Section 1.10 ASARCO Shareholders' Meeting. (a) ASARCO, acting through
its Board of Directors, shall, in accordance with applicable Law and its
Certificate of Incorporation and By-laws:
(i) duly call, give notice of, convene and, if required
by applicable Law in order to consummate the ASARCO Merger, hold a special
meeting of its shareholders (the "ASARCO Shareholders Meeting") subject to
the approval of the SEC, to the extent practicable and permitted by
applicable Law (including the requisite mailing period for the Proxy
Statement as required under the Exchange Act and the rules and regulations
promulgated thereunder), on or prior to December 8, 1999, or as soon
thereafter as practicable and as permitted under applicable Law, for the
purpose of considering and taking action upon this Agreement; provided,
that if the Tender Offer is consummated prior to the date of the ASARCO
Shareholders Meeting, ASARCO shall use its reasonable best efforts to cause
the record date for determination of the shareholders who are entitled to
vote at the ASARCO Shareholders Meeting to be on or after the date of the
consummation of the Tender Offer;
(ii) as soon as practicable after the date hereof, prepare a
preliminary proxy or information statement relating to the ASARCO Merger
and this Agreement and use all reasonable efforts to file such preliminary
proxy or information statement with the SEC within 7 business days after
the date hereof, and further use its reasonable efforts (x) to obtain and
furnish the information required to be included by the SEC in the proxy
statement and, after consultation with Parent, to respond promptly to any
comments made by the SEC with respect to the preliminary proxy or
information statement and cause a definitive proxy or information statement
(the "Proxy Statement") to be mailed to its shareholders and (y) to obtain
the necessary approvals of the ASARCO Merger and this Agreement by its
shareholders;
(iii) if at any time prior to the Effective Time any
information relating to ASARCO or Parent, or any of their respective
affiliates, officers or directors, should be discovered by ASARCO or Parent
which should be set forth in an amendment or supplement to the Proxy
Statement, so that the Proxy Statement 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 shareholders of the
Company; and
(iv) subject to the fiduciary obligations of the ASARCO
Board of Directors determined after consultation with outside legal
counsel, (i) include in the Proxy Statement the recommendation of the
ASARCO Board of Directors that shareholders of ASARCO vote in favor of the
approval of the ASARCO Merger and the approval and adoption of this
Agreement, and (ii) use its reasonable best efforts to procure the approval
of the shareholders of ASARCO for the ASARCO Merger required under
applicable Law.
(b) No filing of, or amendment or supplement to, the Proxy Statement
will be made by ASARCO without providing Parent the opportunity to review
and comment thereon. Parent shall immediately review and comment upon any
such filing, amendment or supplement. ASARCO will advise Parent, promptly
after it receives notice thereof, of any request by the SEC for amendment
of the Proxy Statement or comments thereon and responses thereto or
requests by the SEC for additional information.
(c) Parent agrees that it will vote, or cause to be voted, all of the
Shares then owned by it, the Purchaser or any of its other subsidiaries and
affiliates in favor of the approval of the ASARCO Merger and the approval
and adoption of this Agreement.
Section 1.11 ASARCO Merger Without Meeting of Shareholders.
Notwithstanding Section 1.10 hereof, in the event that Parent, the
Purchaser or any other subsidiary of Parent shall have acquired Shares
which (when taken together with Shares then owned by Parent or the
Purchaser) constitute at least 90% of the outstanding Shares, whether
pursuant to the Tender Offer or otherwise, the parties hereto agree to take
all necessary and appropriate action to cause the ASARCO Merger to become
effective as soon as practicable after such acquisition, without a meeting
of ASARCO shareholders, in accordance with Section 14A:10-5.1 and Section
14A:10-7 of the NJBCA and Section 253 of the DGCL.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
Section 2.1 Conversion of Securities. At the Effective Time, by virtue
of the ASARCO Merger and without any action on the part of Parent, the
Purchaser, ASARCO or the holders of any of the following securities:
(a) Each share of ASARCO Common Stock issued and outstanding
immediately prior to the Effective Time (other than any shares of ASARCO
Common Stock to be canceled pursuant to Section 2.1(b)) shall be converted
into the right to receive the Offer Price payable to the holder thereof,
without interest (the "Merger Consideration"), upon surrender of the
certificate formerly representing such share of ASARCO Common Stock in the
manner provided in Section 2.3. At the Effective Time, each share of ASARCO
Common Stock shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each certificate
previously evidencing any such share (other than shares to be canceled
pursuant to Section 2.1(b)) shall thereafter represent only the right to
receive, upon the surrender of such certificate in accordance with the
provisions of Section 2.3, an amount in cash per share equal to the Merger
Consideration. The holders of such certificates previously evidencing such
shares of ASARCO Common Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such shares
of ASARCO Common Stock except the right to receive the Merger Consideration
in the manner provided in Section 2.3.
(b) Each share of capital stock of ASARCO (i) held in the treasury of
ASARCO or by any wholly owned subsidiary of ASARCO or (ii) owned by Parent,
the Purchaser or any other wholly owned subsidiaries of Parent shall
automatically be canceled, retired and cease to exist without any
conversion thereof and no payment shall be made with respect thereto.
(c) Each share of common stock, par value $.01 per share (the
"Purchaser Common Stock"), of the Purchaser outstanding immediately prior
to the Effective Time shall be converted into and become one share of
common stock of the Surviving Corporation and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
Section 2.2 Stock Options; Payment Rights. Each outstanding stock
option and stock appreciation right, if any, to purchase or acquire a share
of ASARCO Common Stock under employee incentive or benefit plans, programs
or arrangements and non-employee director plans presently maintained by
ASARCO ("ASARCO Option Plans") and each other award under the ASARCO Option
Plans denominated in or the value of which is determined by reference to
the ASARCO Common Stock which are outstanding immediately prior to the
Effective Time (together, the "ASARCO Equity Awards") shall, in accordance
with their terms, become immediately exercisable, and each holder thereof
shall be paid by the Surviving Corporation as soon as practicable after the
exercise thereof (provided that such exercise occurs within the period
beginning September 27, 1999 and ending 30 days after the earlier of the
Expiration Date or the Effective Time (the "Exercise Period")), an amount
in cash determined by (A) subtracting the applicable exercise price per
share of such award from the greater of (i) the amount of the Merger
Consideration and (ii) the highest sales price per share of the ASARCO
Common Stock during the 60-day period preceding the earlier of the
Expiration Date or the Effective Time, and (B) multiplying the difference
by the number of shares of ASARCO Common Stock that would have been
issuable upon the exercise of such award or, if the ASARCO Equity Award
does not have an exercise price, an amount in cash determined by
multiplying (x) the greater of (iii) the amount of the Merger Consideration
and (iv) the highest sales price per share of the ASARCO Common Stock
during the 60-day period preceding the earlier of the Expiration Date or
the Effective Time by (y) the number of shares of ASARCO Common Stock that
would have been issuable upon the exercise of such award. All amounts
payable pursuant to this Section 2.2 shall be subject to any required
income tax withholding. Notwithstanding the foregoing, each ASARCO Equity
Award that is outstanding at the Effective Time and not exercised during
the Exercise Period shall remain outstanding and shall be treated in
accordance with Section 5.3 hereof.
Section 2.3 Exchange of Certificates and Cash. (a) Exchange Agent.
Prior to the Effective Time, Parent shall have entered into an agreement
providing for the matters set forth in this Section 2.3 (the "Exchange
Agent Agreement") with Citibank N.A. (the "Exchange Agent"), authorizing
such Exchange Agent to act as Exchange Agent in connection with the ASARCO
Merger. Immediately prior to the Effective Time, Parent shall deposit or
shall cause to be deposited with or for the account of the Exchange Agent,
for the benefit of the holders of shares of ASARCO Common Stock (other than
shares to be canceled pursuant to Section 2.1(b)), an amount in cash equal
to the Merger Consideration payable pursuant to Section 2.1(a) (such cash
funds are hereafter referred to as the "Exchange Fund").
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent will instruct the Exchange Agent to mail to each
holder of record of a certificate or certificates which immediately prior
to the Effective Time evidenced outstanding Shares (other than Shares to be
canceled pursuant to Section 2.1(b)) (the "Certificates"), (i) a form
letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon proper
delivery of the Certificates to the Exchange Agent and shall be in such
form and have such other provisions as Parent and ASARCO may reasonably
specify) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration. 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 a letter of
transmittal, duly executed, and such other customary documents as may be
required pursuant to such instructions (collectively, the "Transmittal
Documents"), the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration for each share of ASARCO Common
Stock formerly represented by such Certificate, without any interest
thereon, less any required withholding of taxes, and the Certificate so
surrendered shall thereupon be canceled. In the event of a transfer of
ownership of shares of ASARCO Common Stock which is not registered in the
transfer records of ASARCO, the Merger Consideration may be issued and paid
in accordance with this Article II to the transferee of such shares if the
Certificate evidencing such shares of ASARCO Common Stock is presented to
the Exchange Agent and is properly endorsed or otherwise in proper form for
transfer. The signature on the Certificate or any related stock power must
be properly guaranteed and the person requesting payment of the Merger
Consideration must either pay any transfer or other taxes required by
reason of the payment to a person other than the registered holder of the
Certificate so surrendered or establish to the Parent that such tax has
been paid or is not applicable. The Merger Consideration will be delivered
by the Exchange Agent as promptly as practicable following surrender of a
Certificate and the related Transmittal Documents. Cash payments may be
made by check unless otherwise required by a depositary institution in
connection with the book-entry delivery of securities. In no event will
interest be payable on the Merger Consideration. Until surrendered in
accordance with this Section 2.3, each Certificate shall be deemed at any
time after the Effective Time to evidence only the right to receive, upon
such surrender, the Merger Consideration for each share of ASARCO Common
Stock formerly represented by such Certificate. The Exchange Fund shall not
be used for any purpose other than as set forth in this Article II. Any
interest, dividends or other income earned on the investment of cash held
in the Exchange Fund shall be for the account of the Surviving Corporation.
(c) Termination of Exchange Fund. Any portion of the Exchange Fund
(including the proceeds of any investments thereof) which remains
undistributed to the holders of ASARCO Common Stock for six months
following the Effective Time shall be delivered to the Surviving
Corporation, upon demand. Any holders of ASARCO Common Stock who have not
theretofore complied with this Article II shall thereafter look only to the
Surviving Corporation for payment of the Merger Consideration.
(d) No Liability. None of the Parent, Surviving Corporation, ASARCO or
the Exchange Agent shall be liable to any holder of Shares for any cash
delivered to a public official pursuant to any applicable abandoned
property, escheat or similar Law. If any Certificate shall not have been
surrendered prior to seven years after the Effective Time (or immediately
prior to such earlier date on which any Merger Consideration would
otherwise escheat to or become the property of any governmental body or
authority) any such Merger Consideration in respect of such Certificate
shall, to the extent permitted by applicable Law, become the property of
the Surviving Corporation, free and clear of all claims or interest of any
person previously entitled thereto.
(e) Withholding Rights. The Surviving Corporation and the Exchange
Agent shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of
ASARCO Common Stock such amounts as the Surviving Corporation or the
Exchange Agent is required to deduct and withhold with respect to the
making of such payment under the United States Internal Revenue Code of
1986, as amended (the "Code"), or any provision of state, local or foreign
tax Law. To the extent that amounts are so withheld by the Surviving
Corporation or the Exchange Agent, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the
shares of ASARCO Common Stock in respect of which such deduction and
withholding was made by the Surviving Corporation or the Exchange Agent.
(f) Lost, Stolen or Destroyed Certificates. In the event any
Certificates evidencing shares of ASARCO Common Stock shall have been lost,
stolen or destroyed, the holder of such lost, stolen or destroyed
Certificate(s) shall execute an affidavit of that fact upon request. The
holder of any such lost, stolen or destroyed Certificate(s) shall also
deliver a reasonable indemnity against any claim that may be made against
Parent, the Surviving Corporation or the Exchange Agent with respect to the
Certificate(s) alleged to have been lost, stolen or destroyed. The
affidavit and any indemnity which may be required hereunder shall be
delivered to the Exchange Agent, who shall be responsible for making
payment of the Merger Consideration for such lost, stolen or destroyed
Certificates(s) pursuant to the terms hereof.
Section 2.4 Stock Transfer Books. At the Effective Time, the stock
transfer books of ASARCO shall be closed, and there shall be no further
registration of transfers of shares of ASARCO Common Stock thereafter on
the records of ASARCO. Any Certificates presented to the Exchange Agent or
the Surviving Corporation for any reason at or after the Effective Time
shall be canceled and exchanged for the Merger Consideration pursuant to
the terms in this Article II.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Except as set forth in the disclosure schedule delivered by ASARCO to
Parent prior to the execution of this Agreement (the "ASARCO Disclosure
Schedule"), ASARCO represents and warrants to Parent as set forth in this
Article III.
Section 3.1 Organization, Qualification, Etc.
(a) ASARCO is a corporation duly organized, validly existing and in
good standing (or other equivalent status) under the laws of the
jurisdiction of its incorporation and has the corporate power and authority
to own, operate and lease all of its properties and assets and to carry on
its business as it is now being conducted or presently proposed to be
conducted and is duly qualified to do business and is in good standing (or
other equivalent status) in each jurisdiction in which the ownership,
operation or leasing of its properties or assets or the conduct of its
business requires such qualification, except for jurisdictions in which the
failure to be so qualified or in good standing (or other equivalent status)
would not, individually or in the aggregate, have a Material Adverse Effect
on ASARCO and its Subsidiaries, taken as a whole. As used in this
Agreement, any reference to any state of facts, event, change or effect
having a "Material Adverse Effect" on or with respect to ASARCO or Parent,
means such state of facts, event, change or effect that has had or would
reasonably be expected to have a material adverse effect on the business,
results of operations or financial condition of ASARCO or Parent and their
respective Subsidiaries, taken as a whole; provided, however, that any
adverse effect that copper prices have had or may have on the business,
results of operations or financial condition of ASARCO or Parent and their
respective Subsidiaries, taken as a whole, shall not be deemed a Material
Adverse Effect for purposes of this Agreement. The copies of ASARCO's
Certificate of Incorporation and By-laws which have been delivered to
Parent and the Purchaser are complete and correct and in full force and
effect.
(b) Each of ASARCO's Significant Subsidiaries is a corporation duly
organized, validly existing and in good standing (or other equivalent
status) under the laws of its jurisdiction of incorporation or
organization, has the power and authority to own, operate and lease its
properties and to carry on its business as it is now being conducted or
presently proposed to be conducted, and is duly qualified to do business
and is in good standing (or equivalent status) in each jurisdiction in
which the ownership, operation or leasing of its properties or assets or
the conduct of its business requires such qualification, except for
jurisdictions in which the failure to be so qualified or in good standing
(or other equivalent status) would not, individually or in the aggregate,
have a Material Adverse Effect on ASARCO. ASARCO has made available to
Parent and the Purchaser complete and correct copies of the certificate of
incorporation, bylaws or other similar governing documents which are in
full force and effect for each of ASARCO's Significant Subsidiaries that
are not directly or indirectly wholly owned.
(c) All the outstanding shares of capital stock of, or other ownership
interests in, ASARCO's Subsidiaries are validly issued, fully paid and
non-assessable and are owned of record and beneficially by ASARCO, directly
or indirectly, free and clear of all Encumbrances. As used in this
Agreement, the term "Encumbrance" means any mortgage, pledge, lien, charge,
encumbrance, defect, security interest, claim, option or restriction of any
kind. There are no (i) securities of ASARCO or any of its Subsidiaries
convertible into or exchangeable or exercisable for shares of capital stock
or other voting securities or ownership interests in any of ASARCO's
Subsidiaries, (ii) warrants, calls, options or other rights to acquire from
ASARCO or any of its Subsidiaries, or any obligations of ASARCO of its
Subsidiaries 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 of ASARCO's Subsidiaries, or (iii) obligations of ASARCO
or any of its Subsidiaries to repurchase, redeem or otherwise acquire any
outstanding securities of ASARCO's Subsidiaries or to issue, deliver or
sell, or cause to be issued, delivered or sold, any such securities.
(d) Except for ASARCO's Subsidiaries, as set forth in Section 3.1(d)
of the ASARCO Disclosure Schedule or ASARCO's (or any of its Subsidiaries')
SEC Reports, and in respect of minerals exploration or development
agreements in the ordinary course of business, ASARCO (excluding employee
pension or benefit plans) does not own any securities of, or have any debt
or equity investment in, or loans outstanding to, any corporation,
partnership, joint venture, limited liability company or other entity.
ASARCO is not subject to any contractual obligation under which it may be
required to advance or contribute capital to any entity, except in respect
of minerals exploration or development agreements in the ordinary course of
business.
Section 3.2 Capital Stock.
(a) Section 3.2(a) of the ASARCO Disclosure Schedule sets forth as of
September 30, 1999:
(i) the number of authorized shares of each class or series of capital
stock of ASARCO;
(ii) the number of shares of each class or series of capital stock of
ASARCO which are issued and outstanding;
(iii) the number of shares of each class or series of capital stock
which are held in the treasury of ASARCO;
(iv) the number of shares of each class or series of capital stock of
ASARCO which are reserved for issuance, indicating each specific
reservation; and
(v) the number of shares of each class or series of capital stock of
ASARCO which are subject to employee stock options, stock appreciation
rights or other rights to purchase or receive capital stock granted under
ASARCO's stock option or other stock based employee or non-employee
director benefit plans, indicating the name of the plan, the date of grant,
the number of shares and the exercise price thereof.
(b) All of the issued and outstanding shares of capital stock of
ASARCO have been validly issued and are fully paid and nonassessable.
Except as set forth in Section 3.2(a) of the ASARCO Disclosure Schedule,
there are no authorized, issued, reserved for issuance or outstanding (i)
shares of capital stock or voting securities of ASARCO, (ii) securities
convertible into or exchangeable for shares of capital stock or voting
securities of ASARCO, (iii) warrants, calls, options or other rights to
acquire from ASARCO or any of its Subsidiaries, or any obligation of ASARCO
or any of its Subsidiaries to issue, any shares of capital stock or voting
securities or securities convertible into or exchangeable or exercisable
for capital stock or voting securities of ASARCO, and (iv) there are no
outstanding obligations of ASARCO 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.
Section 3.3 Corporate Authority Relative to this Agreement. ASARCO has
the corporate power and authority to enter into this Agreement and to carry
out its obligations hereunder. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by the ASARCO Board of Directors,
and, except for the approval of this Agreement by its shareholders, no
other corporate proceedings on the part of ASARCO are necessary to
authorize the consummation of the transactions contemplated hereby. The
ASARCO Board of Directors has taken all appropriate action so that none of
Parent or the Purchaser will be (i) an "interested stockholder" within the
meaning of Section 14A:10A-3 of the NJBCA or (ii) an "interested
shareholder" within the meaning of the Certificate of Incorporation of
ASARCO by virtue of Parent and the Purchaser entering into this Agreement
and consummating the transactions contemplated hereby. The ASARCO Board of
Directors has determined that the transactions contemplated by this
Agreement are fair to and in the best interest of ASARCO and its
shareholders and to recommend to such shareholders that they accept the
Tender Offer, tender their Shares thereunder to the Purchaser and approve
and adopt this Agreement and the ASARCO Merger. This Agreement has been
duly and validly executed and delivered by ASARCO and, assuming this
Agreement constitutes a valid and binding agreement of the other parties
hereto, this Agreement constitutes a valid and binding agreement of ASARCO,
enforceable against ASARCO in accordance with its terms (except insofar as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or by principles governing the availability of equitable
remedies).
Section 3.4 Non-Contravention; Consents and Approvals.
(a) None of the execution, delivery or performance of this Agreement
by ASARCO or the consummation by ASARCO of the transactions contemplated
hereby will (i) violate the certificate of incorporation or the bylaws or
other similar governing documents of ASARCO or any of its Subsidiaries,
(ii) except for the ASARCO Required Third Party Consents, result in the
violation or breach of or constitute (with or without due notice or lapse
of time or both) a default (or give rise to any right of termination,
cancellation, vesting, payment, exercise, acceleration, suspension or
revocation) under any of the provisions of any note, bond, mortgage, deed
of trust, security interest, indenture, license, contract, agreement, plan
or other instrument or obligation to which ASARCO or any of its
Subsidiaries is a party or by which any of them or any of their properties
or assets may be bound (the "ASARCO Contracts"), (iii) except for the
ASARCO Required Statutory Approvals, violate any order, writ, injunction,
decree, judgment, permit, license, statute, law, ordinance, policy, rule or
regulation ("Law") of any court, tribunal or administrative, governmental
or regulatory body, agency, commission, division, department, public body
or other authority, whether federal, state, local or foreign (individually,
a "Governmental Entity") applicable to ASARCO or any of its Subsidiaries or
any of their respective property or assets, or (iv) result in the creation
or imposition of any Encumbrance on any asset of ASARCO or any of its
Subsidiaries, except in the case of clauses (ii), (iii) and (iv) for
violations, breaches, defaults, terminations, cancellations, accelerations
or creations which would not in the aggregate have a Material Adverse
Effect on ASARCO and its Subsidiaries, taken as a whole, or prevent or
delay the consummation of the transactions contemplated hereby.
(b) Section 3.4(b)(i) of the ASARCO Disclosure Schedule sets forth a
list of all third party consents and approvals required to be obtained
under the ASARCO Contracts prior to the consummation of the transactions
contemplated by this Agreement the failure of which to obtain would have,
individually or in the aggregate, a Material Adverse Effect on ASARCO and
its Subsidiaries, taken as a whole (the "ASARCO Required Third Party
Consents"). Section 3.4(b)(ii) of the ASARCO Disclosure Schedule sets forth
a list of all notices to, filings and registrations with, and permits,
authorizations, consents and approvals of, Governmental Entities required
to be made or obtained from Governmental Entities prior to the consummation
of the transactions contemplated by this Agreement the failure of which to
obtain would have, individually or in the aggregate, a Material Adverse
Effect on ASARCO and its Subsidiaries, taken as a whole (the "ASARCO
Required Statutory Approvals").
Section 3.5 Reports and Financial Statements. ASARCO has previously
furnished or made available to Parent and the Purchaser complete and
correct copies of:
(a) ASARCO's (and any of its Subsidiaries') Annual Reports on Form
10-K filed with the SEC for each of the years ended December 31, 1996
through 1998;
(b) ASARCO's (and any of its Subsidiaries') Quarterly Reports on Form
10-Q filed with the SEC for the each of the fiscal quarters ended following
ASARCO's last fiscal year end;
(c) each definitive proxy statement filed by ASARCO any of its
Subsidiaries with the SEC since March 1, 1996;
(d) each final prospectus filed by ASARCO with the SEC since December
31, 1995; and
(e) all Current Reports on Form 8-K filed by ASARCO with the SEC since
January 1, 1998.
As of their respective dates, such reports, proxy statements and
prospectuses (collectively, with any amendments, supplements and exhibits
thereto, the "SEC Reports") (i) complied as to form in all material
respects with the applicable requirements of the Securities Act of 1933, as
amended (the "Securities Act"), the Exchange Act, and the rules and
regulations promulgated thereunder, and (ii) did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. Except to the
extent that information contained in any SEC Report of ASARCO has been
revised or superseded by an SEC Report subsequently filed by ASARCO, none
of ASARCO's SEC Reports contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The audited consolidated
financial statements and unaudited consolidated interim financial
statements included in ASARCO's SEC Reports (including any related notes
and schedules) fairly present the financial position of ASARCO and its
consolidated Subsidiaries as of the dates thereof and the results of
operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end adjustments), in each case in
accordance with past practice and generally accepted accounting principles
("GAAP") consistently applied during the periods involved (except as
otherwise disclosed in the notes thereto). Since January 1, 1998, ASARCO
has timely filed all reports, registration statements and other filings
required to be filed by it with the SEC under the rules and regulations of
the SEC.
Section 3.6 Environmental Matters.
(a) Except for Environmental Claims disclosed in or referred to in
Section 3.6(b) of the ASARCO Disclosure Schedule, as of the date of this
Agreement, each of ASARCO and its Subsidiaries has obtained all licenses,
permits, authorizations, approvals and consents from Governmental Entities
which are required under any applicable Environmental Law in respect of its
business, properties, assets and operations ("Environmental Permits"),
except (i) for such permits as to which due and proper application is
pending, and (ii) for such failures to have Environmental Permits which,
individually or in the aggregate, are not reasonably expected to have a
Material Adverse Effect on ASARCO and its Subsidiaries, taken as a whole.
Each of such Environmental Permits is in full force and effect, and each of
ASARCO and its Subsidiaries is in compliance with the terms and conditions
of all such Environmental Permits and with all applicable Environmental
Laws, except for such exceptions as would not, individually or in the
aggregate, have a Material Adverse Effect on ASARCO and its Subsidiaries,
taken as a whole.
(b) Except for Environmental Claims disclosed in or referred to in
Section 3.6(b) of the ASARCO Disclosure Schedule, as of the date of this
Agreement, there is no Environmental Claim filed, pending, or to the best
knowledge of ASARCO threatened or in process, against ASARCO or any of its
Subsidiaries or any person whose liability for such Environmental Claim
ASARCO or any of its Subsidiaries has or may have retained or assumed
either contractually or by operation of Law, that would, individually or in
the aggregate, have a Material Adverse Effect on ASARCO and its
Subsidiaries, taken as a whole.
(c) Except as disclosed or referred to in Section 3.6(c) of the ASARCO
Disclosure Schedule, no Encumbrances have arisen under or pursuant to any
Environmental Law on any property, site or facility owned, operated or
leased by ASARCO or any of its Subsidiaries, except for such Encumbrances
which would not, individually or in the aggregate, have a Material Adverse
Effect on ASARCO and its Subsidiaries, taken as a whole, and no action of
any Governmental Entity has been taken or, to the best knowledge of ASARCO,
is threatened or in process which could subject any of such properties to
such Encumbrances, except for such action which would not, individually or
in the aggregate, have a Material Adverse Effect on ASARCO and its
Subsidiaries, taken as a whole.
(d) As used in this Agreement:
(i) "Environmental Claim" means any claim, action, cause
of action, order, investigation or notice (written or oral) by any person
alleging potential or actual liability (including, without limitation,
potential or actual liability for investigation, evaluation, cleanup,
removal actions, remedial actions, response actions, natural resources
damages, property damages, personal injuries or penalties) arising out of,
based on or resulting from any Environmental Law, including any claim under
CERCLA, and shall include any request for information under CERCLA or any
comparable state or local Law.
(ii) "Environmental Law" means any Law relating to (a)
the environment or pollution, environmental matters, the protection of the
environment, or the protection of human health and safety from
environmental concerns, (b) actual or threatened emissions, discharges, or
releases of pollutants, contaminants, chemicals or solid, industrial, toxic
or hazardous substances, wastes or constituents into the environment, and
(c) the presence, manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials.
(iii) "Hazardous Materials" mean (a) any petroleum or
petroleum products and radioactive materials, (b) any chemicals,
constituents, materials, or substances defined or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous substances," "toxic substances" and
related materials, as such materials are defined in any Environmental
Law, and (c) any other chemical, material or substance, exposure to which
is prohibited, limited or regulated by any Governmental Entity.
Section 3.7 Employee Benefit Plans; ERISA.
(a) Except as set forth in ASARCO's SEC Reports or as would not have a
Material Adverse Effect on ASARCO and its Subsidiaries, taken as a whole,
(i) all Employee Benefit Plans (other than any Employee Benefit Plan that
is a "multiemployer plan" within the meaning of Section 3(37) of ERISA (a
"Multiemployer Plan")) of ASARCO are in material compliance with all
applicable requirements of Law, including ERISA and the Code, and (ii)
neither ASARCO nor any of its Subsidiaries nor any ERISA Affiliate has any
liabilities or obligations with respect to any such Employee Benefit Plans,
whether accrued, contingent or otherwise, that are not otherwise reflected
on ASARCO's financial statements, nor to the best knowledge of ASARCO, are
any such liabilities or obligations expected to be incurred. Except as
described in ASARCO's (or any of its Subsidiaries') SEC Reports or as set
forth in Section 3.7(a) of the ASARCO Disclosure Schedule, the execution
and delivery of, and performance of the transactions contemplated by this
Agreement will not (either alone or upon the occurrence of any additional
or subsequent events) constitute an event under any Employee Benefit Plan
of ASARCO that will or may result in acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to
fund benefits with respect to any employee. The only severance agreements
or severance policies applicable to ASARCO or any of its Subsidiaries are
the agreements and policies specifically described in Section 3.7(a) of the
ASARCO Disclosure Schedule.
(b) With respect to each of its Plans, ASARCO has heretofore made
available to Parent and the Purchaser complete and correct copies of each
of the following documents, as applicable: (i) a copy of the Plan and any
amendments thereto; (ii) a copy of the most recent annual report; (iii) a
copy of the most recent actuarial report; (iv) a copy of the most recent
Summary Plan Description and all material modifications; (v) a copy of the
trust or other funding agreement and any amendments thereto; and (vi) the
most recent determination letter received from the Internal Revenue Service
(the "IRS") with respect to each Plan that is intended to be qualified
under Section 401 of the Code and all notices of reportable events received
following receipt of such letter. ASARCO will deliver to Parent and the
Purchaser a copy of each Foreign Plan within thirty days following the date
hereof.
(c) Section 3.7(c) of the ASARCO Disclosure Schedule sets forth a list
of each employee of ASARCO (or any Subsidiary) who is a party to any
agreement (whether written or oral) with respect to such person's
employment by ASARCO or a Subsidiary, other than offer letters which do not
have guaranteed periods of employment and statutory employment agreements
under foreign Laws, and which provide for annual compensation in excess of
$100,000. ASARCO has made available to Parent and the Purchaser a complete
and correct copy of each such written employment agreement, and a complete
and correct summary of each such oral agreement.
(d) No liability under Title IV of ERISA has been incurred by ASARCO
or any ERISA Affiliate within the past six years that has not been
satisfied in full. To the best knowledge of ASARCO, no condition exists
that presents a material risk to ASARCO, any of its Subsidiaries or any
ERISA Affiliate of incurring a liability under such Title that is
reasonably likely to have a Material Adverse Effect on ASARCO. The Pension
Benefit Guaranty Corporation has not instituted proceedings to terminate
any of the Employee Benefit Plans, and, to the knowledge of ASARCO, no
condition exists that presents a material risk that such proceedings will
be instituted. Except as would not have a Material Adverse Effect on
ASARCO, with respect to each of the Employee Benefit Plans that is subject
to Title IV of ERISA, the present value of accrued benefits under such
Employee Benefit Plan, based upon the actuarial assumptions used for
funding purposes in the most recent actuarial report prepared by such
Employee Benefit Plan's actuary with respect to such Employee Benefit Plan,
did not, as of its latest valuation date, exceed the then current value of
the assets of such Employee Benefit Plan allocable to such accrued
benefits, and there have been no changes since such latest valuation date
which would cause the present value of such accrued benefits to exceed the
current value of such assets. None of the Employee Benefit Plans or any
trust established thereunder 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 Employee Benefit Plans ended prior to the date of this
Agreement. None of the Employee Benefit Plans is a Multiemployer Plan. To
the knowledge of ASARCO the Employee Benefit Plans that is intended to be
"qualified" within the meaning of Section 401(a) of the Code is so
qualified and the trusts maintained thereunder are exempt from taxation
under Section 501(a) of the Code. Except as set forth in Section 3.7(d) of
the ASARCO Disclosure Schedule, no Employee Benefit Plan provides benefits,
including without limitation death or 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). There are no material pending or threatened claims by or on
behalf of any Employee Benefit Plan, by any employee or beneficiary covered
under any such Employee Benefit Plan, or otherwise involving any such
Employee Benefit Plan (other than routine claims for benefits). No
prohibited transaction has occurred with respect to any Employee Benefit
Plan that would result, directly or indirectly, in the imposition of an
excise Tax or other liability under the Code or ERISA, except for such a
Tax or other liability that would not have a Material Adverse Effect on
ASARCO. Except as would not have a Material Adverse Effect on ASARCO, with
respect to each Foreign Plan: (i) all amounts required to be reserved on
account of each Foreign Plan have been so reserved in accordance with
reasonable accounting practices prevailing in the country where such
Foreign Plan is established, and (ii) each Foreign Plan required to be
registered with a Governmental Entity has been registered, has been
maintained in good standing with the appropriate Governmental Entities, and
has been maintained and operated in accordance with its terms and
applicable Law.
(e) Except as otherwise set forth in Section 3.7(e) of the ASARCO
Disclosure Schedule, no director or officer or other employee of ASARCO
will become entitled to any termination, retirement, severance or similar
payment, benefit or enhanced or accelerated benefit (including any
acceleration of vesting or lapse of restrictions, repurchase rights or
obligations with respect to any employee stock option or other benefit
under any stock option plan or incentive or compensation plan or
arrangement) as a result of the transactions contemplated by this Agreement
(either standing alone or in conjunction with any additional or subsequent
events).
(f) Except as set forth in Section 3.7(f) of the ASARCO Disclosure
Schedule, any amount or other entitlement that could be received (whether
in cash or property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer or
director of ASARCO or any of its affiliates who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation
Section 1.280G-1) under any employee benefit plan or other compensation
arrangement currently in effect would not be characterized as an "excess
parachute payment" or a "parachute payment" (as such terms are defined in
Section 280G(b)(1) of the Code).
(g) As used in this Agreement:
(i) "Employee Benefit Plan" means any material Plan
entered into, established, maintained, sponsored, contributed to or
required to be contributed to by ASARCO, any of its Subsidiaries or ERISA
Affiliates for the benefit of the current or former employees or directors
of ASARCO or any of its Subsidiaries and existing on the date of this
Agreement or at any time subsequent thereto and on or prior to the
Effective Time;
(ii) "Foreign Plan" shall refer to each material plan,
program or contract that is subject to or governed by the Laws of any
jurisdiction other than the United States, and which would have been
treated as an Employee Benefit Plan had it been a United States plan,
program or contract;
(iii) "Plan" means any employment, bonus, incentive
compensation, deferred compensation, pension, profit sharing, retirement,
stock purchase, stock option, stock ownership, stock appreciation rights,
phantom stock, leave of absence, layoff, vacation, day or dependent care,
legal services, cafeteria, life, health, medical, accident, disability,
worker's compensation or other insurance, severance, separation,
termination, change of control or other benefit plan, agreement, practice
policy, program or arrangement of any kind, whether written or oral, other
than a Foreign Plan, including, but not limited to any "employee benefit
plan" within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended, and the rules and regulations thereunder
("ERISA"); and
(iv) "ERISA Affiliate" means, with respect to ASARCO, any
entity, trade or business that is a member of the same controlled group as
ASARCO (within the meaning of Sections 414(b), (c), (m) or (o) of the
Code).
Section 3.8 Schedule 14D-9; Proxy Statement; Schedule 14D-1; Other
Information. None of the Schedule 14D-9, the Proxy Statement (with respect
to the information included therein relating to ASARCO or its Subsidiaries)
or the Schedule 14D-1 (with respect to the information included therein
relating to ASARCO or its Subsidiaries) will, at the respective times the
Schedule 14D-9, the Schedule 14D-1 and the Proxy Statement are filed with
the SEC, and at the time of the mailing of the Schedule 14D-9, the Proxy
Statement or the Schedule 14D-1 or any amendments or supplements thereto,
and at the time of the ASARCO 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 were made, not misleading,
except that no representation is made by ASARCO with respect to information
supplied in writing by Parent and the Purchaser or any of their affiliates
specifically for inclusion in the Proxy Statement. The Proxy Statement will
comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations promulgated thereunder. The
letter to shareholders, notice of meeting, proxy statement and form of
proxy to be distributed to ASARCO shareholders in connection with the
ASARCO Merger and any schedules required to be filed with the SEC in
connection therewith are collectively referred to herein as the "Proxy
Statement."
Section 3.9 ASARCO Rights Plan. ASARCO represents and warrants that
the Board of Directors of ASARCO has taken all necessary action to render
the Rights Agreement between ASARCO and The Bank of New York, dated as of
January 28, 1998, as amended as of July 15, 1999, inapplicable to the
transactions contemplated by this Agreement.
Section 3.10 Tax Matters.
(a) All federal, state, local and foreign Tax Returns required to be
filed by or on behalf of ASARCO, each of its Subsidiaries, and each
affiliated, combined, consolidated or unitary group of which ASARCO or any
of its Subsidiaries (i) is a member (a "Current ASARCO Group") or (ii) was
a member during six years prior to the date hereof but is not currently a
member, but only insofar as any such Tax Return relates to a taxable period
ending on a date within the last six years (a "Past ASARCO Group," together
with Current ASARCO Groups, an "ASARCO Affiliated Group") have been timely
filed, and all such Tax Returns filed are complete and accurate except to
the extent any failure to file or any inaccuracies in filed Tax Returns
would not, individually or in the aggregate, have a Material Adverse Effect
on ASARCO (it being understood that the representations made in this
Section, to the extent that they relate to Past ASARCO Groups, are made to
the knowledge of ASARCO). All Taxes due and owing by ASARCO, any Subsidiary
of ASARCO or any ASARCO Affiliated Group have been paid, or adequately
reserved for, except to the extent any failure to pay or reserve would not,
individually or in the aggregate, have a Material Adverse Effect on ASARCO.
There is no audit examination, deficiency, refund litigation, proposed
adjustment or matter in controversy with respect to any Taxes due and owing
by ASARCO, any Subsidiary of ASARCO or any ASARCO Affiliated Group which
would, individually or in the aggregate, have a Material Adverse Effect on
ASARCO; provided that in no event shall the existence of a proposed
adjustment or matter in controversy with respect to Taxes be deemed to have
or contribute to a Material Adverse Effect for any purpose under this
Agreement to the extent such proposed adjustment or matter in controversy
has been specifically reserved for or paid as of the date of this
Agreement. All assessments for Taxes due and owing by ASARCO, any
Subsidiary of ASARCO, or any ASARCO Affiliated Group with respect to
completed and settled examinations or concluded litigation have been paid.
As soon as practicable after the public announcement of the execution of
the Merger Agreement, ASARCO will provide the other party with written
schedules of (i) the taxable years of ASARCO for which the statutes of
limitations with respect to federal income Taxes have not expired, and (ii)
with respect to federal income Taxes, those years for which examinations
have been completed, those years for which examinations are presently being
conducted, and those years for which examinations have not yet been
initiated. ASARCO and each of its Subsidiaries have complied in all
material respects with all rules and regulations relating to the
withholding of Taxes, except to the extent any such failure to comply would
not, individually or in the aggregate, have a Material Adverse Effect on
ASARCO.
(b) Neither ASARCO nor any of its Subsidiaries has (i) entered into a
closing agreement or similar agreement with a taxing authority relating to
Taxes of ASARCO or any of its Subsidiaries with respect to a taxable period
for which the statute of limitations is still open, or (ii) with respect to
U.S. federal income Taxes, granted any waiver of any statute of limitations
with respect to, or any extension of a period for the assessment of, any
such income Tax, in either case, that is still outstanding. There are no
Encumbrances relating to Taxes upon the assets of ASARCO other than
Encumbrances relating to Taxes not yet due, except as would not have a
Material Adverse Effect on ASARCO. Neither ASARCO nor any of its
Subsidiaries is a party to any agreement relating to the allocating or
sharing of Taxes, other than an agreement with each other.
For purposes of this Agreement: (i) "Taxes" means any and all federal,
state, local, foreign or other taxes of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any taxing authority, including, without
limitation, taxes or other charges on or with respect to income, franchise,
windfall or other profits, gross receipts, property, sales, use, severance,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth, and taxes or other charges in the
nature of excise, withholding, ad valorem or value added, and (ii) "Tax
Return" means any return, report or similar statement (including the
attached schedules) required to be filed with respect to any Tax,
including, without limitation, any information return, claim for refund,
amended return or declaration of estimated Tax.
Section 3.11 Required Vote. If, as of the date of any action taken by
the Board of Directors of ASARCO with respect to the ASARCO Merger or as of
any record date of the determination of shareholders of ASARCO entitled to
notice of and to vote with respect thereto or immediately prior to the
consummation of the ASARCO Merger, Parent or any of its Subsidiaries is the
beneficial owner of less than 10% of any class of capital stock of ASARCO,
then the affirmative vote of a majority of the votes cast by the holders of
shares of ASARCO Common Stock entitled to vote at the ASARCO Shareholders
Meeting is required to approve this Agreement. If, as of the date of any
action taken by the Board of Directors of ASARCO with respect to the ASARCO
Merger or as of any record date of the determination of shareholders of
ASARCO entitled to notice of and to vote with respect thereto or
immediately prior to the consummation of the ASARCO Merger, Parent or any
of its Subsidiaries is the beneficial owner of 10% or more of any class of
capital stock of ASARCO, the affirmative vote of the holders of 80% of the
outstanding shares of ASARCO Common Stock entitled to vote at the ASARCO
Shareholders Meeting is required to approve this Agreement. The relevant
approval of the shareholders of ASARCO referred to in the two preceding
sentences is referred to herein as the "ASARCO Shareholder Approval." No
other vote of the shareholders of ASARCO is required by Law, the
Certificate of Incorporation or the Bylaws of ASARCO or otherwise in order
for ASARCO to consummate the ASARCO Merger and the transactions
contemplated thereby.
Section 3.12 Opinion of Financial Advisor. The Board of Directors of
ASARCO has received the opinion of Credit Suisse First Boston Corporation,
dated October 23, 1999, to the effect that, as of such date and based upon
and subject to the matters stated therein, the consideration to be received
in the Tender Offer and the ASARCO Merger, taken together, is fair to the
holders of ASARCO Common Stock from a financial point of view.
Section 3.13 Absence of Certain Changes. Except as set forth in
Section 3.13 of the ASARCO Disclosure Schedule, since December 31, 1998,
and, other than with respect to clause (a) below, prior to the date hereof,
except as set forth in ASARCO's (or any of its Subsidiaries') SEC Reports
filed prior to the date hereof, ASARCO and its Subsidiaries have conducted
their respective businesses in the ordinary course, consistent with past
practice and there has not been:
(a) any event, occurrence or development (including the discovery of
new or additional information concerning an existing environmental
condition) which, individually or in the aggregate, would have a Material
Adverse Effect on ASARCO;
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of ASARCO (other
than regular quarterly cash dividends payable by ASARCO in respect of
shares of its capital stock consistent with past practice) or any
repurchase, redemption or other acquisition by ASARCO or any of its
Subsidiaries of any outstanding shares of its capital stock (except (x) as
required by the terms of any employee or stock option plan or compensation
plan or arrangement, (y) in accordance with any dividend reinvestment plan
as in effect as of the date of this Agreement in the ordinary course of
operation of such plan consistent with past practice, and/or (z) as
otherwise permitted by Section 5.1);
(c) any amendment of any material term of any outstanding security of
ASARCO or any of its Subsidiaries;
(d) any transaction or commitment made, or any contract, agreement or
settlement entered into, by (or judgment, order or decree affecting) ASARCO
or any of its Subsidiaries relating to its assets or business (including
the acquisition or disposition of any material amount of assets) or any
relinquishment by ASARCO or any of its Subsidiaries of any contract or
other right, in either case, material to ASARCO and its Subsidiaries taken
as a whole, other than transactions, commitments, contracts, agreements or
settlements (including without limitation settlements of litigation and tax
proceedings) in the ordinary course of business consistent with past
practice and those contemplated by this Agreement;
(e) any change prior to the date hereof in any method of accounting or
accounting practice by ASARCO or any of its Subsidiaries, except for any
such change which is not material or which is required by reason of a
concurrent change in GAAP;
(f) any (i) grant of any severance or termination pay to (or amendment
to any such existing arrangement with) any director, officer or employee of
the ASARCO or any of its Subsidiaries, (ii) entering into of any
employment, deferred compensation, supplemental retirement or other similar
agreement (or any amendment to any such existing agreement) with any
director, officer or employee of ASARCO or any of its Subsidiaries, (iii)
increase in, or accelerated vesting and/or payment of, benefits under any
existing severance or termination pay policies or employment agreements or
(iv) increase in or enhancement of any rights or features related to
compensation, bonus or other benefits payable to directors, officers or
employees of ASARCO or any of its Subsidiaries, in each case, other than in
the ordinary course of business consistent with past practice or as
permitted by this Agreement; or
(g) any material Tax election made or changed, any material audit
settled or any material amended Tax Returns filed.
Section 3.14 No Undisclosed Material Liabilities. There are no
liabilities of ASARCO or any of its Subsidiaries of any kind whatsoever,
whether accrued, contingent, absolute, determined or determinable, other
than:
(a) liabilities which, individually or in the aggregate, would not
have a Material Adverse Effect on ASARCO;
(b) liabilities disclosed in the SEC Reports of ASARCO or except as
disclosed pursuant to Section 3.6 hereto; and
(c) liabilities under or arising as a result of this Agreement.
Section 3.15 Labor Relations. As of the date of this Agreement: (i)
Section 3.15 of the ASARCO Disclosure Schedule sets forth a complete list
of each collective bargaining agreement to which ASARCO or any of its
Subsidiaries is a party, (ii) no labor organization or group of employees
of ASARCO (or any of its Subsidiaries) has made a pending demand for
recognition or certification, and there are no representation or
certification proceedings or petitions seeking a representation proceeding
presently pending or, to the knowledge of ASARCO, threatened to be brought
or filed, with the National Labor Relations Board or any other labor
relations tribunal or authority, and (iii) there are no organizing
activities, strikes, work stoppages, slowdowns, lockouts, material
arbitrations or material grievances, or other material labor disputes
pending or, to the knowledge of ASARCO, threatened against or involving
ASARCO or any of its Subsidiaries.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND THE PURCHASER
Except as set forth in the disclosure schedule delivered by Parent to
ASARCO prior to the execution of this Agreement (the "Parent Disclosure
Schedule"), Parent and the Purchaser represent and warrant to ASARCO as set
forth in this Article IV.
Section 4.1 Organization, Qualification, Etc. Each of Parent and the
Purchaser is a corporation duly organized, validly existing and in good
standing (or other equivalent status) under the laws of the jurisdiction of
its incorporation and has the corporate power and authority to own, operate
and lease all of its properties and assets and to carry on its business as
it is now being conducted or presently proposed to be conducted.
Section 4.2 Authority Relative to This Agreement. Each of Parent and
the Purchaser has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly authorized by
the Board of Directors of Parent and the Purchaser, and no other corporate
proceedings on the part of Parent or the Purchaser are necessary to
authorize the consummation of the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Parent and
the Purchaser and, assuming this Agreement constitutes a valid and binding
agreement of ASARCO, this Agreement constitutes a valid and binding
agreement of Parent and the Purchaser enforceable against Parent and the
Purchaser in accordance with its terms (except insofar as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally, or by
principles governing the availability of equitable remedies).
Section 4.3 No Conflict; Required Filings and Consents.
(a) None of the execution, delivery or performance of this Agreement
by Parent and the Purchaser or the consummation by Parent and the Purchaser
of the transactions contemplated hereby will (i) violate the certificate of
incorporation or the bylaws or other similar governing documents of Parent,
the Purchaser or any of Parent's Subsidiaries, (ii) except for the Parent
Required Third Party Consents, result in the violation or breach of or
constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation, vesting, payment,
exercise, acceleration, suspension or revocation) under any of the
provisions of any note, bond, mortgage, deed of trust, security interest,
indenture, license, contract, agreement, plan or other instrument or
obligation to which Parent, the Purchaser or any of Parent's Subsidiaries
is a party or by which any of them or any of their properties or assets may
be bound (the "Parent Contracts"), (iii) except for the Parent Required
Statutory Approvals, violate any Law of any Governmental Entity applicable
to Parent, the Purchaser or any of Parent's Subsidiaries or any of their
respective property or assets, or (iv) result in the creation or imposition
of any Encumbrance on any asset of Parent, the Purchaser or any of Parent's
Subsidiaries, except in the case of clauses (ii), (iii) and (iv) for
violations, breaches, defaults, terminations, cancellations, accelerations
or creations which would not in the aggregate have a Material Adverse
Effect on Parent and its Subsidiaries, taken as a whole, or prevent or
delay the consummation of the transactions contemplated hereby.
(b) Section 4.3(b)(i) of the Parent Disclosure Schedule sets forth a
list of all third party consents and approvals required to be obtained
under the Parent Contracts prior to the consummation of the transactions
contemplated by this Agreement the failure of which to obtain would have,
individually or in the aggregate, a Material Adverse Effect on Parent and
its Subsidiaries, taken as a whole (the "Parent Required Third Party
Consents"). Section 4.3(b)(ii) of the Parent Disclosure Schedule sets forth
a list of all notices to, filings and registrations with, and permits,
authorizations, consents and approvals of, Governmental Entities required
to be made or obtained from Governmental Entities prior to the consummation
of the transactions contemplated by this Agreement the failure of which to
obtain would have, individually or in the aggregate, a Material Adverse
Effect on Parent and its Subsidiaries, taken as a whole (the "Parent
Required Statutory Approvals").
Section 4.4 Financial Capability. Parent and the Purchaser have
received a commitment letter from The Chase Manhattan Bank and Chase
Securities, Inc., originally dated as of September 24, 1999, as amended and
restated as of October 5, 1999, October 7, 1999 and October 15, 1999, to
make available credit facilities which, when taken together with Parent's
equity contribution to the Purchaser, will provide sufficient funds to
purchase all of the Shares outstanding on the Expiration Date, as such date
may be extended, and the Effective Time, to make all payments required
pursuant to Sections 2.2 and 2.3 and to pay all fees and expenses related
to the transactions contemplated by this Agreement.
Section 4.5 Capitalization of the Purchaser. The authorized capital
stock of the Purchaser consists of 1,000 shares of Purchaser Common Stock.
As of the date hereof, 100 shares of Purchaser Common Stock are
outstanding, all of which (i) were validly issued, and are fully paid and
nonassessable and (ii) are owned by Parent.
Section 4.6 No Prior Activities. The Purchaser was formed for the
purpose of effecting the Tender Offer, the ASARCO Merger and the
transactions contemplated by this Agreement, and does not have any
Subsidiaries and has not undertaken any business or other activities other
than in connection with pursuing the Tender Offer and entering into this
Agreement and engaging in the transactions contemplated hereby.
Section 4.7 Tender Offer Documents. Neither the Tender Offer Documents
nor any information supplied by Parent or the Purchaser for inclusion in
the Schedule 14D-9 will, at the respective times the Schedule 14D-1 and the
Schedule 14D-9 are filed with the SEC and first published, sent or given to
ASARCO shareholders, contain a false and misleading statement with respect
to any 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. If a
Proxy Statement is mailed to ASARCO shareholders, on the date the Proxy
Statement is mailed to ASARCO shareholders and on the date of the ASARCO
Shareholders Meeting, if there is one, none of the information supplied by
Parent and the Purchaser for inclusion in the Proxy Statement will be false
or misleading with respect to any material fact or will 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 or necessary to correct any statement in any earlier
communication with respect to the ASARCO Shareholders Meeting or the
solicitation of proxies to be used at the ASARCO Shareholders Meeting.
However, Parent and the Purchaser do not make any representations or
warranties with respect to information supplied by ASARCO or any of its
affiliates or representatives for inclusion in the Tender Offer Documents,
or with respect to the Schedule 14D-9 or the Proxy Statement (except to the
extent of information supplied by Parent and the Purchaser for inclusion in
the Schedule 14D-9 or the Proxy Statement). The Tender Offer Documents will
comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder.
ARTICLE V
COVENANTS AND AGREEMENTS
Section 5.1 Conduct of Business Pending the Effective Time. From and
after the date hereof and prior to the Effective Time or the date, if any,
on which this Agreement is earlier terminated pursuant to Section 7.1 (the
"Termination Date"), and except as may be agreed in writing by the other
parties hereto or as may be provided for or permitted pursuant to this
Agreement:
(a) ASARCO shall, and shall cause each of its Subsidiaries to, conduct
its operations according to their ordinary and usual course of business in
substantially the same manner as heretofore conducted;
(b) ASARCO shall use its reasonable best efforts, and cause each of
its Subsidiaries to use its reasonable best efforts, to preserve intact its
business organizations and goodwill, keep available the services of its
current officers and other key employees and preserve its relationships
with those persons having business dealings with it (including its
relationships with customers, suppliers, employees and business partners);
(c) ASARCO shall confer at such times as Parent may reasonably request
with one or more representatives of such requesting party to report
material operational matters and the general status of ongoing operations
(to the extent such requesting party reasonably requires such information);
(d) ASARCO shall notify Parent of any emergency or other change in the
normal course of its or its Subsidiaries' respective businesses or in the
operation of its or its Subsidiaries, respective properties and of any
complaints or hearings (or communications indicating that the same may be
contemplated) of any Governmental Entity if such emergency, change,
complaint, investigation or hearing would have a Material Adverse Effect on
ASARCO;
(e) ASARCO shall not, and shall not permit any of its Subsidiaries to,
(i) declare, set aside, authorize or pay any dividends on or make any
distribution with respect to its outstanding shares of stock, except in the
case of ASARCO and its majority owned subsidiary Southern Peru Copper
Corporation for regular quarterly cash dividends on the outstanding shares
of their common stock and except for cash dividends by a wholly owned
Subsidiary to a parent, or (ii) split, combine or reclassify any of its
shares of capital stock;
(f) ASARCO shall not, and shall not permit any of its Subsidiaries to,
except (i) in the ordinary course of business consistent with past
practice, (ii) as otherwise provided in this Agreement or (iii) as required
by applicable Law, adopt or amend any Employee Benefit Plan;
(g) ASARCO shall not, and shall not permit any of its Subsidiaries to,
authorize, propose or announce an intention to authorize or propose, or
enter into an agreement with respect to, any merger, consolidation or
business combination (other than the ASARCO Merger), any acquisition of a
material amount of assets or securities, any disposition of a material
amount of assets or securities or any release or relinquishment of any
material contract rights, in each case not in the ordinary course of
business;
(h) ASARCO shall not, and shall not permit its Subsidiaries to,
propose or adopt any amendments to its certificate of incorporation or
by-laws or other similar governing documents;
(i) ASARCO shall not, and shall not permit any of its Subsidiaries to,
issue or authorize the issuance of, or agree to issue or sell any shares of
their capital stock of any class (whether through the issuance or granting
of options, warrants, commitments, subscriptions, rights to purchase or
otherwise), except for the issuance of shares of ASARCO Common Stock by
ASARCO upon the exercise of stock options or other rights to acquire
ASARCO's capital stock, in each case which securities, options and rights
are outstanding as of the date of this Agreement and such issuance is made
in accordance with the terms of such securities, options and rights in
effect on the date of this Agreement; provided that ASARCO shall not issue
any shares of ASARCO Common Stock or any other shares of capital stock or
other securities convertible into or representing the right to receive
shares of ASARCO Common Stock after consummation of the Tender Offer;
(j) ASARCO shall not, and shall not permit any of its Subsidiaries to,
except in the ordinary course of business in connection with employee
incentive and benefit plans, programs or arrangements in existence on the
date hereof, purchase or redeem any shares of its stock or any rights,
warrants or options to acquire any such shares;
(k) ASARCO shall not, and shall not permit any of its Subsidiaries to,
incur, assume or prepay any indebtedness or any other material liabilities,
other than indebtedness between such party and a wholly owned Subsidiary or
between wholly owned Subsidiaries, provided, in either such case, such
wholly owned Subsidiaries remain wholly owned Subsidiaries, and other than
in the ordinary course of business consistent with past practice;
(l) ASARCO shall not, and shall not permit any of its Subsidiaries to,
sell, lease, license, mortgage or otherwise encumber or subject to any Lien
or otherwise dispose of any of its properties or assets (including
securitizations), other than in the ordinary course of business consistent
with past practice and other than the consummation of contracts of sale
executed and delivered prior to the date hereof;
(m) ASARCO shall not, and shall not permit any of its Subsidiaries to
make any material Tax election or settle or compromise any material Tax
liability, other than in the ordinary course of business consistent with
past practice; and
(n) ASARCO shall not, and shall not permit any of its Subsidiaries to,
agree, in writing or otherwise, to take any of the foregoing actions or
take any action which would (i) make any representation or warranty in
Article III hereof untrue or incorrect or (ii) result in any of the
conditions to the Tender Offer or the ASARCO Merger set forth in Article VI
not being satisfied.
Section 5.2 Investigation. (a) ASARCO shall, and shall cause its
Subsidiaries to, (i) afford to Parent and to Parent's officers, employees,
accountants, counsel and other authorized representatives (which shall
include the financing sources referred to in Section 4.4 of this Agreement)
full and complete access on reasonable prior notice during normal business
hours, throughout the period prior to the earlier of the Effective Time or
the Termination Date, to its and its Subsidiaries' properties, contracts,
commitments, books, and records (including but not limited to Tax Returns)
and any report, schedule or other document filed or received by it or any
of its Subsidiaries pursuant to the requirements of federal or state
securities laws or filed with or sent to the SEC, the Department of
Justice, the Federal Trade Commission or any other Governmental Entity and
shall use its reasonable best efforts to cause its representatives and
Subsidiaries to furnish promptly to Parent such additional financial and
operating data and other information as to its and its Subsidiaries'
respective businesses and properties as Parent or its duly authorized
representatives may from time to time reasonably request, and (ii) instruct
ASARCO's officers, employees, accountants, counsel and other authorized
representatives to cooperate with Parent and Purchaser in their preparation
of any syndication book or similar marketing materials ("Syndication
Materials") in connection with documenting the credit facilities referred
to in Section 4.4 of this Agreement (the "Credit Facilities"), including by
furnishing copies of data or information pertaining to the business of
ASARCO and its Subsidiaries prepared in the ordinary course of business;
provided that all requests for information pursuant to this Section 5.2
shall be directed to and coordinated with the chief financial officer of
ASARCO or such other person as shall be designated by ASARCO; and provided
further that ASARCO's obligations to provide reasonable access in
accordance with this Section 5.2 shall be owed exclusively to Parent and
Purchaser (and not to any provider of loans or credit) and shall in no way
affect the commitment to provide the Credit Facilities, the obligations of
Parent and Purchaser in Article I (subject exclusively to the conditions
set forth in Annex A) and in Article II (subject exclusively to the
conditions in Article VI). Notwithstanding any provision of this Agreement
to the contrary, no party shall be obligated to make any disclosure in
violation of applicable Laws or which would waive any legal privilege.
(b) Parent, the Purchaser and ASARCO will not, and will cause their
respective officers, employees, accountants, counsel and representatives
not to, use any information obtained pursuant to this Section 5.2 for any
purpose unrelated to the consummation of the transactions contemplated by
this Agreement. Pending consummation of the transactions herein
contemplated, each of Parent and ASARCO will keep confidential, and will
cause their respective officers, employees, accountants, counsel and
representatives to keep confidential (it being understood that ASARCO will
not unreasonably withhold its consent for Parent or Purchaser to use such
information in the Syndication Materials as customary and appropriate), all
information and documents obtained pursuant to this Section 5.2 unless such
information (i) was already known to it, (ii) becomes available to it from
other sources not known by it to be bound by a confidentiality obligation,
(iii) is independently acquired by it as a result of work carried out by
any of its employees or representatives to whom no disclosure of such
information has been made, (iv) is disclosed with the prior written
approval of the other party, (v) is required to be disclosed by applicable
law or regulation or (vi) is or becomes readily ascertainable from
published information or trade sources. Upon any termination of this
Agreement, each party will, upon request, collect and deliver to the other
party all documents obtained by it or any of its officers, employees,
accountants, counsel and representatives then in their possession and any
copies thereof.
Section 5.3 ASARCO Employee Stock Options, Incentive and Benefit
Plans.
(a) Parent and its Subsidiaries and affiliates agree to honor in
accordance with their terms the ASARCO Employee Benefit Plans, including,
without limitation, all rights or benefits arising thereunder as a result
of the transactions contemplated by this Agreement (either alone or in
combination with any other event). It is the intention of the parties
hereto that, for a period of six months from the Effective Time, Parent and
its Subsidiaries continue to maintain the ASARCO Employee Benefit Plans, in
each case in accordance with their terms as in effect at the Effective
Time, with only such amendments as are required by applicable Law or
permitted by the terms thereof as in effect at the Effective Time, and
which do not adversely affect the rights of participants (or their
beneficiaries) thereunder. Notwithstanding any provision of this Agreement
and the Schedules hereto to the contrary, effective as of the Effective
Time, ASARCO shall terminate any ASARCO Employee Benefit Plans (or
applicable portions of any other plans), other than the Savings Plan of
ASARCO Incorporated, that provide for benefits or awards that are
denominated in or the value of which is determined by reference to ASARCO
Common Stock, and neither ASARCO or Parent nor any of their respective
Subsidiaries shall have any obligation to provide any benefits or issue any
securities that modify, replace, supplement or are in substitution of the
benefits provided under such terminated plans; provided, however, that
Parent agrees that it shall and shall cause its Subsidiaries to provide
benefits during such period that are, in the aggregate, no less favorable
than the benefits provided, in the aggregate, under the ASARCO Employee
Benefit Plans immediately prior to the Effective Time; provided, further,
that the ASARCO 1996 Stock Incentive Plan and the ASARCO Stock Incentive
Plan shall continue in full force and effect following the Effective Time
with respect to ASARCO Equity Awards issued thereunder and outstanding at
the Effective Time (except that (i) such ASARCO Equity Awards which are not
exercised during the Exercise Period will operate solely as stock
appreciation rights with reference to the Series B common stock, no par
value, of Parent (the "Parent Common Stock") and (ii) for purposes of
determining any payments with respect thereto, the value of the Parent
Common Stock shall be the closing price thereof on the date of exercise
converted into U.S. dollars at the Noon Buying Rate in New York City for
Mexican Pesos on such date). For purposes of the preceding sentence (1)
each ASARCO Equity Award shall be deemed to operate as a number of stock
appreciation rights equal to the number of shares of ASARCO Common Stock
subject to such ASARCO Equity Award multiplied by a fraction (the "Option
Exchange Ratio"), the numerator of which is the Merger Consideration and
the denominator of which is the closing price (converted into U.S. dollars
at the Noon Buying Rate in New York City for Mexican Pesos on the Closing
Date) of the Parent Common Stock on the Mexican Bolsa on the Closing Date
and (2) the exercise price of each such stock appreciation right shall be
equal to the exercise price of the ASARCO Equity Award divided by the
Option Exchange Ratio. Notwithstanding the foregoing, if Parent Common
Stock (or any class of American Depository Shares corresponding to Parent
Common Stock) becomes registered under any applicable provision of U.S.
securities law ("Parent U.S. Securities"), Parent, in its sole discretion,
may convert or cause the conversion of such stock appreciation rights into
options to acquire such Parent U.S. Securities on equivalent economic
terms.
(b) Parent shall take, and shall cause the Surviving Corporation and
its Subsidiaries and all other affiliates of Parent to take, the following
actions: (i) waive any limitations regarding pre-existing conditions and
eligibility waiting periods under any welfare or other employee benefit
plan maintained by any of them for the benefit of employees of ASARCO or
any of its Subsidiaries immediately prior to the Effective Time (the
"ASARCO Employees") or in which ASARCO Employees participate after the
Effective Time, (ii) provide each ASARCO Employee with credit for any
co-payments and deductibles paid prior to the Effective Time for the
calendar year in which the Effective Time occurs, in satisfying any
applicable deductible or out-of-pocket requirements under any welfare plans
that such employees are eligible to participate in after the Effective
Time, and (iii) for all purposes under all compensation and benefit plans
and policies applicable to ASARCO Employees, treat all service by ASARCO
Employees with ASARCO or any of its Subsidiaries or affiliates before the
Effective Time as service with Parent and its Subsidiaries and affiliates.
(c) As of the Effective Time, Parent shall guarantee the performance
of the employment contracts and ASARCO Employee Benefit Plans in accordance
with their respective terms and the terms of this Agreement.
(d) The parties agree that the transactions contemplated by this
Agreement shall constitute a "change of control" for purposes of the ASARCO
Employee Benefit Plans.
Section 5.4 Filings; Other Action
(a) Subject to the terms and conditions herein provided, Parent and
ASARCO shall (i) promptly make all filings necessary in connection with
their respective Required Statutory Approvals and (ii) use reasonable best
efforts to cooperate with one another in (y) determining whether any
filings are required to be made with, or consents, permits, authorizations
or approvals are required to be obtained from, any third party or other
governmental or regulatory bodies or authorities of federal, state, local
and foreign jurisdictions in connection with the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
and thereby and (z) timely making all such filings and timely seeking all
such consents, permits, authorizations or approvals, including such party's
Required Third Party Consents. The parties shall cooperate with one another
in connection with the making of all such filings, including providing
copies of all such documents to the non-filing or non-submitting party and
its advisors prior to filing or otherwise submitting.
(b) (i) Without limiting the generality of the undertakings of Parent
and ASARCO pursuant to Section 5.4(a), Parent agrees to obtain the
expiration or termination of the applicable waiting periods under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act") (which approval has already been obtained), and applicable foreign
Laws that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization, restraint of trade
or limitation of competition (collectively, "Antitrust Laws"), which
obligation shall be unconditional and shall be not be qualified by best
efforts (regardless of whether fulfillment of such obligation would have a
Material Adverse Effect on Parent or ASARCO). The existence of the
conditions set forth in Sections 6.1(a) and clause (a) of Annex A shall not
limit or diminish Parent's obligations pursuant to the foregoing sentence
or relieve Parent of any liability or damages that may result from its
breach of its obligations under this Section 5.4(b)(i) (nor limit the
obligations of ASARCO pursuant to the following sentence or relieve ASARCO
of any liability or damages that may result from its breach of obligations
under this Section 5.4(b)(i)). In connection with the foregoing, ASARCO
will cooperate with and assist Parent, and, with respect to matters that
are within its power or control will use its reasonable best efforts to
promptly (i) take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable under applicable
Antitrust Laws to consummate the transactions contemplated by this
Agreement as soon as practicable, including, without limitation, preparing
and filing as promptly as practicable all documentation to effect all
necessary filings, notices, petitions, statements, registrations,
submissions of information, applications and other documents and (ii)
obtain and maintain all approvals, consents, registrations, permits,
authorizations and other confirmations required to be obtained from any
third party that are necessary, proper or advisable to consummate the
ASARCO Merger and the other transactions contemplated by this Agreement. At
Parent's request, ASARCO will commit to and implement any divestiture, hold
separate or similar transaction or action with respect to any asset or
business of ASARCO, which commitment and implementation may, at ASARCO's
option, be conditioned upon and effective as of the Effective Time. Subject
to applicable Laws relating to the exchange of information, Parent and
ASARCO shall have the right to review in advance, and to the extent
practicable each will consult with the other on, all the information
relating to their respective Subsidiaries that appears in any filing made
with, or written materials submitted to, any third party and/or any
Governmental Entity in connection with the ASARCO Merger and the other
transactions contemplated by this Agreement.
(ii) In furtherance and not in limitation of the foregoing, and to the
extent that any such action has not heretofore been taken or completed,
each of Parent and ASARCO agrees to (x) make 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 and in any
event within ten business days of the date hereof, (y) supply as promptly
as practicable any additional information and documentary material that may
be requested pursuant to the HSR Act and (z) complete the review process
under the HSR Act to permit the consummation of the ASARCO Merger
including, but not limited to, causing the expiration of termination of the
applicable waiting periods under the HSR Act as soon as practicable.
Section 5.5 Other Cooperation and Further Assurances. If required by
applicable Law, as soon as practicable following consummation of the Tender
Offer, Parent and ASARCO shall together, or pursuant to any reasonable
allocation of responsibility between them, cooperate with one another in
order to lift any injunctions or remove any other impediment to the
consummation of the transactions contemplated herein. In case at any time
after the Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement, the proper officers and directors
of each of the parties to this Agreement shall take all such necessary
action.
Section 5.6 Takeover Statute. If any "fair price," "moratorium,"
"control share acquisition" or other form of antitakeover statute or
regulation shall become applicable to the transactions contemplated hereby,
ASARCO and Parent and the members of their respective Boards of Directors
shall grant such approvals and take such actions as are reasonably
necessary so that the transactions contemplated hereby may be consummated
as promptly as practicable on the terms contemplated hereby and otherwise
act to eliminate or minimize the effects of such statute or regulation on
the transactions contemplated hereby.
Section 5.7 No Solicitation by ASARCO.
(a) ASARCO shall not, nor shall it permit any of its Subsidiaries to,
nor shall it authorize or permit any of its directors, officers or
employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by it or any of 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
which constitutes any ASARCO Takeover Proposal (or reasonably could be
expected to lead to an ASARCO Takeover Proposal) or (ii) participate in any
discussions or negotiations regarding any ASARCO Takeover Proposal;
provided, however, that if the ASARCO Board of Directors determines in good
faith, (A) after consultation with and based upon the advice of a
nationally recognized investment banking firm, that such ASARCO Takeover
Proposal represents a financially superior transaction for the shareholders
of ASARCO when compared to the ASARCO Merger, (B) that such ASARCO Takeover
Proposal can be consummated in a reasonably timely manner and that
financing is committed or is reasonably likely to be obtained, (C) that the
approval and adoption of this Agreement by holders of ASARCO Common Stock
may not be obtained due to such pending ASARCO Takeover Proposal and (D)
after consultation with its outside counsel, that failure to do so would be
inconsistent with its fiduciary duties to ASARCO shareholders under
applicable Law, ASARCO may, in response to an ASARCO Takeover Proposal
which was not solicited by it or which did not otherwise result from a
breach of this Section 5.7(a), and subject to providing prior written
notice of its decision to take such action to Parent (x) furnish
information with respect to ASARCO and its Subsidiaries to any person
making an ASARCO Takeover Proposal pursuant to a customary confidentiality
agreement (as determined by ASARCO after consultation with its outside
counsel) and (y) participate in discussions or negotiations regarding such
ASARCO Takeover Proposal. For purposes of this Agreement, "ASARCO Takeover
Proposal" means any inquiry, proposal or offer (or any improvement,
restatement, amendment, renewal or reiteration thereof) from any person
relating to any direct or indirect acquisition or purchase of a business or
shares of any class of equity securities of ASARCO or any of its
Subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning any class of equity securities of
ASARCO or any of its Subsidiaries, or any merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving ASARCO or any of its subsidiaries, other than the
transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 5.7, neither the
ASARCO Board of Directors nor any committee thereof shall (i) withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to
Parent or the Purchaser, the recommendation by such Board of Directors or
such committee of the Tender Offer, the ASARCO Merger or this Agreement,
(ii) approve or recommend, or propose publicly to approve or recommend, any
ASARCO Takeover Proposal, or (iii) cause ASARCO to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar
agreement (each, an "ASARCO Acquisition Agreement") related to any ASARCO
Takeover Proposal. Notwithstanding the foregoing, in the event that the
Board of Directors of ASARCO receives an ASARCO Takeover Proposal and the
ASARCO Board of Directors determines in good faith, after consultation with
outside counsel, that failure to do so would be inconsistent with its
fiduciary duties to ASARCO shareholders under applicable Law, the ASARCO
Board of Directors may (x) take any of the actions described in clauses
(i), (ii) or (iii) above or (y) subject to this paragraph (b), terminate
this Agreement (and concurrently with or after such termination, if it so
chooses, cause ASARCO to enter into any ASARCO Acquisition Agreement with
respect to any ASARCO Takeover Proposal) but only after the fifth business
day following Parent's receipt of written notice advising Parent that the
ASARCO Board of Directors is prepared to accept an ASARCO Takeover
Proposal, and attaching the most current version of any such ASARCO
Takeover Proposal or any draft of an ASARCO Acquisition Agreement.
(c) In addition to the obligations of ASARCO set forth in paragraphs
(a) and (b) of this Section 5.7, ASARCO shall immediately advise Parent
orally and in writing of any request for information or of any ASARCO
Takeover Proposal, the material terms and conditions of such request or
ASARCO Takeover Proposal and the identity of the person making such request
or ASARCO Takeover Proposal. ASARCO will keep Parent reasonably informed of
the status and details (including amendments or proposed amendments) of any
such request or ASARCO Takeover Proposal.
(d) Nothing contained in this Section 5.7 shall prohibit ASARCO from
taking and disclosing to its shareholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure
to ASARCO shareholders if, in the good faith judgement of the ASARCO Board
of Directors, after consultation with outside counsel, failure so to
disclose would be inconsistent with its obligations under applicable Law.
Section 5.8 Public Announcements. ASARCO and Parent will consult with
and provide each other the reasonable opportunity to review and comment
upon any press release prior to the issuance of any press release relating
to this Agreement or the transactions contemplated herein and shall not
issue any such press release prior to such consultation except as may be
required by Law or by obligations pursuant to any listing agreement with
any national securities exchange in the United States or Mexico.
Section 5.9 Indemnification and Insurance.
(a) Parent agrees that all rights to exculpation and indemnification
for acts or omissions occurring prior to the Effective Time now existing in
favor of the current or former directors or officers (the "ASARCO
Indemnified Parties") of ASARCO as provided in its charter or by-laws or in
any agreement shall survive the Tender Offer and the ASARCO Merger and
shall continue in full force and effect in accordance with their terms. For
six years from the Effective Time, Parent shall indemnify the ASARCO
Indemnified Parties to the same extent as such ASARCO Indemnified Parties
are entitled to indemnification pursuant to the preceding sentence.
(b) For three years from the Effective Time, Parent shall maintain in
effect ASARCO's current directors' and officers' liability insurance policy
(the "ASARCO Policy"), covering those persons who are currently covered by
the ASARCO Policy (a copy of which has been heretofore delivered to
Parent); provided, however, that in no event shall Parent be required to
expend in any one year an amount in excess of 150% of the annual premiums
currently paid by ASARCO for such insurance, and, provided, further, that
if the annual premiums of such insurance coverage exceed such amount,
Parent shall be obligated to obtain a policy with the greatest coverage
available for a cost not exceeding such amount; and provided, further, that
Parent may meet its obligations under this paragraph by covering the above
people under Parent's insurance policy or policies on the terms described
above.
(c) Parent and the Purchaser hereby fully and unconditionally release
from any and all claims, actions, causes of action, lawsuits, damages,
liabilities, costs, losses, expenses, assessments, sums of money, promises
and demands of any nature whatsoever of Parent and the Purchaser against
each of the members of the Board of Directors of ASARCO, and each officer,
director and employee of ASARCO (i) which are related to or arise out of
(A) action taken or omitted to be taken (including any untrue statements
made or any statements omitted to be made) in connection with or in
anticipation of the Transactions or (B) actions taken or omitted to be
taken by Parent, the Purchaser or any of their affiliates in connection
with the Transactions, (ii) which are otherwise related to or arise out of
the Transactions or (iii) by reason of the fact that such person is or was
a member of the Board of Directors of ASARCO or an officer employee of
ASARCO, as the case may be. For purposes of this Section 5.9 the
"Transactions" means the transactions contemplated by the Cyprus Amax
Merger Agreement, the transactions contemplated by the PD Merger Agreement
and the transactions contemplated by this Agreement, or any of them.
Section 5.10 Additional Reports. ASARCO shall furnish to Parent copies
of any reports of the type referred to in Section 3.5 which it files with
the SEC on or after the date hereof, and ASARCO represents and warrants
that as of the respective dates thereof, such reports will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statement therein,
in light of the circumstances under which they were made, not misleading.
Any unaudited consolidated interim financial statements included in such
reports (including any related notes and schedules) will fairly present the
financial position of ASARCO and its consolidated Subsidiaries, as the case
may be, as of the dates thereof and the results of operations and changes
in financial position or other information included therein for the periods
or as of the date then ended (subject, where appropriate, to normal
year-end adjustments), in each case in accordance with past practice and
GAAP consistently applied during the periods involved (except as otherwise
disclosed in the notes thereto).
Section 5.11 Disclosure Schedule Supplements. From time to time after
the date of this Agreement and prior to the Effective Time, ASARCO will
promptly supplement or amend the ASARCO Disclosure Schedule with respect to
any matter hereafter arising which, if existing or occurring at or prior to
the date of this Agreement, would have been required to be set forth or
described in the ASARCO Disclosure Schedule or which is necessary to
correct any information in a schedule or in any representation and warranty
of ASARCO which has been rendered inaccurate thereby. For purposes of
determining the accuracy of the representations and warranties of ASARCO
contained in this Agreement in order to determine the fulfillment of the
conditions set forth in Sections 6.1, the ASARCO Disclosure Schedule shall
be deemed to include only that information contained therein on the date of
this Agreement and shall be deemed to exclude any information contained in
any subsequent supplement or amendment thereto.
Section 5.12 Shareholder Litigation. ASARCO shall give Parent the
reasonable opportunity to participate in the defense of any shareholder
litigation against ASARCO, as applicable, and its directors relating to the
transactions contemplated by this Agreement.
Section 5.13 Change of Control Agreements. ASARCO has change of
control employment agreements with the 12 people listed in Section 5.13(a)
of the ASARCO Disclosure Schedule which provide certain benefits upon a
termination of employment other than for "cause" or for "good reason"
following the Effective Time. Parent shall take all appropriate steps
necessary to, and will, give reasonable advance notice of its intention to
offer employment (including the proposed terms thereof), or not to offer
employment, to each of the aforementioned 12 people and will make such
offers in the former case, all sufficiently in advance of the Effective
Time to afford such offerees reasonable time prior to the Effective Time to
decide whether or not to accept the employment offered prior to the
Effective Time. ASARCO has previously made written disclosure to Parent for
each of such 12 people and for all such people in the aggregate of the
total estimated amount payable to such people for all obligations owed to
them by ASARCO under all contractual and plan arrangements with such
people, assuming that the employment of each such person was terminated
effective as of December 31, 1999 (except that specific benefits are
calculated as of specified dates set forth in the written disclosure). The
parties agree that the transactions contemplated by this Agreement shall
constitute a "change of control" for purposes of the change of control
agreements referred to in this Section 5.13.
ARTICLE VI
CONDITIONS TO THE ASARCO MERGER
Section 6.1 Conditions to Each Party's Obligation to Effect the ASARCO
Merger. The respective obligations of each party to effect the ASARCO
Merger shall be subject to the fulfillment at or prior to the Effective
Time of the following conditions:
(a) If the ASARCO Shareholder Approval is required by applicable Law,
the ASARCO Shareholder Approval shall have been obtained, all in accordance
with applicable Law.
(b) No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
court or other tribunal or governmental body or authority which prohibits
the consummation of the ASARCO Merger substantially on the terms
contemplated hereby. In the event any order, decree or injunction shall
have been issued, each party shall use its reasonable efforts to remove any
such order, decree or injunction.
(c) Unless the consummation of the Tender Offer shall not have
occurred prior to the date of the ASARCO Shareholders Meeting, the
Purchaser shall have accepted for purchase all shares of ASARCO Common
Stock validly tendered and not withdrawn pursuant to the Tender Offer;
provided, however, that this condition shall not be applicable to the
obligations of the Purchaser if, in breach of this Agreement, the Purchaser
fails to accept for purchase any such shares validly tendered and not
withdrawn pursuant to the Tender Offer.
(d) In the event the consummation of the Tender Offer shall not have
occurred prior to the ASARCO Shareholders Meeting, the obligation to effect
the ASARCO Merger is further subject to the conditions set forth in clause
(b) of Annex A hereto, and ASARCO shall have delivered to Parent a
certificate, dated the Effective Time and signed by its Chief Executive
Officer and its President, to the effect that such conditions have been
satisfied.
(e) In the event the consummation of the Tender Offer shall not have
occurred prior to the ASARCO Shareholders Meeting, (i) The Chase Manhattan
Bank and Chase Securities Inc. shall not have terminated the commitment
letter referred to in Section 4.4 as a result of there having occurred
after the date hereof to December 18, 1999, a general banking moratorium
established by Federal or state authorities, a generally recognized capital
markets crisis, as evidenced by a cumulative 20% decline in the Dow Xxxxx
Industrial Average over a period of five (5) consecutive trading days, or a
virtual cessation in bank and other private debt financings or the
introduction of additional material government restrictions imposed upon
lending institutions which materially affect the type of transactions
contemplated by this Agreement, and (ii) The Chase Manhattan Bank and Chase
Securities Inc. shall not have terminated the commitment letter referred to
in Section 4.4 as a result of there having occurred after December 18,
1999, a material disruption of or material adverse change in U.S. or
developed country financial, banking or capital market conditions that is
reasonably likely to materially impair the syndication of the Credit
Facilities.
ARTICLE VII
TERMINATION, WAIVER AND AMENDMENT
Section 7.1 Termination or Abandonment. This Agreement may be
terminated at any time prior to the Effective Time, whether before or after
any approval of the matters presented in connection with the ASARCO Merger
by the shareholders of ASARCO:
(a) by the mutual written consent of ASARCO and Parent;
(b) by either ASARCO or Parent, if (i) the Tender Offer shall have
expired without any shares of ASARCO Common Stock being purchased pursuant
thereto or (ii) the ASARCO Merger (in the event the ASARCO Shareholders
Meeting occurs prior to the expiration or termination of the Tender Offer)
or the Tender Offer has not been consummated on or before February 29,
2000; provided, that the party seeking to terminate this Agreement pursuant
to this clause 7.1(b) shall not have breached in any material respect its
obligations under this Agreement in any manner that shall have proximately
contributed to the failure of shares of ASARCO Common Stock to have been
purchased on or before such date;
(c) by Parent, if, prior to the ASARCO Merger (in the event the ASARCO
Shareholders Meeting occurs prior to the expiration or termination of the
Tender Offer) or the purchase of any shares of ASARCO Common Stock pursuant
to the Tender Offer, ASARCO shall have breached Section 5.7;
(d) by ASARCO, in accordance with Section 5.7(b), prior to the ASARCO
Merger (in the event the ASARCO Shareholders Meeting occurs prior to the
expiration or termination of the Tender Offer) or the acceptance for
purchase of any shares of ASARCO Common Stock pursuant to the Tender Offer,
provided that ASARCO shall have complied with all provisions of Sections
5.7(b); and provided further that any such termination will not be
effective unless the Termination Fee pursuant to Section 7.4 shall have
been paid contemporaneously with such termination.
(e) by Parent, if (i) prior to the ASARCO Merger (in the event the
ASARCO Shareholders Meeting occurs prior to the expiration or termination
of the Tender Offer) or the purchase of any shares of ASARCO Common Stock
pursuant to the Tender Offer, the ASARCO Board of Directors or any
committee thereof shall have amended, withdrawn or modified (or publicly
disclosed its intention to do so) in a manner adverse to Parent its
approval or recommendation of the Tender Offer or this Agreement (it being
understood that ASARCO taking no position or remaining neutral with respect
to a tender or exchange offer from a third party (a "Neutral Statement"),
or making a recommendation in favor of an ASARCO Takeover Proposal, in a
filing made pursuant to Rules l4d-9 and 14e-2(a) promulgated under the
Exchange Act shall constitute an adverse modification of its approval or
recommendation of the Tender Offer or ASARCO Merger, unless, in the case of
a Neutral Statement only, contemporaneously with the filing of such Neutral
Statement ASARCO publicly confirms that it continues to recommend approval
of the ASARCO Merger and continues to actively support the ASARCO Merger
thereafter), or (ii) any condition to the Tender Offer described in Annex A
hereto shall not have been satisfied on or prior to the earlier of 30 days
of notice that such condition has not been satisfied and February 29, 2000;
(f) by ASARCO, if all of the conditions to the Tender Offer have been
satisfied and Parent or the Purchaser shall have terminated the Tender
Offer without purchasing any Shares thereunder; provided, that ASARCO shall
not have breached in any material respect its obligations under this
Agreement in any manner that shall have proximately contributed to the
failure of shares of ASARCO Common Stock to have been purchased in the
Tender Offer;
(g) by either Parent or ASARCO, if any court of competent jurisdiction
or other governmental body shall have issued an order (other than a
temporary restraining order), decree or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the purchase of ASARCO
Common Stock pursuant to the ASARCO Merger, and such order, decree, ruling
or other action shall have become final and nonappealable; provided that
the party seeking to terminate this Agreement shall have used its
reasonable best efforts to remove or lift such order, decree or ruling; or
any statute, rule regulation, order, injunction or decree shall have been
enacted, entered, promulgated or enforced by any court, administrative
agency or commission or other governmental authority or instrumentality
which prohibits or makes illegal the consummation of the ASARCO Merger and
which, in the case of any such order, injunction or decree, shall have
become final and nonappealable; or
(h) by Parent or ASARCO, if the shareholders of ASARCO fail to approve
and adopt this Agreement and approve the ASARCO Merger at the ASARCO
Shareholders Meeting or any adjournment thereof.
Section 7.2 Effect of Termination. In the event of termination of this
Agreement pursuant to Section 7.1, this Agreement shall terminate (except
for the provisions of Sections 5.2, 5.9(c) and 8.2), and there shall be no
other liability on the part of ASARCO or Parent to the other except
liability arising out of a willful and material breach of this Agreement.
Section 7.3 Amendment or Supplement. At any time before or after
adoption of this Agreement by the shareholders of ASARCO and prior to the
Effective Time, this Agreement may be amended or supplemented in writing by
ASARCO and Parent with respect to any of the terms contained in this
Agreement; provided, however, that following approval by the shareholders
of ASARCO there shall be no amendment or change to the provisions hereof
with respect to the Merger Consideration as provided herein nor any
amendment or change not permitted under applicable Law, without further
approval by the shareholders of ASARCO.
Section 7.4 Termination Fees. If this Agreement shall have been
terminated pursuant to Sections 7.1(b) (provided, that in case of
termination pursuant to Section 7.1(b) the conditions to the Tender Offer
in clauses (a) and (e) of Annex A shall be satisfied and the Minimum
Condition shall be unsatisfied and at the time of such termination there
shall have been publicly disclosed and not withdrawn or terminated an
ASARCO Takeover Proposal), 7.1(c), 7.1(d), 7.1(e)(i) or 7.1(h) (provided,
that in the case of a termination pursuant to 7.1(h), at the time of the
ASARCO Shareholders Meeting an ASARCO Takeover Proposal shall have been
publicly disclosed and not withdrawn or terminated), then ASARCO shall
promptly, but (except as otherwise provided in Section 7.1(d)) no event
less than two business days after the termination of this Agreement, pay
Parent a fee equal to $40 million (the "Termination Fee"), payable by wire
transfer of same day funds; provided, however, that no ASARCO Termination
Fee shall be payable to Parent pursuant to this paragraph unless and until
within 18 months of such termination ASARCO or any of its Subsidiaries
enters into any ASARCO Acquisition Agreement or consummates any ASARCO
Takeover Proposal, except as provided otherwise in Section 7.1(d). For the
purposes of the foregoing proviso the terms "ASARCO Acquisition Agreement"
and "ASARCO Takeover Proposal" shall have the meanings assigned to such
terms in Section 5.7, except that the reference to the "acquisition or
purchase of a business or shares of any class of equity securities of
ASARCO or any of its Subsidiaries" in the definition of "ASARCO Takeover
Proposal" in Section 5.7 shall be deemed to be a reference to the
"acquisition or purchase of a business that constitutes 20% or more of the
net revenues, net income or the assets of ASARCO and its Subsidiaries,
taken as a whole, or 20% of any class of equity securities of ASARCO or any
of its Subsidiaries," in which event the Termination Fee shall be payable
upon the first to occur of such events. ASARCO acknowledges that the
agreements contained in this Section 7.4(a) are an integral part of the
transactions contemplated by this Agreement, and that, without these
agreements, Parent would not enter into this Agreement; accordingly, if
ASARCO fails promptly to pay the ASARCO Termination Fee, and, in order to
obtain such payment, Parent commences a suit which results in a judgment
against ASARCO for the ASARCO Termination Fee, ASARCO shall pay to Parent
its costs and expenses (including attorneys' fees and expenses) in
connection with such suit, together with interest on the amount of the
ASARCO Termination Fee and the prime rate of Citibank N.A. in effect on the
date such payment was required to be made.
Section 7.5 Extension of Time, Waiver, Etc. At any time prior to the
Effective Time, any party may:
(a) extend the time for the performance of any of the obligations or
acts of the other party;
(b) waive any inaccuracies in the representations and warranties of
the other party contained herein or in any document delivered pursuant
hereto; or
(c) subject to the proviso of Section 7.3 waive compliance with any of
the agreements or conditions of the other party contained herein.
Notwithstanding the foregoing no failure or delay by any party in
exercising any right hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right hereunder. Any
agreement on the part of a party hereto to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 No Survival 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.
Section 8.2 Expenses. Except to the extent that a Termination Fee is
payable pursuant to Section 7.4, whether or not the Tender Offer and the
ASARCO Merger are consummated, all costs and expenses incurred in
connection with the Tender Offer, the ASARCO Merger, this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, except that (a)(i) the filing fee in connection with any HSR Act
filing or any other Required Statutory Approval and (ii) the expenses
incurred in connection with the printing and mailing of the Proxy Statement
(including SEC filing fees) shall be shared equally by Parent and ASARCO.
Section 8.3 Counterparts; Effectiveness. This Agreement may be
executed in two or more consecutive counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were
upon the same instrument, and shall become effective when one or more
counterparts have been signed by each of the parties and delivered (by
telecopy or otherwise) to the other parties.
Section 8.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
regard to the principles of conflicts of laws thereof, except to the extent
the provisions of this Agreement are expressly governed by or derive their
authority from the NJBCA.
Section 8.5 Notices. All notices and other communications hereunder
shall be in writing (including telecopy or similar writing) and shall be
effective (a) if given by telecopy, when such telecopy is transmitted to
the telecopy number specified in this Section 8.5 and the appropriate
telecopy confirmation is received or (b) if given by any other means, when
delivered at the address specified in this Section 8.5:
To ASARCO:
ASARCO Incorporated
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxxxx, Esq.
Telecopy: (000) 000-0000
copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: J. Xxxxxxx Xxxxxx
Xxxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
To Parent or the Purchaser:
Grupo Mexico, S.A. de C.V.
Baja California 200
Piso 6
Col. Xxxx Xxx
00000 Xxxxxx, D.F.
Attention Xxxxxx Xxxxxxxxx Xxxxxx
Telecopy: (000) 000-0000
copy to:
Xxxxx & Wood LLP
Xxx Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx Xxxxxxx
Telecopy: (000) 000-0000
Section 8.6 Assignment; Binding Effect. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of Law or otherwise) without
the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
Section 8.7 Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining
terms and provisions of this Agreement in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, such
provision shall be interpreted to be only so broad as is enforceable.
Section 8.8 Enforcement of Agreement. The parties hereto agree that
money damages or other remedy at Law (including without limitation payment
of the Termination Fee) would not be sufficient or adequate remedy for any
breach or violation of, or a default under, this Agreement by them and that
in addition to all other remedies available to them, each of them shall be
entitled to the fullest extent permitted by Law to an injunction
restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including, without
limitation, specific performance, without bond or other security being
required.
Section 8.9 Entire Agreement; Third-Party Beneficiaries. This
Agreement constitutes the entire agreement, and supersede all other prior
agreements and understandings, both written and oral, between the parties,
or any of them, with respect to the subject matter hereof and thereof and,
except for the provisions of Section 5.9 hereof, is not intended to and
shall not confer upon any person other than the parties hereto any rights
or remedies hereunder.
Section 8.10 Headings. Headings of the Articles and Sections of this
Agreement are for convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
Section 8.11 Definitions. References in this Agreement to
"Subsidiaries" of any person shall mean any corporation or other form of
legal entity of which more than 50% of the outstanding voting securities
are on the date hereof directly or indirectly owned by such person.
References in this Agreement to "Significant Subsidiaries" shall mean
Subsidiaries which constitute "significant subsidiaries" under Rule 405
promulgated by the SEC under the Securities Act. References in this
Agreement (except as specifically otherwise defined) to "affiliates" shall
mean, as to any person, any other person which, directly or indirectly,
controls, or is controlled by, or is under common control with, such
person. As used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control with")
shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of management or policies of a person, whether
through the ownership of securities or partnership of other ownership
interests, by contract or otherwise. References in the Agreement to
"person" shall mean an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including,
without limitation, a governmental body or authority.
Section 8.12 Finders or Brokers. Except for Chase Securities Inc. with
respect to Parent and the Purchaser, and Credit Suisse First Boston
Corporation with respect to ASARCO, neither Parent nor ASARCO nor any of
their respective Subsidiaries has employed any investment banker, broker,
finder or intermediary in connection with the transactions contemplated
hereby who might be entitled to any fee or any commission in connection
with or upon consummation of the Tender Offer or the ASARCO Merger.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first above
written.
ASARCO INCORPORATED
By: /s/ Xxxxxxx X. XxXxxxxxxx
-------------------------------------
Name: Xxxxxxx X. XxXxxxxxxx
Title: Chairman and Chief Executive Officer
GRUPO MEXICO, S.A. DE C.V.
By: /s/ German Xxxxxx
--------------------------------------
Name: German Xxxxxx
Title: Chairman & CEO
By: /s/ Xxxxxx Xxxxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxx Xxxxxx
Title: Managing Director for Administrative
and Finance and Alternate Director
ASMEX CORPORATION
By: /s/ German Xxxxxx
---------------------------------------
Name: German Xxxxxx
Title: Chairman & CEO
ANNEX A
CONDITIONS TO THE TENDER OFFER
Notwithstanding any other provisions of the Tender Offer, and in
addition to (and not in limitation of) the Purchaser's rights to extend and
amend the Tender Offer at any time in its sole discretion (subject to the
provisions of the Agreement), the Purchaser shall not be required to accept
for payment or, subject to any applicable rules and regulations of the SEC,
including Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's
obligation to pay for or return tendered ASARCO Common Stock promptly after
termination or withdrawal of the Tender Offer), pay for, and may delay the
acceptance for payment of or, subject to the restriction referred to above,
the payment for, any tendered shares of ASARCO Common Stock, and may
terminate or amend the Tender Offer (but only subject to and in accordance
with this Agreement) if (i) the HSR Act Condition has not been satisfied,
(ii) the Minimum Condition has not been satisfied or (iii) at any time on
or after October 23, 1999 and before the Expiration Date, any of the
following events shall occur:
(a) there shall have been any statute, rule, regulation, judgment,
order or injunction promulgated, entered, enforced, enacted, issued or
rendered applicable to the Tender Offer or the ASARCO Merger by any
domestic or foreign, federal or state governmental regulatory or
administrative agency or authority or court or legislative body or
commission which (i) prohibits, or imposes any material limitations on,
Parent's or the Purchaser's ownership or operation of all or a material
portion of ASARCO's businesses or assets, (ii) prohibits, or makes illegal
the acceptance for payment, payment for or purchase of ASARCO Common Stock
or the consummation of the Tender Offer or the ASARCO Merger, (iii) results
in a material delay in or restricts the ability of the Purchaser, or
renders the Purchaser unable, to accept for payment, pay for or purchase
some or all of the tendered shares of ASARCO Common Stock, or (iv) imposes
material limitations on the ability of the Purchaser or Parent effectively
to exercise full rights of ownership of the ASARCO Common Stock, including,
without limitation, the right to vote the ASARCO Common Stock purchased by
it on all matters properly presented to ASARCO's shareholders, provided
that Parent and the Purchaser shall have used all reasonable efforts to
cause any such judgment, order or injunction to be vacated or lifted;
(b) the representations and warranties of ASARCO set forth in the
Agreement shall not be true and correct as of the date of consummation of
the Tender Offer as though made on or as of such date except, in each case,
(i) for changes specifically permitted by the Agreement and (ii) (A) those
representations and warranties that address matters only as of a particular
date which are true and correct as of such date or (B) where the failure of
such representations and warranties to be true and correct (without giving
effect to any qualifications as to "materiality" or "Material Adverse
Effect" set forth therein) would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on ASARCO, or
ASARCO shall have materially breached or failed in any material respect to
perform or comply with any material obligation, agreement or covenant
required by the Agreement to be performed or complied with by it;
(c) the Agreement shall have been terminated in accordance with its
terms prior to the Expiration Date;
(d) ASARCO shall have entered into a definitive agreement or agreement
in principle with any person with respect to an ASARCO Takeover Proposal or
similar business combination with ASARCO;
(e) (i) The Chase Manhattan Bank and Chase Securities Inc. shall have
terminated the commitment letter referred to in Section 4.4 as a result of
there having occurred after the date hereof to December 18, 1999, a general
banking moratorium established by Federal or state authorities, a generally
recognized capital markets crisis, as evidenced by a cumulative 20% decline
in the Dow Xxxxx Industrial Average over a period of five (5) consecutive
trading days, or a virtual cessation in bank and other private debt
financings or the introduction of additional material government
restrictions imposed upon lending institutions which materially affect the
type of transactions contemplated by this Agreement, and (ii) The Chase
Manhattan Bank and Chase Securities Inc. shall have terminated the
commitment letter referred to in Section 4.4 as a result of there having
occurred after December 18, 1999, a material disruption of or material
adverse change in U.S. or developed country financial, banking or capital
market conditions that is reasonably likely to materially impair the
syndication of the Credit Facilities; or
(f) the ASARCO Board of Directors shall have withdrawn, or amended,
modified or changed in a manner adverse to Parent or the Purchaser
(including by amendment of the Schedule 14D-9), its recommendation of the
Tender Offer, the Agreement, or the ASARCO Merger, or recommended another
proposal or offer from any person other than Parent or the Purchaser, or
shall have resolved to do any of the foregoing; which in the reasonable
judgment of Parent or the Purchaser, in any such case, and regardless of
the circumstances giving rise to such condition, makes it inadvisable to
proceed with the Tender Offer and/or with such acceptance for payment or
payments.
The foregoing conditions are for the sole benefit of the Purchaser and
Parent and may be waived by Parent or the Purchaser, in whole or in part at
any time and from time to time in the sole discretion of Parent or the
Purchaser.
