1
AGREEMENT AND PLAN OF MERGER
AMONG
GENERAL DYNAMICS CORPORATION,
GRAIL ACQUISITION CORPORATION
AND
NEWPORT NEWS SHIPBUILDING INC.
2
TABLE OF CONTENTS
DESCRIPTION PAGE
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ARTICLE 1 THE OFFER.....................................................................1
Section 1.1 The Offer.....................................................................1
Section 1.2 Company Action................................................................4
Section 1.3 Directors.....................................................................5
Section 1.4 Merger Without Meeting of Stockholders........................................7
ARTICLE 2 THE MERGER....................................................................7
Section 2.1 The Merger....................................................................7
Section 2.2 The Closing...................................................................7
Section 2.3 Effective Time................................................................7
Section 2.4 Effects of the Merger.........................................................8
Section 2.5 Certificate of Incorporation and Bylaws.......................................8
Section 2.6 Directors.....................................................................8
Section 2.7 Officers......................................................................8
Section 2.8 Conversion of Company Common Stock............................................8
Section 2.9 Stock Options; Equity-Based Awards............................................9
Section 2.10 Conversion of the Purchaser Common Stock.....................................11
ARTICLE 3 PAYMENT......................................................................11
Section 3.1 Surrender of Certificates....................................................11
Section 3.2 Paying Agent; Certificate Surrender Procedures...............................12
Section 3.3 Transfer Books...............................................................12
Section 3.4 Termination of Payment Fund..................................................13
Section 3.5 Appraisal Rights.............................................................13
Section 3.6 Lost Certificates............................................................13
Section 3.7 No Rights as Stockholder.....................................................13
Section 3.8 Withholding..................................................................13
Section 3.9 Escheat......................................................................14
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................14
Section 4.1 Organization.................................................................14
Section 4.2 Authorization of Transaction; Enforceability.................................14
Section 4.3 Noncontravention; Consents...................................................15
Section 4.4 Capitalization...............................................................16
Section 4.5 Company Reports; Proxy Statement.............................................17
Section 4.6 No Undisclosed Liabilities...................................................18
Section 4.7 Absence of Material Adverse Effect and Certain Events........................18
Section 4.8 Litigation and Legal Compliance..............................................19
Section 4.9 Contract Matters.............................................................19
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Section 4.10 Tax Matters..................................................................21
Section 4.11 Employee Benefit Matters.....................................................22
Section 4.12 Environmental Matters........................................................26
Section 4.13 Title........................................................................27
Section 4.14 Intellectual Property Matters................................................27
Section 4.15 Labor Matters................................................................28
Section 4.16 Rights Agreement.............................................................28
Section 4.17 State Takeover Laws..........................................................28
Section 4.18 Brokers' Fees................................................................29
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE PURCHASER...............29
Section 5.1 Organization.................................................................29
Section 5.2 Authorization of Transaction; Enforceability.................................30
Section 5.3 Noncontravention; Consents...................................................30
Section 5.4 Adequate Cash Resources......................................................30
Section 5.5 No Capital Ownership in the Company..........................................30
Section 5.6 Brokers......................................................................30
Section 5.7 Information for the Schedules TO and 14D-9 and Proxy Statement...............31
ARTICLE 6 COVENANTS....................................................................31
Section 6.1 General......................................................................31
Section 6.2 Notices and Consents.........................................................32
Section 6.3 Interim Conduct of the Company...............................................32
Section 6.4 Preservation of Organization.................................................34
Section 6.5 Full Access..................................................................34
Section 6.6 Notice of Developments.......................................................35
Section 6.7 Other Potential Acquirers....................................................35
Section 6.8 Company Stockholder Meeting, Preparation of Proxy Statement..................37
Section 6.9 Indemnification..............................................................37
Section 6.10 Public Announcements.........................................................39
Section 6.11 Actions Regarding Antitakeover Statutes......................................39
Section 6.12 Defense of Orders and Injunctions............................................39
Section 6.13 Employee Benefit Matters.....................................................40
Section 6.14 Standstill Provisions........................................................42
Section 6.15 Number of Shares Necessary for Minimum Condition.............................42
Section 6.16 Adjustment to Offer Price....................................................42
Section 6.17 Parent Actions Following Consummation of the Offer...........................42
ARTICLE 7 CONDITIONS TO THE CONSUMMATION OF THE MERGER.................................42
Section 7.1 Conditions to the Obligations of Each Party..................................42
Section 7.2 Frustration of Closing Conditions............................................42
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ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER............................................43
Section 8.1 Termination..................................................................43
Section 8.2 Effect of Termination........................................................45
Section 8.3 Termination Fee..............................................................45
ARTICLE 9 MISCELLANEOUS................................................................46
Section 9.1 Nonsurvival of Representations...............................................46
Section 9.2 Remedies.....................................................................46
Section 9.3 Successors and Assigns.......................................................47
Section 9.4 Amendment....................................................................47
Section 9.5 Extension and Waiver.........................................................47
Section 9.6 Severability.................................................................47
Section 9.7 Counterparts.................................................................47
Section 9.8 Descriptive Headings.........................................................47
Section 9.9 Notices......................................................................47
Section 9.10 No Third Party Beneficiaries.................................................48
Section 9.11 Entire Agreement.............................................................49
Section 9.12 Construction.................................................................49
Section 9.13 Submission to Jurisdiction...................................................49
Section 9.14 Governing Law................................................................49
ANNEX I - CERTAIN CONDITIONS OF THE OFFER..................................................A-1
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TABLE OF DEFINED TERMS
Antitrust Laws Section 4.3
Certificate Section 3.1
Certificate of Merger Section 2.3
Closing Section 2.2
Closing Date Section 2.2
Code Section 4.11(a)(i)
Company Preamble
Company Applicable Period Section 6.7(a)
Company Board Section 6.7(a)
Company Common Stock Section 1.1(a)
Company Disclosure Letter Article 4
Company Material Adverse Effect Section 4.1
Company Plans Section 4.11(a)
Company Rights Agreement Section 4.4(a)
Company SEC Documents Section 4.5(a)
Company Stock-Based Award Section 2.9(a)(ii)
Company Stockholder Approval Section 6.8(d)
Company Stockholder Meeting Section 6.8(a)
Company Superior Proposal Section 6.7(b)
Company Takeover Proposal Section 6.7(e)
Confidentiality Agreement Section 6.5
Consummation of the Offer Section 1.4
Delaware Act Section 1.4
Dissenting Stockholders Section 2.8(b)
Effective Time Section 2.3
Employees Section 6.13(a)
Employee Pension Benefit Plan Section 4.11(a)
Employee Welfare Benefit Plan Section 4.11(a)
Environmental Law Section 4.12(b)
ERISA Section 4.11(a)
ESPAP Section 6.13(g)
Exchange Act Section 1.1(a)
GAAP Section 4.5(b)
Governmental Entities Section 6.1
Government Contract Section 4.9(b)
Government Subcontract Section 4.9(b)
Hazardous Materials Section 4.12(c)
HSR Act Section 4.3
Indemnified Losses Section 6.9(a)
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Indemnified Parties Section 6.9(a)
Independent Directors Section 1.3(a)
Intellectual Property Section 4.14(b)
Joint Press Release Section 1.1(d)
Laws Section 1.2(a)
Lien Section 4.3
Merger Section 2.1
Merger Consideration Section 2.8(b)
Minimum Condition Section 1.1(a)
Multiemployer Plan Section 4.11(a)(vi)
OFCCP Section 4.15
Offer Section 1.1(a)
Offer Documents Section 1.1(e)
Offer Price Section 1.1(a)
Offer to Purchase Section 1.1(a)
Opinion Section 4.2
Outside Date Section 8.1(b)(i)
Parent Preamble
Parent Material Adverse Effect Section 5.1
Parent SSIP Section 6.13(a)
Paying Agent Section 3.1
Payment Fund Section 3.2(a)
Permitted Liens Section 4.13
Proxy Statement Section 6.8(b)
Purchaser Preamble
Qualified Person Section 1.3(a)
Rights Section 4.4(a)
Schedule 14D-9 Section 1.2(c)
Schedule TO Section 1.1(e)
SEC Section 1.1(b)
SECT Section 2.8(a)
Securities Act Section 4.5(a)
Stock Option Section 2.9(a)(i)
Stock Plans Section 2.9(a)(i)
Significant Subsidiary Section 4.1
Subsidiary Section 2.8(c)
Surviving Corporation Section 2.1
Taxes Section 4.10(a)
Tax Returns Section 4.10(a)
Termination Fee Section 8.3(a)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of April 24, 2001 among General
Dynamics Corporation, a Delaware corporation (the "Parent"), Grail Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary of the Parent
(the "Purchaser"), and Newport News Shipbuilding Inc., a Delaware corporation
(the "Company").
The Boards of Directors of the Parent, the Purchaser, and the Company
have each determined that a business combination among the Parent, the Purchaser
and the Company is desirable and in the best interests of the Parent, the
Purchaser and the Company and their respective stockholders. The Boards of
Directors of the Parent, the Purchaser and the Company accordingly have each
duly adopted resolutions approving this Agreement and the transactions
contemplated hereby.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and for other good and valuable consideration, the value, receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
THE OFFER
Section 1.1 The Offer.
(a) Provided that this Agreement shall not have been terminated
pursuant to Section 8.1 hereof, as promptly as reasonably practicable,
but in no event later than seven business days following the public
announcement of the terms of this Agreement (which public announcement
shall occur no later than the first business day following the execution
of this Agreement), the Purchaser shall, and the Parent shall cause the
Purchaser to, commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) a
tender offer (as it may be amended from time to time as permitted by
this Agreement, the "Offer") to purchase all of the shares of Common
Stock, par value $0.01 per share of the Company ("Company Common Stock")
issued and outstanding (including the related Rights, as defined in
Section 4.4(a)) at a price of U.S. $67.50 per share, net to the seller
in cash (such price, or such higher (or other price if adjusted pursuant
to Section 6.16) price per share of Company Common Stock as may be paid
in the Offer, being referred to herein as the "Offer Price"). For
purposes of this Agreement, the term "business day" shall mean any day,
other than Saturday, Sunday or a federal holiday, and shall consist of
the time period from 12:01 a.m. through 12:00 midnight Eastern time. The
obligation of the Purchaser to accept for payment and pay for shares of
Company Common Stock (including the related Rights) tendered pursuant to
the Offer shall be subject only to the condition that there
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shall be validly tendered (other than by guaranteed delivery where
actual delivery has not occurred) in accordance with the terms of the
Offer, prior to the expiration date of the Offer and not withdrawn, a
number of shares of Company Common Stock that, together with the shares
of Company Common Stock then owned by the Parent and/or the Purchaser,
represents at least a majority of the shares of Company Common Stock
outstanding on a fully diluted basis (after giving effect to the
conversion or exercise of all outstanding options, warrants and other
rights to acquire, and securities exercisable or convertible into,
Company Common Stock, whether or not exercised or converted at the time
of determination, other than potential dilution attributable to the
Rights) (the "Minimum Condition") and to the satisfaction or waiver by
the Purchaser as permitted hereunder of the other conditions set forth
in Annex I hereto. The Offer shall be made by means of an offer to
purchase (the "Offer to Purchase") and the related letter of
transmittal, each in form reasonably satisfactory to the Company,
containing the terms set forth in this Agreement and the conditions set
forth in Annex I. Without limiting the foregoing, effective upon
Consummation of the Offer (as defined in Section 1.4), the holder of
such Company Common Stock (including the related Rights) will sell and
assign to the Purchaser all right, title and interest in and to all of
the shares of Company Common Stock tendered (including, but not limited
to, such holder's right to any and all dividends and distributions with
a record date before, and a payment date after, the scheduled or
extended expiration date).
(b) The Purchaser expressly reserves the right, subject to
compliance with the Exchange Act, to waive any of the conditions to the
Offer and to make any change in the terms of or conditions to the Offer;
provided that (i) the Minimum Condition may not be waived or changed
without the prior written consent of the Company and (ii) no change may
be made that changes the form of consideration to be paid, decreases the
Offer Price, decreases the number of shares of Company Common Stock
sought in the Offer, adds additional conditions to the Offer, modifies
any of the conditions to the Offer in a manner adverse to holders of
Company Common Stock, makes any other change in the terms of the Offer
that is in any manner adverse to the holders of the Company Common Stock
or (except as provided in the next sentence and in Section 1.1(c))
changes the expiration date of the Offer, without the prior written
consent of the Company. Without the consent of the Company, the
Purchaser shall have the right to extend the expiration date of the
Offer (which shall initially be 12:00 midnight Eastern time on the date
that is the twentieth business day from the commencement date of the
Offer, pursuant to Rule 14d-2 under the Exchange Act) from time to time
for one or more additional periods of not more than 10 business days (5
business days if only the Minimum Condition remains to be satisfied) (or
such longer period as may be approved by the Company), (i) if,
immediately before the scheduled or extended expiration date of the
Offer, any of the conditions to the Offer shall not have been satisfied
or, to the extent permitted, waived, until such conditions are satisfied
or waived or (ii) for any period required by any rule, regulation,
interpretation or position of the Securities and Exchange Commission or
the staff thereof (the "SEC") applicable to the Offer or any period
required by applicable law.
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If the Purchaser elects to extend the expiration date pursuant to the
immediately preceding sentence when the only Offer Condition that is not
satisfied (or waived by the Purchaser) is the Minimum Condition, to the
extent requested in writing by the Company (which request must be
delivered on or before the expiration date), the Purchaser and the
Parent shall be deemed to have irrevocably waived all of the Offer
Conditions other than the Minimum Condition. In addition, if, at the
scheduled or extended expiration date of the Offer, conditions to the
Offer have been satisfied or waived and the Minimum Condition has been
satisfied but Company Common Stock tendered and not withdrawn pursuant
to the Offer constitutes less than 90 percent of the outstanding Company
Common Stock, without the consent of the Company, the Purchaser shall
(subject to applicable law) have the right to provide for a "subsequent
offering period" (as contemplated by Rule 14d-11 under the Exchange Act)
for up to 20 business days after the Purchaser's acceptance for payment
of the shares of Company Common Stock then tendered and not withdrawn
pursuant to the Offer.
(c) If any of the conditions to the Offer are not satisfied or
waived on any scheduled or extended expiration date of the Offer, the
Purchaser shall, and the Parent shall cause the Purchaser to, extend the
Offer, if such condition or conditions could reasonably be expected to
be satisfied, from time to time until such conditions are satisfied or
waived; provided, that the Purchaser shall not be required to extend the
Offer beyond the Outside Date. Subject to the foregoing and upon the
terms and subject to the conditions of the Offer, the Purchaser shall,
and the Parent shall cause it to, accept for payment and pay for, as
promptly as practicable after the expiration of the Offer and in
accordance with Rule 14e-1(c) of the SEC (or as required by Rule 14d-11
under the Exchange Act), all shares of Company Common Stock validly
tendered and not withdrawn pursuant to the Offer.
(d) No later than the first business day following execution of
this Agreement and subject to the conditions of this Agreement, the
Parent shall issue a joint press release with the Company (the "Joint
Press Release") regarding this Agreement and its intent to make the
Offer and shall file with the SEC the Joint Press Release, under cover
of Schedule TO, indicating on the front of such Schedule TO that such
filing contains pre-commencement communications.
(e) On the date of commencement of the Offer, the Parent and the
Purchaser shall file with the SEC a Tender Offer Statement on Schedule
TO (together with all amendments and supplements thereto and including
the exhibits thereto, the "Schedule TO") with respect to the Offer. The
Schedule TO will include or incorporate by reference as exhibits the
Offer to Purchase and forms of the letter of transmittal and summary
advertisement (collectively, together with any supplements or amendments
thereto, the "Offer Documents"). The Parent and the Purchaser will take
all steps necessary to cause the Offer Documents to be disseminated to
holders of shares of Company Common Stock to the extent required by
applicable federal securities law. The
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Parent, the Purchaser and the Company each agree promptly to correct any
information provided by it for use in the Offer Documents if and to the
extent that such information shall have become false or misleading in
any material respect. The Parent and the Purchaser agree to take all
steps necessary to cause the Schedule TO as so corrected to be filed
with the SEC and the Offer Documents as so corrected to be disseminated
to holders of shares of Company Common Stock, in each case as and to the
extent required by applicable federal securities law, including
applicable SEC rules and regulations thereunder. The Company and its
counsel shall be given a reasonable opportunity to review and comment on
the Schedule TO and the Offer Documents prior to their being filed with
the SEC or disseminated to the holders of shares of Company Common
Stock. The Purchaser and the Parent also agree to provide the Company
and its counsel in writing with any comments the Purchaser, the Parent
or their counsel may receive from the SEC or its staff with respect to
the Schedule TO or the Offer Documents promptly after the receipt of
such comments and shall consult with and provide the Company and its
counsel a reasonable opportunity to review and comment on the response
of the Purchaser to such comments prior to responding.
Section 1.2 Company Action.
(a) The Company hereby approves of and consents to the Offer. The
Company has been advised that all of its directors and executive
officers who own shares of Company Common Stock intend to tender their
shares of Company Common Stock pursuant to the Offer so long as such
action would not result in liability under Section 16(b) of the Exchange
Act. In connection with the Offer, the Company will, or will cause its
transfer agent to, promptly furnish the Parent with a list of its
stockholders, mailing labels and any available listing or computer file
containing the names and addresses of all record holders of shares of
Company Common Stock and lists in the Company's possession or control of
securities positions of shares of Company Common Stock held in stock
depositories, in each case as of a recent date, and will provide to the
Parent such additional information (including updated lists of
stockholders, mailing labels and lists of securities positions) and such
other assistance as the Parent may reasonably request in connection with
the Offer. Subject to the requirements of applicable statutes, laws
(including common law), ordinances, rules or regulations (collectively,
"Laws"), and, except for such steps as are necessary to disseminate the
Schedule TO and the Offer Documents and any other documents necessary to
consummate the Offer and the transactions contemplated by this
Agreement, the Parent and the Purchaser shall hold in confidence the
information contained in any such labels, listings and files, shall use
such information only in connection with the Offer and the Merger, and,
if this Agreement shall be terminated, shall, upon request, deliver to
the Company all copies of such information then in their possession.
(b) No later than the first business day following execution of
this Agreement, and subject to the conditions of this Agreement, the
Company shall issue the Joint Press
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Release with the Parent and shall file with the SEC the Joint Press
Release, under cover of Schedule 14D-9, indicating on the front of such
Schedule 14D-9 that such filing contains pre-commencement
communications.
(c) On the day that the Offer is commenced, the Company shall
file with the SEC and disseminate to holders of shares of Company Common
Stock, in each case as and to the extent required by applicable federal
securities law, a Solicitation/Recommendation Statement on Schedule
14D-9 (together with any amendments or supplements thereto, the
"Schedule 14D-9") that shall reflect the recommendations of the Company
Board. The Company, the Parent and the Purchaser each agree 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 or misleading in any
material respect. The Company 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 shares of Company Common Stock, in each
case as and to the extent required by applicable federal securities law.
The Parent and its counsel shall be given a reasonable opportunity to
review and comment on the Schedule 14D-9 prior to its being filed with
the SEC or disseminated to holders of Company Common Stock. The Company
also agrees to provide the Parent and its counsel in writing with any
comments the Company or its counsel may receive from the SEC with
respect to the Schedule 14D-9 promptly after the receipt of such
comments and shall consult with and provide the Parent and its counsel a
reasonable opportunity to review and comment on the response of the
Company to such comments prior to responding.
Section 1.3 Directors.
(a) Promptly upon the purchase of and payment for, and as long as
the Parent directly or indirectly owns, not less than a majority of the
issued and outstanding shares of Company Common Stock on a fully diluted
basis by the Parent or any of its direct or indirect Subsidiaries
pursuant to the Offer, the Parent shall be entitled to designate for
appointment or election to the Company's then existing Board of
Directors, upon written notice to the Company, such number of directors,
rounded up to the next whole number, on the Board of Directors such that
the percentage of its designees on the Board shall equal the percentage
of the outstanding shares of Company Common Stock owned of record by the
Parent and its direct or indirect Subsidiaries. In furtherance thereof,
the Company shall, upon request of the Purchaser, use its reasonable
efforts promptly to cause the Parent's designees (and any replacement
designees in the event that any designee shall no longer be on the Board
of Directors) to be so elected to the Company's Board, and in
furtherance thereof, to the extent necessary, increase the size of the
Board of Directors or use its reasonable efforts to obtain the
resignation of such number of its current directors as is necessary to
give effect to the foregoing provision. At such time, the Company shall
also, upon the request of the Purchaser, use its reasonable efforts to
cause the Persons designated by the Parent to constitute at least the
same percentage
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(rounded up to the next whole number) as is on the Company's Board of
Directors of (i) each committee of the Company's Board of Directors,
(ii) each board of directors (or similar body) of each Subsidiary of the
Company and (iii) each committee (or similar body) of each such board.
Notwithstanding the foregoing, until the Effective Time, the Board of
Directors of the Company shall have at least two directors who are
directors of the Company on the date of this Agreement and who are not
officers of the Company or any of its Subsidiaries (the "Independent
Directors"); provided, however, that (x) notwithstanding the foregoing,
in no event shall the requirement to have at least two Independent
Directors result in the Parent's designees constituting less than a
majority of the Company's Board of Directors unless the Parent shall
have failed to designate a sufficient number of Persons to constitute at
least a majority and (y) if the number of Independent Directors shall be
reduced below two for any reason whatsoever (or if immediately following
Consummation of the Offer there are not at least two then-existing
directors of the Company who (1) are Qualified Persons (as defined
below) and (2) are willing to serve as Independent Directors), then the
number of Independent Directors required hereunder shall be one, unless
the remaining Independent Director is able to identify a person, who is
not an officer or Affiliate of the Company, the Parent or any of their
respective Subsidiaries (any such person being referred to herein as a
"Qualified Person"), willing to serve as an Independent Director, in
which case such remaining Independent Director shall be entitled to
designate any such Qualified Person or Persons to fill such vacancy, and
such designated Qualified Person shall be deemed to be an Independent
Director for purposes of this Agreement, or if no Independent Directors
then remain, the other Directors shall be required to designate two
Qualified Persons to fill such vacancies, and such persons shall be
deemed to be Independent Directors for purposes of this Agreement.
(b) The Company shall promptly take all actions required pursuant
to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder in order to fulfill its obligations under Section 1.3(a),
including mailing to stockholders the information required by such
Section 14(f) and Rule 14f-1 (which the Company shall mail together with
the Schedule 14D-9 if it receives from the Parent and the Purchaser the
information below on a basis timely to permit such mailing) as is
necessary to fulfill the Company's obligations under Section 1.3(a). The
Company's obligations to appoint the Parent's designees to the Company's
Board of Directors shall be subject to compliance with Section 14(f) of
the Exchange Act and Rule 14f-1 promulgated thereunder. The Parent or
the Purchaser shall supply the Company in writing 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 as is necessary
in connection with the appointment of any of the Parent's designees
under Section 1.3(a). The provisions of Section 1.3(a) are in addition
to and shall not limit any rights that the Purchaser, the Parent or any
of their Affiliates may have as a holder or beneficial owner of shares
of Company Common Stock as a matter of law with respect to the election
of directors or otherwise.
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(c) Following the election or appointment of the Parent's
designees pursuant to Section 1.3(a), the approval by affirmative vote
or written consent of all of the Independent Directors then in office
(or, if there shall be only one Independent Director then in office, the
Independent Director) shall be required to authorize (and such
authorization shall constitute the authorization of the Company's Board
of Directors and no other action on the part of the Company, including
any action by any committee thereof or any other director of the
Company, shall, unless otherwise required by law, be required or
permitted to authorize) (i) any amendment or termination of this
Agreement by the Company, (ii) any extension of time for performance of
any obligation or action hereunder by the Parent or the Purchaser or
(iii) any waiver or exercise of any of the Company's rights under this
Agreement.
Section 1.4 Merger Without Meeting of Stockholders. If following first
acceptance for payment of shares of Company Common Stock by the Purchaser
pursuant to the Offer (the "Consummation of the Offer") (or any subsequent
offering period), the Purchaser owns at least 90 percent of the outstanding
shares of Company Common Stock, each of the parties hereto shall take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after such acquisition, without the Company Stockholder Meeting,
in accordance with Section 253 of the Delaware General Corporation Law (the
"Delaware Act").
ARTICLE 2
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time (as defined in Section 2.3) the
Purchaser will be merged (the "Merger") with and into the Company in accordance
with the provisions of the Delaware Act. Following the Merger, the Company will
continue as the surviving corporation (the "Surviving Corporation") and the
separate corporate existence of the Purchaser will cease.
Section 2.2 The Closing. Upon the terms and subject to the conditions
set forth in this Agreement, the consummation of the Merger and the other
transactions contemplated by this Agreement (the "Closing") will take place at
the offices of Jenner & Block, LLC, 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000, at 10:00 a.m., local time, no later than the third business day following
the satisfaction or waiver, to the extent permitted by applicable Laws, of the
conditions set forth in Article 7 (other than those conditions that by their
nature are to be satisfied at the Closing, but subject to the satisfaction or,
where permitted, waiver of those conditions), or at such other date, time or
place as the Parent and the Company may agree. The date upon which the Closing
occurs is referred to in this Agreement as the "Closing Date."
Section 2.3 Effective Time. Upon the terms and subject to the conditions
of this Agreement, on the date of the Closing (or on such other date as the
Parent and the Company may agree), the Parent, the Purchaser and the Company
shall file with the Secretary of State of the
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State of Delaware a certificate of merger (or certificate of ownership and
merger, as the case may be) (the "Certificate of Merger") executed and
acknowledged in accordance with Section 251 (or Section 253, as the case may be)
of the Delaware Act, and shall make all other filings or recordings required
under the Delaware Act. The Merger (whether effected pursuant to Section 251 or
Section 253 of the Delaware Act) shall become effective on the later of the date
on which the Certificate of Merger has been duly filed with the Secretary of
State of the State of Delaware or such time as is agreed upon by the parties and
specified in the Certificate of Merger, and such time is hereinafter referred to
as the "Effective Time."
Section 2.4 Effects of the Merger. From and after the Effective Time,
the Merger shall have the effects set forth in this Agreement and Section 259 of
the Delaware Act. Without limiting the generality of the foregoing, as of the
Effective Time, all properties, rights, privileges, powers and franchises of the
Company and the Purchaser will vest in the Surviving Corporation and all debts,
liabilities and duties of the Company and the Purchaser will become debts,
liabilities and duties of the Surviving Corporation.
Section 2.5 Certificate of Incorporation and Bylaws. At the Effective
Time, the certificate of incorporation and bylaws of the Company as in effect
immediately prior to the Effective Time will be the certificate of incorporation
and bylaws of the Surviving Corporation, until amended by the Surviving
Corporation pursuant to the Delaware Act and subject to the provisions of
Section 6.9(e).
Section 2.6 Directors. The directors of the Purchaser at the Effective
Time will be the initial directors of the Surviving Corporation and will hold
office from the Effective Time until their respective successors are duly
elected or appointed and qualified in the manner provided in the certificate of
incorporation and bylaws of the Surviving Corporation or as otherwise provided
by law.
Section 2.7 Officers. The officers of the Company at the Effective Time
will be the initial officers of the Surviving Corporation and will hold office
from the Effective Time until their respective successors are duly elected or
appointed and qualified in the manner provided in the certificate of
incorporation and bylaws of the Surviving Corporation or as otherwise provided
by law.
Section 2.8 Conversion of Company Common Stock. As of the Effective
Time, by virtue of the Merger and without any action on the part of the holders
of any shares of Company Common Stock or any shares of capital stock of the
Purchaser:
(a) All shares of Company Common Stock that are owned by the
Company, any Subsidiary of the Company, the Parent or any Subsidiary of
the Parent immediately prior to the Effective Time shall be cancelled
and shall cease to exist and no consideration shall be delivered in
exchange therefor; provided that shares of Company Common Stock held
beneficially or of record by any Stock Plan or Company Plan or in
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accordance with the provisions of the Company's Amended and Restated
Stock Employee Compensation Trust Agreement dated as of August 1, 2000
among the Company and Wachovia Bank, N.A. (the "SECT") shall not be
deemed to be held by the Company regardless of whether the Company has,
directly or indirectly, the power to vote or control the disposition of
such shares.
(b) Each share of Company Common Stock (other than shares to be
cancelled in accordance with Section 2.8(a) and any shares that are held
by stockholders exercising appraisal rights pursuant to Section 262 of
the Delaware Act ("Dissenting Stockholders")) issued and outstanding
immediately prior to the Effective Time, including any shares of Company
Common Stock held beneficially or of record by any Stock Plan or Company
Plan or in accordance with the provisions of the SECT, shall be
converted into the right to receive the Offer Price in cash, payable to
the holder thereof, without interest (the "Merger Consideration"), upon
surrender of the Certificate (as defined in Section 3.1) formerly
representing such share in the manner provided in Section 3.2. All such
shares, when so converted, shall no longer be outstanding and shall
automatically be cancelled and shall cease to exist, and each holder of
a Certificate representing any such shares shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration therefor upon the surrender of such Certificate in
accordance with Section 3.2, without interest.
(c) The term "Subsidiary" as used in this Agreement means any
corporation, partnership, limited liability company or other business
entity 50 percent or more of the outstanding voting equity securities of
which are owned, directly or indirectly, by the Company or the Parent,
as applicable.
Section 2.9 Stock Options; Equity-Based Awards
(a) As soon as practicable following the date of this Agreement,
the Board of Directors of the Company (or, if appropriate, any committee
administering the Stock Plans) shall adopt such resolutions or take such
other actions (if any) as may be required to effect the following:
(i) each option to purchase shares of Company Common Stock
(a "Stock Option") granted under any stock option plan,
program, agreement or arrangement of the Company or any
of its Subsidiaries (collectively, the "Stock Plans;"
for the avoidance of doubt, the term "Stock Plan" does
not include the Company's Deferred Compensation Plan or
Deferred Compensation Plan for Nonemployee Directors)
which is outstanding and unexercised immediately prior
to the acceptance for payment of shares of Company
Common Stock pursuant to the Offer, whether vested or
unvested, may be surrendered immediately prior to the
acceptance for payment of shares of Company Common Stock
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pursuant to the Offer, with the holder thereof becoming
entitled to receive a payment in cash from the Company
in an amount equal to the product of (a) the excess, if
any, of the Merger Consideration over the exercise price
per share of Company Common Stock subject to such Stock
Option and (b) the number of shares of Company Common
Stock subject to such Stock Option; notwithstanding the
foregoing, this Section 2.9(a)(i) will not apply to the
ESPAP (as defined in Section 6.13(g)) and the rights
thereunder;
(ii) each right of any kind, whether vested or unvested,
contingent or accrued, to acquire or receive shares of
Company Common Stock or to receive benefits measured by
the value of a number of shares of Company Common Stock,
that may be held, awarded, outstanding, credited,
payable or reserved for issuance under the Stock Plans
(including, without limitation, restricted stock and
performance shares or awards), except for Stock Options
(each, a "Company Stock-Based Award") outstanding
immediately prior to the acceptance for payment of
shares of Company Common Stock pursuant to the Offer,
whether vested or unvested, shall fully vest (at the
maximum level of possible payout, if applicable), and
may be surrendered immediately prior to the acceptance
for payment of shares of Company Common Stock pursuant
to the Offer, with the holder thereof becoming entitled
to receive a payment, in cash from the Company in an
amount equal to the product of (x) the Merger
Consideration and (y) the number of shares of Company
Common Stock subject to such Company Stock-Based Award;
(iii) any cash payments required to be made pursuant to
Section 2.9(a)(i) or 2.9(a)(ii) are to be made (subject
to applicable withholding and payroll taxes) by the
Company promptly following the Consummation of the
Offer, but in any event within one business day
following Consummation of the Offer;
(iv) each Stock Option granted under the Stock Plans that is
not surrendered for cash in accordance with Section
2.9(a)(i), and that is outstanding and unexercised
immediately prior to the Effective Time, shall be
canceled immediately prior to the Effective Time, with
the holder thereof becoming entitled to receive a
payment in cash from the Surviving Corporation in an
amount equal to the product of (a) the excess, if any,
of the Merger Consideration over the exercise price per
share of the Company Common Stock subject to such Stock
Option and (b) the number of shares of Company Common
Stock subject to such Stock Option;
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(v) each Company Stock-Based Award that is not surrendered
for cash in accordance with Section 2.9(a)(ii), and
that is outstanding immediately prior to the Effective
Time, shall be cancelled immediately prior to the
Effective Time, with the holder thereof becoming
entitled to receive a payment in cash from the
Surviving Corporation in an amount equal to the
product of (x) the Merger Consideration and (y) the
number of shares of Company Common Stock subject to
such Company Stock-Based Award; and
(vi) any cash payments required to be made pursuant to
Section 2.9(a)(iv) or 2.9(a)(v) are to be made
(subject to applicable withholding and payroll taxes)
by the Surviving Corporation promptly following the
Effective Time, but in any event within one business
day following the Effective Time.
(b) Except to the extent permitted by Section 6.3, no additional
Stock Options, Company Stock-Based Awards or other equity-based awards
or other rights to acquire Company Common Stock will be granted pursuant
to the Stock Plans or otherwise after the date of this Agreement.
(c) The Company Board, or applicable committee thereof, will grant
all approvals and take all other actions required pursuant to Rules
16b-3 under the Exchange Act to cause the disposition in the Merger of
Company Common Stock, Company Stock-Based Awards and Stock Options to be
exempt from the provisions of Section 16(b) of the Exchange Act.
Section 2.10 Conversion of the Purchaser Common Stock. Each share of the
Common Stock, par value $0.01 per share, of the Purchaser issued and outstanding
immediately prior to the Effective Time will, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into one
share of the Common Stock, par value $0.01 per share, of the Surviving
Corporation.
ARTICLE 3
PAYMENT
Section 3.1 Surrender of Certificates. From and after the Effective
Time, each holder of a certificate that immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (a "Certificate") will be
entitled to receive in exchange therefor, upon surrender thereof to a paying
agent (the "Paying Agent") to be designated by the Parent prior to the Effective
Time with approval of the Company, which approval shall not be unreasonably
withheld, the Merger Consideration in accordance with the provisions of Article
2 and this
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Article 3. No interest will be payable on the Merger Consideration to be paid to
any holder of a Certificate irrespective of the time at which such Certificate
is surrendered for exchange.
Section 3.2 Paying Agent; Certificate Surrender Procedures.
(a) As soon as reasonably practicable following the Effective
Time, the Parent will deposit, or cause to be deposited, with the Paying
Agent, an amount in cash sufficient to provide all funds necessary for
the Paying Agent to make payment of the Merger Consideration pursuant to
Section 2.8 (the "Payment Fund"). Pending payment of such funds to the
holders of Certificates for shares of Company Common Stock, such funds
will be held and may be invested by the Paying Agent as the Parent
directs (so long as such directions do not impair the rights of holders
of Company Common Stock) in the direct obligations of the United States,
obligations for which the full faith and credit of the United States is
pledged to provide for the payment of principal and interest or
commercial paper rated of the highest quality by Xxxxx'x Investors
Services, Inc. or Standard & Poor's Corporation. Any net profit
resulting from, or interest or income produced by, such investments will
be payable to the Surviving Corporation or the Parent, as the Parent
directs. The Parent will promptly replace any monies lost through any
investment made pursuant to this Section 3.2(a).
(b) As soon as reasonably practicable after the Effective Time,
the Parent will instruct the Paying Agent to mail to each record holder
of a Certificate (i) a letter of transmittal (which will specify that
delivery will be effected, and risk of loss and title to such
Certificates will pass, only upon delivery of the Certificate to the
Paying Agent and will be in such form and have such other provisions as
the Parent will reasonably specify) and (ii) instructions for use in
effecting the surrender of Certificates for the Merger Consideration.
Commencing immediately after the Effective Time, upon the surrender to
the Paying Agent of such Certificate or Certificates, together with a
duly executed and completed letter of transmittal and all other
documents and other materials required by the Paying Agent to be
delivered in connection therewith, the holder will be entitled to
receive the Merger Consideration in accordance with the provisions of
Section 2.8.
Section 3.3 Transfer Books. The stock transfer books of the Company will
be closed at the Effective Time and no transfer of any shares of Company Common
Stock outstanding immediately prior to the Effective Time will thereafter be
recorded on any of the stock transfer books. In the event of a transfer of
ownership of any Company Common Stock prior to the Effective Time that is not
registered in the stock transfer records of the Company at the Effective Time,
the Merger Consideration will be paid to the transferee in accordance with the
provisions of Section 3.2(b) only if the Certificate is surrendered as provided
in Section 3.2 and accompanied by all documents required to evidence and effect
such transfer and by evidence of payment of any applicable stock transfer taxes.
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Section 3.4 Termination of Payment Fund. Any portion of the Payment Fund
which remains undistributed one hundred eighty (180) days after the Effective
Time will be delivered to the Parent upon demand, and each holder of Company
Common Stock who has not theretofore surrendered Certificates in accordance with
the provisions of this Article 3 will thereafter look only to the Parent for
satisfaction of such holder's claims for the Merger Consideration.
Section 3.5 Appraisal Rights. Notwithstanding anything in this Agreement
to the contrary, if any Dissenting Stockholder shall demand to be paid the fair
cash value of such holder's shares of Company Common Stock, as provided in
Section 262 of the Delaware Act, such shares shall not be converted into or be
exchangeable for the right to receive the Merger Consideration except as
provided in this Section 3.5, and the Company shall give the Parent notice of
any demand for appraisal rights under Section 262 of the Delaware Act received
by the Company, and the Parent shall have the right to participate in all
negotiations and proceedings with respect to any such demands. Neither the
Company nor the Surviving Corporation shall, except with the prior written
consent of the Parent, voluntarily make any payment with respect to, or settle
or offer to settle, any such demand for payment. If any Dissenting Stockholder
shall fail to perfect or shall have effectively withdrawn or lost the right to
an appraisal under Section 262 of the Delaware Act, the shares of Company Common
Stock held by such Dissenting Stockholder shall thereupon be treated as though
such shares had been converted into the right to receive the Merger
Consideration at the Effective Time pursuant to Section 2.8.
Section 3.6 Lost Certificates. If any Certificate has been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Parent, the posting by such person of a bond in such reasonable amount as
the Parent may direct as indemnity against any claim that may be made against it
with respect to such Certificate, the Paying Agent will deliver in exchange for
such lost, stolen or destroyed Certificate the Merger Consideration pursuant to
Section 2.8.
Section 3.7 No Rights as Stockholder. From and after the Effective Time,
the holders of Certificates will cease to have any rights as a stockholder of
the Surviving Corporation except as otherwise provided in this Agreement or by
applicable law, and the Parent will be entitled to treat each Certificate that
has not yet been surrendered for exchange solely as evidence of the right to
receive the Merger Consideration in accordance with the provisions of Article 2
hereof and this Article 3, provided, however, that each holder of a Certificate
that has become entitled to any declared and unpaid dividend will continue to be
entitled to such dividend following the Effective Time, and the Surviving
Corporation will pay such dividend to such holder in the amount and on the date
specified therefor by the Board of Directors of the Company at the time of
declaration thereof.
Section 3.8 Withholding. The Parent will be entitled to deduct and
withhold from the Merger Consideration otherwise payable to any former holder of
Company Common Stock all amounts relating to federal and state income and
payroll taxes required by law to be deducted or withheld therefrom.
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Section 3.9 Escheat. Neither the Parent, the Purchaser nor the Company
will be liable to any former holder of Company Common Stock for any portion of
the Merger Consideration delivered to any public official pursuant to any
applicable abandoned property, escheat or similar law. In the event any
Certificate has not been surrendered for the Merger Consideration prior to the
sixth anniversary of the Closing Date, or prior to such earlier date as of which
such Certificate or the Merger Consideration payable upon the surrender thereof
would otherwise escheat to or become the property of any governmental entity,
then the Merger Consideration otherwise payable upon the surrender of such
Certificate will, to the extent permitted by applicable law, become the property
of the Surviving Corporation, free and clear of all rights, interests and
adverse claims of any person.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent and the Purchaser that
except as disclosed in the reports, schedules, forms, statements and other
documents filed by the Company with the SEC since December 31, 1999, and
publicly available prior to the date of this Agreement or as disclosed in the
letter dated as of the date of this Agreement from the Company to the Parent
(the "Company Disclosure Letter"):
Section 4.1 Organization. The Company and each of its Subsidiaries is
(a) a corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation, (b) has all requisite power and authority to
own, lease and operate its properties and to carry on its business as presently
being conducted, and (c) is in good standing under the laws of the jurisdiction
of its incorporation and is duly qualified to conduct business as a foreign
corporation in each other jurisdiction where such qualification is required,
except, in the case of clauses (a) (as it relates to the Subsidiaries), (b) and
(c) above, where such failure, individually or in the aggregate, is not
reasonably likely to have a material adverse effect on the business, financial
condition, operations or results of operations of the Company and its
Subsidiaries taken as a whole (other than changes or effects relating to the
economy in general, the securities markets in general or the shipbuilding or
defense industries in general and not specifically relating to the Company) or
the ability of the Company to consummate the Merger and to perform its
obligations under this Agreement (a "Company Material Adverse Effect"). The
Company has delivered to the Parent correct and complete copies of its
certificate of incorporation and bylaws, as presently in effect, and, upon
request, will make available to the Parent after the date of this Agreement
correct and complete copies of the charters and bylaws, as presently in effect,
of each of its "significant subsidiaries", as such term is defined in Regulation
S-X of the Exchange Act (the "Significant Subsidiaries").
Section 4.2 Authorization of Transaction; Enforceability. The Company
has full corporate power and authority and has taken all requisite corporate
action to enable it to execute
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and deliver this Agreement, to consummate the Merger and the other transactions
contemplated hereby and to perform its obligations hereunder, other than
obtaining the Company Stockholder Approval (as defined in Section 6.8(d)), if
necessary, and the filing of the Certificate of Merger. The Board of Directors
of the Company, at a meeting thereof duly called and held, has duly adopted
resolutions by unanimous vote approving this Agreement, the Merger and the other
transactions contemplated hereby, determining that the terms and conditions of
this Agreement, the Merger and the other transactions contemplated hereby are in
the best interests of the Company and its stockholders and recommending that the
Company's stockholders approve this Agreement. The foregoing resolutions of the
Board of Directors of the Company have not been modified, supplemented or
rescinded and remain in full force and effect as of the date of this Agreement.
In connection with its adoption of the foregoing resolutions, the Board of
Directors of the Company received the opinion (the "Opinion") of Credit Suisse
First Boston Corporation, financial advisor to the Board of Directors of the
Company, to the effect that, as of the date of such opinion, the Offer Price and
the Merger Consideration are fair to the holders of shares of Company Common
Stock (other than the Parent and its affiliates), from a financial point of
view. The Company will deliver to the Parent a correct and complete copy of such
Opinion, promptly following receipt thereof. Assuming due execution and
authorization by the Parent and the Purchaser, this Agreement constitutes the
valid and legally binding obligation of the Company, enforceable against the
Company in accordance with its terms and conditions, except as enforceability
may be limited by applicable bankruptcy, insolvency or other similar Laws
affecting the enforcement of creditors' rights generally and by general
principals of equity relating to enforceability.
Section 4.3 Noncontravention; Consents. Except for (a) filings and
approvals necessary to comply with the applicable requirements of the Exchange
Act and the "blue sky" laws and regulations of various states, (b) the filing of
a Notification and Report Form and related material with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
under the Xxxx-Xxxxx-Xxxxxx Act of 1976, as amended (the "HSR Act"), and any
other filing required pursuant to any other applicable competition, merger
control, antitrust or similar law or regulation (together with the HSR Act, the
"Antitrust Laws"), (c) the filing of the Certificate of Merger pursuant to the
Delaware Act and any applicable documents with the relevant authorities of other
jurisdictions in which the Company or any of its Subsidiaries is qualified to do
business, (d) any filings required under the rules and regulations of the New
York Stock Exchange and (e) to the extent set forth in the Company Disclosure
Letter, neither the execution and delivery of this Agreement by the Company, nor
the consummation by the Company of the transactions contemplated hereby, will
constitute a violation of, be in conflict with, constitute or create (with or
without notice or lapse of time or both) a default under, give rise to any right
of termination, cancellation, amendment or acceleration with respect to, or
result in the creation or imposition of any lien, encumbrance, security interest
or other claim (a "Lien") upon any property of the Company or any of its
Subsidiaries pursuant to (i) the certificate of incorporation or bylaws of the
Company or any of its Subsidiaries, (ii) any constitutional provision, law,
rule, regulation, permit, order, writ, injunction, judgment or decree to which
the Company or any of its Subsidiaries is subject or (iii) any agreement or
commitment
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to which the Company or any of its Subsidiaries is a party or by which the
Company, any of its Subsidiaries or any of their respective properties is bound
or subject, except, in the case of clauses (ii) and (iii) above, for such
matters which, individually or in the aggregate, are not reasonably likely to
have a Company Material Adverse Effect.
Section 4.4 Capitalization.
(a) As of the date of this Agreement, the authorized capital
stock of the Company consists of 70 million shares of Company Common
Stock, par value $0.01 per share, and 10 million shares of Preferred
Stock, par value $0.01 per share, of which 400,000 shares have been
designated as Series A Participating Cumulative Preferred Stock, par
value $0.01 per share, none of which shares of preferred stock have been
issued. As of the close of business on April 19, 2001, (i) 35,396,356
shares of Company Common Stock were issued and outstanding, (ii) 33,912
shares of Company Common Stock were subject to restricted stock grants,
(iii) 2,239 shares were held by the Company as treasury shares, (iv)
21,690,000 shares were reserved for issuance pursuant to the Stock
Plans, and (v) 400,000 shares of Company Series A Participating
Cumulative Preferred Stock were reserved for issuance in connection with
the rights (the "Rights") issued pursuant to the Rights Agreement dated
as of June 10, 1998 (as amended from time to time) (the "Company Rights
Agreement") between the Company and First Chicago Trust Company of New
York, as Rights Agent. All of the issued and outstanding shares of
capital stock of the Company have been duly authorized and are validly
issued, fully paid and nonassessable.
(b) Other than (i) Stock Options to acquire an aggregate of not
more than 2,836,743 shares of Company Common Stock granted by the
Company to current and former directors, officers, employees and
advisors of the Company and its Subsidiaries, and (ii) the Rights, as of
the date of this Agreement, there are no outstanding or authorized
options, warrants, subscription rights, conversion rights, exchange
rights or other contracts or commitments that could require the Company
or any of its Significant Subsidiaries to issue, sell or otherwise cause
to become outstanding any of its capital stock. There are no outstanding
stock appreciation, phantom stock, profit participation, dividend
equivalent rights or similar rights with respect to the Company or any
of its Significant Subsidiaries. The Company Disclosure Letter sets
forth the aggregate number of outstanding Stock Options and the
aggregate number of Company Stock-Based Awards and the average weighted
exercise price of the Stock Options and the average weighted base price
of the Company Stock-Based Awards.
(c) As of the date of this Agreement the trust under the SECT is
the owner of 5,866,096 shares of Company Common Stock.
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(d) Neither the Company nor any of its Significant Subsidiaries
is a party to any voting trust, proxy or other agreement or
understanding with respect to the voting of any capital stock of the
Company or any of its Significant Subsidiaries.
(e) Prior to the date of this Agreement, the Company Board has
not declared any dividend or distribution with respect to the Company
Common Stock the record or payment date for which is on or after the
date of this Agreement.
(f) All of the outstanding shares of the capital stock of each of
the Company's Subsidiaries have been validly issued, are fully paid and
nonassessable and as of the date of this Agreement are owned by the
Company or one of its Subsidiaries, free and clear of any Lien other
than Permitted Liens, except where the failure to be validly issued,
fully paid or nonassessable is not reasonably likely to have a Company
Material Adverse Effect. Except for its Subsidiaries, as of the date of
this Agreement, the Company does not control directly or indirectly or
have any direct or indirect equity participation in any corporation,
partnership, limited liability company, joint venture or other entity.
(g) The number of shares of Company Common Stock required to be
validly tendered to satisfy the Minimum Condition, calculated as of
April 19, 2001, is 19,116,550.
Section 4.5 Company Reports; Proxy Statement.
(a) The Company has since December 31, 1999 filed all reports,
forms, statements and other documents (collectively, together with all
financial statements included or incorporated by reference therein, the
"Company SEC Documents") required to be filed by the Company with the
SEC pursuant to the provisions of the Securities Act of 1933 (as
amended, the "Securities Act"), or Section 12(b), 12(g) or 15(d) of the
Exchange Act. Each of the Company SEC Documents, as of its filing date,
complied in all material respects with the applicable requirements of
the Securities Act and the Exchange Act. None of the Company SEC
Documents, as of their respective filing dates, contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading. No Subsidiary of the Company is required to file
any reports, forms, statements or other documents pursuant to the
Securities Act or Section 12(b), 12(g) or 15(d) of the Exchange Act.
(b) Each of the consolidated financial statements (including
related notes) included in the Company SEC Documents presented fairly in
all material respects the consolidated financial condition, cash flows
and results of operations of the Company and its Subsidiaries for the
respective periods or as of the respective dates set forth therein. Each
of the financial statements (including related notes) included in the
Company SEC Documents has been prepared in accordance with United States
generally
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accepted accounting principles ("GAAP"), consistently applied during the
periods involved, except (i) as noted therein, (ii) to the extent
required by changes in GAAP or (iii) in the case of unaudited interim
financial statements, normal recurring year-end audit adjustments and as
permitted by Form 10-Q of the SEC.
(c) The Schedule 14D-9 and the Proxy Statement to be filed by the
Company pursuant to this Agreement will comply in all material respects
with the applicable requirements of the Exchange Act and will not, at
the time the Schedule 14D-9 or the definitive Proxy Statement is filed
with the SEC, as the case may be, and mailed to the stockholders of the
Company, contain any untrue statement of 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. No representation or warranty is made
herein by the Company with respect to any information, if any, supplied
by the Parent or the Purchaser for inclusion in the Schedule 14D-9 or
the Proxy Statement. The information regarding the Company to be
provided to the Parent and the Purchaser for inclusion in the Schedule
TO will not, at the time such information is provided, contain any
untrue statement of 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.
Section 4.6 No Undisclosed Liabilities. The Company and its Subsidiaries
have no liabilities or obligations (whether absolute or contingent, liquidated
or unliquidated, or due or to become due) except for (a) liabilities and
obligations referenced (whether by value or otherwise) or reflected in the
Company SEC Documents, (b) liabilities and obligations incurred in the ordinary
course of business, consistent with past practice, since December 31, 2000, and
(c) other liabilities and obligations which, individually or in the aggregate,
are not reasonably likely to have a Company Material Adverse Effect.
Section 4.7 Absence of Material Adverse Effect and Certain Events. Since
December 31, 2000 to the date of this Agreement, (i) there has not been a
Company Material Adverse Effect nor has there occurred any event, change, effect
or development which, individually or in the aggregate, is reasonably likely to
have a Company Material Adverse Effect; (ii) any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock, or
property) with respect to any capital stock of the Company or any purchase,
redemption or other acquisition for value by the Company of any capital stock
except in the ordinary course of business, consistent with past practice; (iii)
any split, combination or reclassification of any capital stock of the Company
or any issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for shares of capital stock of the
Company; (iv) (A) any granting by the Company or any Subsidiary of the Company
to any director or executive officer of the Company or any Subsidiary of the
Company of any increase in compensation, except in the ordinary course of
business consistent with prior practice or as was required under employment
agreements in effect as of December 31, 2000, (B) any granting by
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the Company or any Subsidiary of the Company to any such director or executive
officer of any increase in severance or termination pay, except as was required
under any employment, severance or termination agreements in effect as of
December 31, 2000, or (C) any entry by the Company or any Subsidiary of the
Company into any employment, severance or termination agreement with any such
director or executive officer; (v) any change in accounting methods, principles
or practices by the Company or any Subsidiary of the Company materially
affecting the consolidated assets, liabilities or results of operations of the
Company, except insofar as may have been required by a change in GAAP or by Law;
or (vi) any material elections with respect to Taxes by the Company or any
Subsidiary of the Company (other than those elections reflected on Tax Returns
filed as of the date hereof) or settlement or compromise by the Company or any
Subsidiary of the Company of any material Tax Liability or refund.
Section 4.8 Litigation and Legal Compliance.
(a) As of the date of this Agreement, the Company Disclosure
Letter sets forth each instance in which the Company or any of its
Subsidiaries is (i) subject to any material unsatisfied judgment order,
decree, stipulation, injunction or charge or (ii) a party to or, to the
Company's knowledge, threatened to be made a party to any material
charge, complaint, action, suit, proceeding or hearing of or in any
court or quasi-judicial or administrative agency of any federal, state,
local or foreign jurisdiction, except for judgments, orders, decrees,
stipulations, injunctions, charges, complaints, actions, suits,
proceedings and hearings which, individually or in the aggregate, are
not reasonably likely to have a Company Material Adverse Effect. As of
the date of this Agreement, there are no judicial or administrative
actions or proceedings pending or, to the Company's knowledge,
threatened that question the validity of this Agreement or any action
taken or to be taken by the Company in connection with this Agreement,
which, if adversely determined, are reasonably likely to have a Company
Material Adverse Effect.
(b) Except for instances of noncompliance which, individually or
in the aggregate, are not reasonably likely to have a Company Material
Adverse Effect, and except for Taxes and Environmental Laws, which are
the subject of Section 4.10 and Section 4.12, respectively, the Company
and its Subsidiaries are in compliance with each constitutional
provision, law, rule, regulation, permit, order, writ, injunction,
judgment or decree to which the Company or any of its Subsidiaries is
subject.
Section 4.9 Contract Matters.
(a) Neither the Company nor any of its Subsidiaries is in default
or violation of (and no event has occurred which with notice or the
lapse of time or both would constitute a default or violation of) any
term, condition or provision of any note, mortgage, indenture, loan
agreement, other evidence of indebtedness, guarantee, license, lease,
agreement or other contract, instrument or contractual obligation to
which the Company or any of its Subsidiaries is a party or by which any
of their respective assets is
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bound, except for any such default or violation which, individually or
in the aggregate, is not reasonably likely to have a Company Material
Adverse Effect.
(b) With respect to each contract, agreement, bid or proposal
between the Company or any of its Subsidiaries and any domestic or
foreign government or governmental agency, including any facilities
contract for the use of government-owned facilities (a "Government
Contract"), and each contract, agreement, bid or proposal that is a
subcontract between the Company or any of its Subsidiaries and a third
party relating to a contract between such third party and any domestic
or foreign government or governmental agency (a "Government
Subcontract"), (i) the Company and each of its Subsidiaries have
complied with all terms and conditions of such Government Contract or
Government Subcontract, including all clauses, provisions and
requirements incorporated expressly, by reference or by operation of law
therein, (ii) the Company and each of its Subsidiaries have complied
with all requirements of all laws, rules, regulations or agreements
pertaining to such Government Contract or Government Subcontract,
including where applicable the Cost Accounting Standards disclosure
statement of the Company or such Subsidiary, (iii) as of the date of
this Agreement, neither the United States government nor any prime
contractor, subcontractor or other person or entity has notified the
Company or any of its Subsidiaries, in writing or orally, that the
Company or any of its Subsidiaries has breached or violated any law,
rule, regulation, certification, representation, clause, provision or
requirement pertaining to such Government Contract or Government
Subcontract, (iv) neither the Company nor any of its Subsidiaries has
received any notice of termination for convenience, notice of
termination for default, cure notice or show cause notice pertaining to
such Government Contract or Government Subcontract, (v) as of the date
of this Agreement, other than in the ordinary course of business, no
cost incurred by the Company or any of its Subsidiaries pertaining to
such Government Contract or Government Subcontract has been questioned
or challenged, is the subject of any audit or investigation or has been
disallowed by any government or governmental agency, and (vi) as of the
date of this Agreement, no payments due to the Company or any of its
Subsidiaries pertaining to such Government Contract or Government
Subcontract has been withheld or set off, nor has any claim been made to
withhold or set off money, and the Company and its Subsidiaries are
entitled to all progress payments received to date with respect thereto,
except in each such case for any such failure, noncompliance, breach,
violation, termination, cost, investigation, disallowance or payment
which, individually or in the aggregate, is not reasonably likely to
have a Company Material Adverse Effect.
(c) To the Company's knowledge, neither the Company nor any of
its Subsidiaries, any of the respective directors, officers, employees,
consultants or agents of the Company or any of its Subsidiaries is or
since January 1, 2000 has been under administrative, civil or criminal
investigation, indictment or information by any government or
governmental agency or any audit or in investigation by the Company or
any of its Subsidiaries with respect to any alleged act or omission
arising under or
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relating to any Government Contract or Government Subcontract except for
any investigation, indictment, information or audit relating to matters
which, individually or in the aggregate, are not reasonably likely to
have a Company Material Adverse Effect.
(d) There exist (i) no material outstanding claims against the
Company or any of its Subsidiaries, either by any government or
governmental agency or by any prime contractor, subcontractor, vendor or
other person or entity, arising under or relating to any Government
Contract or Government Subcontract, and (ii) no disputes between the
Company or any of its Subsidiaries and the United States government
under the Contract Disputes Act or any other federal statute or between
the Company or any of its Subsidiaries and any prime contractor,
subcontractor or vendor arising under or relating to any Government
Contract or Government Subcontract, except for any such claim or dispute
which, individually or in the aggregate, is not reasonably likely to
have a Company Material Adverse Effect. Neither the Company nor any of
its Subsidiaries has (i) any interest in any pending or potential
material claim against any government or governmental agency or (ii) any
interest in any pending claim against any prime contractor,
subcontractor or vendor arising under or relating to any Government
Contract or Government Subcontract, which, if adversely determined
against the Company, individually or in the aggregate, is reasonably
likely to have a Company Material Adverse Effect.
(e) Since January 1, 2000, neither the Company nor any of its
Subsidiaries has been debarred or suspended from participation in the
award of contracts with the United States government or any other
government or governmental agency (excluding for this purpose
ineligibility to bid on certain contracts due to generally applicable
bidding requirements). To the Company's knowledge, there exists no facts
or circumstances that would warrant the institution of suspension or
debarment proceedings or the finding of nonresponsibility or
ineligibility on the part of the Company, any of its Subsidiaries or any
of their respective directors, officers or employees. No payment has
been made by or on behalf of the Company or any of its Subsidiaries in
connection with any Government Contract or Government Subcontract in
violation of applicable procurement laws, rules and regulations or in
violation of, or requiring disclosure pursuant to, the Foreign Corrupt
Practices Act, as amended, except for any such violation or failure to
disclose which, individually or in the aggregate, is not reasonably
likely to have a Company Material Adverse Effect.
Section 4.10 Tax Matters.
(a) For each taxable period beginning on or after January 1,
1997, the Company and each of its Subsidiaries have timely filed all
required returns, declarations, reports, claims for refund or
information returns and statements, including any schedule or attachment
thereto (collectively "Tax Returns"), relating to any federal, state,
local or foreign net income, gross income, gross receipts, sales, use,
ad valorem, transfer,
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franchise, profits, license, lease, service, service use, withholding,
payroll, employment, excise, severance, stamp, occupation, premium,
property, windfall profits, customs, duties or other tax, fee,
assessment or charge, including any interest, penalty or addition
thereto and including any liability for the taxes of any other person or
entity under Treasury Regulation Section 1.1502-6 (or any similar state,
local or foreign law, rule or regulation), and any liability in respect
of any tax as a transferee or successor, by law, contract or otherwise
(collectively "Taxes"), and all such Tax Returns are accurate and
complete in all respects, except to the extent any such failure to file
or any such inaccuracy in any filed Tax Return, individually or in the
aggregate, is not reasonably likely to have a Company Material Adverse
Effect. All Taxes owed by the Company or any of its Subsidiaries
(whether or not shown on any Tax Return) have been paid or adequately
reserved for in accordance with generally accepted accounting principles
in the financial statements of the Company, except to the extent any
such failure to pay or reserve, individually or in the aggregate, is not
reasonably likely to have a Company Material Adverse Effect.
(b) No deficiency with respect to Taxes has been proposed,
asserted or assessed against the Company or any of its Subsidiaries and
no requests for waivers of the time to assess any such Taxes are
pending, except (i) requests for waivers for income Taxes for periods
referred to in Section 4.10(c) (or subsequent periods) or (ii) to the
extent any such deficiency or request for waiver, individually or in the
aggregate, is not reasonably likely to have a Company Material Adverse
Effect.
(c) The Company Disclosure Letter sets forth the periods, as of
the date of this Agreement, of the federal income Tax Returns of the
Company and its Subsidiaries being examined by the Internal Revenue
Service.
(d) Except for Liens for current Taxes not yet due and payable or
which are being contested in good faith, there is no Lien affecting any
of the assets or properties of the Company or any of its Subsidiaries
that arose in connection with any failure or alleged failure to pay any
Tax, except for Liens which, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect.
(e) Neither the Company nor any of its Subsidiaries is a party
to any Tax allocation or Tax sharing agreement with any person other
than the Company or any of its Subsidiaries other than the agreement
dated as of December 11, 1996 between the Company, Tenneco Inc., New
Tenneco Inc. and El Paso National Gas Company.
Section 4.11 Employee Benefit Matters.
(a) The Company has made available to the Parent each plan,
program, agreement or arrangement constituting a material employee
welfare benefit plan (an "Employee Welfare Benefit Plan") as defined in
Section 3(1) of the Employee
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Retirement Income Security Act of 1974 (as amended, "ERISA"), or a
material employee pension benefit plan (an "Employee Pension Benefit
Plan") as defined in Section 3(2) of ERISA, and each other material
employee benefit plan, agreement, program or arrangement or employment
practice maintained by the Company or any of its Subsidiaries with
respect to any of its current or former employees or to which the
Company or any of the Company Subsidiaries contributes or is required to
contribute with respect to any of its current or former employees
(collectively, the "Company Plans"). With respect to each Company Plan:
(i) such Company Plan (and each related trust, insurance
contract or fund) has been administered in a manner consistent in
all respects with its written terms and complies in form and
operation with the applicable requirements of ERISA and the
Internal Revenue Code of 1986, as amended (the "Code") and other
applicable laws, except for failures of administration or
compliance which, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect;
(ii) all required reports and descriptions (including Form
5500 Annual Reports, Summary Annual Reports, PBGC-1's and Summary
Plan Descriptions) have been filed or distributed appropriately
with respect to such Company Plan, except for failures of filing
or distribution which, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect;
(iii) the requirements of Part 6 of Subtitle B of Title I
of ERISA and Section 4980B of the Code have been met with respect
to each such Company Plan which is an Employee Welfare Benefit
Plan, except for failures which, individually or in the
aggregate, are not reasonably likely to have a Company Material
Adverse Effect;
(iv) all material contributions, premiums or other
payments (including all employer contributions and employee
salary reduction contributions) that are required to be made
under the terms of any Company Plan have been timely made or have
been reflected on the financial statements contained in the
Company's most recent Form 10-K or Form 10-Q included in the
Company SEC Documents except for failures which, individually or
in the aggregate, are not reasonably likely to have a Company
Material Adverse Effect;
(v) each such Company Plan which is an Employee Pension
Benefit Plan (other than a plan that is exempt from the
requirements of Parts 2, 3 and 4 of Title I of ERISA) intended to
be a "qualified plan" under Section 401(a) of the Code has
received a favorable determination letter from the Internal
Revenue Service, and no event has occurred which could reasonably
be expected to cause the loss, revocation or denial of any such
favorable determination letter except
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where the lack of a favorable determination letter is not
reasonably likely to have a Company Material Adverse Effect;
(vi) the Company has made available and will continue to
make available to the Parent, upon its request, correct and
complete copies of the plan documents and most recent summary
plan descriptions, the most recent determination letter received
from the Internal Revenue Service, the most recent Form 5500
Annual Report, the most recent actuarial report, the most recent
audited financial statements, and all related trust agreements,
insurance contracts and other funding agreements that implement
such Company Plan (but excluding the failure to make available
any such document which is not material). The valuation summaries
provided by the Company to the Parent reasonably represent the
assets and liabilities attributable to each Company Plan which is
an Employee Pension Benefit Plan (other than any "multiemployer
plan" as defined in Section 3(37) of ERISA ("Multiemployer
Plan")) or an Employee Welfare Benefit Plan providing retiree
medical or life benefits calculated in accordance with the
Company's past practices, but excluding any failure which,
individually or in the aggregate, is not reasonably likely to
have a Company Material Adverse Effect;
(vii) no Company Plan which is an Employee Pension Benefit
Plan has been amended in any manner which would require the
posting of security under Section 401(a)(29) of the Code or
Section 307 of ERISA, except any such action which, individually
or in the aggregate, is not reasonably likely to have a Company
Material Adverse Effect; and
(viii) neither the Company nor any of its Subsidiaries has
communicated to any employee (excluding internal memoranda to
management) any plan or commitment, whether or not legally
binding, to create any additional material employee benefit plan
or to materially modify or change any Company Plan affecting any
employee or terminated employee of the Company or any of its
Subsidiaries, except any such action which, individually or in
the aggregate, is not reasonably likely to have a Company
Material Adverse Effect.
(b) With respect to each Employee Welfare Benefit Plan or
Employee Pension Benefit Plan that the Company or any of its
Subsidiaries maintains or ever has maintained, or to which any of them
contributes, ever has contributed or ever has been required to
contribute:
(i) no such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been completely or partially terminated
(other than any termination which, individually or in the
aggregate, is not reasonably likely to have a Company Material
Adverse Effect), no reportable event (as defined in Section 4043
of ERISA) for which the 30-day reporting requirement has not been
waived, as to which notices would be required to be filed with
the Pension Benefit
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Guaranty Corporation, has occurred but has not yet been so
reported (but excluding any failure to report which,
individually or in the aggregate, is not reasonably likely to
have a Company Material Adverse Effect), and no proceeding by
the Pension Benefit Guaranty Corporation to terminate such
Employee Pension Benefit Plan (other than any Multiemployer
Plan) has been instituted;
(ii) there have been no non-exempt prohibited transactions
(as defined in Section 406 of ERISA and Section 4975 of the Code)
with respect to such plan, no fiduciary has any liability for
breach of fiduciary duty or any other failure to act or comply in
connection with the administration or investment of the assets of
such plan, and no action, suit, proceeding, hearing or, to the
Company's knowledge, investigation with respect to the
administration or the investment of the assets of such plan
(other than routine claims for benefits) is pending or, to the
Company's knowledge, threatened, but excluding, from each of the
foregoing, events or circumstances which, individually or in the
aggregate, are not reasonably likely to have a Company Material
Adverse Effect; and
(iii) other than routine claims for benefits, none of the
Company or any of its Subsidiaries or related entities has
incurred, and the Company has no reason to expect that the
Company or any of its Subsidiaries or related entities will
incur, any liability under Subtitle C or D Title IV of ERISA or
under the Code with respect to any Company Plan that is an
Employee Pension Benefit Plan, other than liabilities which,
individually or in the aggregate, are not reasonably likely to
have a Company Material Adverse Effect;
(c) Neither the Company nor any of its Subsidiaries presently
contributes to, nor, since January 1, 1997, have they been obligated to
contribute to, a Multiemployer Plan, other than obligations which,
individually or in the aggregate, are not reasonably likely to have a
Company Material Adverse Effect.
(d) Other than pursuant to a Company Plan, neither the Company
nor any of its Subsidiaries has any obligation to provide medical,
health, life insurance or other welfare benefits for current or future
retired or terminated employees, their spouses or their dependents
(other than in accordance with Section 4980B of the Code), other than
obligations which, individually or in the aggregate, are not reasonably
likely to have a Company Material Adverse Effect.
(e) Except as set forth in Section 4.11(e) of the Company
Disclosure Letter, no Company Plan contains any provision that would
prohibit the transactions contemplated by this Agreement, would give
rise to any severance, termination or other payments as a result of the
transactions contemplated by this Agreement (alone or together with the
occurrence of any other event), or would cause any payment, acceleration
or increase in benefits provided by any Company Plan as a result of the
transactions contemplated by this Agreement (alone or together with the
occurrence of
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any other event), but excluding any benefit acceleration or increase
which would not have a Company Material Adverse Effect.
Section 4.12 Environmental Matters.
(a) Except for matters which, individually or in the aggregate,
are not reasonably likely to have a Company Material Adverse Effect: (i)
the Company and its Subsidiaries are, and, to the Company's knowledge,
since January 1, 1999 have been in compliance in all respects with all
Environmental Laws (as defined in Section 4.12(b)) in connection with
the ownership, use, maintenance and operation of their owned, operated
or leased real property used by them and otherwise in connection with
their operations, (ii) neither the Company nor any of its Subsidiaries
has any liability, whether contingent or otherwise, under, or for any
violations of, any Environmental Law, (iii) no written notices of any
violation or alleged violation of, non-compliance or alleged
noncompliance with or any liability under, any Environmental Law have
been received by the Company or any of its Subsidiaries since January 1,
1999 that are currently outstanding and unresolved as of the date of
this Agreement, and, to the Company's knowledge, there are no other
outstanding notices that are unresolved for which the Company or any of
its Subsidiaries have responsibility, (iv) there are no administrative,
civil or criminal writs, injunctions, decrees, orders or judgments
outstanding or any administrative, civil or criminal actions, suits,
claims, proceedings or, to the Company's knowledge, investigations
pending or, to the Company's knowledge, threatened, relating to
compliance with or liability under any Environmental Law affecting the
Company or any of its Subsidiaries, (v) the Company and its Subsidiaries
possess valid environmental permits required by any Environmental Law in
connection with the ownership, use, maintenance and operation of its
owned, operated and leased real property, and (vi) to the knowledge of
the Company, no material changes to or alterations of the practices or
operations of the Company or any of its Subsidiaries as presently
conducted are anticipated to be required in the future in order to
permit the Company and its Subsidiaries to continue to comply in all
material respects with all applicable Environmental Laws. The Company
Disclosure Letter sets forth the amount reserved as of December 31, 2000
by the Company for compliance with all Environmental Laws.
(b) The term "Environmental Law" as used in this Agreement means
any applicable and binding law, rule, regulation, permit, order, writ,
injunction, judgment or decree with respect to the preservation of the
environment or the promotion of worker health and safety, including any
such law, rule, regulation, permit, order, writ, injunction, judgment or
decree relating to Hazardous Materials (as defined in Section 4.12(c)).
Without limiting the generality of the foregoing, the term will
encompass each of the following statutes and the regulations promulgated
thereunder, each as amended (i) the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, (ii) the Solid Waste
Disposal Act, (iii) the Hazardous Materials Transportation Act, (iv) the
Toxic Substances Control Act, (v) the Clean Water Act, (vi) the Clean
Air Act, (vii) the Safe Drinking Water Act, (viii) the National
Environmental Policy Act of 1969, (ix) the
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Superfund Amendments and Reauthorization Act of 1986, (x) Title III of
the Superfund Amendments and Reauthorization Act, (xi) the Federal
Insecticide, Fungicide and Rodenticide Act and (xii) the provisions of
the Occupational Safety and Health Act of 1970 relating to the handling
of and exposure to Hazardous Materials.
(c) The term "Hazardous Materials" as used in this Agreement
means each and every compound, chemical mixture, contaminant, pollutant,
material, waste or other substance (i) that is defined or has been
identified as hazardous or toxic under any Environmental Law or (ii) the
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, storing, escaping, leaching, dumping, discarding, burying,
abandoning or disposing into the environment of which is prohibited
under any Environmental Law. Without limiting the generality of the
foregoing, the term will include (i) "hazardous substances" as defined
in the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, and regulations promulgated thereunder, each as amended,
(ii) "extremely hazardous substance" as defined in the Superfund
Amendments and Reauthorization Act of 1986, or Title III of the
Superfund Amendments and Reauthorization Act and regulations promulgated
thereunder, each as amended, (iii) "hazardous waste" as defined in the
Solid Waste Disposal Act and regulations promulgated thereunder, each as
amended, (iv) "hazardous materials" as defined in the Hazardous
Materials Transportation Act and the regulations promulgated thereunder,
each as amended, (v) "chemical substance or mixture" as defined in the
Toxic Substances Control Act and regulations promulgated thereunder,
each as amended, (vi) petroleum and petroleum products and byproducts
and (vii) asbestos.
Section 4.13 Title. The Company and its Subsidiaries have good and, in
the case of real property, marketable title to all the properties and assets
purported to be owned by them, free and clear of all Liens except (a) Liens for
current Taxes or assessments not delinquent, (b) builder, mechanic,
warehousemen, materialmen, contractor, workmen, repairmen, carrier or other
similar Liens arising and continuing in the ordinary course of business for
obligations that are not delinquent, (c) the rights, if any, of vendors having
possession of tooling of the Company and its Subsidiaries, (d) liens arising
from the receipt by the Company and its Subsidiaries of progress payments by the
United States government, (e) Liens securing rental payments under capital lease
arrangements and (f) other Liens which, individually or in the aggregate, are
not reasonably likely to have a Company Material Adverse Effect (collectively,
"Permitted Liens").
Section 4.14 Intellectual Property Matters.
(a) The Company and its Subsidiaries own or have the right to use
pursuant to valid license, sublicense, agreement or permission all items
of Intellectual Property necessary for their operations as presently
conducted and as presently proposed to be conducted, except where the
failure to have such rights, individually or in the aggregate, is not
reasonably likely to have a Company Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has received any charge, complaint,
claim, demand or notice alleging any interference, infringement,
misappropriation or violation of the
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Intellectual Property rights of any third party, except for any charges,
complaints, claims, demands or notices relating to matters which,
individually or in the aggregate, are not reasonably likely to have a
Company Material Adverse Effect. Since January 1, 2000, to the Company's
knowledge, no third party has interfered with, infringed upon,
misappropriated or otherwise come into conflict with any Intellectual
Property rights of the Company or any of its Subsidiaries, except for
misappropriations and violations which, individually or in the
aggregate, are not reasonably likely to have a Company Material Adverse
Effect.
(b) The term "Intellectual Property" as used in this Agreement
means, collectively, patents, patent disclosures, trademarks, service
marks, logos, trade names, copyrights and mask works, and all
registrations, applications, reissuances, continuations,
continuations-in-part, revisions, extensions, reexaminations and
associated good will with respect to each of the foregoing, computer
software (including source and object codes), computer programs,
computer data bases and related documentation and materials, data,
documentation, trade secrets, confidential business information
(including ideas, formulas, compositions, inventions, know-how,
manufacturing and production processes and techniques, research and
development information, drawings, designs, plans, proposals and
technical data, financial, marketing and business data and pricing and
cost information) and all other intellectual property rights (in
whatever form or medium).
Section 4.15 Labor Matters. As of the date of this Agreement, there are
no controversies pending or, to the Company's knowledge, threatened between the
Company or any of its Subsidiaries and any of their current or former employees
or any labor or other collective bargaining unit representing any such employee
that are reasonably likely to have a Company Material Adverse Effect or are
reasonably likely to result in a material labor strike, dispute, slow-down or
work stoppage. As of the date of this Agreement, the Company is not aware of any
organizational effort presently being made or threatened by or on behalf of any
labor union with respect to employees of the Company or any of its Subsidiaries.
As of the date of this Agreement, there are no current U.S. Department of Labor,
Office of Federal Contract Compliance Programs ("OFCCP") or Equal Employment
Opportunity Commission audits, except for any audits relating to matters which,
individually or in the aggregate, are not reasonably likely to have a Company
Material Adverse Effect. To the knowledge of the Company, as of the date of this
Agreement, there are no OFCCP conciliation agreements in effect.
Section 4.16 Rights Agreement. The Company has taken all requisite
action under the Rights Agreement to cause the provisions of the Rights
Agreement not to be applicable to this Agreement, the Offer, the Merger or the
other transactions contemplated hereby and to provide for the expiration of the
Rights upon the Consummation of the Offer.
Section 4.17 State Takeover Laws. The Board of Directors of the Company
has approved the Offer, the Merger and this Agreement and, assuming the accuracy
of the Parent's and the Purchaser's representations in Section 5.5, such
approval is sufficient to render
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inapplicable to the Offer, the Merger, this Agreement and the other transactions
contemplated hereby the restrictions on "business combinations" set forth in
Section 203 of the Delaware Act. To the Company's knowledge, no other "fair
price," "moratorium," "control share," "business combination," "affiliate
transaction," or other anti-takeover statute or similar statute or regulation of
any state is applicable to the Offer, the Merger, this Agreement and the other
transactions contemplated hereby.
Section 4.18 Brokers' Fees. Except for the fees and expenses payable by
the Company to Credit Suisse First Boston, neither the Company nor any of its
Subsidiaries has any liability or obligation to pay any fees or commissions to
any financial advisor, broker, finder or agent with respect to the transactions
contemplated by this Agreement. The Company has delivered to the Parent a
correct and complete copy of the engagement letter between the Company and
Credit Suisse First Boston relating to the transactions contemplated by this
Agreement, which letter describes the fees payable to Credit Suisse First Boston
in connection with this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE PURCHASER
Each of the Parent and the Purchaser, jointly and severally, represents
and warrants to the Company that:
Section 5.1 Organization. Each of the Parent and the Purchaser is (a) a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, (b) has all requisite power and
authority to own, lease and operate its properties and to carry on its business
as presently being conducted and (c) is in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to conduct business as a
foreign corporation in each other jurisdiction where such qualification is
required, except, in the case of clauses (b) and (c) above, where such failure,
individually or in the aggregate, is not reasonably likely to have a material
adverse effect on the business, financial condition, operations or results of
operations of the Parent and its Subsidiaries taken as a whole (other than
changes or effects relating to the economy in general, the securities markets in
general or the industries in which the Parent operates in general and not
specifically relating to the Parent) or the ability of the Parent to consummate
the Merger and to perform its obligations under this Agreement (a "Parent
Material Adverse Effect"). All of the outstanding shares of the capital stock of
the Purchaser have been validly issued, are fully paid and nonassessable and are
owned by the Parent free and clear of any Lien. The Purchaser has been organized
solely for the purpose of engaging in the Merger and the other transactions
contemplated by this Agreement and has not engaged in any business other than
contemplated by this Agreement. The Parent has delivered or otherwise made
available to the Company correct and complete copies of the certificates of
incorporation and bylaws, as presently in effect, of the Parent and the
Purchaser.
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Section 5.2 Authorization of Transaction; Enforceability. Each of the
Parent and the Purchaser has full corporate power and authority and has taken
all requisite corporate action to enable it to execute and deliver this
Agreement, to consummate the Offer, the Merger and the other transactions
contemplated hereby and to perform its obligations hereunder. The Parent has,
simultaneously with the execution and delivery hereof, executed a written
consent in lieu of a special meeting of the sole stockholder of the Purchaser in
accordance with Section 228 of the Delaware Act adopting and approving this
Agreement. Each of the Board of Directors of the Parent and the Board of
Directors of the Purchaser, has duly adopted resolutions by the requisite
majority vote approving and declaring advisable this Agreement, the Offer, the
Merger and the other transactions contemplated hereby and determining that the
Agreement, the Offer, the Merger and the other transactions contemplated hereby
are in the best interests of the Parent and its stockholders and of the
Purchaser and its sole stockholder, as the case may be. The foregoing
resolutions of each such Board of Directors have not been modified, supplemented
or rescinded and remain in full force and effect as of the date of this
Agreement. This Agreement constitutes the valid and legally binding obligation
of each of the Parent and the Purchaser, enforceable against the Parent and the
Purchaser in accordance with its terms and conditions.
Section 5.3 Noncontravention; Consents. Except for (a) filings and
approvals necessary to comply with the applicable requirements of the Exchange
Act and the "blue sky" laws and regulations of various states, (b) the filing of
a Notification and Report Form and related material with the Federal Trade
Commission and the Antitrust Division of the United States Department of Justice
under the HSR Act and any other filing required by any other Antitrust Law, (c)
the filing of the Certificate of Merger under the Delaware Act and (d) any
filings required under the rules and regulations of the New York Stock Exchange,
neither the execution and delivery of this Agreement by the Parent or the
Purchaser, nor the consummation by the Parent or the Purchaser of the
transactions contemplated hereby, will constitute a violation of, be in conflict
with, constitute or create (with or without notice or lapse of time or both) a
default under, give rise to any right of termination, cancellation, amendment or
acceleration with respect to, or result in the creation or imposition or any
Lien upon any property of the Parent or the Purchaser, or result in the breach
of (i) the certificate of incorporation or bylaws of the Parent or the
Purchaser, (ii) any constitutional provision, law, rule, regulation, permit,
order, writ, injunction, judgment or decree to which the Parent, the Purchaser
or any of their respective properties is bound or is subject or (iii) any
material agreement or commitment to which the Parent or the Purchaser is a party
or by which either of them is bound or subject.
Section 5.4 Adequate Cash Resources. The Parent has adequate resources
for obtaining and providing the aggregate Merger Consideration and the Option
Consideration in cash in the amount and at the time required under this
Agreement.
Section 5.5 No Capital Ownership in the Company. Neither the Parent nor
any of its Subsidiaries owns any shares of Company Common Stock.
Section 5.6 Brokers. No broker, investment banker, financial advisor or
other person, other than Bear Xxxxxxx, the fees and expenses of which will be
paid by the Parent, is entitled to
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any broker's, finder's, financial advisor's or other similar fee or commission
in connection with the Offer, the Merger and the other transactions contemplated
hereby based upon arrangements made by or on behalf of the Parent.
Section 5.7 Information for the Schedules TO and 14D-9 and Proxy
Statement. The Schedule TO to be filed by the Purchaser and the Parent pursuant
to this Agreement will comply in all material respects with the applicable
requirements of the Exchange Act and will not, at the time the Schedule TO is
filed with the SEC, contain any untrue statement of 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. No representation or warranty is made herein by the Parent
with respect to any information supplied by the Company for inclusion in the
Schedule TO. The information regarding the Parent and the Purchaser to be
provided by the Parent to the Company for inclusion in the Schedule 14D-9 and
the Proxy Statement will not, at the time such information is so provided,
contain any untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary in order to the make the statements
therein, in light of the circumstances under which they were made, not
misleading.
ARTICLE 6
COVENANTS
Section 6.1 General. Subject to Sections 6.7 and 6.12, each of the
parties will use its respective best efforts to take all action and to do all
things necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement, including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from any federal, state, local or foreign
government or any administrative agency or commission or other governmental
authority (collectively, "Governmental Entities") and the making of all
necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (ii) the obtaining of all necessary consents, approvals or
waivers from third parties, (iii) using best efforts in the defense of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the Offer, the Merger or the
other transactions contemplated by this Agreement, including seeking to have any
stay or temporary restraining order entered by any court or other Governmental
Entity vacated or reversed and (iv) the execution and delivery of any additional
instruments necessary to consummate the Offer, the Merger or the other
transactions contemplated by this Agreement and to fully carry out the purposes
of this Agreement. Each party will consult with counsel for the other parties as
to, and will permit such counsel to participate in, any litigation referred to
in clause (iii) above.
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Section 6.2 Notices and Consents.
(a) Without limiting the generality of Section 6.1, each of the
parties will give all notices to third parties and governmental entities
and will use its respective best efforts to obtain all third party and
governmental consents and approvals that are required in connection with
the transactions contemplated by this Agreement. As soon as reasonably
practicable following the execution and delivery of this Agreement, each
of the parties will file a Notification and Report Form and related
material with the Federal Trade Commission and the Antitrust Division of
the United States Department of Justice under the HSR Act, and will make
all further filings pursuant thereto or any other Antitrust Law that may
be necessary, proper or advisable, including using its best efforts to
comply with any second requests for information in as expeditious a
manner as practicable. The foregoing two sentences and Section 6.1 will
not require the Parent to enter into any agreement, consent decree or
other commitment requiring the Parent or any of its Subsidiaries (i) to
dispose of or hold separate any material portion of its shares of
Company Common Stock or of the business or assets of the Company and its
Subsidiaries, or the Parent and its Subsidiaries, in each case taken as
a whole, or (ii) to take any other action which, individually or in the
aggregate, is reasonably likely to have a Parent Material Adverse
Effect.
(b) Neither the Parent, nor the Company will directly or
indirectly extend any waiting period under the HSR Act or enter into any
agreement with a Governmental Entity to delay or not to consummate the
transactions contemplated by this Agreement except with the prior
written consent of the Company or the Parent, respectively.
Section 6.3 Interim Conduct of the Company. Except as expressly
contemplated by this Agreement, as set forth in the Company Disclosure Letter,
as required by law or by the terms of any contract in effect on the date of this
Agreement or as the Parent may approve, which approval will not be unreasonably
withheld or delayed, from and after the date of this Agreement through the
Closing Date, the Company will, and will cause each of its Subsidiaries to,
conduct its operations in accordance with its ordinary course of business,
consistent with past practice, and in accordance with such covenant will not,
and will not cause or permit any of its Subsidiaries to:
(a) amend its certificate of incorporation or bylaws or file any
certificate of designation or similar instrument with respect to any
shares of its authorized but unissued capital stock in any manner
adverse to the Parent, the Purchaser or the Company;
(b) authorize or effect any stock split or combination or
reclassification of shares of its capital stock;
(c) declare or pay any dividend or distribution with respect to
its capital stock (other than the regular quarterly dividend of $0.04
per share of Company Common Stock and dividends payable by a Subsidiary
of the Company to the Company or another
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Subsidiary), issue or authorize the issuance of any shares of its
capital stock (other than in connection with the exercise of currently
outstanding Stock Options or Company Stock-Based Awards or pursuant to
the ESPAP or pursuant to the exercise of Rights) or any other securities
exercisable or exchangeable for or convertible into shares of its
capital stock, or repurchase, redeem or otherwise acquire for value any
shares of its capital stock or any other securities exercisable or
exchangeable for or convertible into shares of its capital stock (other
than the redemption of the Rights in accordance with the provisions of
this Agreement);
(d) in the case of the Company, merge or consolidate with any
entity;
(e) sell, lease or otherwise dispose of any of its capital assets
that are material, individually or in the aggregate, to the Company and
its Subsidiaries taken as a whole, including any shares of the capital
stock of any of its Significant Subsidiaries, other than sales, leases
or other dispositions of machinery, equipment, tools, vehicles and other
operating assets no longer required in its operations made in the
ordinary course of business, consistent with past practice;
(f) in the case of the Company only, liquidate, dissolve or
effect any recapitalization or reorganization in any form;
(g) acquire any interest in any business (whether by purchase of
assets, purchase of stock, merger or otherwise) or enter into any joint
venture except for any interests in any business or joint venture which
does not involve an investment by the Company in excess of $5 million;
(h) create, incur, assume or suffer to exist any indebtedness for
borrowed money (including capital lease obligations), other than (i)
indebtedness existing as of the date of this Agreement, (ii) borrowings
under existing credit lines in the ordinary course of business,
consistent with past practice, (iii) indebtedness that can be prepaid at
any time without premium or penalty and (iv) intercompany indebtedness
among the Company and its Subsidiaries arising in the ordinary course of
business, consistent with past practice;
(i) create, incur, assume or suffer to exist any Lien (other than
Permitted Liens) affecting any of its material assets or properties;
(j) except as required by GAAP, change any of the accounting
principles or practices used by it or revalue in any material respect
any of its assets or properties, other than write-downs of inventory or
accounts receivable in the ordinary course of business, consistent with
past practice;
(k) except in the ordinary course of business consistent with
past practice and except as required under the terms of any collective
bargaining agreement in effect as of the date of this Agreement or as
required by applicable law, grant any general or uniform
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increase in the rates of pay of its employees or grant any increase in
the benefits under any bonus or employee benefit plan or other
arrangement, contract or commitment;
(l) except in the ordinary course of business consistent with
past practice and except for any increase required under the terms of
any collective bargaining agreement or consulting, executive or
employment agreement in effect on the date of this Agreement or as
required by applicable law, increase the compensation payable or to
become payable to officers and salaried employees or increase any bonus,
insurance, pension or other benefit plan, payment or arrangement made
to, for or with any such officers or salaried employees;
(m) enter into any contract or commitment or engage in any
transaction with any affiliated person or entity (other than the Company
or its Subsidiaries) or enter into any contract or commitment or engage
in any transaction with any unaffiliated person or entity which, to the
Company's knowledge, is reasonably likely to have a Company Material
Adverse Effect;
(n) make any material Tax election or settle or compromise any
material Tax liability, except in the ordinary course of business;
(o) settle or compromise any material pending or threatened suit,
action or proceeding except to the extent any such settlement or
compromise is not reasonably likely to have a Company Material Adverse
Effect; or
(p) commit to do any of the foregoing.
Section 6.4 Preservation of Organization. Subject to compliance with the
provisions of Section 6.3, the Company will, and will cause each of its
Subsidiaries to, use its reasonable efforts to preserve its business
organization intact in all material respects, use its reasonable efforts to keep
available to the Company and its Subsidiaries, the present officers and
employees of the Company and its Subsidiaries as a group and use its reasonable
efforts to preserve the present relationships of the Company and its
Subsidiaries with suppliers and customers and others having business relations
with the Company and its Subsidiaries.
Section 6.5 Access. The Company will, and will cause its Subsidiaries
and their representatives to, afford the Parent and its representatives
reasonable access, upon reasonable notice at reasonable times to all premises,
properties, books, records, contracts and documents of or pertaining to the
Company and its Subsidiaries. Notwithstanding the foregoing, neither party will
be required to provide access or to disclose information (i) where such access
or disclosure would contravene any law or contract or would result in the waiver
of any legal privilege or work-product protection, or (ii) to the extent that
counsel for such party advises that such information should not be disclosed in
order to ensure compliance with the Antitrust Laws. Any information disclosed
pursuant to Section 6.5 will be subject to the provisions of the Confidentiality
Agreement, dated March 26, 2001, between the Company and the Parent (the
"Confidentiality Agreement").
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Section 6.6 Notice of Developments. The Company will give prompt written
notice to the Parent of any event which has had or is reasonably likely to have
a Company Material Adverse Effect. Each party will give prompt written notice to
the other of any material development which would give rise to a failure of a
condition set forth in Annex I. No such written notice of such a material
development will be deemed to have amended any of the disclosures set forth in
the Company Disclosure Letter, to have qualified the representations and
warranties contained herein or to have cured any misrepresentation or breach of
warranty that otherwise might have existed hereunder by reason of such material
development.
Section 6.7 Other Potential Acquirers.
(a) The Company shall not, nor shall it permit any Company
Subsidiary to, nor shall it authorize or knowingly permit any officer,
director or employee of, or any investment banker, attorney or other
advisor or representative of, the Company or any Company Subsidiary to,
(i) directly or indirectly solicit, initiate or encourage the submission
of, any Company Takeover Proposal (as defined in Section 6.7(e)), (ii)
enter into any agreement with respect to any Company Takeover Proposal
(except a confidentiality agreement in accordance with this Section
6.7(a)) or (iii) directly or indirectly participate in any discussions
or negotiations regarding, or furnish to any person any information with
respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected
to lead to, any Company Takeover Proposal; provided, however, that prior
to Consummation of the Offer (the "Company Applicable Period"), if the
Company receives a proposal or offer that was not solicited by the
Company and that did not otherwise result from a breach or deemed breach
of this Section 6.7(a) and that the Board of Directors of the Company
(the "Company Board") believes in good faith could result in a third
party making a Company Superior Proposal, and subject to compliance with
Section 6.7(c), the Company may (A) furnish information with respect to
the Company to the person making such a proposal or offer pursuant to a
customary confidentiality agreement the terms of which shall be no less
favorable to the Company than the terms of the Confidentiality
Agreement; provided, that no such agreement will be required to contain
the provisions set forth in the sixth paragraph of the Confidentiality
Agreement; and (B) participate in discussions or negotiations with such
person regarding such proposal or offer. Without limiting the foregoing,
it is agreed that any violation of the restrictions set forth in the
preceding sentence by any executive officer of the Company or any
Company Subsidiary or any affiliate, director or investment banker,
attorney or other advisor or representative of the Company or any
Company Subsidiary, shall be deemed to be a breach of this Section
6.7(a) by the Company.
(b) If the Company receives any Company Takeover Proposal which
the Company Board determines is a Company Superior Proposal, the Company
Board shall within 24 hours deliver to the Parent written notice
advising the Parent that the Company Board has received such Company
Superior Proposal, specifying the material terms and conditions of such
Company Superior Proposal and identifying the person making such
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Company Superior Proposal. For purposes of this Agreement, a "Company
Superior Proposal" means any proposal made by a third party to acquire,
directly or indirectly, including pursuant to a tender offer, exchange
offer, merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction, for consideration
consisting of cash and/or securities, more than 50 percent of the
combined voting power of the shares of the Company Common Stock then
outstanding or all or substantially all the assets of the Company and
otherwise on terms which the Company Board determines in its good faith
judgment (after consulting with a financial advisor of nationally
recognized reputation) (A) is reasonably capable of being completed,
taking into account all legal, financial, regulatory and other aspects
of the proposal and the third party making such proposal, and (B)
presents, in its entirety, more favorable terms, financial and
otherwise, taken as a whole, to the Company's stockholders, than the
terms of this Agreement.
(c) The Company promptly shall advise the Parent orally and in
writing of any Company Takeover Proposal or any inquiry with respect to
or that could reasonably be expected to lead to any Company Takeover
Proposal, the identity of the person making any such Company Takeover
Proposal or inquiry and the material terms of any such Company Takeover
Proposal or inquiry. The Company shall keep the Parent informed of the
status of any such Company Takeover Proposal or inquiry (including any
change to the material terms thereof).
(d) Neither the Company nor the Company Board nor any committee
thereof shall withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to the Parent or the Purchaser, the
recommendation of the Company Board of this Agreement or the Merger, or
approve or recommend, or propose publicly to approve or recommend, a
Company Takeover Proposal, unless a withdrawal or modification of such
recommendation is, in the good faith judgment of the Company Board after
consultation with its outside counsel, required by its fiduciary duties.
Nothing contained in this Section 6.7 shall prohibit the Company from
taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or from making any
required disclosure to the Company's stockholders if, in the good faith
judgment of the Company Board, after consultation with outside counsel,
failure so to disclose would be inconsistent with its obligations under
applicable law.
(e) For purposes of this Agreement, "Company Takeover Proposal"
means any proposal or offer for a merger, consolidation, dissolution,
liquidation, recapitalization or other business combination involving
the Company or any Significant Subsidiary, any proposal or offer for the
issuance by the Company of a material amount of its equity securities as
consideration for the assets or securities of any person or any proposal
or offer to acquire in any manner, directly or indirectly, a material
equity interest in any voting securities of, or a substantial portion of
the assets of, the Company or any Company Subsidiary.
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Section 6.8 Company Stockholder Meeting, Preparation of Proxy Statement.
Subject to Section 1.4, as promptly as practicable following Consummation of the
Offer, if required by applicable law in order to consummate the Merger, the
Company, acting through the Company Board, shall, in accordance with applicable
law:
(a) duly call, give notice of, convene and hold a special meeting
of its stockholders (the "Company Stockholder Meeting") for the purpose
of considering and taking action upon the adoption of this Agreement;
(b) prepare and file with the SEC a preliminary proxy or
information statement in accordance with the Exchange Act relating to
the Merger and this Agreement and use its reasonable efforts to obtain
and furnish the information required to be included by the Exchange Act
and the SEC in the Proxy Statement (as hereinafter defined) and, after
consultation with the 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,
including any amendment or supplement thereto (the "Proxy Statement"),
to be mailed to its stockholders, provided that no amendment or
supplement to the Proxy Statement will be made by the Company without
consultation with the Parent and its counsel;
(c) subject to the Company Board's fiduciary duties under
Delaware law and the provisions of this Agreement, include in the Proxy
Statement the recommendation of the Company Board that stockholders of
the Company vote in favor of adoption of this Agreement; and
(d) use reasonable efforts to solicit from its stockholders
proxies, and to take all other action necessary and advisable, to secure
the vote of stockholders required by applicable law and the Company's
certificate of incorporation or bylaws to obtain the approval for this
Agreement and the Merger (the "Company Stockholder Approval"). In the
event a Company Stockholder Meeting is required under the Delaware Act
in order to consummate the Merger, the Parent will provide the Company
with the information concerning the Parent and the Purchaser required to
be included in the Proxy Statement and will vote or cause to be voted
all shares of Company Common Stock held by the Parent or its
Subsidiaries in favor of the adoption and approval of this Agreement and
the transactions contemplated hereby.
Section 6.9 Indemnification.
(a) From and after the Closing Date, the Parent will cause the
Surviving Corporation to indemnify, defend and hold harmless each person
who is now, or has been at any time prior to the Effective Time, an
officer or director of the Company or any of its present or former
Subsidiaries or corporate parents (collectively, the "Indemnified
Parties") from and against all losses, claims, damages and expenses
(including reasonable attorney's fees and expenses) ("Indemnified
Losses") arising out of or relating to actions
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or omissions, or alleged actions or omissions, occurring at or prior to
the Effective Time to the fullest extent permitted from time to time by
the Delaware Act or any other applicable laws as presently or hereafter
in effect. Furthermore, from and after the Closing Date, the Parent
shall indemnify, defend and hold harmless the directors and officers of
the Company from all Indemnified Losses arising out of, or pertaining
to, actions or omissions with respect to this Agreement and the
transactions contemplated hereby.
(b) Any determination required to be made with respect to whether
any Indemnified Party may be entitled to indemnification will, if
requested by such Indemnified Party, be made by independent legal
counsel selected by the Indemnified Party and reasonably satisfactory to
the Surviving Corporation.
(c) For a period of six years after the Closing Date, the Parent
will cause to be maintained in effect the policies of directors and
officers liability insurance and fiduciary liability insurance currently
maintained by the Company with respect to claims arising from or
relating to actions or omissions, or alleged actions or omissions,
occurring on or prior to the Closing Date. The Parent may at its
discretion substitute for such policies currently maintained by the
Company directors and officers liability insurance and fiduciary
liability insurance policies with reputable and financially sound
carriers providing for no less favorable coverage. Notwithstanding the
provisions of this Section 6.9(c), the Parent will not be obligated to
make annual premium payments with respect to such policies of insurance
to the extent such premiums exceed 300 percent of the annual premiums
paid by the Company as of the date of this Agreement. If the annual
premium costs necessary to maintain such insurance coverage exceed the
foregoing amount, the Parent will maintain the most advantageous
policies of directors and officers liability insurance and fiduciary
liability insurance obtainable for an annual premium equal to the
foregoing amount.
(d) To the fullest extent permitted from time to time under the
law of the State of Delaware, the Parent will cause the Surviving
Corporation to pay on an as-incurred basis the reasonable fees and
expenses of each Indemnified Party (including reasonable fees and
expenses of counsel) in advance of the final disposition of any action,
suit, proceeding or investigation that is the subject of the right to
indemnification, subject to reimbursement in the event such Indemnified
Party is not entitled to indemnification.
(e) The provisions set forth in Article Sixth of the Restated
Certificate of Incorporation of the Company and in Section 14 of Article
IV of the By-Laws of the Company, as in effect as of the date hereof,
will apply to each director or officer, as applicable, of the Company
with respect to matters occurring on or prior to the Effective Time. The
foregoing will not be deemed to restrict the right of the Surviving
Corporation to modify the provisions of its certificate of incorporation
or by-laws with respect to events or occurrences after the Closing Date
but such modifications shall not adversely affect the rights of the
directors hereunder. The Parent shall cause the Surviving Corporation to
honor the provisions of this Section 6.9(e).
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(f) In the event of any action, suit, investigation or
proceeding, the Indemnified Party will be entitled to control the
defense thereof with counsel of its own choosing reasonably acceptable
to the Parent, and the Parent and the Surviving Corporation will
cooperate in the defense thereof, provided that neither the Parent nor
the Surviving Corporation will be liable for the fees of more than one
counsel for all Indemnified Parties, other than local counsel, unless
the use of a single counsel would make it impracticable or unethical for
all Indemnified Parties to be represented by a single counsel, and
provided further that neither the Parent nor the Surviving Corporation
will be liable for any settlement effected without its written consent
(which consent will not be reasonably withheld or delayed).
(g) The rights of each Indemnified Party hereunder will be in
addition to any other rights such Indemnified Party may have under the
certificate of incorporation or bylaws of the Surviving Corporation or
any of its Subsidiaries, under the Delaware Act or otherwise.
Notwithstanding anything to the contrary contained in this Agreement or
otherwise, the provisions of this Section 6.9 will survive the
consummation of the Merger.
(h) Nothing in this Section 6.9 will diminish any right or
entitlements available to any director or officer of the Company under
the Company's certificate of incorporation and by-laws as in effect as
of the date of this Agreement.
(i) The provisions of this Section 6.9 are intended for the
benefit of and will be enforceable by each Indemnified Party and his or
her heirs, executors and legal representatives.
Section 6.10 Public Announcements. The initial press release announcing
the transactions contemplated by this Agreement will be a Joint Press Release.
Thereafter, the Parent and the Company will consult with one another before
issuing any press releases or otherwise making any public announcements with
respect to the transactions contemplated by this Agreement and, except as may be
required by applicable law or by the rules and regulations of the New York Stock
Exchange, will not issue any such press release or make any such announcement
prior to such consultation.
Section 6.11 Actions Regarding Antitakeover Statutes. If any fair price,
moratorium, control share acquisition or other form of antitakeover statute,
rule or regulation is or becomes applicable to the transactions contemplated by
this Agreement, the Board of Directors of the Company will grant such approvals
and take such other actions as may be required so that the transactions
contemplated hereby may be consummated as promptly as practicable on the terms
and conditions set forth in this Agreement.
Section 6.12 Defense of Orders and Injunctions. In the event either
party becomes subject to any order or injunction of a court of competent
jurisdiction which prohibits the consummation of the transactions contemplated
by this Agreement, each party will use its best efforts to overturn or lift such
order or injunction. The foregoing will not be deemed to require
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the Parent to enter into any agreement, consent decree or other commitment
requiring the Parent or any of its Subsidiaries (i) to dispose of or hold
separate any material portion of its shares of Company Common Stock or of the
business or assets of the Company and its Subsidiaries, or the Parent and its
Subsidiaries, in each case taken as a whole or (ii) to take any action which,
individually or in the aggregate, is reasonably likely to have a Parent Material
Adverse Effect.
Section 6.13 Employee Benefit Matters.
(a) Subject to applicable collective bargaining agreements, with
respect to the period beginning as of the Consummation of the Offer and
ending on December 31, 2003, the Parent Corporation shall cause the
employees and former employees of the Company and its Subsidiaries (the
"Employees"), to receive employee benefits pursuant to the Company Plans
in effect immediately prior to the Consummation of the Offer.
Notwithstanding the foregoing, the covenant of this Section 6.13(a)
shall not apply to the following Company Plans: any annual cash bonus
plan (provided however, that the Company's Annual Incentive Plan shall
be maintained in respect of the period ending December 31, 2001, in
accordance with its terms as in effect immediately prior to the
Consummation of the Offer); the Continental Maritime Industries, Inc.
Employee Stock Ownership Plan (provided that any proceeds of unallocated
shares are allocated to participants after satisfaction of any
outstanding indebtedness); the ESPAP; the Company 401(k) Investment Plan
for Salaried Employees (the "Salaried 401(k) Plan") (provided that, for
the period of this covenant, as soon as practicable following the
Effective Time, Employees eligible to participate in the Salaried 401(k)
Plan shall be eligible to participate in the Parent's Savings and Stock
Investment Plan, as applicable to salaried employees located at the
Parent's headquarters (the "Parent SSIP") or otherwise be eligible under
the Salaried 401(k) Plan to receive the same benefits such Employees
would have received had they participated directly in the Parent SSIP);
the SECT; the Company's Deferred Compensation Plan and Deferred
Compensation Plan for Nonemployee Directors; and any Stock Plan or
similar equity or equity-based compensation plan, program or
arrangement.
(b) The Parent Corporation will honor and will cause the
Purchaser to honor, in accordance with their respective terms, the
obligations, as of the Consummation of the Offer, under the Company
Plans, including any rights or benefits arising as a result of the
transactions contemplated by this Agreement (either alone or in
combination with any other event). The Parent and the Company
acknowledge and agree that the Consummation of the Offer and the
transactions contemplated by this Agreement constitute a "change in
control" for all purposes under the Company Plans.
(c) For all purposes under the employee benefit plans of the
Parent and its Subsidiaries (including the Surviving Corporation)
providing benefits to any Employees after the Effective Time, each
Employee will be credited with his or her years of service with the
Company and its Subsidiaries (and any predecessor entities thereof)
before the Effective Time, to the same extent as such Employee was
entitled, before the Effective Time, to credit for such service under
any similar Company Plan; provided, however, that
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Employees shall not be entitled to any credit for benefit accrual
purposes under any defined benefit pension plan in which they commence
participation after the Effective Time in the absence of a transfer of
assets and liabilities from any applicable prior defined benefit pension
plan or to the extent that it would result in a duplication of benefits
for the same period of service. Following the Effective Time, the Parent
will, or will cause its Subsidiaries to, (i) waive any pre-existing
condition limitation under any Employee Welfare Benefit Plan maintained
by the Parent or any of its Subsidiaries in which Employees and their
eligible dependents participate except to the extent that such
pre-existing condition limitation would have been applicable under the
comparable Company Employee Welfare Benefit plans immediately prior to
the Effective Time), and (ii) provide each Employee with credit for any
co-payments and deductibles incurred prior to the Effective Time (or
such earlier or later transition date to new Employee Welfare Benefits
Plans) for the calendar year in which the Effective Time (or such
earlier or later transition date) occurs, in satisfying any applicable
deductible or out-of-pocket requirements under any welfare plans that
the Employees participate in after the Effective Time.
(d) The Parent will, and will cause the Surviving Corporation and
their respective representatives to, afford any officer (as of
immediately prior to the Consummation of the Offer) of the Company and
any of his or her representatives reasonable access, upon reasonable
notice, to such books and records of the Company and the Surviving
Corporation as are reasonably required by such officer to determine
amounts owing to such officer under any Company Plan.
(e) The Company will amend the SECT as set forth in the Company
Disclosure Letter and will take all necessary actions to terminate the
SECT following Consummation of the Offer, in accordance with Section
6.13 of the Company Disclosure Letter.
(f) Nothing contained herein will create any rights in any third
party, including without limitation, any right to employment or right to
any particular benefit except as set forth in Section 6.13(b) and
6.13(d). Except as specifically provided in this Section 6.13, nothing
contained herein shall be construed as prohibiting or restricting in any
way the right of the Parent Corporation or the Company (or any successor
thereto) to modify, amend or terminate any employee benefit plan,
program or arrangement in whole or in part at any time after the
Effective Time.
(g) As soon as practicable following the date of this Agreement,
the Board of Directors of the Company (or, if appropriate, any committee
administering the Employee Stock Purchase and Accumulation Plan (the
"ESPAP")) shall adopt such resolutions or take such other actions (if
any) as may be required to provide that (i) with respect to the offering
period under the ESPAP under way immediately prior to the Effective
Time, the scheduled exercise date shall be accelerated, and all
unexercised rights granted in respect of such offering period shall be
exercised not later than immediately prior to the Effective Time, (ii)
all holding periods with respect to shares of Company Common Stock under
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the ESPAP shall be waived immediately prior to the Consummation of the
Offer so as to permit the holders thereof to accept the Offer, and (iii)
the ESPAP shall terminate at the Effective Time.
Section 6.14 Standstill Provisions. The restrictions on the Parent and
the Purchaser contained in the sixth paragraph of the Confidentiality Agreement
between the Parent and the Company are hereby waived by the Company to the
extent reasonably required to permit the Parent and the Purchaser to comply with
their obligations or enforce their rights under this Agreement.
Section 6.15 Number of Shares Necessary for Minimum Condition. The
Company will promptly notify the Parent in the event that the number of shares
of Company Common Stock required to satisfy the Minimum Condition exceeds
19,307,716.
Section 6.16 Adjustment to Offer Price. In the event there shall occur a
Distribution Date (as defined in the Company Rights Agreement), at any time
during the period from the date of this Agreement to the Consummation of the
Offer, the Company and the Parent shall mutually agree to make such adjustment
to the Offer Price so as to preserve the economic benefits that the Company and
the Parent reasonably expected on the date of this Agreement to receive as a
result of the Consummation of the Offer and the Merger and the other
transactions contemplated by this Agreement.
Section 6.17 Parent Actions Following Consummation of the Offer.
Following the Consummation of the Offer, the Parent will appoint to its Board of
Directors Xxxxxxx X. Xxxxxx.
ARTICLE 7
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Section 7.1 Conditions to the Obligations of Each Party. The respective
obligation of each party to effect the Merger is subject to the satisfaction at
or prior to the Closing Date of each of the following conditions:
(a) this Agreement shall have been adopted by the requisite vote
of the stockholders of the Company, if required by applicable law, in
order to consummate the Merger; and
(b) Consummation of the Offer shall have occurred; and
(c) no party will be subject to any order or injunction of a
court of competent jurisdiction or other legal restraint which prohibits
the consummation of the Merger.
Section 7.2 Frustration of Closing Conditions. None of the Company, the
Parent or the Purchaser may rely on the failure of any condition set forth in
Section 7.1, to be satisfied if
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such party's breach of this Agreement has been a principal reason that such
condition has not been satisfied.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after receipt of the Company
Stockholder Approval, if necessary:
(a) by mutual written consent of the Parent, the Purchaser
and the Company;
(b) by either the Parent or the Company:
(i) if Consummation of the Offer does not occur on
or before November 30, 2001 (the "Outside
Date"), unless such failure is the result of a
material breach of this Agreement by the party
seeking to terminate this Agreement; provided,
however, that the Company may extend such date
to April 30, 2002, if at the initial Outside
Date the only conditions to the Offer not
satisfied (or waived by the Purchaser) are the
Minimum Condition and the conditions set forth
in clauses (a)(ii) and (b)(i) of Annex I;
(ii) if any court of competent jurisdiction in the
United States issues a final order, decree or
ruling or takes any other final action
permanently enjoining, restraining or otherwise
prohibiting the Offer or the Merger and such
order, decree, ruling or other action shall have
become final and nonappealable, unless such
order, decree, ruling or other action is the
result of a material breach of this Agreement by
the party seeking to terminate this Agreement;
or
(iii) if, upon a vote at a duly held meeting to obtain
the Company Stockholder Approval, if necessary,
the Company Stockholder Approval is not
obtained, unless such failure to obtain the
Company Stockholder Approval is the result of a
material breach of this Agreement by the party
seeking to terminate this Agreement;
(c) by the Parent prior to the Consummation of the Offer:
(i) if the Company breaches or fails to perform in
any material respect any of its representations,
warranties or covenants contained in this
Agreement, which breach or failure to perform
(A) would give rise to the failure of a
condition set forth in Annex I, and (B) cannot
be or
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has not been cured within 30 days after the
giving of written notice to the Company of such
breach; or
(ii) if (A) the Company, or the Company Board, as the
case may be, shall have (1) after the date
hereof, entered into any agreement, other than a
confidentiality agreement permitted under
Section 6.7(a), with respect to any Company
Takeover Proposal other than the Offer or the
Merger, (2) amended, conditioned, qualified,
withdrawn, modified or contradicted, or resolved
to do any of the foregoing, in a manner adverse
to the Parent or the Purchaser, its approval and
recommendation of the Offer, the Merger and this
Agreement (regardless of whether such action was
permitted under this Agreement), (3) solicited,
approved or recommended any Company Takeover
Proposal other than the Offer or the Merger, or
(4) violated Section 6.7, or (B) the Company or
the Company Board, or any committee thereof,
shall have resolved or agreed, in writing or
otherwise, to do any of the foregoing; provided
that (x) any disclosure by the Company to its
stockholders of information that in its good
faith judgment, after consultation with outside
counsel, is required by Law shall not be deemed
to constitute any of the actions referred to in
the foregoing clauses (A)(2) and A(3) so long as
such disclosure does not change the Company
Board's approval or recommendation of the Offer,
the Merger or the Agreement and (y) any action
taken by the Company Board consistent with
Section 8.1(d)(ii), or any announcement of any
such action, shall not constitute any of the
actions described in the foregoing clauses
(A)(2), (A)(3) and (B);
(d) by the Company prior to the Consummation of the Offer:
(i) if the Parent breaches or fails to perform in
any material respect any of its representations,
warranties or covenants contained in this
Agreement, which breach or failure to perform
(A) would give rise to the failure of a
condition set forth in Section 7.1(a) or 7.1(b),
and (B) cannot be or has not been cured within
30 days after the giving of written notice to
the Parent of such breach; or
(ii) if at any time prior to Consummation of the
Offer (A) a Company Superior Proposal is
received by the Company and (B) the Company
complies with Section 6.7; provided that the
Company may not terminate this Agreement
pursuant to this Section 8.1(d)(ii) unless and
until: (1) three business days have elapsed
following delivery to the Parent of a written
notice of such determination by the Company
Board and during such three business day period
the Company has given the Parent reasonable
opportunity to discuss with the Company
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the Company Superior Proposal and any proposed
amendments to this Agreement; (2) at the end of
such three business day period the Company
Takeover Proposal continues to constitute a
Company Superior Proposal (taking into account
any modifications to the terms hereof proposed
by the Parent) and the Company Board confirms
its determination (after consultation with
outside counsel) that it is a Company Superior
Proposal; (3) following such termination the
Company enters into a definitive acquisition,
merger or similar agreement to effect the
Company Superior Proposal; and (4) the Company
prior to such termination pays to the Parent in
immediately available funds the Termination Fee
(as defined in Section 8.3).
Section 8.2 Effect of Termination. In the event of termination of this
Agreement by either the Company or the Parent as provided in Section 8.1, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of the Parent, the Purchaser or the Company, (except
for any liability of any party then in willful material breach of any covenant
or agreement); provided that the provisions of this Section 8.2 and Section 8.3
of this Agreement will continue in full force and effect notwithstanding such
termination and abandonment.
Section 8.3 Termination Fee.
(a) The Company shall pay to the Parent a fee of $50,000,000
(the "Termination Fee") if:
(i) the Parent terminates this Agreement pursuant to
Section 8.1(c)(ii) or the Company terminates
this Agreement pursuant to Section 8.1(d)(ii),
which payment shall be payable on the date this
Agreement is terminated;
(ii) in the event (A) a Company Takeover Proposal
shall have been publicly announced or any person
has publicly announced an intention (whether or
not conditional and whether or not withdrawn) to
make a Company Takeover Proposal, (B) the
Consummation of the Offer shall not have
occurred prior to the Outside Date, (C) on the
Outside Date, the only condition to the Offer
that shall not have been satisfied shall be the
Minimum Condition, (D) the Agreement is
thereafter terminated by either the Parent or
the Company pursuant to Section 8.1(b)(i) and
(E) within 12 months after such termination, the
Company or any of its Significant Subsidiaries
enters into an agreement with respect to, or
consummates, such Company Takeover Proposal; or
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(iii) in the event (A) there is a publicly announced
Company Takeover Proposal, (B) the Company
thereafter breaches one of its covenants in this
Agreement, (C) the Parent thereafter terminates
this Agreement under Section 8.1(c)(i) by reason
of such breach, and (D) within 12 months after
such termination, the Company or any of its
Significant Subsidiaries enters into an
agreement with respect to, or consummates, such
Company Takeover Proposal;
provided that with respect to clauses (ii) and (iii) no fee shall be
payable by the Company until and unless the agreement is entered into or
the Company Takeover Proposal is actually consummated within the 12
months following such termination and shall be payable on the earlier of
(y) the date the agreement is entered into or (z) the Company Takeover
Proposal is consummated. Any fee due under this Section 8.3 shall be
paid to the Parent by certified check or wire transfer of same-day funds
on the date payable under this Section 8.3.
(b) Except as specifically provided in this Section 8.3, each
party will bear its own expenses incurred in connection with the
transactions contemplated by this Agreement, whether or not such
transactions are consummated.
(c) The Company acknowledges that the agreements regarding the
payment of fees contained in this Section 8.3 are an integral part of
the transactions contemplated by this Agreement and that, in the absence
of such agreements, the Parent and the Purchaser would not have entered
into this Agreement. The Company accordingly agrees that in the event
the Company fails to pay the Termination Fee promptly, the Company will
in addition to the payment of such amount also pay to the Parent all of
the reasonable costs and expenses (including reasonable attorneys' fees
and expenses) incurred by the Parent in the enforcement of its rights
under this Section 8.3, together with interest on such amount at a rate
of 11 percent per annum from the date upon which such payment was due,
to and including the date of payment. Provided that the Company was not
in breach of the provisions of Section 6.7, payment of the Termination
Fee will constitute full and complete satisfaction, and will constitute
the Parent's sole and exclusive remedy for any loss, liability, damage
or claim arising out of or in connection with any such termination of
this Agreement or the facts and circumstances resulting in or related to
this Agreement.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Nonsurvival of Representations. The representations and
warranties contained in this Agreement will not survive the Merger or the
termination of this Agreement.
Section 9.2 Remedies. The parties agree that irreparable damage would
occur in the event that the provisions of this Agreement were not performed in
accordance with their specific
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terms. It is accordingly agreed that the parties will be entitled to specific
performance of the terms of this Agreement, without posting a bond or other
security, this being in addition to any other remedy to which they are entitled
at law or in equity.
Section 9.3 Successors and Assigns. No party hereto may assign or
delegate any of such party's rights or obligations under or in connection with
this Agreement without the written consent of the other parties hereto. Except
as otherwise expressly provided herein, all covenants and agreements contained
in this Agreement by or on behalf of any of the parties hereto or thereto will
be binding upon and enforceable against the respective successors and assigns of
such party and will be enforceable by and will inure to the benefit of the
respective successors and permitted assigns of such party.
Section 9.4 Amendment. This Agreement may be amended by the execution
and delivery of an written instrument by or on behalf of the Parent, the
Purchaser and the Company at any time before or after the Company Stockholder
Approval, provided that after the date of the Company Stockholder Approval, no
amendment to this Agreement will be made without the approval of stockholders of
the Company to the extent such approval is required under the Delaware Act.
Section 9.5 Extension and Waiver. At any time prior to the Effective
Time, the parties may extend the time for performance of or, subject to
applicable law, waive compliance with any of the covenants or agreements of the
other parties to this Agreement and may waive any breach of the representations
or warranties of such other parties. No agreement extending or waiving any
provision of this Agreement will be valid or binding unless it is in writing and
is executed and delivered by or on behalf of the party against which it is
sought to be enforced.
Section 9.6 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
Section 9.7 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Agreement.
Section 9.8 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
Section 9.9 Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when delivered personally to
the recipient or when sent to the recipient by telecopy (receipt confirmed), one
business day after the date when sent to the recipient by reputable express
courier service (charges prepaid) or three business days after the date when
mailed to the recipient by certified or registered mail, return receipt
requested and
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postage prepaid. Such notices, demands and other communications will be sent to
the Parent and the Company at the addresses indicated below:
If to the Parent
Corporation General Dynamics Corporation
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Senior Vice President and
General Counsel
Facsimile No: (000) 000-0000
With a copy (which will
not constitute notice) to: Jenner & Block, LLC
Xxx XXX Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxxxx, Esq.
Facsimile No.:(000) 000-0000
If to the Company: Newport News Shipbuilding Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Vice President, General
Counsel & Secretary
Facsimile No.: (000) 000-0000
With a copy (which will
not constitute notice ) to: Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx Xxxx
Facsimile No.: (000) 000-0000
or to such other address or to the attention of such other party as the
recipient party has specified by prior written notice to the sending party.
Section 9.10 No Third Party Beneficiaries. This Agreement will not
confer any rights or remedies upon any person or entity other than the Parent,
the Purchaser and the Company and their respective successors and permitted
assigns, except for the provisions of Article 2 and Article 3 and except that
the respective beneficiaries as of the Closing Date of the provisions of Section
6.9 and Section 6.13(f) will, for all purposes, be third party beneficiaries of
the covenants and agreements contained therein and, accordingly, will be treated
as a party to this
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Agreement for purposes of the rights and remedies relating to enforcement of
such covenants and agreements and will be entitled to enforce any such rights
and exercise any such remedies directly against the Parent and the Surviving
Corporation.
Section 9.11 Entire Agreement. This Agreement (including the
Confidentiality Agreement, the Company Disclosure Letter and the other documents
referred to herein) constitutes the entire agreement among the parties and
supersedes any prior understandings, agreements or representations by or among
the parties, written or oral, that may have related in any way to the subject
matter hereof.
Section 9.12 Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent
and no rule of strict construction will be applied against any party. The use of
the word "including" in this Agreement means "including without limitation" and
is intended by the parties to be by way of example rather than limitation. As
used in this Agreement, the qualification "to the Company's knowledge" and
clauses of similar effect will mean the actual knowledge by any executive
officer of the Company or of its Subsidiaries of the existence or absence of
facts which would contradict a particular representation and warranty of the
Company.
Section 9.13 Submission to Jurisdiction. Each of the parties to this
Agreement submits to the jurisdiction of any state or federal court sitting in
the State of Delaware, in any action or proceeding arising out of or relating to
this Agreement, agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court, and agrees not to bring any
action or proceeding arising out of or relating to this Agreement in any other
court. Each of the parties to this Agreement waives any defense of inconvenient
forum to the maintenance of any action or proceeding so brought and waives any
bond, surety or other security that might be required of any other party with
respect thereto.
Section 9.14 Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE SCHEDULES HERETO WILL BE
GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF
DELAWARE.
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56
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the date first written above.
GENERAL DYNAMICS CORPORATION
By /s/ Xxxxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
GRAIL ACQUISITION CORPORATION
By /s/ Xxxx X. Xxxxx
----------------------------------------
Xxxx X. Xxxxx
President
NEWPORTS NEWS SHIPBUILDING INC.
By /s/ Xxxxxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
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ANNEX I
CERTAIN CONDITIONS OF THE OFFER
The capitalized terms used in this Annex I which are not defined
herein shall have the meanings set forth in the Agreement to which this Annex I
is attached, except that the term the "Merger Agreement" shall be deemed to
refer to the Agreement to which this Annex I is attached.
Notwithstanding any other provision of the Offer, the Purchaser
shall not be required to accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-l(c) promulgated under the
Exchange Act (relating to the Purchaser's obligations to pay for or return
tendered shares of Company Common Stock promptly after termination or withdrawal
of the Offer), pay for any shares of Company Common Stock tendered pursuant to
the Offer, and may (subject to Section 1.1 of the Merger Agreement) terminate or
amend the Offer in accordance with the Merger Agreement; if:
(a) immediately prior to any scheduled or extended
expiration date of the Offer:
(i) the Minimum Condition shall not have been
satisfied; or
(ii) the applicable waiting period under the HSR Act
shall not have expired or been terminated;
(b) any of the following conditions exists as of the
expiration date of the Offer:
(i) there shall have been any action taken, or suit
or proceeding threatened or commenced, or any statute, rule,
regulation, legislation, judgment, order or injunction
promulgated, entered, enforced, enacted, issued or deemed
applicable to the Offer or the Merger, in each case by any
domestic or foreign federal or state governmental regulatory or
administrative agency or authority or court or legislative body
or commission which is reasonably likely to have the effect of
(1) prohibiting, or imposing any material limitations, on
Parent's or the Purchaser's ownership or operation (or that of
any of their respective Subsidiaries) of all or a material
portion of the Company's and its Subsidiaries' businesses or
assets as a whole, or compelling the Parent or the Purchaser or
their respective Subsidiaries to dispose of or hold separate any
material portion of its shares of Company Common Stock or of the
business or assets of the Company and its Subsidiaries or the
Parent and its Subsidiaries, in each case taken as a whole,
other than limitations generally affecting the industries in
which the Company and the Parent and their respective
Subsidiaries conduct their business, (2) prohibiting, or making
illegal, Consummation of the Offer or consummation of the Merger
or
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58
the other transactions contemplated by the Merger Agreement, or
(3) imposing material limitations on the ability of the
Purchaser or the Parent or any of their Subsidiaries effectively
to exercise full rights of ownership of all or a substantial
number of the shares of the Company Common Stock including,
without limitation, the right to vote the shares of the Company
Common Stock purchased by it on all matters properly presented
to the Company's shareholders on an equal basis with all other
holders of such shares and the right to hold, transfer or
dispose of such shares;
(ii) since the date of the Merger Agreement, except as
disclosed in the Company Disclosure Letter and the Company SEC
Documents filed prior to the date of the Merger Agreement, there
shall have occurred any state of facts change, development,
effect, event, condition or occurrence that individually or in
the aggregate has had or is reasonably likely to have a Company
Material Adverse Effect;
(iii) (1) the representations of the Company contained in
the Merger Agreement shall not be true and correct with the same
effect as if made at and as of the expiration date of the Offer
or if such representations speak as of an earlier date, as of
such earlier date, except, in either such case to the extent that
the breach thereof would not have a Company Material Adverse
Effect, or (2) the Company shall have failed to comply in
material respects with its covenants and agreements contained in
the Merger Agreement;
(iv) the Merger Agreement shall have been terminated in
accordance with its terms; or
(v) there shall have occurred a Distribution Date (as
defined in the Company Rights Agreement and any necessary
adjustment to the Offer Price under Section 6.16 of the Merger
Agreement has not been made as contemplated by the Merger
Agreement;
which, in any such case, and regardless of the circumstances giving rise to any
such condition, make it inadvisable, in the sole and absolute discretion of the
Parent and the Purchaser, to proceed with such acceptance for payment or
payment.
Subject to the provisions of the Merger Agreement, the foregoing
conditions are for the sole benefit of the Parent and the Purchaser and may be
asserted by the Purchaser or, subject to the terms of the Merger Agreement, may
be waived by the Parent or the Purchaser, in whole or in part at any time and
from time to time in the sole discretion of the Parent or the Purchaser. The
failure by the Parent or the Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right and each such
right shall be deemed an ongoing right
A-2
59
which may, subject to Section 1.1 of the Merger Agreement, be asserted at any
time and from time to time.
A-3
