EXHIBIT (c)(1)
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
November 14, 1998, by and among Vulcan Materials Company, a New Jersey
corporation ("Parent"), ALB Acquisition Corporation, a Delaware corporation and
a wholly-owned subsidiary of Parent (the "Purchaser"), and CalMat Co., a
Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, the
Purchaser and the Company have approved the acquisition of the Company by Parent
on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, pursuant to this Agreement the Purchaser has agreed
to commence a tender offer (the "Offer") to purchase all of the outstanding
common stock, par value $1.00 per share (the "Common Shares," and together with
the associated common share purchase rights (the "Rights") issued pursuant to
the Rights Agreement (the "Rights Agreement"), dated as of September 22, 1987,
as amended as of October 26, 1992 and July 22, 1997, by and between the Company
and First Chicago Trust Company of New York, as Rights Agent, the "Shares"), at
a price per Share of $31.00 net to the seller in cash (such $31.00 price or any
higher price Purchaser determines in its sole discretion to pay in the Offer,
the "Offer Price");
WHEREAS, the Board of Directors of the Company (the "Company
Board") has, in light of and subject to the conditions set forth herein, (i)
approved the Offer, (ii) approved this Agreement and (iii) resolved to recommend
that the Company's stockholders accept the Offer and adopt this Agreement;
WHEREAS, the respective Boards of Directors of the Purchaser
and the Company have approved the merger of the Purchaser with and into the
Company (the "Merger"), in accordance with the General Corporation Law of the
State of Delaware (the "DGCL") and upon the terms and subject to the conditions
set forth in this Agreement, whereby each of the issued and outstanding Common
Shares not owned directly or indirectly by Parent, the Purchaser or the Company
will be converted into the right to receive an amount equal to the Offer Price
in cash;
WHEREAS, as a condition to and inducement to Parent's and the
Purchaser's willingness to enter into this Agreement, simultaneously with the
execution of this Agreement, each of the Company's directors are entering into
and delivering support agreements (the "Support Agreements") in the form
attached hereto as Exhibit B; and
WHEREAS, Parent, the Purchaser and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
the Offer and the Merger and also to prescribe various conditions to the Offer
and the Merger;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, Parent, the Purchaser and the Company agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1. The Offer.
(a) Provided that this Agreement shall not have been
terminated in accordance with Article VIII hereof and none of the events set
forth in Exhibit A hereto (the "Tender Offer Conditions") shall have occurred,
(i) as promptly as practicable but in no event later than the fifth business day
from the date of this Agreement, Parent shall (A) cause the Purchaser to
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (including the rules and regulations promulgated thereunder,
the "Exchange Act")) the Offer and, (B) after affording the Company a reasonable
opportunity to review and comment thereon, file all necessary documents with the
Securities and Exchange Commission (the "SEC") in connection with the Offer (the
"Offer Documents") and (ii) Parent shall use reasonable best efforts to
consummate the Offer, subject to the terms and conditions thereof. The
obligation of the Purchaser to accept for payment and pay for any Shares
tendered pursuant thereto will be subject only to the satisfaction or waiver of
the Tender Offer Conditions.
(b) Without the prior written consent of the Company, the
Purchaser shall not (i) decrease the Offer Price or change the form of
consideration payable in the Offer, (ii) decrease the number of Shares sought to
be purchased in the Offer, (iii) subject to Parent's and Purchaser's right to
waive same (subject to clause (iv) below), amend the Tender Offer Conditions or
impose additional conditions to the Offer, (iv) waive the Minimum Condition (as
defined in Exhibit A hereto) or (v) amend any other term of the Offer in any
manner adverse to the holders of Common Shares. The Offer shall remain open
until the later of (x) the date that is 20 business days (as such term is
defined in Rule 14d-l(c)(6) under the Exchange Act) after the commencement of
the Offer and (y) January 1, 1999 (such later date being referred to herein as
the "Expiration Date"), unless the Purchaser shall have extended the period of
time for which the Offer is open pursuant to, and in accordance with, the two
succeeding sentences or as may be required by applicable law, in which event the
term "Expiration Date" shall mean the latest time and date as the Offer, as so
extended, may expire. If at any Expiration Date any of the Tender Offer
Conditions are not satisfied or waived by the Purchaser, or if required by any
rule, regulation, interpretation or position of the SEC or its staff applicable
to the Offer, the Purchaser shall extend the Offer from time to time until all
of the Tender Offer Conditions have been satisfied or waived or until an
extension is not required by such rule, regulation, interpretation or position;
provided that no individual extension shall extend beyond 5 business days (as
such term is defined in Rule 14d-1(c)(6) under the Exchange Act), or for such
longer period as required by any applicable law or any such rule, regulation,
interpretation or position, from the immediately preceding Expiration Date and
that the Purchaser shall in no event be required to extend the Offer beyond
March 31, 1999. In addition, if all of the Tender Offer Conditions are satisfied
and more than 70% but less than 90% of the outstanding Common Shares on a fully
diluted basis have been validly tendered and not withdrawn in the Offer, the
Purchaser shall have the right, in its sole discretion, to extend the Offer from
time to time for up to a maximum of ten additional business days in the
aggregate for all such extensions beyond the latest Expiration Date that
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would be permitted under the third sentence of this Section 1.1(b). Subject to
the terms of the Offer and this Agreement and the satisfaction or waiver of all
of the Tender Offer Conditions as of any Expiration Date, Parent shall cause the
Purchaser to, and the Purchaser shall, accept for payment and pay for all Shares
validly tendered and not withdrawn pursuant to the Offer as soon as practicable
after such Expiration Date of the Offer.
(c) Parent and the Purchaser represent that the Offer
Documents will comply in all material respects with the provisions of applicable
federal securities laws and, on the date filed with the SEC and on the date
first published, sent or given to the Company's stockholders, shall not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading, except that no representation is made by Parent or the Purchaser
with respect to information supplied by the Company in writing for inclusion in
the Offer Documents. Each of Parent and the Purchaser, on the one hand, and the
Company, on the other hand, agrees promptly to correct any information provided
by it for use in the Offer Documents if and to the extent that it shall have
become false or misleading in any material respect, and the Purchaser further
agrees to take all steps necessary to cause the Offer Documents as so corrected
to be filed with the SEC and to be disseminated to stockholders of the Company,
in each case, as and to the extent required by applicable federal securities
laws. Parent and the Purchaser agree to provide to the Company and its counsel
any comments Parent or the Purchaser or their counsel may receive from the SEC
or its staff with respect to the Offer Documents promptly after the receipt of
such comments.
SECTION 1.2. Company Actions.
(a) The Company shall, after affording Parent a reasonable
opportunity to review and comment thereon, file with the SEC and mail to the
holders of Common Shares, as promptly as practicable on the date of the filing
by Parent and the Purchaser of the Offer Documents with the SEC, a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
amendments or supplements thereto, the "Schedule 14D-9") reflecting the
recommendation of the Company Board that holders of Shares tender their Shares
pursuant to the Offer, and shall disseminate the Schedule 14D-9 as required by
Rule 14d-9 promulgated under the Exchange Act. The Schedule 14D-9 will set
forth, and the Company hereby represents, that the Company Board, at a meeting
duly called and held, has (i) determined by unanimous vote of its directors that
each of the transactions contemplated hereby, including each of the Offer and
the Merger, is fair to and in the best interests of the Company's stockholders,
(ii) approved the Offer and this Agreement in accordance with the DGCL and (iii)
recommended acceptance of the Offer and adoption of this Agreement by the
Company's stockholders (if such adoption is required by applicable law);
provided, however, that such recommendation, adoption and approval may be
withdrawn, modified or amended to the extent that the Company Board determines
in good faith following consultation with outside counsel that failure to take
such action would constitute a breach of the Company Board's fiduciary
obligations under applicable law. The Company further represents that, prior to
the execution hereof, Credit Suisse First Boston Corp. ("CSFB"), has delivered
to the Company Board its opinion (subsequently confirmed in writing) that, as of
the date hereof, the consideration to be received by the holders of Common
Shares (other than
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Parent or any of its affiliates) pursuant to the Offer and the Merger is fair to
such holders from a financial point of view. The Company hereby consents to the
inclusion in the Offer Documents of the recommendations of the Company Board
described in this Section 1.2(a).
(b) The Company represents that the Schedule 14D-9 will comply
in all material respects with the provisions of applicable federal securities
laws and, on the date filed with the SEC and on the date first published, sent
or given to the Company's stockholders, shall not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements made therein, in light of
the circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Parent or the Purchaser in writing for inclusion in the Schedule 14D-9. Each of
the Company, on the one hand, and Parent and the Purchaser, on the other hand,
agree promptly to correct any information provided by either of them for use in
the Schedule 14D-9 if and to the extent that it shall have become false or
misleading in any material respect, and the Company further agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and to be disseminated to the stockholders of the Company, in each case, as
and to the extent required by applicable federal securities law. The Company
agrees to provide to Parent and its counsel any comments the Company or its
counsel may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments.
(c) In connection with the Offer, the Company will promptly
furnish the Purchaser with mailing labels, security position listings, any
available non-objecting beneficial owner lists and any available listing or
computer list containing the names and addresses of the record holders of the
Common Shares as of the most recent practicable date and shall furnish the
Purchaser with such additional available information (including, but not limited
to, updated lists of holders of Common Shares and their addresses, mailing
labels and lists of security positions and non-objecting beneficial owner lists)
and such other assistance as the Purchaser or its agents may reasonably request
in communicating the Offer to the Company's record and beneficial stockholders.
Subject to the requirements of applicable law, and except for such steps as are
reasonably necessary to disseminate the Offer Documents and any other documents
and information reasonably necessary to consummate the Offer and the Merger,
Parent and the Purchaser and their agents shall hold in confidence the
information contained in any such labels, listings and information, will use
such information only in connection with the Offer and the Merger and, if this
Agreement shall be terminated, will deliver to the Company or destroy (as
certified in writing), and will use their reasonable best efforts to cause their
agents to deliver to the Company or destroy (as certified in writing), all
copies of and any extracts or summaries from such information then in their
possession or control.
SECTION 1.3. Directors.
(a) Subject to compliance with applicable law, promptly upon
the payment by the Purchaser for Shares pursuant to the Offer, and from time to
time thereafter, Parent shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Company Board as is equal to the
product of the total number of directors on the Company
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Board (determined after giving effect to the election of directors pursuant to
this sentence) multiplied by the percentage that the aggregate number of Common
Shares beneficially owned by Parent or its affiliates bears to the total number
of Common Shares then outstanding, and the Company shall, upon request of
Parent, promptly take all actions necessary to cause Parent's designees to be so
elected, including, if necessary, seeking the resignations of one or more
existing directors; provided, however, that prior to the Effective Time (as
defined in Section 2.2), the Company Board shall always have at least two
members who are neither officers, directors, affiliates or designees of the
Purchaser or any of its affiliates ("Purchaser Insiders"). If the number of
directors who are not Purchaser Insiders is reduced below two prior to the
Effective Time, the remaining director who is not a Purchaser Insider shall be
entitled to designate a person who is not a Purchaser Insider to fill such
vacancy.
(b) The Company's obligations to appoint Parent's designees to
the Board shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1
thereunder. The Company shall promptly take all actions required pursuant to
such Section and Rule in order to fulfill its obligations under this Section 1.3
and shall include in the Schedule 14D-9 such information supplied by Parent on a
timely basis with respect to Parent and its designees as is required under such
Section and Rule in order to fulfill its obligations under this Section 1.3.
Parent will supply any such information with respect to itself and its designees
required by such Section and Rule to the Company.
(c) Following the election or appointment of Parent's
designees pursuant to this Section 1.3 and prior to the Effective Time, any
amendment or termination of this Agreement by the Company, any extension by the
Company of the time for the performance of any of the obligations or other acts
of Parent or the Purchaser, any waiver of any of the Company's rights hereunder
or any other actions taken by the Company, will require the concurrence of a
majority of the directors of the Company then in office who are not Purchaser
Insiders (or in the case where there are two or fewer directors who are not
Purchaser Insiders, the concurrence of one director who is not a Purchaser
Insider) if such amendment, termination, extension, waiver or action would be
reasonably likely to have an adverse effect on the minority stockholders of the
Company.
ARTICLE II
THE MERGER
SECTION 2.1. The Merger. Upon the terms and subject to the
satisfaction or waiver of the conditions hereof, and in accordance with the
applicable provisions of this Agreement and the DGCL, at the Effective Time
the Purchaser shall be merged with and into the Company. Following the
Merger, the separate corporate existence of the Purchaser shall cease and the
Company shall continue as the surviving corporation (the "Surviving
Corporation").
SECTION 2.2. Effective Time. As soon as practicable, but in any
event within five business days, after the satisfaction or waiver of the
conditions set forth in Article VII, the Company shall execute, in the manner
required by the DGCL, and deliver to the Secretary of
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State of the State of Delaware a duly executed and verified certificate of
merger, and the parties shall take such other and further actions as may be
required by law to make the Merger effective. The time the Merger becomes
effective in accordance with applicable law is referred to herein as the
"Effective Time."
SECTION 2.3. Effects of the Merger. The Merger shall have the
effects set forth in the DGCL. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, all the properties, rights,
privileges, powers and franchises of the Company and the Purchaser shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and the Purchaser shall become the debts, liabilities and duties of the
Surviving Corporation.
SECTION 2.4. Certificate of Incorporation and By-Laws of the
Surviving Corporation.
(a) The Certificate of Incorporation of the Purchaser, as in
effect immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended in
accordance with the provisions thereof and applicable law.
(b) The By-Laws of the Purchaser in effect at the Effective
Time shall be the By-Laws of the Surviving Corporation until thereafter amended
in accordance with applicable law.
SECTION 2.5. Directors. Subject to applicable law, the directors
of the Purchaser immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation and shall hold office until their
respective successors are duly elected and qualified, or their earlier death,
resignation or removal.
SECTION 2.6. Officers. The officers of the Purchaser immediately
prior to the Effective Time shall be the initial officers of the Surviving
Corporation and shall hold office until their respective successors are duly
elected and qualified, or their earlier death, resignation or removal.
SECTION 2.7. Conversion of Common Shares. At the Effective Time,
by virtue of the Merger and without any action on the part of the holders
thereof, each Common Share issued and outstanding immediately prior to the
Effective Time (other than (i) any Common Shares held by Parent, the Purchaser,
any wholly-owned Subsidiary of Parent or the Purchaser, in the treasury of the
Company or by any wholly-owned subsidiary of the Company, which Common Shares,
by virtue of the Merger and without any action on the part of the holder
thereof, shall be cancelled and retired and shall cease to exist with no payment
being made with respect thereto and (ii) Dissenting Shares (as defined in
Section 3.1)), shall be cancelled and retired and shall be converted into the
right to receive an amount equal to the Offer Price in cash (the "Merger
Price"), payable to the holder thereof, without interest thereon, upon surrender
of the certificate formerly representing such Common Share.
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SECTION 2.8. Conversion of Purchaser Common Stock. The Purchaser
has outstanding 1,000 shares of common stock, par value $.01 per share, all of
which are entitled to vote with respect to approval of this Agreement. At the
Effective Time, each share of common stock of the Purchaser issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and become one validly issued, fully paid and non-assessable share of
common stock, par value $.01 per share, of the Surviving Corporation.
SECTION 2.9. Options; Stock Plans. Prior to the Effective Time,
the Company Board (or, if appropriate, any committee thereof) shall adopt
appropriate resolutions and use its reasonable best efforts to provide for the
cancellation, effective at the Effective Time, of all the outstanding stock
options (the "Options") heretofore granted under any stock option or similar
plan of the Company (the "Stock Plans"), or under any agreement, without any
payment therefor except as otherwise provided in this Section 2.9. Effective as
of immediately prior to the Effective Time, the Company shall accelerate the
vesting of all Options, if any, which are not then vested, and, giving effect to
the foregoing, each then vested option shall no longer be exercisable but shall
only entitle each holder thereof, in cancellation and settlement therefor, to a
payment in cash by the Company (subject to any applicable withholding taxes), at
the Effective Time, equal to the product of (x) the total number of Common
Shares subject to such vested option and (y) the excess of the Merger Price over
the exercise price per Common Share subject to such vested option (the "Cash
Payments"). The Company represents and warrants that it has taken all necessary
action to terminate the 1987 Stock Option Plan, the 1990 Stock Option Plan, the
1993 Stock Option Plan, the 1998 Stock Option Plan and the Employee Stock
Purchase Plan, as any of them may have been amended, and all other Stock Plans,
and any other plans, programs or arrangements providing for the issuance or
grant of any other interest in respect of the capital stock of the Company or
any subsidiary in each case effective immediately prior to the Effective Time.
The Company will take all reasonable steps to ensure that none of Parent, the
Company or any of their respective subsidiaries is or will be bound by any
Options or other options, warrants, rights or agreements that would entitle any
Person, other than Parent or its affiliates, to own any capital stock of the
Surviving Corporation or any of its subsidiaries or to receive any payment in
respect thereof.
SECTION 2.10. Stockholders' Meeting.
(a) If required by applicable law in order to consummate the
Merger, the Company, acting through the Company Board, shall, in accordance with
applicable law:
(i) duly call, give notice of, convene and hold a
special meeting of its stockholders (the "Special Meeting") as
soon as practicable following the acceptance for payment of and
payment for Common Shares by the Purchaser pursuant to the Offer
for the purpose of adopting this Agreement;
(ii) prepare and file with the SEC a preliminary proxy
statement relating to this Agreement, and use its reasonable best
efforts (x) to obtain and furnish the information required by the
SEC to be included in the Proxy Statement (as hereinafter
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defined) and, after consultation with Parent, to respond promptly
to any comments made by the SEC with respect to the preliminary
proxy statement and cause a definitive proxy statement (the "Proxy
Statement") to be mailed to its stockholders and (y) to obtain the
necessary approvals of the Merger and this Agreement by its
stockholders; and
(iii) subject to the fiduciary obligations of the
Company Board under applicable law as provided in Section 1.2(a),
include in the Proxy Statement the recommendation of the Company
Board that stockholders of the Company vote in favor of the
approval of this Agreement.
(b) Parent agrees that it will vote, or cause to be voted, all
of the Common Shares then owned by it, the Purchaser or any of its other
subsidiaries, including all Shares purchased pursuant to the Offer, in favor of
the approval of the Merger and of this Agreement.
SECTION 2.11. Merger Without Meeting of Stockholders.
Notwithstanding Section 2.10, in the event that Parent, the Purchaser or any
other subsidiary of Parent shall acquire at least 90% of the outstanding Common
Shares pursuant to the Offer or otherwise, the parties hereto agree to take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the acceptance for payment of and payment for Common Shares
by the Purchaser pursuant to the Offer without a meeting of stockholders of the
Company, in accordance with Section 253 of the DGCL.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES
SECTION 3.1. Dissenting Shares. Notwithstanding Section 2.7,
Common Shares outstanding immediately prior to the Effective Time and held by
a holder who has not voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such Common Shares in accordance
with the DGCL ("Dissenting Shares") shall not be converted into a right to
receive the Merger Price, unless such holder fails to perfect or withdraws or
otherwise loses his right to appraisal. If after the Effective Time such
holder fails to perfect or withdraws or loses his right to appraisal, such
Common Shares shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger Price pursuant to Section
2.7. The Company shall give Parent prompt notice of any demands received by
the Company for appraisal of Common Shares, and Parent shall have the right
to participate in all negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written consent of
Parent, make any payment with respect to, or settle or offer to settle, or
otherwise negotiate any such demands.
SECTION 3.2. Payment for Common Shares.
(a) From and after the Effective Time, such bank or trust
company as shall be mutually reasonably acceptable to Parent and the Company
shall act as paying agent (the
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"Paying Agent") in effecting the payment of the Merger Price in respect of
certificates (the "Certificates") that, prior to the Effective Time, represented
Common Shares entitled to payment of the Merger Price pursuant to Section 2.7.
Promptly following the Effective Time, Parent or the Purchaser shall deposit, or
cause to be deposited, with the Paying Agent the aggregate Merger Price to which
holders of Common Shares shall be entitled at the Effective Time pursuant to
Section 2.7.
(b) Promptly after the Effective Time, Parent shall cause the
Paying Agent to mail to each record holder of Certificates that immediately
prior to the Effective Time represented Common Shares a form of letter of
transmittal which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent and instructions for use in surrendering such
Certificates and receiving the Merger Price in respect thereof. Upon the
surrender of each such Certificate, the Paying Agent shall pay the holder of
such Certificate the Merger Price multiplied by the number of Common Shares
formerly represented by such Certificate, in consideration therefor, and such
Certificate shall forthwith be cancelled. Until so surrendered, each such
Certificate (other than Certificates representing Common Shares held by Parent
or the Purchaser, any wholly-owned subsidiary of Parent or the Purchaser, in the
treasury of the Company or by any wholly-owned subsidiary of the Company or
Dissenting Shares) shall represent solely the right to receive the aggregate
Merger Price relating thereto. No interest or dividends shall be paid or accrued
on the Merger Price. If the Merger Price (or any portion thereof) is to be
delivered to any person other than the person in whose name the Certificate
formerly representing Common Shares surrendered therefor is registered, it shall
be a condition to such right to receive such Merger Price that the Certificate
so surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the person surrendering such Certificate shall pay to the
Paying Agent any transfer or other taxes required by reason of the payment of
the Merger Price to a person other than the registered holder of the Certificate
surrendered, or shall establish to the satisfaction of the Paying Agent that
such tax has been paid or is not applicable. In the event any Certificate shall
have been lost, stolen or destroyed, the Paying Agent shall be required to pay
the full Merger Price in respect of any Common Shares represented by such
Certificate; however, Parent may require the owner of such lost, stolen or
destroyed Certificate to execute and deliver to the Paying Agent a form of
affidavit, in form and substance reasonably satisfactory to Parent, claiming
such Certificate to be lost, stolen or destroyed, and may require such owner to
post a bond in such amount as Parent may determine to be reasonably necessary as
indemnity against any claim that may be made against Parent or the Paying Agent.
(c) Promptly following the date which is 180 days after the
Effective Time, the Paying Agent shall deliver to the Surviving Corporation all
cash, Certificates and other documents in its possession relating to the
transactions described in this Agreement, and the Paying Agent's duties shall
terminate. Thereafter, each holder of a Certificate formerly representing a
Common Share may surrender such Certificate to the Surviving Corporation and
(subject to applicable abandoned property, escheat and similar laws) receive in
consideration therefor the aggregate Merger Price relating thereto, without any
interest or dividends thereon.
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(d) After the Effective Time, there shall be no transfers on
the stock transfer books of the Surviving Corporation of any Common Shares which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates formerly representing Common Shares are presented
to the Surviving Corporation or the Paying Agent, they shall be surrendered and
cancelled in return for the payment of the aggregate Merger Price relating
thereto, as provided in this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the corresponding enumerated section of
the Disclosure Schedule delivered by the Company to Parent prior to the
execution of this Agreement (the "Company Disclosure Schedule"), the Company
represents and warrants to Parent and the Purchaser as follows:
SECTION 4.1. Organization and Qualification; Subsidiaries. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of the Company's subsidiaries is
duly organized, validly existing and is in good standing under the laws of the
jurisdiction of its organization, except where the failure to be so organized,
existing or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company. The
Company and each of its subsidiaries has the requisite power and authority to
own, operate or lease its properties and to carry on its business as it is now
being conducted, and is duly qualified or licensed to do business, and, with
respect to the Company and the Company's subsidiaries that are organized in a
jurisdiction in the United States of America, is in good standing, in each
jurisdiction in which the nature of its business or the properties owned,
operated or leased by it makes such qualification, licensing or good standing
necessary, except where the failure to have such power or authority, or the
failure to be so qualified, licensed or in good standing, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. The term "Material Adverse Effect on the
Company," as used in this Agreement, means any change or effect that is or would
reasonably be expected to have a material adverse effect on the business,
assets, financial condition or results of operations of the Company and its
subsidiaries taken as a whole, other than any change or effect to the extent
attributable to (i) the economy or the securities markets in general, (ii) this
Agreement or the transactions contemplated hereby or the announcement thereof or
(iii) the Company's industry in general, and not specifically relating to the
Company or its subsidiaries. The Company has heretofore made available to Parent
and the Purchaser a complete and correct copy of the certificate of
incorporation and the by-laws or comparable organizational documents, each as
amended to the date hereof, of the Company and each of its subsidiaries and has
made available a complete and correct copy of the Rights Agreement as amended to
the date hereof.
SECTION 4.2. Capitalization; Subsidiaries. The authorized capital
stock of the Company consists of 100,000,000 Common Shares and 5,000,000 shares
of Preferred Stock, par value $1.00 per share (the "Preferred Stock"). As of the
close of business on November 9, 1998,
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23,797,279 Common Shares were issued and outstanding, all of which are entitled
to vote on this Agreement, and no Common Shares were held in treasury. As of the
date hereof, the Company has no shares of Preferred Stock issued or outstanding.
The Company has no shares reserved for issuance, except that, as of November 6,
1998, there were 2,115,604 Common Shares reserved for issuance pursuant to
outstanding Stock Options and rights granted under the Stock Plans and
37,641,169 Common Shares reserved for issuance upon exercise of the Rights.
Section 4.2 of the Company Disclosure Schedule sets forth as of November 6,
1998, the holders of all outstanding Options and the number, exercise prices,
vesting schedules and expiration dates of each grant to such holders. Since
January 1, 1998, the Company has not issued any shares of capital stock except
pursuant to the exercise of Options outstanding as of such date or as of the
date hereof. All the outstanding Common Shares are, and all Common Shares that
may be issued pursuant to the exercise of outstanding Options will be, when
issued in accordance with the respective terms thereof, duly authorized, validly
issued, fully paid and nonassessable and are not subject to, nor were they
issued in violation of, any preemptive rights. There are no bonds, debentures,
notes or other indebtedness having general voting rights (or convertible into
securities having such rights) ("Voting Debt") of the Company or any of its
subsidiaries issued and outstanding. Except as set forth in this Section 4.2,
and except for the Rights and the Rights Agreement, there are no existing
options, warrants, calls, subscriptions or other rights, agreements,
arrangements or commitments of any character to which the Company or any of its
subsidiaries is a party or by which any of them is bound, obligating the Company
or any of its subsidiaries to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or Voting Debt of, or any other
equity or voting interest in, the Company or any of its subsidiaries or
securities convertible into or exchangeable for such shares or equity interests
or obligating the Company or any of its subsidiaries to grant, extend or enter
into any such option, warrant, call, subscription or other right, agreement,
arrangement or commitment. Except as contemplated by this Agreement, and except
for the Rights Agreement and the Company's obligations in respect of the Options
under the Stock Plans, there are no outstanding contractual obligations of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire
any Common Shares or the capital stock of the Company or any of its
subsidiaries. Each of the outstanding shares of capital stock of each of the
Company's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable, and, except as set forth in Section 4.2 of the Company Disclosure
Schedule, such shares of the Company's subsidiaries are owned by the Company or
by a subsidiary of the Company, in each case free and clear of any lien, claim,
option, charge, security interest or encumbrance (any of the foregoing, a
"Lien"). Set forth in Section 4.2 of the Company Disclosure Schedule is a
complete and correct list of each subsidiary (direct or indirect).
SECTION 4.3. Authority Relative to this Agreement and Related
Matters. The Company has all necessary corporate power and authority to execute
and deliver this Agreement and, except for any required approval by the
Company's stockholders in connection with consummation of the Merger, to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation by the Company of the
transactions
11
contemplated in connection herewith have been duly and validly authorized and
approved by the Company Board and no other corporate proceedings on the part of
the Company are necessary to authorize or approve this Agreement or to
consummate the transactions contemplated hereby (other than, with respect to the
Merger, the approval of this Agreement by the affirmative vote of the holders of
a majority of the then outstanding Common Shares entitled to vote thereon, to
the extent required by applicable law). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due and valid
authorization, execution and delivery of such agreement by Parent and the
Purchaser, constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
SECTION 4.4. No Conflict; Required Filings and Consents.
(a) Assuming (i) the filings required under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act")
are made and the waiting periods thereunder have been terminated or have
expired, (ii) the requirements of the Exchange Act and any applicable state
securities "blue sky" or takeover law are met, (iii) the filing of the
certificate of merger and other appropriate merger documents, if any, as
required by the DGCL, is made and (iv) approval of this agreement by the holders
of a majority of the Common Shares, if required by the DGCL, is received, none
of the execution and delivery of this Agreement by the Company, the consummation
by the Company of the transactions contemplated hereby or compliance by the
Company with any of the provisions hereof will (i) conflict with or violate the
Certificate of Incorporation or By-Laws of the Company or the comparable
organizational documents of any of its subsidiaries, (ii) result in a breach or
violation of, a default under or the triggering of any payment or other material
obligations pursuant to or rights under, any of the Company's existing Plans (as
hereinafter defined) or any grant or award made under any of the foregoing,
(iii) conflict with or violate any statute, ordinance, rule, regulation, order,
judgment, decree, permit or license applicable to the Company or any of its
subsidiaries, or by which any of them or any of their respective properties or
assets may be bound or affected, or (iv) result in a violation or breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in any loss of any
benefit, the triggering of any payment by, or the increase in any other
obligation of, the Company or any of its subsidiaries or the creation of any
Lien on any of the properties or assets of the Company or any of its
subsidiaries (any of the foregoing referred to in clause (ii), (iii) or this
clause (iv) being a "Violation") pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or any of their
respective properties may be bound or affected, other than, in the case of
clause (iii) or (iv) above, any such violations that, individually or in the
aggregate, would not (A) reasonably be expected to have a Material Adverse
Effect on the Company, (B) impair the ability of the Company to perform its
obligations under this Agreement or (C) prevent or materially delay consummation
of any transactions contemplated by this Agreement.
(b) None of the execution and delivery of this Agreement by
the Company, the consummation by the Company of the transactions contemplated
hereby or compliance by the Company with any of the provisions hereof will
require any consent, waiver, approval, authorization or permit of, or
registration or filing with or notification to (any of the foregoing being a
"Consent"), any government or subdivision thereof, domestic, foreign or
supranational or
12
any administrative, governmental or regulatory authority, agency, commission,
tribunal or body, domestic, foreign or supranational (a "Governmental Entity"),
except for (i) compliance with any applicable requirements of the Exchange Act,
(ii) the filing of the appropriate certificate of merger and any other relevant
documents pursuant to the DGCL, and (iii) compliance with the HSR Act; provided
that the Company makes no representation with respect to such of the foregoing
as are required by reason of the regulatory status of Parent or any of its
subsidiaries or facts specifically pertaining to any of them.
SECTION 4.5. SEC Reports and Financial Statements.
(a) Since January 1, 1996, the Company has filed with the SEC
all forms, reports, schedules, registration statements and definitive proxy
statements required to be filed by the Company with the SEC (as they have been
amended since the time of their filing, and including any documents filed as
exhibits thereto, collectively, the "SEC Reports") and has heretofore made
available to Parent complete and correct copies of all such forms, reports,
schedules, registration statements, and proxy statements. As of their respective
dates, the SEC Reports (including but not limited to any financial statements or
schedules included or incorporated by reference therein) complied as to form in
all material respects with the requirements of the Exchange Act or the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations of the SEC promulgated thereunder applicable, as the case may be, to
such SEC Reports, and none of the SEC Reports contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(b) The (i) consolidated balance sheets as of December 31,
1997 and 1996 and the consolidated statements of operations, common
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1997 (including the related notes and schedules thereto) of
the Company contained in the Company's Form 10-K, as amended prior to the date
hereof, for the fiscal year ended December 31, 1997, and (ii) the unaudited
consolidated balance sheet as of June 30, 1998 and the unaudited consolidated
statements of operations, common stockholders' equity and cash flows for the
three- and six-month periods ended June 30, 1998 of the Company contained in the
Company's Form 10-Q for the three-month period ended June 30, 1998, in each case
present fairly in all material respects the consolidated financial position and
the consolidated results of operations and cash flows of the Company and its
consolidated subsidiaries as of the dates or for the periods presented therein
and were prepared in accordance with United States generally accepted accounting
principles ("GAAP") consistently applied during the periods involved except as
otherwise noted therein, including in the related notes (subject, in the case of
unaudited statements, to the absence of notes and to recurring audit adjustments
normal in nature and amount).
(c) Except as reflected, reserved against or otherwise
disclosed in the financial statements of the Company included in the SEC Reports
filed prior to the date of this Agreement (the "Filed Company SEC Reports") or
the notes thereto, since December 31, 1997 neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations (absolute, accrued,
fixed, contingent or otherwise) other than liabilities incurred in the ordinary
13
course of business consistent with past practice that would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company.
(d) The Company has heretofore furnished to Parent a complete
and correct copy of any amendments or modifications that have not yet been filed
with the SEC to any agreements, documents or other instruments that previously
had been filed by the Company with the SEC pursuant to the Securities Act and
the rules and regulations promulgated thereunder or the Exchange Act and the
rules and regulations promulgated thereunder.
SECTION 4.6. Environmental Matters.
(a) The business and operations of the Company and its
subsidiaries comply in all material respects with all applicable Environmental
Laws. The Company and its subsidiaries have obtained all material Governmental
Permits relating to Environmental Laws necessary for the operation of their
businesses; all such material Governmental Permits are in full force and effect,
and the Company and its subsidiaries are in compliance in all material respects
with all terms and conditions of such permits. Neither the Company nor any of
its subsidiaries is subject to any investigation by, order from or claim by any
person (including without limitation any Governmental Entity or prior owner or
operator of any of the Company Property) respecting (i) any Environmental Law,
(ii) any Remedial Action or (iii) any claim arising from the Release or
threatened Release of any Hazardous Materials into the environment, except for
any of the foregoing that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company. Neither
the Company nor any of its subsidiaries is subject to any judicial or
administrative proceeding, order, judgment, decree or settlement alleging or
addressing a violation of or liability under any Environmental Law, except for
such proceedings, orders, judgments, decrees or settlements that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
(b) Neither the Company nor any of its subsidiaries has (i)
reported a Release of a Hazardous Materials pursuant to Section 103(a) of
CERCLA, or any state equivalent; (ii) filed a notice pursuant to Section 103(c)
of CERCLA; or (iii) filed any notice under any applicable Environmental Law
reporting a violation of any applicable Environmental Law; except for any of the
foregoing that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company. There is not now with
respect to the operations of the Company or any of its subsidiaries, nor to the
best knowledge of the Company has there ever been, into, on or under any Company
Property, or into, on or under any other properties, including landfills, in
which Hazardous Materials have been disposed by the Company or any of its
subsidiaries, (A) any Release, (B) any treatment, recycling, storage or disposal
of any Hazardous Materials, or (C) any underground storage tank, surface
impoundment, landfill, leachfield or waste pile, except for such events that
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company.
(c) To the knowledge of the Company, any asbestos-containing
material or presumed asbestos-containing material that is on or part of any
Company Property does not violate any currently applicable Environmental Law in
any material respect. None of the
14
products manufactured, distributed or sold by the Company or any of its
subsidiaries contained asbestos or asbestos-containing material other than for
any such manufacturing, distributions or sales that would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company.
(d) For purposes of this Section:
(i) "Company Property" means any real or personal property,
plant, building, facility, structure, underground storage tank,
equipment or unit, or other asset now or, to the Company's knowledge,
previously, owned, leased or operated by the Company or any of its
present or, to the Company's knowledge as of the date hereof past,
subsidiaries.
(ii) "CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended, and any regulations
promulgated thereunder.
(iii) "Environmental Law" means all federal, state and local
laws or regulations relating to or addressing the environment, health
or safety, including but not limited to CERCLA, OSHA and RCRA and any
state equivalent thereof.
(iv) "Governmental Permits" means any permits, licenses,
certificates, orders, consents, authorizations, franchises and other
approvals from, or required by, any Governmental Entity that are used
by, or are necessary to own and to operate, the business of the Company
and its subsidiaries as currently configured and operated.
(v) "OSHA" means the Occupational Safety and Health Act, as
amended, and any regulations promulgated thereunder.
(vi) "Hazardous Materials" means, collectively, (A) any
petroleum or petroleum products, flammable explosives, radioactive
materials, asbestos in any form that is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing polycholorinated biphenyls in
excess of 50 parts per million, and radon gas; and (B) any chemicals,
materials, substances or wastes that are defined as or included in the
definition of "hazardous materials," "hazardous wastes" or "toxic
substances" under applicable Environmental Laws.
(vii) "RCRA" means the Resource Conservation and Recovery
Act, as amended, and any regulations promulgated thereunder.
(viii) "Release" means release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration of any Hazardous Materials into the environment or into or
out of any Company Property, including the movement of any Hazardous
Materials through or in the air, soil, surface water, groundwater or
Company Property.
15
(ix) "Remedial Action" means all actions required to (a)
clean up, remove, treat or in any other way remediate any Hazardous
Material; (b) prevent the release of Hazardous Materials so that they
do not migrate or endanger or threaten to endanger public health or
welfare or the environment; or (c) perform studies, investigations and
care related to any such Hazardous Material.
SECTION 4.7. Compliance with Applicable Laws. Except with respect
to Environmental Laws, which are covered exclusively in Section 4.6, the Company
and its subsidiaries hold all permits, licenses, variances, exemptions, orders
and approvals of all Governmental Entities (the "Company Permits") as are
necessary to conduct their respective businesses in the manner currently
conducted, except for any such Company Permits the failure of which to have
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company. The Company and its subsidiaries are in
compliance with the terms of the Company Permits, except for such failures to be
in compliance that would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect on the Company. Except with respect
to Environmental Laws that are covered in Section 4.6, the business operations
of the Company and its subsidiaries have been conducted in compliance with all
laws, ordinances and regulations of any Governmental Entity, except for
violations that could not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect on the Company.
SECTION 4.8. Change of Control. The total amounts payable to the
executives identified in Section 4.8 of the Company Disclosure Schedule
(excluding payments to such executives in respect of their vested options which
are listed in Section 4.2 of the Company Disclosure Schedule), as a result of
the transactions contemplated by this Agreement and/or any subsequent employment
termination (including any cash-out or acceleration of options and restricted
stock and any "gross-up" payments with respect to any of the foregoing), based
on the Offer Price being $31.00, will not exceed the amount set forth on such
schedule (subject to the adjustments specified therein).
SECTION 4.9. Litigation. There is no suit, claim, action,
proceeding or investigation pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries, which would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company or would reasonably be expected to prevent or
materially delay the consummation of the transactions contemplated by this
Agreement. Neither the Company nor any of its subsidiaries is subject to any
outstanding order, writ, injunction or decree which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect on the
Company or would reasonably be expected to prevent or materially delay the
consummation of the transactions contemplated hereby. This Section 4.9 does not
pertain to any matters to the extent arising out of this Agreement or the
transactions contemplated hereby.
SECTION 4.10. Information. None of the information supplied by the
Company in writing specifically for inclusion or incorporation by reference in
(i) the Offer Documents, (ii) the Proxy Statement or (iii) any other document to
be filed with the SEC or any other Governmental Entity in connection with the
transactions contemplated by this Agreement (the
16
"Other Filings") will, at the respective times filed with the SEC or other
Governmental Entity and, in addition, in the case of the Proxy Statement, at the
date it or any amendment or supplement is mailed to stockholders and at the time
of the Special Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements made therein, in light of the circumstances under which
they were made, not misleading. The Proxy Statement will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations thereunder, except that no representation is made by the Company
with respect to statements made therein based on information supplied by Parent
or the Purchaser in writing specifically for inclusion in the Proxy Statement.
SECTION 4.11. Certain Approvals. The Company Board has taken any
and all necessary and appropriate action to render inapplicable to the Offer,
the Merger and the transactions contemplated by this Agreement the provisions of
Section 203 of the DGCL. No other state takeover statute or similar statute or
regulation applies to the Offer, the Merger or the other transactions
contemplated by this Agreement.
SECTION 4.12. Employee Benefit Plans.
(a) Section 4.12(a) of the Company Disclosure Schedule
includes a complete list of all material employee benefit plans, programs, and
other arrangements providing benefits or compensation to any employee or former
employee or beneficiary or dependent thereof, whether or not written, and
whether covering one person or more than one person, sponsored or maintained by
the Company or any of its subsidiaries or to which the Company or any of its
subsidiaries contributes or is obligated to contribute ("Plans"). Without
limiting the generality of the foregoing, the term "Plans" includes all employee
welfare benefit plans within the meaning of Section 3(l) of the Employee
Retirement Income Security Act of 1974, as amended, and the regulations
thereunder ("ERISA") and all employee pension benefit plans within the meaning
of Section 3(2) of ERISA and all other material employee benefit, employment,
bonus, incentive, profit sharing, thrift, compensation, restricted stock,
retirement, savings, deferred compensation, stock purchase, stock option,
termination, severance, change in control, fringe benefit and other similar
plans, programs, agreements or arrangements.
(b) With respect to each Plan, the Company has made available
to Parent a true, correct and complete copy of: (i) each writing constituting a
part of such Plan, including without limitation all plan documents, benefit
schedules, trust agreements, and insurance contracts and other funding vehicles;
(ii) the most recent Annual Report (Form 5500 Series) and accompanying schedule,
if any; (iii) the current summary plan description, if any; (iv) the most recent
annual financial report, if any; (v) the most recent actuarial report, if any;
and (vi) the most recent determination letter from the Internal Revenue Service
(the "IRS"), if any. Except as specifically provided in the foregoing documents
made available to Parent, there are no amendments to or interpretations of any
Plan that have been adopted or approved nor has the Company or any of its
subsidiaries undertaken to make any such amendments or interpretations.
17
(c) Section 4.12(c) of the Company Disclosure Schedule
identifies each Plan that is intended to be a "qualified plan" within the
meaning of Section 401(a) of the Internal Revenue Code of 1986, as amended, and
the Treasury Regulations thereunder (the "Code") ("Qualified Plans"). The IRS
has issued a favorable determination letter with respect to each Qualified Plan
that has not been revoked, and there are no existing circumstances nor any
events that have occurred that could adversely affect the qualified status of
any Qualified Plan or the related trust. Schedule 4.12(c) identifies each Plan
which is intended to meet the requirements of Code Section 501(c)(9), and each
such plan meets such requirements and provides no disqualified benefits (as such
term is defined in Code Section 4976(b)).
(d) All contributions required to be made to any Plan by
applicable law or regulation or by any plan document or other contractual
undertaking, and all premiums due or payable with respect to insurance policies
funding any Plan, for any period through the date hereof have been timely made
or paid in full or, to the extent not required to be made or paid on or before
the date hereof, have been fully reflected in the financial statements of the
Company included in the SEC Reports to the extent required under generally
accepted accounting principles.
(e) The Company and each of its subsidiaries have complied,
and are now in compliance, in all respects with all provisions of ERISA and
(with respect to any Plan) the Code and all laws and regulations applicable to
the Plans, other than any instances of non-compliance that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. There is not now, nor do any circumstances exist
that could give rise to, any requirement for the posting of security with
respect to a Plan or the imposition of any lien on the assets of the Company or
any of its subsidiaries under ERISA or the Code. No prohibited transaction has
occurred with respect to any Plan.
(f) With respect to each Plan that is subject to Title IV or
Section 302 of ERISA or Section 412 or 4971 of the Code: (i) there does not
exist any accumulated funding deficiency within the meaning of Section 412 of
the Code or Section 302 of ERISA, whether or not waived; (ii) the fair market
value of the assets of such Plan equals or exceeds the actuarial present value
of all accrued benefits under such Plan (whether or not vested); (iii) no
reportable event within the meaning of Section 4043(c) of ERISA for which the
30-day notice requirement has not been waived has occurred, and the consummation
of the transactions contemplated by this agreement will not result in the
occurrence of any such reportable event; (iv) all premiums to the Pension
Benefit Guaranty Corporation ("PBGC") have been timely paid in full; (v) no
liability (other than for premiums to the PBGC) under Title IV of ERISA has been
or is expected to be incurred by the Company; and (vi) the PBGC has not
instituted proceedings to terminate any such Plan and, to the Company's
knowledge, no condition exists that presents a risk that such proceedings will
be instituted or which would constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any such
Plan.
(g) Except as set forth in Schedule 4.12(g) of the Company
Disclosure Schedule: (i) no Plan is a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA (a "Multiemployer Plan") or a plan that has two or
more contributing sponsors at least
18
two of whom are not under common control, within the meaning of Section 4063 of
ERISA (a "Multiple Employer Plan"); (ii) none of the Company and its
subsidiaries, nor any entity, trade or business (whether or not incorporated)
which is or ever has been under common control, or which is or ever has been
treated as a single employer, with the Company or any of its subsidiaries under
Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA (an
"ERISA Affiliate"), has, at any time during the last six years, contributed to
or been obligated to contribute to any Multiemployer Plan or Multiple Employer
Plan; and (iii) none of the Company and its subsidiaries nor any ERISA
Affiliates has incurred any withdrawal liability as defined in Part I of
Subtitle E of Title IV of ERISA ("Withdrawal Liability") as a result of a
complete or partial withdrawal from any Multiemployer Plan or Multiple Employer
Plan that has not been satisfied in full. With respect to each Plan that is a
Multiemployer Plan or a Multiple Employer Plan, except as set forth in Schedule
4.12(g), (A) if the Company or any of its subsidiaries or any of their
respective ERISA Affiliates were to experience a withdrawal or partial
withdrawal from such plan, no Withdrawal Liability would be incurred that would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company, and (B) none of the Company and its subsidiaries,
nor any of their respective ERISA Affiliates has received any notification, nor
has any reason to believe, that any such Plan is in reorganization, has been
terminated, is insolvent, or may reasonably be expected to be in reorganization,
to be insolvent, or to be terminated. There does not now exist, nor, to the
knowledge of the Company as of the date hereof, do any circumstances exist that
are reasonably likely to result in, any liability under (i) Title IV of ERISA,
(ii) Section 302 of ERISA, (iii) Sections 412 and 4971 of the Code, (iv) the
continuation coverage requirements of Sections 601 et seq. of ERISA and Section
4980D of the Code, or (v) to the knowledge of the Company as of the date hereof,
corresponding or similar provisions of foreign laws or regulations, other than a
liability that arises solely out of, or relate solely to, the Plans, that would
be a liability of the Company or any of its subsidiaries following the Closing,
in each case, that would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company. Without limiting the
generality of the foregoing, none of the Company, its subsidiaries nor any ERISA
Affiliate of the Company or any of its subsidiaries has engaged in any
transaction described in Section 4069 or Section 4204 or 4212 of ERISA.
(h) Except as disclosed on Schedule 4.12 of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries has any
liability for life, health, medical or other welfare benefits to former
employees or beneficiaries or dependents thereof, except for health continuation
coverage as required by Section 4980B of the Code or Part 6 of Title I of ERISA
and at no expense to the Company and its subsidiaries. The Company and each of
its subsidiaries has reserved the right to amend, terminate or modify at any
time all plans or arrangements providing for retiree health or life insurance
coverage.
(i) There are no pending or threatened claims (other than
claims for benefits in the ordinary course), lawsuits or arbitrations which have
been asserted or instituted against the Plans, any fiduciaries thereof with
respect to their duties to the Plans or the assets of any of the trusts under
any of the Plans which could reasonably be expected to result in liability of
the Company or any of its subsidiaries to the PBGC, the Department of Treasury,
the Department
19
of Labor or any Multiemployer Plan that would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company.
(j) Except as disclosed on Schedule 4.12 of the Company
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (either alone or
in conjunction with any other event) result in, cause the accelerated vesting or
delivery of, or increase the amount or value of, any payment or benefit to any
employee, officer or director of the Company or any of its subsidiaries. Without
limiting the generality of the foregoing, except as disclosed on Schedule 4.12
of the Company Disclosure Schedule, no amount paid or payable by the Company or
any of its subsidiaries in connection with the transactions contemplated hereby
(either solely as a result thereof or as a result of such transactions in
conjunction with any other event) will be an "excess parachute payment" within
the meaning of Section 280G of the Code.
SECTION 4.13. Taxes.
(a) The Company and each of its subsidiaries has filed all
federal, state, and all material county, local and foreign income Tax Returns
(as hereinafter defined) required to be filed by it, and all other material Tax
Returns required to be filed by it, and has paid or caused to be paid all Taxes
(as hereinafter defined) shown as due and payable on such Tax Returns in respect
of the periods covered by such returns and has made adequate provision in the
Company's financial statements for payment of all Taxes payable in respect of
all taxable periods or portions thereof ending on or before the date hereof,
except where the failures to so file or pay or make adequate provision would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company. Section 4.13 of the Company Disclosure Schedule
lists the periods through which the material Tax Returns required to be filed by
the Company or any of its subsidiaries have been examined by the IRS or other
appropriate taxing authority, or the period during which any assessments may be
made by the IRS or other appropriate taxing authority has expired. All material
deficiencies and assessments asserted as a result of such examinations or other
audits by federal, state, local or foreign taxing authorities have been paid,
fully settled or adequately provided for in the Company's financial statements,
and no issue or claim has been asserted in writing for Taxes by any taxing
authority for any prior period, the adverse determination of which would,
individually or in the aggregate, reasonably be expected to result in a
deficiency which could have a Material Adverse Effect on the Company, other than
those heretofore fully paid or fully provided for in the Company's financial
statements. There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any material Tax Return or any
material Taxes of the Company or any of its subsidiaries. Neither the Company
nor any of its subsidiaries has filed a consent pursuant to Section 341(f) of
the Code or agreed to have Section 341(f)(2) of the Code apply to any
disposition of a subsection (f) asset (as such term is defined in Section
341(f)(2) of the Code) owned by the Company or any of its subsidiaries. Neither
the Company nor any of its subsidiaries (i) has been during the preceding five
(5) years a member of an affiliated group filing consolidated returns for
federal income tax purposes (except for the group of which the Company is the
common parent), (ii) has any liability for the Taxes of any person (other than
the Company and its subsidiaries) under Treas. Reg. Section 1.1502-6 (or any
similar provision of state, local or foreign law)
20
or (iii) is a party to a Tax sharing or Tax indemnity agreement or any other
agreement of a similar nature that remains in effect. The Company and each of
its subsidiaries have made all material estimated income tax deposits and all
other material required tax payments or deposits (including withholding taxes)
and have complied for all prior periods in all material respects with the tax
provisions of all applicable federal, state, local and other laws. The Company
has made available to Parent and the Purchaser correct and complete copies of
its federal income tax returns for the last three taxable years and has made
available such other tax returns as requested by Parent and the Purchaser.
(b) For purposes of this Agreement, the term "Taxes" means all
taxes, charges, fees, levies or other assessments, including, without
limitation, income, gross receipts, excise, property, sales, transfer, license,
payroll, withholding, capital stock and franchise taxes, imposed by the United
States or any state, local or foreign government or subdivision or agency
thereof, including any interest, penalties or additions thereto. For purposes of
this Agreement, the term "Tax Return" means any report, return or other
information or document required to be supplied to a taxing authority in
connection with Taxes.
SECTION 4.14. Absence of Certain Changes. Since December 31, 1997
(i) there have not been any changes or effects prior to the date hereof that
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company; (ii) the businesses of the Company and
each of its subsidiaries have been conducted only in the ordinary course and in
a manner consistent with past practice; and (iii) there has not been any
revaluation by the Company or any of its subsidiaries of any material assets,
including but not limited to writing down the value of inventory or writing off
notes or accounts receivable other than in the ordinary course of business.
SECTION 4.15. Labor Matters. Except as disclosed in the Filed
Company SEC Reports or on Section 4.15 of the Company Disclosure Schedule, no
employees of the Company or of any of its subsidiaries are represented by any
labor union or any collective bargaining organization. No labor organization or
group of employees of the Company or any of its subsidiaries has made a pending
demand for recognition or certification, and there are no representation or
certification proceedings or petitions seeking a representation proceeding
presently pending or threatened to be brought or filed, with the National Labor
Relations Board or any other labor relations tribunal or authority, which would,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company.
SECTION 4.16. Relationships with Customers, Suppliers,
Distributors and Sales Representatives. As of the date hereof, since December
31, 1997 the Company has not received written notice that any customer,
supplier, distributor or sales representative intends to cancel, terminate or
otherwise modify its relationship with the Company or any subsidiary which
would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company.
SECTION 4.17. Contracts. Section 4.17 of the Company Disclosure
Schedule lists all written or oral contracts, agreements, guarantees or leases
(each a "Contract") to which
21
the Company or any of its subsidiaries is a party and which fall within any of
the following categories: (i) material joint venture, partnership and similar
agreements, (ii) Contracts containing covenants purporting to limit the freedom
of the Company or any of its subsidiaries to compete in any line of business in
any geographic area or to hire or solicit any individual or group of
individuals, (iii) Contracts which after the Effective Time would have the
effect of limiting the freedom of Parent or its subsidiaries (other than the
Company and its subsidiaries) to compete in any line of business in any
geographic area or to hire any individual or group of individuals, (iv)
Contracts which contain minimum purchase conditions or requirements or other
terms that restrict or limit the purchasing relationships of the Company or any
of its subsidiaries and which have or had a term in excess of one year when
executed, (v) Contracts relating to any outstanding commitment for capital
expenditures in excess of $300,000, (vi) indentures, mortgages, promissory
notes, loan agreements, guarantees of amounts in excess of $100,000, letters of
credit or other agreements or instruments of the Company or any of its
subsidiaries or commitments for the borrowing or the lending of amounts in
excess of $100,000 by the Company or any of its subsidiaries or providing for
the creation of any charge, security interest, encumbrance or lien upon any of
the assets of the Company or any of its subsidiaries (vii) Contracts with or for
the benefit of any affiliate of the Company (other than subsidiaries of the
Company), (viii) any employment or consulting agreement requiring payments in
the aggregate in excess of $100,000; and (ix) any Contract that would reasonably
be expected to prohibit or materially delay the consummation of the transactions
contemplated by this Agreement. All of the Contracts required to be disclosed by
this Section 4.17 are valid and binding obligations of the Company or a
subsidiary of the Company and, to the Company's knowledge as of the date hereof,
the valid and binding obligation of each other party thereto, except such
Contracts which if not so valid and binding would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company. Neither the Company nor any of its subsidiaries nor, to the knowledge
of the Company, any other party thereto is in violation of or in default in
respect of, nor has there occurred an event or condition which with the passage
of time or giving of notice (or both) could constitute a default under, any such
Contract except such violations or defaults under such Contracts which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company.
SECTION 4.18. Rights Agreement. The Company and the Company Board
have authorized all necessary action to amend the Rights Agreement (without
redeeming the Rights) so that none of the execution or delivery of this
Agreement, the making of the Offer, the acquisition of Common Shares pursuant to
the Offer or the consummation of the Merger, in each case in accordance with the
terms of this Agreement, will (i) cause any Rights issued pursuant to the Rights
Agreement to become exercisable or to separate from the stock certificates to
which they are attached, (ii) cause Parent, the Purchaser or any of their
Affiliates or Associates to be an Acquiring Person (as such term is defined in
the Rights Agreement) or (iii) trigger other provisions of the Rights Agreement,
including giving rise to a Distribution Date (as such term is defined in the
Rights Agreement), and such amendment shall be in full force and effect from and
after the date hereof.
SECTION 4.19. Affiliated Transactions. Neither the Company nor any
of its subsidiaries nor any of their respective officers, directors, employees
or affiliates (nor any
22
individual related by blood, marriage or adoption to any such individual), is a
party to any agreement, contract, commitment, transaction or understanding with
or binding upon the Company or any of its subsidiaries or any of their
respective assets or has engaged in any transaction with any of the foregoing
within the last twelve months except for customary payments to employees,
officers or directors in the ordinary course of business consistent with past
practice for services rendered in their capacity as employees, officers or
directors.
SECTION 4.20. Brokers. Except for the engagement of CSFB, none of
the Company, any of its subsidiaries, or any of their respective officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement. The Company has previously
delivered to Parent a copy of the Company's engagement letter with CSFB. The
aggregate Merger Fees owed or which will be owing by the Company and its
subsidiaries in connection with the Offer, the Merger and the transactions
contemplated by this Agreement will not exceed the amount set forth in Section
4.20 of the Company Disclosure Schedule. "Merger Fees" means all fees and
expenses paid or payable by or on behalf of the Company or any of its
subsidiaries to all attorneys, accountants, investment bankers, financial
advisors and other experts and advisors incident to negotiation, preparation,
execution and consummation of this Agreement and the transactions contemplated
hereby.
SECTION 4.21. Opinion of CSFB. The Company has received the
opinion of CSFB to the effect (and the Company will receive a written opinion of
CSFB confirming) that, as of the date of this Agreement, the consideration to be
received by the holders of Common Shares (other than Parent or any of its
affiliates) pursuant to the Offer and the Merger is fair to such holders from a
financial point of view. The Company has previously delivered, or will deliver
promptly upon receipt, to Parent a true and correct copy of any such written
opinion.
SECTION 4.22. Condition of Assets. The properties and assets,
including the equipment, supplies and other consumables, owned, leased or used
by the Company and its subsidiaries in the operation of their respective
business are in good operating condition and repair, ordinary wear and tear
excepted, are reasonably suitable for the purposes for which they are used, are
reasonably adequate and sufficient for the Company's and its subsidiaries'
current operations and are directly related to the business of the Company and
its subsidiaries, in each case except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant to the Company as
follows:
SECTION 5.1. Organization and Qualification. Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New Jersey and each subsidiary of Parent is duly organized,
validly existing and in good standing under the laws of
23
the jurisdiction of its organization, except where the failure to be so
organized, existing or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Affect on Parent.
The Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Parent and each of its
subsidiaries (including the Purchaser) has the requisite power and authority to
own, operate or lease its properties and to carry on its business as it is now
being conducted, and is duly qualified or licensed to do business, and is in
good standing, in each jurisdiction in which the nature of its business or the
properties owned, operated or leased by it makes such qualification, licensing
or good standing necessary, except where the failure to have such power or
authority, or the failure to be so qualified, licensed or in good standing,
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Parent. The term "Material Adverse Effect on Parent,"
as used in this Agreement, means any change or effect that is or would
reasonably be expected to have a material adverse effect on the business,
assets, financial condition or results of operations of Parent and its
subsidiaries taken as a whole, other than any change or effect to the extent
attributable to (i) the economy or the securities markets in general, (ii) this
Agreement or the transactions contemplated hereby or the announcement thereof or
(iii) Parent's industry in general, and not specifically relating to Parent or
its subsidiaries.
SECTION 5.2. Authority Relative to this Agreement. Each of Parent
and the Purchaser has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by Parent and the Purchaser and the
consummation by Parent and the Purchaser of the transactions contemplated hereby
have been duly and validly authorized and approved by the respective Boards of
Directors of Parent and the Purchaser and by Parent as sole stockholder of the
Purchaser and no other corporate proceedings on the part of Parent or the
Purchaser are necessary to authorize or approve this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of Parent and the Purchaser and, assuming the due and valid
authorization, execution and delivery by the Company, constitutes a valid and
binding obligation of each of Parent and the Purchaser enforceable against each
of them in accordance with its terms.
SECTION 5.3. No Conflict; Required Filings and Consents.
(a) Assuming (i) the filings required under the HSR Act are
made and the waiting periods thereunder have terminated or have expired, (ii)
the requirements of the Exchange Act and any applicable state securities, "blue
sky" or takeover law are met and (iii) the filing of the certificate of merger
and other appropriate merger documents, if any, as required by the DGCL, is
made, none of the execution and delivery of this Agreement by Parent or the
Purchaser, the consummation by Parent or the Purchaser of the transactions
contemplated hereby or compliance by Parent or the Purchaser with any of the
provisions hereof will (i) conflict with or violate the organizational documents
of Parent or the Purchaser, (ii) conflict with or violate any statute,
ordinance, rule, regulation, order, judgment, decree, permit or license
applicable to Parent or the Purchaser or any of their subsidiaries, or by which
any of them or any of their respective properties or assets may be bound or
affected, or (iii) result in a violation or breach of or constitute a default
(or an event which with notice or lapse of time or both would become a default)
24
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in any loss of any benefit, the triggering of any
payment by, or the increase in any other obligation of, Parent or any of its
subsidiaries or the creation of any Lien on any of the properties or assets of
Parent or any of its subsidiaries pursuant to any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or the Purchaser or any of their
subsidiaries is a party or by which Parent or the Purchaser or any of their
subsidiaries or any of their respective properties or assets may be bound or
affected, other than, in the case of clause (ii) or (iii) above, any such
violations that, individually or in the aggregate, would not prevent or
materially delay the consummation of the transactions contemplated hereby or
thereby.
(b) None of the execution and delivery of this Agreement by
Parent and the Purchaser, the consummation by Parent and the Purchaser of the
transactions contemplated hereby or thereby or compliance by Parent and the
Purchaser with any of the provisions hereof will require any Consent of any
Governmental Entity, except for (i) compliance with any applicable requirements
of the Exchange Act and any state securities "blue sky" or takeover law, (ii)
the filing of a certificate of merger pursuant to the DGCL, and (iii) compliance
with the HSR Act; provided that Parent and Purchaser make no representation with
respect to such of the foregoing as are required by reason of the regulatory
status of the Company or any of its subsidiaries or facts specifically
pertaining to any of them.
SECTION 5.4. Information. None of the information supplied or to
be supplied by Parent and the Purchaser in writing specifically for inclusion or
incorporation by reference in (i) the Schedule 14D-9, (ii) the Proxy Statement
or (iii) the Other Filings will, at the respective times filed with the SEC or
such other Governmental Entity and, in addition, in the case of the Proxy
Statement, at the date it or any amendment or supplement is mailed to
stockholders and at the time of the Special Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
SECTION 5.5. Financing. Parent has, and will have at the closing
of the Offer and the Effective Time, available to it sufficient funds to
consummate the transactions contemplated by this Agreement, and will cause the
Purchaser to have sufficient funds available to consummate the Offer and the
Merger and the transactions contemplated hereby.
ARTICLE VI
COVENANTS
SECTION 6.1. Conduct of Business of the Company. Except as
expressly contemplated by this Agreement, or otherwise with the prior written
consent of Parent, during the period from the date of this Agreement to the
Effective Time, the Company will, and will cause each of its subsidiaries to,
conduct its operations only in the ordinary and usual course of business
consistent with past practice and will use its reasonable best efforts, and will
cause each of its subsidiaries to use its reasonable best efforts, to preserve
intact the business organization of
25
the Company and each of its subsidiaries, to keep available the services of its
and their present officers and key employees, and to preserve the good will of
those having business relationships with it, including, without limitation,
maintaining satisfactory relationships with licensors, suppliers, distributors,
customers and others having business relationships with the Company. Without
limiting the generality of the foregoing, and except as otherwise expressly
contemplated by this Agreement, the Company will not, and will not permit any of
its subsidiaries to, prior to the Effective Time, without the prior written
consent of Parent:
(a) adopt any amendment to its Certificate of Incorporation or
By-Laws or comparable organizational documents or adopt a plan of merger,
consolidation, reorganization, dissolution or liquidation;
(b) sell, pledge or encumber any stock owned by it in any of
its subsidiaries;
(c) issue, reissue or sell, or authorize the issuance,
reissuance or sale of, (A) additional shares of capital stock of any class, or
securities convertible into capital stock of any class, or any rights, warrants
or options to acquire any convertible securities or capital stock, other than
the issuance of Common Shares (and the related Rights) pursuant to the exercise
of Options outstanding on the date hereof (or, if a Distribution Date (as
defined in the Rights Agreement) shall occur as a result of any action by a
party other than Parent or the Purchaser, the Rights) or (B) any other
securities in respect of, in lieu of, or in substitution for, Common Shares
outstanding on the date hereof (other than the Rights if a Distribution Date
shall occur under the aforesaid circumstances);
(d) declare, set aside or pay any dividend or other
distribution (whether in cash, securities or property or any combination
thereof) in respect of any class or series of its capital stock other than
between any of the Company and any of its wholly-owned subsidiaries;
(e) split, combine, subdivide, reclassify or redeem, purchase
or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any
shares of its capital stock, or any of its other securities;
(f) except as set forth in Section 6.1 of the Company
Disclosure Schedule: hire any employee with aggregate annual compensation and
benefits in excess of $100,000, or increase the compensation or fringe benefits
payable or to become payable to its directors, officers or employees (whether
from the Company or any of its subsidiaries), or pay or award any benefit not
required by any existing plan or arrangement to any officer, director or
employee (including, without limitation, the granting of stock options, stock
appreciation rights, shares of restricted stock or performance units pursuant to
the Stock Plans or otherwise), or make any payment described in Section 4.8 of
this Agreement in excess of the amount set forth in Section 4.8 of the Company
Disclosure Schedule (subject to the adjustments specified therein), or grant any
severance or termination pay to any officer, director or other employee of the
Company or any of its subsidiaries (other than as required by existing
agreements or policies described in the Company Disclosure Schedule), or enter
into any employment or severance agreement with, any director, officer or other
employee of the Company or any of its subsidiaries or establish,
26
adopt, enter into, amend or waive any performance or vesting criteria or
accelerate vesting or exercisability under any Plan for the benefit or welfare
of any current or former directors, officers or employees of the Company or its
subsidiaries or their beneficiaries or dependents, except, in each case, to the
extent required by applicable law or regulation or by the terms of any
collective bargaining agreement; provided that the Company may accelerate the
vesting of Options at any time prior to the Effective Time;
(g) acquire, mortgage, encumber, sell, lease, license or
dispose of any assets which are material to the Company or securities, except
pursuant to existing contracts or commitments in the ordinary course of business
consistent with past practice, or enter into any commitment or transaction
outside the ordinary course of business consistent with past practice other than
transactions between a wholly-owned subsidiary of the Company and the Company or
another wholly-owned subsidiary of the Company;
(h) (i) incur, assume or pre-pay any long-term debt or incur
or assume any short-term debt, except that the Company and its subsidiaries may
incur, assume or pre-pay debt in the ordinary course of business in amounts and
for purposes consistent with past practice under existing lines of credit, (ii)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person
except in the ordinary course of business consistent with past practice, (iii)
pay, discharge or satisfy any claims, liabilities or obligations (absolute,
accrued, contingent or otherwise), except in the ordinary course of business
consistent with past practice or pursuant to existing contracts or commitments
and in accordance with their terms, (iv) make any loans, advances or capital
contributions to, or investments in, any other person, except for loans,
advances, capital contributions or investments between any wholly-owned
subsidiary of the Company and the Company or another wholly-owned subsidiary of
the Company, (v) take any of the actions set forth in Section 6.1(h) of the
Company Disclosure Schedule, (vi) accelerate or delay in any material respect
collection of notes or accounts receivable in advance of or beyond their regular
due dates or the dates when the same would have been collected in the ordinary
course of business consistent with past practice, (vii) accelerate or delay in
any material respect payment of accounts payable beyond or in advance of its due
date or the date such liability would have been paid in the ordinary course of
business consistent with past practice, or (viii) vary the Company's inventory
practices in any material respect from the Company's past practices;
(i) settle or compromise any suit or claim or threatened suit
or claim if the amount involved in such settlement or compromise is greater than
$300,000 or if the aggregate amount involved for all such settlements and
compromises is in excess of $500,000;
(j) other than in the ordinary course of business consistent
with past practice, (i) modify, amend or terminate any contract, (ii) waive,
release, relinquish or assign any contract (or any of the Company's rights
thereunder), right or claim, or (iii) cancel or forgive any indebtedness owed to
the Company or any of its subsidiaries;
27
(k) make any material tax election not required by law or
settle or compromise any material tax liability, except in the case of any such
liability to the extent reserved for on the Company's financial statements;
(l) permit any insurance policy naming it as a beneficiary or
a loss payable payee to be canceled or terminated, except in the ordinary course
of business consistent with past practice;
(m) acquire (by merger, consolidation or acquisition of stock
or assets) any corporation, partnership or other business organization or
division thereof;
(n) enter into any contract or agreement other than in the
ordinary course of business consistent with past practice;
(o) except as may be required as a result of a change in law
or in generally accepted accounting principles, make any change in its methods
of accounting, including tax accounting policies and procedures;
(p) take, or commit to take, any action that would or is
reasonably likely to result in any of the Tender Offer Conditions or any of the
conditions to the Merger set forth in Article VII not being satisfied;
(q) agree in writing or otherwise to take any of the foregoing
actions prohibited under this Section 6.1.
SECTION 6.2. Access to Information. From the date of this
Agreement until the Effective Time, the Company will, and will cause its
subsidiaries, and each of their respective officers, employees, counsel,
advisors and representatives (collectively, the "Company Representatives") to,
give Parent and the Purchaser and their respective officers, employees, counsel,
advisors and representatives (collectively, the "Parent Representatives")
reasonable access, during normal business hours, to the offices and other
facilities and to the books and records of the Company and its subsidiaries and
will cause the Company Representatives and the Company's subsidiaries to furnish
Parent, the Purchaser and the Parent Representatives with such financial and
operating data and such other information with respect to the business and
operations of the Company and its subsidiaries as Parent and the Purchaser may
from time to time reasonably request. The Company shall furnish promptly to
Parent and the Purchaser a copy of each report, schedule, registration statement
and other document filed by it or its subsidiaries during such period pursuant
to the requirements of federal or state securities laws. Parent and the
Purchaser agree that any information furnished pursuant to this Section 6.2 will
be subject to the provisions of the letter agreement dated September 24, 1998
between Parent and the Company (the "Confidentiality Agreement").
SECTION 6.3. Efforts.
(a) Subject to the terms and conditions provided herein, each
of the Company, Parent and the Purchaser shall, and shall cause each of its
subsidiaries to, cooperate
28
and use reasonable best efforts to make, or cause to be made, all filings
necessary or proper under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including but not
limited to cooperation in the preparation and filing of the Offer Documents, the
Schedule 14D-9, the Proxy Statement and any required filings under the HSR Act
(which filings under the HSR Act shall be made by the parties within five
business days after the date hereof) and any amendments to any thereof.
In addition, if at any time prior to the Effective Time any
event or circumstance relating to either the Company or Parent or the Purchaser
or any of their respective subsidiaries should be discovered by the Company or
Parent, as the case may be, that should be set forth in an amendment to the
Offer Documents or Schedule 14D-9, the discovering party will promptly inform
the other party of such event or circumstance. If at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, including the execution of additional instruments,
the proper officers and directors of each party to this Agreement shall take all
such necessary action.
(b) Each of the parties will use its reasonable best efforts
to (i) obtain as promptly as practicable all Consents of any Governmental Entity
or any other person required in connection with, and waivers of any Violations
that may be caused by, the consummation of the transactions contemplated by this
Agreement, (ii) prevent any action or proceeding by any Governmental Entity with
respect and adverse to the transactions contemplated by this Agreement, (iii)
defend any lawsuits or other proceedings challenging this Agreement or the
consummation of the transactions contemplated hereby, (iv) subject in the case
of the Company to its rights set forth in Sections 1.2(a) and 6.10(a), cause the
Tender Offer Conditions and the conditions to the Merger set forth in Article
VII to be satisfied.
(c) Except as otherwise expressly contemplated by this
Agreement, Parent will not, and will not permit any of its subsidiaries to,
during the period from the date of this Agreement to the Effective Time, without
the prior written consent of the Company take or commit to take any action that
would or is reasonably likely to result in any of the Tender Offer Conditions or
any of the conditions to the Merger set forth in Article VII not being
satisfied.
SECTION 6.4. Public Announcements. The Company, on the one hand,
and Parent and the Purchaser, on the other hand, agree to consult promptly with
each other prior to issuing any press release or otherwise making any public
statement (including statements made generally to employees or shareholders of
the Company and its subsidiaries) with respect to the Offer, the Merger and the
other transactions contemplated hereby, agree to provide to the other party for
review a copy of any such press release or statement, and shall not issue any
such press release or make any such public statement prior to such consultation
and review, unless required by applicable law or any listing agreement with a
securities exchange.
SECTION 6.5. Employee Benefit Arrangements.
(a) From and after the Effective Time, Parent will honor, or
cause to have honored, all obligations of the Company under the Plans; provided,
however, that with respect to the contracts listed in Section 6.5(d) of the
Company Disclosure Schedule, Parent shall
29
not be required to pay or cause to be paid any amounts under such contracts in
excess of the amounts set forth in such Section 4.8 of the Company Disclosure
Schedule (subject to the adjustments specified therein). Notwithstanding the
foregoing, from and after the Effective Time, subject to the remaining
provisions of this Section 6.5(a), Parent or its designee may exercise any right
to amend, modify, alter or terminate any Plans, provided that any such action
shall not adversely affect the vested rights of any employees or other
beneficiaries which shall have arisen thereunder prior to such amendment,
modification, alteration or termination, and shall not affect any rights for
which the agreement of the other party or a beneficiary is required.
(b) From and after the Effective Time, Parent will, or will
cause the Surviving Corporation to, recognize the prior service with the Company
or its subsidiaries (to the extent such service was recognized by the Company or
its subsidiaries under any comparable Plan) of each employee of the Company or
any of its subsidiaries as of the Effective Time (the "Company Employees") in
connection with the Parent employee benefit plans for purposes of eligibility,
vesting and levels of benefits (but not for purposes of benefit accruals under
any defined benefit pension plan) in which such Company Employee is eligible to
participate following the Effective Time. From and after the Effective Time,
Parent will, or will cause the Surviving Corporation to (i) cause any
pre-existing conditions or limitations and eligibility waiting periods (to the
extent such limitations or waiting periods did not apply to the Company
Employees under the Plans) under any group health plans of Parent to be waived
with respect to the Company Employees and their eligible dependents and (ii)
give each Company Employee credit for the plan year in which the Effective Time
occurs towards applicable deductibles and annual out-of-pocket limits for
expenses incurred prior to the Effective Time. From and after the Effective
Time, Parent will, or will cause the Surviving Corporation, to provide severance
benefits to eligible Company Employees pursuant to the terms and conditions set
forth on Exhibit 6.5(d)(i) of the Company Disclosure Schedule.
(c) The Company will not take any action that could prevent or
impede the termination of the 1987 Stock Option Plan, the 1990 Stock Option
Plan, the 1993 Stock Option Plan, the 1998 Stock Option Plan and the Employee
Stock Purchase Plan, as any of them may have been amended, and all other Stock
Plans, and any other plans, programs or arrangements providing for the issuance
or grant of any other interest in respect of the capital stock of the Company or
any subsidiary, in each case, effective prior to the Effective Time. The Company
will use its reasonable best efforts to obtain all necessary consents so that,
after the Effective Time, holders of Options will have no rights other than the
rights of the holders of Options to receive the Cash Payment (less any required
withholding), if any, in cancellation and settlement thereof.
(d) Notwithstanding anything in this Agreement to the
contrary, (i) the Company (or Parent, if applicable) may take any of the actions
set forth in Section 6.5(d)(i) of the Company Disclosure Schedule before the
Expiration Date and (ii) the Company shall take all necessary actions,
including, without limitation, obtaining any required approvals by the Company's
Board of Directors or using reasonable best efforts to obtain any required
employee consents, in order to effectuate the items set forth in Section
6.5(d)(ii) of the Company Disclosure Schedule, upon the request of Parent and
effective prior to the date designated by Parent, and, in
30
either case, such actions shall not be considered a violation of any provision
of this Agreement; provided, however, that the Company shall in no event be
required to take any of the actions set forth in Section 6.5(d)(ii) of the
Company Disclosure Schedule unless and until Parent and the Purchaser shall have
irrevocably waived all of the Tender Offer Conditions which they are permitted
to waive hereunder.
SECTION 6.6. Indemnification; Directors' and Officers' Insurance.
(a) Parent agrees that, from and after the Effective Time, all
rights to indemnification, defense and advancement of funds now existing in
favor of individuals who at or prior to the Effective Time were directors or
officers of the Company or any of its subsidiaries (the "Indemnified Parties"),
as set forth in the Certificate of Incorporation or By-Laws of the Company or
any agreements identified in Section 6.6 of the Company Disclosure Schedule,
shall survive the Merger with respect to matters existing or occurring at or
prior to the Effective Time. Parent agrees to cause the Surviving Corporation to
honor all rights to indemnification, defense and advancement of funds referred
to in the preceding sentence (including, to the extent required, providing
sufficient funding to enable the Surviving Corporation to satisfy its
obligations under the preceding sentence).
(b) Parent shall, or shall cause (including, to the extent
required, by providing sufficient funding) the Surviving Corporation to,
maintain in effect for not less than six years (subject to the last sentence of
this Section 6.6(b)) from the Effective Time the current policies of the
directors, and officers, liability insurance maintained by the Company; provided
that the Surviving Corporation may substitute therefor other policies of at
least the same coverage amounts and which contain terms and conditions not less
advantageous in the aggregate to the beneficiaries of the current policies and
provided that such substitution shall not result in any gaps or lapses in
coverage with respect to matters occurring prior to the Effective Time; and
provided, further, that the Surviving Corporation shall not be required to pay
an annual premium in excess of 200% of the last annual premium paid by the
Company prior to the date hereof (which the Company represents to be $233,200
for the 12-month period ending June 27, 1998) and if the Surviving Corporation
is unable to obtain the insurance required by this Section 6.6 (b) it shall
obtain as much comparable insurance as possible for an annual premium equal to
such maximum amount. Notwithstanding the foregoing, at any time on or after the
third anniversary of the Effective Time, Parent may, at its election, undertake
to provide funds to the Surviving Corporation to the extent necessary so that
the Surviving Corporation may self-insure with respect to the level and scope of
insurance coverage required under this Section 6.6(b) in lieu of causing to
remain in effect any directors, and officers, liability insurance policy.
(c) Any Indemnified Party wishing to claim indemnification
under paragraph (a) of this Section 6.6, upon learning of any such claim,
action, suit, proceeding or investigation, shall promptly notify Parent thereof,
but the failure to so notify shall not relieve Parent of any liability it may
have to such Indemnified Party if and to the extent such failure does not
materially prejudice Parent as the indemnifying party. After the Effective Time,
in the event of any such claim, action, suit, proceeding or investigation
(whether arising or asserted before or after the Effective Time), (i) Parent or
the Surviving Corporation shall have the right to assume
31
the defense thereof and Parent shall not be liable to such Indemnified Parties
for any legal expenses of other counsel or any other expenses subsequently
incurred by such Indemnified Parties in connection with the defense thereof,
except that if Parent and the Surviving Corporation elect not to assume such
defense, or if counsel for the Indemnified Parties advises that there are issues
that raise conflicts of interest between Parent or the Surviving Corporation and
the Indemnified Parties, the Indemnified Parties may retain counsel satisfactory
to them, and Parent or the Surviving Corporation shall pay all reasonable fees
and expenses of such counsel for the Indemnified Parties promptly as detailed
statements therefor are received; provided, however, that Parent shall be
obligated pursuant to this paragraph (c) to pay for only one firm of counsel for
all Indemnified Parties in any jurisdiction unless the use of one counsel for
such Indemnified Parties would present such counsel with a conflict of interest,
(ii) the Indemnified Parties will cooperate in the defense of any such matter,
and (iii) Parent shall not be liable for any settlement effected without its
prior written consent, which consent shall not be unreasonably withheld; and
provided, further, that Parent shall not have any obligation hereunder to any
Indemnified Party if and when a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final and non-appealable,
that the indemnification of such Indemnified Party in the manner contemplated
hereby is prohibited by applicable law.
(d) This Section 6.6 shall survive the consummation of the
Merger at the Effective Time, is intended to benefit the Indemnified Parties,
shall be binding on all successors and assigns of Parent and the Surviving
Corporation and shall be enforceable by the Indemnified Parties.
SECTION 6.7. Notification of Certain Matters. Parent and the
Company shall promptly notify each other of (i) the occurrence or non-occurrence
of any fact or event which would be reasonably likely (A) to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time or (B) to cause any covenant, condition or agreement under this
Agreement not to be complied with or satisfied and (ii) any failure of the
Company, Parent or Purchaser, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that no such notification shall affect the
representations or warranties of any party or the conditions to the obligations
of any party hereunder. Each of the Company, Parent and the Purchaser shall give
prompt notice to the other parties hereof of any notice or other communication
from any third party alleging that the consent of such third party is or may be
required in connection with the transactions contemplated by this Agreement.
SECTION 6.8. Rights Agreement. The Company covenants and agrees
that it will not (i) redeem the Rights, (ii) amend the Rights Agreement or (iii)
take any action which would allow any Person (as defined in the Rights
Agreement) other than Parent or the Purchaser to acquire beneficial ownership of
25% or more of the Common Shares without causing a Distribution Date (as such
term is defined in the Rights Agreement) to occur.
SECTION 6.9. State Takeover Laws. Each party hereto shall, upon
the request of any other party hereto, take all reasonable steps to assist in
any challenge by such other party
32
to the validity or applicability to the transactions contemplated by this
Agreement, including the Offer and the Merger, of any state takeover law.
SECTION 6.10. No Solicitation.
(a) The Company, its affiliates and their respective officers,
directors (in their capacity as such), employees, representatives and agents
shall immediately cease any existing discussions or negotiations, if any, with
any parties conducted heretofore with respect to any acquisition or exchange of
all or any material portion of the assets of, or any material equity interest
in, the Company or any of its subsidiaries or any business combination with the
Company or any of its subsidiaries. The Company agrees that, prior to the
Effective Time, it shall not, and shall not authorize or permit any of its
subsidiaries or any of its or its subsidiaries' directors (in their capacity as
such), officers, employees, agents or representatives, directly or indirectly,
to solicit, initiate, encourage or facilitate, or furnish or disclose nonpublic
information in furtherance of, any inquiries or the making of any proposal with
respect to any merger, liquidation, recapitalization, consolidation or other
business combination involving the Company or its subsidiaries or acquisition of
any material amount of capital stock or any material portion of the assets
(except for acquisition of assets in the ordinary course of business consistent
with past practice) of the Company or its subsidiaries, or any combination of
the foregoing (other than the Offer and the Merger) (an "Acquisition
Transaction"), or negotiate or engage in substantive discussions with any person
(other than the Purchaser, Parent or their respective directors, officers,
employees, agents and representatives) with respect to any Acquisition
Transaction or enter into or resolve to enter into any agreement, arrangement or
understanding with respect to any Acquisition Transaction or requiring it to
abandon, terminate or fail to consummate the Merger or any other transaction
contemplated by this Agreement; provided, however, that the Company may furnish
information to, and negotiate or otherwise engage in substantive discussions
with, any person who has delivered a bona fide written proposal for an
Acquisition Transaction, and may terminate this Agreement pursuant to Section
8.1(g) of this Agreement in order to immediately thereafter enter into a
definitive agreement with respect to such Acquisition Transaction, in each case,
if the Company Board determines in good faith following consultation with
outside counsel that failing to take such action would constitute a breach of
the fiduciary obligations of the Company Board under applicable law, provided
that prior to furnishing non-public information to any such party, the Company
shall have entered into a confidentiality agreement containing terms at least as
favorable to the Company as those of the Confidentiality Agreement (other than
the sixth paragraph thereof) with respect to the maintenance of confidentiality
and the permitted use of information provided by or on behalf of the Company.
(b) From and after the execution of this Agreement, the
Company shall promptly advise Parent of any discussions, negotiations or
proposals relating to an Acquisition Transaction, identify the offeror and
furnish to Parent a copy of any such proposal, if it is in writing, or a written
summary of any such proposal relating to an Acquisition Transaction if it is not
in writing. The Company shall promptly advise Parent of any material development
relating to any such proposal, including the results of any discussions or
negotiations with respect thereto.
33
(c) Nothing contained in this Agreement shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to the Company's stockholders, in each case, if, in the good
faith judgment of the Board of Directors of the Company following consultation
with outside counsel, failure to take such positions or so to disclose such
would constitute a violation of applicable law.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.1. Conditions. The respective obligations of Parent, the
Purchaser and the Company to consummate the Merger are subject to the
satisfaction or waiver (by each such party), at or before the Effective Time, of
each of the following conditions:
(a) Stockholder Approval. The stockholders of the Company
shall have duly adopted this Agreement, if required by applicable law.
(b) Purchase of Common Shares. The Purchaser shall have
accepted for payment and paid for Common Shares pursuant to the Offer; provided,
however, that this condition shall be deemed to be satisfied with respect to the
obligation of Parent and the Purchaser to effect the Merger if the Purchaser
fails to accept for payment or pay for Common Shares pursuant to the Offer in
violation of the terms of the Offer or of this Agreement.
(c) Injunctions; Illegality. The consummation of the Merger
shall not be restrained, enjoined or prohibited by any order, judgment, decree,
injunction or ruling of a court of competent jurisdiction or any Governmental
Entity and there shall not have been any statute, rule or regulation enacted,
promulgated or deemed by a Governmental Entity applicable to the Merger by any
Governmental Entity which prevents the consummation of the Merger or has the
effect of making the purchase of Common Shares illegal; provided that each party
hereto shall use reasonable best efforts to prevent the entry of and to appeal
any such order, judgment, decree, injunction or ruling or the enactment,
promulgation or such other action by any Governmental Entity with respect to any
such statute, rule or regulation.
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time prior to the Effective
Time, notwithstanding approval thereof by the stockholders of the Company (with
any termination by Parent also being an effective termination by the Purchaser);
provided that if Shares are accepted for payment pursuant to the Offer, neither
Parent nor the Purchaser may terminate this Agreement or abandon the Merger
except pursuant to clause (a) below:
34
(a) by the mutual written consent of Parent and the Company,
by action of their respective Boards of Directors;
(b) by the Company if (i) Parent or the Purchaser fails to
commence the Offer as provided in Section 1.1 hereof, or (ii) Parent or the
Purchaser shall not have accepted for payment and paid for Common Shares
pursuant to the Offer in accordance with the terms hereof and thereof on or
before March 31, 1999;
(c) by Parent or the Company if the Offer expires pursuant to
its terms without any Common Shares being purchased thereunder;
(d) by Parent or the Company if any court of competent
jurisdiction or other Governmental Entity shall have issued an order, decree or
ruling or taken any other action permanently enjoining, restraining or otherwise
prohibiting the Merger or the acceptance for payment of, or payment for, Common
Shares pursuant to the Offer and such order, decree or ruling or other action
shall have become final and nonappealable, provided that the party seeking to
terminate this Agreement shall have used its reasonable best efforts to remove
or lift such order, decree or ruling;
(e) by Parent if the Company breaches its covenant in
Section 6.8;
(f) by Parent if the Company Board shall have withdrawn or
modified (including by amendment of the Schedule 14D-9) in a manner adverse to
the Purchaser its approval or recommendation of the Offer, this Agreement or the
Merger, shall have approved or recommended any Acquisition Transaction, or shall
have resolved to effect any of the foregoing; and
(g) by the Company in accordance with Section 6.10 of this
Agreement.
SECTION 8.2. Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 8.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party or its directors, officers or stockholders, other than the provisions
of the last sentence of Section 6.2 and the provisions of this Section 8.2 and
Section 8.3, which shall survive any such termination. Nothing contained in this
Section 8.2 shall relieve any party from liability for any willful breach of
this Agreement.
SECTION 8.3. Fees and Expenses.
(a) Whether or not the Merger is consummated, except as
otherwise specifically provided herein, all costs and expenses incurred in
connection with the Offer, this Agreement and the transactions contemplated by
this Agreement shall be paid by the party incurring such expenses.
(b) In the event that this Agreement is terminated pursuant to
Section 8.1 (e), (f) or (g) or pursuant to Section 8.1(c) as a result of the
failure of any of the conditions set
35
forth in paragraph (d) of Exhibit A, then the Company shall, within two business
days after (or, in the case of a termination pursuant to Section 8.1(g), at or
prior to) such termination, pay Parent a termination fee of $20,000,000 (the
"Termination Fee") in immediately available funds by wire transfer to an account
designated by Parent. In the event that (i) a bona fide Acquisition Transaction
has been proposed to the Company or publicly announced or disclosed, (ii) this
Agreement is subsequently terminated pursuant to Section 8.1(b)(ii) or Section
8.1(c) (other than as a result of the failure of any of the conditions set forth
in paragraph (d) of Exhibit A) and (iii) within six months of such termination
the Company shall have entered into a definitive agreement or a written
agreement in principle providing for an Acquisition Transaction with respect to,
directly or indirectly, more than 50% of the capital stock of the Company or of
the assets (based on fair market value) of the Company and its subsidiaries,
taken as a whole, the Company shall pay Parent the Termination Fee at or prior
to execution of such agreement or agreement in principle in immediately
available funds by wire transfer to an account designated by Parent.
(c) The prevailing party in any legal action undertaken to
enforce this Agreement or any provision hereof shall be entitled to recover from
the other party the costs and expenses (including attorneys' and expert witness
fees) incurred in connection with such action.
SECTION 8.4. Amendment. Subject to Section 1.3(c), this Agreement
may be amended by the Company, Parent and the Purchaser at any time before or
after any approval of this Agreement by the stockholders of the Company but,
after any such approval, no amendment shall be made which decreases the Merger
Price or which adversely affects the rights of the Company's stockholders
hereunder without the approval of such stockholders or which otherwise violates
applicable law. This Agreement may not be amended except by an instrument in
writing signed on behalf of all the parties.
SECTION 8.5. Extension; Waiver. Subject to Section 1.3(c), at any
time prior to the Effective Time, Parent and the Purchaser, on the one hand, and
the Company, on the other hand, may (i) extend the time for the performance of
any of the obligations or other acts of the other, (ii) waive any inaccuracies
in the representations and warranties contained herein of the other or in any
document, certificate or writing delivered pursuant hereto by the other or (iii)
waive compliance by the other with any of the agreements or conditions. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Non-Survival of Representations and Warranties. The
representations and warranties made in this Agreement shall not survive beyond
the Effective Time. Notwithstanding the foregoing, the agreements set forth in
Section 2.9 (Options; Stock Plans), Section 3.2 (Payment for Common Shares), the
last sentence of the second paragraph of Section 6.3(a) (Efforts - further
action), Section 6.5 (Employee Benefit Arrangements) and Section 6.6
36
(Indemnification; Directors' and Officers' Insurance) shall survive the
Effective Time indefinitely (except to the extent a shorter period of time is
explicitly specified therein).
SECTION 9.2. Entire Agreement; Assignment.
(a) This Agreement (including the documents and the
instruments referred to herein) constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof and thereof.
(b) Neither this Agreement nor any of the rights, interests or
obligations hereunder will be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties (except that the Purchaser may assign its rights, interest and
obligations to any affiliate or direct or indirect subsidiary of Parent without
the consent of the Company provided that no such assignment shall relieve Parent
of any liability for any breach by such assignee). Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
SECTION 9.3. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.
SECTION 9.4. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered in person, by overnight courier or facsimile to
the respective parties as follows:
If to Parent or the Purchaser:
Vulcan Materials Company
Xxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Facsimile Number: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile Number: (000) 000-0000
37
If to the Company:
CalMat Co.
0000 Xxx Xxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile Number: (000) 000-0000
with a copy to:
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Facsimile Number: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above;
provided that notice of any change of address shall be effective only upon
receipt thereof.
SECTION 9.5. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof. Each of the parties hereto (i) consents to submit itself to the
personal jurisdiction of any Delaware state court or any federal court located
in the State of Delaware in the event any dispute arises out of this Agreement,
(ii) agrees that it will not attempt to defeat or deny such personal
jurisdiction by motion or other request for leave from any such court and (iii)
agrees that it will not bring any action relating to this Agreement in any court
other than a Delaware state court or a federal court sitting in the State of
Delaware.
SECTION 9.6. Descriptive Headings. The descriptive headings herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
SECTION 9.7. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same agreement.
SECTION 9.8. Parties in Interest. Except with respect to Sections
2.9 and 6.6 (which are intended to be for the benefit of the persons identified
therein, and may be enforced by such persons), this Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
38
SECTION 9.9. Certain Definitions. As used in this Agreement:
(a) the term "affiliate," as applied to any person, shall mean
any other person directly or indirectly controlling, controlled by, or under
common control with, that person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that person, whether through the
ownership of voting securities, by contract or otherwise;
(b) the term "Person" or "person" shall include individuals,
corporations, partnerships, trusts, other entities and groups (which term shall
include a "group" as such term is defined in Section 13(d)(3) of the Exchange
Act); and
(c) the term "Subsidiary" or "subsidiaries" means, with
respect to Parent, the Company or any other person, any corporation,
partnership, joint venture or other legal entity of which Parent, the Company or
such other person, as the case may be (either alone or through or together with
any other subsidiary), owns, directly or indirectly, stock or other equity
interests the holders of which are generally entitled to more than 50% of the
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
SECTION 9.10. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any Delaware state court
or any federal court sitting in the State of Delaware, this being in addition to
any other remedy to which they are entitled at law or in equity.
39
IN WITNESS WHEREOF, each of the parties has caused this Agreement
to be executed on its behalf by its respective officer thereunto duly
authorized, all as of the day and year first above written.
ATTEST: VULCAN MATERIALS COMPANY
By: /s/ Xxxxxxx X. Xxxxxx, III By: /s/ Xxxxxx X. Xxxxx
---------------------------------- ----------------------------------
Name: Xxxxxxx X. Xxxxxx, III Name: Xxxxxx X. Xxxxx
Title: Senior Vice President Title: Chairman and Chief
Law and Secretary Executive Officer
ATTEST: ALB ACQUISITION CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx, III By: /s/ Xxxxxx X. Xxxxx
---------------------------------- ----------------------------------
Name: Xxxxxxx X. Xxxxxx, III Name: Xxxxxx X. Xxxxx
Title: Senior Vice President, Title: Chairman and Chief
Law and Secretary Executive Officer
ATTEST: CALMAT CO.
By: /s/ By: /s/ A. Xxxxxxxxx Xxxxxxxx
---------------------------------- ----------------------------------
Name: Name: A. Xxxxxxxxx Xxxxxxxx
Title: Title: Chairman and Chief Executive
Officer
40
[BLANK PAGE]
41
Exhibit A
The capitalized terms used in this Exhibit A shall have the
same meanings set forth in the Agreement and Plan of Merger to which this
Exhibit is attached, except that as used in this Exhibit A the term "Merger
Agreement" shall be deemed to refer to such Agreement and Plan of Merger.
Conditions to the Offer. Notwithstanding any other provisions
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-1(c) promulgated under the Exchange Act, pay for any tendered Common Shares
and, subject to the terms of the Merger Agreement, may amend the Offer, if (i)
there shall not be validly tendered and not properly withdrawn prior to the
expiration of the Offer that number of Common Shares which represents at least a
majority of the total number of outstanding Common Shares on a fully diluted
basis on the date of purchase (not taking into account the Rights) (the "Minimum
Condition"), (ii) any waiting period under the HSR Act applicable to the Offer
or the Merger shall not have expired or been terminated prior to the expiration
of the Offer, or (iii) at any time on or after the date hereof and prior to the
expiration of the Offer, any of the following events (each, an "Event") shall
occur:
(a) there shall be any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, enforced, promulgated, amended, issued or deemed applicable to
the Offer or the Merger, by any Governmental Entity, other than the
application of the waiting period provisions of the HSR Act to the
Offer or to the Merger, that reasonably would be expected to: (i) make
illegal or otherwise prohibit consummation of the Offer or the Merger
or seek to obtain material damages or make materially more costly the
making of the Offer, (ii) prohibit or materially limit the ownership or
operation by Parent or the Purchaser of all or any material portion of
the business or assets of the Company or any of its subsidiaries taken
as a whole or compel Parent or the Purchaser to dispose of or hold
separately all or any material portion of the business or assets of
Parent or the Company or any of its subsidiaries taken as a whole, or
seek to impose any material limitation on the ability of Parent or the
Purchaser to conduct its business or own such assets, in each case as a
result of or principally in connection with the Offer or the Merger,
(iii) impose material limitations on the ability of Parent or the
Purchaser effectively to acquire, hold or exercise full rights of
ownership of the Common Shares, including, without limitation, the
right to vote any Common Shares acquired or owned by the Purchaser or
Parent on all matters properly presented to the Company's stockholders,
or (iv) require divestiture by Parent or the Purchaser of any Common
Shares; or
(b) there shall be instituted or pending any action or
proceeding by any Governmental Entity seeking, or that would reasonably
be expected to result in, any of the consequences referred to in
clauses (i) through (iv) of paragraph (a) above or by any third party
for which there is a substantial likelihood of resulting in any of the
consequences referred to in clauses (i) through (iv) of paragraph (a)
above; or
(c) there have been any changes or effects that would,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company; or
(d) (i) it shall have been publicly disclosed or the Purchaser
shall have otherwise learned that beneficial ownership (determined for
the purposes of this paragraph (d) as set forth in Rule 13d-3
promulgated under the Exchange Act) of 50% or more of the outstanding
Common Shares has been acquired by any person (including the Company or
any of its subsidiaries or affiliates) or group (as defined in Section
13(d)(3) under the Exchange Act), (ii) the Company Board or any
committee thereof shall have withdrawn, or shall have modified or
amended in a manner adverse to Parent or the Purchaser, the approval,
adoption or recommendation, as the case may be, of the Offer or the
Merger Agreement, or approved or recommended any Acquisition
Transaction, (iii) a Person shall have entered into a definitive
agreement or an agreement in principle with the Company with respect to
an Acquisition Transaction (whether in violation of the Merger
Agreement or not), or (iv) the Company Board or any committee thereof
shall have resolved to do any of the foregoing; or
(e) the Company and the Purchaser and Parent shall have
reached a written agreement authorized by their respective Boards of
Directors that the Offer or the Merger Agreement be terminated, or the
Merger Agreement shall have been terminated in accordance with its
terms; or
(f) any of the representations and warranties of the Company
set forth in the Merger Agreement, when read without any exception or
qualification as to materiality or Material Adverse Effect on the
Company, shall not be true and correct, as if such representations and
warranties were made at the time of such determination (except as to
any such representation or warranty which speaks as of a specific date,
which must be untrue or incorrect as of such specific date), except
where the failure to be so true and correct would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse
Effect on the Company or prevent the consummation of the Offer or the
Merger; or
(g) the Company shall have failed to perform or to comply with
any of its obligations, covenants or agreements under the Merger
Agreement in any material respect.
The foregoing conditions (including those set forth in clauses
(i) and (ii) of the initial paragraph) may be asserted by Parent or the
Purchaser regardless of the circumstances giving rise to any such conditions.
The conditions set forth in clauses (a) through (g) above are for the benefit of
the Parent and the Purchaser and may be waived by Parent or the Purchaser in
whole or in part at any time and from time to time in their reasonable
discretion, in each case, subject to the terms of the Merger Agreement. The
failure by 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 which may be asserted at any time and from time to
time.
2
