EXHIBIT 99.2
AGREEMENT AND PLAN OF MERGER
AMONG
IMC GLOBAL INC.
BULL MERGER COMPANY
AND
THE VIGORO CORPORATION
Dated as of November 13, 1995
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER
Section 1.1 The Merger 2
Section 1.2 Effective Time 2
Section 1.3 Effects of the Merger 2
Section 1.4 Certificate of Incorporation; By-laws;
Directors and Officers. 3
Section 1.5 Conversion of Securities 3
Section 1.6 Parent to Make Stock Certificates Available 5
Section 1.7 Dividends; Transfer Taxes; Withholding 7
Section 1.8 No Fractional Shares 8
Section 1.9 Return of Exchange Fund 9
Section 1.10 November Stock Dividend; Adjustment of
Conversion Number 9
Section 1.11 No Further Ownership Rights in Company
Common Shares 10
Section 1.12 Closing of Company Transfer Books 10
Section 1.13 Further Assurances 10
Section 1.14 Closing 10
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Section 2.1 Organization, Standing and Power 11
Section 2.2 Capital Structure 12
Section 2.3 Authority 13
Section 2.4 Consents and Approvals; No Violation 14
Section 2.5 SEC Documents and Other Reports 15
Section 2.6 Registration Statement and Joint Proxy
Statement 16
Section 2.7 Absence of Certain Changes or Events 17
Section 2.8 No Existing Violation, Default, Etc. 17
Section 2.9 Licenses and Permits 18
Section 2.10 Environmental Matters 19
Section 2.11 Tax Matters 19
Section 2.12 Actions and Proceedings 20
Section 2.13 Labor Matters 21
Section 2.14 Contracts 21
Section 2.15 ERISA 22
Section 2.16 Liabilities 23
Section 2.17 Opinion of Financial Advisor 23
Section 2.18 Pooling of Interests; Reorganization 23
Section 2.19 Operations of Sub 23
Section 2.20 Brokers 24
Section 2.21 Ownership of Company Capital Stock 24
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization, Standing and Power 24
Section 3.2 Capital Structure 24
Section 3.3 Authority 25
Section 3.4 Consents and Approvals; No Violation 26
Section 3.5 SEC Documents and Other Reports 27
Section 3.6 Registration Statement and Joint Proxy
Statement 28
Section 3.7 Absence of Certain Changes or Events 28
Section 3.8 No Existing Violation, Default, Etc. 29
Section 3.9 Licenses and Permits 30
Section 3.10 Environmental Matters 30
Section 3.11 Tax Matters 31
Section 3.12 Actions and Proceedings 31
Section 3.13 Labor Matters 32
Section 3.14 Contracts 32
Section 3.15 ERISA 33
Section 3.16 Liabilities 35
Section 3.17 Opinion of Financial Advisor 35
Section 3.18 State Takeover Statutes; Absence of
Stockholder Rights Plan 35
Section 3.19 Pooling of Interests; Reorganization 35
Section 3.20 Brokers 36
Section 3.21 Ownership of Parent Capital Stock 36
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 Conduct of Business Pending the Merger 36
Section 4.2 No Solicitation 42
Section 4.3 Third Party Standstill Agreements 43
Section 4.4 Pooling of Interests; Reorganization 43
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Stockholder Meetings 44
Section 5.2 Preparation of the Registration Statement
and the Joint Proxy Statement 44
Section 5.3 Comfort Letters 45
Section 5.4 Access to Information 45
Section 5.5 Compliance with the Securities Act 46
Section 5.6 Stock Exchange Listings 47
Section 5.7 Fees and Expenses 47
Section 5.8 Company Stock Options 49
Section 5.9 Reasonable Best Efforts; Pooling of
Interests 50
Section 5.10 Public Announcements 51
Section 5.11 Real Estate Transfer and Gains Tax 51
Section 5.12 State Takeover Laws 52
Section 5.13 Indemnification; Directors and Officers
Insurance 52
Section 5.14 Notification of Certain Matters 54
Section 5.15 Board of Directors 54
Section 5.16 Employee Benefits 55
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER
Section 6.1 Conditions to Each Party's Obligation to
Effect the Merger 56
Section 6.2 Conditions to Obligation of the Company
to Effect the Merger 58
Section 6.3 Conditions to Obligations of Parent and
Sub to Effect the Merger 60
ARTICLE VII
TERMINATION; AMENDMENT AND WAIVER
Section 7.1 Termination 61
Section 7.2 Effect of Termination 65
Section 7.3 Amendment 65
Section 7.4 Waiver 65
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Non-Survival of Representations and
Warranties 65
Section 8.2 Notices 66
Section 8.3 Interpretation 66
Section 8.4 Counterparts 67
Section 8.5 Entire Agreement; No Third-Party
Beneficiaries 67
Section 8.6 Governing Law 67
Section 8.7 Assignment 67
Section 8.8 Severability 67
Section 8.9 Enforcement of this Agreement 68
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of November 13, 1995
(this "Agreement") among IMC Global Inc., a Delaware corporation
("Parent"), Bull Merger Company, a Delaware corporation and a wholly-
owned subsidiary of Parent ("Sub"), and The Vigoro Corporation, a
Delaware corporation (the "Company") (Sub and the Company being
hereinafter collectively referred to as the "Constituent
Corporations").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Sub
and the Company have approved and declared advisable the merger of Sub
into the Company (the "Merger"), upon the terms and subject to the
conditions herein set forth, whereby each issued and outstanding share
of Common Stock, $.01 par value, of the Company ("Company Common
Shares"), not owned directly or indirectly by Parent or the Company,
will be converted into shares of Common Stock, $1.00 par value, of
Parent ("Parent Common Stock");
WHEREAS, the respective Boards of Directors of Parent and the
Company have determined that the Merger is in furtherance of and
consistent with their respective long-term business strategies and is
fair to and in the best interests of their respective stockholders, and
Parent has approved this Agreement and the Merger as the sole
stockholder of Sub;
WHEREAS, in order to induce Parent and Sub to enter into this
Agreement, concurrently herewith the Company is entering into a Stock
Option Agreement dated as of the date hereof (the "Stock Option
Agreement") with Parent, the form of which is attached hereto as
Exhibit A;
WHEREAS, concurrently herewith Parent and Great American
Management and Investment, Inc. (the "Principal Stockholder") are
entering into a Voting Agreement dated as of the date hereof (the
"Voting Agreement") and a Limited Irrevocable Proxy (the "Irrevocable
Proxy"), the forms of which are attached hereto as Exhibit B;
WHEREAS, for United States income tax purposes, it is
intended that the Merger shall qualify as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code");
WHEREAS, it is intended that the Merger shall be recorded for
accounting purposes as a pooling of interests.
NOW, THEREFORE, in consideration of the premises,
representations, warranties and agreements herein contained, the
parties hereto agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the
conditions herein set forth, and in accordance with the General
Corporation Law of the State of Delaware (the "DGCL"), Sub shall be
merged with and into the Company at the Effective Time (as hereinafter
defined). Following the Merger, the separate corporate existence of
Sub shall cease and the Company shall continue as the surviving
corporation (the "Surviving Corporation") and shall succeed to and
assume all the rights and obligations of Sub in accordance with the
DGCL.
Section 1.2 Effective Time. The Merger shall become
effective when a Certificate of Merger (the "Certificate of Merger"),
executed in accordance with the relevant provisions of the DGCL, has
been filed with the Secretary of State of the State of Delaware;
provided, however, that, upon the mutual consent of the Constituent
Corporations, the Certificate of Merger may provide for a later date of
effectiveness of the Merger, but not to exceed 30 days after the date
that the Certificate of Merger has been filed. When used in this
Agreement, the term "Effective Time" means the later of the date and
time at which the Certificate of Merger has been filed or such later
date and time as is established by the Certificate of Merger. The
filing of the Certificate of Merger shall be made as soon as
practicable after the satisfaction or waiver of the conditions to the
Merger herein set forth.
Section 1.3 Effects of the Merger. At the Effective Time,
the effect of the Merger shall be as provided in the applicable
provisions of the DGCL and as set forth in this Agreement. Without
limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all of the
property, rights, privileges, powers and franchises of Sub and the
Company shall vest in the Surviving Corporation, and all debts,
liabilities and duties of Sub and the Company shall become the debts,
liabilities and duties of the Surviving Corporation.
Section 1.4 Certificate of Incorporation; By-laws; Directors
and Officers.
(a) At the Effective Time, the Certificate of Incorporation
of the Company, as in effect prior to the Effective Time, shall be
amended so that the first paragraph of ARTICLE FOURTH thereof shall
read in its entirety as follows:
"The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 1,003,800 consisting of
3,800 shares of Preferred Stock, $100.00 par value per share, and
1,000,000 shares of Common Stock, $.01 par value per share."
As so amended, such Certificate of Incorporation shall be the
Certificate of Incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
From and after the Effective Time, the Surviving Corporation shall have
the power to amend and restate such Certificate of Incorporation to
delete any Certificates of Designations relating to any series of
Preferred Stock of the Surviving Corporation that is not then
outstanding.
(b) The By-Laws of the Company, as in effect immediately
prior to the Effective Time, shall be the By-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or
in the Certificate of Incorporation of the Surviving Corporation or as
provided by applicable law.
(c) The Board of Directors of the Surviving Corporation
shall consist of not less than three directors to be designated by
Parent, who shall serve until respective successors are duly elected
and qualified.
(d) The officers of the Company immediately prior to the
Effective Time shall be the officers of the Surviving Corporation until
their respective successors are duly elected and qualified.
Section 1.5 Conversion of Securities. As of the Effective
Time, by virtue of the Merger and without any action on the part of any
stockholder of either of the Constituent Corporations:
(a) Each issued and outstanding common share, $.01 par
value, of Sub shall be converted into 500 Common Shares of the
Surviving Corporation.
(b) All Company Common Shares that are held in the treasury
of the Company and any Company Common Shares owned by Parent shall be
cancelled and no capital stock of Parent or other consideration shall
be delivered in exchange therefor.
(c) Subject to the provisions of Sections 1.8 and 1.10, each
Company Common Share issued and outstanding immediately prior to the
Effective Time (other than shares to be cancelled in accordance with
Section 1.5(b)) shall be converted into 0.80 (such number being
hereinafter referred to as the "Conversion Number") of a validly
issued, fully paid and nonassessable share of Parent Common Stock;
provided, however, that if the average of the per share daily closing
prices on the New York Stock Exchange (the "NYSE") of Parent Common
Stock (as reported in the NYSE Composite Transactions in the Wall
Street Journal, Midwest Edition) during the 20 consecutive trading days
ending on the fifth trading day prior to the date that the Company
Stockholder Meeting is held (the "Average Price") is less than $61.875,
then the Conversion Number shall be equal to the lesser of: (a) 0.85;
and (b) the number obtained by dividing $49.50 by the Average Price;
and provided, further, that if the Average Price is greater than
$80.00, then the Conversion Number shall be equal to the greater of:
(x) 0.75; and (y) the number obtained by dividing $64.00 by the Average
Price. All such Company Common Shares, when so converted, shall no
longer be outstanding and shall automatically be cancelled and retired;
and each holder of a certificate representing prior to the Effective
Time any such Company Common Shares shall cease to have any rights with
respect thereto, except the right to receive (i) certificates
representing the shares of Parent Common Stock into which such Company
Common Shares have been converted, (ii) any dividends and other
distributions in accordance with Section 1.7 and (iii) any cash,
without interest, to be paid in lieu of any fractional share of Parent
Common Stock in accordance with Section 1.8.
(d) The Company Series E Preferred Shares and the Company F
Preferred Shares (as such terms are defined in Section 3.2) shall not
be converted or cancelled (except to the extent that the holder of any
such Series E Preferred Shares or Series F Preferred Shares shall have
perfected and not lost or withdrawn any right to appraisal for such
shares under any applicable provisions of the DGCL) but shall remain
Company Series E Preferred Shares and Company Series F Preferred
Shares, respectively, of the Surviving Corporation (collectively, the
"Preferred Shares") without alteration of their relative rights,
preferences, terms and conditions.
Section 1.6 Parent to Make Stock Certificates Available.
(a) Exchange of Certificates. Parent shall authorize a commercial
bank having capital of not less than $5 billion (or such other person
or persons as shall be acceptable to Parent and the Company) to act as
exchange agent hereunder (the "Exchange Agent"). As soon as
practicable after the Effective Time, Parent shall deposit with the
Exchange Agent, in trust for the holders of certificates (the "Company
Certificates") which immediately prior to the Effective Time
represented Company Common Shares converted in the Merger, certificates
(the "Parent Certificates") representing the shares of Parent Common
Stock (such shares of Parent Common Stock, together with any dividends
or distributions with respect thereto deposited in accordance with
Section 1.7, being hereinafter referred to as the "Exchange Fund")
issuable pursuant to Section 1.5(c) in exchange for the outstanding
Company Common Shares. The Exchange Fund shall not be used for any
other purpose.
(b) Exchange Procedures. Promptly after the Effective Time,
the Exchange Agent shall mail to each record holder of a Company
Certificate at the Effective Time a letter of transmittal in customary
and reasonable form (which shall specify that delivery shall be
effected, and risk of loss and title to the Company Certificates shall
pass, only upon actual delivery thereof to the Exchange Agent and shall
contain instructions for use in effecting the surrender of the Company
Certificates in exchange for the property described in the next
sentence). Upon surrender for cancellation to the Exchange Agent of
Company Certificate(s) held by any record holder of a Company
Certificate, together with such letter of transmittal duly executed,
such holder shall be entitled to receive in exchange therefor a Parent
Certificate representing the number of whole shares of Parent Common
Stock into which the Company Common Shares represented by the
surrendered Company Certificate(s) shall have been converted at the
Effective Time pursuant to this Article I, cash in lieu of any
fractional share of Parent Common Stock in accordance with Section 1.8
and any dividends and other distributions payable in accordance with
Section 1.7; and the Company Certificate(s) so surrendered shall
forthwith be cancelled. Shares of Parent Common Stock issued in the
Merger shall be issued as of, and be deemed to be outstanding as of,
the Effective Time. Parent shall cause all such shares of Parent
Common Stock issued pursuant to the Merger to be duly authorized,
validly issued, fully paid and nonassessable and not subject to
preemptive rights.
In the event any Company Certificate(s) shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such Certificate(s) to be lost, stolen or destroyed
and, if reasonably required by Parent or the Surviving Corporation,
upon the posting by such person of a bond in such amount as Parent or
the Surviving Corporation may reasonably direct as indemnity against
any claim that may be made against it with respect to such
Certificate(s), the Exchange Agent will issue in respect of such lost,
stolen or destroyed Certificate(s), the consideration to be received by
virtue of the Merger with respect to the Company Common Shares
represented thereby (subject to the payment of cash in lieu of
fractional shares in accordance herewith) and such person shall be
entitled to the voting, dividend and other distribution rights provided
herein with respect thereto.
(c) Status of Company Certificates. Subject to the
provisions of Sections 1.7 and 1.8, each Company Certificate which
immediately prior to the Effective Time represented Company Common
Shares to be converted in the Merger shall, from and after the
Effective Time until surrendered in exchange for Parent Certificate(s)
in accordance with this Section 1.6, be deemed for all purposes to
represent the number of shares of Parent Common Stock into which such
Company Common Shares shall have been so converted. Appropriate
procedures shall be established by Parent and the Exchange Agent so
that each holder of a Company Certificate at the Effective Time shall
be entitled to vote on all matters subject to vote of holders of Parent
Common Stock with a record date on or after the date of the Effective
Time, whether or not such Certificate holder shall have surrendered
Certificates in accordance with the provisions of this Agreement. For
purposes of this Section 1.6, Parent may rely conclusively on the
shareholder records of the Company in determining the identity of, and
the number of Company Common Shares held by, each holder of a Company
Certificate at the Effective Time.
(d) Notwithstanding anything contained in the preceding
provisions of this Section 1.6 or elsewhere in this Agreement to the
contrary, all shares of Parent Common Stock which are required by
virtue of the Merger to be issued to a holder of Company Common Shares
whose acquisition of such shares of Parent Common Stock is subject to
the reporting requirements of the Xxxx Xxxxx Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), shall at the
written request of such holder be placed in an escrow by the Exchange
Agent for the benefit of such holder, pending expiration or termination
of the waiting period under the HSR Act with respect to the acquisition
of such Parent Common Stock on terms which are consistent with 16 CFR
Section 801.31(d) (it being understood that, if such escrow is not
permitted under applicable law or any rules or regulations or
interpretations thereunder or if such escrow would cause the Merger not
to qualify as a pooling of interests under generally accepted
accounting principles, the foregoing provisions of this paragraph (d)
shall not apply).
(e) To the extent that any holder of Preferred Shares shall
make a demand for appraisal of such holder's Preferred Shares pursuant
to any applicable provision of the DGCL, the Company shall give Parent
prompt notice upon receipt of such demand or appraisal. The Company
agrees that, prior to the Effective Time, it will not, except with the
prior written consent of Parent, voluntarily make any payment with
respect to, or settle or offer to settle with, any such holder of
Preferred Shares. Each holder of Preferred Shares who shall become
entitled, pursuant to any applicable appraisal rights provisions of the
DGCL, to payment for his or her Preferred Shares shall receive payment
therefor from the Surviving Corporation (but only after the amount
thereof shall have been agreed upon or finally determined pursuant to
such provisions) and such Preferred Shares shall be cancelled.
Section 1.7 Dividends; Transfer Taxes; Withholding.
(a) No dividends or other distributions that are declared on or after
the Effective Time on Parent Common Stock, or are payable to the
holders of record thereof who became such on or after the Effective
Time, shall be paid to any person entitled by reason of the Merger to
receive Parent Certificates representing Parent Common Stock, and no
cash payment in lieu of any fractional share of Parent Common Stock
shall be paid to any such person pursuant to Section 1.8, until such
person shall have surrendered its Company Certificate(s) as provided in
Section 1.6. Subject to applicable law, there shall be paid to each
person receiving a Parent Certificate representing such shares of
Parent Common Stock: (i) at the time of such surrender or as promptly
as practicable thereafter, the amount of any dividends or other
distributions theretofore paid with respect to the shares of Parent
Common Stock represented by such Parent Certificate and having a record
date on or after the Effective Time and a payment date prior to such
surrender; and (ii) at the appropriate payment date or as promptly as
practicable thereafter, the amount of any dividends or other
distributions payable with respect to such shares of Parent Common
Stock and having a record date on or after the Effective Time but prior
to such surrender and a payment date on or subsequent to such
surrender. In no event shall the person entitled to receive such
dividends or other distributions be entitled to receive interest on
such dividends or other distributions.
(b) If any cash or Parent Certificate representing shares of
Parent Common Stock is to be paid to or issued in a name other than
that in which the Company Certificate surrendered in exchange therefor
is registered, it shall be a condition of such exchange that the
Company Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and that the person requesting
such exchange shall pay to the Exchange Agent any transfer or other
taxes required by reason of the issuance of such Parent Certificate and
the distribution of such cash payment in a name other than that of the
registered holder of the Company Certificate so surrendered, or shall
establish to the satisfaction of the Exchange Agent that such tax has
been paid or is not applicable. Parent or the Exchange Agent shall be
entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of Company Common
Shares such amounts as Parent or the Exchange Agent are required to
deduct and withhold under the Code or any provision of state, local or
foreign tax law, with respect to the making of such payment. To the
extent that amounts are so withheld by Parent or the Exchange Agent,
such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Company Common
Shares in respect of whom such deduction and withholding was made by
Parent or the Exchange Agent.
Section 1.8 No Fractional Shares. No certificates or scrip
representing fractional shares of Parent Common Stock shall be issued
upon the surrender for exchange of Company Certificates pursuant to
this Article I (taking into account all Company Certificates held by a
stockholder); no dividend or other distribution by Parent and no stock
split, combination or reclassification shall relate to any such
fractional share; and no such fractional share shall entitle the record
or beneficial owner thereof to vote or to any other rights of a
stockholder of Parent. In lieu of any such fractional share, each
holder of Company Common Shares who would otherwise have been entitled,
based on all Company Certificate(s) surrendered for exchange by such
holder, thereto upon the surrender of Company Certificate(s) for
exchange pursuant to this Article I will promptly be paid an amount in
cash (without interest) rounded to the nearest whole cent, determined
by multiplying (i) the per share closing price on the New York Stock
Exchange, Inc. (the "NYSE") of Parent Common Stock (as reported in the
NYSE Composite Transactions) on the date on which the Effective Time
shall occur (or, if the Parent Common Stock shall not trade on the NYSE
on such date, the first day of trading in Parent Common Stock on the
NYSE thereafter) by (ii) the fractional share to which such holder
would otherwise be entitled. Parent shall make available to the
Exchange Agent the cash necessary for this purpose.
Section 1.9 Return of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the former holders of
Company Common Shares for one year after the Effective Time shall be
delivered to Parent, upon its request, and any such former holders who
have not theretofore surrendered to the Exchange Agent their Company
Certificate in compliance with this Article I shall thereafter look
only to Parent for payment of their claim for shares of Parent Common
Stock, any cash in lieu of fractional shares of Parent Common Stock and
any dividends or distributions with respect to such shares of Parent
Common Stock. Neither Parent nor the Company shall be liable to any
former holder of Company Common Shares for any such shares of Parent
Common Stock held in the Exchange Fund (and any such cash, dividends
and distributions payable in respect thereof) which is delivered to a
public official pursuant to any applicable abandoned property, escheat
or similar law.
Section 1.10 November Stock Dividend;
Adjustment of Conversion Number. The Board of Directors of Parent has
declared a two-for-one stock split which is to be effected in the form
of a 100% stock dividend to be distributed on November 30, 1995 to
stockholders of record of Parent Common Stock as of the close of
business on November 15, 1995 (the "November Stock Dividend").
Section 1.5 sets forth the Conversion Number and certain share price
information before giving effect to the November Stock Dividend.
Notwithstanding anything contained herein to the contrary, from and
after the record date for the November Stock Dividend, Section 1.5
shall be deemed automatically amended and restated to the effect set
forth in Schedule 1.5 and thereafter all references in this Agreement
to Section 1.5 or the Conversion Number shall refer to such amended and
restated Section 1.5 and the Conversion Number set forth in Schedule
1.5. In the event of any other stock split, combination,
reclassification or stock dividend with respect to Parent Common Stock,
any change or conversion of Parent Common Stock into other securities
or any other dividend or distribution with respect to Parent Common
Stock (other than quarterly cash dividends permitted by Section
4.1(a)(i)(A)), or the issuance of any securities, property or cash upon
the exercise of, or in exchange for, Parent Rights (as defined in
Section 2.2 herein) or if a record date with respect to any of the
foregoing should occur, prior to the Effective Time, appropriate,
equitable and proportionate adjustments shall be made to the Conversion
Number and related numbers and stock prices set forth in Section 1.5
(or Schedule 1.5 as the case may be), and thereafter all references in
this Agreement to the Conversion Number shall be deemed to be to the
Conversion Number as so adjusted.
Section 1.11 No Further Ownership Rights in Company Common
Shares. All certificates representing shares of Parent Common Stock
delivered upon the surrender for exchange of any Company Certificate in
accordance with the terms hereof (including any cash paid pursuant to
Section 1.7 or 1.8) shall be deemed to have been delivered (and paid)
in full satisfaction of all rights pertaining to the Company Common
Shares represented by such Company Certificate.
Section 1.12 Closing of Company Transfer Books. At the
Effective Time, the transfer books of the Company for the Company
Common Shares shall be closed, and no transfer of Company Common Shares
shall thereafter be made. Subject to the last sentence of Section 1.9,
if, after the Effective Time, Company Certificates are presented to the
Surviving Corporation, they shall be cancelled and exchanged as
provided in this Article I.
Section 1.13 Further Assurances. If, at any time after the
Effective Time, the Surviving Corporation shall consider or be advised
that any deeds, bills of sale, assignments or assurances or any other
acts or things are necessary, desirable or proper (i) to vest, perfect
or confirm, of record or otherwise, in the Surviving Corporation its
right, title and interest in, to or under any of the rights,
privileges, powers, franchises, properties or assets of either of the
Constituent Corporations or (ii) otherwise to carry out the purposes of
this Agreement, the Surviving Corporation and its proper officers and
directors or their designees shall be authorized to execute and
deliver, in the name and on behalf of either Constituent Corporation,
all such deeds, bills of sale, assignments and assurances and to do, in
the name and on behalf of either Constituent Corporation, all such
other acts and things as may be necessary, desirable or proper to vest,
perfect or confirm the Surviving Corporation's right, title and
interest in, to and under any of the rights, privileges, powers,
franchises, properties or assets of such Constituent Corporation and
otherwise to carry out the purposes of this Agreement.
Section 1.14 Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the
offices of Sidley & Austin, Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
at 10:00 A.M., local time, on the first business day on which each of
the conditions set forth in Article VI shall have been (and continue to
be) fulfilled or waived, or at such other time and place as Parent and
the Company may agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant, jointly and severally,
to the Company, except as set forth in the Parent Letter (as
hereinafter defined) as follows:
Section 2.1 Organization, Standing and Power. Each of
Parent and Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware; all of Sub's
outstanding shares of capital stock are owned directly by Parent; and
each of Parent and Sub has the requisite corporate power and authority
to carry on its business as now being conducted. Each Subsidiary of
Parent is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated
and has the requisite corporate power and authority to carry on its
business as now being conducted. Parent and each of its Subsidiaries
are duly qualified to do business, and are in good standing, in each
jurisdiction where the character of their properties owned or held
under lease or the nature of their activities makes such qualification
necessary, except where the failure to be so qualified would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Parent. For purposes of this Agreement: (i)
"Material Adverse Change" or "Material Adverse Effect" means, when used
with respect to Parent or the Company, as the case may be, any change
or effect that is materially adverse to the business, properties,
assets, liabilities, condition (financial or otherwise) or results of
operations of Parent and its Subsidiaries taken as a whole, or the
Company and its Subsidiaries taken as a whole, as the case may be,
except, in the case of a Material Adverse Change, for any change
resulting from conditions or circumstances generally affecting the
businesses in which Parent or the Company, as the case may be,
operates; and (ii) "Subsidiary" means any corporation, partnership,
joint venture or other legal entity and of which Parent or the Company,
as the case may be (either alone or through or together with any other
Subsidiary), owns, directly or indirectly, 50% or more of the capital
stock or other equity interests the holders of which are generally
entitled to vote with respect to matters to be voted on in such
corporation, partnership, joint venture or other legal entity. Except
as disclosed in the Parent SEC Documents or the Parent Letter, Parent
and its Subsidiaries are not subject to any material joint venture,
joint operating or similar arrangement or any material shareholders
agreement relating thereto.
Section 2.2 Capital Structure. As of the date hereof, the
authorized capital stock of Parent consists of: 100,000,000 shares of
Parent Common Stock and 12,000,000 shares of Series Preferred Stock,
$1.00 par value (the "Parent Preferred Stock"), of which 3,000,000
shares have been designated as "Junior Participating Preferred Stock,
Series C" (the "Parent Series C Preferred Stock"). At the close of
business on October 31, 1995, 29,748,273 shares of Parent Common Stock
were issued and outstanding, all of which were validly issued, are
fully paid and nonassessable and are free of preemptive rights. No
shares of Parent Preferred Stock have been issued, and there has been
no material change in the number of issued and outstanding shares of
Parent Common Stock between October 31 and November 10, 1995. All of
the shares of Parent Common Stock issuable in exchange for Company
Common Shares at the Effective Time in accordance with this Agreement
will be, when so issued, duly authorized, validly issued, fully paid
and nonassessable and free of preemptive rights. As of the date of
this Agreement, except for this Agreement, except as provided in
Parent's Restated Certificate of Incorporation, except for the rights
("Parent Rights") to purchase shares of Parent Series C Preferred Stock
pursuant to the Rights Agreement (the "Parent Rights Agreement") dated
June 21, 1989 between Parent and the First National Bank of Chicago, as
Rights Agent, except for stock options covering not in excess of
300,000 shares of Parent Common Stock (collectively, the "Parent Stock
Options") and except for the November Stock Dividend, there are no
options, warrants, calls, rights or agreements to which Parent or any
of its Subsidiaries is a party or by which any of them is bound
obligating Parent or any of its Subsidiaries to issue, deliver or sell,
or cause to be issued, delivered or sold, additional shares of capital
stock of Parent or any such Subsidiary or obligating Parent or any such
Subsidiary to grant, extend or enter into any such option, warrant,
call, right or agreement. Each outstanding share of capital stock of
each Subsidiary of Parent is duly authorized, validly issued, fully
paid and nonassessable and, except as disclosed in the Parent SEC
Documents or the Parent Letter (as such terms are hereinafter defined),
each such share is beneficially owned by Parent or another Subsidiary
of Parent, free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on
voting rights, charges and other encumbrances of any nature whatsoever.
As of the date of its filing, Exhibit 21 to Parent's Annual Report on
Form 10-K for the year ended June 30, 1995, as filed with the United
States Securities and Exchange Commission (the "SEC") (the "Parent
Annual Report"), is a true, accurate and correct statement in all
material respects of all of the information required to be set forth
therein by the regulations of the SEC. Pursuant to the Parent Rights
Agreement, all shares of Parent Common Stock are issued with Rights
attached thereto.
Section 2.3 Authority. The Board of Directors of Parent (a)
has declared as advisable and fair to and in the best interests of the
stockholders of Parent (and, in the case of clauses (ii) and (iii)
below, has resolved to recommend to such stockholders for approval) (i)
the Merger, (ii) amendments to the Restated Certificate of
Incorporation of Parent to increase to not less than 13 the number of
directors that may from time to time comprise the Board of Directors
and to increase the number of authorized shares of Parent Common Stock
to 250,000,000 (collectively, the "Charter Amendments") and (iii) the
issuance (the "Parent Share Issuance") of shares of Parent Common Stock
in accordance with the Merger and (b) has approved this Agreement. The
Board of Directors of Sub has declared the Merger advisable and
approved this Agreement. Parent has all requisite power and authority
to enter into this Agreement, the Stock Option Agreement and (subject
to (x) approval of the Parent Share Issuance by a majority of the votes
cast at the Parent Stockholder Meeting (as hereinafter defined) by the
holders of the shares of Parent Common Stock, provided that the total
number of votes cast on the Parent Share Issuance represents more than
50% of the shares of Parent Common Stock entitled to vote thereon at
the Parent Stockholder Meeting, and (y) adoption of the Charter
Amendments by the holders of a majority of the outstanding shares of
Parent Common Stock) to consummate the transactions contemplated hereby
and thereby. Sub has all requisite power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by Parent and Sub, the
execution and delivery of the Stock Option Agreement by Parent and the
consummation by Parent and Sub of the transactions contemplated hereby
and thereby have been duly authorized by all necessary corporate action
on the part of Parent and Sub, subject, in the case of this Agreement,
to (x) approval of the Parent Share Issuance by a majority of the votes
cast at the Parent Stockholder Meeting by the holders of the shares of
Parent Common Stock, provided that the total number of votes cast on
the Parent Share Issuance represents more than 50% of the shares of
Parent Common Stock entitled to vote thereon at the Parent Stockholder
Meeting, and (y) adoption of the Charter Amendments by the holders of a
majority of the outstanding shares of Parent entitled to vote thereon.
This Agreement has been duly executed and delivered by Parent and Sub
and the Stock Option Agreement has been duly executed and delivered by
Parent and (assuming the valid authorization, execution and delivery
hereof and thereof by the Company and the validity and binding effect
hereof and thereof on the Company) each constitutes the valid and
binding obligation of Parent and Sub enforceable against Parent and Sub
in accordance with its terms. The Parent Share Issuance and the
preparation of a registration statement on Form S-4 to be filed with
the SEC by Parent under the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the
"Securities Act"), for the purpose of registering the shares of Parent
Common Stock to be issued in connection with the Merger (together with
any amendments or supplements thereto, whether prior to or after the
effective date thereof, the "Registration Statement"), including the
Joint Proxy Statement (as hereinafter defined), have been duly
authorized by Parent's Board of Directors.
Section 2.4 Consents and Approvals; No Violation. Except as
set forth in the letter dated and delivered to the Company on the date
hereof (the "Parent Letter"), which relates to this Agreement and is
designated therein as being the Parent Letter, the execution and
delivery of this Agreement and the Stock Option Agreement do not, and
the consummation of the transactions contemplated hereby and thereby
and compliance with the provisions hereof and thereof will not, result
in any violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to the loss of a
material benefit under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of
Parent or any of its Subsidiaries under: (i) subject to adoption of the
Charter Amendments as described in the second sentence of Section 2.3,
any provision of the Restated Certificate of Incorporation or By-laws
of Parent or the comparable charter or organization documents or by-
laws of any of its Subsidiaries, (ii) any loan or credit agreement,
note, bond, mortgage, indenture, lease, agreement, instrument, permit,
concession, franchise or license applicable to Parent or any of its
Subsidiaries or (iii) any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Parent or any of its
Subsidiaries or any of their respective properties or assets, other
than, in the case of clauses (ii) and (iii), any such violations,
defaults, rights, liens, security interests, charges or encumbrances
that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on Parent and would not
materially impair the ability of Parent or Sub to perform their
respective obligations hereunder or under the Stock Option Agreement or
prevent the consummation of any of the transactions contemplated hereby
or thereby. No filing or registration with, or authorization, consent
or approval of, any domestic (federal and state), foreign (including
provincial) or supranational court, commission, governmental body,
regulatory agency, authority or tribunal (a "Governmental Entity") is
required by or with respect to Parent or any of its Subsidiaries in
connection with the execution and delivery of this Agreement by Parent
and Sub, the execution and delivery of the Stock Option Agreement by
Parent or is necessary for the consummation of the Merger and the other
transactions contemplated by this Agreement or the Stock Option
Agreement, except: (i) in connection, or in compliance, with the provi
sions of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), the Securities Act and the Securities Exchange
Act of 1934, as amended (together with the rules and regulations
promulgated thereunder, the "Exchange Act"), (ii) for the filing with
the Secretary of State of the State of Delaware of a Certificate of
Amendment to Parent's Restated Certificate of Incorporation relating to
the Charter Amendments and the filing of a Certificate of Merger with
the Secretary of State of the State of Delaware and appropriate
documents with the relevant authorities of other states in which the
Company or any of its Subsidiaries is qualified to do business, (iii)
for such filings and consents as may be required under any
environmental, health or safety law or regulation pertaining to any
notification, disclosure or required approval triggered by the Merger
or the transactions contemplated by this Agreement, (iv) for such
filings, authorizations, orders and approvals, if any, as may be
required by state takeover laws (the "State Takeover Approvals"),
(v) for such filings as may be required in connection with the taxes
described in Section 5.11, (vi) for such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be
required under the laws of any foreign country (including, without
limitation, any political subdivision thereof) in which Parent or the
Company or any of their respective Subsidiaries conducts any business
or owns any property or assets and (vii) for such other consents,
orders, authorizations, registrations, declarations and filings the
failure of which to obtain or make would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
Parent and would not materially impair the ability of Parent or Sub to
perform their respective obligations hereunder or under the Stock
Option Agreement or prevent the consummation of any of the transactions
contemplated hereby or thereby.
Section 2.5 SEC Documents and Other Reports. Parent has
filed all documents required to be filed by it with the SEC since June
30, 1993. As of their respective dates, all documents filed by Parent
with the SEC since June 30, 1993 (the "Parent SEC Documents") complied
in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and none of the Parent SEC
Documents contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading. The consolidated financial
statements of Parent included in the Parent SEC Documents complied as
to form in all material respects with the applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of the unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto) and fairly present the
consolidated financial position of Parent and its consolidated
Subsidiaries as at the respective dates thereof and the consolidated
results of their operations and their consolidated cash flows for the
respective periods then ended (subject, in the case of the unaudited
statements, to normal year-end audit adjustments and to any other
adjustments described therein). Except as set forth in the Parent SEC
Documents, since June 30, 1995 Parent has not made any change in the
accounting practices or policies applied in the preparation of its
financial statements.
Section 2.6 Registration Statement and Joint Proxy State
ment. None of the information (other than information provided by the
Company) included or incorporated by reference in the Registration
Statement or the joint proxy statement/prospectus included therein
relating to the Stockholder Meetings (as defined in Section 5.1)
(together with any amendments or supplements thereto, the "Joint Proxy
Statement") will (i) in the case of the Registration Statement, at the
time it becomes effective, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading or
(ii) in the case of the Joint Proxy Statement, at the time of the
mailing thereof, at the time of each of the Stockholder Meetings and at
the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any
time prior to the Effective Time any event with respect to Parent, its
directors and officers or any of its Subsidiaries shall occur which is
required to be described in the Joint Proxy Statement or the Registra
tion Statement, such event shall be so described, and an appropriate
amendment or supplement shall be promptly filed with the SEC and, to
the extent required by law, disseminated to the stockholders of Parent.
The Registration Statement will comply as to form in all material
respects with the provisions of the Securities Act, and the Joint Proxy
Statement will comply as to form in all material respects with the
provisions of the Exchange Act, in each case other than as to
information provided for inclusion therein by the Company.
Section 2.7 Absence of Certain Changes or Events. Except as
set forth in the Parent SEC Documents filed prior to the date hereof or
the Parent Letter, since June 30, 1994: (i) Parent and its Subsidiaries
have not incurred any material liability or obligation (indirect,
direct or contingent), or entered into any material oral or written
agreement or other transaction, that is not in the ordinary course of
business or that has resulted or would reasonably be expected to result
in a Material Adverse Effect on Parent; (ii) Parent and its
Subsidiaries have not sustained any loss or interference with their
business or properties from fire, flood, windstorm, accident or other
calamity (whether or not covered by insurance) that has had or that
would reasonably be expected to have a Material Adverse Effect on
Parent; (iii) there has been no material change in the indebtedness of
Parent and its Subsidiaries (other than changes in the ordinary course
of business), no change in the outstanding shares of capital stock of
Parent except for the issuance of shares of Parent Common Stock
pursuant to the Parent Stock Options and no dividend or distribution of
any kind declared, paid or made by Parent on any class of its capital
stock except for regular quarterly dividends (before giving effect to
the November Stock Dividend) of not more than $0.16 per share on Parent
Common Stock and except for the November Stock Dividend and (iv) there
has been no Material Adverse Change with respect to Parent, nor any
event or development that would, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change with
respect to Parent.
Section 2.8 No Existing Violation, Default, Etc. Neither
Parent nor any of its Subsidiaries is in violation of (i) its charter
or other organization documents or by-laws, (ii) any applicable law,
ordinance or administrative or governmental rule or regulation or (iii)
any order, decree or judgment of any Governmental Entity having
jurisdiction over Parent or any of its Subsidiaries, except for any
violations that, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect on Parent. The
properties, assets and operations of Parent and its Subsidiaries are in
compliance in all material respects with all applicable federal, state,
local and foreign (including without limitation, provincial) laws,
rules and regulations, orders, decrees, judgments, permits and licenses
relating to public and worker health and safety (collectively, "Worker
Safety Laws") and the protection and clean-up of the environment and
activities or conditions related thereto, including, without
limitation, those relating to the generation, handling, disposal,
transportation or release of hazardous materials (collectively,
"Environmental Laws"), except for any violations that, individually or
in the aggregate, would not reasonably be expected to have a Material
Adverse Effect on Parent. With respect to such properties, assets and
operations, including any previously owned, leased or operated
properties, assets or operations, there are no past or current events,
conditions, circumstances, activities, practices, incidents, actions or
plans of Parent or any of its Subsidiaries that may interfere with or
prevent compliance or continued compliance in all material respects
with applicable Worker Safety Laws and Environmental Laws, other than
any such interference or prevention as, individually or in the
aggregate with any such other interference or prevention, has not had
and would not reasonably be expected to have a Material Adverse Effect
on Parent. The term "hazardous materials" shall mean those substances
that are regulated by or form the basis for liability under any
applicable Environmental Laws.
Except as may be set forth in the Parent SEC Documents or the
Parent Letter: (i) there is no existing event of default or event that,
but for the giving of notice or lapse of time, or both, would
constitute an event of default under any loan or credit agreement,
note, bond, mortgage, indenture or guarantee of indebtedness for
borrowed money and (ii) there is no existing event of default or event
that, but for the giving of notice or lapse of time, or both, would
constitute an event of default under any lease, other agreement or
instrument to which Parent or any of its Subsidiaries is a party or by
which Parent or any such Subsidiary or any of their respective
properties, assets or business is bound, in the case of each of clause
(i) and (ii) immediately above, which, individually or in the
aggregate, has had or would reasonably be expected to have a Material
Adverse Effect on Parent.
Section 2.9 Licenses and Permits. Parent and its
Subsidiaries have received such certificates, permits, licenses,
franchises, consents, approvals, orders, authorizations and clearances
from appropriate Governmental Entities (the "Parent Licenses") as are
necessary to own or lease and operate their respective properties and
to conduct their respective businesses substantially in the manner
described in the Parent SEC Documents and as currently owned or leased
and conducted, and all such Parent Licenses are valid and in full force
and effect, except for any such certificates, permits, licenses,
franchises, consents, approvals, orders, authorizations and clearances
which the failure to have or to be in full force and effect would not
reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on Parent. Parent and its Subsidiaries are
in compliance in all material respects with their respective
obligations under the Parent Licenses, with only such exceptions as,
individually or in the aggregate, have not had and would not reasonably
be expected to have a Material Adverse Effect on Parent, and no event
has occurred that allows, or after notice or lapse of time, or both,
would allow, revocation or termination of any material Parent License.
Section 2.10 Environmental Matters. Except as set forth in
the Parent SEC Documents or the Parent Letter, (i) neither Parent nor
any of its Subsidiaries is the subject of any federal, state, local,
foreign or provincial investigation, and neither Parent nor any of its
Subsidiaries has received any notice or claim (or is aware of any facts
that would form a reasonable basis for any claim), or entered into any
negotiations or agreements with any other person, relating to any
material liability or obligation or material remedial action or
potential material liability or obligation or material remedial action
under any Environmental Law; and (ii) there are no pending, reasonably
anticipated or, to the knowledge of Parent, threatened actions, suits
or proceedings (or facts that would form a reasonable basis for any
such action, suit or proceeding) against Parent, any of its
Subsidiaries or any of their respective properties, assets or
operations asserting any such material liability or obligation or
seeking any material remedial action in connection with any
Environmental Laws.
Section 2.11 Tax Matters. Except as otherwise set forth in
the Parent Letter: (i) Parent and each of its Subsidiaries have filed
all federal, and all material state, local, foreign and provincial, Tax
Returns (as hereinafter defined) required to have been filed on or
prior to the date hereof, or appropriate extensions therefor have been
properly obtained, and such Tax Returns are correct and complete,
except to the extent that any failure to be correct and complete would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Parent; (ii) all Taxes (as hereinafter
defined) shown to be due on such Tax Returns have been timely paid or
extensions for payment have been duly obtained, or such Taxes are being
timely and properly contested, and Parent and each of its Subsidiaries
have complied in all material respects with all rules and regulations
relating to the withholding of Taxes, except to the extent that any
failure to comply with such rules and regulations would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Parent; (iii) neither Parent nor any of its
Subsidiaries has waived any statute of limitations in respect of its
Taxes; (iv) such Tax Returns relating to federal and state income Taxes
have been examined by the Internal Revenue Service or the appropriate
state taxing authority or the period for assessment of the Taxes in
respect of which such Tax Returns were required to be filed has
expired; (v) no material issues that have been raised in writing by the
relevant taxing authority in connection with the examination of such
Tax Returns are currently pending; and (vi) all deficiencies asserted
or assessments made as a result of any examination of such Tax Returns
by any taxing authority have been paid in full or are being timely and
properly contested. The charges, accruals and reserves on the books of
Parent and its Subsidiaries in respect of Taxes have been established
and maintained in accordance with generally accepted accounting
principles. To the knowledge of Parent, the representations set forth
in the Parent Tax Certificate attached to the Parent Letter, if made on
the date hereof (assuming the Merger were consummated on the date
hereof), would be true and correct in all material respects. For
purposes of this Agreement: (i) "Taxes" means any federal, state,
local, foreign or provincial income, gross receipts, property, sales,
use, license, excise, franchise, employment, payroll, withholding,
alternative or added minimum, ad valorem, transfer or excise tax, or
any other tax, custom, duty, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest or
penalty, imposed by any Governmental Entity; and (ii) "Tax Return"
means any return, report or similar statement (including any attached
schedules) required to be filed with respect to any Tax, including,
without limitation, any information return, claim for refund, amended
return or declaration of estimated Tax.
Section 2.12 Actions and Proceedings. Except as set forth
in the Parent SEC Documents or the Parent Letter, there are no
outstanding orders, judgments, injunctions, awards or decrees of any
Governmental Entity against Parent or any of its Subsidiaries, any of
its or their properties, assets or business, any Parent Plan (as
defined in Section 2.15) or, to the knowledge of Parent, any of its or
their current or former directors or officers, as such, that would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Parent. Except as set forth in the Parent
SEC Documents or the Parent Letter, there are no actions, suits or
claims or legal, administrative or arbitration proceedings or
investigations pending or, to the knowledge of Parent, threatened
against Parent or any of its Subsidiaries, any of its or their
properties, assets or business, any Parent Plan or, to the knowledge of
Parent, any of its or their current or former directors or officers, as
such, that would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Parent. Except as set forth in
the Parent SEC Documents or the Parent Letter, as of the date hereof,
there are no actions, suits or claims or legal, administrative or
arbitration proceedings or investigations pending or, to the knowledge
of Parent, threatened against Parent or any of its Subsidiaries, any of
its or their properties, assets or business, any Parent Plan or, to the
knowledge of Parent, any of its or their current or former directors or
officers, as such, relating to the transactions contemplated by this
Agreement.
Section 2.13 Labor Matters. Except as disclosed in the
Parent SEC Documents or the Parent Letter, neither Parent nor any of
its Subsidiaries has any labor contracts, collective bargaining
agreements or material employment or consulting agreements with any
persons employed by or otherwise performing services primarily for
Parent or any of its Subsidiaries (the "Parent Business Personnel") or
any representative of any Parent Business Personnel. Except as set
forth in the Parent SEC Documents or the Parent Letter, neither Parent
nor any of its Subsidiaries has engaged in any unfair labor practice
with respect to Parent Business Personnel, and there is no unfair labor
practice complaint pending against Parent or any of its Subsidiaries
with respect to Parent Business Personnel, which, in either case, would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Parent. Except as set forth in the Parent
SEC Documents or the Parent Letter, there is no material labor strike,
dispute, slowdown or stoppage pending or, to the knowledge of Parent,
threatened against Parent or any of its Subsidiaries, and neither
Parent nor any of its Subsidiaries has experienced any material primary
work stoppage or other material labor difficulty involving its
employees during the last three years.
Section 2.14 Contracts. All of the material contracts of
Parent and its Subsidiaries that are required to be described in the
Parent SEC Documents or to be filed as exhibits thereto have been
described or filed as required. Neither Parent or any of its
Subsidiaries nor, to the knowledge of Parent, any other party is in
breach of or default under any such contracts which are currently in
effect, except for such breaches and defaults which are described in
the Parent Letter or which would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Parent.
Except as set forth in the Parent SEC Documents or the Parent Letter,
neither Parent nor any of its Subsidiaries is a party to or bound by
any non-competition agreement or any other agreement or obligation
which purports to limit in any material respect the manner in which, or
the localities in which, Parent or any such Subsidiary is entitled to
conduct all or any material portion of the business of Parent and its
Subsidiaries taken as whole.
Section 2.15 ERISA. Each Parent Plan complies in all
material respects with the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), the Code and all other applicable laws and
administrative or governmental rules and regulations. No "reportable
event" (within the meaning of Section 4043 of ERISA) has occurred with
respect to any Parent Plan for which the 30-day notice requirement has
not been waived (other than with respect to the transactions
contemplated by this Agreement), and no condition exists which would
subject Parent or any ERISA Affiliate (as hereinafter defined) to any
fine under Section 4071 of ERISA; except as disclosed in the Parent
Letter, neither Parent nor any of its ERISA Affiliates has withdrawn
from any Parent Plan or Parent Multiemployer Plan (as hereinafter
defined) or has taken, or is currently considering taking, any action
to do so; and no action has been taken, or is currently being
considered, to terminate any Parent Plan subject to Title IV of ERISA.
No Parent Plan, nor any trust created thereunder, has incurred any
"accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived. To the knowledge of Parent, there are no
actions, suits or claims pending or threatened (other than routine
claims for benefits) with respect to any Parent Plan which would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Parent. Neither Parent nor any of its ERISA
Affiliates has incurred or would reasonably be expected to incur any
material liability under or pursuant to Title IV of ERISA. No
prohibited transactions described in Section 406 of ERISA or Section
4975 of the Code have occurred which would reasonably be expected to
result in material liability to Parent or its Subsidiaries. Except as
set forth in the Parent Letter, all Parent Plans that are intended to
be qualified under Section 401(a) of the Code have received a favorable
determination letter as to such qualification from the Internal Revenue
Service, and no event has occurred, either by reason of any action or
failure to act, which would cause the loss of any such qualification.
Parent is not aware of any reason why any Parent Plan is not so
qualified in operation. Neither Parent nor any of its ERISA Affiliates
has been notified by any Parent Multiemployer Plan that such Parent
Multiemployer Plan is currently in reorganization or insolvency under
and within the meaning of Section 4241 or 4245 of ERISA or that such
Parent Multiemployer Plan intends to terminate or has been terminated
under Section 4041A of ERISA. As used herein: (i) "Parent Plan" means
a "pension plan" (as defined in Section 3(2) of ERISA, other than a
Parent Multiemployer Plan) or a "welfare plan" (as defined in Section
3(1) of ERISA) established or maintained by Parent or any of its ERISA
Affiliates or to which Parent or any of its ERISA Affiliates has
contributed or otherwise may have any liability; (ii) "Parent
Multiemployer Plan" means a "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA) to which Parent or any of its ERISA Affiliates is
or has been obligated to contribute or otherwise may have any
liability; and (iii) with respect to any person, "ERISA Affiliate"
means any trade or business (whether or not incorporated) which is
under common control or would be considered a single employer with such
person pursuant to Section 414(b), (c), (m) or (o) of the Code and the
regulations promulgated thereunder or pursuant to Section 4001(b) of
ERISA and the regulations promulgated thereunder.
Section 2.16 Liabilities. Except as fully reflected or
reserved against in the most recent audited consolidated financial
statements included in the Parent SEC Documents filed prior to the date
hereof, or disclosed in the footnotes thereto, or set forth in the
Parent Letter, Parent and its Subsidiaries had no liabilities
(including, without limitation, Tax liabilities) at the date of such
consolidated financial statements, absolute or contingent, of a nature
which are required by generally accepted accounting principles to be
reflected on such consolidated financial statements or disclosed in the
footnotes thereto, that were material, either individually or in the
aggregate, to Parent and its Subsidiaries taken as a whole. Except as
so reflected, reserved, disclosed or set forth, Parent and its
Subsidiaries have no commitments which are reasonably expected to be
materially adverse, either individually or in the aggregate, to Parent
and its Subsidiaries taken as a whole.
Section 2.17 Opinion of Financial Advisor. Parent has
received the opinion of Xxxxxx Brothers Inc., dated the date hereof, to
the effect that, as of the date hereof, the financial terms of the
Merger are fair to Parent from a financial point of view, a copy of
which opinion has been delivered to the Company.
Section 2.18 Pooling of Interests; Reorganization. To the
knowledge of Parent after due investigation, neither Parent nor any of
its Subsidiaries has (i) taken any action or failed to take any action
which action or failure would jeopardize the treatment of the Merger as
a pooling of interests for accounting purposes or (ii) taken any action
or failed to take any action which action or failure would result in
the failure of the Merger to qualify as a reorganization within the
meaning of Section 368(a) of the Code.
Section 2.19 Operations of Sub. Sub has been formed solely
for the purpose of engaging in the transactions contemplated hereby,
has engaged in no other business activities and has conducted its
operations only as contemplated hereby.
Section 2.20 Brokers. No broker, investment banker or other
person, other than Xxxxxx Brothers Inc., the fees and expenses of which
will be paid by Parent (as reflected in an agreement between Xxxxxx
Brothers Inc. and Parent, a copy of which has been furnished to the
Company), is entitled to any broker's, finder's or other similar fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Parent.
Section 2.21 Ownership of Company Capital Stock. None of
Parent, Sub or any of Parent's other Subsidiaries owns any shares of
the capital stock of the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub, except
as set forth in the Company Letter (as hereinafter defined), as
follows:
Section 3.1 Organization, Standing and Power. The Company
is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the requisite corporate
power and authority to carry on its business as now being conducted.
Each Subsidiary of the Company is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in
which it is incorporated and has the requisite corporate power and
authority to carry on its business as now being conducted. The Company
and each of its Subsidiaries are duly qualified to do business, and are
in good standing, in each jurisdiction where the character of their
properties owned or held under lease or the nature of their activities
makes such qualification necessary, except where the failure to be so
qualified would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company. Except as
disclosed in the Company SEC Documents or the Company Letter, the
Company and its Subsidiaries are not subject to any material joint
venture, joint operating or similar arrangement or any material
shareholders agreement relating thereto.
Section 3.2 Capital Structure. As of the date hereof, the
authorized capital stock of the Company consists of: 50,000,000 Company
Common Shares and 600,000 shares of Preferred Stock, $100 par value
("Company Preferred Shares"), of which 3,500 shares have been
designated as "Series E Preferred Stock" ("Company Series E Preferred
Shares") and 300 shares have been designated as "Series F Preferred
Stock" ("Company Series F Preferred Shares"). At the close of business
on November 10, 1995: (i) 19,896,132 Company Common Shares were issued
and outstanding, all of which were validly issued, are fully paid and
nonassessable and are free of preemptive rights; (ii) 2826.2018 Company
Series E Preferred Shares were issued and outstanding, all of which
were validly issued, are fully paid and nonassessable and are free of
preemptive rights; and (iii) 200 Company Series F Preferred Shares were
issued and outstanding, all of which were validly issued, are fully
paid and nonassessable and are free of preemptive rights. As of the
date of this Agreement, except as provided in the Company's Certificate
of Incorporation, except for stock options covering not in excess of
1,310,033 Company Common Shares (collectively, the "Company Stock
Options"), and except for the Stock Option Agreement, there are no
options, warrants, calls, rights or agreements 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, deliver or
sell, or cause to be issued, delivered or sold, additional shares of
capital stock of the Company or any such Subsidiary or obligating the
Company or any such Subsidiary to grant, extend or enter into any such
option, warrant, call, right or agreement. Each outstanding share of
capital stock of each Subsidiary of the Company is duly authorized,
validly issued, fully paid and nonassessable and, except as disclosed
in the Company SEC Documents or the Company Letter (as such terms are
hereinafter defined), each such share is beneficially owned by the
Company or another Subsidiary of the Company, free and clear of all
security interests, liens, claims, pledges, options, rights of first
refusal, agreements, limitations on voting rights, charges and other
encumbrances of any nature whatsoever. As of the date of its filing,
Exhibit 21 to the Company's Annual Report on Form 10-K for the
transition period from July 1, 1994 to December 31, 1994, as filed with
the SEC (the "Company Annual Report"), is a true, accurate and correct
statement in all material respects of all of the information required
to be set forth therein by the regulations of the SEC.
Section 3.3 Authority. The Board of Directors of the
Company has declared as advisable and fair to and in the best interests
of the stockholders of the Company (and has resolved to recommend to
stockholders for approval) the Merger and has approved this Agreement,
and the Company has all requisite power and authority to enter into
this Agreement and the Stock Option Agreement and (subject to approval
of the Merger by a majority of the outstanding stock of the Company
entitled to vote thereon) to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement and
the Stock Option Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate action on the part of the
Company, subject to the approval of the Merger by a majority of the
outstanding stock of the Company entitled to vote thereon. The holders
of the Company Preferred Shares are entitled to vote together with the
holders of the Company Common Shares on the Merger and are entitled to
one vote for each Company Preferred Share held. This Agreement and the
Stock Option Agreement have been duly executed and delivered by the
Company and (assuming the valid authorization, execution and delivery
hereof by Parent and Sub and the validity and binding effect hereof on
Parent and Sub) each constitutes the valid and binding obligation of
the Company enforceable against the Company in accordance with its
terms. The issuance of up to 3,959,330 Company Common Shares pursuant
to the Stock Option Agreement has been duly authorized by the Company's
Board of Directors. The preparation of the Joint Proxy Statement to be
filed with the SEC has been duly authorized by the Company's Board of
Directors.
Section 3.4 Consents and Approvals; No Violation. Except as
set forth in the letter dated and delivered to Parent on the date
hereof (the "Company Letter"), which relates to this Agreement and is
designated therein as being the Company Letter, the execution and
delivery of this Agreement and the Stock Option Agreement do not, and
the consummation of the transactions contemplated hereby and thereby
and compliance with the provisions hereof and thereof will not, result
in any violation of, or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to the loss of a
material benefit under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of
the Company or any of its Subsidiaries under: (i) any provision of the
Certificate of Incorporation or By-Laws of the Company or the
comparable charter or organization documents or by-laws of any of its
Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease, agreement, instrument, permit, concession, franchise
or license applicable to the Company or any of its Subsidiaries or
(iii) any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Company or any of its Subsidiaries or any
of their respective properties or assets, other than, in the case of
clauses (ii) and (iii), any such violations, defaults, rights, liens,
security interests, charges or encumbrances that, individually or in
the aggregate, would not reasonably be expected to have a Material
Adverse Effect on the Company and would not materially impair the
ability of the Company to perform its obligations hereunder or under
the Stock Option Agreement or prevent the consummation of any of the
transactions contemplated hereby or thereby. No filing or registration
with, or authorization, consent or approval of, any Governmental Entity
is required by or with respect to the Company or any of its
Subsidiaries in connection with the execution and delivery of this
Agreement or the Stock Option Agreement by the Company or is necessary
for the consummation of the Merger and the other transactions
contemplated by this Agreement or the Stock Option Agreement, except:
(i) in connection, or in compliance, with the provisions of the HSR
Act, the Securities Act and the Exchange Act, (ii) for the filing of a
Certificate of Merger with the Secretary of State of the State of
Delaware and appropriate documents with the relevant authorities of
other states in which the Company or any of its Subsidiaries is
qualified to do business, (iii) for such filings and consents as may be
required under any environmental, health or safety law or regulation
pertaining to any notification, disclosure or required approval
triggered by the Merger or the transactions contemplated by this
Agreement, (iv) for such filings, authorizations, orders and approvals,
if any, as may be required to obtain the State Takeover Approvals,
(v) for such filings as may be required in connection with the taxes
described in Section 5.11, (vi) for such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be
required under the laws of any foreign country (including, without
limitation, any political subdivision thereof) in which Parent or the
Company or any of their respective Subsidiaries conducts any business
or owns any property or assets and (vii) for such other consents,
orders, authorizations, registrations, declarations and filings the
failure of which to obtain or make would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
the Company and would not materially impair the ability of the Company
to perform its obligations hereunder or under the Stock Option
Agreement or prevent the consummation of any of the transactions
contemplated hereby or thereby.
Section 3.5 SEC Documents and Other Reports. The Company
has filed all documents required to be filed by it with the SEC since
June 30, 1993. As of their respective dates, all documents filed by
the Company with the SEC since June 30, 1993 (the "Company SEC
Documents") complied in all material respects with the requirements of
the Securities Act or the Exchange Act, as the case may be, and none of
the Company SEC Documents contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
consolidated financial statements of the Company included in the
Company SEC Documents complied as to form in all material respects with
the applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in
accordance with generally accepted accounting principles (except, in
the case of the unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except
as may be indicated therein or in the notes thereto) and fairly present
the consolidated financial position of the Company and its consolidated
Subsidiaries as at the respective dates thereof and the consolidated
results of their operations and their consolidated cash flows for the
respective periods then ended (subject, in the case of the unaudited
statements, to normal year-end audit adjustments and to any other
adjustments described therein). Except as set forth in the Company SEC
Documents, since December 31, 1994, the Company has not made any change
in the accounting practices or policies applied in the preparation of
its financial statements.
Section 3.6 Registration Statement and Joint Proxy State
ment. None of the information included or incorporated by reference in
the Joint Proxy Statement and provided by the Company will, at the time
of the mailing thereof, at the time of each of the Stockholder Meetings
and at the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. If at any
time prior to the Effective Time any event with respect to the Company,
its directors and officers or any of its Subsidiaries shall occur which
is required to be described in the Joint Proxy Statement, such event
shall be so described, and an appropriate amendment or supplement shall
be promptly filed with the SEC and, to the extent required by law,
disseminated to the stockholders of the Company. The Joint Proxy
Statement will comply (with respect to the Company) as to form in all
material respects with the provisions of the Exchange Act.
Section 3.7 Absence of Certain Changes or Events. Except as
set forth in the Company SEC Documents filed prior to the date hereof
or the Company Letter, since December 31, 1994: (i) the Company and its
Subsidiaries have not incurred any material liability or obligation
(indirect, direct or contingent), or entered into any material oral or
written agreement or other transaction, that is not in the ordinary
course of business or that has resulted or would reasonably be expected
to result in a Material Adverse Effect on the Company; (ii) the Company
and its Subsidiaries have not sustained any loss or interference with
their business or properties from fire, flood, windstorm, accident or
other calamity (whether or not covered by insurance) that has had or
that would reasonably be expected to have a Material Adverse Effect on
the Company; (iii) there has been no material change in the
indebtedness of the Company and its Subsidiaries (other than changes in
the ordinary course of business), no change in the outstanding shares
of capital stock of the Company except for the issuance of Company
Common Shares pursuant to the Company Stock Options and no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock except for regular quarterly dividends of
not more than $175 per Company Series E Preferred Share, of not more
than $175 per Company Series F Preferred Share and of not more than
$.23 per Company Common Share; and (iv) there has been no Material
Adverse Change with respect to the Company, nor any event or
development that would, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change with respect to the
Company.
Section 3.8 No Existing Violation, Default, Etc. Neither
the Company nor any of its Subsidiaries is in violation of (i) its
charter or other organization documents or by-laws, (ii) any applicable
law, ordinance or administrative or governmental rule or regulation or
(iii) any order, decree or judgment of any Governmental Entity having
jurisdiction over the Company or any of its Subsidiaries, except for
any violations that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the
Company. The properties, assets and operations of the Company and its
Subsidiaries are in compliance in all material respects with all
applicable Worker Safety Laws and Environmental Laws, except for any
violations that, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect on the Company. With
respect to such properties, assets and operations, including any
previously owned, leased or operated properties, assets or operations,
there are no past or current events, conditions, circumstances,
activities, practices, incidents, actions or plans of the Company or
any of its Subsidiaries that may interfere with or prevent compliance
or continued compliance in all material respects with applicable Worker
Safety Laws and Environmental Laws, other than any such interference or
prevention as, individually or in the aggregate with any such other
interference or prevention, has not had and would not reasonably be
expected to have a Material Adverse Effect on the Company.
Except as may be set forth in the Company SEC Documents or
the Company Letter: (i) there is no existing event of default or event
that, but for the giving of notice or lapse of time, or both, would
constitute an event of default under any loan or credit agreement,
note, bond, mortgage, indenture or guarantee of indebtedness for
borrowed money and (ii) there is no existing event of default or event
that, but for the giving of notice or lapse of time, or both, would
constitute an event of default under any lease, other agreement or
instrument to which the Company or any of its Subsidiaries is a party
or by which the Company or any such Subsidiary or any of their
respective properties, assets or business is bound, in the case of each
of clause (i) and (ii) immediately above, which, individually or in the
aggregate, has had or would reasonably be expected to have a Material
Adverse Effect on the Company.
Section 3.9 Licenses and Permits. The Company and its
Subsidiaries have received such certificates, permits, licenses,
franchises, consents, approvals, orders, authorizations and clearances
from appropriate Governmental Entities (the "Company Licenses") as are
necessary to own or lease and operate their respective properties and
to conduct their respective businesses substantially in the manner
described in the Company SEC Documents and as currently owned or leased
and conducted, and all such Company Licenses are valid and in full
force and effect, except for any such certificates, permits, licenses,
franchises, consents, approvals, orders, authorizations and clearances
which the failure to have or to be in full force and effect would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company. The Company and its
Subsidiaries are in compliance in all material respects with their
respective obligations under the Company Licenses, with only such
exceptions as, individually or in the aggregate, have not had or would
not reasonably be expected to have a Material Adverse Effect on the
Company, and no event has occurred that allows, or after notice or
lapse of time, or both, would allow, revocation or termination of any
material Company License.
Section 3.10 Environmental Matters. Except as set forth in
the Company SEC Documents or the Company Letter, (i) neither the
Company nor any of its Subsidiaries is the subject of any federal,
state, local, foreign or provincial investigation, and neither the
Company nor any of its Subsidiaries has received any notice or claim
(or is aware of any facts that would form a reasonable basis for any
claim), or entered into any negotiations or agreements with any other
person, relating to any material liability or obligation or material
remedial action or potential material liability or obligation or
material remedial action under any Environmental Law; and (ii) there
are no pending, reasonably anticipated or, to the knowledge of the
Company, threatened actions, suits or proceedings (or facts that would
form a reasonable basis for any such action, suit or proceeding)
against the Company, any of its Subsidiaries or any of their respective
properties, assets or operations asserting any such material liability
or obligation or seeking any material remedial action in connection
with any Environmental Laws.
Section 3.11 Tax Matters. Except as otherwise set forth in
the Company Letter: (i) the Company and each of its Subsidiaries have
filed all federal, and all material state, local, foreign and
provincial, Tax Returns required to have been filed on or prior to the
date hereof, or appropriate extensions therefor have been properly
obtained, and such Tax Returns are correct and complete, except to the
extent that any failure to be correct and complete would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on the Company; (ii) all Taxes shown to be due
on such Tax Returns have been timely paid or extensions for payment
have been duly obtained, or such Taxes are being timely and properly
contested, and the Company and each of its Subsidiaries have complied
in all material respects with all rules and regulations relating to the
withholding of Taxes, except to the extent that any failure to comply
with such rules and regulations would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
the Company; (iii) neither the Company nor any of its Subsidiaries has
waived any statute of limitations in respect of its Taxes; (iv) such
Tax Returns relating to federal and state income Taxes have been
examined by the Internal Revenue Service or the appropriate state
taxing authority or the period for assessment of the Taxes in respect
of which such Tax Returns were required to be filed has expired; (v) no
material issues that have been raised in writing by the relevant taxing
authority in connection with the examination of such Tax Returns are
currently pending; and (vi) all deficiencies asserted or assessments
made as a result of any examination of such Tax Returns by any taxing
authority have been paid in full or are being timely and properly
contested. The charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of Taxes have been established
and maintained in accordance with generally accepted accounting
principles. To the knowledge of the Company, the representations set
forth in the Company Tax Certificate attached to the Company Letter, if
made on the date hereof (assuming the Merger were consummated on the
date hereof), would be true and correct in all material respects.
Section 3.12 Actions and Proceedings. Except as set forth
in the Company SEC Documents or the Company Letter, there are no
outstanding orders, judgments, injunctions, awards or decrees of any
Governmental Entity against the Company or any of its Subsidiaries, any
of its or their properties, assets or business, any Company Plan (as
defined in Section 3.15) or, to the knowledge of the Company, any of
its or their current or former directors or officers, as such, that
would reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect on the Company. Except as set forth in the
Company SEC Documents or the Company Letter, there are no actions,
suits or claims or legal, administrative or arbitration proceedings or
investigations pending or, to the knowledge of the Company, threatened
against the Company or any of its Subsidiaries, any of its or their
properties, assets or business, any Company Plan or, to the knowledge
of the Company, any of its or their current or former directors or
officers, as such, that would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the
Company. Except as set forth in the Company SEC Documents or the
Company Letter, as of the date hereof, there are no actions, suits or
claims or legal, administrative or arbitration proceedings or
investigations pending or, to the knowledge of the Company, threatened
against the Company or any of its Subsidiaries, any of its or their
properties, assets or business, any Company Plan or, to the knowledge
of the Company, any of its or their current or former directors or
officers, as such, relating to the transactions contemplated by this
Agreement.
Section 3.13 Labor Matters. Except as disclosed in the
Company SEC Documents or the Company Letter, neither the Company nor
any of its Subsidiaries has any labor contracts, collective bargaining
agreements or material employment or consulting agreements with any
persons employed by or otherwise performing services primarily for the
Company or any of its Subsidiaries (the "Company Business Personnel")
or any representative of any Company Business Personnel. Except as set
forth in the Company SEC Documents or the Company Letter, neither the
Company nor any of its Subsidiaries has engaged in any unfair labor
practice with respect to Company Business Personnel, and there is no
unfair labor practice complaint pending against the Company or any or
its Subsidiaries with respect to Company Business Personnel, which, in
either case, would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company. Except as set
forth in the Company SEC Documents or the Company Letter, there is no
material labor strike, dispute, slowdown or stoppage pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries, and neither the Company nor any of its Subsidiaries has
experienced any material primary work stoppage or other material labor
difficulty involving its employees during the last three years.
Section 3.14 Contracts. All of the material contracts of
the Company and its Subsidiaries that are required to be described in
the Company SEC Documents or to be filed as exhibits thereto have been
described or filed as required. Neither the Company or any of its
Subsidiaries nor, to the knowledge of the Company, any other party is
in breach of or default under any such contracts which are currently in
effect, except for such breaches and defaults which are described in
the Company Letter or which would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the
Company. Except as set forth in the Company SEC Documents or the
Company Letter, neither the Company nor any of its Subsidiaries is a
party to or bound by any non-competition agreement or any other
agreement or obligation which purports to limit in any material respect
the manner in which, or the localities in which, the Company or any
such Subsidiary is entitled to conduct all or any material portion of
the business of the Company and its Subsidiaries taken as a whole.
Section 3.15 ERISA. Schedule A to the Company Letter sets
forth the name of (a) each Company Plan which is a single-employer plan
as defined in Section 4001(a)(15) of ERISA and (b) each employment,
severance, termination, consulting or retirement plan or agreement
providing for payment of benefits in excess of twelve months
compensation and benefits, and which contains any special provision
becoming effective upon the occurrence of a change in control of the
Company, excluding any such payments required under any domestic or
foreign law. True copies of each of the documents described in clause
(a) and (b) above have heretofore been delivered to Parent. Each
Company Plan complies in all material respects with ERISA, the Code and
all other applicable laws and administrative or governmental rules and
regulations. Except as set forth in the Company Letter, no "reportable
event" (within the meaning of Section 4043 of ERISA) has occurred with
respect to any Company Plan for which the 30-day notice requirement has
not been waived (other than with respect to the transactions
contemplated by this Agreement), and no condition exists which would
subject the Company or any ERISA Affiliate to any fine under Section
4071 of ERISA; except as disclosed in the Company Letter, neither the
Company nor any of its ERISA Affiliates has withdrawn from any Company
Plan or Company Multiemployer Plan (as hereinafter defined) or has
taken, or is currently considering taking, any action to do so; and no
action has been taken, or is currently being considered, to terminate
any Company Plan subject to Title IV of ERISA. No Company Plan, nor
any trust created thereunder, has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived. To the knowledge of the Company, there are no actions, suits
or claims pending or threatened (other than routine claims for
benefits) with respect to any Company Plan which would reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company. Neither the Company nor any of its ERISA
Affiliates has incurred or would reasonably be expected to incur any
material liability under or pursuant to Title IV of ERISA. No
prohibited transactions described in Section 406 of ERISA or Section
4975 of the Code have occurred which would reasonably be expected to
result in material liability to the Company or its Subsidiaries.
Except as set forth in the Company Letter, all Company Plans that are
intended to be qualified under Section 401(a) of the Code have received
a favorable determination letter as to such qualification from the
Internal Revenue Service, and no event has occurred, either by reason
of any action or failure to act, which would cause the loss of any such
qualification. The Company is not aware of any reason why any Company
Plan is not so qualified in operation. Neither the Company nor any of
its ERISA Affiliates has been notified by any Company Multiemployer
Plan that such Company Multiemployer Plan is currently in
reorganization or insolvency under and within the meaning of Section
4241 or 4245 of ERISA or that such Company Multiemployer Plan intends
to terminate or has been terminated under Section 4041A of ERISA. As
used herein: (i) "Company Plan" means a "pension plan" (as defined in
Section 3(2) of ERISA, other than a Company Multiemployer Plan) or a
"welfare plan" (as defined in Section 3(1) of ERISA) established or
maintained by the Company or any of its ERISA Affiliates or to which
the Company or any of its ERISA Affiliates has contributed or otherwise
may have any liability; and (ii) "Company Multiemployer Plan" means a
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) to
which the Company or any of its ERISA Affiliates is or has been
obligated to contribute or otherwise may have any liability. Except as
disclosed in the Company SEC Documents or the Company Letter, since
January 1, 1995, neither the Company or any Subsidiary of the Company
has entered into or adopted any Company Plan other than a Company Plan
which is not material in the ordinary course of business consistent
with past practices or amended in any material respect any existing
Company Plan, except as required by law or in the ordinary course of
business consistent with past practices nor has the Company or any
Subsidiary of the Company materially increased the compensation payable
or to become payable to its officers or employees, except for increases
in the ordinary course of business and consistent with past practice,
or granted any severance or termination pay to, or entered into, or
amended or modified, any employment, severance or consulting agreement
with, any director or officer of the Company or any of its
Subsidiaries, or, except in the ordinary course of business consistent
with past practices, established, adopted, entered into or, except as
may be required to comply with applicable law, or except in the
ordinary course of business consistent with past practices, amended in
any material respect or taken action to enhance in any material respect
or accelerate any rights or benefits under, any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted
stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, officer or employee.
Under the circumstances of the Merger, the execution and delivery by
the Company of this Agreement and the consummation of the Merger will
not, by operation of the terms of any stock option plan of the Company
or any Subsidiary of the Company, result in the acceleration of the
vesting of any options granted under any such plan, but will result in
a benefit under the Company's 1994 Shareholder Value Plan becoming
fully payable in shares.
Section 3.16 Liabilities. Except as fully reflected or
reserved against in the most recent audited consolidated financial
statements included in the Company SEC Documents filed prior to the
date hereof, or disclosed in the footnotes thereto, or set forth in the
Company Letter, the Company and its Subsidiaries had no liabilities
(including, without limitation, Tax Liabilities) at the date of such
consolidated financial statements, absolute or contingent, of a nature
which are required by generally accepted accounting principles to be
reflected on such consolidated financial statements or disclosed in the
footnotes thereto, that were material, either individually or in the
aggregate, to the Company and its Subsidiaries taken as a whole.
Except as so reflected, reserved, disclosed or set forth, the Company
and its Subsidiaries have no commitments which are reasonably expected
to be materially adverse, either individually or in the aggregate, to
the Company and its Subsidiaries taken as a whole.
Section 3.17 Opinion of Financial Advisor. The Company has
received the opinion of X.X. Xxxxxx & Co., Inc., dated the date hereof,
to the effect that, subject to the provisions set forth in such letter,
as of the date hereof, the consideration to be received in the Merger
by the Company's stockholders is fair to the Company's stockholders
from a financial point of view, a copy of which opinion has been
delivered to Parent.
Section 3.18 State Takeover Statutes; Absence of Stockholder
Rights Plan. The restrictions on business combinations contained in
Section 203 of the DGCL will not apply with respect to or as a result
of the Merger, this Agreement, the Stock Option Agreement, the Voting
Agreement, the Irrevocable Proxy or the transactions contemplated
hereby or thereby. The Board of Directors of the Company has adopted a
resolution as follows: "The transactions contemplated by the Merger
Agreement, the Stock Option Agreement, the Voting Agreement and the
Irrevocable Proxy are hereby authorized and approved with the intent
that no State Takeover Laws shall be applicable to the Merger, the
Merger Agreement, the Stock Option Agreement, the Irrevocable Proxy,
the Voting Agreement or the transactions contemplated thereby." The
Company has not adopted or executed, and is not a party or subject to,
any "Shareholder Rights Plan" or similar instrument, plan or agreement.
Section 3.19 Pooling of Interests; Reorganization. To the
knowledge of the Company after due investigation, neither the Company
nor any of its Subsidiaries has (i) taken any action or failed to take
any action which action or failure would jeopardize the treatment of
the Merger as a pooling of interests for accounting purposes or (ii)
taken any action or failed to take any action which action or failure
would result in the failure of the Merger to qualify as a
reorganization within the meaning of Section 368(a) of the Code.
Section 3.20 Brokers. No broker, investment banker or other
person, other than X.X. Xxxxxx & Co., Inc. the fees and expenses of
which will be paid by the Company (as reflected in an agreement between
X.X. Xxxxxx & Co., Inc. and the Company, a copy of which has been
furnished to Parent), is entitled to any broker's, finder's or other
similar fee or commission in connection with the transactions contem
plated by this Agreement based upon arrangements made by or on behalf
of the Company.
Section 3.21 Ownership of Parent Capital Stock. Neither the
Company nor any of its Subsidiaries owns any shares of the capital
stock of Parent.
ARTICLE IV
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.1 Conduct of Business Pending the Merger.
(a) Actions by Parent. During the period from the date of this
Agreement through the Effective Time, except as otherwise expressly
required by this Agreement or as set forth in the Parent Letter, Parent
shall, and shall cause each of its Subsidiaries to, in all material
respects carry on its business in, and not enter into any material
transaction other than in accordance with, the ordinary course of its
business as currently conducted and, to the extent consistent
therewith, use its reasonable best efforts to preserve intact its
current business organization, keep available the services of its
current officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it, all
to the end that its goodwill and ongoing business shall be unimpaired
at the Effective Time. Without limiting the generality of the
foregoing, and except as otherwise expressly contemplated by this
Agreement or as set forth in the Parent Letter, Parent shall not, and
shall not permit any of its Subsidiaries to, without the prior written
consent of the Company:
(i) (A) declare, set aside or pay any dividends on, or make
any other actual, constructive or deemed distributions in respect of,
any of its capital stock, or otherwise make any payments to its
stockholders in their capacity as such (other than regular quarterly
dividends (before giving effect to the November Stock Dividend) of not
more than $0.16 per share on Parent Common Stock, dividends paid
by Subsidiaries of Parent in the ordinary course of business and
consistent with past practice and the November Stock Dividend); or (B)
purchase, redeem or otherwise acquire any shares of its capital stock
or those of any Subsidiary or any other securities thereof or any
rights, warrants or options to acquire any such shares or other
securities, if the result of any such purchase, redemption or
acquisition would be to impair the ability of Parent to account for the
Merger as a pooling of interest;
(ii) issue, deliver, sell, pledge, dispose of or otherwise
encumber any shares of its capital stock, any other voting securities
or equity equivalent or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, voting securities,
equity equivalent or convertible securities (other than the
distribution of the Parent Rights in accordance with the Parent Rights
Agreement and the issuance of any securities upon the exercise thereof,
the issuance of Parent Common Stock during the period from the date of
this Agreement through the Effective Time upon the exercise of Parent
Stock Options outstanding on the date of this Agreement under Parent's
existing stock option plans, grant options for Parent Common Stock and
issue Parent Common Stock upon the exercise of Parent Stock Options
which may be granted pursuant to Parent's existing stock option plans
in the ordinary course of business consistent with past practice, the
issuance of Parent Common Stock pursuant to the November Stock
Dividend, the issuance of Parent Common Stock pursuant to any other
stock split or dividend, which such split or dividend would give rise
to an adjustment to the Conversion Number under Section 1.10 hereof,
and other than issuances or sales of any of the foregoing securities in
an amount in the aggregate, pursuant to one or more transactions, not
exceeding 10% of the shares of Parent Common Stock outstanding as of
the date hereof);
(iii) amend its charter or organization documents; or amend
its by-laws if such amendment would adversely affect the rights of the
Company hereunder or holders of Company Common Shares upon consummation
of the Merger;
(iv) acquire or agree to acquire, by merging or consolidating
with, by purchasing a substantial portion of the assets of or equity in
or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets, other than
transactions that are not material to Parent and its Subsidiaries taken
as a whole;
(v) sell, lease or otherwise dispose of, or agree to sell,
lease or otherwise dispose of, any of its assets, other than
transactions that are not material to Parent and its Subsidiaries taken
as a whole;
(vi) incur any indebtedness for borrowed money or guarantee
any such indebtedness or make any loans, advances or capital
contributions to, or other investments in, any other person, other than
(A) borrowings or guarantees incurred in the ordinary course of
business and consistent with past practice and (B) any loans, advances
or capital contributions to, or other investments in, Parent or any
majority-owned Subsidiary of Parent;
(vii) violate or fail to perform any material obligation or
duty imposed upon Parent or any Subsidiary by any applicable federal,
state, local, foreign or provincial law, rule, regulation, guideline or
ordinance;
(viii) take any action, other than reasonable and usual actions
in the ordinary course of business consistent with past practice, with
respect to accounting policies or procedures;
(ix) authorize, recommend, propose or announce an intention
to do any of the foregoing, or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing; or
(x) acquire any shares of capital stock of the Company.
Parent shall promptly advise the Company orally and in
writing of any change or event having, or which would reasonably be
expected to have, a Material Adverse Effect on Parent.
(b) Actions by the Company. During the period from the date of
this Agreement through the Effective Time, except as otherwise
expressly required by this Agreement or as set forth in the Company
Letter, the Company shall, and shall cause each of its Subsidiaries to,
in all material respects carry on its business in, and not enter into
any material transaction other than in accordance with, the ordinary
course of its business as currently conducted and, to the extent
consistent therewith, use its reasonable best efforts to preserve
intact its current business organization, keep available the services
of its current officers and employees and preserve its relationships
with customers, suppliers and others having business dealings with it,
all to the end that its goodwill and ongoing business shall be
unimpaired at the Effective Time. Without limiting the generality of
the foregoing, and except as otherwise expressly contemplated by this
Agreement or as set forth in the Company Letter, the Company shall not,
and shall not permit any of its Subsidiaries to, without the prior
written consent of Parent:
(i) (A) declare, set aside or pay any dividends on, or make
any other actual, constructive or deemed distributions in respect of,
any of its capital stock, or otherwise make any payments to its
stockholders in their capacity as such (other than regular quarterly
dividends of not more than $180 per Company Series E Preferred
Share, of not more than $180 per Company Series F Preferred Share and
of not more than $.23 per Company Common Share (it being the express
understanding of Parent and the Company that the stockholders of the
Company shall be entitled to either a dividend on Company Common Shares
or shares of Parent Common Stock, but not both, for the calendar
quarter in which the Closing shall occur, and the Board of Directors of
the Company shall not declare any dividend or fix any record date
therefor which would have such effect; provided however, that if (i)
the Company shall not have declared any regular quarterly dividend in
respect of any quarter after the date hereof in order to provide its
stockholders an opportunity to receive a quarterly dividend in respect
of Parent Common Stock for such quarter and (ii) the Merger is not
effected on a date which would enable such stockholders to receive such
dividend on Parent Common Stock, then the Company shall be entitled to
declare a special dividend of not more than $.23 per Company Common
Share with respect to any quarter to compensate such stockholders for
such regularly quarterly dividend they would otherwise have received in
respect of their Company Common Shares) and dividends paid by
Subsidiaries of the Company in the ordinary course of business and
consistent with past practice); (B) split, combine or reclassify any of
its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of
its capital stock; or (C) purchase, redeem or otherwise acquire any
shares of its capital stock or those of any Subsidiary or any other
securities thereof or any rights, warrants or options to acquire any
such shares or other securities;
(ii) issue, deliver, sell, pledge, dispose of or otherwise
encumber any shares of its capital stock, any other voting securities
or equity equivalent or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, voting securities,
equity equivalent or convertible securities (other than the issuance of
Company Common Shares upon the exercise of Company Stock Options
outstanding on the date of this Agreement in accordance with their
current terms and the issuance of shares pursuant to the Stock Option
Agreement);
(iii) amend its charter or organization documents; or amend
its by-laws, other than such amendments consented to in writing by
Parent (which consent shall not be unreasonably withheld);
(iv) acquire or agree to acquire, by merging or consolidating
with, by purchasing a substantial portion of the assets of or equity in
or by any other manner, any business or any corporation, partnership,
association or other business organization or division thereof or
otherwise acquire or agree to acquire any assets, other than (A)
transactions that are in the ordinary course of business and consistent
with past practice and not material to the Company and its Subsidiaries
taken as a whole and (B) acquisitions for an aggregate consideration
paid or payable by the Company and its Subsidiaries (valuing any
non-cash consideration at its fair market value and any contingent
payments at the maximum amount payable and treating any liabilities
assumed as consideration paid) in an amount not to exceed $10 million;
(v) sell, lease or otherwise dispose of, or agree to sell,
lease or otherwise dispose of, any of its assets, other than (A)
transactions that are in the ordinary course of business and consistent
with past practice and not material to the Company and its Subsidiaries
taken as a whole, (B) dispositions for an aggregate consideration paid
or payable to the Company and its Subsidiaries (valuing any non-cash
consideration, contingent payments and liabilities assumed as provided
in clause (iv) above) in an amount not to exceed $10 million and (C)
transactions between the Company and any wholly-owned Subsidiary of the
Company or between one Subsidiary of the Company and another Subsidiary
of the Company;
(vi) incur any indebtedness for borrowed money or guarantee
any such indebtedness, or make any loans, advances or capital
contributions to, or other investments in, any other person, or retire
any outstanding indebtedness for borrowed money, other than (A)
borrowings or guarantees incurred in the ordinary course of business
and consistent with past practice and (B) any loans, advances or
capital contributions to, or other investments in, the Company or any
majority-owned or 50% owned Subsidiary of the Company;
(vii) enter into or adopt any Company Plan other than a Company
Plan which is not material in the ordinary course of business
consistent with past practices, or amend in any material respect any
existing Company Plan, other than as required by law or in the ordinary
course of business consistent with past practices;
(viii) materially increase the compensation payable or to become
payable to its officers or employees, except for increases in the
ordinary course of business and consistent with past practice, or grant
any severance or termination pay to, or enter into, or amend or modify,
any employment, severance or consulting agreement with, any director or
officer of the Company or any of its Subsidiaries, or, except in the
ordinary course of business consistent with past practices, establish,
adopt, enter into or, except as may be required to comply with
applicable law or, except in the ordinary course of business consistent
with past practices, amend in any material respect or take action to
enhance in any material respect or accelerate any rights or benefits
under, any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of
any director, officer or employee;
(ix) violate or fail to perform any material obligation or
duty imposed upon the Company or any Subsidiary by any applicable
federal, state, local, foreign or provincial law, rule, regulation,
guideline or ordinance;
(x) take any action, other than reasonable and usual actions
in the ordinary course of business consistent with past practice, with
respect to accounting policies or procedures;
(xi) authorize, recommend, propose or announce an intention to
do any of the foregoing, or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing; or
(xii) acquire any shares of capital stock of Parent.
The Company shall promptly advise Parent orally and in
writing of any change or event having, or which would reasonably be
expected to have, a Material Adverse Effect on the Company. Any
transaction which is expressly permitted by this Section 4.1(b) to be
engaged in or consummated by the Company or any Subsidiary of the
Company shall not be deemed otherwise prohibited by Section 4.2 or be
deemed to constitute a "Takeover Proposal" hereunder.
Section 4.2 No Solicitation. From and after the date
hereof, the Company shall not, and shall use its reasonable best
efforts to not permit any of its directors, officers, employees,
attorneys, financial advisors, agents or other representatives or those
of any of its Subsidiaries to, directly or indirectly, solicit,
initiate or knowingly encourage (including by way of furnishing
information) any Takeover Proposal (as hereinafter defined) from any
person, or engage in or continue discussions or negotiations relating
to any Takeover Proposal; provided, however, that the Company may
engage in discussions or negotiations with, or furnish information
concerning the Company and its properties, assets and business to, any
person which makes, indicates in writing an intention or desire to
make, or in respect of which the Board of Directors of the Company has
concluded in good faith is reasonably likely to make, a Superior
Proposal (as hereinafter defined), in each case if the Board of
Directors of the Company shall conclude in good faith on the basis of
the advice of its outside counsel that the failure to take such action
would be inconsistent with the fiduciary obligations of such Board of
Directors under applicable law; and provided further that
notwithstanding anything to the contrary herein contained, the Board of
Directors of the Company may take and disclose to the Company's
stockholders a position contemplated by Rule 14e-2 promulgated under
the Securities Exchange Act of 1934, as amended, comply with Rule 14d-9
thereunder and make all disclosures required by applicable law in
connection therewith. The Company shall promptly notify Parent of any
Takeover Proposal received by it or any of its directors, officers,
employees, attorneys, financial advisors, agents or other
representatives or those of any of its Subsidiaries or the receipt by
the Company or any of the foregoing of any notice of any intention to
make a Superior Proposal, including the material terms and conditions
thereof (but expressly not including the identity of the person (or
group) making such Takeover Proposal or indicating such intention or
desire). As used in this Agreement: (i) "Takeover Proposal" means any
proposal or offer, or any expression of interest by any person relating
to the Company's willingness or ability to receive or discuss any
proposal or offer (other than a proposal or offer by Parent or any of
its Subsidiaries), for any merger, consolidation or other business
combination involving the Company or any of its Subsidiaries or any
acquisition in any manner (including, without limitation, by tender or
exchange offer) of a substantial equity interest in, or a substantial
portion of the assets of, the Company or any of its Subsidiaries; and
(ii) "Superior Proposal" means a bona fide proposal or offer made by
any person (x) to acquire the Company pursuant to any tender or
exchange offer or any acquisition of all or substantially all of the
assets of the Company and its Subsidiaries or (y) to enter into a
merger, consolidation or other business consolidation with the Company
or any of its Subsidiaries, in each case on terms which a majority of
the members of the Board of Directors of the Company determines in good
faith, and based on the advice of independent financial advisors, to be
more favorable to the Company and its stockholders than the
transactions contemplated hereby (including any revised transaction
proposed by Parent pursuant to Section 7.1(f)).
Section 4.3 Third Party Standstill Agreements. During the
period from the date of this Agreement through the Effective Time, the
Company shall not terminate, amend, modify or waive any provision of
any confidentiality or standstill agreement to which it or any of its
Subsidiaries is a party (other than any involving Parent or its
Subsidiaries). During such period, the Company shall enforce, to the
fullest extent permitted under applicable law, the provisions of any
such agreement, including, but not limited to, by obtaining injunctions
to prevent any breaches of such agreements and to enforce specifically
the terms and provisions thereof in any court of the United States of
America or of any state having jurisdiction unless, in any case, the
Board of Directors of the Company concludes in good faith, and based on
the advice of its outside counsel, that the enforcement of such
provisions would be inconsistent with the fiduciary obligations of such
Board of Directors under applicable law.
Section 4.4 Pooling of Interests; Reorganization. During
the period from the date of this Agreement through the Effective Time,
unless the other parties hereto shall otherwise agree in writing, none
of Parent, the Company or any of their respective Subsidiaries shall
(i) knowingly take or fail to take any action which action or failure
would result in the failure of the Merger to qualify as a pooling of
interests for accounting purposes or (ii) knowingly take or fail to
take any action which action or failure would result in the failure of
the Merger to qualify as a reorganization within the meaning of Section
368(a) of the Code or would cause any of the representations and
warranties set forth in the Company Tax Certificate attached to the
Company Letter or the Parent Tax Certificate attached to the Parent
Letter to be untrue or incorrect in any material respect.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1 Stockholder Meetings. The Company and Parent
shall each call a meeting of its stockholders (respectively, the
"Company Stockholder Meeting" and the "Parent Stockholder Meeting" and,
collectively, the "Stockholder Meetings") to be held as promptly as
practicable (but in no event prior to the fulfillment of the conditions
specified in Section 6.1(c) to each party's obligation to effect the
Merger) for the purpose of voting upon the Merger (in the case of the
Company) and the Parent Share Issuance and the Charter Amendments (in
the case of Parent). The Company and Parent shall, through their
respective Boards of Directors, recommend to their respective
stockholders approval of such matters and shall not withdraw such
recommendation; provided, however, that neither such Board of Directors
shall be required to make, and each such Board shall be entitled to
withdraw, such recommendation if such Board of Directors concludes in
good faith on the basis of the advice of its outside counsel that the
making of, or the failure to withdraw, such recommendation would be
inconsistent with the fiduciary obligations of such Board of Directors
under applicable law. The respective Boards of Directors of the
Company, Parent and Sub shall not rescind their respective declarations
that the Merger is advisable unless, in any such case, any such Board
of Directors concludes in good faith on the basis of the advice of its
outside counsel that the failure to rescind such determination would be
inconsistent with the fiduciary obligations of such Board of Directors
under applicable law. The Company and Parent shall coordinate and
cooperate with respect to the timing of such meetings and shall use
their reasonable best efforts to hold such meetings on the same day.
Section 5.2 Preparation of the Registration Statement and
the Joint Proxy Statement. The Company and Parent shall promptly
prepare and file with the SEC the Joint Proxy Statement and Parent
shall prepare and file with the SEC the Registration Statement, in
which the Joint Proxy Statement will be included as a prospectus.
Parent shall use its reasonable best efforts to have the Registration
Statement declared effective under the Securities Act as promptly as
practicable after such filing and the Company shall reasonably
cooperate with Parent in connection therewith. Parent shall also take
any action (other than qualifying to do business in any jurisdiction in
which it is now not so qualified) required to be taken under any
applicable state securities laws in connection with the issuance of
Parent Common Stock in connection with the Merger and upon any exercise
of the Substitute Options (as defined in Section 5.8). The Company
shall use its reasonable best efforts to furnish all information
concerning the Company and the holders of Company Common Shares as may
be reasonably requested by Parent in connection with any such action.
Section 5.3 Comfort Letters. (a) The Company shall use its
reasonable best efforts to cause to be delivered to Parent "comfort"
letters of Xxxxxx Xxxxxxxx LLP, the Company's independent public
accountants, dated the date on which the Registration Statement shall
become effective and as of the Effective Time, and addressed to Parent
and the Company, in form and substance reasonably satisfactory to
Parent and as is reasonably customary in scope and substance for
letters delivered by independent public accountants in connection with
transactions such as those contemplated by this Agreement.
(b) Parent shall use its reasonable best efforts to cause to
be delivered to the Company "comfort" letters of Ernst & Young LLP,
Parent's independent public accountants, dated the date on which the
Registration Statement shall become effective and as of the Effective
Time, and addressed to the Company and Parent, in form and substance
reasonably satisfactory to the Company and as is reasonably customary
in scope and substance for letters delivered by independent public
accountants in connection with transactions such as those contemplated
by this Agreement.
Section 5.4 Access to Information. Subject to currently
existing contractual and legal restrictions applicable to Parent (which
Parent represents and warrants do not require it to withhold
information which is material and adverse to Parent and its
Subsidiaries taken as a whole) or to the Company (which the Company
represents and warrants do not require it to withhold information which
is material and adverse to the Company and its Subsidiaries taken as a
whole), Parent and the Company shall, and shall cause each of its
respective Subsidiaries to, afford, during normal business hours during
the period from the date of this Agreement through the Effective Time,
to the accountants, counsel, financial advisors, officers and other
representatives of the other reasonable access to, and permit them to
make such inspections as may reasonably be requested of, its
properties, books, contracts, commitments and records (including,
without limitation, the work papers of independent public accountants),
and also permit such interviews with its officers and employees as may
be reasonably requested; and, during such period, Parent and the
Company shall, and shall cause each of its respective Subsidiaries to,
furnish promptly to the other (i) a copy of each report, schedule,
registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws
and (ii) all other information concerning its properties, assets,
business and personnel as the other may reasonably request. From the
date of this Agreement through the Effective Time, Parent and the
Company shall consult with each other regarding any inquiries made by
antitrust regulatory authorities, including as to any issues raised by
such authorities and the possible resolutions thereof. No
investigation pursuant to this Section 5.4 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto. All information
obtained by Parent or the Company pursuant to this Section 5.4 shall be
kept confidential in accordance with the Confidentiality Agreements
dated July 7, 1995 between Parent and the Company. Parent and the
Company each hereby expressly reaffirms its obligations under such
Confidentiality Agreements and agrees and acknowledges that such
Confidentiality Agreements shall survive the termination of this
Agreement.
Section 5.5 Compliance with the Securities Act. (a) Prior
to the Effective Time, the Company shall cause to be prepared and
delivered to Parent a list (reasonably satisfactory to counsel for
Parent) identifying each person who, at the time of the Company
Stockholder Meeting, may be deemed to be an "affiliate" of the Company,
as such term is used in paragraphs (c) and (d) of Rule 145 under the
Securities Act (the "Company Rule 145 Affiliates"). The Company shall
use its reasonable best efforts to cause each person who is identified
as a Company Rule 145 Affiliate in such list to deliver to Parent on or
prior to the Effective Time a written agreement, in the form previously
approved by the parties hereto, that such Company Rule 145 Affiliate
will not (i) sell, transfer or otherwise dispose of any Company Common
Shares or any shares of Parent Common Stock issued to such Company Rule
145 Affiliate in connection with the Merger, except pursuant to an
effective registration statement or in compliance with such Rule 145 or
another exemption from the registration requirements of the Securities
Act, or (ii) sell, pledge, transfer or otherwise dispose of or in any
other way reduce such Company Rule 145 Affiliate's risk relative to any
Company Common Shares or any shares of Parent Common Stock received in
the Merger (within the meaning of Section 201.01 of the SEC's Financial
Reporting Release No. 1) during the period commencing 30 days prior to
the Effective Time and ending at such time as the financial results
(including combined sales and net income) covering at least 30 days of
post-Merger operations have been published, except as permitted by
Staff Accounting Bulletin No. 76 issued by the SEC.
(b) Prior to the Effective Time, Parent shall cause to be
prepared and delivered to the Company a list (reasonably satisfactory
to counsel for the Company) identifying all persons who, at the time of
the Parent Stockholder Meeting, may be deemed to be an "affiliate" of
Parent, as such term is used in paragraphs (c) and (d) of Rule 145
under the Securities Act (the "Parent Rule 145 Affiliates"). Parent
shall use its reasonable best efforts to cause each person who is
identified as a Parent Rule 145 Affiliate in such list to deliver to
the Company on or prior to the Effective Time a written agreement, in
the form previously approved by the parties hereto, that such Parent
Rule 145 Affiliate will not sell, pledge, transfer or otherwise dispose
of or in any other way reduce such Parent Rule 145 Affiliate's risk
relative to any shares of Parent Common Stock or any Company Common
Shares (within the meaning of Section 201.01 of the SEC's Financial
Reporting Release No. 1) during the period commencing 30 days prior to
the Effective Time and ending at such time as the financial results
(including combined sales and net income) covering at least 30 days of
post-Merger operations have been published, except as permitted by
Staff Accounting Bulletin No. 76 issued by the SEC. As soon as
reasonably practicable, but in no event later than 30 days after the
end of the first full fiscal quarter of Parent which includes results
covering at least 30 days of post-Merger combined operations of Parent
and the Company, Parent shall publish its results of operations for
such fiscal quarter.
Section 5.6 Stock Exchange Listings. Parent shall use its
reasonable best efforts to list on the NYSE, upon official notice of
issuance, the shares of Parent Common Stock to be issued in connection
with the Merger and upon any exercise of the Substitute Options.
Section 5.7 Fees and Expenses. (a) Except as otherwise
provided in this Section 5.7 and in Section 5.11, whether or not the
Merger shall be consummated, all costs and expenses incurred in
connection with this Agreement, the Stock Option Agreement and the
transactions contemplated hereby and thereby, including, without
limitation, the fees and disbursements of counsel, financial advisors,
accountants, actuaries and consultants, shall be paid by the party
incurring such costs and expenses, provided that all printing expenses
and filing fees shall be divided equally between Parent and the
Company.
(b) Notwithstanding any provision in this Agreement to the
contrary, if this Agreement shall be terminated by the Company pursuant
to Section 7.1(f), the Company shall simultaneous therewith pay to
Parent an amount in cash equal to $30 million less the Stock Option
Gain Amount, if any.
(c) Notwithstanding any provision in this Agreement to the
contrary, if there shall be a Takeover Proposal and if this Agreement
shall be terminated by Parent pursuant to Section 7.1(g), the Company
shall immediately pay to Parent an amount in cash equal to $30 million
less the Stock Option Gain Amount, if any.
(d) Notwithstanding any provision in this Agreement to the
contrary, if (i) prior to the Company Stockholder Meeting this
Agreement shall not have been terminated and (x) there shall be a
Takeover Proposal or the Company shall receive an indication of a
possible Takeover Proposal by any person other than Parent or an
Affiliate of Parent, (y) any person other than Parent or an Affiliate
of Parent shall file a Statement on Schedule 13D under the Exchange Act
or (z) the Company shall engage in discussions or negotiations with, or
furnish information to, any person pursuant to the first proviso of the
first sentence of Section 4.2, (ii) the stockholders of the Company
shall not approve the Merger at the Company Stockholder Meeting or any
adjournment thereof, (iii) within twelve months after the Company
Stockholder Meeting or the last adjournment thereof the Company shall
enter into any letter of intent (whether or not binding), acquisition
agreement, merger agreement or other similar agreement or agreement in
principle in respect of a Takeover Proposal with any person
contemplated by subparts (x),(y) or (z) of clause (i) above or such
person shall commence any tender or exchange offer for the Company
Common Shares and (iv) upon, or at any time within twelve months after,
such entry into any agreement or such commencement of any tender or
exchange offer such person shall consummate a transaction similar to
that contemplated by such Takeover Proposal or any tender or exchange
offer for the Company Common Shares, the Company shall immediately pay
to Parent an amount in cash equal to $30 million less the Stock Option
Gain Amount, if any.
(e) Notwithstanding any provision in this Agreement to the
contrary, if (i) this Agreement shall be terminated by the Company
pursuant to Section 7.1(l) after a Takeover Proposal has been made by
any person, (ii) within twelve months after such termination, the
Company shall enter into a letter of intent (whether or not binding),
acquisition agreement, merger agreement or other similar agreement or
agreement in principle with such person (or any Affiliate of such
person or other person related to such person) with respect to such
Takeover Proposal and (iii) upon, or at any time within twelve months
after, such entry into a letter of intent, acquisition agreement,
merger agreement or other similar agreement or agreement in principle
such person (or any such Affiliate or related person) shall consummate
a transaction similar to that contemplated by such Takeover Proposal,
the Company shall immediately pay to Parent an amount in cash equal to
$30 million less the Stock Option Gain Amount, if any.
(f) Notwithstanding any provision in this Agreement to the
contrary, if this Agreement shall be terminated by the Company pursuant
to Section 7.1(h), Parent shall immediately pay to the Company an
amount in cash equal to $30 million.
(g) Notwithstanding any provision in this Agreement to the
contrary, if this Agreement shall be terminated by the Company pursuant
to Section 7.1(m), Parent shall reimburse the Company for all costs and
expenses incurred by it in connection with this Agreement, the Stock
Option Agreement and the transactions contemplated hereby and thereby,
including, without limitation, the fees and disbursements of counsel,
financial advisors, accountants, actuaries and consultants, and the
Company share of printing expenses and filing fees, immediately upon
presentation by the Company of a statement therefore which expenses
will be conclusively established by such statement; provided, however,
that in no event shall Parent be required to reimburse the Company for
more than $5 million of costs and expenses, in the aggregate, pursuant
to this Section 5.7(g).
For purposes of this Section 5.7, the term "Stock Option Gain
Amount" shall mean the aggregate of all Spread Amounts (as defined
below) with respect to exercises of the Option simultaneously with, or
prior to, the event giving rise to the payment of the fee specified in
this Section 5.7. "Spread Amount" means, with respect to each exercise
of the Option, the amount, in cash, equal to the dollar amount by which
the average of the per share closing prices on the NYSE of the Company
Common Shares (as reported in the New York Stock Exchange Composite
Transactions) during the 20 consecutive trading days (or such fewer
number of trading days after the date hereof, as the case may be)
ending on the trading day immediately prior to the date on which such
exercise occurs exceeds the Exercise Price (as defined in the Stock
Option Agreement) then in effect, multiplied by the number of Optioned
Shares (as defined in the Stock Option Agreement) as to which the
Option is then so exercised. If, at the time of payment of the fee
specified in this Section 5.7, the Option has not been exercised by
Parent, the Stock Option Gain Amount shall be zero.
In no event shall the Company be required to pay more than
one such fee specified in any of subsections (b), (c), (d) or (e) of
this Section 5.7. Nothing contained in this Section 5.7 shall be
deemed to limit any remedies available to any party for any breach of
this Agreement by any other party which such remedies shall be in
addition to any amounts received by any party pursuant to this Section
5.7; provided, however, that, with respect to any breach by the Company
of the provisions of Section 4.2 that is not the result of willful
action (or willful failure to take action) or bad faith on the part of
the Company, Parent's exclusive remedy in respect of such breach shall
be limited to the right to receive the fee described in subsection (b),
(c), (d) or (e) of this Section 5.7 and, upon payment of such fee to
Parent in accordance with the provisions of such subsection (b), (c),
(d) or (e), the Company shall have no further liability to Parent in
respect of such breach.
Section 5.8 Company Stock Options. Not later than the
Effective Time, each Company Stock Option which is outstanding
immediately prior to the Effective Time pursuant to any stock option
plan (other than any "stock purchase plan" within the meaning of
Section 423 of the Code) of the Company in effect on the date hereof
(the "Company Stock Plans") shall become and represent an option to pur
chase the number of shares of Parent Common Stock (a "Substitute
Option"), decreased to the nearest whole share, determined by
multiplying (i) the number of Company Common Shares subject to such
Company Stock Option immediately prior to the Effective Time by
(ii) the Conversion Number, at an exercise price per share of Parent
Common Stock (increased to the nearest whole cent) equal to the
exercise price per Company Common Share immediately prior to the
Effective Time divided by the Conversion Number. After the Effective
Time, except as provided above in this Section 5.8, each Substitute
Option shall be exercisable upon the same terms and conditions as were
applicable to the related Company Stock Option immediately prior to the
Effective Time, and each Substitute Option shall be vested to the
extent provided in the related Company Stock Option. This Section 5.8
shall be subject to any contrary provision contained in the applicable
Company Stock Plan or in the option agreement with respect to any
Company Stock Option outstanding thereunder, but the Company shall use
its reasonable best efforts to obtain any necessary consents of the
holders of such Company Stock Options to effect this Section 5.8. The
Company shall not grant any stock appreciation rights or limited stock
appreciation rights and shall not permit cash payments to holders of
Company Stock Options in lieu of the substitution therefor of
Substitute Options as provided in this Section 5.8. Parent shall
register under the Securities Act on Form S-8 or another appropriate
form all Substitute Options and all shares of Parent Common Stock
issuable pursuant to all Substitute Options.
Section 5.9 Reasonable Best Efforts; Pooling of Interests;
Reorganization. (a) Upon the terms and subject to the conditions set
forth in this Agreement, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable, to
consummate and make effective, as soon as reasonably practicable, the
Merger and the other transactions contemplated by this Agreement,
including, but not limited to: (i) the obtaining of all necessary
actions or non-actions, waivers, consents and approvals from all
Governmental Entities and the making of all necessary registrations and
filings with, and the taking of all other reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid an action
or proceeding by, any Governmental Entity (including those in
connection with the HSR Act and any State Takeover Approvals); (ii) the
obtaining of all necessary consents, approvals or waivers from persons
other than Governmental Entities; (iii) the defending of any lawsuits
or other legal proceedings, whether judicial or administrative,
challenging this Agreement, the Stock Option Agreement, the Voting
Agreement or the consummation of the transactions contemplated hereby
or thereby, including seeking to have any stay or temporary restraining
order entered by any court or other Governmental Entity vacated or
reversed; provided, however, that no party hereto shall be obligated to
defend any such lawsuit or proceedings initiated by a Governmental
Entity beyond any lawsuit or proceeding in a Federal District Court
(and any appeal thereof); and (iv) the execution and delivery of any
additional instruments necessary to consummate the transactions
contemplated by this Agreement.
(b) Each of Parent and the Company shall cooperate and work
together, with its respective accountants, with the objective that the
Merger qualify as a pooling of interests under generally accepted
accounting principles.
(c) Each party hereto shall use its reasonable best efforts
not to take any action, or to enter into any transaction, which would
cause any of its representations or warranties contained in this
Agreement to be untrue or to result in a breach of any of its covenants
in this Agreement.
(d) Notwithstanding any provision in this Agreement to the
contrary: (i) neither Parent nor the Company shall be obligated to use
its reasonable best efforts or to take any action (or omit to take any
action) pursuant to this Agreement if the Board of Directors of Parent
or the Company, as the case may be, shall conclude in good faith on the
basis of the advice of its outside counsel that such action would be
inconsistent with the fiduciary obligations of such Board of Directors
under applicable law; and (ii) in connection with any filing or
submission or other action required to be made or taken by either
Parent or the Company to effect the Merger and to consummate the other
transactions contemplated hereby and by the Stock Option Agreement,
neither Parent nor the Company shall, without the other's prior written
consent, commit to any divestiture transaction, and neither Parent, the
Company nor any of their Affiliates shall be required to divest or hold
separate or otherwise take or commit to take any action that limits its
freedom of action with respect to, or its ability to retain, the
Company and its Subsidiaries or any material portions thereof or any of
the business, product lines, properties or assets of Parent or any of
its Affiliates.
(e) From and after the Effective Time, Parent shall not (and
shall cause the Surviving Corporation and any other Subsidiary of
Parent not to) knowingly take or fail to take any action which would
result in the failure of the Merger to qualify as a reorganization
within the meaning of Section 368(a) of the Code.
Section 5.10 Public Announcements. Parent and the Company
shall consult with each other before issuing any press release or
otherwise making any public statement with respect to the transactions
contemplated by this Agreement and shall not issue any such press
release or make any such public statement prior to such consultation
and without the written approval (which shall not unreasonably be
withheld) of the other, except as may be required by applicable law or
by existing obligations pursuant to any listing agreement with any
national securities exchange.
Section 5.11 Real Estate Transfer and Gains Tax. Either the
Company or the Surviving Corporation shall pay all state, local or
foreign taxes, if any (collectively, the "Gains Taxes"), attributable
to the transfer of the beneficial ownership of the Company's and its
Subsidiaries' real properties, and any penalties or interest with
respect thereto, payable in connection with the consummation of the
Merger. The Company shall cooperate with Parent in the filing of any
returns with respect to the Gains Taxes, including supplying in a
timely manner a complete list of all real property interests held by
the Company and its Subsidiaries and any information with respect to
such properties that is reasonably necessary to complete such returns.
The portion of the consideration allocable to the real properties of
the Company and its Subsidiaries shall be determined by Parent in its
reasonable discretion. The stockholders of the Company shall be deemed
to have agreed to be bound by the allocation established pursuant to
this Section 5.11 in the preparation of any return with respect to the
Gains Taxes.
Section 5.12 State Takeover Laws. If any "fair price" or
"control share acquisition" statute or other similar statute or
regulation shall become applicable to the transactions contemplated
hereby, Parent and the Company and their respective Boards of Directors
shall use their reasonable best efforts to grant such approvals and to
take such other actions as are necessary so that the transactions
contemplated hereby may be consummated as promptly as practicable on
the terms contemplated hereby and shall otherwise use their reasonable
best efforts to eliminate the effects of any such statute or regulation
on the transactions contemplated hereby.
Section 5.13 Indemnification; Directors and Officers
Insurance. (a) From and after the Effective Time, Parent shall cause
the Surviving Corporation to indemnify and hold harmless to the fullest
extent permitted under applicable law each person who is now, or has
been at any time prior to the date hereof or who becomes prior to the
Effective Time, an officer, director, employee or agent of the Company
or any of its Subsidiaries or a director, officer, employee, agent or
trustee of any employee benefit plan for employees of the Company or
any of its Subsidiaries, including, without limitation, each person
controlling any of the foregoing persons (individually, an "Indemnified
Party" and collectively, the "Indemnified Parties"), against all
losses, claims, damages, liabilities, costs or expenses (including
attorneys' fees), judgements, fines, penalties and amounts paid in
settlement in connection with any threatened or actual claim, action,
suit, proceeding or investigation (whether civil, criminal or
administrative) arising out of or pertaining to acts or omissions or
alleged acts or omissions, by them in their capacities as such (whether
or not alleged in their capacities as such) whether commenced, asserted
or claimed before or after the Effective Time and including, without
limitation, liabilities arising under the Securities Act, the Exchange
Act and state corporation laws in connection with the Merger. From and
after the Effective Time, Parent shall cause the Surviving Corporation
to pay expenses in advance of the final disposition of any such action
or proceeding to each Indemnified Party to the full extent permitted
under applicable law. Without limiting the foregoing, in the event any
such claim, action, suit, proceeding or investigation is brought
against any Indemnified Parties (whether arising before or after the
Effective Time), (i) the Indemnified Parties may retain counsel
satisfactory to them and the Company (or them and Parent and the
Surviving Corporation after the Effective Time) and the Company shall
(or after the Effective Time, Parent shall cause the Surviving
Corporation to) pay all fees and expenses of such counsel for the
Indemnified Parties promptly as statements therefor are received; and
(ii) the Company (or after the Effective Time, Parent and the Surviving
Corporation) will use all reasonable efforts to assist in the defense
of any such matter, provided that neither the Company, Parent nor the
Surviving Corporation shall be liable for any settlement effected
without its prior written consent which consent shall not unreasonably
be withheld. Any Indemnified Party wishing to claim indemnification
under this Section 5.13, upon learning of any such claim, action, suit,
proceeding or investigation, shall notify the Company (or after the
Effective Time, the Surviving Corporation) and Parent (but the failure
to so notify shall not relieve a party from any liability which it may
have under this Section 5.13 except to the extent such failure
materially prejudices such party), and shall deliver to the Company (or
after the Effective Time, Parent and the Surviving Corporation) the
undertaking contemplated by Section 145(e) of the DGCL. The
Indemnified Parties as a group may retain only one law firm to
represent them with respect to each such matter unless there is, under
applicable standards of professional conduct, a conflict on any
significant issue between the positions of any two or more Indemnified
Parties. The Company, Parent and Sub agree that all rights to
indemnification and the like, including provisions relating to advances
of expenses incurred in defense of any action or suit, existing in
favor of the Indemnified Parties with respect to matters occurring
through the Effective Time, shall survive the Merger and Parent shall
cause the Surviving Corporation to honor such rights in full.
(b) Parent shall cause the Surviving Corporation to keep in
effect provisions in its Certificate of Incorporation and Bylaws
providing for exculpation of director and officer liability and its
indemnification of the Indemnified Parties to the fullest extent
permitted under the DGGL, which provisions shall not be modified or
amended except as required by applicable law or except to make changes
permitted by law that would enlarge the Indemnified Parties' right of
indemnification.
(c) Parent or the Surviving Corporation shall maintain the
Company's existing directors' and officers' liability insurance policy
("D&O Insurance") for a period of not less than six years after the
Effective Date; provided, that Parent may substitute therefor policies
of substantially similar coverage and amounts containing terms no less
advantageous to such former directors or officers; and provided further
that neither Parent nor the Surviving Corporation shall be required to
pay an annual premium for such D&O Insurance in excess of 200% of the
last annual premium paid prior to the date hereof, but in such case
shall purchase as much coverage as possible for such amount.
(d) The provisions of this Section 5.13 are intended to be
for the benefit of, and shall be enforceable by, each Indemnified
Person, his or her heirs and his or her personal representatives and
shall be binding on all successors and assigns of Parent, Sub, the
Company and the Surviving Corporation. In the event Parent or the
Surviving Corporation or any of the successors or assigns of either of
them transfers or conveys all or substantially all of its properties
and assets to any person, then, in each such case, proper provision
shall be made to cause the transferee of such properties and assets to
assume the obligations of Parent or the Surviving Corporation or such
successors or assigns, as the case may be, under this Section 5.13.
Section 5.14 Notification of Certain Matters. Parent shall
give prompt notice to the Company, and the Company shall give prompt
notice to Parent, of: (i) the occurrence, or non-occurrence, of any
event the occurrence, or non-occurrence, of which does or would be
likely to cause (A) any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect or (B) any
covenant, condition or agreement contained in this Agreement not to be
complied with or satisfied; and (ii) any failure of Parent or the
Company, 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 the delivery of any notice pursuant
to this Section 5.14 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
Section 5.15 Board of Directors. Parent and the Company
shall mutually select from among the current members of the Board of
Directors of the Company four individuals for nomination as directors
of Parent. If an individual so selected consents to serve as a
director, such individual shall be elected as a director of Parent,
effective as of the Effective Time, for a term expiring (a) at Parent's
1996 annual meeting of stockholders in the case of two of such
individuals, (b) at Parent's 1997 annual meeting of stockholders in the
case of one other of such individuals and (c) at Parent's 1998 annual
meeting of stockholders in the case of the remaining of such four
individuals, in each case subject to being renominated as a director
following the expiration of such terms at the discretion of the
nominating committee of Parent's Board of Directors.
Section 5.16 Employee Benefits. (a) During the one-year
period immediately following the Effective Time, Parent shall cause to
be provided each of the employees who were employed by the Company or
any of its Subsidiaries at the Effective Time and continue or terminate
employment with the Surviving Corporation or any of its Subsidiaries
("Employee") compensation and benefits (including any Company Plans,
Parent Plans, vacation pay, holiday pay, sick pay, incentive pay,
bonuses, salary continuation, fringe benefits and other benefit plans
or arrangements) no less favorable in the aggregate than the
compensation and benefits provided the Employee by the Company or any
of its Subsidiaries immediately prior to the Effective Time, all of
which compensation and benefit plans and arrangements are reasonable
under the circumstances and were entered into in the ordinary course of
business.
(b) During the one-year period immediately following the
Effective Time, Parent shall cause to be maintained for each Employee
whose employment with the Surviving Corporation or any of its
Subsidiaries is terminated after the Closing a severance policy which
is no less favorable in the aggregate than the severance policy of the
Company or any of its Subsidiaries as applied to the class of employees
of which such Employee is a part prior to the Effective Time, which
severance policy is reasonable under the circumstances and was entered
into in the ordinary course of business.
(c) Parent shall cause service with the Company or any of
its Subsidiaries (or their respective predecessors) prior to the
Effective Time to be treated as service for all benefit plans and
arrangements described in Section 5.16(a) for all purposes under such
benefit plans and arrangements, including, without limitation, for
purposes of pre-existing conditions limitations, waiting period and
vesting requirements and shall cause all benefits accrued by any
Employee under any Company Plan or other benefit plan or arrangement
prior to the Effective Time to be provided to such Employee; provided,
however, that this Section 5.16(c) shall not be applicable to any
benefit accrual under any Parent Plan that is a defined benefit pension
plan or result in a duplication of benefits.
(d) Nothing in this Section 5.17 shall prevent the Surviving
Corporation from terminating the employment of any Employee at anytime.
(e) (i) The Surviving Corporation shall, and Parent shall
cause the Surviving Corporation to, honor in accordance with its terms
The Vigoro Corporation Severance Plan, in substantially the form
attached to the Company Letter (the "Severance Plan"), and which will
be applicable to those persons listed on Schedule 5.16(e)(i) to the
Company Letter. Schedule 5.16(e)(i) sets forth the approximate amount
of the Severance Benefit (as defined in the Severance Plan) for each
person listed on such Schedule as if the Severance Benefit were
calculated as of the date hereof. Notwithstanding anything to the
contrary contained in this Agreement, the adoption and implementation
of the Severance Plan in accordance with its terms shall not constitute
a breach by the Company of any representation, warranty or covenant
contained in this Agreement.
(ii) Simultaneously with the consummation of the Merger,
Parent and the Surviving Corporation shall offer to enter into (and
enter into with respect to each offer that is accepted) (A) a
Transition Bonus Agreement, in substantially the form attached to the
Company Letter (the "Bonus Agreement"), with each of the persons listed
on Schedule 5.16(e)(ii)(A) to the Company Letter and (B) a Non-
Competition Agreement, in substantially the form attached to the
Company Letter (the "Non-Compete"), with each of the persons listed on
Schedule 5.16(i)(ii)(B) to the Company Letter. Schedule 5.16(e)(ii)
(A) sets forth the approximate amount of the Transition Bonus (as
defined in the Bonus Agreement) for each person listed on such schedule
as if the Transition Bonus were calculated as of the date hereof.
Schedule 5.16(e)(ii)(B) sets forth the approximate amount of the
payment to be made pursuant to the Non-Competes for each person listed
on such schedule.
ARTICLE VI
CONDITIONS PRECEDENT TO THE MERGER
Section 6.1 Conditions to Each Party's Obligation to Effect
the Merger. The respective obligations of each party hereto to effect
the Merger shall be subject to the fulfillment at or prior to the
Effective Time of the following conditions:
(a) Stockholder Approval. The Merger shall have been duly
approved by a majority of the outstanding stock of the Company entitled
to vote thereon, in accordance with applicable law and the Certificate
of Incorporation and By-laws of the Company, the Parent Charter
Amendments shall have been duly adopted by the holders of a majority of
the outstanding shares of Parent entitled to vote thereon and the
Parent Share Issuance shall have been duly approved by the holders of a
majority of the votes cast at the Parent Stockholder Meeting by the
holders of the shares of Parent Common Stock, provided, that the total
number of votes cast on the Parent Share Issuance represents more than
50% of the shares of Parent Common Stock entitled to vote thereon at
the Parent Stockholder Meeting.
(b) Stock Exchange Listings. The shares of Parent Common
Stock issuable in accordance with the Merger and upon exercise of the
Substitute Options shall have been authorized for listing on the NYSE,
subject to official notice of issuance.
(c) HSR and Other Approvals. (i) The waiting period (and
any extension thereof) applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated.
(ii) All authorizations, consents, orders, declarations or
approvals of, or filings with, or terminations or expirations of
waiting periods imposed by, any Governmental Entity, which the failure
to obtain, make or occur would have the effect of making the Merger or
any of the transactions contemplated hereby illegal or would have a
Material Adverse Effect on Parent or the Company (as the Surviving
Corporation), assuming the Merger had taken place, shall have been
obtained, shall have been made or shall have occurred.
(d) Registration Statement. The Registration Statement
shall have become effective in accordance with the provisions of the
Securities Act. No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the SEC and no
proceedings for that purpose shall have been initiated or, to the
knowledge of Parent or the Company, threatened by the SEC. All
necessary state securities authorizations (including State Takeover
Approvals) shall have been received and shall be in full force and
effect.
(e) No Order. No court or other Governmental Entity having
jurisdiction over the Company or Parent, or any of their respective
Subsidiaries, shall have enacted, issued, promulgated, enforced or
entered any law, rule, regulation, executive order, decree, injunction
or other order (whether temporary, preliminary or permanent) which is
then in effect and has the effect of making illegal or prohibiting the
Merger or any of the transactions contemplated hereby.
(f) Accounting. Each of Parent and the Company shall have
received a copy of an opinion of (i) Xxxxxx Xxxxxxxx LLP, in form and
substance reasonably satisfactory to Parent and the Company, addressed
to the Company, that, based on such procedures as were deemed relevant,
the Company qualifies as an entity that may be a party to a business
combination for which the pooling-of-interests method of accounting
would be available and (ii) Ernst & Young LLP, in form and substance
reasonably satisfactory to Parent and the Company, addressed to Parent,
that, based on such procedures as were deemed relevant, the Merger will
qualify as a pooling of interests under generally accepted accounting
principles.
Section 6.2 Conditions to Obligation of the Company to
Effect the Merger. The obligation of the Company to effect the Merger
shall be subject to the fulfillment at or prior to the Effective Time
of the following additional conditions:
(a) Performance of Obligations; Representations and
Warranties. Each of Parent and Sub shall have performed in all
material respects each of its agreements contained in this Agreement
required to be performed at or prior to the Effective Time, each of the
representations and warranties of Parent and Sub contained in this
Agreement that is qualified by materiality shall be true and correct at
and as of the Effective Time as if made at and as of the Effective Time
and each of such representations and warranties that is not so
qualified shall be true and correct in all material respects at and as
of the Effective Time as if made at and as of the Effective Time, in
each case except as contemplated or permitted by this Agreement; and
the Company shall have received a certificate signed on behalf of
Parent by its Chief Executive Officer and its Chief Financial Officer
to such effect.
(b) Tax Opinion. The Company shall have received an opinion
of Altheimer & Xxxx (or such other outside counsel as shall be
reasonably satisfactory to the Company and Parent), in form and
substance reasonably satisfactory to the Company, dated the Effective
Time, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion which are
consistent with the state of facts existing as of the Effective Time,
for United States federal income tax purposes:
(i) The Merger will constitute a "reorganization" within the
meaning of Section 368(a) of the Code, and the Company, Sub and Parent
will each be a party to such reorganization within the meaning of
Section 368(b) of the Code;
(ii) No gain or loss will be recognized by Parent or the
Company as a result of the Merger;
(iii) No gain or loss will be recognized by the stockholders
of the Company who are United States persons (within the meaning of the
Code) upon the exchange of their Company Common Shares solely for
shares of Parent Common Stock pursuant to the Merger, except with
respect to cash, if any, received in lieu of fractional shares of
Parent Common Stock;
(iv) The aggregate tax basis of the shares of Parent Common
Stock received by such a stockholder solely in exchange for Company
Common Shares pursuant to the Merger (including fractional shares of
Parent Common Stock for which cash is received) will be the same as the
aggregate tax basis of the Company Common Shares exchanged therefor;
(v) The holding period for shares of Parent Common Stock
received by such a stockholder in exchange for Company Common Shares
pursuant to the Merger will include the holding period of the Company
Common Shares exchanged therefor, provided such Company Common Shares
were held as capital assets by the stockholder at the Effective Time;
and
(vi) A stockholder of the Company who receives cash in lieu
of a fractional share of Parent Common stock will recognize gain or
loss equal to the difference, if any, between such stockholder's tax
basis in such fractional share (as described in clause (iv) above) and
the amount of cash received.
In rendering such opinion, Altheimer & Xxxx (or such other counsel) may
receive and rely upon representations, made as of the Effective Time
contained in a certificate of the Company substantially in the form of
the Company Tax Certificate attached to the Company Letter, a
certificate of Parent substantially in the form of the Parent Tax
Certificate attached to the Parent Letter and other appropriate
certificates of the Company, Parent and others, including, without
limitation, a certificate by the Company as to the historical and
present status of the Company's stockholders and the stockholdings
thereof.
(c) Consents Under Agreements. Parent shall have obtained
the consent or approval of each person (other than the Governmental
Entities referred to in Section 6.1(c)) whose consent or approval shall
be required in connection with the transactions contemplated hereby
under any indenture, mortgage, evidence of indebtedness, Parent
License, lease or other agreement or instrument, except where the
failure to obtain the same would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on
Parent or upon the consummation of the transactions contemplated
hereby.
(d) Parent Affiliate Agreements. The Company shall have
received the written agreements from the Parent Rule 145
Affiliates described in Section 5.5(b).
(e) Material Adverse Change. Since the date of this
Agreement, there shall have been no Material Adverse Change with
respect to Parent; and the Company shall have received a certificate
signed on behalf of Parent by its Chief Executive Officer and its Chief
Financial Officer to such effect.
(f) Litigation. There shall not have been instituted or be
pending, or threatened, any suit, action or proceeding by any
Governmental Entity as a result of this Agreement or any of the
transactions contemplated hereby which, if such Governmental Entity
were to prevail, would reasonably be expected, in the good faith
opinion of the Company, to have a Material Adverse Effect on Parent or
the Company.
(g) Registration Rights Agreement. Parent shall enter into
the Registration Rights Agreement with each of the parties thereto
attached hereto as Exhibit C.
Section 6.3 Conditions to Obligations of Parent and Sub to
Effect the Merger. The obligation of Parent and Sub to effect the
Merger shall be subject to the fulfillment at or prior to the Effective
Time of the following additional conditions:
(a) Performance of Obligations; Representations and
Warranties. The Company shall have performed in all material respects
each of its agreements contained in this Agreement required to be
performed at or prior to the Effective Time, each of the repre
sentations and warranties of the Company contained in this Agreement
that is qualified by materiality shall be true and correct at and as of
the Effective Time as if made at and as of the Effective Time and each
of such representations and warranties that is not so qualified shall
be true and correct in all material respects at and as of the Effective
Time as if made at and as of the Effective Time, in each case except as
contemplated or permitted by this Agreement; and Parent shall have
received a certificate signed on behalf of the Company by its Chief
Executive Officer and its Chief Financial Officer to such effect.
(b) Consents Under Agreements. The Company shall have
obtained the consent or approval of each person (other than the
Governmental Entities referred to in Section 6.1(c)) whose consent or
approval shall be required in connection with the transactions
contemplated hereby under any indenture, mortgage, evidence of
indebtedness, Company License, lease or other agreement or instrument,
except where the failure to obtain the same would not reasonably be
expected, in the good faith opinion of Parent, individually or in the
aggregate, to have a Material Adverse Effect on the Company or Parent
or upon the consummation of the transactions contemplated hereby.
(c) Company Affiliate Agreements. Parent shall have
received the written agreements from the Company Rule 145 Affiliates
described in Section 5.5(a).
(d) Litigation. There shall not have been instituted or be
pending, or threatened, any suit, action or proceeding by any
Governmental Entity as a result of this Agreement or any of the
transactions contemplated hereby which, if such Governmental Entity
were to prevail, would reasonably be expected, in the good faith
opinion of Parent, to have a Material Adverse Effect on Parent or the
Company (as the Surviving Corporation).
(e) Stock Option Agreement. The Company and Parent shall
have entered into the Stock Option Agreement, which shall have remained
in full force and effect without breach by the Company.
(f) Material Adverse Change. Since the date of this
Agreement, there shall have been no Material Adverse Change with
respect to the Company; and Parent shall have received a certificate
signed on behalf of the Company by its Chief Executive Officer and its
Chief Financial Officer to such effect.
ARTICLE VII
TERMINATION; AMENDMENT AND WAIVER
Section 7.1 Termination. This Agreement may be terminated
at any time prior to the Effective Time, whether before or after any
approval by the stockholders of Parent or the Company of the matters
presented in connection with the Merger:
(a) by mutual written consent of Parent and the Company;
(b) by Parent, by written notice to the Company, if (i) the
Company shall have failed to comply in any material respect with any of
its covenants or agreements contained in this Agreement required to be
complied with prior to the date of such termination, which failure to
comply has not been cured within five business days after receipt by
the Company of notice of such failure to comply, (ii) the stockholders
of the Company shall not approve the Merger at the Company Stockholder
Meeting or any adjournment thereof or (iii) the stockholders of Parent
shall not approve and adopt the Parent Share Issuance or the Charter
Amendments at the Parent Stockholder Meeting or any adjournment
thereof;
(c) by the Company, by written notice to Parent, if (i)
Parent or Sub shall have failed to comply in any material respect with
any of its respective covenants or agreements contained in this
Agreement required to be complied with prior to the date of such
termination, which failure to comply has not been cured within five
business days after receipt by Parent of notice of such failure to
comply, (ii) the stockholders of the Company shall not approve the
Merger at the Company Stockholder Meeting or any adjournment thereof or
(iii) the stockholders of Parent shall not approve and adopt the Parent
Share Issuance or the Charter Amendments at the Parent Stockholder
Meeting or any adjournment thereof;
(d) by either Parent or the Company, by written notice from
the terminating party to the other parties, if there has been (i) a
material breach by the other (or Sub if the Company is the terminating
party) of any representation or warranty that is not qualified as to
materiality or (ii) a breach by the other (or Sub if the Company is the
terminating party) of any representation or warranty that is qualified
as to materiality, in each case which breach has not been cured within
five business days after receipt by the breaching party of notice of
the breach;
(e) by either Parent or the Company, by written notice from
the terminating party to the other parties, if: (i) the Merger has not
been effected on or prior to the close of business on August 14, 1996;
provided, however, that the right to terminate this Agreement pursuant
to this clause (e) shall not be available to any party whose failure to
fulfill any obligation of this Agreement has been the cause of, or re
sulted in, the failure of the Merger to have occurred on or prior to
such date; or (ii) any court or other Governmental Entity having
jurisdiction over a party hereto shall have issued an order, decree or
ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the transactions contemplated by this Agreement
and such order, decree, ruling or other action shall have become final
and nonappealable;
(f) by the Company, by written notice to Parent, if the
Board of Directors of the Company shall determine in good faith that a
Takeover Proposal constitutes a Superior Proposal; provided, however,
that the Company may not terminate this Agreement pursuant to this
clause (f) unless (i) five business days shall have elapsed after
delivery to Parent of a written notice of such determination by such
Board of Directors and at all reasonable times during such five
business-day period the Company shall have cooperated with Parent in
informing Parent of the terms and conditions of such Takeover Proposal
and the identity of the person or group making such Takeover Proposal,
with the objective of providing Parent a reasonable opportunity, during
such five business-day period, to propose a modification of the terms
and conditions of this Agreement so that a business combination between
the Company and Parent (or an Affiliate of Parent) may be effected, and
(ii) at the end of such five business-day period such Board of
Directors shall continue to believe in good faith that such Takeover
Proposal constitutes a Superior Proposal and simultaneously therewith
the Company shall enter into a definitive acquisition, merger or
similar agreement to effect such Superior Proposal; provided further
that, simultaneously with any such termination under this Section
7.1(f), the fee set forth in Section 5.7(b) shall have been paid to
Parent by the Company;
(g) by Parent, by written notice to the Company, if: (i) the
Board of Directors of the Company shall not have recommended the Merger
to the Company's stockholders, or shall have resolved not to make such
recommendation, or shall have modified in a manner adverse to Parent or
rescinded its recommendation of the Merger to the Company's
stockholders as being advisable and fair to and in the best interests
of the Company and its stockholders, or shall have modified or
rescinded its approval of this Agreement, or shall have resolved to do
any of the foregoing, (ii) the Board of Directors of the Company shall
have recommended to the stockholders of the Company any Takeover
Proposal or shall have resolved to do so or (iii) a tender offer or
exchange offer for 30% or more of the outstanding shares of capital
stock of the Company is commenced, and the Board of Directors of the
Company fails to recommend against acceptance of such tender offer or
exchange offer by its stockholders within the 10 business day period
(or such shorter period) required by Section 14e-2 of the Exchange Act
(the taking of no position by the expiration of such 10 business day
period (or such shorter period) with respect to the acceptance of such
tender offer or exchange offer by its stockholders constituting such a
failure);
(h) by the Company, by written notice to Parent, if the
Board of Directors of Parent shall not have recommended the Parent
Share Issuance or the Charter Amendments to Parent's stockholders, or
shall have resolved not to make such recommendation, or shall have
modified in a manner adverse to the Company or rescinded its
recommendation of the Parent Share Issuance or the Charter Amendments
to Parent's stockholders as being advisable and fair to and in the best
interests of Parent and its stockholders, or shall have modified in a
manner adverse to the Company or rescinded its approval of this
Agreement, or shall have resolved to do any of the foregoing;
(i) by Parent, by written notice to the Company if the
Company shall breach any of its covenants or agreements in Section 4.2;
(j) by the Company, by written notice to Parent, prior to
the Company Stockholder Meeting if the Average Price is less than
$58.23 (this provision to be deemed amended and restated to the effect
set forth in Schedule 7.1 after the November Stock Dividend);
(k) by Parent, by written notice to the Company prior to the
Parent Stockholder Meeting if the Average Price is greater than $85.33
(this provision to be deemed amended and restated to the effect set
forth in Schedule 7.1 after the November Stock Dividend);
(l) by either Parent or the Company, at any time during the
30-day period commencing on March 12, 1996 and ending on April 11,
1996, by written notice from the terminating party to the other
parties, if the Merger has not been effected; or
(m) by the Company, by written notice to Parent, if (i)
Parent shall have entered into a definitive acquisition, merger or
similar agreement under which the holders of Parent Common Stock
outstanding immediately before the consummation of the acquisition,
merger or similar transaction contemplated thereby will not own
immediately after such consummation more than 50% of the outstanding
voting securities (as such term is defined in Rule 405 under the
Securities Act) of the acquiring or surviving corporation or its
parent, or (ii) the Board of Directors of Parent recommends acceptance
of a tender or exchange offer by any person for more than 50% of the
outstanding Parent Common Stock.
The right of Parent or the Company to terminate this
Agreement pursuant to this Section 7.1 shall remain operative and in
full force and effect regardless of any investigation made by or on
behalf of such party, whether prior to or after the execution of this
Agreement.
Section 7.2 Effect of Termination. In the event of
the termination of this Agreement by either Parent or the Company as
provided in Section 7.1, this Agreement shall forthwith become void
without any liability hereunder on the part of the Company, Parent, Sub
or their respective directors or officers, except for the last two
sentences of Section 5.4 and the entirety of Section 5.7, which shall
survive any such termination; provided, however, that nothing contained
in this Section 7.2 shall relieve any party hereto from any liability
for any breach of this Agreement; provided, however, that, with respect
to any breach by the Company of the provisions of Section 4.2 that is
not the result of willful action (or willful failure to take action) or
bad faith on the part of the Company, Parent's exclusive remedy in
respect of such breach shall be limited to the right to receive the fee
described in subsection (b), (c), (d) or (e) of Section 5.7 and, upon
payment of such fee to Parent in accordance with the provisions of such
subsection (b), (c), (d) or (e), the Company shall have no further
liability to Parent in respect of such breach.
Section 7.3 Amendment. This Agreement may be amended by the
parties hereto, by or pursuant to action taken by their respective
Boards of Directors, at any time before or after approval by the
stockholders of Parent and the Company of the matters presented to them
in connection with the Merger; provided, however, that after any such
approval, no amendment shall be made if applicable law would require
further approval by such stockholders, unless such further approval
shall be obtained. This Agreement shall not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
Section 7.4 Waiver. At any time prior to the Effective
Time, the parties hereto may (i) extend the time for the performance of
any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties
contained herein or in any instrument delivered pursuant hereto and
(iii) waive compliance with any of the agreements or conditions
contained herein which may legally be waived. Any agreement on the
part of any party hereto to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1 Non-Survival of Representations and Warranties.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant hereto shall survive the Effective Time.
Section 8.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given when delivered
personally, one day after being delivered to an overnight courier or
when telecopied (with a confirmatory copy sent by overnight courier) to
the other parties hereto at the following addresses (or at such other
address for any party as shall be specified by like notice):
(a) if to Parent or Sub, to
IMC Global Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxx
Senior Vice President and
General Counsel
Facsimile: (000) 000-0000
with a copy to:
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx and
Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
(b) if to the Company, to
The Vigoro Corporation
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
President and Chief Executive Officer
Facsimile: (000) 000-0000
with a copy to:
Altheimer & Xxxx
00 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Gold
Facsimile: (000) 000-0000
Section 8.3 Interpretation. When reference is made in this
Agreement to a Section, such reference shall be to a Section of this
Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for convenience of reference
only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
Section 8.4 Counterparts. This Agreement may be executed in
any number of counterparts, all of which shall be considered one and
the same agreement, and shall become effective when one or more
counterparts shall have been signed by each of the parties hereto and
delivered to the other parties.
Section 8.5 Entire Agreement; No Third-Party Beneficiaries.
This Agreement, the Stock Option Agreement, the Company Letter, the
Parent Letter and the Confidentiality Agreements described in Section
5.4, (and the schedules and attachments to the foregoing) except as
provided in the last sentence of Section 5.4, constitutes the entire
agreement of the parties hereto and supersede all prior agreements and
understandings, both written and oral, among such parties with respect
to the subject matter hereof. This Agreement, except for the
provisions of Sections 5.9(e), 5.13 or 5.16, is not intended to confer
upon any person other than the parties hereto any rights or remedies
hereunder.
Section 8.6 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 conflict of laws of such state.
Section 8.7 Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by
operation of law or otherwise by any of the parties hereto without the
prior written consent of the other parties.
Section 8.8 Severability. If any term or provision of this
Agreement is invalid, illegal or incapable of being enforced by any
rule of law, or public policy, all other terms, provisions and condi
tions of this Agreement shall nevertheless remain in full force and
effect so long as the economic and legal substance of the transactions
contemplated hereby are not affected in any manner materially adverse
to any party hereto. Upon any determination that any term or other
provision hereof is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of such parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated by this Agreement may be consummated as
originally contemplated to the fullest extent possible.
Section 8.9 Enforcement of this Agreement. The parties
hereto agree that irreparable damage would occur in the event that any
of the terms or provisions of this Agreement were not performed in
accordance with their specific wording or were otherwise breached. It
is accordingly agreed that each of the parties hereto 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
court of the United States of America or any state having jurisdiction,
such remedy being in addition to any other remedy to which any party
may be entitled at law or in equity.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused
this Agreement to be executed and attested by their respective officers
thereunto duly authorized, all as of the date first written above.
IMC GLOBAL INC.
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Chairman and Chief
Executive Officer
Attest: /s/ Xxxxxxxxx X. Xxxxx
Xxxxxxxxx X. Xxxxx
Senior Vice President and
General Counsel
BULL MERGER COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Chairman and Chief
Executive Officer
Attest: /s/ Xxxxxxxxx X. Xxxxx
Xxxxxxxxx X. Xxxxx
Senior Vice President and
General Counsel
THE VIGORO CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Chairman of the Board
Attest: /s/ Xxxxxx X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxx, Xx.
President and Chief
Executive Officer
Schedule 1.5
AMENDED AND RESTATED SECTION 1.5
OF THE MERGER AGREEMENT
(to apply after November Stock Dividend)
Section 1.5 Conversion of Securities. As of the Effective
Time, by virtue of the Merger and without any action on the part of any
stockholder of either of the Constituent Corporations:
(a) Each issued and outstanding common share, $.01 par
value, of Sub shall be converted into 500 Common Shares of the
Surviving Corporation.
(b) All Company Common Shares that are held in the treasury
of the Company and any Company Common Shares owned by Parent shall be
cancelled and no capital stock of Parent or other consideration shall
be delivered in exchange therefor.
(c) Subject to the provisions of Sections 1.8 and 1.10, each
Company Common Share issued and outstanding immediately prior to the
Effective Time (other than shares to be cancelled in accordance with
Section 1.5(b)) shall be converted into 1.60 (such number being
hereinafter referred to as the "Conversion Number") of a validly
issued, fully paid and nonassessable share of Parent Common Stock;
provided, however, that if the average of the per share daily closing
prices on the New York Stock Exchange (the "NYSE") of Parent Common
Stock (as reported in the NYSE Composite Transactions in the Wall
Street Journal, Midwest Edition) during the 20 consecutive trading days
ending on the fifth trading day prior to the date that the Company
Stockholder Meeting is held (the "Average Price") is less than $30.938,
then the Conversion Number shall be equal to the lesser of: (a) 1.70;
and (b) the number obtained by dividing $49.50 by the Average Price;
and provided, further, that if the Average Price is greater than
$40.00, then the Conversion Number shall be equal to the greater of:
(x) 1.50; and (y) the number obtained by dividing $64.00 by the Average
Price. All such Company Common Shares, when so converted, shall no
longer be outstanding and shall automatically be cancelled and retired;
and each holder of a certificate representing prior to the Effective
Time any such Company Common Shares shall cease to have any rights with
respect thereto, except the right to receive (i) certificates
representing the shares of Parent Common Stock into which such Company
Common Shares have been converted, (ii) any dividends and other
distributions in accordance with Section 1.7 and (iii) any cash,
without interest, to be paid in lieu of any fractional share of Parent
Common Stock in accordance with Section 1.8.
(d) The Company Series E Preferred Shares and the Company F
Preferred Shares (as such terms are defined in Section 3.2) shall not
be converted or cancelled (except to the extent that the holder of any
such Series E Preferred Shares or Series F Preferred Shares shall have
perfected and not lost or withdrawn any right to appraisal for such
shares under any applicable provisions of the DGCL) but shall remain
Company Series E Preferred Shares and Company Series F Preferred
Shares, respectively, of the Surviving Corporation (collectively, the
"Preferred Shares") without alteration of their relative rights,
preferences, terms and conditions.
Schedule 7.1
AMENDED AND RESTATED SECTION 7.1(j) and 7.1(k)
OF THE MERGER AGREEMENT
(to apply after November Stock Dividend)
(j) by the Company, by written notice to Parent, prior to
the Company Stockholder Meeting if the Average Price is less than
$29.115;
(k) by Parent, by written notice to the Company prior to the
Parent Stockholder Meeting if the Average Price is greater than
$42.665;
