EXHIBIT (d)(1)
-------------------------------------
AGREEMENT AND PLAN OF MERGER
among
EBRO PULEVA, S.A.,
EBRO PULEVA PARTNERS G.P.
and
RIVIANA FOODS INC.
dated as of
July 23, 2004
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TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER......................................................... 1
ARTICLE I THE OFFER.................................................................. 2
Section 1.1 The Offer............................................................. 2
Section 1.2 Company Actions....................................................... 4
ARTICLE II THE MERGER................................................................ 5
Section 2.1 The Merger............................................................ 5
Section 2.2 Effective Time........................................................ 6
Section 2.3 Effects of the Merger................................................. 6
Section 2.4 Charter and By-laws; Directors and Officers........................... 6
Section 2.5 Conversion of Shares.................................................. 6
Section 2.6 Exchange of Certificates.............................................. 7
Section 2.7 Stock Plans........................................................... 9
Section 2.8 Further Assurances.................................................... 10
Section 2.9 Closing............................................................... 10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB......................... 10
Section 3.1 Organization.......................................................... 10
Section 3.2 Authority............................................................. 10
Section 3.3 Consents and Approvals; No Violations................................. 11
Section 3.4 Information Supplied.................................................. 12
Section 3.5 Interim Operations of Sub............................................. 12
Section 3.6 Brokers............................................................... 12
Section 3.7 Financing............................................................. 12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................. 12
Section 4.1 Organization, Standing and Power...................................... 13
Section 4.2 Capital Structure..................................................... 13
Section 4.3 Authority............................................................. 15
Section 4.4 Consents and Approvals; No Violation.................................. 15
Section 4.5 SEC Documents and Other Reports....................................... 16
Section 4.6 Information Supplied.................................................. 17
Section 4.7 Absence of Certain Changes or Events.................................. 17
Section 4.8 Permits and Compliance; Contracts..................................... 18
Section 4.9 Tax Matters........................................................... 19
Section 4.10 Actions and Proceedings.............................................. 21
Section 4.11 Employee Benefits.................................................... 21
Section 4.12 Liabilities.......................................................... 23
Section 4.13 Labor Matters; Worker Safety Laws.................................... 23
Section 4.14 Intellectual Property................................................ 25
Section 4.15 Title to Assets and Related Matters.................................. 26
Section 4.16 Environmental Matters................................................ 27
Section 4.17 State Takeover Statutes.............................................. 29
Section 4.18 Required Vote of Company Stockholders................................ 29
Section 4.19 Brokers.............................................................. 29
Section 4.20 Insurance............................................................ 29
Section 4.21 Warranties and Product Liability..................................... 30
Section 4.22 Opinion of Financial Advisor......................................... 30
Section 4.23 Absence of Certain Business Practices................................ 30
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS.................................. 30
Section 5.1 Conduct of Business by the Company Pending the Merger................. 30
Section 5.2 No Solicitation....................................................... 34
ARTICLE VI ADDITIONAL AGREEMENTS..................................................... 36
Section 6.1 Stockholder Meeting................................................... 36
Section 6.2 Access to Information................................................. 38
Section 6.3 Directors............................................................. 38
Section 6.4 Fees and Expenses..................................................... 39
Section 6.5 Reasonable Best Efforts; Cooperation.................................. 39
Section 6.6 Public Announcements.................................................. 40
Section 6.7 State Takeover Statutes............................................... 40
Section 6.8 Indemnification....................................................... 40
Section 6.9 Notification of Certain Matters....................................... 40
Section 6.10 Employee Matters..................................................... 41
Section 6.11 Regulatory Approvals................................................. 42
Section 6.12 Section 16 Matters................................................... 42
Section 6.13 Standstill Agreements................................................ 42
Section 6.14 FIRPTA Certification................................................. 42
ARTICLE VII CONDITIONS PRECEDENT TO THE MERGER....................................... 43
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger............ 43
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER....................................... 43
Section 8.1 Termination........................................................... 43
Section 8.2 Effect of Termination................................................. 45
Section 8.3 Amendment............................................................. 46
Section 8.4 Waiver................................................................ 46
ARTICLE IX GENERAL PROVISIONS........................................................ 46
Section 9.1 Non-Survival of Representations and Warranties........................ 46
Section 9.2 Notices............................................................... 47
Section 9.3 Interpretation; Certain Definitions................................... 48
Section 9.4 Counterparts.......................................................... 51
Section 9.5 Entire Agreement; No Third-Party Beneficiaries........................ 51
Section 9.6 Governing Law......................................................... 51
Section 9.7 Assignment............................................................ 51
Section 9.8 Severability.......................................................... 52
Section 9.9 Specific Performance;................................................. 52
EXHIBIT INDEX
Exhibit A - Conditions of the Offer
Exhibit B-1 Significant Shareholders
Exhibit B-2 Form of Shareholder Agreement
Exhibit C-1 Surviving Corporation - Amendments to Restated Certificate of
Incorporation of the Company
Exhibit C-2 Surviving Corporation - By-Laws
Exhibit C-3 Surviving Corporation - Directors
INDEX OF DEFINED TERMS
Acceptance Date................................................ 3
Active Subsidiary.............................................. 14
Agreement...................................................... 1
Antitrust Condition............................................ ii
Cash Payment................................................... 9
Certificate of Merger.......................................... 6
Certificates................................................... 8
Closing........................................................ 6
Closing Date................................................... 6
COBRA.......................................................... 23
Code........................................................... 9
Company........................................................ 1
Company Common Stock........................................... 1
Company Financial Advisor...................................... 4
Company Form 10-K.............................................. 24
Company Owned Real Property.................................... 50
Company Permits................................................ 19
Company Plan................................................... 22
Company Preferred Stock........................................ 14
Company Property............................................... 26
Company Proxy Statement........................................ 5
Company Real Property Leases................................... 50
Company SEC Documents.......................................... 17
Company Securities............................................. 15
Compensation Agreement......................................... 22
Constituent Corporations....................................... 1
DGCL........................................................... 3
Disclosure Schedule............................................ 11
Dissenting Shares.............................................. 7
Dormant Subsidiaries........................................... 24
Effective Time................................................. 6
ERISA.......................................................... 22
ERISA Affiliate................................................ 22
Exchange Act................................................... 2
GAAP........................................................... 17
Governmental Entity............................................ 9
Group.......................................................... 15
Hazardous Substances........................................... 29
HSR Act........................................................ 12
Independent Directors.......................................... 40
Information Statement.......................................... 5
Intellectual Property.......................................... 26
Knowledge...................................................... 19, 23
Leased Real Property........................................... 50
Material Adverse Effect........................................ 12
Merger......................................................... 1
Merger Consideration........................................... 7
Minimum Condition.............................................. 44
Offer.......................................................... 1
Offer Conditions............................................... 2
Offer Documents................................................ 3
Offer Price.................................................... 1
Offer to Purchase.............................................. 3
Options........................................................ 10
Organizational Documents....................................... 12
Outside Date................................................... 3
Owned Property................................................. 26
Parent......................................................... 1
Parent Benefit Plan............................................ 43
Paying Agent................................................... 8
Permitted Encumbrances......................................... 51
Person......................................................... 4
Proxy Statement................................................ 5
Real Property.................................................. 52
Related Party.................................................. 34
Representatives................................................ 8
Schedule 14D-9................................................. 4
Schedule TO.................................................... 3
SEC............................................................ 3
Securities Act................................................. 17
Shares......................................................... 1
Significant Stockholders....................................... 1
State Takeover Approvals....................................... 12
Stock Plan..................................................... 10
Stockholder Agreements......................................... 1
Stockholder Meeting............................................ 12
Sub............................................................ 1
Subsidiary..................................................... 6
Superior Proposal.............................................. 4
Surviving Corporation.......................................... 6
Takeover Proposal.............................................. 35
Tax Return..................................................... 20
Taxes.......................................................... 8
Trade Secrets.................................................. 26
Welfare Plan................................................... 23
Worker Safety Laws............................................. 25
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of July 23, 2004 (this "Agreement"),
among Ebro Puleva, S.A., a "sociedad anonima" organized under the laws of Spain
("Parent"), Ebro Puleva Partners G.P., a Delaware general partnership whose
general partners are Parent and Herba Foods S.L., a "sociedad limitada"
organized under the laws of Spain ("Sub"), and Riviana Foods Inc., a Delaware
corporation (the "Company") (Sub and the Company being hereinafter collectively
referred to as the "Constituent Corporations"). Capitalized terms not defined in
the context of the Section of this Agreement in which such terms first appear
shall have the meanings set forth in Section 9.3(b).
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent and the Company and
the general partners of the Sub have determined that the acquisition of the
Company by Parent is in the best interests of their respective corporations and
stockholders and have approved such acquisition on the terms and subject to the
conditions set forth herein;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause Sub
to make a tender offer (as it may be amended from time to time as permitted
under this Agreement, the "Offer") to purchase all of the outstanding shares
(the "Shares") of Common Stock, par value $1.00 per share, of the Company (the
"Company Common Stock") at a purchase price of $25.75 per Share the "Offer
Price"), net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, the Board of Directors of the Company has adopted resolutions
approving the Offer and the Merger (as defined below) and recommending that
holders of Shares accept the Offer and that the Company's stockholders approve
this Agreement and the transactions contemplated hereby;
WHEREAS, the respective Boards of Directors of Parent and the Company and
the general partners of the Sub have approved and declared advisable the merger
of Sub and the Company (the "Merger"), upon the terms and subject to the
conditions set forth herein, whereby each issued and outstanding Share not owned
directly or indirectly by Parent or the Company will be converted into the right
to receive the Offer Price; and the Boards of Directors of the Company and the
general partners of the Sub have approved and adopted this Agreement and the
transactions contemplated hereby;
WHEREAS, in order to induce Parent and Sub to enter into this Agreement,
concurrently herewith Parent, Sub and certain of the stockholders of the Company
set forth on Exhibit B-1 hereto (collectively, the "Significant Stockholders")
are entering into Stockholder Agreements dated as of the date hereof (the
"Stockholder Agreements") in the form attached hereto as Exhibit B-2, pursuant
to which each of the Significant Shareholders has agreed, among other things, to
tender all of their shares of Company Common Stock owned by such Significant
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Shareholder into the Offer and to take certain other actions in furtherance of
the Merger and to grant an irrevocable proxy to the Parent with respect thereto;
and
WHEREAS, Parent, Sub and Company desire to make certain representations,
warranties, covenants and agreements in connection with the Offer and the Merger
and to prescribe various conditions to the Offer and the Merger as set forth
herein.
NOW, THEREFORE, in consideration of the premises, representations,
warranties and agreements herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
THE OFFER
Section 1.1 THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article VIII and none of the events set forth in Exhibit A shall
have occurred, as promptly as practicable but in no event later than seven (7)
business days following the public announcement by Parent and the Company of the
Offer and Merger, Sub shall, and Parent shall cause Sub to, commence, within the
meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended
(together with the rules and regulations thereunder, the "Exchange Act"), the
Offer at the Offer Price. The obligation of Sub to, and of Parent to cause Sub
to, consummate the Offer and accept for payment, and pay for, any Shares
tendered and not withdrawn pursuant to the Offer shall be subject to the
conditions set forth in Exhibit A (the "Offer Conditions") (any of which may be
waived in whole or in part by Parent and Sub in their sole discretion, except as
expressly provided in the Offer Conditions) and to the rights of Parent and Sub
to terminate this Agreement as provided in Section 8.1. The conditions to the
Offer set forth in Exhibit A are for the sole benefit of Parent and Sub and may
be asserted by Parent and Sub regardless of the circumstances giving rise to any
such conditions (other than as a result of any action or inaction of Parent or
Sub that constitutes a breach of this Agreement). The initial expiration date of
the Offer shall be the twentieth (20th) business day following commencement of
the Offer. The Offer Price shall be net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions of the Offer. Parent and
Sub expressly reserve the right, in their sole discretion, to modify the terms
of the Offer, except that, without the consent of the Company, Sub shall not (i)
reduce the number of Shares subject to the Offer, (ii) reduce the Offer Price,
(iii) impose any material conditions to the Offer other than the Offer
Conditions or modify the Offer Conditions (other than to waive any Offer
Conditions to the extent permitted by this Agreement); (iv) except as provided
in the next sentence, extend the Offer beyond any scheduled expiration date; (v)
change the form of consideration payable in the Offer (other than adding
consideration); or (vi) amend any other material terms of the Offer in a manner
adverse to the holders of Shares. Notwithstanding the foregoing, Sub may,
without the consent of the Company (i) extend the Offer, if at the scheduled or
extended expiration date of the Offer any of the Offer Conditions shall not be
satisfied or waived, until such time as such conditions are satisfied or waived;
provided, however, that notwithstanding anything herein to the contrary, if any
of the conditions to the Offer are not satisfied or waived on any scheduled
expiration date of
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the Offer, Parent and Sub shall be required to extend the Offer until such
condition or conditions are satisfied or waived unless such condition or
conditions could not reasonably be expected to be satisfied by the Outside Date;
provided, further, that in no event shall Parent and Sub be required to extend
the expiration date of the Offer beyond the Outside Date; (ii) extend the Offer
for any period required by any rule, regulation, interpretation or position of
the Securities and Exchange Commission (the "SEC") or the staff thereof
applicable to the Offer; (iii) extend the Offer for any reason on one or more
occasions for an aggregate period of not more than 15 business days beyond the
latest expiration date that would otherwise be permitted under clauses (i) and
(ii) of this sentence if there shall not have been tendered a sufficient number
of Shares to enable the Merger to be effected without a meeting of the Company's
stockholders in accordance with Section 253 of the General Corporation Law of
the State of Delaware, as amended (the "DGCL"); and (iv) after the Acceptance
Date, for one or more subsequent offering periods of up to an additional twenty
(20) business days in the aggregate pursuant to Rule 14d-11 of the Exchange Act,
in each case subject to the right of Parent, Sub or the Company to terminate
this Agreement pursuant to the terms hereof. Subject to the foregoing and
applicable law and upon the terms and subject to the conditions of the Offer,
Sub shall, and Parent shall cause it to, accept for payment, as promptly as
permitted under applicable securities laws, and pay for (after giving effect to
any required withholding tax), as promptly as practicable after the date on
which Sub first accepts shares for payment pursuant to the Offer (such date,
regardless of whether Parent and Sub elect to provide for one or more subsequent
offering periods pursuant to Rule 14d-11 of the Exchange Act, the "Acceptance
Date") all shares of Company Common Stock validly tendered and not withdrawn
pursuant to the Offer.
(b) The Offer shall be made by means of an offer to purchase (the
"Offer to Purchase") subject to the Offer Conditions set forth in Exhibit A. On
the date of commencement of the Offer, Parent and Sub shall file with the SEC a
Tender Offer Statement on Schedule TO (together with all supplements or
amendments thereto, the "Schedule TO") with respect to the Offer, which shall
contain as an exhibit or incorporate by reference the Offer to Purchase and a
related letter of transmittal and summary advertisement (such Schedule TO and
the documents included therein pursuant to which the Offer will be made,
together with any supplements or amendments thereto, the "Offer Documents"), and
Parent and Sub shall cause to be disseminated the Offer Documents to holders of
Shares as and to the extent required by applicable federal securities laws.
Parent and Sub agree that the Offer Documents shall comply in all material
respects with the Exchange Act and the Offer Documents, on the date first
published, sent or given to the Company's stockholders, shall not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no covenant is made by Parent or Sub with respect to information supplied
by the Company or any of its stockholders specifically for inclusion or
incorporation by reference in the Offer Documents. Each of Parent, Sub and the
Company agrees to correct promptly any information provided by it for use in the
Offer Documents if and to the extent that the Offer Documents shall be, or have
become, false or misleading in any material respect, and Parent and Sub further
agree to take all steps necessary to cause the Schedule TO, as so corrected, to
be filed with the SEC and the other Offer Documents, as so corrected, to be
disseminated to holders of Shares, in each case as and to the extent required by
applicable federal securities laws. The Company and its counsel shall be given
reasonable opportunity to review and comment upon the Offer Documents prior to
their filing with the SEC or
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dissemination to the stockholders of the Company. Parent and Sub agree to
provide the Company and its counsel any comments Parent, Sub or their counsel
may receive from the SEC or its staff with respect to the Offer Documents
promptly after the receipt of such comments and to cooperate with the Company
and its counsel in responding to any such comments.
Section 1.2 COMPANY ACTIONS.
(a) The Company hereby approves of and consents to the Offer and
represents and warrants that the Board of Directors of the Company, at a meeting
duly called and held on July 22, 2004, at which all directors were present (in
person or by telephone), duly and unanimously adopted resolutions: (i) approving
and adopting this Agreement, including the Offer, the Merger and the other
transactions contemplated hereby; (ii) taking all action necessary to render the
provisions of Section 203 of the DGCL and other state takeover statutes
inapplicable to the Offer, the Merger, this Agreement, the Stockholder
Agreements and the transactions contemplated hereby and thereby as contemplated
by Section 4.17 hereof; (iii) determining that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, are
advisable, fair to, and in the best interests of, the Company and the Company's
stockholders and that the consideration to be paid for each Share in the Offer
and the Merger is fair to the holders of Shares; and (iv) recommending that
holders of Shares accept the Offer, tender their Shares pursuant to the Offer
and approve this Agreement and the transactions contemplated hereby, including
the Merger. The Company hereby consents to the inclusion in the Offer Documents
of the recommendations of the Board of Directors of the Company described in
this Section 1.2(a); provided, however, that the Company's Board of Directors
may withdraw, modify or amend the recommendation if it determines in good faith
only after consultation with Xxxxxxx Xxxxx & Co. (the "Company Financial
Advisor") and receipt of and based upon advice from outside legal counsel to the
Company that the Board of Directors is required by fiduciary duties to the
Company's stockholders under applicable law to withdraw, modify or amend its
recommendations in response to a Superior Proposal as provided in Section 5.2
below. The Company represents and warrants to Parent and Sub that it has been
advised by each of its directors and executive officers that each such person
intends to tender all Shares owned by such person pursuant to the Offer.
(b) On the date on which the Offer Documents are filed with the
SEC, the Company shall file with the SEC a Tender Offer
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the
Offer (together with any amendments or supplements thereto, the "Schedule
14D-9") that will comply in all material respects with the provisions of all
applicable federal securities laws and that will contain the recommendations of
the Board of Directors of the Company and the opinion of the Company Financial
Advisor, in each case, described in Section 1.2(a), and the Company shall cause
to be disseminated the Schedule 14D-9 along with the Offer Documents to holders
of Shares as and to the extent required by applicable federal securities laws.
On the date filed with the SEC and on the date first published, sent or given to
the Company's stockholders, the Schedule 14D-9 shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
covenant is made by the Company with respect to information supplied by Parent
or Sub specifically for inclusion in the Schedule 14D-9. Each of the Company,
Parent and Sub agrees to correct promptly any information provided
4
by it for use in the Schedule 14D-9 if and to the extent that such information
shall be, or has become, false or misleading in any material respect, and the
Company further agrees to take all steps necessary to amend or supplement the
Schedule 14D-9 and to cause the Schedule 14D-9, as so corrected, to be filed
with the SEC and disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. Parent and its counsel
shall be given reasonable opportunity to review and comment upon the Schedule
14D-9 prior to its filing with the SEC or dissemination to holders of Shares.
The Company agrees to provide Parent and its counsel any comments the Company or
its counsel may receive from the SEC or its staff with respect to the Schedule
14D-9 promptly after the receipt of such comments and to cooperate with Parent,
Sub and their counsel in responding to any such comments.
(c) The Company hereby consents to the inclusion of the
recommendations of the Board of Directors of the Company and the opinion of the
Company Financial Advisor, in each case, described in Section 1.2(a) in, as
necessary, the proxy statement (including the form of proxies) ("Proxy
Statement") or information statement ("Information Statement") relating to the
vote of the Company's stockholders with respect to this Agreement (as amended,
supplemented or modified, the Proxy Statement and the Information Statement,
together the "Company Proxy Statement").
(d) In connection with the Offer and the Merger, the Company shall
cause its transfer agent or agents to furnish Sub promptly with mailing labels
containing the names and addresses of the record holders of Shares as of a
recent date and of those Persons becoming record holders subsequent to such
date, together with copies of all lists of stockholders, security position
listings and computer files and all other information in the Company's
possession or control regarding the beneficial owners of Shares and any
securities convertible into Shares, and shall furnish to Sub such information
and assistance (including updated lists of stockholders, security position
listings and computer files) as Parent may reasonably request in communicating
the Offer to the record and beneficial holders of Shares. Subject to the
requirements of applicable law, and except for such steps as are necessary to
disseminate the Offer Documents and any other documents necessary to consummate
the Merger, Parent and Sub and their agents shall hold in confidence the
information contained in any such labels, listings and files, will use such
information only in connection with the Offer and the Merger and, if this
Agreement shall be terminated, will, upon request, deliver, and will use their
reasonable efforts to cause their agents to deliver, to the Company all copies
of such information then in their possession or control.
ARTICLE II
THE MERGER
Section 2.1 THE MERGER. Upon the terms and subject to the conditions
hereof, and in accordance with the DGCL, Sub shall be merged with and into the
Company at the Effective Time (as hereinafter defined). Upon the Merger, the
separate partnership 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. Notwithstanding anything to the contrary herein, at the election of
Parent, any direct or indirect wholly-owned Subsidiary (as hereinafter defined)
of Parent may be
5
substituted for Sub as a constituent corporation in the Merger. In such event,
the parties agree to execute an appropriate amendment to this Agreement, in form
and substance reasonably satisfactory to Parent and the Company, in order to
reflect such substitution.
Section 2.2 EFFECTIVE TIME. If all the conditions to the Merger set forth
in Article VII of this Agreement have been fulfilled or waived and this
Agreement shall not have been terminated as provided in Article VIII hereof, the
parties hereto shall cause a certificate of merger, or if applicable, a
certificate of ownership and merger, (the "Certificate of Merger") to be
properly executed and filed in accordance with the DGCL and the terms of this
Agreement on the Closing Date and shall cause all other filings and records
required by applicable law in connection with the Merger. The Merger shall
become effective when the Certificate of Merger executed in accordance with the
relevant provisions of the DGCL, is filed with the Secretary of State of the
State of Delaware; provided, however, that, upon mutual written consent of the
Company and the Sub, the Certificate of Merger may provide for a later date and
time of effectiveness of the Merger. When used in this Agreement, the term
"Effective Time" shall mean the date and time at which the Certificate of Merger
is accepted for record or such later date and time of effectiveness of the
Merger established by the Certificate of Merger. The Certificate of Merger shall
be filed on the date of the Closing (as defined below).
Section 2.3 EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in the DGCL. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, all the property, rights, privileges, powers and
franchises of the Company and Sub shall vest in the Surviving Corporation, and
all debts, liabilities and duties of the Company and Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
Section 2.4 CHARTER AND BY-LAWS; DIRECTORS AND OFFICERS.
(a) At the Effective Time, the Restated Certificate of
Incorporation of the Company (the "Company Charter"), as amended as set forth on
Exhibit C-1, shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law. At the Effective Time, the Restated By-laws of Company, in the
form attached hereto as Exhibit C-2, shall be the By-laws of the Surviving
Corporation until thereafter changed or amended as provided therein or by the
Company Charter.
(b) At the Effective Time the initial directors of the Surviving
Corporation shall be those persons set forth on Exhibit C-3 hereto, until the
earlier of their resignation, removal or death or until their respective
successors are duly elected and qualified, as the case may be. The officers of
the Company at the Effective Time shall be the initial officers of the Surviving
Corporation, until the earlier of their resignation, removal or death or until
their respective successors are duly elected and qualified, as the case may be.
Section 2.5 CONVERSION OF SHARES. As of the Effective Time, by virtue of
the Merger and without any action on the part of Sub, the Company or the holders
of any securities of the Constituent Corporations:
(a) Each issued and outstanding partnership interest of Sub, shall
be canceled
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and converted into and thereafter represent one validly issued, fully paid and
nonassessable share of common stock of the Surviving Corporation, par value
$1.00 per share, which newly issued shares shall constitute all of the issued
and outstanding capital stock of the Surviving Corporation.
(b) All Shares that are held in the treasury of the Company and
all Shares owned by Parent or by any Subsidiary of Parent immediately prior to
the Effective Time shall be canceled, and no capital stock of Parent or other
consideration shall be delivered in exchange therefor.
(c) Subject to the provisions of Section 2.5(d), each Share issued
and outstanding immediately prior to the Effective Time (other than shares to be
canceled in accordance with Section 2.5(b) and other than Dissenting Shares (as
defined in Section 2.5(d)) shall be canceled and converted into the right to
receive from the Surviving Corporation the Offer Price in cash, without interest
(the "Merger Consideration"), upon surrender of the certificate representing
such Share as provided in Section 2.6 of this Agreement. All such Shares, when
so converted, shall no longer be outstanding and shall automatically be canceled
and retired, and each holder of a certificate representing any such Shares shall
cease to have any rights with respect thereto, except the right to receive the
Merger Consideration.
(d) Notwithstanding any provision of this Agreement to the
contrary, if required by the DGCL but only to the extent required thereby,
Shares that are issued and outstanding immediately prior to the Effective Time
that have not been voted for adoption of this Agreement and are held by holders
who have properly exercised appraisal rights with respect thereto in accordance
with Section 262 of the DGCL (the "Dissenting Shares") will not be converted
into the right to receive the Merger Consideration, and holders of such Shares
will be entitled to receive payment of the appraised value of such Shares in
accordance with the provisions of such Section 262 unless and until such holders
fail to perfect, or effectively withdraw or lose, their rights to appraisal and
payment under the DGCL. If, after the Effective Time, any such holder fails to
perfect, or effectively withdraws or loses, such right, then such Shares will
thereupon be treated as if they had been converted into, at the Effective Time,
the right to receive the Merger Consideration, without any interest thereon,
pursuant to Section 2.5(c). Prior to the Effective Time, the Company will give
Parent prompt written notice and copies of (i) any demands received by the
Company for appraisals of Shares and (ii) all written and electronic
communications between the Company and its representatives, on the one hand, and
the dissenting stockholders and their representatives, on the other hand
relating thereto. The Company shall give Parent the opportunity to participate
in and direct all negotiations and proceedings with respect to such demands. The
Company shall not, except with the prior written consent of Parent, make any
payment with respect to any demands for appraisal or offer to settle, settle or
otherwise negotiate any such demands. Each Dissenting Share, if any, shall be
canceled after payment in respect thereof made to the holder thereof pursuant to
the DGCL.
Section 2.6 EXCHANGE OF CERTIFICATES.
(a) Prior to the Effective Time, Parent shall designate a United
States bank or trust company (or such other Person or Persons as shall be
reasonably acceptable to Parent and the Company) to act as paying agent in the
Merger (the "Paying Agent"), and from time to time
7
on, prior to or after the Effective Time, Parent shall make available, or cause
the Surviving Corporation to make available, to the Paying Agent cash in amounts
and at the times necessary for the payment of the Merger Consideration upon
surrender of certificates representing Shares as part of the Merger pursuant to
Section 2.5. Such funds shall be invested by the Paying Agent as directed by
Parent. Any and all profits resulting from, or interest or income earned on or
produced by, such investments shall be payable as directed by Parent.
(b) As soon as reasonably practicable after the Effective Time,
the Paying Agent shall mail to each holder of record of a certificate or
certificates (the "Certificates") that immediately prior to the Effective Time
represented Shares which were converted into the right to receive the Merger
Consideration, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Paying Agent and shall be in a
form and have such other provisions as Parent may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the Merger Consideration as provided in Section 2.5. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly completed and validly executed, and such other documents as may be
reasonably required by the Paying Agent, the holder of such Certificate shall be
entitled to receive in exchange therefor a check representing the amount of
cash, without interest, into which the Shares theretofore represented by such
Certificate shall have been converted pursuant to Section 2.5, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Shares that is not registered in the transfer records
of the Company, payment may be made to a Person other than the Person in whose
name the Certificate so surrendered is registered, if such Certificate shall be
properly endorsed or otherwise be in proper form for transfer and otherwise
accompanied by all documents required to evidence and effect such transfer and
the Person requesting such payment shall pay any transfer or other Taxes
required by reason of the payment to a Person other than the registered holder
of such Certificate or establish to the satisfaction of the Surviving
Corporation that such Tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 2.6, each Certificate (other than Certificates
representing Dissenting Shares or Shares to be cancelled in accordance with
Section 2.5(b) above) shall be deemed for all purposes at any time after the
Effective Time to represent only the right to receive upon such surrender the
amount of cash, without interest, into which the Shares theretofore represented
by such Certificate shall have been converted pursuant to Section 2.5. No
interest will be paid or will accrue on the cash payable upon the surrender of
any Certificate. Parent (or any affiliate thereof) or the Paying Agent shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Shares such amounts as Parent or the
Paying Agent is required to deduct and withhold with respect to the making of
such payment under the Code (as hereinafter defined) or under any provisions of
state, local or foreign Tax law. To the extent that amounts are so withheld by
Parent or the Paying Agent, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the Person in respect of which
such deduction or withholding was made by Parent or the Paying Agent.
(c) All cash paid upon the surrender of Certificates in accordance
with the terms of this Article II shall be deemed to have been paid in full
satisfaction of all rights pertaining to the Shares theretofore represented by
such Certificates. At the Effective Time, the
8
stock transfer books of the Company shall be closed, and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the Shares that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Paying Agent for any reason, then they shall be
canceled and exchanged as provided in this Article II.
(d) Promptly following the date that is six months after the
Effective Time, the Paying Agent shall deliver to Parent all cash, certificates
and other documents in its possession relating to the transactions contemplated
hereby, and the Paying Agent's duties shall terminate. Thereafter, each holder
of a Certificate (other than Certificates representing Dissenting Shares and
Certificates representing Shares to be canceled pursuant to Section 2.5(b))
shall look only to the Surviving Corporation (subject to abandoned property,
escheat or similar laws) and only as general creditors thereof, with respect to
any Merger Consideration that may be payable, without interest thereon, upon due
surrender of the Certificates held by such holder.
(e) Notwithstanding the foregoing, none of Parent, Sub, the
Company or the Paying Agent shall be liable to any Person in respect of any cash
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. If any Certificates shall not have been surrendered
prior to seven years after the Effective Time (or immediately prior to such
earlier date on which any payment pursuant to this Article II would otherwise
escheat to or become the property of any Governmental Entity (as hereinafter
defined)), then the cash payment in respect of such Certificate shall, to the
extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interests of any Person previously
entitled thereto.
(f) If any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed and, if required by Parent or the
Paying Agent, the posting by such Person of a bond, in such reasonable amount as
Parent or the Paying Agent may direct as indemnity against any claim that may be
made against them with respect to such Certificate, the Paying Agent will pay in
exchange for such lost, stolen or destroyed Certificate the amount of cash to
which the holders thereof are entitled pursuant to this Article II.
Section 2.7 STOCK PLANS. Immediately prior to the Effective Time, each
then outstanding stock option or similar right (collectively, the "Options"),
whether or not then vested or exercisable, shall be (or, if not previously
vested and exercisable, shall become), consistent with the plans and agreements
applicable to such Options (each, a "Stock Plan"), vested and exercisable and
such Options as of the Effective Time shall be canceled by the Company, and each
then vested Option shall no longer be exercisable but shall entitle the holder
thereof, in cancellation and settlement therefor, to a payment in cash by the
Company (subject to any applicable withholding taxes) (and, if necessary, Parent
shall provide funds to the Company sufficient for such payments), promptly
following the Effective Time, equal to the product of (a) the total number of
Shares subject to such vested Option and (b) the excess, if any, of the Merger
Consideration over the exercise price per Share subject to such vested Option
(such amounts payable hereunder being referred to as the "Cash Payment"). All
Stock Plans and any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the
9
capital stock of the Company or any Subsidiary of the Company shall terminate as
of the Effective Time. The Company shall take all actions necessary to
effectuate the provisions of this Section 2.7, including obtaining all necessary
consents to ensure that, after the Effective Time, holders of Options will have
no rights in respect of such Options other than the rights of the holders of
vested Options to receive the Cash Payment in cancellation and settlement
thereof. The Cash Payment shall be made by check representing the applicable
cash amount, without interest.
Section 2.8 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 (a) to vest, perfect or confirm, of record or otherwise, in
the Surviving Corporation its right, title or interest in, to or under any of
the rights, privileges, powers, franchises, properties or assets of either of
the Constituent Corporations acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger or (b) otherwise
to carry out the purposes of this Agreement, then 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 of the Constituent
Corporations, 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 or interest in, to or 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 2.9 CLOSING. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place (a) at the
offices of Xxxxx Xxxxxxxxxx LLP, 1301 Avenue of the Americas, Xxx Xxxx, Xxx Xxxx
00000-0000 on the date that the last of the conditions set forth in Article VII
of this Agreement (other than (i) those that are waived by the party or parties
for whose benefit such conditions exist and (ii) any such conditions which, by
their terms, are not capable of being satisfied until the Closing Date) are
satisfied; or (b) at such other place, time and/or date as the parties hereto
may otherwise agree. The date upon which the Closing shall occur is referred to
herein as the "Closing Date."
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
Section 3.1 ORGANIZATION. Parent is a "sociedad anonima" duly organized
and in good legal standing under the laws of Spain. Sub is a general partnership
duly formed, validly existing and in good standing under the laws of the State
of Delaware.
Section 3.2 AUTHORITY. On or prior to the date of this Agreement, the
Board of Directors of Parent and the general partners of Sub have declared the
Merger advisable and have approved and adopted this Agreement in accordance with
applicable law. Each of Parent and Sub has all requisite corporate or
partnership power and authority to execute and deliver this Agreement and the
Stockholder Agreements, and each of Parent and Sub has all requisite
10
corporate or partnership power and authority to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by
Parent and Sub of this Agreement and the Stockholder Agreements and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate or partnership action (including Board or
general partner action) on the part of Parent and Sub, and no other corporate or
partnership proceeding is necessary for the execution and delivery by Parent or
Sub of this Agreement or the Stockholder Agreements, the performance by Parent
or Sub of their respective obligations hereunder and thereunder and the
consummation by Parent and Sub of the transactions contemplated hereby and
thereby, subject, in the case of this Agreement, to the filing of the
Certificate of Merger as required by the DGCL. This Agreement has been duly
executed and delivered by Parent and Sub, and (assuming the valid authorization,
execution and delivery of this Agreement by the Company and the validity and
binding effect hereof on the Company) this Agreement constitutes the valid and
binding obligation of each of Parent and Sub enforceable against them in
accordance with its terms.
Section 3.3 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set forth on
Schedule 3.3 of the Disclosure Schedule, assuming that all consents, approvals,
authorizations and other actions described in this Section 3.3 have been
obtained and all filings and obligations described in this Section 3.3 have been
made or satisfied, the execution and delivery of this Agreement and the
Stockholder Agreements 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 to others a right of termination,
cancellation or acceleration of any obligation or result in the loss of a
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 Sub under, any
provision of (a) the Organizational Documents of Parent and of Sub, each as
amended to date, (b) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise
or license applicable to Parent or Sub or (c) any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to Parent or Sub or any
of their respective properties or assets, other than, in the case of clauses (b)
and (c), any such violations, defaults, rights, liens, security interests,
charges or encumbrances that, individually or in the aggregate, would not have a
Material Adverse Effect on Parent or Sub, materially impair or delay the ability
of Parent or Sub to perform their respective obligations hereunder or under the
Stockholder Agreements or prevent or materially delay the consummation by Parent
or Sub 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 or supranational court, commission, governmental
body, regulatory agency, authority or tribunal (a "Governmental Entity") is
required by or with respect to Parent or Sub in connection with the execution
and delivery by Parent or Sub of this Agreement or of the Stockholder Agreements
or is necessary for the consummation by Parent or Sub of the Offer, the Merger
and the other transactions contemplated by this Agreement or the Stockholder
Agreements, except for (i) in connection, or in compliance, with the Exchange
Act, (ii) the filing of the Certificate of Merger with the Secretary of State of
the State of Delaware; (iii) such filings, authorizations, orders and approvals
as may be required by state takeover laws (the "State Takeover Approvals"); (iv)
such filings required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
0000 (xxx "XXX Xxx"); (v) filings and approvals required under applicable
foreign or multi-international antitrust laws and regulations; and (vi) such
other consents, orders, authorizations, registrations, declarations and
11
filings the failure of which to be obtained or made would not, individually or
in the aggregate, have a Material Adverse Effect on Parent, materially impair or
delay the ability of Parent or Sub to perform its obligations hereunder or under
the Stockholder Agreements or prevent or materially delay the consummation by
Parent or Sub of any of the transactions contemplated hereby or thereby.
Section 3.4 INFORMATION SUPPLIED. None of the information supplied or to
be supplied by Parent or Sub specifically for inclusion or incorporation by
reference in (a) the Offer Documents, (b) the Schedule 14D-9, (c) the
information to be filed by the Company in connection herewith pursuant to Rule
14f-1 under the Exchange Act (if required) and (d) the Company Proxy Statement
(if required) will (except to the extent revised or superseded by amendments or
supplements contemplated hereby), (i) in the case of clauses (a), (b) and (c) at
the respective times such documents are filed with the SEC or first published,
sent or given to the Company's stockholders, or (ii) in the case of clause (d),
at the time such document is first mailed to the Company's stockholders or at
the time of the Stockholder Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Offer Documents will comply in
all material respects with the requirements of the Exchange Act. Notwithstanding
the foregoing, no representation or warranty is made by Parent or Sub with
respect to statements made or incorporated by reference therein based on
information supplied by the Company or any Subsidiary of the Company
specifically for inclusion or incorporation by reference therein.
Section 3.5 INTERIM OPERATIONS OF SUB. Sub was 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 3.6 BROKERS. No broker, investment banker, financial advisor or
other Person, other than Bear Xxxxxxx, the fees and expenses of which will be
paid by Parent, is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Parent or Sub.
Section 3.7 FINANCING. Parent has or will have available to it at the time
required the funds necessary to consummate the Offer and the Merger in
accordance with the terms of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub that, except as set
forth in the Disclosure Schedule delivered to Parent and Sub at the time of
execution of this Agreement (the "Disclosure Schedule"), it being agreed that
disclosure of any item on the Disclosure Schedule shall be deemed to be
disclosed with respect to the Section of this Agreement to which such item is
correspondingly numbered and all other Sections of this Agreement to which the
relevance of such item is reasonably apparent from the face of the Disclosure
Schedule:
12
Section 4.1 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 duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has the requisite corporate (in the
case of a Subsidiary that is a corporation) or other 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, individually or in the
aggregate, have a Material Adverse Effect on the Company. A list of all
Subsidiaries of the Company, together with the jurisdiction of incorporation of
each Subsidiary of the Company, the percentage of the outstanding capital stock
of each Subsidiary owned by the Company and each other Subsidiary of the Company
and the name of any Person other than the Company or another Subsidiary of the
Company that owns capital stock of the Subsidiary of the Company, is set forth
in Section 4.1 of the Disclosure Schedule. The Company has heretofore furnished
to Parent a complete and correct copy of the Certificate of Incorporation of the
Company and the charter documents of each Active Subsidiary and the By-laws of
the Company and each Active Subsidiary, as applicable and as currently in
effect, all stock records and all corporate minute books and records of the
Company and each Active Subsidiary. The corporate minute books and records of
the Company and each Active Subsidiary accurately reflect, in all material
respects, all action taken by the stockholders or the Board of Directors or any
committee thereof of the Company and each Active Subsidiary and contain true and
complete copies, in all material respects, of all resolutions adopted by the
stockholders or the Board of Directors or any committee thereof of the Company
and any Active Subsidiary. No other similar organizational documents are
applicable to or binding upon the Company or any Active Subsidiary. Except as
set forth in Section 4.1 of the Disclosure Schedule, the Company does not
directly or indirectly own any equity or similar interest in, or any interest
convertible into or exercisable for any equity or similar interest in, any
corporation, partnership, limited liability company, joint venture or other
legal entity. There are no current or prospective obligations of the Company or
any of its Subsidiaries to provide funds to, or make any investment in (in the
form of a loan, capital contribution or otherwise), or to assume any liability
or obligation of, any other Person. The Dormant Subsidiaries have either no or
de minimis operations and revenues.
Section 4.2 CAPITAL STRUCTURE.
(a) The authorized capital stock of the Company consists of
24,000,000 shares of Company Common Stock and 5,000,000 shares of preferred
stock, par value $1.00 per share ("Company Preferred Stock").
(b) As of the date hereof:
(i) 14,529,823 Shares (excluding the Shares held in
treasury) were issued and outstanding, all of which were duly authorized,
validly issued, fully paid and nonassessable and free of preemptive or
similar rights;
13
(ii) no shares of Company Preferred Stock were issued and
outstanding;
(iii) except for 1,353,077 Shares held in the treasury of the
Company, no Shares or shares of Company Preferred Stock were held in the
treasury of the Company or by Subsidiaries of the Company; and
(iv) 1,388,120 Shares were issuable upon exercise of
outstanding Options granted under the Stock Plans as set forth on Section
4.2(b)(iv) of the Disclosure Schedule.
(c) Except as described on Section 4.2(c) of the Disclosure
Schedule, 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, any shares of capital stock or
other voting securities or securities convertible into or exchangeable for
capital stock or voting securities of or other equity interests in the Company
or any of its Subsidiaries or equity equivalents, interests in ownership or
earnings of the Company (including stock appreciation rights, phantom stock or
stock-based performance units) or other similar rights (collectively, "Company
Securities") or obligating the Company or any of its Subsidiaries to grant,
extend or enter into any such option, warrant, call, right or agreement, and
there are no outstanding contractual rights to which the Company or any of its
Subsidiaries is a party the value of which is based on the value of any Company
Securities. Except as described on Schedule 4.2(c) of the Disclosure Schedule,
there are no programs in place or outstanding obligations of the Company or any
of its Subsidiaries to repurchase, redeem or otherwise acquire any capital stock
or other voting securities of the Company or any Company Securities or to vote
or dispose of any shares of the capital stock or other voting securities of any
of the Subsidiaries of the Company. Each outstanding share of Common Stock is,
and each share of Common Stock that may be issued pursuant to the exercise of
outstanding Options, when issued in accordance with the respective terms
thereof, will be, duly authorized, validly issued, fully paid and nonassessable
and free of preemptive and similar rights and registration rights
(d) Each outstanding share of capital stock of each Subsidiary of
the Company is duly authorized, validly issued, fully paid and nonassessable and
free of preemptive or similar rights and, except as set forth in Section 4.2(d)
of the Disclosure Schedule, owned by the Company or a wholly-owned 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. There are no existing
options, calls, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock or
other equity interests or securities of any Subsidiary of the Company.
(e) Except as described on Section 4.2(e) of the Disclosure
Schedule, there are no stockholders agreements, voting trusts or other
agreements or understandings to which the Company or any Subsidiary of the
Company is a party or by which the Company or any Subsidiary of the Company is
bound relating to the issued or unissued capital stock of the Company or any
Subsidiary of the Company (including any such agreements or understandings
14
that may limit in any way the solicitation of proxies by or on behalf of the
Company from, or the casting of votes by, the stockholders of the Company with
respect to the Merger) or granting to any Person or group of Persons the right
to elect, or to designate or nominate for election, a director to the Board of
Directors of the Company or any Subsidiary of the Company. The following
information for each Active Subsidiary of the Company is listed in the
Disclosure Schedule, if applicable: (i) its name and jurisdiction of
incorporation or organization, (ii) the location of its principal executive
office, (iii) the names and positions of its senior officers, and (iv) the names
of its directors.
Section 4.3 AUTHORITY. On or prior to the date of this Agreement, the
Board of Directors of the Company has unanimously approved the Offer and
declared the Merger advisable and fair to and in the best interest of the
Company and its stockholders, approved and adopted this Agreement and the
transactions contemplated hereby in accordance with the DGCL, resolved to
recommend the acceptance of the Offer by the Company's stockholders and directed
that this Agreement be submitted to the Company's stockholders for approval, if
applicable. The Company has all requisite corporate power and authority to enter
into this Agreement and, subject to approval of the Merger by the stockholders
of the Company, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby have been duly authorized by
all necessary corporate action (including Board action) on the part of the
Company, and no other corporate proceeding is necessary for the execution and
delivery by the Company of this Agreement, the performance by the Company of its
obligations hereunder and the consummation by the Company of the transactions
contemplated hereby, subject to (A) approval of the Merger by the stockholders
of the Company and (B) the filing of the Certificate of Merger as required by
the DGCL. This Agreement has been duly executed and delivered by the Company and
(assuming the valid authorization, execution and delivery of this Agreement by
Parent and Sub and the validity and binding effect of this Agreement on Parent
and Sub) constitutes the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
Section 4.4 CONSENTS AND APPROVALS; NO VIOLATION. Assuming that all
consents, approvals, authorizations and other actions described in this Section
4.4 have been obtained and all filings and obligations described in this Section
4.4 have been made, except as set forth in Section 4.4 of the Disclosure
Schedule, the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not, result in any violation of, or default (with or
without notice or lapse of time, or both) under, or give to others a right of
termination, cancellation or acceleration of any obligation or result in 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, any provision of (a) the
Organizational Documents of the Company or any of the Company's Subsidiaries,
(b) any loan or credit agreement, note, bond, mortgage, indenture, lease or
other agreement, instrument, permit, concession, franchise or license applicable
to the Company or any of its Subsidiaries or (c) 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 (b) or (c), any such violations, defaults, rights, liens,
security interests, charges or encumbrances that, individually or in the
aggregate, would not have a Material Adverse Effect on the Company, impair or
delay the ability of the Company to perform its obligations hereunder or prevent
or delay the
15
ability of the Company to perform its obligations hereunder or prevent or delay
the consummation by the Company of any of the transactions contemplated hereby.
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 by the Company of
this Agreement or is necessary for the consummation by the Company of the Offer,
the Merger and the other transactions contemplated by this Agreement, except for
(i) in connection, or in compliance, with the provisions of the Exchange Act or
the HSR Act, (ii) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware, (iii) such filings, authorizations, orders and
approvals as may be required in connection with State Takeover Approvals, (iv)
the approvals and filings set forth in Section 4.4 of the Disclosure Schedule,
(v) applicable requirements, if any, of Blue Sky Laws or the NASDAQ National
Market and (vi) such other consents, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would not,
individually or in the aggregate, have a Material Adverse Effect on the Company,
impair or delay the ability of the Company to perform its obligations hereunder
or prevent or delay the consummation by the Company of any of the transactions
contemplated hereby.
Section 4.5 SEC DOCUMENTS AND OTHER REPORTS.
(a) The Company has timely filed all forms, reports, schedules,
proxy statements, registration statements and other documents required to be
filed with the SEC since July 1, 2001 (collectively, the "Company SEC
Documents"). Except as set forth in Section 4.5 of the Disclosure Schedule, the
Company SEC Documents, including any financial statements or schedules included
or incorporated by reference therein) (a) at the time they became effective, in
the case of registration statements, or when filed, in the case of any other
Company SEC Document, complied in all material respects with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange
Act, as the case may be, and (b) do not (except to the extent revised or
superseded by a subsequent filing with the SEC), and did not at the time they
were filed, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading except to the extent revised or superseded by a subsequent filing
with the SEC prior to the date hereof. The consolidated financial statements
(including, in each case, any notes thereto) of the Company included in the
Company SEC Documents complied in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with United States generally
accepted accounting principles ("GAAP") (except, in the case of unaudited
quarterly statements, the omission of full footnote disclosures to such
financial 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 presented in all material respects the
consolidated financial position of the Company and its Subsidiaries at the
respective dates thereof and the consolidated results of their operations and
their consolidated cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments and to any other
adjustments described therein, none of which were or are material in amount).
Except as disclosed in the Company SEC Documents, the Company has not, since
July 31, 2001, made any change in the accounting practices or policies applied
in the preparation of financial statements.
16
(b) Section 4.5(b) of the Company Disclosure Schedule sets forth
the (i) consolidated unaudited balance sheet of the Company and its Subsidiaries
as of June 27, 2004 and (ii) consolidated unaudited statements of operations of
the Company and its Subsidiaries for the three (3) month and twelve (12) month
periods ended on June 27, 2004. The balance sheet and statement of operations
set forth in Section 4.5(b) of the Company Disclosure Schedule comply in all
material respects with the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with GAAP applied on a consistent
basis during the period involved (except as may be indicated therein or in the
notes thereto) and present fairly in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as of June
27, 2004 and the consolidated results of their operations for the period
(subject to normal year-end audit adjustments and any other adjustments
described therein and the fact that they do not or will not, as the case may be,
contain all of the footnote disclosures required by GAAP).
Section 4.6 INFORMATION SUPPLIED. The Schedule 14D-9, when filed with the
SEC and first published, sent or given to stockholders of the Company, will
comply in all material respects with the Exchange Act. Neither the Schedule
14D-9 nor any of the information provided by or on behalf of the Company
specifically for inclusion in the Schedule TO or the Offer Documents will, at
the respective times the Schedule 14D-9, the Schedule TO and the Offer Documents
or any amendments or supplements thereto are filed with the SEC or first
published, sent or given to stockholders of the Company, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, no representation or warranty is made by the
Company with respect to written information supplied by Parent or Sub
specifically for inclusion in the Schedule 14D-9. The Company Proxy Statement
will comply in all material respects with the applicable requirements of the
Exchange Act and the DGCL, except that no representation or warranty is made by
the Company with respect to written information supplied by Parent or Sub
specifically for inclusion in the Company Proxy Statement. The Company Proxy
Statement will not, at the time the Company Proxy Statement (or any amendment or
supplement thereto) is filed with the SEC or first sent to stockholders, at the
time of the Stockholders Meeting or 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 were made, not misleading.
Section 4.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Company SEC Documents filed with the SEC prior to the date of this Agreement
or as set forth in Section 4.7 of the Disclosure Schedule, since March 28, 2004:
(a) the business of the Company and its Subsidiaries has been conducted in the
ordinary course of business consistent with past practice; (b) 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 would result in a Material Adverse Effect on the Company, (c) the
Company and its Subsidiaries have not sustained any damage, destruction, loss or
interference with their business or properties (whether or not covered by
insurance) that has had or would have a Material Adverse Effect on the Company,
(d) other than any changes in the ordinary course of the Company's business and
consistent with past practice of the Company, there has not been any material
changes in the
17
amount or terms of the indebtedness of the Company and its Subsidiaries from
that described in the Company SEC Documents filed prior to the date hereof, and
(e) there has been no event causing a Material Adverse Effect on the Company,
nor any development that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect on the Company or any of its
Subs and (f) neither the Company nor any of its Subsidiaries has taken any
action, or failed to take any action, which if such action or failure occurred
during the period from the date of this Agreement to the Closing Date would
constitute a breach or violation of Section 5.1.
Section 4.8 PERMITS AND COMPLIANCE; CONTRACTS.
(a) Except as set forth in Section 4.8 of the Disclosure Schedule,
and except with respect to Environmental Permits (as defined in Section 4.16 of
this Agreement), which are addressed exclusively in Section 4.16(b) of this
Agreement, each of the Company and its Subsidiaries holds all franchises,
grants, authorizations, licenses, permits, easements, variances, exceptions,
consents, certificates, approvals and orders of any Governmental Entity
necessary for the Company or any of its Subsidiaries to own, lease and operate
its properties or to carry on its business as it is now being conducted (the
"Company Permits"), except as would not reasonably be expected to have a
Material Adverse Effect. No suspension or cancellation of any material Company
Permits is pending or, to the Knowledge of the Company, threatened. The Company
and its Subsidiaries are in compliance in all material respects with (i) their
respective Organizational Documents, (ii) all applicable foreign, federal, state
and local laws, ordinances, administrative or governmental rules or regulations,
(iii) all orders, decrees and judgments of any Governmental Entity having
jurisdiction over the Company or any of its Subsidiaries and (iv) all Company
Permits.
(b) Each material written or oral contract, instrument or other
agreement, guarantee, license, lease or other agreement to which the Company or
any of its Subsidiaries is a party (each, a "Contract") is valid and binding on
the Company (or, to the extent a Subsidiary is a party, such Subsidiary) and, to
the Knowledge of the Company, each other party thereto, and each Contract is in
full force and effect, and the Company and each Subsidiary and, to the Knowledge
of the Company, each other party thereto has performed in all material respects
the obligations required to be performed by such party to date under each
Contract. Except as set forth in the Company SEC Documents filed prior to the
date of this Agreement, no event of material default or event that, but for the
giving of notice or the lapse of time or both, would constitute an event of
material default exists or, upon the consummation by the Company of the
transactions contemplated by this Agreement, will exist under any Contract
(including, without limitation, any indenture, mortgage, loan agreement, note or
other agreement or instrument for borrowed money, any guarantee of any agreement
or instrument for borrowed money or any lease, contractual license or other
similar agreement or instrument) to which the Company or any of its Subsidiaries
is a party or by which the Company or any such Subsidiary is bound or to which
any of the properties, assets or operations of the Company or any such
Subsidiary is subject.
(c) As of the date hereof, except as set forth in Section 4.8 of
the Disclosure Schedule, neither the Company nor any of its Subsidiaries is a
party to or bound by, and neither they or any of their assets or properties
subject to, any Contracts required to be disclosed in the
18
Company SEC Documents which are either not filed or not publicly available
without redaction as an exhibit to one or more Company SEC Documents filed with
the SEC prior to the date hereof.
(d) Except as set forth in Section 4.8 of the Disclosure Schedule
or the Company SEC Documents, neither the Company nor any of its Subsidiaries is
a party to, or bound by, any written or oral: (i) Contract obligating the
Company or its Subsidiaries to pay or receive an amount in excess of $500,000
(excluding purchase and sale orders entered into by the Company or its
Subsidiaries in the ordinary course of business); (ii) Contract containing
provisions which are in effect as of the date hereof which restrict in any
manner the Company's right to compete with any other person or entity, the
Company's right to sell to or purchase from any other person or entity, the
right of any other party to compete with the Company, or the ability of such
person or entity to employ any of the Company's employees; (iii) secrecy or
confidentiality agreements (except for secrecy and confidentiality agreements
which (A) are terminable at will at any time by the Company, (B) do not provide
for any payment of consideration and (C) do not contain any "standstill"
provision or similar restriction on the Company's ability to negotiate an
acquisition of another entity); (iv) other than as set forth in the Disclosure
Schedule, distributorship, non-employee commission or marketing agent,
representative or franchise agreement providing for the marketing and/or sale of
the products or services of the Company or any of its Subsidiaries; (v) Contract
pursuant to which the Company acquired the ownership or control of any material
interest (with respect to value) in a partnership, corporation, limited
liability company, joint venture or other entity or similar arrangement other
than as otherwise disclosed herein; (vi) Contract containing change of control
provisions relating to the Company; or (vii) any other Contract not entered into
in the ordinary course of business.
Section 4.9 TAX MATTERS.
(a) Except as otherwise set forth in Section 4.9(a) of the
Disclosure Schedule: (i) the Company and each of its Subsidiaries have filed
with the appropriate Governmental Entity all material Tax Returns (as
hereinafter defined) required to have been filed, and such Tax Returns are
correct and complete in all material respects; (ii) all Taxes due and owing by
the Company and each of its Subsidiaries have been timely paid; (iii) the most
recent financial statements contained in the Company SEC Documents provide an
adequate accrual for the payment of Taxes for the periods covered by such
Company SEC Documents; (iv) the Company and each of its Subsidiaries have
complied with all material rules and regulations relating to the withholding of
Taxes and the remittance of withheld Taxes; (v) neither the Company nor any of
its Subsidiaries has requested any extension of time within which to file any
Tax Return in respect of any taxable year, which Tax Return has not since been
filed; and (vi) there are no outstanding waivers, agreements or comparable
consents that have been given by the Company or any of its Subsidiaries or with
respect to any Tax Return of the Company or any of its Subsidiaries regarding
the statute of limitations with respect to any Taxes or Tax Returns of the
Company or any of its Subsidiaries.
(b) Except as otherwise set forth in Section 4.9(b) of the
Disclosure Schedule, to the Knowledge of the Company: (i) no issues have been
raised by any Governmental Entity in connection with the Tax Returns of the
Company or any of its Subsidiaries; (ii) no claim has
19
ever been made by a Governmental Entity in a jurisdiction where any of the
Company and its Subsidiaries does not file Tax Returns that it is or may be
subject to taxation in that jurisdiction; (iii) no power of attorney has been
granted by or with respect to the Company or any of its Subsidiaries with
respect to any matter relating to Taxes; (iv) there is no action, suit,
investigation, audit, claim, assessment or other administrative or court
proceedings pending or proposed or threatened that could affect materially the
liability for Taxes of the Company or any of its Subsidiaries or against the
Company or any of its Subsidiaries; and (v) there are no encumbrances or liens
for Taxes upon the assets of the Company or any of its Subsidiaries except for
liens relating to current Taxes not yet due and payable.
(c) Except as otherwise set forth in Section 4.9(c) of the
Disclosure Schedule: (i) none of the Company or any of its Subsidiaries has been
a member of any group of corporations filing Tax Returns on a consolidated,
combined, unitary or similar basis (other than a group the common parent of
which is the Company) or has any liability for the Taxes of any Person (other
than the Company and its Subsidiaries); (ii) neither the Company nor any of its
Subsidiaries is a party to, or is bound by, any Tax sharing, Tax indemnity, cost
sharing, or similar agreement, policy or practice relating to Taxes; (iii) the
Company has made available to Parent copies of all material Tax Returns filed by
the Company or any of its Subsidiaries for any of the taxable periods that
remains open, as of the date hereof, for examination or assessment of Tax; and
(iv) neither the Company nor any of its Subsidiaries is or has been a United
States real property holding corporation within the meaning of Section 897(c)(2)
of the Code during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code.
(d) Except as otherwise set forth in Section 4.9(d) of the
Disclosure Schedule: (i) neither the Company nor any of its Subsidiaries has
made any payments, or is a party to an agreement (including this Agreement) that
under any circumstances could or will obligate it to make payments (either
before, on, or after the Closing Date) that will not be deductible because of
Section 162(m) or Section 280G of the Code (or any corresponding provision of
state, local or foreign tax law); (ii) none of the indebtedness of the Company
or any of its Subsidiaries constitutes (a) "corporate acquisition indebtedness"
(as defined in Section 279(b) of the Code) with respect to which any interest
deductions may be disallowed under Section 279 of the Code or (b) an "applicable
high yield discount obligation" under Section 163(i) of the Code; and (iii)
neither the Company nor any of its Subsidiaries has participated in an
international boycott as defined in Code Section 999.
(e) Except as otherwise set forth in Section 4.9(e) of the
Disclosure Schedule: the Company and each of its Subsidiaries will not be
required to include any item of income in, or exclude any item of deduction
from, taxable income for any taxable period (or portion thereof) ending after
the date of the Closing as a result of any (i) change in method of accounting
for a taxable period ending on or prior to the Closing Date; (ii) "closing
agreement" as described in Section 7121 of the Code (or any corresponding or
similar provision of state, local or foreign income Tax law) executed on or
prior to the Closing Date; (iii) deferred intercompany gain or any excess loss
account described in Treasury Regulations under Code Section 1502 (or any
corresponding or similar provision of state, local or foreign income Tax law);
(iv) installment sale or open transaction disposition made on or prior to the
date of the Closing or (v) prepaid amount received on or prior to the date of
the Closing.
20
(f) During the five-year period ending on the date hereof, neither
the Company nor any of its Subsidiaries was either a "distributing corporation"
or a "controlled corporation" in a distribution of stock intended to be governed
by Section 355 of the Code.
(g) Neither the Company nor any of its Subsidiaries has engaged in
any "listed transaction" within the meaning of Treasury Regulation Section
1.6011-4(b)(2).
Section 4.10 ACTIONS AND PROCEEDINGS. There are no outstanding orders,
judgments, injunctions, awards or decrees of any Governmental Entity against or
affecting the Company or any of its Subsidiaries, or against or affecting any of
the present or former directors, officers, employees, consultants, agents or
stockholders of the Company or any of its Subsidiaries with respect to the
Company or any of its Subsidiaries, any of the properties, assets or business of
the Company or any of its Subsidiaries or any Company Plan, that, individually
or in the aggregate, would reasonably be expected to have a Material Adverse
Effect on the Company or could prevent or delay the consummation of the
transactions contemplated hereunder. Except as set forth in Section 4.10 of the
Disclosure Schedule, there are no actions, suits or claims or legal,
administrative or arbitrative proceedings or investigations (including claims
for workers' compensation) pending or, to the Knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries or any of
its or their present or former directors, officers, employees, consultants,
agents or stockholders with respect to the Company or any of its Subsidiaries,
or any of the properties, assets or business of the Company or any of its
Subsidiaries or any Company Plan, that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on the Company or could
prevent or delay the consummation of the transactions contemplated hereunder.
Section 4.11 EMPLOYEE BENEFITS.
(a) Each material Company Plan is listed in Section 4.11(a) of the
Disclosure Schedule. With respect to each such Company Plan, the Company has
provided to Parent a true and correct copy of (i) the most recent annual report
(Form 5500) filed with the IRS, (ii) all documents, including trust agreements,
insurance and annuity contracts and administration agreements, (iii) a written
summary of the Company Plan if the Company Plan is unwritten, (iv) the most
recent summary plan description and other written explanations of each Company
Plan provided to participants, beneficiaries and parties thereto, (v) the most
recent determination letter issued by the IRS, (vi) any request for a
determination letter currently pending before the IRS and (vii) all
correspondence with the IRS, the Department of Labor, or the SEC relating to any
outstanding controversy.
(b) Each Company Plan complies, in form and operation, in all
material respects with ERISA, the Code and all other applicable statutes and
governmental rules and regulations. Except as set forth on Section 4.11(b) of
the Disclosure Schedule, neither the Company nor any ERISA Affiliate or any
Subsidiary of the Company currently maintains, contributes to or has any
liability or potential liability under, or at any time during the past six years
has maintained or contributed to, any pension plan which is subject to Section
412 of the Code, Section 302 of ERISA or Title IV of ERISA. Except as set forth
on Section 4.11(b) of the Disclosure Schedule, neither the Company nor any ERISA
Affiliate or any Subsidiary of the Company currently maintains, contributes to
or has any liability or potential liability under, or at
21
any time during the past six years has maintained or contributed to, any
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA).
(c) Each material Compensation Agreement is listed in Section
4.11(c) of the Disclosure Schedule. With respect to each such Compensation
Agreement, the Company has provided the Parent a true and complete copy of (i)
all documents, including trust agreements and insurance and annuity contracts,
(ii) a written summary if the Compensation Agreement is unwritten and (iii) the
most recent written explanations provided to participants, beneficiaries and
parties thereto.
(d) With respect to each Company Plan and Compensation Agreement,
all payments due to or from any such Company Plan or Compensation Agreement (or
from the Company or any of its Subsidiaries with respect to any such Company
Plan or Compensation Agreement) have been made. All Company Plans (other than a
prototype plan) that are intended to be qualified or exempt under Section 401(a)
of the Code or exempt from Tax under Section 501(a) of the Code have received a
favorable determination letter from the IRS or a timely application for such
determination letter is now pending. Except as set forth in Section 4.11(d) of
the Disclosure Schedule, neither the Company nor any ERISA Affiliate or any
Subsidiary of the Company has any liability or obligation under any welfare plan
to provide benefits after termination of employment to any Person other than as
required by Part 6 of Title I of ERISA or any similar state law (together,
"COBRA") and the Company, any ERISA Affiliate and any Subsidiary of the Company
may at any time amend, modify or terminate such post-termination coverage or
benefits.
(e) There are no pending or, to the Company's Knowledge,
threatened, material claims, lawsuits, arbitrations or audits asserted or
instituted against, or related to, any Company Plan or Compensation Agreement,
any fiduciary (as defined by Section 3(21) of ERISA) of any Company Plan, the
Company or any of its Subsidiaries, or any employee or administrator thereof, in
connection with the existence, operation or administration of a Company Plan or
Compensation Arrangement, other than routine claims for benefits.
(f) Except as set forth on Section 4.11(f) of the Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation of the transactions provided for herein will (either alone or in
conjunction with any other event) (i) cause or result in the accelerated
vesting, funding or delivery of, or increase the amount or value of, any
material payment or benefit to any employee, officer or director of the Company
or any of its Subsidiaries, (ii) cause or result in the funding of any Company
Plan or Compensation Arrangement or (iii) cause or result in a limitation on the
right of the Company or any of its Subsidiaries to amend, merge, terminate or
receive a reversion of assets from any Company Plan or related trust. Without
limiting the generality of the foregoing, no amount paid or payable by the
Company or any of its Subsidiaries in connection with the transactions provided
for herein (either solely as a result thereof or as a result of such
transactions in conjunction with any other event) will be an "excess parachute
payment" within the meaning of Section 280G of the Code.
(g) As used herein,
22
(i) "Company Plan" means a "pension plan" (as defined in
Section 3(2) of ERISA), a "welfare plan" (as defined in Section 3(1) of
ERISA), and any other written or oral bonus, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase,
stock option, phantom stock, restricted stock, stock appreciation right,
holiday pay, vacation, severance, medical, dental, vision, disability,
death benefit, sick leave, fringe benefit, insurance or other plan, trust,
policy, arrangement or understanding (a) maintained by the Company, any
ERISA Affiliate or any Subsidiary of the Company, or (b) as to which the
Company, any ERISA Affiliate or any Subsidiary of the Company has
contributed or may have any liability (including any such arrangement
sponsored or required by any government or any statute or other law), in
either case (a) or (b), for the benefit of any prior or present employee,
officer, director or consultant of the Company, any ERISA Affiliate or any
Subsidiary of the Company (or spouse, dependent or other beneficiary of
any such individual);
(ii) "Compensation Agreement" means a written or oral
agreement, arrangement or understanding of any kind (including any
employment, consulting, compensation, deferred compensation, termination
or severance agreement, arrangement or understanding) with or for the
benefit of any prior or present employee, officer, director or consultant
of the Company, any ERISA Affiliate or any Subsidiary of the Company as to
which the Company, any ERISA Affiliate or any Subsidiary of the Company is
a party or may have any liability, except for any Company Plan; and
(iii) "ERISA Affiliate" means any trade or business (whether
or not incorporated) that would be considered a single employer with the
Company or any of its Subsidiaries pursuant to Section 414 (b), (c), (m)
or (o) of the Code and the regulations promulgated under those sections or
pursuant to Section 4001(b) of ERISA and the regulations promulgated
thereunder, or with any trade or business described in this clause (iii).
(h) Section 4.11(f) of the Disclosure Schedule contains a list of
all Company Plans and Compensation Agreements containing change of control or
similar provisions.
Section 4.12 LIABILITIES. Except as (i) fully reflected or reserved
against in the audited consolidated financial statements of the Company and its
Subsidiaries at June 29, 2003, including the notes thereto, contained in the
Annual Report on Form 10-K of the Company for the fiscal year ended June 29,
2003 (the "Company Form 10-K"), (ii) fully reflected or reserved against in the
unaudited consolidated financial statements of the Company and its Subsidiaries
at March 28, 2004, including the notes thereto, contained in the Quarterly
Report on Form 10-Q of the Company for the quarterly period ended March 28, 2004
or (iii) set forth on Section 4.12 of the Disclosure Schedule, the Company and
its Subsidiaries have no liabilities or obligations of any nature (whether
accrued, absolute, fixed, contingent or otherwise) other than liabilities or
obligations incurred in the ordinary course of business consistent with past
practice. There are no revenues, material liabilities or obligations of any
nature in the Dormant Subsidiaries.
Section 4.13 LABOR MATTERS; WORKER SAFETY LAWS.
(a) Except as set forth in Section 4.13(a) of the Disclosure
Schedule: (i)
23
neither the Company nor any of its Subsidiaries is presently, nor has any of
them in the past 10 years been, a party to or bound by any collective bargaining
agreement, labor contract or similar agreement with any labor organization or
employee associations applicable to employees of the Company or any of its
Subsidiaries; (ii) neither the Company nor any of its Subsidiaries has engaged
in any unfair labor practice, and there is no unfair labor practice complaint or
grievance pending or, to the Knowledge of the Company, threatened against or
affecting the Company or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect; (iii) in the past three years, there
has been no labor strike, dispute, slowdown, stoppage or similar labor activity
and no such action is pending or, to the Knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries; (iv) to the
Knowledge of the Company, there are no efforts in progress by labor unions to
organize any employees who are not now represented by recognized collective
bargaining agents; and (v) neither the Company nor any of its Subsidiaries is
delinquent in payments which have become due to any of its employees for any
wages, salaries, commissions, bonuses, benefits or other compensation for any
services performed by them to the date of this agreement or documents required
to be reimbursed to such employees.
(b) Except as set forth in Section 4.13(b) of the Disclosure
Schedule, neither the Company nor any of its Subsidiaries is a party to any
Contract with any current or former officer or director of the Company or any
Subsidiary, or any independent contractor relating to the employment or service
of any such Person that is likely to result in any material liability to or
obligation of the Company or any Subsidiary after the Effective Time. The
Company has delivered to Parent true and complete copies of all such Contracts
or detailed descriptions of individual Contracts (or, in the case of any
Contract that is not in writing, a description of the terms and conditions of
such Contract), and the Company and its Subsidiaries have been in compliance in
all material respects with the terms and conditions of all such Contracts.
(c) The properties, assets and operations of the Company and its
Subsidiaries are in compliance in all material respects with all applicable
federal, state, local and foreign laws, rules and regulations, orders, decrees,
judgments, permits and licenses relating to public and worker health and safety
(collectively, "Worker Safety Laws"). With respect to such properties, assets
and operations, there are no 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.
(d) The Company and its Subsidiaries are in compliance in all
material respects with all applicable laws and orders applicable to such entity
or the employees or other persons providing services to or on behalf of such
entity, as the case may be, relating to the employment of labor, including all
such laws and orders relating to discrimination, civil rights, immigration,
safety and health, workers' compensation, wages, withholding, hours, employment
standards and classification, including the WARN Act, the California WARN Act
(California Labor Code Section 1400, et seq.), Title VII of the Civil Rights Act
of 1964, Age Discrimination in Employment Act, Americans with Disabilities Act,
Equal Pay Act, Health Insurance Portability and Accessibility Act, ERISA and
Family and Medical Leave Act.
(e) Except as set forth in Section 4.13(e) of the Disclosure
Schedule, with
24
respect to any employees of the Company and its Subsidiaries, there are no
pending or, to the Company's Knowledge, as of the date hereof, threatened
discrimination complaints relating to race, color, national origin, sex,
religion, age, marital status, or handicap against the Company and its
Subsidiaries.
(f) As of the date hereof, no management employee of the Company
or any Subsidiary has given notice to the Company or any of its Subsidiaries
and, to the Company's Knowledge, no such employee intends to terminate his or
her employment with the Company or any of its Subsidiaries.
Section 4.14 INTELLECTUAL PROPERTY
(a) As used herein, "Intellectual Property" shall mean,
collectively: (x) all U.S. and non-U.S. registered, unregistered and pending (i)
trade names, trade dress, trademarks, service marks, assumed names, business
names and logos, internet domain names and URLs and all registrations and
applications therefor, (ii) copyrights and all registrations and applications
therefor, (iii) utility and design patents, registered designs and invention
disclosures, and all grants, registrations and applications therefor; and (y)
all (i) trade secrets, inventions, processes, formulae, know-how, concepts,
ideas and research and development (collectively, "Trade Secrets"), (ii) web
sites and web pages and related items, and all intellectual property and
proprietary rights incorporated therein, and (iii) other intellectual property
and proprietary rights ("Other Intellectual Property"). "Material Intellectual
Property" shall mean any Intellectual Property which is material to the business
of the Company or any of its Subsidiaries.
(b) Section 4.14 of the Disclosure Schedule sets forth a complete
and accurate list of (i) all Material Intellectual Property in which the Company
or any of its Subsidiaries has an ownership interest (indicating the owner
thereof), including all applications, registrations and grants with respect
thereto (collectively, the "Owned Property"), provided that such list need not
identify Trade Secrets or non-material unregistered copyrights and need not
identify Other Intellectual Property or trade dress, (ii) all Material
Intellectual Property (other than the Owned Property) which is used in or
relates to the business of the Company (including the business of any
Subsidiary), indicating the owner or licensor thereof, and (iii) all licenses,
assignments, distribution or other agreements with respect to the Material
Intellectual Property referred to in clauses (i) and (ii) above. The
Intellectual Property included in clauses (i) and (ii) above is collectively
referred to herein as the "Company Property".
(c) Except as set forth in Section 4.14 of the Disclosure
Schedule, the Company or a Subsidiary is the sole and exclusive owner of each
item of the Owned Property, and is listed in the records of the appropriate U.S.
and/or non-U.S. governmental agencies as the sole and exclusive owner of record
for each registration, grant and application listed in Section 4.14 of the
Disclosure Schedule.
(d) To the Knowledge of the Company, no act has been done or
omitted to be done by the Company or any Subsidiary, or any licensee thereof,
which has had or could reasonably be expected to have the effect of impairing or
dedicating to the public, or entitling any U.S. or non-U.S. Governmental Entity
or any other Person to cancel, forfeit, modify or
25
consider abandoned, any Owned Property, or give any Person any rights with
respect thereto (other than pursuant to an IP Contract listed in Section 4.14 of
the Company Disclosure Schedule). All of the Company Property and all of the
Company's or a Subsidiary's rights in the Company Property which are material to
the business of the Company or the relevant Subsidiary are valid and
enforceable. Neither the Company nor any Subsidiary has any knowledge of any
facts or claims which cause or would cause any such Company Property to be
invalid or unenforceable, and neither the Company nor any Subsidiary has
received any notice that any Person may bring such a claim.
(e) Except as set forth in Section 4.14 of the Disclosure
Schedule, the Company and each of its Subsidiaries owns, free and clear of any
lien or encumbrance, or otherwise has the valid right to use through a Contract
listed in Section 4.14 of the Disclosure Schedule or otherwise as described in
Section 4.14 of the Disclosure Schedule, free and clear of any royalty or other
payment obligations (except for royalties payable in respect of off-the-shelf
computer software at standard commercial rates) and otherwise on commercially
reasonable terms, any and all Material Intellectual Property that is used in or
is necessary for the conduct of the business of the Company or any Subsidiary as
currently conducted.
(f) To the Knowledge of the Company, except as set forth in
Section 4.14 of the Disclosure Schedule none of the Company, any of its
Subsidiaries or the business of the Company or any Subsidiary as currently
conducted or as contemplated to be conducted, is in conflict with or in
violation or infringement of, or has violated or infringed, nor has the Company
or any of its Subsidiaries received any notice of any conflict with or violation
or infringement of, nor are proceedings or claims pending, nor have any such
proceedings or claims been instituted or asserted in writing against the Company
or any of its Subsidiaries, nor are any proceedings threatened, alleging any
violation, nor is there any valid basis for any such proceeding or claim, of any
rights or asserted rights of any other Person with respect to any Intellectual
Property of such other Person.
(g) Except as set forth in Section 4.14 of the Disclosure
Schedule, no proceedings or claims in which the Company or any of its
Subsidiaries alleges that any Person is infringing upon, or otherwise violating,
any Owned Property (or, to the Company's Knowledge, with respect to Company
Property which is not Owned Property) are pending, and none have been served by,
instituted or asserted by the Company or any such Subsidiary, nor are any
proceedings threatened alleging any such violation or infringement.
Section 4.15 TITLE TO ASSETS AND RELATED MATTERS
(a) The Company and its Subsidiaries possess good and marketable
title to all of the assets and properties (other than Real Property) that it
owns or uses and that are reflected on the Company's consolidated balance sheet
(or in the footnotes related thereto) as of June 29, 2003, contained in the
Company Form 10-K, or that were thereafter acquired (except for assets and
properties sold, consumed or otherwise disposed of in the ordinary course of
business since such date), in each case, free and clear of any and all liens
(statutory or otherwise), encumbrances, charges, claims, restrictions, options
to purchase, sale contracts, pledges, security interests or impositions, except
for liens to secure indebtedness reflected on the Company's
26
consolidated balance sheet as of June 29, 2003, contained in the Company Form
10-K or in Section 4.15 of the Company Disclosure Schedule.
(b) The Company has insurable fee simple title to the Company
Owned Real Property free and clear of any and all mortgages, liens (statutory or
otherwise), encumbrances, charges, claims, restrictions, easements, rights of
way, covenants, options to purchase, sale contracts, pledges, security interests
or impositions, except for Permitted Encumbrances.
(c) Each of the Real Property Leases (i) constitutes the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms and (ii) is, to the Knowledge of the Company, enforceable against
the other parties to each Company Real Property Lease in accordance with its
terms. The Company (i) has in all material respects performed all the
obligations required to be performed by it to the date hereof under the Company
Real Property Leases, is not in default thereunder and possesses and quietly
enjoys the Leased Real Property, and, to the Knowledge of the Company, the
Leased Real Property is not subject to any encumbrances, use or occupancy
restrictions, reservations or limitations, other than Permitted Encumbrances and
(ii) has no Knowledge of any material default or state of facts which, with
notice or lapse of time or both, would constitute a material default on the part
of the Company, or to the Knowledge of the Company any other party, in the
performance of any obligation to be performed or paid by any party under the
Company Real Property Leases.
(d) None of the improvements comprising the Real Property or the
businesses conducted by the Company or its Subsidiaries thereon, are, to the
Knowledge of the Company, in violation of any building line or use or occupancy
restriction, limitation, condition or covenant of record or any zoning or
building law, code or ordinance, public utility or other easements or other
applicable law, except for violations which would not reasonably be expected to
have a Material Adverse Effect on the Company. As of the date hereof, to the
Knowledge of the Company, no material expenditures are required to be made by
the Company or any of its Subsidiaries for the repair or maintenance of any
improvements on the Real Property other than routine repairs and maintenance in
the ordinary course of business. Neither the Company nor its Subsidiaries are in
default under any material agreement relating to the Real Property nor, to the
Knowledge of the Company, is any other party thereto in default thereunder.
(e) There are no condemnation proceedings pending against the
Company or, to the Knowledge of the Company, threatened with respect to any
portion of the Real Property.
(f) To the Knowledge of the Company, the buildings and other
facilities located on the Real Property are free of any material latent
structural or engineering defects or any material latent structural or
engineering defects.
Section 4.16 ENVIRONMENTAL MATTERS.
(a) The representations and warranties contained in this Section
4.16 shall be the sole and exclusive representations and warranties of the
Company with respect to matters relating to Hazardous Substances, Environmental
Laws, and Environmental Permits. For purposes of this Agreement, the following
terms shall have the following meanings: (i) "Hazardous Substances" means (A)
petroleum and petroleum products, by-products or
27
breakdown products, radioactive materials, asbestos-containing materials and
polychlorinated biphenyls, and (B) any toxic or hazardous chemicals, materials,
substances, pollutants, contaminants, or wastes regulated by any applicable
Environmental Law; (ii) "Environmental Law" means any applicable United States
federal, state or local or foreign law, statute, ordinance, rule, regulation or
other requirement of any Governmental Entity in effect as of the date hereof,
including any applicable binding judicial or administrative order, decree or
judgment, relating to pollution or protection of the environment, health or
safety or natural resources, including those relating to the use, handling,
transportation, treatment, storage, generation, release, or threatened release
of Hazardous Substances; and (iii) "Environmental Permit" means any permit,
approval, identification number, license or other authorization required under
any applicable Environmental Law.
(b) Except as set forth in Schedule 4.16 of the Disclosure
Schedule or as would not reasonably be expected to have a Material Adverse
Effect, (i) each of the Company and its Subsidiaries holds all Environmental
Permits necessary for the Company or any of its Subsidiaries to own, lease and
operate its properties or to carry on its business as it is now being conducted,
(ii) no suspension or cancellation of any material Environmental Permits is
pending or, to the Knowledge of the Company, threatened, and (iii) the Company
and its Subsidiaries are in compliance in all material respects with applicable
Environmental Laws and applicable Environmental Permits.
(c) Except as set forth in Section 4.16 of the Disclosure
Schedule, to the Knowledge of the Company, neither the Company nor any of its
Subsidiaries has stored, used, released, transported, or disposed of any
Hazardous Substances on, under, from or at any location currently or formerly
owned, leased, occupied or operated by the Company or any of its Subsidiaries or
any other location in material violation of applicable Environmental Laws,
except as would not reasonably be expected to have a Material Adverse Effect on
the Company.
(d) Except as disclosed in Section 4.16 of the Disclosure
Schedule, there are no suits, actions, claims, proceedings or investigations by
any Governmental Entity or any other Person pending, or to the Knowledge of the
Company, threatened against the Company relating to alleged releases or disposal
by the Company of Hazardous Substances, or alleged noncompliance by the Company
with applicable Environmental Laws or Environmental Permits.
(e) Except as disclosed in Section 4.16 of the Disclosure
Schedule, to the current actual knowledge of the Company, there are no Hazardous
Substances present in, on, under, or emanating from any real property currently
or formerly occupied, leased, or owned by the Company or any of its
Subsidiaries, that would require the Company to perform or fund the performance
by a third party of any reporting, investigation, and/or response activities,
except as would not reasonably be expected to have a Material Adverse Effect.
For the purposes of this Section 4.16(e) and Section 4.16(f), "current actual
knowledge of the Company" shall mean the current, actual knowledge, without
obligation to conduct any inquiry or investigation, and without imputing
knowledge of any information (including without limitation information that may
be available in public or private records), of the following individuals: Xxxxx
X. Xxxxxxxx III, Xxxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxx, Xx., W. Xxxxx Xxxxx, E.
Xxxxx Xxx, Xx., and Xxxxxxxxx X. Xxxxxxx.
28
(f) Except as disclosed in Section 4.16 of the Disclosure
schedule, to the current actual knowledge of the Company, the Company has not
received any written notices from any Governmental Entity or potentially
responsible party ("PRP") under the federal Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA"), or any state analogues
thereof, designating it as a PRP for the remediation of any facility (as that
term is defined in CERCLA).
(g) The Company and its Subsidiaries have provided or made
available to Parent copies of personnel and environmental assessments, audit
reports, or other similar studies or analyses currently in the possession of the
Company or any of its Subsidiaries relating to any real property currently or
formerly owned, leased or occupied by the Company or any of its Subsidiaries.
Section 4.17 STATE TAKEOVER STATUTES. The Board of Directors of the
Company has approved the Offer, the Merger, this Agreement and the transactions
contemplated by the Stockholder Agreements, and such approval is sufficient to
render inapplicable to the Offer, the Merger, this Agreement, the Stockholder
Agreements and the transactions contemplated hereby and thereby the limitations
on business combinations contained in including Section 203 of the DGCL or any
applicable anti-takeover provision in the Company's Certificate of Incorporation
or By-laws. To the Company's knowledge, no other "control share acquisition,"
"fair price" or other anti-takeover laws or regulations enacted under state or
federal laws in the United States apply to this Agreement, the Stockholder
Agreements or any of the transactions contemplated hereby and thereby. The
Company does not have a "shareholders rights plan" or other arrangement of
similar effect.
Section 4.18 REQUIRED VOTE OF COMPANY STOCKHOLDERS. The affirmative vote
of the holders of a majority of Shares entitled to vote is required to approve
this Agreement and the transactions contemplated hereby; provided, however, that
no such vote shall be required if the Merger is subject to Section 253 of the
DGCL. No other vote of the holders of any class or series of the Company's
capital stock is required by law, the Certificate of Incorporation or the
By-laws of the Company or otherwise in order for the Company to approve this
Agreement and the transactions contemplated hereby, including the Merger. The
Company's Board of Directors has duly adopted resolutions approving the
recommendations contemplated by Section 1.2(a) above.
Section 4.19 BROKERS. Except as set forth in Section 4.19 of the
Disclosure Schedule, no broker, investment banker, financial advisor or other
Person, other than the Company Financial Advisor, the fees and expenses of which
will be paid by the Company, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
the Company or any of its Subsidiaries. The Company has heretofore furnished to
Parent true and complete copies of all agreements and other arrangements between
the Company and the Company Financial Advisor.
Section 4.20 INSURANCE. Section 4.20 of the Disclosure Schedule sets forth
a true and complete list of all domestic insurance policies carried by or
covering the Company and its Subsidiaries with respect to their businesses,
assets and properties, together with, in respect of each such policy, the name
of the insurer, the policy number, the type of policy, the amount of
29
coverage and the deductible. All such policies are in full force and effect, and
no notice of cancellation has been received by the Company or its Subsidiaries
with respect to any such policy. All premiums due on such policies have been
paid in a timely manner, and the Company and its Subsidiaries have complied in
all material respects with the terms and provisions of such policies. The
insurance coverage provided by such policies is adequate and customary for the
industry in which the Company and its Subsidiaries operate.
Section 4.21 WARRANTIES AND PRODUCT LIABILITY. The Company has made
available to Parent copies of all material agreements containing outbound
warranties with respect to the Company's products and services. Except as set
forth in Section 4.21 of the Disclosure Schedule, there are no material claims
or proceedings pending or, to the Knowledge of the Company, threatened against
the Company or any of its Subsidiaries with respect to the quality of or absence
of defects in such products or services nor are there any facts known to the
Company relating to the quality of or absence of defects in such products or
services which, if known by a potential claimant or Governmental Entity, would
be reasonably likely to give rise to a material claim or proceeding.
Section 4.22 OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of the Company Financial Advisor, dated as of the date hereof, to the
effect that, as of such date, the Offer Price to be received for each Share by
the holders of Shares pursuant to the Offer and the Merger is fair, from a
financial point of view, to such holders (other than the Parent and its
affiliates).
Section 4.23 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither the Company
nor any of its Subsidiaries, nor any director, officer, employee or agent of the
Company or any Subsidiary, nor any other Person acting on its behalf, directly
or indirectly, has, to the Company's knowledge, (i) used any funds for unlawful
contributions or unlawful expenses relating to political activity or (ii) made
any unlawful payment to foreign or domestic government officials or employees or
to foreign or domestic political parties or companies or violated any provision
of the Foreign Corrupt Practices Act of 1977, as amended.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 5.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER.
(a) Except as otherwise permitted by this Agreement, during the
period from the date of this Agreement through the Effective Time, the Company
shall, and shall cause each of its Subsidiaries to:
(i) carry on its business in the ordinary course of its
business consistent with past practice and take no action which would
reasonably be expected to adversely affect its ability to consummate the
transactions contemplated by this Agreement;
(ii) use commercially reasonable efforts to preserve intact
its current business organizations and goodwill, keep available the
services of its current
30
officers and employees and preserve its relationships with customers,
suppliers and others having business dealings with it; and
(iii) comply in all material respects with all laws and
regulations applicable to it or any of its properties, assets or business.
(b) Without limiting the generality of the foregoing, between the
date of this Agreement and the Effective Time, the Company shall not, and shall
not permit any of its Subsidiaries to, without the prior written consent of
Parent:
(i) (A) other than any dividends paid by wholly-owned
Subsidiaries, 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, (B) other than in the case of any Subsidiary,
split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock or (C) purchase, redeem
or otherwise acquire any shares of capital stock of the Company or any
other securities thereof or any rights, warrants or options to acquire any
such shares or other securities;
(ii) issue, reissue, deliver, sell, pledge, grant, 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 (including options under the Stock Plans) to
acquire any such shares, voting securities, equity equivalent or
convertible securities or any other ownership interest (including stock
appreciation rights, phantom stock and stock-based performance units),
except in the ordinary course of business consistent with past practice;
(iii) amend its Organizational Documents;
(iv) acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of or any
equity interest in, or by any other manner, any business or any
corporation, limited liability company, partnership, association or other
business organization or division thereof or otherwise acquire or agree to
acquire any assets;
(v) sell, lease, pledge or otherwise dispose of or encumber,
or agree to sell, lease, pledge or otherwise dispose of or encumber, any
of its assets with a fair market value in excess of $100,000 individually
or $500,000 in the aggregate, other than sales of inventory that are in
the ordinary course of business consistent with past practice;
(vi) incur any indebtedness for borrowed money, guarantee any
such indebtedness or make any loans, advances or capital contributions to,
or other capital contributions or investments in, any other Person, other
than (A) in the ordinary course of business consistent with past practices
or (B) indebtedness, loans, advances, capital contributions and
investments between the Company and any of its wholly-owned
31
Subsidiaries or between any of such wholly-owned Subsidiaries, in each
case in the ordinary course of business consistent with past practices;
(vii) alter (through merger, liquidation, reorganization,
restructuring or in any other fashion) the corporate structure or
ownership of the Company or any of its Subsidiaries or adopt a plan of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or
any of its Subsidiaries (other than the Merger);
(viii) reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any shares of
capital stock of the Company or any of its Subsidiaries or any securities
convertible into or exercisable for any such shares of its capital stock
or securities, other than pursuant to Options outstanding as of the date
hereof in accordance with their respective terms;
(ix) make any change to accounting methods, policies or
procedures used by it as of the date hereof (other than actions required
to be taken by GAAP);
(x) except as set forth in Section 5.1(b)(x) of the
Disclosure Schedule, enter into, amend or terminate any agreement or
contract (A) having a term in excess of 12 months and that is not
terminable by the Company or a Subsidiary without penalty or premium by
notice of 60 days or less or (B) outside the ordinary course of business
consistent with past practice, which involves or is expected to involve
payments of $100,000 individually or $500,000 in the aggregate or more
during the term thereof (provided that in the case of agreements or
contracts with any customer, the margins anticipated from any such
agreement or contract shall be consistent in all material respects with
historical margins); enter into, amend or terminate any other agreement or
contract material to the Company and its Subsidiaries, taken as a whole;
or purchase any real property, or make or agree to make any new capital
expenditure or expenditures (other than the purchase of real property or
capital expenditures set forth on Section 5.1(b)(x) of the Disclosure
Schedule) that are in excess of $100,000 individually or $500,000 in the
aggregate and not modify or amend, or terminate a waiver or release or
assign any material rights or claims with respect to, any material
agreement or arrangement to which it is a party;
(xi) Except as set forth on Section 5.1(b)(xi) of the
Disclosure Schedule (A) pay, discharge or satisfy any claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction of any such
claims, liabilities or obligations in the ordinary course of business
consistent with past practice or in accordance with their terms, (B)
cancel any material indebtedness (individually or in the aggregate) or
waive any claims or rights of substantial value or (C) waive the benefits
of, or agree to modify in any manner, any confidentiality, standstill or
similar agreement to which it is a party;
32
(xii) promptly deliver to Parent true and correct copies of
any report, statement or schedule filed with the SEC subsequent to the
date of this Agreement;
(xiii) not modify, extend the term or forgive or cancel any
outstanding loans owed to the Company or any of its Subsidiaries by any
current or former directors, officers, employees, consultants or
independent contractors of such entities;
(xiv) except as set forth in Section 5.(b)(xiv) of the
Disclosure Schedule, not make any loans, advances or capital contributions
to, or investments in any other Person;
(xv) not alter, amend or revoke any tax election or method of
accounting with respect to taxes or settle or compromise any material tax
claim;
(xvi) maintain insurance on its tangible assets and its
business in such amounts and against such risks and losses as are
currently in effect;
(xvii) except as required in accordance with GAAP, not revalue
any of its assets, including, without limitation, writing down the value
of its inventory or writing off notes or accounts receivables other than
in the ordinary course of business consistent with past practice;
(xviii) pursuant to or within the meaning of any bankruptcy
law, not (A) commence a voluntary case, (B) consent to the entry of an
order for relief against it in an involuntary case, (C) consent to the
appointment of a custodian of it or for all or substantially all of its
property or (D) make a general assignment for the benefit of its
creditors;
(xix) other than in the ordinary course of business, not
amend, modify, assign, terminate, reject, cancel or fail to exercise a
right of renewal or extension, with respect to any material Contract
relating to Intellectual Property;
(xx) not settle any legal proceedings, whether now pending or
hereafter made or brought, except to the extent of any accruals therefor
in the Company's Financial Statements;
(xxi) except as set forth on Section 5.1(b)(xxi) of the
Disclosure Schedule, not apply any of its assets or properties to the
direct or indirect payment, discharge, satisfaction or reduction of any
amount payable directly or indirectly, to or for the benefit of any
Related Party or enter into any transaction with a Related Party (except
for payment of salary and other customary expense reimbursements made in
the ordinary course of business to Related Parties who are employees,
directors or officers of the Company and its Subsidiaries. "Related Party"
means any affiliate, associate, shareholder, officer, director, employee
or agent of the Company or any Subsidiary or any member of his or her
family by blood or marriage;
33
(xxii) except as set forth on Section 5.1(b)(xxii) of the
Disclosure Schedule, not (A) increase any compensation or enter into or
amend any employment, severance, retention or similar compensation
agreement or arrangements with any of its present or future officers,
directors or employees, (B) grant any severance or termination package to
any director, officer, employee or consultant other than rights set forth
on the Disclosure Schedule, (C) hire any new employee who shall have, or
terminate the employment of any current employee who has, an annual salary
in excess of $70,000, (D) adopt any new employee benefit plan (including
any stock option, stock benefit or stock purchase plan) or amend, except
as required by applicable law (in which case the Company should provide
prompt written notice to Parent following such adoption), any existing
benefit plan in any material respect, except for changes which are not
more favorable to participants in such plans; and (E) grant any stock
option or other equity or incentive awards to any director, officer,
employee, consultant or other service provider and (F) other than in the
ordinary course of business, enter into any transaction with any director
or executive officer of the Company or any of its Subsidiaries or any
immediate family member of any such director or executive except in the
ordinary course of business, hire any additional consultants or
independent contractors or enter into or extend the term of any consulting
or independent contractor relationship;
(xxiii) authorize, recommend, propose or announce an intention
to do, or enter into any contract, agreement, commitment or arrangement to
do, any of the foregoing; or
(xxiv) take any action that would cause any representation or
warranty in this Agreement to become untrue or incorrect or any action
that would result in any of the conditions set forth in Exhibit A not
being satisfied.
Section 5.2 NO SOLICITATION.
(a) The Company shall not, nor shall it permit any of its
affiliates to, nor shall it authorize or permit any officer, director or
employee of or any financial advisor, attorney or other advisor, consultant,
agent or representative of (collectively, the "Representatives"), the Company or
any of its affiliates to, directly or indirectly (A) solicit, initiate,
encourage or facilitate the making of, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes or may reasonably
be expected to lead to, any Takeover Proposal (including by taking any action
that would make Section 203 of the DGCL inapplicable to any Takeover Proposal),
(B) participate in any way in discussions or negotiations regarding, or furnish
or disclose to any Person any information with respect to the Company or any of
its Subsidiaries in connection with, or take any other action to cooperate in
any way with respect to, any Takeover Proposal, (C) withdraw or modify, or
propose to withdraw or modify, in a manner adverse to Parent or Sub the approval
and recommendation of the Offer, the Merger or this Agreement, (D) approve or
recommend, or propose to approve or recommend, any Takeover Proposal or (E)
enter into any agreement, letter of intent or similar document contemplating or
otherwise relating to any Takeover Proposal; provided, however, that nothing
contained in this Section 5.2(a) shall prohibit the Company or its directors
from:
34
(i) participating in discussions or negotiations with, or
furnishing or disclosing nonpublic information to (subject to Section
5.2(b) below), any Person in response to an unsolicited, bona fide and
written Takeover Proposal that is submitted to the Company by such Person
after the date of this Agreement and prior to the Acceptance Date if (A)
none of the Company, any of its affiliates or any of the Representatives
shall have violated any of the provisions of this Section 5.2, (B) a
majority of the members of the Board of Directors of the Company
determines in good faith, after having consulted with the Company
Financial Advisor or other independent nationally recognized financial
advisor (x) that such Person is reasonably capable of consummating such
Takeover Proposal taking into account the legal, financial, regulatory and
other aspects of such Takeover Proposal and (y) that such Takeover
Proposal is reasonably likely to lead to a Superior Proposal, (C) a
majority of the members of the Board of Directors of the Company
determines in good faith, after having taken into account the advice of
its outside legal counsel, that failing to take such action is reasonably
likely to constitute a breach of its fiduciary duties to the Company's
stockholders under applicable law, as such duties would exist in the
absence of this Section 5.2, (D) at least two business days prior to
furnishing or disclosing any nonpublic information to such Person, the
Company furnishes such information to Parent (to the extent such
information has not been previously delivered or made available by the
Company to Parent), and (E) all action of the Board of Directors of the
Company is taken in accordance with the DGCL and applicable Delaware law;
or
(ii) approving or recommending, or entering into (and in
connection therewith, withdrawing or modifying the approval and
recommendation of the Offer, the Merger and this Agreement), a definitive
agreement with respect to an unsolicited, bona fide and written Takeover
Proposal that is submitted to the Company after the date of this Agreement
and prior to the Acceptance Date if (A) none of the Company, any of its
affiliates or any of the Representatives have violated any of the
provisions of this Section 5.2, (B) the Company provides Parent with
written notice at least four business days prior to any meeting of the
Board of Directors of the Company at which such Board of Directors will
consider whether such Takeover Proposal constitutes a Superior Proposal,
during which four-business day period the Company shall cause the Company
Financial Advisor (or another independent nationally recognized financial
advisor) and its legal advisors to negotiate in good faith with Parent and
its advisors in an effort to make such adjustments in the terms and
conditions of this Agreement as would enable the Company to proceed with
the transactions contemplated herein on such adjusted terms, (C)
notwithstanding having complied with its obligations pursuant to clause
(B) above, the Board of Directors of the Company after having consulted
with the Company Financial Advisor or other independent nationally
recognized financial advisor, makes the determination that such Takeover
Proposal constitutes a Superior Proposal, (D) a majority of the members of
the Board of Directors of the Company determines in good faith, after
having taken into account the advice of its outside legal counsel, that
failing to take such action is reasonably likely to constitute a breach of
its fiduciary duties to the Company's stockholders under applicable law,
(E) all action of the Board of Directors of the Company is taken in
accordance with the DGCL and applicable Delaware law, (F) the Company does
not approve or recommend or enter into a definitive agreement with respect
to such Takeover Proposal at any time before the day that is the
35
fourth business day after Parent receives written notice from the Company
stating that the Board of Directors of the Company has determined such
Takeover Proposal constitutes a Superior Proposal and fulfills its
obligations under (B) above and (G) simultaneously with the earlier of the
(1) withdrawal or modification in any manner adverse to Parent or Sub of
the approval and recommendation of the Offer, the Merger or this Agreement
or (2) the approval or recommendation of, or execution of a definitive
agreement with respect to, any such Superior Proposal, the Company makes
the payments to the Parent required to be made pursuant to Section 8.2(b);
or
(iii) complying with Rule 14e-2 promulgated under the
Exchange Act with regard to a tender offer or exchange offer in accordance
with the foregoing; or
(iv) upon an unsolicited request, referring a third
party to this Section 5.2(a) or making a copy of this Section 5.2(a)
available to any third party.
(b) In addition to the obligations of the Company set forth in
Section 5.2(a), on the date of receipt thereof, the Company shall advise Parent
of any request for information or of any Takeover Proposal, or any inquiry,
proposal, discussions or negotiation with respect to any Takeover Proposal, the
terms and conditions of such request, Takeover Proposal, inquiry, proposal,
discussion or negotiation, and the Company shall promptly provide to Parent
copies of any written materials received by the Company in connection with any
of the foregoing and the identity of the Person making any such Takeover
Proposal or such request, inquiry or proposal or with whom any discussions or
negotiations are taking place. Prior to furnishing nonpublic information to, or
entering into discussions or negotiations with, any other Person, the Company
shall enter into a customary confidentiality agreement with such Person (if the
Company has not already entered into a customary confidentiality agreement with
such Person), it being understood that such confidentiality agreement (i) shall
not include any provision calling for any exclusive right to negotiate with such
party or having the effect of prohibiting the Company from satisfying its
obligations hereunder and (ii) shall be no less favorable to the Company than
the Company's confidentiality agreement with the Parent, dated May 4, 2004. The
Company shall keep Parent informed of the status and general progress (including
amendments or proposed amendments) of any such request or Takeover Proposal and
keep Parent informed as to the details of any information requested of or
provided by the Company and as to the details of all discussions or
negotiations. The Company shall promptly provide to Parent any nonpublic
information the Company provided to any other Person in connection with any
Takeover Proposal that was not previously provided to Parent, such information
to be provided no later than the date of provision of such information to such
other party.
(c) Nothing contained in this Section 5.2 shall prohibit Sub from
purchasing the Shares pursuant to the Offer or consummating the Merger.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 STOCKHOLDER MEETING.
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(a) The Company will duly call, give notice of, convene and hold a
meeting of stockholders (the "Stockholder Meeting") for the purpose of
considering the approval of this Agreement and at such meeting call for a vote
and cause proxies to be voted in respect of the approval and adoption of this
Agreement (if such meeting is required). The Stockholder Meeting shall be held
as soon as practicable following the purchase of Shares pursuant to the Offer,
and, subject to Section 5.2(a)(iii) above the Company will, through its Board of
Directors, recommend to its stockholders the approval of this Agreement, not
withdraw or modify such recommendation, use its reasonable best efforts to
solicit from stockholders of the Company proxies in favor of the Merger and take
all other action necessary or, in the reasonable opinion of Parent, advisable to
secure any vote of stockholders required by the DGCL. The record date for the
Stockholder Meeting shall be a date subsequent to the date on which Parent or
Sub becomes a record holder of Company Common Stock purchased pursuant to the
Offer.
(b) The Company shall, at Parent's request, as soon as practicable
following the consummation of the Offer if the Stockholder Meeting is required
and if required by the Exchange Act, prepare and file a preliminary Proxy
Statement with the SEC and shall use its reasonable best efforts to respond to
any comments of the SEC or its staff and to cause the Proxy Statement to be
mailed to the Company's stockholders as promptly as practicable after responding
to all such comments to the satisfaction of the staff. Prior to such filing, the
Company shall afford Parent and its counsel a reasonable opportunity to review
and comment on the proposed form of the Company Proxy Statement, and neither the
Company Proxy Statement, nor any amendment or supplement to the Company Proxy
Statement, will be made by the Company without the approval of Parent, which
approval shall not be unreasonably withheld. The Company shall notify Parent
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and will supply Parent with copies of
all correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement or the Merger. If, at any time prior to the Stockholder Meeting, there
shall occur any event that should be set forth in an amendment or supplement to
the Proxy Statement, then upon learning of such event shall promptly inform the
Parent and, subject to the following sentence, the Company shall promptly
prepare and mail to its stockholders such an amendment or supplement. Parent and
the Company shall cooperate in the preparation of the Proxy Statement or any
amendment or supplement thereto, including the supply of any information
required to be included in the Proxy Statement regarding Parent or Sub.
(c) Parent agrees to cause all Shares purchased pursuant to the
Offer and all other Shares owned by Parent or any subsidiary of Parent to be
voted in favor or approval of the Merger.
(d) Notwithstanding the foregoing, if Sub, or any other direct or
indirect Subsidiary of Parent, shall acquire at least 90 percent of the
outstanding Shares and, provided that the conditions set forth in Article VII
shall have been satisfied or waived, the Company shall, at the request of
Parent, take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after such acquisition, without a meeting of
stockholders of the Company, in accordance with Section 253 of the DGCL.
37
Section 6.2 ACCESS TO INFORMATION. The Company shall, and shall cause each
of its Subsidiaries to, afford to the accountants, counsel, financial advisors
and other representatives of Parent reasonable access to, during normal business
hours, and permit them to make such inspections as they may reasonably require
of, during the period from the date of this Agreement through the Effective
Time, all of their respective properties, books, contracts, commitments and
records (including accounting records and Tax Returns and the work papers of
independent accountants, if available and subject to the consent of such
independent accountants), and during such period, the Company shall, and shall
cause each of its Subsidiaries to, (a) furnish promptly to Parent 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,
(b) furnish promptly to Parent all other information concerning its business,
properties and personnel as Parent may reasonably request and (c) promptly make
available to Parent, appropriate personnel of the Company and its Subsidiaries
and the Representatives in connection with such inspections. All information
obtained by Parent pursuant to this Section 6.2 shall be kept confidential in
accordance with the Confidentiality Agreement, dated May 4, 2004, between Parent
and the Company.
Section 6.3 DIRECTORS. Promptly upon acceptance for payment and payment
for any Shares by Sub pursuant to the Offer, Parent shall be entitled, to the
fullest extent permitted by law, to designate at its option up to that number of
directors, rounded to the nearest whole number, of the Board of Directors of the
Company, subject to compliance with Section 14(f) of the Exchange Act and Rule
4350 of the NASD Manual, as will give Parent representation on the Board of
Directors of the Company equal to the product of the total number of directors
on the Board of Directors of the Company (giving effect to the directors
appointed or elected pursuant to this sentence) multiplied by the percentage
that the aggregate number of Shares beneficially owned by Parent or any
affiliate of Parent (including for purposes of this Section 6.3 such Shares as
are accepted for payment and paid for pursuant to the Offer) bears to the number
of Shares then outstanding. In furtherance thereof, concurrently with such
acceptance for payment and payment for such Shares, the Company shall promptly
take all actions necessary to cause Parent's designees to be elected or
appointed to the Board of Directors of the Company in accordance with the terms
of this Section 6.3, including increasing the size of the Board of Directors of
the Company and/or securing the resignations of such number of directors as is
necessary to enable Parent's designees to be elected to the Board of Directors
of the Company in accordance with the terms of this Section 6.3. At such time,
the Company shall also cause, if requested by Parent, (a) each committee of the
Board of Directors of the Company, (b) the board of directors of each of the
Subsidiaries and (c) each committee of such Subsidiaries' board, to include
persons designated by Parent constituting up to the same percentage (rounded up
to the next whole number) of each such committee or board as Parent's designees
constitute on the Board of Directors of the Company. Notwithstanding the
foregoing, in the event that Parent's designees are appointed or elected to the
Board of Directors of the Company, such Board of Directors shall have until the
Effective Time at least three directors who are directors on the date hereof and
who are neither officers of the Company nor designees, affiliates or associates
(within the meaning of the federal securities laws) of Parent (three or more of
such directors, the "Independent Directors"); provided, however, that in such
event, if the number of Independent Directors shall be reduced below three for
any reason whatsoever, the remaining Independent Director(s) shall designate a
person or persons to fill such vacancy or vacancies, each of whom shall be
determined to be and Independent Director for purposes of this Agreement;
provided,
38
further, that if no Independent Directors remain, the other directors shall
designate three persons to fill the vacancies who shall be neither an officer,
designee, Affiliate or associate (as defined in Rule 12b-2 under the Exchange
Act) of the Company nor an officer, designee, Affiliate or associate of Parent,
and such persons shall be deemed to be Independent Directors for purposes of
this Agreement. Subject to applicable law, the Company shall promptly take all
action necessary to effect any such election or appointment, including mailing
to its stockholders the information required by Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder, and the Company agrees to make such
mailing with the mailing of the Schedule 14D-9 (provided that Sub shall have
provided to the Company on a timely basis all information required to be
included in the Information Statement with respect to Sub's designees). Parent
will supply the Company any information with respect to itself and its nominees,
officers, directors and affiliates required by Section 14(f) and Rule 14f-1.
Notwithstanding anything in this Agreement to the contrary, following the time
directors designated by Parent constitute a majority of the Board of Directors
of the Company and prior to the Effective Time, the affirmative vote of a
majority of the Independent Directors shall be required to (i) amend or
terminate this Agreement on behalf of the Company, (ii) exercise or waive any of
the Company's rights or remedies hereunder or (iii) to the extent a decision of
the Company, extend the time for performance of Parent's or Sub's obligations
hereunder, and such affirmative majority vote shall be sufficient to take any
such action.
Section 6.4 FEES AND EXPENSES. Except as provided in Section 8.2(b),
whether or not the Merger is consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby,
including the fees and disbursements of counsel, financial advisors and
accountants, shall be paid by the party incurring such costs and expenses.
Without limiting the generality of the foregoing, all costs and expenses of the
Company incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the Company. An estimate of the Company's
fees and expenses related to the Offer and Merger as of the date hereof is
disclosed in Section 4.12 of the Disclosure Schedule.
Section 6.5 REASONABLE BEST EFFORTS; COOPERATION.
(a) Upon the terms and subject to the conditions hereof, each of
the parties hereto shall use reasonable best efforts to obtain in a timely
manner all necessary waivers, consents and approvals and to effect all necessary
registrations and filings, and to use all reasonable best efforts to take, or
cause to be taken, all other actions and to do, or cause to be done, all other
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement,
including, (a) cooperating in responding to inquiries from, and making
presentations to, regulatory authorities and customers, (b) defending against
and responding to any action, suit, proceeding, or investigation, whether
judicial or administrative, challenging or relating to this Agreement or the
transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered, by any court or other Governmental Entity
vacated or reversed, (c) cooperating in the preparation and filing of the Offer
Documents, the Schedule TO, the Schedule 14D-9 and the Company Proxy Statement
and (d) promptly making all regulatory filings and applications and any
amendments thereto as are necessary for the consummation of the transactions
contemplated by this Agreement, including, without limitation those required by
the HSR Act. No party to this Agreement shall consent to any voluntary delay in
the
39
consummation of the Offer or the Merger at the behest of any Governmental Entity
without the prior written consent of the other parties to this Agreement, which
consent shall not be unreasonably withheld or delayed.
(b) Each party hereto shall use commercially reasonable efforts to
not take any action, or enter into any transaction, that would cause any of its
representations or warranties contained in this Agreement to be untrue or result
in a breach of any covenant made by it in this Agreement.
Section 6.6 PUBLIC ANNOUNCEMENTS. Parent, Sub and the Company will not
issue any press release with respect to the transactions contemplated by this
Agreement or otherwise issue any written public statements with respect to such
transactions without the prior written approval of the other parties (which
approval shall not to be unreasonably withheld or delayed), except as may be
required by applicable law or by obligations pursuant to any listing agreement
with any national securities exchange on which such party's securities are
listed, and in such case shall use all reasonable efforts to consult with and
obtain the approval of the other party prior to such release or announcement
being issued.
Section 6.7 STATE TAKEOVER STATUTES. If any "fair price," "business
combination" or "control share acquisition" statute or other similar statute or
regulation shall become applicable to the transactions contemplated hereby or by
the Stockholder Agreements, then the parties hereto shall promptly grant such
approvals as may be reasonably necessary and take such actions as are necessary
to render such statute or regulation inapplicable to all of the foregoing.
Section 6.8 INDEMNIFICATION. From and after the Effective Time, Parent
shall cause the Surviving Corporation, to the extent permitted by applicable
law, to indemnify and hold harmless all past and present officers and directors
of the Company and of its Subsidiaries to the same extent and in the same manner
such Persons are indemnified as of the date of this Agreement by the Company
pursuant to the DGCL and/or the Organizational Documents of the Company and its
Subsidiaries for acts or omissions occurring at or prior to the Effective Time
and shall advance, to the fullest extent permitted by Delaware law, reasonable
litigation expenses incurred by such officers and directors in connection with
defending any action arising out of such acts or omissions. In addition to the
foregoing, Parent or the Surviving Corporation shall maintain in effect for not
less than six (6) years after the Effective Time the policies of directors' and
officers' liability insurance maintained by the Company on the date of this
Agreement or policies having comparable coverage, terms and conditions provided,
however, that Parent shall not be required to pay a per annum premium in excess
of 200% of the per annum premium that the Company currently pays for its
existing policy of directors' and officers' liability insurance (it being
understood that, if the premium required to be paid by Parent for such policy
would exceed such 200% amount, then the coverage of such policy shall be reduced
to the maximum amount that may be obtained for a per annum premium of such 200%
amount).
Section 6.9 NOTIFICATION OF CERTAIN MATTERS. The Parent and the Company
shall give prompt written notice to the other party of (a) any occurrence, or
non-occurrence, of any event the occurrence, or non occurrence, of which would
be likely to cause (i) any representation or warranty contained in this
Agreement and made by it to be untrue or inaccurate in any material respect,
(ii) any condition set forth in Exhibit A to be unsatisfied at any time from the
date hereof
40
to the date Parent or Sub purchases Shares pursuant to the Offer, (iii) any
covenant, condition or agreement contained in this Agreement and made by it not
to be complied with or satisfied in all material respects, (b) any failure of
the Parent or the Company, as the case may be, to comply in a timely manner with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder and (c) any change or event that would be reasonably likely to
have a Material Adverse Effect on the Company; provided, however, that the
delivery of any notice pursuant to this Section 6.9 shall not limit or otherwise
affect the remedies available to the party receiving such notice. The Company
shall give prompt notice to Parent of any notice or other communication from any
third party alleging that the consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement.
Section 6.10 EMPLOYEE MATTERS.
(a) The Company will, and will cause its Subsidiaries to, and from
and after the Effective Time the Surviving Corporation will, honor, in
accordance with their respective terms the employment and severance agreements
between the Company or any of its Subsidiaries and any officer, director or
employee of the Company or any of its Subsidiaries specified in Section 6.10 of
the Disclosure Schedule.
(b) From and after the date hereof, all communications with
employees and directors relating to the Company Plans, including the Stock
Plans, shall be subject to Parent's comment and approval prior to distribution,
which shall not be unreasonably withheld or delayed, and the Company shall
cooperate with and assist Parent in providing necessary or desirable
communications to the employees and directors of the Company regarding the
transactions contemplated hereby.
(c) For a period of 24 months following the Effective Time, Parent
shall or shall cause the Surviving Corporation to either continue the existing
Company Plans or provide benefits to employees of the Company and its
subsidiaries under substitute plans or arrangements that are no less favorable,
in the aggregate, to such employees than those provided under the current
Company Plans; provided, however, that neither Parent, Sub nor the Surviving
Corporation shall have any obligation to continue any current equity
compensation plan or current incentive compensation plan after the Effective
Time.
(d) With respect to any Parent Benefit Plan in which the Company's
or its subsidiaries' employees participate effective as of the Closing Date,
Parent shall, or shall cause the Surviving Corporation to: (A) waive all
limitations as to pre-existing conditions, exclusions and waiting periods with
respect to participation and coverage requirements applicable to the employees
under any Parent Benefit Plan in which such employees may be eligible to
participate after the Effective Time, (B) provide each employee with credit for
any co-payments and deductibles paid prior to the Effective Time in satisfying
any applicable deductible or out-of-pocket requirements under any Parent Benefit
Plan in which such employees may be eligible to participate after the Effective
Time, and (C) recognize all service of the employees with the Company or any
subsidiary for all purposes (excluding for benefit accrual) in any Parent
Benefit Plan in which such employees may be eligible to participate after the
Effective Time, to the same extent taken into account under a comparable Company
Plan immediately prior to the Closing Date; provided, however, that such service
shall not be recognized to the extent that
41
such recognition would result in a duplication of benefits.
Section 6.11 REGULATORY APPROVALS. Each party shall use all reasonable
efforts to file, as soon as practicable after the date of this Agreement, all
notices, reports and other documents required to be filed by such party with any
Governmental Entity with respect to the Offer, the Merger and the other
transactions contemplated by this Agreement, and to submit promptly any
additional information requested by any such Governmental Entity. Without
limiting the generality of the foregoing, the Company and Parent shall, promptly
after the date of this Agreement, prepare and file any notifications required
under any applicable antitrust laws in connection with the Offer, the Merger or
the other transactions contemplated by this Agreement. The Company and Parent
shall respond as promptly as practicable to any inquiries or requests received
from any antitrust authority or other Governmental Entity in connection with
antitrust or related matters. Each of the Company and Parent shall (a) give the
other party prompt notice of the commencement or threat of commencement of any
proceeding by or before any Governmental Entity with respect to the Offer, the
Merger or any of the other transactions contemplated by this Agreement, (b) keep
the other party informed as to the status of any such proceeding or threat, and
(c) promptly inform the other party of any communication to or from any
Governmental Entity regarding the Offer, the Merger or any of the other
transactions contemplated by this Agreement. Except as may be prohibited by any
Governmental Entity or by any law, (y) each party will consult and cooperate
with the other, and will consider in good faith the views of the other, in
connection with any analysis, appearance, presentation, memorandum, brief,
proceeding under or relating to any foreign, federal or state antitrust or fair
trade law, and (z) in connection with any such proceeding, each party will
permit authorized representatives of the other to be present at each meeting or
conference relating to any such proceeding and to have access to and be
consulted in connection with any document, opinion or proposal made or submitted
to any Governmental Entity in connection with any such proceeding.
Section 6.12 SECTION 16 MATTERS. The board of directors of the Company
shall adopt a resolution in advance of the Effective Time providing that the
disposition by the officers and directors of Company Common Stock, Options or
other equity securities of the Company pursuant to the Offer, the Merger or the
other transactions contemplated by this Agreement is intended to be exempt from
liability pursuant to Rule 16b-3 under the Exchange Act.
Section 6.13 STANDSTILL AGREEMENTS. Effective immediately following the
date of this Agreement, the Company hereby waives and releases all the
standstill and other similar restrictions which may be or may be deemed to be in
effect with respect to the Parent.
Section 6.14 FIRPTA CERTIFICATION. On the Acceptance Date and immediately
prior to the Effective Time, the Company shall provide to Parent a certification
that stock in the Company is not a U.S. real property interest because the
Company is not, and has not been, a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code. Such
certification shall be in accordance with Treasury Regulation Section
1.1445-2(c)(3)(i). The Company shall timely deliver to the Internal Revenue
Service the notification required under Treasury Regulation Section
1.897-2(h)(2).
42
ARTICLE VII
CONDITIONS PRECEDENT TO THE MERGER
Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of the following conditions
(unless waived in accordance with the provisions of this Agreement):
(a) This Agreement (including the Merger) shall have been approved
and adopted by the affirmative vote of the stockholders of the Company (unless
the vote of stockholders is not required under the DGCL) as required by the DGCL
and the Certificate of Incorporation of the Company;
(b) Parent shall have made, or caused to be made, the Offer, and
Parent or Sub shall have previously accepted for payment and paid for Shares
pursuant to the Offer in an amount sufficient to satisfy the Minimum Condition
of the Offer (as defined herein)and otherwise pursuant to the Offer (provided
that the purchase of Shares pursuant to the Offer shall not be a condition to
the obligations of Parent and Sub hereunder if Sub shall fail to accept payment
and pay for Shares pursuant to the Offer in violation of the terms thereof or of
this Agreement); and
(c) 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 statute, law, rule,
regulation, executive order, decree, injunction, ruling or other order (whether
temporary, preliminary or permanent), or taken any other action, that has the
effect of (i) making the Merger illegal or directly or indirectly restraining,
prohibiting or restricting the consummation of the Merger or (ii) materially
changing the terms or conditions of the Agreement.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 TERMINATION. This Agreement may be terminated and the Offer
and Merger abandoned at any time prior to the Effective Time, whether before or
after approval of the matters presented in connection with Merger by the
stockholders of the Company (with any termination by Parent also being an
effective termination by Sub):
(a) by mutual written consent of Parent and the Company;
(b) by either of Parent or the Company if any statute, law, rule
or regulation shall have been promulgated that prohibits the consummation of the
Offer or the Merger or if any Governmental Entity having jurisdiction over
Parent, Sub or the Company shall have issued an executive order, decree,
injunction, ruling or other order or taken any other action (which order,
decree, injunction or ruling or other action each party hereto shall use its
reasonable best efforts to have vacated or reversed in accordance with Section
6.5), in each case permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement
43
and such order, decree, ruling or other action shall have become final and
non-appealable;
(c) by either of Parent or the Company if the Offer is terminated
or withdrawn pursuant to its terms (including pursuant to the conditions set
forth in Exhibit A) or the Offer shall have expired without Sub having purchased
any Shares pursuant thereto; provided, however, that Parent may not terminate
this Agreement pursuant to this Section 8.1(c) if Parent or Sub shall have
materially breached this Agreement and the Company may not terminate this
Agreement pursuant to this Section 8.1(c) if the Company shall have materially
breached this Agreement;
(d) by the Company (i) if the Board of Directors of the Company
shall have approved or recommended, or the Company shall have executed or
entered into a definitive agreement with respect to, a Superior Proposal in
compliance with Section 5.2(a)(ii); provided, however, that such termination
under this clause (i) shall not be effective until the Company has made the
payments required by Section 8.2(b); or (ii) if Parent, Sub or any of their
affiliates shall have failed to commence the Offer in accordance with Section
1.1; provided, however, that the Company may not terminate this Agreement
pursuant to this clause (ii) if such failure to have commenced the Offer shall
have been caused by the Company's failure to perform any of its obligations
under this Agreement;
(e) by Parent or Sub if any of the following have occurred: (i)
the Company or any of its affiliates or Representatives violates any of the
provisions of Section 5.2; (ii) the Board of Directors of the Company recommends
to the Company's stockholders any Takeover Proposal or Superior Proposal; (iii)
the Company enters into any agreement, letter of intent or similar document
(excluding a confidentiality agreement with terms no more favorable to the
Company than those contained in the Confidentiality Agreement) contemplating or
otherwise relating to any Takeover Proposal or Superior Proposal; (iv) the Board
of Directors of the Company or any committee thereof shall have withdrawn, or
modified or changed, or publicly proposed to withdraw, modify or change, in a
manner adverse to Parent or Sub (including by amendment of the Schedule 14D-9)
its approval or recommendation of the Offer, this Agreement or the Merger or
shall have approved or recommended or publicly proposed to approve or recommend
a Takeover Proposal; or (v) the Company shall have failed to include in the
Schedule 14D-9 its recommendation of the Offer;
(f) by Parent or the Company if the Acceptance Date shall not have
occurred prior to October 31, 2004 (the "Outside Date"); provided, however, that
the right to terminate this Agreement under this Section 8.1(f) will not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Acceptance
Date to occur on or before such date;
(g) (i) by the Company, if Parent or Sub shall have breached or
failed to perform in any material respect any of its representations,
warranties, covenants or agreements contained in this Agreement, which breach or
failure to perform is not capable of being cured on or before the Outside Date
and (ii) by the Parent or Sub, if the Company shall have breached or failed to
perform any of its representations, warranties, covenants or agreements
contained in this Agreement, such that the conditions set forth in clauses (c)
and (d) of the Offer Conditions are not capable of being satisfied on or before
the Outside Date; or
44
(h) by Parent if (1) the failure to satisfy the Minimum Condition
is the sole reason the Offer has not been consummated by September 7, 2004 (the
"Minimum Condition Target Date"), and (2) on or after the Minimum Condition
Target Date, (X) Parent provides written notice requesting a reduction of the
Minimum Condition to an amount not less than a majority of the outstanding
shares of the Company, on a fully diluted basis, and (Y) the Company does not
agree in writing to such reduction within five (5) business days (including the
date the Company received such notice) following the Company's receipt of such
notice.
The right of any party hereto to terminate this Agreement pursuant to this
Section 8.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any Person
controlling any such party or any of their respective officers or directors,
whether prior to or after the execution of this Agreement.
Section 8.2 EFFECT OF TERMINATION.
(a) In the event of termination of this Agreement by either Parent
or the Company, as provided in Section 8.1, this Agreement shall forthwith
become void and have no effect, without any liability or obligation hereunder on
the part of the Company, Parent, Sub or their respective officers or directors
(except for the last sentence of Section 6.2 and the entirety of Section 6.4 and
this Section 8.2, which shall survive the termination); provided, however, that
the termination of this Agreement shall not relieve any party from any liability
for any breach of this Agreement.
(b) IF,
(i) The Company terminates this Agreement pursuant to
Section 8.1(d)(i);
(ii) Parent or Sub terminates this Agreement pursuant
to Section 8.1(e)(ii), (iii), (iv) or (v); or
(iii) The Company or Parent terminates this Agreement
pursuant to Section 8.1(c) or Section 8.1(f) or the Parent or Sub
terminates this Agreement pursuant to Section 8.1(e)(i) and in the case of
a termination pursuant to this clause (iii)(A) at any time after the date
of this Agreement and prior to such termination a Takeover Proposal shall
have been publicly announced or otherwise publicly communicated to the
stockholders of the Company generally and (B) prior to the date which is
nine months following the date of such termination, the Company shall
enter into a definitive agreement with respect to a Takeover Proposal or a
Takeover Proposal is consummated,
THEN, the Company shall pay to Parent (less any amount paid pursuant to
Section 8.2(c) below) a non-refundable fee in immediately available funds
in an amount equal to $3,000,000 as follows:
(x) in the case of clause (i) above, upon termination
of this Agreement, if such payment shall not have
earlier been made simultaneously with the taking
of such action as required by Section
5.2(a)(ii)(G);
45
(y) in the case of clause (ii) above, upon termination
of this Agreement; or
(z) in the case of clause (iii) above, upon the
entering into of a definitive agreement with
respect to, or the consummation of, a Takeover
Proposal prior to the date which is nine months
following the date of such termination.
The parties acknowledge that the agreements contained in this
Section 8.2(b) are an integral part of the transactions contemplated
by this Agreement, and that, without these agreements the Parent
would not have entered into this Agreement.
(c) If Parent terminates this Agreement in accordance with Section
8.1(h), then upon such termination the Company shall, upon presentation of
invoices or other reasonable supporting documentation, promptly reimburse Parent
for its reasonable out of pocket costs incurred in connection with the
transactions contemplated by this Agreement (including, without limitation, the
reasonable fees and expenses of Parent's legal counsel, accountants and
financial advisors) up to an amount not to exceed $3,000,000; provided, however,
that the parties hereby acknowledge and agree that in no event shall the
aggregate amount payable to Parent upon termination of this Agreement pursuant
to Section 8.2(b) and this Section 8.2(c) exceed $3,000,000.
Section 8.3 AMENDMENT. Subject to Section 6.3, this Agreement may be
amended by the parties hereto by or pursuant to action taken by their respective
Board of Directors at any time prior to the Effective Time (notwithstanding any
stockholder approval); provided, however, that, after approval of the Merger by
the stockholders of the Company, no amendment may be made that by law requires
further approval by such stockholders without such further approval. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
Section 8.4 WAIVER. At any time prior to the Effective Time, subject to
Section 6.3, the parties hereto may (a) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein that may legally be waived. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party. The failure of any party hereto to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of those rights.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall terminate at the Effective Time.
Notwithstanding the foregoing, and without limitation, the
46
agreements set forth in Section 2.6, Section 6.8, Section 6.10(a) and Section
8.2(b) shall survive the Effective Time indefinitely (except to the extent a
shorter period of time is explicitly specified therein).
Section 9.2 NOTICES. All notices, requests, demands and other
communications hereunder shall be given in writing and shall be personally
delivered; sent by telecopier or facsimile transmission; or sent to the Parties
at their respective addresses indicated herein by registered or certified U.S.
mail, return receipt requested and postage prepaid, or by private overnight mail
courier service, as follows:
(a) If to the Company, to:
Riviana Foods Inc.
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Facsimile: 000-000-0000
(with a copy to)
Xxxxx Liddell & Xxxx LLP
3400 JPMorgan Chase Tower
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
(b) If to Parent or Sub, to:
Ebro Puleva, X.X.
Xxxxxxxxxx 0
00000 Xxxxxx
Xxxxx
Attention: Xxxxx Xxxxx Xxxxxxxxx
Chief Financial Officer
Facsimile: x00 00 000 0000
(with a copy to)
Xxxxx Xxxxxxxxxx
Xxx Xxxxxx Xxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: x00 000 000 0000
47
or to such other person or address as any party shall have specified by notice
in writing to the other party. If personally delivered, such communication shall
be deemed delivered upon actual receipt; if sent by telecopier or facsimile
transmission, such communication shall be deemed delivered the day of the
transmission, or if the transmission is not made on a business day, the first
business day after transmission (and sender shall bear the burden of proof of
delivery); if sent by overnight courier pursuant to this paragraph, such
communication shall be deemed delivered upon receipt; and if sent by U.S. mail
pursuant to this paragraph, such communication shall be deemed delivered as of
the date of delivery indicated on the receipt issued by the relevant postal
service, or, if the addressee fails or refuses to accept delivery, as of the
date of such failure or refusal.
Section 9.3 INTERPRETATION; CERTAIN DEFINITIONS.
(a) When a 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 reference
purposes 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." Each Section of this Agreement is qualified by the matters set
forth with respect to such Section in the Disclosure Schedule to the extent
specified therein and such other Sections of this Agreement to the extent a
matter in such Section is disclosed in such a way to make its relevance called
for by such other Section readily apparent from the information set forth on the
face of the Schedule.
(b) For purposes of this Agreement, the following terms have the
meaning specified in this Section 9.3.
Any reference to "$" or "dollars" in this Agreement shall mean U.S.
Dollars.
"Active Subsidiary" means the following Subsidiaries of the Company:
Riviana International, Inc., Pozuelo, S.A., Distribuidora Tropical, S.A.,
Riviana De Panama S.A., Riviana De Centroamerica, Alimentos Xxxx DE Guatemala,
S.A., Envases Industriales, S.A., S&B Herba Foods Limited, Riviana Foods
Limited, Xxxxxx Xxxx & Sons Limited, Xxxxx & Company Limited, N. & C. Boost
N.V., Boost Distribution C.V., Euryza GMBH, Herto N.V., Riviana (Puerto Rico)
Inc., Rivland Partnership, South LaFourche Farm Partnership, S-TECS, L.L.C.,
J-TECS, L.L.C.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Owned Real Property" means the real property listed on Section
4.15 of the Company Disclosure Schedule.
"Company Real Property Leases" means those leases listed on Section 4.15
of the Company Disclosure Schedule.
"Disclosure Schedule" shall have the meaning set forth in the introductory
paragraph of Article IV.
48
"Dormant Subsidiaries" means any Subsidiary which is not an Active
Subsidiary and that has no or de minimis operations and revenue.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"Knowledge" or "Knowledge of the Company" means the actual knowledge,
after reasonable inquiry, of the directors and executive officers of the Company
and the Subsidiaries.
"Leased Real Property" means the real property subject to the Company Real
Property Leases.
"Material Adverse Effect" means, when used with respect to the Company or
Parent, as the case may be, any change, effect, condition, factor or
circumstance that is or would reasonably be expected to be materially adverse to
the business, operations, properties or results of operations, and condition
(financial or otherwise), with all such matters being considered in the
aggregate, of the Company and its Subsidiaries, taken as a whole, or Parent and
its Subsidiaries, taken as a whole, as the case may be; provided, however, that
(i) with respect to a party hereto there shall be disregarded any adverse
change, effect, condition, factor or circumstance after the date hereof
resulting from or relating to (A) general business or economic conditions; (B)
conditions generally affecting the industry in which the Company competes; (C)
the announcement or pendency of the Offer, the Merger or any other transaction
contemplated by this Agreement; and (D) any national or international political
or social conditions, including without limitation the engagement by the United
States or Spain in hostilities, whether or not pursuant to the declaration of a
national emergency or war or the occurrence of any military or terrorist attack
upon the United States or Spain or any of their respect territories, possessions
or diplomatic or consular offices, or upon any military installation, equipment
or personnel or the United States or Spain (except to the extent, in the case of
clauses (A) and (D) above, such changes, effects, conditions, factors or
circumstances that have a materially disproportionate adverse effect on the
Company as compared to any other company that competes in the Company's
industry); and (ii) with respect to the Company and its Subsidiaries only, there
shall be disregarded any adverse change, effect, condition, factor or
circumstance resulting from compliance with any limitation on the Company's and
its Subsidiaries' operations imposed by this Agreement.
"Organizational Documents" means (a) with respect to a corporation, the
articles or certificate of incorporation and bylaws of such entity, (b) with
respect to a limited partnership, the certificate of limited partnership (or
equivalent document) and partnership agreement or similar operational agreement,
and (c) with respect to a limited liability company, the articles of
organization (or equivalent document) and regulation, limited liability company
agreement or similar operational agreement and (d) with respect to a general
partnership, the partnership agreement.
"Permitted Encumbrances" means (a) the liens to secure indebtedness
reflected on the Company's consolidated balance sheet as of June 29, 2003,
contained in the Company Form 10-
49
K; (b) standby fees and real estate taxes for the current and subsequent years,
and subsequent assessments for prior years due to a change in land usage or
ownership; (c) (i) any discrepancies, conflicts or shortages in area or boundary
lines, or any encroachments, if any overlapping of improvements, (ii) existing
building and zoning ordinances, (iii) covenants, restrictions, conditions,
reservations, exceptions, encroachments and easements, (iv) oil, gas, mineral
and royalty conveyances, and Company Real Property Leases, (v) the encumbrances
referred to in Section 4.15 of the Company Disclosure Schedule, (vi) rights of
parties in possession, and (vii) all such matters of record that a current
examination of the real property records of the counties or parishes in which
the Company Owned Real Property is located would reveal, in all cases, provided
same do not materially interfere with the existing use of the property in
question and are not violated by the consummation of the transactions
contemplated by the Agreement and do not materially and adversely affect the
value or marketability of, or materially impair the existing use of, the
property affected thereby.
"Person" means an individual, corporation, partnership, association,
trust, any unincorporated organization or group (within the meaning of Section
13(d)(3) of the Exchange Act).
"Real Estate" means, with respect to the Company or any of its
Subsidiaries, as applicable, all of the fee or leasehold ownership right, title
and interest of such Person, in and to all real estate and improvement owned or
leased by any such Person and that is used by any such Person in connection with
the operation of its business.
"Real Property" means the Company Owned Real Property and the Leased Real
Property.
"Subsidiary" means any corporation, partnership, limited liability
company, joint venture or other legal entity of which Parent or the Company, as
the case may be, (either alone or through or together with any other Subsidiary)
(i) owns, directly or indirectly, 50% or more of the stock or other equity
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity, (ii) in the case of partnerships, serves as a general partner
(excluding partnerships the general partnership interests of which held by such
Person or any Subsidiary of such Person do not have a majority of the voting
interests in such partnership), (iii) in the case of a limited liability
company, serves as managing member or (iv) otherwise has the ability to elect a
majority of the directors, trustees or managing members thereof.
"Superior Proposal" means a bona fide written proposal made by a third
party to acquire all of the issued and outstanding Shares pursuant to a tender
offer or a merger or to acquire all of the properties and assets of the Company
on terms and conditions that a majority of the members of the Board of Directors
of the Company determines in good faith, after consulting with the Company
Financial Advisor or another independent outside nationally recognized financial
advisor and taking into account all the terms and conditions of such proposal
and all other facts and circumstances (including, without limitation, the cash
component of the offer, any expense reimbursement provisions, termination fees
and conditions to and anticipated timing of closing), is more favorable to the
Company's stockholders from a financial point of view than the transactions
contemplated hereby, is reasonably likely to be consummated and is made by a
third
50
party that the Company reasonably believes has the financial capability to
consummate such Superior Proposal.
"Takeover Proposal" means any proposal or offer from any Person (in each
case, whether or not in writing and whether or not delivered to the stockholders
of the Company generally) relating to (i) any direct or indirect acquisition or
purchase whether by merger, reorganization, acquisition, tender offer, share
exchange, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving any purchase of 15% or more of the
net revenue, net income or assets of the Company or any of its Subsidiaries or
of 15% or more of any class of equity securities of the Company or any of its
Subsidiaries or (ii) any other transaction, the consummation of which would
reasonably be expected to impede, interfere with, prevent or materially delay
the Offer or the Merger or which would reasonably be expected to dilute
materially the benefits to Parent of the transactions contemplated hereby.
"Taxes" means any federal, state, local or foreign income, gross receipts,
property, sales, use, license, excise, franchise, employment, payroll,
severance, stamp, occupation, withholding, alternative or add-on minimum, ad
valorem, value-added, transfer or estimated tax, or other tax, custom, duty,
governmental fee or any other like assessment or charge, together with any
interest or penalty thereon.
"Tax Return" means any return, report or similar statement (including the
attached schedules) required to be filed with respect to any Tax, including any
information return, claim for refund, amended return or declaration of estimated
Tax.
Section 9.4 COUNTERPARTS. This Agreement may be executed in counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties. This Agreement may be executed by facsimile
signature of the parties hereto.
Section 9.5 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This Agreement
(including the documents and the instruments referred to herein) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof;
and there are no conditions to this Agreement that are not set forth herein.
Except with respect to Section 6.8 (which is intended to be for the benefit of
the persons identified therein, and may be enforced by such persons), this
Agreement shall be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is intended to confer
upon any other person any rights or remedies of any nature whatsoever under or
by reason of this Agreement.
Section 9.6 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 conflicts of
laws thereof.
Section 9.7 ASSIGNMENT. Subject to Section 2.1, neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other party (except that Parent may assign its
rights and Sub may assign its rights, interest and obligations to
51
any affiliate of Parent without the consent of the Company, provided, however,
that no such assignment shall relieve Parent of any liability for any breach by
such assignee). Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
Section 9.8 SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other terms, conditions and provisions 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. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the 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 9.9 SPECIFIC PERFORMANCE; JURISDICTION AND VENUE. The parties
hereto agree that legal damages would be inadequate and that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties hereto shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof (without the posting of any bond or security),
such remedy being in addition to any other remedy to which any party is entitled
at law or in equity. Each of the parties hereto (a) consents to submit itself to
the personal jurisdiction of any federal court located in the State of Delaware
or any Delaware state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (b) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and (c) agrees that it will not
bring any action relating to this Agreement or any of the transaction
contemplated by this Agreement in any court other than a federal or state court
sitting in the State of Delaware. Each party hereto waives any right to a trial
by jury in connection with any such action, suit or proceeding.
[Signature Page Follows]
52
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement and Plan of Merger to be signed by their respective officers thereunto
duly authorized all as of the date first written above.
EBRO PULEVA, S.A.
By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx
Title: CEO
By: /s/ Xxxxx Xxxxx Xxxxxxxxx
Name: Xxxxx Xxxxx Xxxxxxxxx
Title: CFO
EBRO PULEVA PARTNERS G.P.
By: Ebro Puleva, S.A., General Partner
By: /s/ Xxxxxxx Xxxxxxxxx
Name: Xxxxxxx Xxxxxxxxx
Title: CEO
By: /s/ Xxxxx Xxxxx Xxxxxxxxx
Name: Xxxxx Xxxxx Xxxxxxxxx
Title: CFO
RIVIANA FOODS INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chief Executive Officer
53
EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or this Agreement, Sub shall
not be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating
to Sub's obligation to pay for or return tendered Shares after the termination
or withdrawal of the Offer), to pay for any Shares, and, subject to the terms
and conditions of this Agreement, may delay the acceptance for payment of any
tendered Shares and amend or terminate the Offer if (i) there shall not have
been validly tendered and not withdrawn prior to the expiration of the Offer
such number of Shares that would constitute at least sixty six and two-thirds
percent (66 2/3%) of all shares of Common Stock that in the aggregate are
outstanding determined on a fully diluted basis (assuming the exercise of all
options to purchase Company Common Stock and the conversion or exchange of all
securities convertible or exchangeable into, Shares outstanding at the
expiration date of the Offer) (the "Minimum Condition"); provided, however, that
Parent and Sub shall not waive or reduce the Minimum Condition without the prior
written consent of the Company or (ii) at any time after the date of this
Agreement and prior to payment for any such Shares (whether or not any Shares
have theretofore been accepted for payment or paid pursuant to the Offer), any
of the following events shall occur or conditions shall exist:
(a) (x) there shall have been any action taken, or any statute,
rule, regulation, legislation, interpretation, judgment, order or injunction,
proposed, sought, promulgated, enacted, entered, enforced, issued, amended or
deemed applicable to Parent, Sub, the Company, any other affiliate of Parent or
the Company, the Offer or the Merger, by any Governmental Entity that would or,
in the reasonable, good faith judgment of Parent, would be expected to, directly
or indirectly, (i) make illegal by the acceptance for payment of, or payment for
or purchase of any or all of the Shares pursuant to the Offer, or otherwise
restrict, make more costly or prohibit the making of the Offer or the
consummation of the Offer or the Merger, (ii) result in a material delay in or
restrict the ability of Sub to accept for payment, pay for or purchase any or
all of the Shares pursuant to the Offer or to effect the Merger, (iii) render
Sub unable to accept for payment or pay for or purchase any or all of the Shares
pursuant to the Offer, (iv) impose material limitations on the ability of
Parent, Sub or any of their respective affiliates to acquire or hold, transfer
or dispose of, or effectively to exercise all rights of ownership of, any or all
of the Shares, including, the right to vote any Shares on an equal basis with
all other Shares on all matters properly presented to the stockholders of the
Company, or (v) impose any material limitations on the ability of Parent, Sub or
any of their respective affiliates effectively to control the business or
operations of the Company, Parent, Sub or any of their respective affiliates or
(y) there shall have been instituted or pending any action, proceeding or
counterclaim by any Governmental Entity, challenging the making of the Offer or
the acquisition by Sub of the Shares pursuant to the Offer or the consummation
of the Merger, or seeking to, directly or indirectly, impose or result in any of
the consequences referred to in subclauses (i) through (v) in clause (x) above;
or (z) there shall have been threatened in writing any action, proceeding or
counterclaim by any Governmental Entity, challenging the making of the Offer or
the acquisition by Sub of the Shares pursuant to the Offer or the consummation
of the Merger, or seeking to, directly or indirectly, impose or result in any of
the consequences referred to in subclauses (i) through (v) in clause (x) above
that has a reasonable probability of
i
success;
(b) the Board of Directors of the Company or any committee thereof
(i) shall have withdrawn, or modified or amended in a manner adverse to Parent
or Sub (including by amendment of the Schedule 14D-9) its approval or
recommendation of the Agreement or the transactions contemplated hereby,
including the Offer or the Merger, (ii) shall have approved or recommended, or
announced a neutral position with respect to, any Takeover Proposal or (iii)
shall have adopted any resolution to effect any of the foregoing;
(c) any of the representations and warranties of the Company set
forth in the Agreement and in any document executed and delivered in connection
herewith, when read without any exception or qualification as to materiality or
"Material Adverse Effect," shall not be true and correct, as if such
representations and warranties were made at the time of such determination
(except as to any such representation or warranty which speaks as of a specific
date, which must be untrue or incorrect as of such specific date) except where
the failure to be so true and correct, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect;
(d) the Company shall have failed to perform in any material
respect any obligation or to comply in any material respect with any obligation,
agreement or covenant of the Company to be performed or complied with by it
under this Agreement;
(e) any Person or "group" (as defined in Section 13(d)(3) of the
Exchange Act), other than (i) Parent, Sub, their affiliates or any group of
which any of them is a member or (ii) the Significant Stockholders (so long as
such stockholders do not breach any of the provisions of the Stockholder
Agreement), shall have acquired or entered into a definitive agreement or
agreement in principle to acquire beneficial ownership (as determined pursuant
to Rule 13d-3 promulgated under the Exchange Act) of 25% or more of then
outstanding Shares or shall have been granted any option, right or warrant,
conditional or otherwise, to acquire beneficial ownership of 25% or more of then
outstanding Shares;
(f) this Agreement shall have been terminated in accordance with
its terms or any event shall have occurred that gives Parent or Sub the right to
terminate the Agreement or not consummate the Merger;
(g) any waiting period under any applicable antitrust or
competition law or regulation (including the HSR Act) or other applicable law
shall not have expired or been extended, terminated or any consent required
under any applicable antitrust or competition law or regulation or other
applicable law shall not have been obtained (the "Antitrust Condition"); or
(h) all consents, authorizations, orders and approvals of (or
filings or registrations with) any Governmental Entity required in connection
with the execution, delivery and performance of this Agreement, shall not have
been obtained or made, except for (i) filings with the Secretary of State in
connection with the effectiveness of the Merger and any other documents required
to be filed at or after the Effective Time or (ii) any consents, authorizations,
orders, approvals, filings or registrations that the failure to obtain,
individually or in the
ii
aggregate, would not have (A) a Material Adverse Effect on the Company or (B)
the effect of making the Offer or Merger illegal under any applicable law.
The foregoing conditions are for the sole benefit of Parent or Sub and
(except for the Minimum Condition and the Antitrust Condition) may be waived by
Parent or Sub in whole or in part at any time and from time to time, in their
sole discretion, subject to the terms of this Agreement. The failure by Parent
or Sub at any time to exercise any of the foregoing rights shall not be deemed a
waiver of any such right, the waiver of any such right with respect to
particular facts and circumstances shall not be deemed a waiver with respect to
any other facts and circumstances, and each such right shall be deemed an
ongoing right that may be asserted at any time and from time to time.
Capitalized terms used but not defined in this Exhibit A shall have the
meanings assigned to such terms in the Agreement to which it is attached, except
that the term "Agreement" shall be deemed to refer to the Agreement to which
this Exhibit A is attached.
iii
EXHIBIT B-1
SIGNIFICANT STOCKHOLDERS
Abbeville Family Partnership Limited Partnership
The Xxxxxxx X. Xxxxxxxx 1994 Grantor Retained Annuity Trust
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx III
Xxxxxxxxx Area Xxxxxxxx
Xxxxxx X. Xxxxxx, Xx.
W. Xxxxx Xxxxx
Xxxxxx X. Xxxxxx, Xx. Trustee, Xxxxxx X. Xxxxxx, Xx. 1993 Retained Annuity Trust
The Xxxxxxxxx Area Xxxxxxxx 1994 Grantor Retained Annuity Trust
W. Xxxxx Xxxxxxx
The Xxxxxx X. Xxxxxxxx 1994 Grantor Retained Annuity Trust
Live Oak Foundation
E. Xxxxx Xxxxxx
The Xxxx Xxxxxxxx Xxxxxxxx 1994 Grantor Retained Annuity Trust
Xxxxxxx Xxxxxxxx Xxxxx
E. Xxxxx Xxx, Xx.
The Xxxxxxx Xxxxxxx Xxxxxxxx Revocable Trust
The Xxxxxxx Xxxxxxxx Xxxxx 1994 Grantor Retained Annuity Trust
Xxxxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxx
Xxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxx
Xxxxx Xxxxxxxxxxx Xxxxxxxx Revocable Trust
The Antom Ranch Family Partnership, L. P.
Xxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxxx Xxxxxx 1993 Retained Annuity Trust
iv
EXHIBIT B-2
FORM OF STOCKHOLDER AGREEMENT
[See Exhibit (d)(3) to Schedule TO]
v
EXHIBIT C-1
SURVIVING CORPORATION
AMENDMENTS TO RESTATED
CERTIFICATE OF INCORPORATION
The text of the Restated Certificate of Incorporation of the Company shall
be further amended to read as follows:
1. Existing Article 4(a) and Article 4(b) shall be deleted in their entirety.
Article 4(c) shall be renumbered Article 4(b) and Article 4(a) shall be
replaced with the following:
"The total number of share which the corporation shall have authority to
issue is Ten Thousand (10,000), divided into Eight Thousand (8,000) shares
of common stock of par value One Dollar ($1.00) per share and Two Thousand
(2,000) shares of preferred stock of par value One Dollar ($1.00) per
share."
2. Existing Article 6 shall be amended to provide that the number of
directors constituting the entire board of directors shall be five (5)
until otherwise fixed by a majority of the entire board of directors.
3. Existing Article 7 and Article 9 shall be deleted in their entirety.
4. Article 8 shall be deleted in its entirety and replaced with the
following:
"No director shall be liable to the corporation or any of its stockholders
for monetary damages for breach of fiduciary duty as a director, provided
that the foregoing shall not eliminate or limit any liability that may
exist with respect to (a) a breach of the director's duty of loyalty to
the corporation or its stockholders, (b) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of
law, (c) liability under Section 174 of the Delaware General Corporation
Law or (d) a transaction from which the director derived an improper
personal benefit, it being the intention of the foregoing provision to
eliminate the liability of the corporation's directors to the corporation
or its stockholders to the fullest extent permitted by Section 102(b)(7)
of the Delaware General Corporation Law, as in effect on the date hereof
and as such Section may be amended after the date hereof to the extent
such amendment permits such liability to be further eliminated or limited.
The corporation shall indemnify to the fullest extent permitted by Section
145 of the Delaware General Corporation Law (as in effect on the date
hereof and as such Section may be amended after the date hereof) each
person that such Section grants the corporation the power to indemnify."
EXHIBIT C-2
BY-LAWS
OF
RIVIANA FOODS INC.,
A DELAWARE CORPORATION
ARTICLE I
MEETINGS OF STOCKHOLDERS
Section 1.1 Annual Meetings. The annual meeting of the stockholders for
the election of directors and for the transaction of such other business as
properly may come before such meeting shall be held each year on such date, and
at such time and place within or without the State of Delaware, as may be
designated by the Board of Directors.
Section 1.2 Special Meetings. Special meetings of the stockholders for any
proper purpose or purposes may be called at any time by the Board of Directors
to be held on such date, and at such time and place within or without the State
of Delaware, as the Board of Directors shall direct. A special meeting of the
stockholders shall be called by the president or the secretary of the
Corporation whenever stockholders owning a majority of the shares of the
Corporation then issued and outstanding and entitled to vote on matters to be
submitted to stockholders of the Corporation shall make application therefor in
writing. Any such written request shall state a proper purpose or purposes of
the meeting and shall be delivered to the president or the secretary of the
Corporation.
Section 1.3 Notice of Meeting. Written notice, signed by the president,
the secretary or any assistant secretary of the Corporation, of every meeting of
stockholders stating the date and time when, and the place where, such meeting
is to be held, shall be delivered either personally or by mail to each
stockholder entitled to vote at such meeting not less than ten (10) nor more
than sixty (60) days before the date of such meeting, except as otherwise
provided by law. The purpose or
purposes for which such meeting is called may, in the case of an annual meeting,
and shall in the case of a special meeting, also be stated in such notice. If
mailed, such notice shall be directed to a stockholder at such stockholder's
address as it shall appear on the stock books of the Corporation, unless such
stockholder shall have filed with the president or secretary of the Corporation
a written request that notices intended for such stockholder be mailed to some
other address, in which case it shall be mailed to the address designated in
such request. Whenever any notice is required to be given under the provisions
of the General Corporation Law of the State of Delaware, the Certificate of
Incorporation or these By-laws, a waiver thereof, signed by the stockholder
entitled to such notice, whether before or after the time stated therein, shall
be deemed equivalent thereto. Attendance of a stockholder at the meeting shall
be deemed equivalent to a written waiver of notice of such meeting.
Section 1.4 Quorum. The presence at any meeting of stockholders, in person
or by proxy, of the holders of record of a majority of the shares then issued
and outstanding and entitled to vote shall be necessary and sufficient to
constitute a quorum for the transaction of business, except as otherwise
provided by law.
Section 1.5 Adjournments. In the absence of a quorum, a majority in
interest of the stockholders entitled to vote, present in person or by proxy,
or, if no stockholder entitled to vote is present in person or by proxy, any
officer entitled to preside at or act as secretary of a meeting of stockholders,
may adjourn such meeting from time to time until a quorum shall be present.
Section 1.6 Voting. Directors shall be chosen by a plurality of the votes
cast at the election, and, except as otherwise provided by law or by the
Certificate of Incorporation, all other questions shall be determined by a
majority of the votes cast on such question.
Section 1.7 Proxies. Any stockholder entitled to vote may vote by proxy,
provided that the instrument authorizing such proxy to act shall have been
executed in writing (which shall include telegraphing or cabling) by the
stockholder himself or by such stockholder's duly authorized attorney.
Section 1.8 Judges of Election. The Board of Directors may appoint judges
of election to serve at any election of directors and at balloting on any other
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matter that may properly come before a meeting of stockholders. If no such
appointment shall be made, or if any of the judges so appointed shall fail to
attend, or refuse or be unable to serve, then such appointment may be made by
the presiding officer at the meeting.
ARTICLE II
BOARD OF DIRECTORS
Section 2.1 Number. The number of directors which shall constitute the
whole Board of Directors shall be fixed from time to time by resolution of the
Board of Directors or stockholders (any such resolution of either the Board of
Directors or stockholders being subject to any later resolution of either of
them). The first Board of Directors and subsequent Boards of Directors shall
consist of five (5) directors until changed as herein provided.
The first Board of Directors shall consist of the following persons:
Xxxxxx X. Xxxxxx
W. Xxxxx Xxxxx
Xxxxx Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx Xxxxxxxx
Xxxxx Xxxxxxxxx Xxxxxxxx
Section 2.2 Election and Term of Office. Directors shall be elected at the
annual meeting of the stockholders, except as provided in Section 2.3. Each
director (whether elected at an annual meeting or to fill a vacancy or
otherwise) shall continue in office until such Director's successor shall have
been elected and qualified or until such Director's earlier death, resignation
or removal in the manner hereinafter provided.
Section 2.3 Vacancies and Additional Directorships. If any vacancy shall
occur among the directors by reason of death, resignation or removal, or as the
result of an increase in the number of directorships, a majority of the
directors then in office, or a sole remaining director, though less than a
quorum, may fill any such vacancy.
Section 2.4 Regular Meetings. A regular meeting of the Board of Directors
shall be held for organization, for the election of officers and for the
3
transaction of such other business as may properly come before such meeting,
within thirty (30) days after each annual meeting of stockholders. The Board of
Directors by resolution may provide for the holding of other regular meetings
and may fix the times and places at which such meetings shall be held. Notice of
regular meetings shall not be required to be given, provided that whenever the
time or place of regular meetings shall be fixed or changed, notice of such
action shall be mailed promptly to each director who shall not have been present
at the meeting at which such action was taken, addressed to such director at
such director's residence or usual place of business or shall be sent to such
director at such place by telex, facsimile transmission, telegram, radio or
cable, or telephoned or delivered to him personally.
Section 2.5 Special Meetings. Special meetings of the Board of Directors
shall be held upon call by or at the direction of the president or the secretary
of the Corporation. Except as otherwise required by law, notice of each special
meeting shall be mailed to each director, addressed to such director at such
director's residence or usual place of business, at least two days before the
day on which the meeting is to be held, or shall be sent to such director at
such place by telex, facsimile transmission, telegram, radio or cable, or
telephoned or delivered to him personally, not later than the day before the day
on which the meeting is to be held. Such notice shall state the time and place
of such meeting, but need not state the purposes thereof, unless otherwise
required by law, the Certificate of Incorporation or these By-laws.
Section 2.6 Waiver of Notice. Whenever any notice is required to be given
under the provisions of the General Corporation Law of the State of Delaware,
the Certificate of Incorporation or these By-laws, a waiver thereof, signed by
the director entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent thereto. Attendance of a director at a
meeting shall be deemed equivalent to a written waiver of notice of such
meeting.
Section 2.7 Quorum and Manner of Acting. At each meeting of the Board of
Directors the presence of a majority of the total number of members of the Board
of Directors as constituted from time to time shall be necessary and sufficient
to constitute a quorum for the transaction of business, except that when the
Board of
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Directors consists of one or two directors, then the one or two directors,
respectively, shall constitute a quorum. In the absence of a quorum, a majority
of those present at the time and place of any meeting may adjourn the meeting
from time to time until a quorum shall be present and the meeting may be held as
so adjourned without further notice or waiver. A majority of those present at
any meeting at which a quorum is present may decide any question brought before
such meeting, except as otherwise provided by law, the Certificate of
Incorporation or these By-laws.
Section 2.8 Resignation of Directors. Any director may resign at any time
by giving written notice of such resignation to the Board of Directors. Unless
otherwise specified in such notice, such resignation shall take effect upon
receipt thereof by the Board of Directors or any such officer, and the
acceptance of such resignation shall not be necessary to make it effective.
Section 2.9 Removal of Directors. At any special meeting of the
stockholders, duly called as provided in these By-laws, any director or
directors may be removed from office, either with or without cause, as provided
by law. At such meeting a successor or successors may be elected by a plurality
of the votes cast, or if any such vacancy is not so filled, it may be filled by
the directors as provided in Section 2.3.
Section 2.10 Compensation of Directors. Directors shall receive such
reasonable compensation for their services whether in the form of salary or a
fixed fee for attendance at meetings, with expenses, if any, as the Board of
Directors may from time to time determine. Nothing herein contained shall be
construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
ARTICLE III
COMMITTEES OF THE BOARD
Section 3.1 Designation, Power, Alternate Members and Term of Office. The
Board of Directors may, by resolution passed by a majority of the whole Board of
Directors, designate one or more committees, each committee to consist of one or
more of the directors of the Corporation. Any such committee, to the extent
provided
5
in such resolution and permitted by law, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the Corporation, and may authorize the seal of the Corporation or
a facsimile thereof to be affixed to or reproduced on all such papers as said
committee shall designate. The Board of Directors may designate one or more
directors as alternate members of any committee who, in the order specified by
the Board of Directors, may replace any absent or disqualified member at any
meeting of such committee. If at a meeting of any committee one or more of the
members thereof should be absent or disqualified, and if either the Board of
Directors has not so designated any alternate member or members, or the number
of absent or disqualified members exceeds the number of alternate members who
are present at such meeting, then the member or members of such committee
(including alternates) present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
director to act at such meeting in the place of any such absent or disqualified
member. The term of office of the members of each committee shall be as fixed
from time to time by the Board of Directors, subject to these By-laws; provided,
however, that any committee member who ceases to be a member of the Board of
Directors shall ipso facto cease to be a committee member. Each committee shall
appoint a secretary, who may be a Director or an officer of the Corporation.
Section 3.2 Executive Committee. If an Executive Committee is designated
by the Board of Directors in accordance with the provisions of Section 3.1
hereof, the Executive Committee shall have and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Corporation, and may authorize the seal of the Corporation or a
facsimile thereof to be affixed to all papers which may require it; but the
Executive Committee shall not have power or authority in reference to amending
the Certificate of Incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or exchange of
all or substantially all of the Corporation's property and assets, recommending
to the stockholders a dissolution of the Corporation or a revocation of a
dissolution, amending the By-laws of the Corporation, declaring a dividend or
authorizing the issuance of stock. The provisions of Article III of these
By-laws shall apply to the Executive Committee.
6
Section 3.3 Meetings, Notices and Records. Each committee may provide for
the holding of regular meetings, with or without notice, and may fix the times
and places at which such meetings shall be held. Special meetings of each
committee shall be held upon call by or at the direction of its chairman or, if
there be no chairman, by or at the direction of any one of its members. Except
as otherwise provided by law, notice of each special meeting of a committee
shall be mailed to each member of such committee, addressed to such member at
such member's residence or usual place of business, at least two days before the
day on which the meeting is to be held, or shall be sent to him at such place by
telex, facsimile transmission, telegram, radio or cable, or telephoned or
delivered to such member personally, not later than the day before the day on
which the meeting is to be held. Such notice shall state the time and place of
such meeting, but need not state the purposes thereof, unless otherwise required
by law, the Certificate of Incorporation of the Corporation or these By-laws.
Notice of any meeting of a committee need not be given to any member
thereof who shall attend such meeting in person or who shall waive notice
thereof, before or after such meeting, in a signed writing. Each committee shall
keep a record of its proceedings.
Section 3.4 Quorum and Manner of Acting. At each meeting of any committee
the presence of a majority of its members then in office shall be necessary and
sufficient to constitute a quorum for the transaction of business, except that
when a committee consists of one member, then the one member shall constitute a
quorum. In the absence of a quorum, a majority of the members present at the
time and place of any meeting may adjourn the meeting from time to time until a
quorum shall be present and the meeting may be held as so adjourned without
further notice or waiver. The act of a majority of the members present at any
meeting at which a quorum is present shall be the act of such committee. Subject
to the foregoing and other provisions of these By-laws and except as otherwise
determined by the Board of Directors, each committee may make rules for the
conduct of its business.
Section 3.5 Resignations. Any member of a committee may resign at any time
by giving written notice of such resignation to the Board of Directors. Unless
otherwise specified in such notice, such resignation shall take effect upon
7
receipt thereof by the Board of Directors or any such officer, and the
acceptance of such resignation shall not be necessary to make it effective.
Section 3.6 Removal. Any member of any committee may be removed at any
time with or without cause by the Board of Directors.
Section 3.7 Vacancies. If any vacancy shall occur in any committee by
reason of death, resignation, disqualification, removal or otherwise, the
remaining member or members of such committee, so long as a quorum is present,
may continue to act until such vacancy is filled by the Board of Directors.
Section 3.8 Compensation. Committee members shall receive such reasonable
compensation for their services as such, whether in the form of salary or a
fixed fee for attendance at meetings, with expenses, if any, as the Board of
Directors may from time to time determine. Nothing herein contained shall be
construed to preclude any committee member from serving the Corporation in any
other capacity and receiving compensation therefor.
ARTICLE IV
OFFICERS
Section 4.1 Officers. The Corporation shall have such officers as are
appointed from time to time by the Board of Directors.
Section 4.2 Election, Term of Office and Qualifications. Each officer
(except such officers as may be appointed in accordance with the provisions of
Section 4.3) shall be elected by the Board of Directors. Each such officer shall
hold such office until such officer's successor shall have been elected and
shall qualify, or until such officer's death, or until such officer shall have
resigned in the manner provided in Section 4.4 or shall have been removed in the
manner provided in Section 4.5.
Section 4.3 Subordinate Officers and Agents. The Board of Directors may
delegate to any officer or agent the power to appoint any subordinate officers
or agents and to prescribe their respective terms of office, authorities and
duties.
8
Section 4.4 Resignations. Any officer may resign at any time by giving
written notice of such resignation to the Board of Directors. Unless otherwise
specified in such written notice, such resignation shall take effect upon
receipt thereof by the Board of Directors, and the acceptance of such
resignation shall not be necessary to make it effective.
Section 4.5 Removal. Any officer may be removed with or without cause at
any meeting of the Board of Directors by affirmative vote of a majority of the
directors then in office. Any officer or agent appointed in accordance with the
provisions of Section 4.3 may be removed with or without cause at any meeting of
the Board of Directors by affirmative vote of a majority of the directors
present at such meeting, or at any time by any superior officer or agent upon
whom such power of removal shall have been conferred by the Board of Directors.
Section 4.6 Vacancies. A vacancy in any office by reason of death,
resignation, removal, disqualification or any other cause shall be filled for
the unexpired portion of the term in the manner prescribed by these By-laws for
regular election or appointment to such office.
Section 4.7 General Duties of Officers. Each officer shall perform those
duties and have such powers as from time to time may be assigned to him by the
Board of Directors.
Section 4.8 Salaries. The salaries of the officers of the Corporation
shall be fixed from time to time by the Board of Directors, except that the
Board of Directors may delegate to any person the power to fix the salaries or
other compensation of any officers or agents appointed in accordance with the
provisions of Section 4.3. No officer shall be prevented from receiving such
salary by reason of the fact that such officer is also a director of the
Corporation.
ARTICLE V
EXECUTION OF INSTRUMENTS AND DEPOSIT OF CORPORATE FUNDS
Section 5.1 Execution of Instruments Generally. The Board of Directors may
authorize any officer or officers, or agent or agents, to enter into any
contract or
9
execute and deliver any instrument in the name and on behalf of the Corporation,
and such authorization may be general or confined to specific instances.
Section 5.2 Borrowing. No loans or advance shall be obtained or contracted
for, by or on behalf of the Corporation and no negotiable paper shall be issued
in its name, unless and except as authorized by the Board of Directors. Such
authorization may be general or confined to specific instances. Any officer or
agent of the Corporation thereunto so authorized may obtain loans and advances
for the Corporation, and for such loans and advances may make, execute and
deliver promissory notes, bonds, or other evidences of indebtedness of the
Corporation. Any officer or agent of the Corporation thereunto so authorized may
pledge, hypothecate or transfer as security for the payment of any and all
loans, advances, indebtedness and liabilities of the Corporation, any and all
stocks, bonds, other securities and other personal property at any time held by
the Corporation, and to that end may endorse, assign and deliver the same and do
every act and thing necessary or proper in connection therewith.
Section 5.3 Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to its credit in such banks or trust
companies or with such bankers or other depositaries as the Board of Directors
may select, or as may be selected by any officer or officers or agent or agents
authorized so to do by the Board of Directors. Endorsements for deposit to the
credit of the Corporation in any of its duly authorized depositaries shall be
made in such manner as the Board of Directors from time to time may determine.
Section 5.4 Checks, Drafts, etc. All checks, drafts or other orders for
the payment of money, and all notes or other evidences of indebtedness issued in
the name of the Corporation, shall be signed by such officer or officers or
agent or agents of the Corporation, and in such manner, as from time to time
shall be determined by the Board of Directors.
Section 5.5 Proxies. Proxies to vote with respect to shares of stock of
other corporations owned by or standing in the name of the Corporation may be
executed and delivered from time to time on behalf of the Corporation by the
10
President or by any other person or persons thereunto authorized by the Board of
Directors.
Section 5.6 Other Contracts and Instruments. All other contracts and
instruments binding the Corporation shall be executed in the name and on the
behalf of the Corporation by those officers, employees or agents of the
Corporation as may be authorized by the board of Directors. That authorization
may be general or confined to specific instances.
ARTICLE VI
RECORD DATES
Section 6.1 Dates. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall be not more than sixty (60) nor less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior to any other action.
Only those stockholders of record on the date so fixed shall be entitled to any
of the foregoing rights, notwithstanding the transfer of any such stock on the
books of the Corporation after any such record date fixed by the Board of
Directors.
ARTICLE VII
CORPORATE SEAL
Section 7.1 Corporate Seal. The corporate seal shall be circular in form
and shall bear the name of the Corporation and words and figures denoting its
organization under the laws of the State of Delaware and the year thereof and
otherwise shall be in such form as shall be approved from time to time by the
Board of Directors.
11
ARTICLE VIII
FISCAL YEAR
Section 8.1 Fiscal Year. The fiscal year of the Corporation shall be fixed
by resolution of the Board of Directors.
ARTICLE IX
AMENDMENTS
Section 9.1 Amendments. All By-laws of the Corporation may be amended or
repealed, and new By-laws may be made, by an affirmative majority of the votes
cast at any annual or special stockholders' meeting by holders of outstanding
shares of stock of the Corporation entitled to vote, or by an affirmative vote
of a majority of the directors present at any organizational, regular, or
special meeting of the Board of Directors.
ARTICLE X
ACTION WITHOUT A MEETING
Section 10.1 Action Without A Meeting. Any action which might have been
taken under these By-laws by a vote of the stockholders at a meeting thereof may
be taken without a meeting, without prior notice and without a vote, if a
consent in writing setting forth the action so taken, shall be individually
signed and dated by the holders of outstanding shares of stock of the
Corporation having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted, provided, however, that no
written consent will be effective unless the necessary number of written
consents is delivered to the Corporation within sixty (60) days of the earliest
delivered consent to the Corporation and, provided, further, that prompt notice
shall be given to those stockholders who have not so consented if less than
unanimous written consent is obtained. Any action which might have been taken
under these By-laws by vote of the directors at any meeting of the Board of
Directors or any committee thereof may be taken without a meeting if all the
members of the Board of Directors or such committee, as the case may be, consent
thereto in
12
writing, and the writing or writings are filed with the minutes of the Board of
Directors or such committee.
ARTICLE XI
INDEMNIFICATION
Section 11.1 Indemnification. The Corporation shall indemnify, in the
manner and to the full extent permitted by law, any person (or the estate of any
person) who was or is a party to, or is threatened to be made a party to, any
threatened, pending or completed action, suit or proceeding, whether or not by
or in the right of the Corporation, and whether civil, criminal, administrative,
investigative or otherwise, by reason of the fact that such person is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise.
Where required by law, the indemnification provided for herein shall be made
only as authorized in the specific case upon a determination, in the manner
provided by law, that indemnification of the director, officer, employee or
agent is proper in the circumstances. The Corporation may, to the full extent
permitted by law, purchase and maintain insurance on behalf of any such person
against any liability which may be asserted against such person. To the full
extent permitted by law, the indemnification provided herein shall include
expenses (including attorneys fees), judgments, fines and amounts paid in
settlement, and, in the manner provided by law, any such expenses may be paid by
the Corporation in advance of the final disposition of such action, suit or
proceeding. The indemnification provided herein shall not be deemed to limit the
right of the Corporation to indemnify any other person for any such expenses to
the full extent permitted by law, nor shall it be deemed exclusive of any other
rights to which any person seeking indemnification from the Corporation may be
entitled under any agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office. Such indemnification shall continue
as to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such
person.
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EXHIBIT C-3
SURVIVING CORPORATION
DIRECTORS
Xxxxxx X. Xxxxxx, Xx.
W. Xxxxx Xxxxx
Xxxxx Xxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx Xxxxxxxx
Xxxxx Xxxxxxxxx Xxxxxxxx
viii
