EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
GENERAL DYNAMICS CORPORATION,
GRAIL ACQUISITION CORPORATION
AND
NEWPORT NEWS SHIPBUILDING INC.
TABLE OF CONTENTS
Description Page
ARTICLE 1 THE OFFER.................................................1
Section 1.1 The Offer.................................................1
Section 1.2 Company Action............................................4
Section 1.3 Directors.................................................5
Section 1.4 Merger Without Meeting of Stockholders....................7
ARTICLE 2 THE MERGER................................................7
Section 2.1 The Merger................................................7
Section 2.2 The Closing...............................................7
Section 2.3 Effective Time............................................7
Section 2.4 Effects of the Merger.....................................8
Section 2.5 Certificate of Incorporation and Bylaws...................8
Section 2.6 Directors.................................................8
Section 2.7 Officers..................................................8
Section 2.8 Conversion of Company Common Stock........................8
Section 2.9 Stock Options; Equity-Based Awards........................9
Section 2.10 Conversion of the Purchaser Common Stock.................11
ARTICLE 3 PAYMENT..................................................11
Section 3.1 Surrender of Certificates................................11
Section 3.2 Paying Agent; Certificate Surrender Procedures...........12
Section 3.3 Transfer Books...........................................12
Section 3.4 Termination of Payment Fund..............................13
Section 3.5 Appraisal Rights.........................................13
Section 3.6 Lost Certificates........................................13
Section 3.7 No Rights as Stockholder.................................13
Section 3.8 Withholding..............................................13
Section 3.9 Escheat..................................................14
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY............14
Section 4.1 Organization.............................................14
Section 4.2 Authorization of Transaction; Enforceability.............14
Section 4.3 Noncontravention; Consents...............................15
Section 4.4 Capitalization...........................................16
Section 4.5 Company Reports; Proxy Statement.........................17
Section 4.6 No Undisclosed Liabilities...............................18
Section 4.7 Absence of Material Adverse Effect and Certain Events....18
Section 4.8 Litigation and Legal Compliance..........................19
Section 4.9 Contract Matters.........................................19
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Section 4.10 Tax Matters..............................................21
Section 4.11 Employee Benefit Matters.................................22
Section 4.12 Environmental Matters....................................26
Section 4.13 Title....................................................27
Section 4.14 Intellectual Property Matters............................27
Section 4.15 Labor Matters............................................28
Section 4.16 Rights Agreement.........................................28
Section 4.17 State Takeover Laws......................................28
Section 4.18 Brokers' Fees............................................29
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE
PURCHASER................................................29
Section 5.1 Organization.............................................29
Section 5.2 Authorization of Transaction; Enforceability.............30
Section 5.3 Noncontravention; Consents...............................30
Section 5.4 Adequate Cash Resources..................................30
Section 5.5 No Capital Ownership in the Company......................30
Section 5.6 Brokers..................................................30
Section 5.7 Information for the Schedules TO and 14D-9 and Proxy
Statement................................................31
ARTICLE 6 COVENANTS................................................31
Section 6.1 General..................................................31
Section 6.2 Notices and Consents.....................................32
Section 6.3 Interim Conduct of the Company...........................32
Section 6.4 Preservation of Organization.............................34
Section 6.5 Full Access..............................................34
Section 6.6 Notice of Developments...................................35
Section 6.7 Other Potential Acquirers................................35
Section 6.8 Company Stockholder Meeting, Preparation of Proxy
Statement................................................37
Section 6.9 Indemnification..........................................37
Section 6.10 Public Announcements.....................................39
Section 6.11 Actions Regarding Antitakeover Statutes..................39
Section 6.12 Defense of Orders and Injunctions........................39
Section 6.13 Employee Benefit Matters.................................40
Section 6.14 Standstill Provisions....................................42
Section 6.15 Number of Shares Necessary for Minimum Condition.........42
Section 6.16 Adjustment to Offer Price................................42
Section 6.17 Parent Actions Following Consummation of the Offer.......42
ARTICLE 7 CONDITIONS TO THE CONSUMMATION OF THE MERGER.............42
Section 7.1 Conditions to the Obligations of Each Party..............42
Section 7.2 Frustration of Closing Conditions........................42
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ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER........................43
Section 8.1 Termination..............................................43
Section 8.2 Effect of Termination....................................45
Section 8.3 Termination Fee..........................................45
ARTICLE 9 MISCELLANEOUS............................................46
Section 9.1 Nonsurvival of Representations...........................46
Section 9.2 Remedies.................................................46
Section 9.3 Successors and Assigns...................................47
Section 9.4 Amendment................................................47
Section 9.5 Extension and Waiver.....................................47
Section 9.6 Severability.............................................47
Section 9.7 Counterparts.............................................47
Section 9.8 Descriptive Headings.....................................47
Section 9.9 Notices..................................................47
Section 9.10 No Third Party Beneficiaries.............................48
Section 9.11 Entire Agreement.........................................49
Section 9.12 Construction.............................................49
Section 9.13 Submission to Jurisdiction...............................49
Section 9.14 Governing Law............................................49
ANNEX I - CERTAIN CONDITIONS OF THE OFFER..............................A-1
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TABLE OF DEFINED TERMS
Antitrust Laws Section 4.3
Certificate Section 3.1
Certificate of Merger Section 2.3
Closing Section 2.2
Closing Date Section 2.2
Code Section 4.11(a)(i)
Company Preamble
Company Applicable Period Section 6.7(a)
Company Board Section 6.7(a)
Company Common Stock Section 1.1(a)
Company Disclosure Letter Article 4
Company Material Adverse Effect Section 4.1
Company Plans Section 4.11(a)
Company Rights Agreement Section 4.4(a)
Company SEC Documents Section 4.5(a)
Company Stock-Based Award Section 2.9(a)(ii)
Company Stockholder Approval Section 6.8(d)
Company Stockholder Meeting Section 6.8(a)
Company Superior Proposal Section 6.7(b)
Company Takeover Proposal Section 6.7(e)
Confidentiality Agreement Section 6.5
Consummation of the Offer Section 1.4
Delaware Act Section 1.4
Dissenting Stockholders Section 2.8(b)
Effective Time Section 2.3
Employees Section 6.13(a)
Employee Pension Benefit Plan Section 4.11(a)
Employee Welfare Benefit Plan Section 4.11(a)
Environmental Law Section 4.12(b)
ERISA Section 4.11(a)
ESPAP Section 6.13(g)
Exchange Act Section 1.1(a)
GAAP Section 4.5(b)
Governmental Entities Section 6.1
Government Contract Section 4.9(b)
Government Subcontract Section 4.9(b)
Hazardous Materials Section 4.12(c)
HSR Act Section 4.3
Indemnified Losses Section 6.9(a)
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Indemnified Parties Section 6.9(a)
Independent Directors Section 1.3(a)
Intellectual Property Section 4.14(b)
Joint Press Release Section 1.1(d)
Laws Section 1.2(a)
Lien Section 4.3
Merger Section 2.1
Merger Consideration Section 2.8(b)
Minimum Condition Section 1.1(a)
Multiemployer Plan Section 4.11(a)(vi)
OFCCP Section 4.15
Offer Section 1.1(a)
Offer Documents Section 1.1(e)
Offer Price Section 1.1(a)
Offer to Purchase Section 1.1(a)
Opinion Section 4.2
Outside Date Section 8.1(b)(i)
Parent Preamble
Parent Material Adverse Effect Section 5.1
Parent SSIP Section 6.13(a)
Paying Agent Section 3.1
Payment Fund Section 3.2(a)
Permitted Liens Section 4.13
Proxy Statement Section 6.8(b)
Purchaser Preamble
Qualified Person Section 1.3(a)
Rights Section 4.4(a)
Schedule 14D-9 Section 1.2(c)
Schedule TO Section 1.1(e)
SEC Section 1.1(b)
SECT Section 2.8(a)
Securities Act Section 4.5(a)
Stock Option Section 2.9(a)(i)
Stock Plans Section 2.9(a)(i)
Significant Subsidiary Section 4.1
Subsidiary Section 2.8(c)
Surviving Corporation Section 2.1
Taxes Section 4.10(a)
Tax Returns Section 4.10(a)
Termination Fee Section 8.3(a)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of April 24, 2001 among General
Dynamics Corporation, a Delaware corporation (the "Parent"), Grail
Acquisition Corporation, a Delaware corporation and a wholly-owned
subsidiary of the Parent (the "Purchaser"), and Newport News Shipbuilding
Inc., a Delaware corporation (the "Company").
The Boards of Directors of the Parent, the Purchaser, and the Company
have each determined that a business combination among the Parent, the
Purchaser and the Company is desirable and in the best interests of the
Parent, the Purchaser and the Company and their respective stockholders.
The Boards of Directors of the Parent, the Purchaser and the Company
accordingly have each duly adopted resolutions approving this Agreement and
the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and for other good and valuable consideration, the value, receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:
ARTICLE 1
THE OFFER
Section 1.1 The Offer.
(a) Provided that this Agreement shall not have been
terminated pursuant to Section 8.1 hereof, as promptly as reasonably
practicable, but in no event later than seven business days following
the public announcement of the terms of this Agreement (which public
announcement shall occur no later than the first business day
following the execution of this Agreement), the Purchaser shall, and
the Parent shall cause the Purchaser to, commence (within the meaning
of Rule 14d-2 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) a tender offer (as it may be amended from time
to time as permitted by this Agreement, the "Offer") to purchase all
of the shares of Common Stock, par value $0.01 per share of the
Company ("Company Common Stock") issued and outstanding (including the
related Rights, as defined in Section 4.4(a)) at a price of U.S.
$67.50 per share, net to the seller in cash (such price, or such
higher (or other price if adjusted pursuant to Section 6.16) price per
share of Company Common Stock as may be paid in the Offer, being
referred to herein as the "Offer Price"). For purposes of this
Agreement, the term "business day" shall mean any day, other than
Saturday, Sunday or a federal holiday, and shall consist of the time
period from 12:01 a.m. through 12:00 midnight Eastern time. The
obligation of the Purchaser to accept for payment and pay for shares
of Company Common Stock (including the related Rights) tendered
pursuant to the Offer shall be subject only to the condition that
there
shall be validly tendered (other than by guaranteed delivery where
actual delivery has not occurred) in accordance with the terms of the
Offer, prior to the expiration date of the Offer and not withdrawn, a
number of shares of Company Common Stock that, together with the shares
of Company Common Stock then owned by the Parent and/or the Purchaser,
represents at least a majority of the shares of Company Common Stock
outstanding on a fully diluted basis (after giving effect to the
conversion or exercise of all outstanding options, warrants and other
rights to acquire, and securities exercisable or convertible into,
Company Common Stock, whether or not exercised or converted at the time
of determination, other than potential dilution attributable to the
Rights) (the "Minimum Condition") and to the satisfaction or waiver by
the Purchaser as permitted hereunder of the other conditions set forth in
Annex I hereto. The Offer shall be made by means of an offer to purchase
(the "Offer to Purchase") and the related letter of transmittal, each in
form reasonably satisfactory to the Company, containing the terms set
forth in this Agreement and the conditions set forth in Annex I. Without
limiting the foregoing, effective upon Consummation of the Offer (as
defined in Section 1.4), the holder of such Company Common Stock
(including the related Rights) will sell and assign to the Purchaser all
right, title and interest in and to all of the shares of Company Common
Stock tendered (including, but not limited to, such holder's right to any
and all dividends and distributions with a record date before, and a
payment date after, the scheduled or extended expiration date).
(b) The Purchaser expressly reserves the right, subject to
compliance with the Exchange Act, to waive any of the conditions to the
Offer and to make any change in the terms of or conditions to the Offer;
provided that (i) the Minimum Condition may not be waived or changed
without the prior written consent of the Company and (ii) no change may
be made that changes the form of consideration to be paid, decreases the
Offer Price, decreases the number of shares of Company Common Stock
sought in the Offer, adds additional conditions to the Offer, modifies
any of the conditions to the Offer in a manner adverse to holders of
Company Common Stock, makes any other change in the terms of the Offer
that is in any manner adverse to the holders of the Company Common Stock
or (except as provided in the next sentence and in Section 1.1(c))
changes the expiration date of the Offer, without the prior written
consent of the Company. Without the consent of the Company, the Purchaser
shall have the right to extend the expiration date of the Offer (which
shall initially be 12:00 midnight Eastern time on the date that is the
twentieth business day from the commencement date of the Offer, pursuant
to Rule 14d-2 under the Exchange Act) from time to time for one or more
additional periods of not more than 10 business days (5 business days if
only the Minimum Condition remains to be satisfied) (or such longer
period as may be approved by the Company), (i) if, immediately before the
scheduled or extended expiration date of the Offer, any of the conditions
to the Offer shall not have been satisfied or, to the extent permitted,
waived, until such conditions are satisfied or waived or (ii) for any
period required by any rule, regulation, interpretation or position of
the Securities and Exchange Commission or the staff thereof (the "SEC")
applicable to the Offer or any period required by applicable law.
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If the Purchaser elects to extend the expiration date pursuant to the
immediately preceding sentence when the only Offer Condition that is
not satisfied (or waived by the Purchaser) is the Minimum Condition,
to the extent requested in writing by the Company (which request must
be delivered on or before the expiration date), the Purchaser and the
Parent shall be deemed to have irrevocably waived all of the Offer
Conditions other than the Minimum Condition. In addition, if, at the
scheduled or extended expiration date of the Offer, conditions to the
Offer have been satisfied or waived and the Minimum Condition has been
satisfied but Company Common Stock tendered and not withdrawn pursuant
to the Offer constitutes less than 90 percent of the outstanding
Company Common Stock, without the consent of the Company, the
Purchaser shall (subject to applicable law) have the right to provide
for a "subsequent offering period" (as contemplated by Rule 14d-11
under the Exchange Act) for up to 20 business days after the
Purchaser's acceptance for payment of the shares of Company Common
Stock then tendered and not withdrawn pursuant to the Offer.
(c) If any of the conditions to the Offer are not satisfied or
waived on any scheduled or extended expiration date of the Offer, the
Purchaser shall, and the Parent shall cause the Purchaser to, extend the
Offer, if such condition or conditions could reasonably be expected to be
satisfied, from time to time until such conditions are satisfied or
waived; provided, that the Purchaser shall not be required to extend the
Offer beyond the Outside Date. Subject to the foregoing and upon the
terms and subject to the conditions of the Offer, the Purchaser shall,
and the Parent shall cause it to, accept for payment and pay for, as
promptly as practicable after the expiration of the Offer and in
accordance with Rule 14e-1(c) of the SEC (or as required by Rule 14d-11
under the Exchange Act), all shares of Company Common Stock validly
tendered and not withdrawn pursuant to the Offer.
(d) No later than the first business day following execution of this
Agreement and subject to the conditions of this Agreement, the Parent
shall issue a joint press release with the Company (the "Joint Press
Release") regarding this Agreement and its intent to make the Offer and
shall file with the SEC the Joint Press Release, under cover of Schedule
TO, indicating on the front of such Schedule TO that such filing contains
pre-commencement communications.
(e) On the date of commencement of the Offer, the Parent and the
Purchaser shall file with the SEC a Tender Offer Statement on Schedule TO
(together with all amendments and supplements thereto and including the
exhibits thereto, the "Schedule TO") with respect to the Offer. The
Schedule TO will include or incorporate by reference as exhibits the
Offer to Purchase and forms of the letter of transmittal and summary
advertisement (collectively, together with any supplements or amendments
thereto, the "Offer Documents"). The Parent and the Purchaser will take
all steps necessary to cause the Offer Documents to be disseminated to
holders of shares of Company Common Stock to the extent required by
applicable federal securities law. The
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Parent, the Purchaser and the Company each agree promptly to correct
any information provided by it for use in the Offer Documents if and
to the extent that such information shall have become false or
misleading in any material respect. The Parent and the Purchaser agree
to take all steps necessary to cause the Schedule TO as so corrected
to be filed with the SEC and the Offer Documents as so corrected to be
disseminated to holders of shares of Company Common Stock, in each
case as and to the extent required by applicable federal securities
law, including applicable SEC rules and regulations thereunder. The
Company and its counsel shall be given a reasonable opportunity to
review and comment on the Schedule TO and the Offer Documents prior to
their being filed with the SEC or disseminated to the holders of
shares of Company Common Stock. The Purchaser and the Parent also
agree to provide the Company and its counsel in writing with any
comments the Purchaser, the Parent or their counsel may receive from
the SEC or its staff with respect to the Schedule TO or the Offer
Documents promptly after the receipt of such comments and shall
consult with and provide the Company and its counsel a reasonable
opportunity to review and comment on the response of the Purchaser to
such comments prior to responding.
Section 1.2 Company Action.
(a) The Company hereby approves of and consents to the Offer. The
Company has been advised that all of its directors and executive officers
who own shares of Company Common Stock intend to tender their shares of
Company Common Stock pursuant to the Offer so long as such action would
not result in liability under Section 16(b) of the Exchange Act. In
connection with the Offer, the Company will, or will cause its transfer
agent to, promptly furnish the Parent with a list of its stockholders,
mailing labels and any available listing or computer file containing the
names and addresses of all record holders of shares of Company Common
Stock and lists in the Company's possession or control of securities
positions of shares of Company Common Stock held in stock depositories,
in each case as of a recent date, and will provide to the Parent such
additional information (including updated lists of stockholders, mailing
labels and lists of securities positions) and such other assistance as
the Parent may reasonably request in connection with the Offer. Subject
to the requirements of applicable statutes, laws (including common law),
ordinances, rules or regulations (collectively, "Laws"), and, except for
such steps as are necessary to disseminate the Schedule TO and the Offer
Documents and any other documents necessary to consummate the Offer and
the transactions contemplated by this Agreement, the Parent and the
Purchaser shall hold in confidence the information contained in any such
labels, listings and files, shall use such information only in connection
with the Offer and the Merger, and, if this Agreement shall be
terminated, shall, upon request, deliver to the Company all copies of
such information then in their possession.
(b) No later than the first business day following execution of this
Agreement, and subject to the conditions of this Agreement, the Company
shall issue the Joint Press
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Release with the Parent and shall file with the SEC the Joint Press
Release, under cover of Schedule 14D-9, indicating on the front of
such Schedule 14D-9 that such filing contains pre-commencement
communications.
(c) On the day that the Offer is commenced, the Company shall file
with the SEC and disseminate to holders of shares of Company Common
Stock, in each case as and to the extent required by applicable federal
securities law, a Solicitation/Recommendation Statement on Schedule 14D-9
(together with any amendments or supplements thereto, the "Schedule
14D-9") that shall reflect the recommendations of the Company Board. The
Company, the Parent and the Purchaser each agree promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the
extent that it shall have become false or misleading in any material
respect. The Company agrees to take all steps necessary to cause the
Schedule 14D-9 as so corrected to be filed with the SEC and to be
disseminated to holders of shares of Company Common Stock, in each case
as and to the extent required by applicable federal securities law. The
Parent and its counsel shall be given a reasonable opportunity to review
and comment on the Schedule 14D-9 prior to its being filed with the SEC
or disseminated to holders of Company Common Stock. The Company also
agrees to provide the Parent and its counsel in writing with any comments
the Company or its counsel may receive from the SEC with respect to the
Schedule 14D-9 promptly after the receipt of such comments and shall
consult with and provide the Parent and its counsel a reasonable
opportunity to review and comment on the response of the Company to such
comments prior to responding.
Section 1.3 Directors.
(a) Promptly upon the purchase of and payment for, and as long as
the Parent directly or indirectly owns, not less than a majority of the
issued and outstanding shares of Company Common Stock on a fully diluted
basis by the Parent or any of its direct or indirect Subsidiaries
pursuant to the Offer, the Parent shall be entitled to designate for
appointment or election to the Company's then existing Board of
Directors, upon written notice to the Company, such number of directors,
rounded up to the next whole number, on the Board of Directors such that
the percentage of its designees on the Board shall equal the percentage
of the outstanding shares of Company Common Stock owned of record by the
Parent and its direct or indirect Subsidiaries. In furtherance thereof,
the Company shall, upon request of the Purchaser, use its reasonable
efforts promptly to cause the Parent's designees (and any replacement
designees in the event that any designee shall no longer be on the Board
of Directors) to be so elected to the Company's Board, and in furtherance
thereof, to the extent necessary, increase the size of the Board of
Directors or use its reasonable efforts to obtain the resignation of such
number of its current directors as is necessary to give effect to the
foregoing provision. At such time, the Company shall also, upon the
request of the Purchaser, use its reasonable efforts to cause the Persons
designated by the Parent to constitute at least the same percentage
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(rounded up to the next whole number) as is on the Company's Board of
Directors of (i) each committee of the Company's Board of Directors,
(ii) each board of directors (or similar body) of each Subsidiary of
the Company and (iii) each committee (or similar body) of each such
board. Notwithstanding the foregoing, until the Effective Time, the
Board of Directors of the Company shall have at least two directors
who are directors of the Company on the date of this Agreement and who
are not officers of the Company or any of its Subsidiaries (the
"Independent Directors"); provided, however, that (x) notwithstanding
the foregoing, in no event shall the requirement to have at least two
Independent Directors result in the Parent's designees constituting
less than a majority of the Company's Board of Directors unless the
Parent shall have failed to designate a sufficient number of Persons
to constitute at least a majority and (y) if the number of Independent
Directors shall be reduced below two for any reason whatsoever (or if
immediately following Consummation of the Offer there are not at least
two then-existing directors of the Company who (1) are Qualified
Persons (as defined below) and (2) are willing to serve as Independent
Directors), then the number of Independent Directors required
hereunder shall be one, unless the remaining Independent Director is
able to identify a person, who is not an officer or Affiliate of the
Company, the Parent or any of their respective Subsidiaries (any such
person being referred to herein as a "Qualified Person"), willing to
serve as an Independent Director, in which case such remaining
Independent Director shall be entitled to designate any such Qualified
Person or Persons to fill such vacancy, and such designated Qualified
Person shall be deemed to be an Independent Director for purposes of
this Agreement, or if no Independent Directors then remain, the other
Directors shall be required to designate two Qualified Persons to fill
such vacancies, and such persons shall be deemed to be Independent
Directors for purposes of this Agreement.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder
in order to fulfill its obligations under Section 1.3(a), including
mailing to stockholders the information required by such Section 14(f)
and Rule 14f-1 (which the Company shall mail together with the Schedule
14D-9 if it receives from the Parent and the Purchaser the information
below on a basis timely to permit such mailing) as is necessary to
fulfill the Company's obligations under Section 1.3(a). The Company's
obligations to appoint the Parent's designees to the Company's Board of
Directors shall be subject to compliance with Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. The Parent or the
Purchaser shall supply the Company in writing any information with
respect to either of them and their nominees, officers, directors and
Affiliates required by such Section 14(f) and Rule 14f-1 as is necessary
in connection with the appointment of any of the Parent's designees under
Section 1.3(a). The provisions of Section 1.3(a) are in addition to and
shall not limit any rights that the Purchaser, the Parent or any of their
Affiliates may have as a holder or beneficial owner of shares of Company
Common Stock as a matter of law with respect to the election of directors
or otherwise.
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(c) Following the election or appointment of the Parent's designees
pursuant to Section 1.3(a), the approval by affirmative vote or written
consent of all of the Independent Directors then in office (or, if there
shall be only one Independent Director then in office, the Independent
Director) shall be required to authorize (and such authorization shall
constitute the authorization of the Company's Board of Directors and no
other action on the part of the Company, including any action by any
committee thereof or any other director of the Company, shall, unless
otherwise required by law, be required or permitted to authorize) (i) any
amendment or termination of this Agreement by the Company, (ii) any
extension of time for performance of any obligation or action hereunder
by the Parent or the Purchaser or (iii) any waiver or exercise of any of
the Company's rights under this Agreement.
Section 1.4 Merger Without Meeting of Stockholders. If following first
acceptance for payment of shares of Company Common Stock by the Purchaser
pursuant to the Offer (the "Consummation of the Offer") (or any subsequent
offering period), the Purchaser owns at least 90 percent of the outstanding
shares of Company Common Stock, each of the parties hereto shall take all
necessary and appropriate action to cause the Merger to become effective as
soon as practicable after such acquisition, without the Company Stockholder
Meeting, in accordance with Section 253 of the Delaware General Corporation
Law (the "Delaware Act").
ARTICLE 2
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time (as defined in Section 2.3) the
Purchaser will be merged (the "Merger") with and into the Company in
accordance with the provisions of the Delaware Act. Following the Merger, the
Company will continue as the surviving corporation (the "Surviving
Corporation") and the separate corporate existence of the Purchaser will
cease.
Section 2.2 The Closing. Upon the terms and subject to the conditions set
forth in this Agreement, the consummation of the Merger and the other
transactions contemplated by this Agreement (the "Closing") will take place at
the offices of Jenner & Block, LLC, 000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X.
00000, at 10:00 a.m., local time, no later than the third business day
following the satisfaction or waiver, to the extent permitted by applicable
Laws, of the conditions set forth in Article 7 (other than those conditions
that by their nature are to be satisfied at the Closing, but subject to the
satisfaction or, where permitted, waiver of those conditions), or at such
other date, time or place as the Parent and the Company may agree. The date
upon which the Closing occurs is referred to in this Agreement as the "Closing
Date."
Section 2.3 Effective Time. Upon the terms and subject to the conditions
of this Agreement, on the date of the Closing (or on such other date as the
Parent and the Company may agree), the Parent, the Purchaser and the Company
shall file with the Secretary of State of the
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State of Delaware a certificate of merger (or certificate of ownership and
merger, as the case may be) (the "Certificate of Merger") executed and
acknowledged in accordance with Section 251 (or Section 253, as the case
may be) of the Delaware Act, and shall make all other filings or recordings
required under the Delaware Act. The Merger (whether effected pursuant to
Section 251 or Section 253 of the Delaware Act) shall become effective on
the later of the date on which the Certificate of Merger has been duly
filed with the Secretary of State of the State of Delaware or such time as
is agreed upon by the parties and specified in the Certificate of Merger,
and such time is hereinafter referred to as the "Effective Time."
Section 2.4 Effects of the Merger. From and after the Effective Time, the
Merger shall have the effects set forth in this Agreement and Section 259 of
the Delaware Act. Without limiting the generality of the foregoing, as of the
Effective Time, all properties, rights, privileges, powers and franchises of
the Company and the Purchaser will vest in the Surviving Corporation and all
debts, liabilities and duties of the Company and the Purchaser will become
debts, liabilities and duties of the Surviving Corporation.
Section 2.5 Certificate of Incorporation and Bylaws. At the Effective
Time, the certificate of incorporation and bylaws of the Company as in effect
immediately prior to the Effective Time will be the certificate of
incorporation and bylaws of the Surviving Corporation, until amended by the
Surviving Corporation pursuant to the Delaware Act and subject to the
provisions of Section 6.9(e).
Section 2.6 Directors. The directors of the Purchaser at the Effective
Time will be the initial directors of the Surviving Corporation and will hold
office from the Effective Time until their respective successors are duly
elected or appointed and qualified in the manner provided in the certificate
of incorporation and bylaws of the Surviving Corporation or as otherwise
provided by law.
Section 2.7 Officers. The officers of the Company at the Effective Time
will be the initial officers of the Surviving Corporation and will hold office
from the Effective Time until their respective successors are duly elected or
appointed and qualified in the manner provided in the certificate of
incorporation and bylaws of the Surviving Corporation or as otherwise provided
by law.
Section 2.8 Conversion of Company Common Stock. As of the Effective Time,
by virtue of the Merger and without any action on the part of the holders of
any shares of Company Common Stock or any shares of capital stock of the
Purchaser:
(a) All shares of Company Common Stock that are owned by the
Company, any Subsidiary of the Company, the Parent or any Subsidiary of
the Parent immediately prior to the Effective Time shall be cancelled and
shall cease to exist and no consideration shall be delivered in exchange
therefor; provided that shares of Company Common Stock held beneficially
or of record by any Stock Plan or Company Plan or in
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accordance with the provisions of the Company's Amended and Restated
Stock Employee Compensation Trust Agreement dated as of August 1, 2000
among the Company and Wachovia Bank, N.A. (the "SECT") shall not be
deemed to be held by the Company regardless of whether the Company
has, directly or indirectly, the power to vote or control the
disposition of such shares.
(b) Each share of Company Common Stock (other than shares to be
cancelled in accordance with Section 2.8(a) and any shares that are held
by stockholders exercising appraisal rights pursuant to Section 262 of
the Delaware Act ("Dissenting Stockholders")) issued and outstanding
immediately prior to the Effective Time, including any shares of Company
Common Stock held beneficially or of record by any Stock Plan or Company
Plan or in accordance with the provisions of the SECT, shall be converted
into the right to receive the Offer Price in cash, payable to the holder
thereof, without interest (the "Merger Consideration"), upon surrender of
the Certificate (as defined in Section 3.1) formerly representing such
share in the manner provided in Section 3.2. All such shares, when so
converted, shall no longer be outstanding and shall automatically be
cancelled and shall cease to exist, and each holder of a Certificate
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration therefor
upon the surrender of such Certificate in accordance with Section 3.2,
without interest.
(c) The term "Subsidiary" as used in this Agreement means any
corporation, partnership, limited liability company or other business
entity 50 percent or more of the outstanding voting equity securities of
which are owned, directly or indirectly, by the Company or the Parent, as
applicable.
Section 2.9 Stock Options; Equity-Based Awards
(a) As soon as practicable following the date of this Agreement, the
Board of Directors of the Company (or, if appropriate, any committee
administering the Stock Plans) shall adopt such resolutions or take such
other actions (if any) as may be required to effect the following:
(i) each option to purchase shares of Company Common Stock (a
"Stock Option") granted under any stock option plan,
program, agreement or arrangement of the Company or any of
its Subsidiaries (collectively, the "Stock Plans;" for the
avoidance of doubt, the term "Stock Plan" does not include
the Company's Deferred Compensation Plan or Deferred
Compensation Plan for Nonemployee Directors) which is
outstanding and unexercised immediately prior to the
acceptance for payment of shares of Company Common Stock
pursuant to the Offer, whether vested or unvested, may be
surrendered immediately prior to the acceptance for
payment of shares of Company Common Stock
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pursuant to the Offer, with the holder thereof becoming
entitled to receive a payment in cash from the Company
in an amount equal to the product of (a) the excess, if
any, of the Merger Consideration over the exercise
price per share of Company Common Stock subject to such
Stock Option and (b) the number of shares of Company
Common Stock subject to such Stock Option;
notwithstanding the foregoing, this Section 2.9(a)(i)
will not apply to the ESPAP (as defined in Section
6.13(g)) and the rights thereunder;
(ii) each right of any kind, whether vested or unvested,
contingent or accrued, to acquire or receive shares of
Company Common Stock or to receive benefits measured by
the value of a number of shares of Company Common Stock,
that may be held, awarded, outstanding, credited, payable
or reserved for issuance under the Stock Plans (including,
without limitation, restricted stock and performance
shares or awards), except for Stock Options (each, a
"Company Stock-Based Award") outstanding immediately prior
to the acceptance for payment of shares of Company Common
Stock pursuant to the Offer, whether vested or unvested,
shall fully vest (at the maximum level of possible payout,
if applicable), and may be surrendered immediately prior
to the acceptance for payment of shares of Company Common
Stock pursuant to the Offer, with the holder thereof
becoming entitled to receive a payment, in cash from the
Company in an amount equal to the product of (x) the
Merger Consideration and (y) the number of shares of
Company Common Stock subject to such Company Stock-Based
Award;
(iii) any cash payments required to be made pursuant to Section
2.9(a)(i) or 2.9(a)(ii) are to be made (subject to
applicable withholding and payroll taxes) by the Company
promptly following the Consummation of the Offer, but in
any event within one business day following Consummation
of the Offer;
(iv) each Stock Option granted under the Stock Plans that is
not surrendered for cash in accordance with Section
2.9(a)(i), and that is outstanding and unexercised
immediately prior to the Effective Time, shall be
canceled immediately prior to the Effective Time, with
the holder thereof becoming entitled to receive a
payment in cash from the Surviving Corporation in an
amount equal to the product of (a) the excess, if any,
of the Merger Consideration over the exercise price per
share of the Company Common Stock subject to such Stock
Option and (b) the number of shares of Company Common
Stock subject to such Stock Option;
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(v) each Company Stock-Based Award that is not surrendered for
cash in accordance with Section 2.9(a)(ii), and that is
outstanding immediately prior to the Effective Time, shall
be cancelled immediately prior to the Effective Time, with
the holder thereof becoming entitled to receive a payment
in cash from the Surviving Corporation in an amount equal
to the product of (x) the Merger Consideration and (y) the
number of shares of Company Common Stock subject to such
Company Stock-Based Award; and
(vi) any cash payments required to be made pursuant to Section
2.9(a)(iv) or 2.9(a)(v) are to be made (subject to
applicable withholding and payroll taxes) by the Surviving
Corporation promptly following the Effective Time, but in
any event within one business day following the Effective
Time.
(b) Except to the extent permitted by Section 6.3, no additional
Stock Options, Company Stock-Based Awards or other equity-based awards or
other rights to acquire Company Common Stock will be granted pursuant to
the Stock Plans or otherwise after the date of this Agreement.
(c) The Company Board, or applicable committee thereof, will grant
all approvals and take all other actions required pursuant to Rules 16b-3
under the Exchange Act to cause the disposition in the Merger of Company
Common Stock, Company Stock-Based Awards and Stock Options to be exempt
from the provisions of Section 16(b) of the Exchange Act.
Section 2.10 Conversion of the Purchaser Common Stock. Each share of the
Common Stock, par value $0.01 per share, of the Purchaser issued and
outstanding immediately prior to the Effective Time will, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into one share of the Common Stock, par value $0.01 per share, of the
Surviving Corporation.
ARTICLE 3
PAYMENT
Section 3.1 Surrender of Certificates. From and after the Effective Time,
each holder of a certificate that immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (a "Certificate") will
be entitled to receive in exchange therefor, upon surrender thereof to a
paying agent (the "Paying Agent") to be designated by the Parent prior to the
Effective Time with approval of the Company, which approval shall not be
unreasonably withheld, the Merger Consideration in accordance with the
provisions of Article 2 and this
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Article 3. No interest will be payable on the Merger Consideration to be
paid to any holder of a Certificate irrespective of the time at which such
Certificate is surrendered for exchange.
Section 3.2 Paying Agent; Certificate Surrender Procedures.
(a) As soon as reasonably practicable following the Effective Time,
the Parent will deposit, or cause to be deposited, with the Paying Agent,
an amount in cash sufficient to provide all funds necessary for the
Paying Agent to make payment of the Merger Consideration pursuant to
Section 2.8 (the "Payment Fund"). Pending payment of such funds to the
holders of Certificates for shares of Company Common Stock, such funds
will be held and may be invested by the Paying Agent as the Parent
directs (so long as such directions do not impair the rights of holders
of Company Common Stock) in the direct obligations of the United States,
obligations for which the full faith and credit of the United States is
pledged to provide for the payment of principal and interest or
commercial paper rated of the highest quality by Xxxxx'x Investors
Services, Inc. or Standard & Poor's Corporation. Any net profit resulting
from, or interest or income produced by, such investments will be payable
to the Surviving Corporation or the Parent, as the Parent directs. The
Parent will promptly replace any monies lost through any investment made
pursuant to this Section 3.2(a).
(b) As soon as reasonably practicable after the Effective Time, the
Parent will instruct the Paying Agent to mail to each record holder of a
Certificate (i) a letter of transmittal (which will specify that delivery
will be effected, and risk of loss and title to such Certificates will
pass, only upon delivery of the Certificate to the Paying Agent and will
be in such form and have such other provisions as the Parent will
reasonably specify) and (ii) instructions for use in effecting the
surrender of Certificates for the Merger Consideration. Commencing
immediately after the Effective Time, upon the surrender to the Paying
Agent of such Certificate or Certificates, together with a duly executed
and completed letter of transmittal and all other documents and other
materials required by the Paying Agent to be delivered in connection
therewith, the holder will be entitled to receive the Merger
Consideration in accordance with the provisions of Section 2.8.
Section 3.3 Transfer Books. The stock transfer books of the Company will
be closed at the Effective Time and no transfer of any shares of Company
Common Stock outstanding immediately prior to the Effective Time will
thereafter be recorded on any of the stock transfer books. In the event of a
transfer of ownership of any Company Common Stock prior to the Effective Time
that is not registered in the stock transfer records of the Company at the
Effective Time, the Merger Consideration will be paid to the transferee in
accordance with the provisions of Section 3.2(b) only if the Certificate is
surrendered as provided in Section 3.2 and accompanied by all documents
required to evidence and effect such transfer and by evidence of payment of
any applicable stock transfer taxes.
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Section 3.4 Termination of Payment Fund. Any portion of the Payment Fund
which remains undistributed one hundred eighty (180) days after the Effective
Time will be delivered to the Parent upon demand, and each holder of Company
Common Stock who has not theretofore surrendered Certificates in accordance
with the provisions of this Article 3 will thereafter look only to the Parent
for satisfaction of such holder's claims for the Merger Consideration.
Section 3.5 Appraisal Rights. Notwithstanding anything in this Agreement
to the contrary, if any Dissenting Stockholder shall demand to be paid the
fair cash value of such holder's shares of Company Common Stock, as provided
in Section 262 of the Delaware Act, such shares shall not be converted into or
be exchangeable for the right to receive the Merger Consideration except as
provided in this Section 3.5, and the Company shall give the Parent notice of
any demand for appraisal rights under Section 262 of the Delaware Act received
by the Company, and the Parent shall have the right to participate in all
negotiations and proceedings with respect to any such demands. Neither the
Company nor the Surviving Corporation shall, except with the prior written
consent of the Parent, voluntarily make any payment with respect to, or settle
or offer to settle, any such demand for payment. If any Dissenting Stockholder
shall fail to perfect or shall have effectively withdrawn or lost the right to
an appraisal under Section 262 of the Delaware Act, the shares of Company
Common Stock held by such Dissenting Stockholder shall thereupon be treated as
though such shares had been converted into the right to receive the Merger
Consideration at the Effective Time pursuant to Section 2.8.
Section 3.6 Lost Certificates. If any Certificate has been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
the Parent, the posting by such person of a bond in such reasonable amount as
the Parent may direct as indemnity against any claim that may be made against
it with respect to such Certificate, the Paying Agent will deliver in exchange
for such lost, stolen or destroyed Certificate the Merger Consideration
pursuant to Section 2.8.
Section 3.7 No Rights as Stockholder. From and after the Effective Time,
the holders of Certificates will cease to have any rights as a stockholder of
the Surviving Corporation except as otherwise provided in this Agreement or by
applicable law, and the Parent will be entitled to treat each Certificate that
has not yet been surrendered for exchange solely as evidence of the right to
receive the Merger Consideration in accordance with the provisions of Article
2 hereof and this Article 3, provided, however, that each holder of a
Certificate that has become entitled to any declared and unpaid dividend will
continue to be entitled to such dividend following the Effective Time, and the
Surviving Corporation will pay such dividend to such holder in the amount and
on the date specified therefor by the Board of Directors of the Company at the
time of declaration thereof.
Section 3.8 Withholding. The Parent will be entitled to deduct and
withhold from the Merger Consideration otherwise payable to any former holder
of Company Common Stock all amounts relating to federal and state income and
payroll taxes required by law to be deducted or withheld therefrom.
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Section 3.9 Escheat. Neither the Parent, the Purchaser nor the Company
will be liable to any former holder of Company Common Stock for any portion of
the Merger Consideration delivered to any public official pursuant to any
applicable abandoned property, escheat or similar law. In the event any
Certificate has not been surrendered for the Merger Consideration prior to the
sixth anniversary of the Closing Date, or prior to such earlier date as of
which such Certificate or the Merger Consideration payable upon the surrender
thereof would otherwise escheat to or become the property of any governmental
entity, then the Merger Consideration otherwise payable upon the surrender of
such Certificate will, to the extent permitted by applicable law, become the
property of the Surviving Corporation, free and clear of all rights, interests
and adverse claims of any person.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent and the Purchaser
that except as disclosed in the reports, schedules, forms, statements and
other documents filed by the Company with the SEC since December 31, 1999,
and publicly available prior to the date of this Agreement or as disclosed
in the letter dated as of the date of this Agreement from the Company to
the Parent (the "Company Disclosure Letter"):
Section 4.1 Organization. The Company and each of its Subsidiaries is (a)
a corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation, (b) has all requisite power and authority
to own, lease and operate its properties and to carry on its business as
presently being conducted, and (c) is in good standing under the laws of the
jurisdiction of its incorporation and is duly qualified to conduct business as
a foreign corporation in each other jurisdiction where such qualification is
required, except, in the case of clauses (a) (as it relates to the
Subsidiaries), (b) and (c) above, where such failure, individually or in the
aggregate, is not reasonably likely to have a material adverse effect on the
business, financial condition, operations or results of operations of the
Company and its Subsidiaries taken as a whole (other than changes or effects
relating to the economy in general, the securities markets in general or the
shipbuilding or defense industries in general and not specifically relating to
the Company) or the ability of the Company to consummate the Merger and to
perform its obligations under this Agreement (a "Company Material Adverse
Effect"). The Company has delivered to the Parent correct and complete copies
of its certificate of incorporation and bylaws, as presently in effect, and,
upon request, will make available to the Parent after the date of this
Agreement correct and complete copies of the charters and bylaws, as presently
in effect, of each of its "significant subsidiaries", as such term is defined
in Regulation S-X of the Exchange Act (the "Significant Subsidiaries").
Section 4.2 Authorization of Transaction; Enforceability. The
Company has full corporate power and authority and has taken all requisite
corporate action to enable it to execute
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and deliver this Agreement, to consummate the Merger and the other
transactions contemplated hereby and to perform its obligations hereunder,
other than obtaining the Company Stockholder Approval (as defined in
Section 6.8(d)), if necessary, and the filing of the Certificate of Merger.
The Board of Directors of the Company, at a meeting thereof duly called and
held, has duly adopted resolutions by unanimous vote approving this
Agreement, the Merger and the other transactions contemplated hereby,
determining that the terms and conditions of this Agreement, the Merger and
the other transactions contemplated hereby are in the best interests of the
Company and its stockholders and recommending that the Company's
stockholders approve this Agreement. The foregoing resolutions of the Board
of Directors of the Company have not been modified, supplemented or
rescinded and remain in full force and effect as of the date of this
Agreement. In connection with its adoption of the foregoing resolutions,
the Board of Directors of the Company received the opinion (the "Opinion")
of Credit Suisse First Boston Corporation, financial advisor to the Board
of Directors of the Company, to the effect that, as of the date of such
opinion, the Offer Price and the Merger Consideration are fair to the
holders of shares of Company Common Stock (other than the Parent and its
affiliates), from a financial point of view. The Company will deliver to
the Parent a correct and complete copy of such Opinion, promptly following
receipt thereof. Assuming due execution and authorization by the Parent and
the Purchaser, this Agreement constitutes the valid and legally binding
obligation of the Company, enforceable against the Company in accordance
with its terms and conditions, except as enforceability may be limited by
applicable bankruptcy, insolvency or other similar Laws affecting the
enforcement of creditors' rights generally and by general principals of
equity relating to enforceability.
Section 4.3 Noncontravention; Consents. Except for (a) filings and
approvals necessary to comply with the applicable requirements of the Exchange
Act and the "blue sky" laws and regulations of various states, (b) the filing
of a Notification and Report Form and related material with the Federal Trade
Commission and the Antitrust Division of the United States Department of
Justice under the Xxxx-Xxxxx-Xxxxxx Act of 1976, as amended (the "HSR Act"),
and any other filing required pursuant to any other applicable competition,
merger control, antitrust or similar law or regulation (together with the HSR
Act, the "Antitrust Laws"), (c) the filing of the Certificate of Merger
pursuant to the Delaware Act and any applicable documents with the relevant
authorities of other jurisdictions in which the Company or any of its
Subsidiaries is qualified to do business, (d) any filings required under the
rules and regulations of the New York Stock Exchange and (e) to the extent set
forth in the Company Disclosure Letter, neither the execution and delivery of
this Agreement by the Company, nor the consummation by the Company of the
transactions contemplated hereby, will constitute a violation of, be in
conflict with, constitute or create (with or without notice or lapse of time
or both) a default under, give rise to any right of termination, cancellation,
amendment or acceleration with respect to, or result in the creation or
imposition of any lien, encumbrance, security interest or other claim (a
"Lien") upon any property of the Company or any of its Subsidiaries pursuant
to (i) the certificate of incorporation or bylaws of the Company or any of its
Subsidiaries, (ii) any constitutional provision, law, rule, regulation,
permit, order, writ, injunction, judgment or decree to which the Company or
any of its Subsidiaries is subject or (iii) any agreement or commitment
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to which the Company or any of its Subsidiaries is a party or by which the
Company, any of its Subsidiaries or any of their respective properties is
bound or subject, except, in the case of clauses (ii) and (iii) above, for
such matters which, individually or in the aggregate, are not reasonably
likely to have a Company Material Adverse Effect.
Section 4.4 Capitalization.
(a) As of the date of this Agreement, the authorized capital stock
of the Company consists of 70 million shares of Company Common Stock, par
value $0.01 per share, and 10 million shares of Preferred Stock, par
value $0.01 per share, of which 400,000 shares have been designated as
Series A Participating Cumulative Preferred Stock, par value $0.01 per
share, none of which shares of preferred stock have been issued. As of
the close of business on April 19, 2001, (i) 35,396,356 shares of Company
Common Stock were issued and outstanding, (ii) 33,912 shares of Company
Common Stock were subject to restricted stock grants, (iii) 2,239 shares
were held by the Company as treasury shares, (iv) 21,690,000 shares were
reserved for issuance pursuant to the Stock Plans, and (v) 400,000 shares
of Company Series A Participating Cumulative Preferred Stock were
reserved for issuance in connection with the rights (the "Rights") issued
pursuant to the Rights Agreement dated as of June 10, 1998 (as amended
from time to time) (the "Company Rights Agreement") between the Company
and First Chicago Trust Company of New York, as Rights Agent. All of the
issued and outstanding shares of capital stock of the Company have been
duly authorized and are validly issued, fully paid and nonassessable.
(b) Other than (i) Stock Options to acquire an aggregate of not more
than 2,836,743 shares of Company Common Stock granted by the Company to
current and former directors, officers, employees and advisors of the
Company and its Subsidiaries, and (ii) the Rights, as of the date of this
Agreement, there are no outstanding or authorized options, warrants,
subscription rights, conversion rights, exchange rights or other
contracts or commitments that could require the Company or any of its
Significant Subsidiaries to issue, sell or otherwise cause to become
outstanding any of its capital stock. There are no outstanding stock
appreciation, phantom stock, profit participation, dividend equivalent
rights or similar rights with respect to the Company or any of its
Significant Subsidiaries. The Company Disclosure Letter sets forth the
aggregate number of outstanding Stock Options and the aggregate number of
Company Stock-Based Awards and the average weighted exercise price of the
Stock Options and the average weighted base price of the Company
Stock-Based Awards.
(c) As of the date of this Agreement the trust under the SECT is the
owner of 5,866,096 shares of Company Common Stock.
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(d) Neither the Company nor any of its Significant Subsidiaries is a
party to any voting trust, proxy or other agreement or understanding with
respect to the voting of any capital stock of the Company or any of its
Significant Subsidiaries.
(e) Prior to the date of this Agreement, the Company Board has not
declared any dividend or distribution with respect to the Company Common
Stock the record or payment date for which is on or after the date of
this Agreement.
(f) All of the outstanding shares of the capital stock of each of
the Company's Subsidiaries have been validly issued, are fully paid and
nonassessable and as of the date of this Agreement are owned by the
Company or one of its Subsidiaries, free and clear of any Lien other than
Permitted Liens, except where the failure to be validly issued, fully
paid or nonassessable is not reasonably likely to have a Company Material
Adverse Effect. Except for its Subsidiaries, as of the date of this
Agreement, the Company does not control directly or indirectly or have
any direct or indirect equity participation in any corporation,
partnership, limited liability company, joint venture or other entity.
(g) The number of shares of Company Common Stock required to be
validly tendered to satisfy the Minimum Condition, calculated as of April
19, 2001, is 19,116,550.
Section 4.5 Company Reports; Proxy Statement.
(a) The Company has since December 31, 1999 filed all reports,
forms, statements and other documents (collectively, together with all
financial statements included or incorporated by reference therein, the
"Company SEC Documents") required to be filed by the Company with the SEC
pursuant to the provisions of the Securities Act of 1933 (as amended, the
"Securities Act"), or Section 12(b), 12(g) or 15(d) of the Exchange Act.
Each of the Company SEC Documents, as of its filing date, complied in all
material respects with the applicable requirements of the Securities Act
and the Exchange Act. None of the Company SEC Documents, as of their
respective filing dates, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. No Subsidiary
of the Company is required to file any reports, forms, statements or
other documents pursuant to the Securities Act or Section 12(b), 12(g) or
15(d) of the Exchange Act.
(b) Each of the consolidated financial statements (including related
notes) included in the Company SEC Documents presented fairly in all
material respects the consolidated financial condition, cash flows and
results of operations of the Company and its Subsidiaries for the
respective periods or as of the respective dates set forth therein. Each
of the financial statements (including related notes) included in the
Company SEC Documents has been prepared in accordance with United States
generally
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accepted accounting principles ("GAAP"), consistently applied during
the periods involved, except (i) as noted therein, (ii) to the extent
required by changes in GAAP or (iii) in the case of unaudited interim
financial statements, normal recurring year-end audit adjustments and
as permitted by Form 10-Q of the SEC.
(c) The Schedule 14D-9 and the Proxy Statement to be filed by the
Company pursuant to this Agreement will comply in all material respects
with the applicable requirements of the Exchange Act and will not, at the
time the Schedule 14D-9 or the definitive Proxy Statement is filed with
the SEC, as the case may be, and mailed to the stockholders of the
Company, contain any untrue statement of material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading. No representation or warranty is made
herein by the Company with respect to any information, if any, supplied
by the Parent or the Purchaser for inclusion in the Schedule 14D-9 or the
Proxy Statement. The information regarding the Company to be provided to
the Parent and the Purchaser for inclusion in the Schedule TO will not,
at the time such information is provided, contain any untrue statement of
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Section 4.6 No Undisclosed Liabilities. The Company and its Subsidiaries
have no liabilities or obligations (whether absolute or contingent, liquidated
or unliquidated, or due or to become due) except for (a) liabilities and
obligations referenced (whether by value or otherwise) or reflected in the
Company SEC Documents, (b) liabilities and obligations incurred in the
ordinary course of business, consistent with past practice, since December 31,
2000, and (c) other liabilities and obligations which, individually or in the
aggregate, are not reasonably likely to have a Company Material Adverse
Effect.
Section 4.7 Absence of Material Adverse Effect and Certain Events. Since
December 31, 2000 to the date of this Agreement, (i) there has not been a
Company Material Adverse Effect nor has there occurred any event, change,
effect or development which, individually or in the aggregate, is reasonably
likely to have a Company Material Adverse Effect; (ii) any declaration,
setting aside or payment of any dividend or other distribution (whether in
cash, stock, or property) with respect to any capital stock of the Company or
any purchase, redemption or other acquisition for value by the Company of any
capital stock except in the ordinary course of business, consistent with past
practice; (iii) any split, combination or reclassification of any capital
stock of the Company or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in substitution for shares
of capital stock of the Company; (iv) (A) any granting by the Company or any
Subsidiary of the Company to any director or executive officer of the Company
or any Subsidiary of the Company of any increase in compensation, except in
the ordinary course of business consistent with prior practice or as was
required under employment agreements in effect as of December 31, 2000, (B)
any granting by
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the Company or any Subsidiary of the Company to any such director or
executive officer of any increase in severance or termination pay, except
as was required under any employment, severance or termination agreements
in effect as of December 31, 2000, or (C) any entry by the Company or any
Subsidiary of the Company into any employment, severance or termination
agreement with any such director or executive officer; (v) any change in
accounting methods, principles or practices by the Company or any
Subsidiary of the Company materially affecting the consolidated assets,
liabilities or results of operations of the Company, except insofar as may
have been required by a change in GAAP or by Law; or (vi) any material
elections with respect to Taxes by the Company or any Subsidiary of the
Company (other than those elections reflected on Tax Returns filed as of
the date hereof) or settlement or compromise by the Company or any
Subsidiary of the Company of any material Tax Liability or refund.
Section 4.8 Litigation and Legal Compliance.
(a) As of the date of this Agreement, the Company Disclosure Letter
sets forth each instance in which the Company or any of its Subsidiaries
is (i) subject to any material unsatisfied judgment order, decree,
stipulation, injunction or charge or (ii) a party to or, to the Company's
knowledge, threatened to be made a party to any material charge,
complaint, action, suit, proceeding or hearing of or in any court or
quasi-judicial or administrative agency of any federal, state, local or
foreign jurisdiction, except for judgments, orders, decrees,
stipulations, injunctions, charges, complaints, actions, suits,
proceedings and hearings which, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect. As of the
date of this Agreement, there are no judicial or administrative actions
or proceedings pending or, to the Company's knowledge, threatened that
question the validity of this Agreement or any action taken or to be
taken by the Company in connection with this Agreement, which, if
adversely determined, are reasonably likely to have a Company Material
Adverse Effect.
(b) Except for instances of noncompliance which, individually or in
the aggregate, are not reasonably likely to have a Company Material
Adverse Effect, and except for Taxes and Environmental Laws, which are
the subject of Section 4.10 and Section 4.12, respectively, the Company
and its Subsidiaries are in compliance with each constitutional
provision, law, rule, regulation, permit, order, writ, injunction,
judgment or decree to which the Company or any of its Subsidiaries is
subject.
Section 4.9 Contract Matters.
(a) Neither the Company nor any of its Subsidiaries is in default or
violation of (and no event has occurred which with notice or the lapse of
time or both would constitute a default or violation of) any term,
condition or provision of any note, mortgage, indenture, loan agreement,
other evidence of indebtedness, guarantee, license, lease, agreement or
other contract, instrument or contractual obligation to which the Company
or any of its Subsidiaries is a party or by which any of their respective
assets is
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bound, except for any such default or violation which, individually or
in the aggregate, is not reasonably likely to have a Company Material
Adverse Effect.
(b) With respect to each contract, agreement, bid or proposal
between the Company or any of its Subsidiaries and any domestic or
foreign government or governmental agency, including any facilities
contract for the use of government-owned facilities (a "Government
Contract"), and each contract, agreement, bid or proposal that is a
subcontract between the Company or any of its Subsidiaries and a third
party relating to a contract between such third party and any domestic or
foreign government or governmental agency (a "Government Subcontract"),
(i) the Company and each of its Subsidiaries have complied with all terms
and conditions of such Government Contract or Government Subcontract,
including all clauses, provisions and requirements incorporated
expressly, by reference or by operation of law therein, (ii) the Company
and each of its Subsidiaries have complied with all requirements of all
laws, rules, regulations or agreements pertaining to such Government
Contract or Government Subcontract, including where applicable the Cost
Accounting Standards disclosure statement of the Company or such
Subsidiary, (iii) as of the date of this Agreement, neither the United
States government nor any prime contractor, subcontractor or other person
or entity has notified the Company or any of its Subsidiaries, in writing
or orally, that the Company or any of its Subsidiaries has breached or
violated any law, rule, regulation, certification, representation,
clause, provision or requirement pertaining to such Government Contract
or Government Subcontract, (iv) neither the Company nor any of its
Subsidiaries has received any notice of termination for convenience,
notice of termination for default, cure notice or show cause notice
pertaining to such Government Contract or Government Subcontract, (v) as
of the date of this Agreement, other than in the ordinary course of
business, no cost incurred by the Company or any of its Subsidiaries
pertaining to such Government Contract or Government Subcontract has been
questioned or challenged, is the subject of any audit or investigation or
has been disallowed by any government or governmental agency, and (vi) as
of the date of this Agreement, no payments due to the Company or any of
its Subsidiaries pertaining to such Government Contract or Government
Subcontract has been withheld or set off, nor has any claim been made to
withhold or set off money, and the Company and its Subsidiaries are
entitled to all progress payments received to date with respect thereto,
except in each such case for any such failure, noncompliance, breach,
violation, termination, cost, investigation, disallowance or payment
which, individually or in the aggregate, is not reasonably likely to have
a Company Material Adverse Effect.
(c) To the Company's knowledge, neither the Company nor any of its
Subsidiaries, any of the respective directors, officers, employees,
consultants or agents of the Company or any of its Subsidiaries is or
since January 1, 2000 has been under administrative, civil or criminal
investigation, indictment or information by any government or
governmental agency or any audit or in investigation by the Company or
any of its Subsidiaries with respect to any alleged act or omission
arising under or
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relating to any Government Contract or Government Subcontract except
for any investigation, indictment, information or audit relating to
matters which, individually or in the aggregate, are not reasonably
likely to have a Company Material Adverse Effect.
(d) There exist (i) no material outstanding claims against the
Company or any of its Subsidiaries, either by any government or
governmental agency or by any prime contractor, subcontractor, vendor or
other person or entity, arising under or relating to any Government
Contract or Government Subcontract, and (ii) no disputes between the
Company or any of its Subsidiaries and the United States government under
the Contract Disputes Act or any other federal statute or between the
Company or any of its Subsidiaries and any prime contractor,
subcontractor or vendor arising under or relating to any Government
Contract or Government Subcontract, except for any such claim or dispute
which, individually or in the aggregate, is not reasonably likely to have
a Company Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has (i) any interest in any pending or potential material
claim against any government or governmental agency or (ii) any interest
in any pending claim against any prime contractor, subcontractor or
vendor arising under or relating to any Government Contract or Government
Subcontract, which, if adversely determined against the Company,
individually or in the aggregate, is reasonably likely to have a Company
Material Adverse Effect.
(e) Since January 1, 2000, neither the Company nor any of its
Subsidiaries has been debarred or suspended from participation in the
award of contracts with the United States government or any other
government or governmental agency (excluding for this purpose
ineligibility to bid on certain contracts due to generally applicable
bidding requirements). To the Company's knowledge, there exists no facts
or circumstances that would warrant the institution of suspension or
debarment proceedings or the finding of nonresponsibility or
ineligibility on the part of the Company, any of its Subsidiaries or any
of their respective directors, officers or employees. No payment has been
made by or on behalf of the Company or any of its Subsidiaries in
connection with any Government Contract or Government Subcontract in
violation of applicable procurement laws, rules and regulations or in
violation of, or requiring disclosure pursuant to, the Foreign Corrupt
Practices Act, as amended, except for any such violation or failure to
disclose which, individually or in the aggregate, is not reasonably
likely to have a Company Material Adverse Effect.
Section 4.10 Tax Matters.
(a) For each taxable period beginning on or after January 1, 1997,
the Company and each of its Subsidiaries have timely filed all required
returns, declarations, reports, claims for refund or information returns
and statements, including any schedule or attachment thereto
(collectively "Tax Returns"), relating to any federal, state, local or
foreign net income, gross income, gross receipts, sales, use, ad valorem,
transfer,
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franchise, profits, license, lease, service, service use, withholding,
payroll, employment, excise, severance, stamp, occupation, premium,
property, windfall profits, customs, duties or other tax, fee,
assessment or charge, including any interest, penalty or addition
thereto and including any liability for the taxes of any other person
or entity under Treasury Regulation Section 1.1502-6 (or any similar
state, local or foreign law, rule or regulation), and any liability in
respect of any tax as a transferee or successor, by law, contract or
otherwise (collectively "Taxes"), and all such Tax Returns are
accurate and complete in all respects, except to the extent any such
failure to file or any such inaccuracy in any filed Tax Return,
individually or in the aggregate, is not reasonably likely to have a
Company Material Adverse Effect. All Taxes owed by the Company or any
of its Subsidiaries (whether or not shown on any Tax Return) have been
paid or adequately reserved for in accordance with generally accepted
accounting principles in the financial statements of the Company,
except to the extent any such failure to pay or reserve, individually
or in the aggregate, is not reasonably likely to have a Company
Material Adverse Effect.
(b) No deficiency with respect to Taxes has been proposed, asserted
or assessed against the Company or any of its Subsidiaries and no
requests for waivers of the time to assess any such Taxes are pending,
except (i) requests for waivers for income Taxes for periods referred to
in Section 4.10(c) (or subsequent periods) or (ii) to the extent any such
deficiency or request for waiver, individually or in the aggregate, is
not reasonably likely to have a Company Material Adverse Effect.
(c) The Company Disclosure Letter sets forth the periods, as of the
date of this Agreement, of the federal income Tax Returns of the Company
and its Subsidiaries being examined by the Internal Revenue Service.
(d) Except for Liens for current Taxes not yet due and payable or
which are being contested in good faith, there is no Lien affecting any
of the assets or properties of the Company or any of its Subsidiaries
that arose in connection with any failure or alleged failure to pay any
Tax, except for Liens which, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect.
(e) Neither the Company nor any of its Subsidiaries is a party to
any Tax allocation or Tax sharing agreement with any person other than
the Company or any of its Subsidiaries other than the agreement dated
as of December 11, 1996 between the Company, Tenneco Inc., New Tenneco
Inc. and El Paso National Gas Company.
Section 4.11 Employee Benefit Matters.
(a) The Company has made available to the Parent each plan, program,
agreement or arrangement constituting a material employee welfare benefit
plan (an "Employee Welfare Benefit Plan") as defined in Section 3(1) of
the Employee
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Retirement Income Security Act of 1974 (as amended, "ERISA"), or a
material employee pension benefit plan (an "Employee Pension Benefit
Plan") as defined in Section 3(2) of ERISA, and each other material
employee benefit plan, agreement, program or arrangement or employment
practice maintained by the Company or any of its Subsidiaries with
respect to any of its current or former employees or to which the
Company or any of the Company Subsidiaries contributes or is required
to contribute with respect to any of its current or former employees
(collectively, the "Company Plans"). With respect to each Company
Plan:
(i) such Company Plan (and each related trust, insurance
contract or fund) has been administered in a manner consistent in
all respects with its written terms and complies in form and
operation with the applicable requirements of ERISA and the Internal
Revenue Code of 1986, as amended (the "Code") and other applicable
laws, except for failures of administration or compliance which,
individually or in the aggregate, are not reasonably likely to have
a Company Material Adverse Effect;
(ii) all required reports and descriptions (including Form 5500
Annual Reports, Summary Annual Reports, PBGC-1's and Summary Plan
Descriptions) have been filed or distributed appropriately with
respect to such Company Plan, except for failures of filing or
distribution which, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect;
(iii) the requirements of Part 6 of Subtitle B of Title I of
ERISA and Section 4980B of the Code have been met with respect to
each such Company Plan which is an Employee Welfare Benefit Plan,
except for failures which, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect;
(iv) all material contributions, premiums or other payments
(including all employer contributions and employee salary reduction
contributions) that are required to be made under the terms of any
Company Plan have been timely made or have been reflected on the
financial statements contained in the Company's most recent Form
10-K or Form 10-Q included in the Company SEC Documents except for
failures which, individually or in the aggregate, are not reasonably
likely to have a Company Material Adverse Effect;
(v) each such Company Plan which is an Employee Pension Benefit
Plan (other than a plan that is exempt from the requirements of
Parts 2, 3 and 4 of Title I of ERISA) intended to be a "qualified
plan" under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service, and no event
has occurred which could reasonably be expected to cause the loss,
revocation or denial of any such favorable determination letter
except
-23-
where the lack of a favorable determination letter is not reasonably
likely to have a Company Material Adverse Effect;
(vi) the Company has made available and will continue to make
available to the Parent, upon its request, correct and complete
copies of the plan documents and most recent summary plan
descriptions, the most recent determination letter received from the
Internal Revenue Service, the most recent Form 5500 Annual Report,
the most recent actuarial report, the most recent audited financial
statements, and all related trust agreements, insurance contracts
and other funding agreements that implement such Company Plan (but
excluding the failure to make available any such document which is
not material). The valuation summaries provided by the Company to
the Parent reasonably represent the assets and liabilities
attributable to each Company Plan which is an Employee Pension
Benefit Plan (other than any "multiemployer plan" as defined in
Section 3(37) of ERISA ("Multiemployer Plan")) or an Employee
Welfare Benefit Plan providing retiree medical or life benefits
calculated in accordance with the Company's past practices, but
excluding any failure which, individually or in the aggregate, is
not reasonably likely to have a Company Material Adverse Effect;
(vii) no Company Plan which is an Employee Pension Benefit Plan
has been amended in any manner which would require the posting of
security under Section 401(a)(29) of the Code or Section 307 of
ERISA, except any such action which, individually or in the
aggregate, is not reasonably likely to have a Company Material
Adverse Effect; and
(viii) neither the Company nor any of its Subsidiaries has
communicated to any employee (excluding internal memoranda to
management) any plan or commitment, whether or not legally binding,
to create any additional material employee benefit plan or to
materially modify or change any Company Plan affecting any employee
or terminated employee of the Company or any of its Subsidiaries,
except any such action which, individually or in the aggregate, is
not reasonably likely to have a Company Material Adverse Effect.
(b) With respect to each Employee Welfare Benefit Plan or Employee
Pension Benefit Plan that the Company or any of its Subsidiaries maintains or
ever has maintained, or to which any of them contributes, ever has contributed
or ever has been required to contribute:
(i) no such Employee Pension Benefit Plan (other than any
Multiemployer Plan) has been completely or partially terminated
(other than any termination which, individually or in the aggregate,
is not reasonably likely to have a Company Material Adverse Effect),
no reportable event (as defined in Section 4043 of ERISA) for which
the 30-day reporting requirement has not been waived, as to which
notices would be required to be filed with the Pension Benefit
-24-
Guaranty Corporation, has occurred but has not yet been so reported
(but excluding any failure to report which, individually or in the
aggregate, is not reasonably likely to have a Company Material
Adverse Effect), and no proceeding by the Pension Benefit Guaranty
Corporation to terminate such Employee Pension Benefit Plan (other
than any Multiemployer Plan) has been instituted;
(ii) there have been no non-exempt prohibited transactions (as
defined in Section 406 of ERISA and Section 4975 of the Code) with
respect to such plan, no fiduciary has any liability for breach of
fiduciary duty or any other failure to act or comply in connection
with the administration or investment of the assets of such plan,
and no action, suit, proceeding, hearing or, to the Company's
knowledge, investigation with respect to the administration or the
investment of the assets of such plan (other than routine claims for
benefits) is pending or, to the Company's knowledge, threatened, but
excluding, from each of the foregoing, events or circumstances
which, individually or in the aggregate, are not reasonably likely
to have a Company Material Adverse Effect; and
(iii) other than routine claims for benefits, none of the
Company or any of its Subsidiaries or related entities has incurred,
and the Company has no reason to expect that the Company or any of
its Subsidiaries or related entities will incur, any liability under
Subtitle C or D Title IV of ERISA or under the Code with respect to
any Company Plan that is an Employee Pension Benefit Plan, other
than liabilities which, individually or in the aggregate, are not
reasonably likely to have a Company Material Adverse Effect;
(c) Neither the Company nor any of its Subsidiaries presently contributes
to, nor, since January 1, 1997, have they been obligated to contribute to, a
Multiemployer Plan, other than obligations which, individually or in the
aggregate, are not reasonably likely to have a Company Material Adverse
Effect.
(d) Other than pursuant to a Company Plan, neither the Company nor any of
its Subsidiaries has any obligation to provide medical, health, life insurance
or other welfare benefits for current or future retired or terminated
employees, their spouses or their dependents (other than in accordance with
Section 4980B of the Code), other than obligations which, individually or in
the aggregate, are not reasonably likely to have a Company Material Adverse
Effect.
(e) Except as set forth in Section 4.11(e) of the Company Disclosure
Letter, no Company Plan contains any provision that would prohibit the
transactions contemplated by this Agreement, would give rise to any severance,
termination or other payments as a result of the transactions contemplated by
this Agreement (alone or together with the occurrence of any other event), or
would cause any payment, acceleration or increase in benefits provided by any
Company Plan as a result of the transactions contemplated by this Agreement
(alone or together with the occurrence of
-25-
any other event), but excluding any benefit acceleration or increase which
would not have a Company Material Adverse Effect.
Section 4.12 Environmental Matters.
(a) Except for matters which, individually or in the
aggregate, are not reasonably likely to have a Company Material
Adverse Effect: (i) the Company and its Subsidiaries are, and, to the
Company's knowledge, since January 1, 1999 have been in compliance in
all respects with all Environmental Laws (as defined in Section
4.12(b)) in connection with the ownership, use, maintenance and
operation of their owned, operated or leased real property used by
them and otherwise in connection with their operations, (ii) neither
the Company nor any of its Subsidiaries has any liability, whether
contingent or otherwise, under, or for any violations of, any
Environmental Law, (iii) no written notices of any violation or
alleged violation of, non-compliance or alleged noncompliance with or
any liability under, any Environmental Law have been received by the
Company or any of its Subsidiaries since January 1, 1999 that are
currently outstanding and unresolved as of the date of this Agreement,
and, to the Company's knowledge, there are no other outstanding
notices that are unresolved for which the Company or any of its
Subsidiaries have responsibility, (iv) there are no administrative,
civil or criminal writs, injunctions, decrees, orders or judgments
outstanding or any administrative, civil or criminal actions, suits,
claims, proceedings or, to the Company's knowledge, investigations
pending or, to the Company's knowledge, threatened, relating to
compliance with or liability under any Environmental Law affecting the
Company or any of its Subsidiaries, (v) the Company and its
Subsidiaries possess valid environmental permits required by
any Environmental Law in connection with the ownership, use,
maintenance and operation of its owned, operated and leased real
property, and (vi) to the knowledge of the Company, no material
changes to or alterations of the practices or operations of the
Company or any of its Subsidiaries as presently conducted are
anticipated to be required in the future in order to permit the
Company and its Subsidiaries to continue to comply in all material
respects with all applicable Environmental Laws. The Company
Disclosure Letter sets forth the amount reserved as of December 31,
2000 by the Company for compliance with all Environmental Laws.
(b) The term "Environmental Law" as used in this Agreement means any
applicable and binding law, rule, regulation, permit, order, writ,
injunction, judgment or decree with respect to the preservation of the
environment or the promotion of worker health and safety, including any
such law, rule, regulation, permit, order, writ, injunction, judgment or
decree relating to Hazardous Materials (as defined in Section 4.12(c)).
Without limiting the generality of the foregoing, the term will encompass
each of the following statutes and the regulations promulgated
thereunder, each as amended (i) the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, (ii) the Solid Waste Disposal
Act, (iii) the Hazardous Materials Transportation Act, (iv) the Toxic
Substances Control Act, (v) the Clean Water Act, (vi) the Clean Air Act,
(vii) the Safe Drinking Water Act, (viii) the National Environmental
Policy Act of 1969, (ix) the
-26-
Superfund Amendments and Reauthorization Act of 1986, (x) Title III of
the Superfund Amendments and Reauthorization Act, (xi) the Federal
Insecticide, Fungicide and Rodenticide Act and (xii) the provisions of
the Occupational Safety and Health Act of 1970 relating to the
handling of and exposure to Hazardous Materials.
(c) The term "Hazardous Materials" as used in this
Agreement means each and every compound, chemical mixture,
contaminant, pollutant, material, waste or other substance (i) that is
defined or has been identified as hazardous or toxic under any
Environmental Law or (ii) the spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, storing, escaping,
leaching, dumping, discarding, burying, abandoning or disposing into
the environment of which is prohibited under any Environmental Law.
Without limiting the generality of the foregoing, the term will
include (i) "hazardous substances" as defined in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, and
regulations promulgated thereunder, each as amended, (ii) "extremely
hazardous substance" as defined in the Superfund Amendments and
Reauthorization Act of 1986, or Title III of the Superfund Amendments
and Reauthorization Act and regulations promulgated thereunder, each
as amended, (iii) "hazardous waste" as defined in the Solid Waste
Disposal Act and regulations promulgated thereunder, each as amended,
(iv) "hazardous materials" as defined in the Hazardous Materials
Transportation Act and the regulations promulgated thereunder, each as
amended, (v) "chemical substance or mixture" as defined in the Toxic
Substances Control Act and regulations promulgated thereunder, each as
amended, (vi) petroleum and petroleum products and byproducts and
(vii) asbestos.
Section 4.13 Title. The Company and its Subsidiaries have good and, in
the case of real property, marketable title to all the properties and assets
purported to be owned by them, free and clear of all Liens except (a) Liens
for current Taxes or assessments not delinquent, (b) builder, mechanic,
warehousemen, materialmen, contractor, workmen, repairmen, carrier or other
similar Liens arising and continuing in the ordinary course of business for
obligations that are not delinquent, (c) the rights, if any, of vendors having
possession of tooling of the Company and its Subsidiaries, (d) liens arising
from the receipt by the Company and its Subsidiaries of progress payments by
the United States government, (e) Liens securing rental payments under capital
lease arrangements and (f) other Liens which, individually or in the
aggregate, are not reasonably likely to have a Company Material Adverse Effect
(collectively, "Permitted Liens").
Section 4.14 Intellectual Property Matters.
(a) The Company and its Subsidiaries own or have the right to use
pursuant to valid license, sublicense, agreement or permission all items
of Intellectual Property necessary for their operations as presently
conducted and as presently proposed to be conducted, except where the
failure to have such rights, individually or in the aggregate, is not
reasonably likely to have a Company Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has received any charge, complaint,
claim, demand or notice alleging any interference, infringement,
misappropriation or violation of the
-27-
Intellectual Property rights of any third party, except for any charges,
complaints, claims, demands or notices relating to matters which,
individually or in the aggregate, are not reasonably likely to have a
Company Material Adverse Effect. Since January 1, 2000, to the Company's
knowledge, no third party has interfered with, infringed upon,
misappropriated or otherwise come into conflict with any Intellectual
Property rights of the Company or any of its Subsidiaries, except for
misappropriations and violations which, individually or in the aggregate,
are not reasonably likely to have a Company Material Adverse Effect.
(b) The term "Intellectual Property" as used in this Agreement
means, collectively, patents, patent disclosures, trademarks, service
marks, logos, trade names, copyrights and mask works, and all
registrations, applications, reissuances, continuations,
continuations-in-part, revisions, extensions, reexaminations and
associated good will with respect to each of the foregoing, computer
software (including source and object codes), computer programs, computer
data bases and related documentation and materials, data, documentation,
trade secrets, confidential business information (including ideas,
formulas, compositions, inventions, know-how, manufacturing and
production processes and techniques, research and development
information, drawings, designs, plans, proposals and technical data,
financial, marketing and business data and pricing and cost information)
and all other intellectual property rights (in whatever form or medium).
Section 4.15 Labor Matters. As of the date of this Agreement, there are
no controversies pending or, to the Company's knowledge, threatened between
the Company or any of its Subsidiaries and any of their current or former
employees or any labor or other collective bargaining unit representing any
such employee that are reasonably likely to have a Company Material Adverse
Effect or are reasonably likely to result in a material labor strike, dispute,
slow-down or work stoppage. As of the date of this Agreement, the Company is
not aware of any organizational effort presently being made or threatened by
or on behalf of any labor union with respect to employees of the Company or
any of its Subsidiaries. As of the date of this Agreement, there are no
current U.S. Department of Labor, Office of Federal Contract Compliance
Programs ("OFCCP") or Equal Employment Opportunity Commission audits, except
for any audits relating to matters which, individually or in the aggregate,
are not reasonably likely to have a Company Material Adverse Effect. To the
knowledge of the Company, as of the date of this Agreement, there are no OFCCP
conciliation agreements in effect.
Section 4.16 Rights Agreement. The Company has taken all requisite action
under the Rights Agreement to cause the provisions of the Rights Agreement not
to be applicable to this Agreement, the Offer, the Merger or the other
transactions contemplated hereby and to provide for the expiration of the
Rights upon the Consummation of the Offer.
Section 4.17 State Takeover Laws. The Board of Directors of the Company
has approved the Offer, the Merger and this Agreement and, assuming the
accuracy of the Parent's and the Purchaser's representations in Section 5.5,
such approval is sufficient to render
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inapplicable to the Offer, the Merger, this Agreement and the other
transactions contemplated hereby the restrictions on "business combinations"
set forth in Section 203 of the Delaware Act. To the Company's knowledge, no
other "fair price," "moratorium," "control share," "business combination,"
"affiliate transaction," or other anti-takeover statute or similar statute or
regulation of any state is applicable to the Offer, the Merger, this Agreement
and the other transactions contemplated hereby.
Section 4.18 Brokers' Fees. Except for the fees and expenses payable by
the Company to Credit Suisse First Boston, neither the Company nor any of its
Subsidiaries has any liability or obligation to pay any fees or commissions to
any financial advisor, broker, finder or agent with respect to the
transactions contemplated by this Agreement. The Company has delivered to the
Parent a correct and complete copy of the engagement letter between the
Company and Credit Suisse First Boston relating to the transactions
contemplated by this Agreement, which letter describes the fees payable to
Credit Suisse First Boston in connection with this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE PURCHASER
Each of the Parent and the Purchaser, jointly and severally,
represents and warrants to the Company that:
Section 5.1 Organization. Each of the Parent and the Purchaser is (a) a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, (b) has all requisite power and
authority to own, lease and operate its properties and to carry on its
business as presently being conducted and (c) is in good standing under the
laws of the jurisdiction of its incorporation and is duly qualified to conduct
business as a foreign corporation in each other jurisdiction where such
qualification is required, except, in the case of clauses (b) and (c) above,
where such failure, individually or in the aggregate, is not reasonably likely
to have a material adverse effect on the business, financial condition,
operations or results of operations of the Parent and its Subsidiaries taken
as a whole (other than changes or effects relating to the economy in general,
the securities markets in general or the industries in which the Parent
operates in general and not specifically relating to the Parent) or the
ability of the Parent to consummate the Merger and to perform its obligations
under this Agreement (a "Parent Material Adverse Effect"). All of the
outstanding shares of the capital stock of the Purchaser have been validly
issued, are fully paid and nonassessable and are owned by the Parent free and
clear of any Lien. The Purchaser has been organized solely for the purpose of
engaging in the Merger and the other transactions contemplated by this
Agreement and has not engaged in any business other than contemplated by this
Agreement. The Parent has delivered or otherwise made available to the Company
correct and complete copies of the certificates of incorporation and bylaws,
as presently in effect, of the Parent and the Purchaser.
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Section 5.2 Authorization of Transaction; Enforceability. Each
of the Parent and the Purchaser has full corporate power and authority and
has taken all requisite corporate action to enable it to execute and
deliver this Agreement, to consummate the Offer, the Merger and the other
transactions contemplated hereby and to perform its obligations hereunder.
The Parent has, simultaneously with the execution and delivery hereof,
executed a written consent in lieu of a special meeting of the sole
stockholder of the Purchaser in accordance with Section 228 of the Delaware
Act adopting and approving this Agreement. Each of the Board of Directors
of the Parent and the Board of Directors of the Purchaser, has duly adopted
resolutions by the requisite majority vote approving and declaring
advisable this Agreement, the Offer, the Merger and the other transactions
contemplated hereby and determining that the Agreement, the Offer, the
Merger and the other transactions contemplated hereby are in the best
interests of the Parent and its stockholders and of the Purchaser and its
sole stockholder, as the case may be. The foregoing resolutions of each
such Board of Directors have not been modified, supplemented or rescinded
and remain in full force and effect as of the date of this Agreement. This
Agreement constitutes the valid and legally binding obligation of each of
the Parent and the Purchaser, enforceable against the Parent and the
Purchaser in accordance with its terms and conditions.
Section 5.3 Noncontravention; Consents. Except for (a) filings and
approvals necessary to comply with the applicable requirements of the Exchange
Act and the "blue sky" laws and regulations of various states, (b) the filing
of a Notification and Report Form and related material with the Federal Trade
Commission and the Antitrust Division of the United States Department of
Justice under the HSR Act and any other filing required by any other Antitrust
Law, (c) the filing of the Certificate of Merger under the Delaware Act and
(d) any filings required under the rules and regulations of the New York Stock
Exchange, neither the execution and delivery of this Agreement by the Parent
or the Purchaser, nor the consummation by the Parent or the Purchaser of the
transactions contemplated hereby, will constitute a violation of, be in
conflict with, constitute or create (with or without notice or lapse of time
or both) a default under, give rise to any right of termination, cancellation,
amendment or acceleration with respect to, or result in the creation or
imposition or any Lien upon any property of the Parent or the Purchaser, or
result in the breach of (i) the certificate of incorporation or bylaws of the
Parent or the Purchaser, (ii) any constitutional provision, law, rule,
regulation, permit, order, writ, injunction, judgment or decree to which the
Parent, the Purchaser or any of their respective properties is bound or is
subject or (iii) any material agreement or commitment to which the Parent or
the Purchaser is a party or by which either of them is bound or subject.
Section 5.4 Adequate Cash Resources. The Parent has adequate resources
for obtaining and providing the aggregate Merger Consideration and the Option
Consideration in cash in the amount and at the time required under this
Agreement.
Section 5.5 No Capital Ownership in the Company. Neither the Parent
nor any of its Subsidiaries owns any shares of Company Common Stock.
Section 5.6 Brokers. No broker, investment banker, financial advisor or
other person, other than Bear Xxxxxxx, the fees and expenses of which will be
paid by the Parent, is entitled to
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any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the Offer, the Merger and the other
transactions contemplated hereby based upon arrangements made by or on
behalf of the Parent.
Section 5.7 Information for the Schedules TO and 14D-9 and Proxy
Statement. The Schedule TO to be filed by the Purchaser and the Parent
pursuant to this Agreement will comply in all material respects with the
applicable requirements of the Exchange Act and will not, at the time the
Schedule TO is filed with the SEC, contain any untrue statement of material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. No representation or
warranty is made herein by the Parent with respect to any information supplied
by the Company for inclusion in the Schedule TO. The information regarding the
Parent and the Purchaser to be provided by the Parent to the Company for
inclusion in the Schedule 14D-9 and the Proxy Statement will not, at the time
such information is so provided, contain any untrue statement of material fact
or omit to state any material fact required to be stated therein or necessary
in order to the make the statements therein, in light of the circumstances
under which they were made, not misleading.
ARTICLE 6
COVENANTS
Section 6.1 General. Subject to Sections 6.7 and 6.12, each of the
parties will use its respective best efforts to take all action and to do all
things necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement, including (i) the obtaining of all necessary actions or nonactions,
waivers, consents and approvals from any federal, state, local or foreign
government or any administrative agency or commission or other governmental
authority (collectively, "Governmental Entities") and the making of all
necessary registrations and filings (including filings with Governmental
Entities, if any) and the taking of all reasonable steps as may be necessary
to obtain an approval or waiver from, or to avoid an action or proceeding by,
any Governmental Entity, (ii) the obtaining of all necessary consents,
approvals or waivers from third parties, (iii) using best efforts in the
defense of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the Offer,
the Merger or the other transactions contemplated by this Agreement, including
seeking to have any stay or temporary restraining order entered by any court
or other Governmental Entity vacated or reversed and (iv) the execution and
delivery of any additional instruments necessary to consummate the Offer, the
Merger or the other transactions contemplated by this Agreement and to fully
carry out the purposes of this Agreement. Each party will consult with counsel
for the other parties as to, and will permit such counsel to participate in,
any litigation referred to in clause (iii) above.
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Section 6.2 Notices and Consents.
(a) Without limiting the generality of Section 6.1, each of the
parties will give all notices to third parties and governmental entities
and will use its respective best efforts to obtain all third party and
governmental consents and approvals that are required in connection with
the transactions contemplated by this Agreement. As soon as reasonably
practicable following the execution and delivery of this Agreement, each
of the parties will file a Notification and Report Form and related
material with the Federal Trade Commission and the Antitrust Division of
the United States Department of Justice under the HSR Act, and will make
all further filings pursuant thereto or any other Antitrust Law that may
be necessary, proper or advisable, including using its best efforts to
comply with any second requests for information in as expeditious a
manner as practicable. The foregoing two sentences and Section 6.1 will
not require the Parent to enter into any agreement, consent decree or
other commitment requiring the Parent or any of its Subsidiaries (i) to
dispose of or hold separate any material portion of its shares of Company
Common Stock or of the business or assets of the Company and its
Subsidiaries, or the Parent and its Subsidiaries, in each case taken as a
whole, or (ii) to take any other action which, individually or in the
aggregate, is reasonably likely to have a Parent Material Adverse Effect.
(b) Neither the Parent, nor the Company will directly or indirectly
extend any waiting period under the HSR Act or enter into any agreement
with a Governmental Entity to delay or not to consummate the transactions
contemplated by this Agreement except with the prior written consent of
the Company or the Parent, respectively.
Section 6.3 Interim Conduct of the Company. Except as expressly
contemplated by this Agreement, as set forth in the Company Disclosure Letter,
as required by law or by the terms of any contract in effect on the date of
this Agreement or as the Parent may approve, which approval will not be
unreasonably withheld or delayed, from and after the date of this Agreement
through the Closing Date, the Company will, and will cause each of its
Subsidiaries to, conduct its operations in accordance with its ordinary course
of business, consistent with past practice, and in accordance with such
covenant will not, and will not cause or permit any of its Subsidiaries to:
(a) amend its certificate of incorporation or bylaws or file any
certificate of designation or similar instrument with respect to any
shares of its authorized but unissued capital stock in any manner adverse
to the Parent, the Purchaser or the Company;
(b) authorize or effect any stock split or combination or
reclassification of shares of its capital stock;
(c) declare or pay any dividend or distribution with respect to its
capital stock (other than the regular quarterly dividend of $0.04 per
share of Company Common Stock and dividends payable by a Subsidiary of
the Company to the Company or another
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Subsidiary), issue or authorize the issuance of any shares of its
capital stock (other than in connection with the exercise of currently
outstanding Stock Options or Company Stock- Based Awards or pursuant
to the ESPAP or pursuant to the exercise of Rights) or any other
securities exercisable or exchangeable for or convertible into shares
of its capital stock, or repurchase, redeem or otherwise acquire for
value any shares of its capital stock or any other securities
exercisable or exchangeable for or convertible into shares of its
capital stock (other than the redemption of the Rights in accordance
with the provisions of this Agreement);
(d) in the case of the Company, merge or consolidate with any
entity;
(e) sell, lease or otherwise dispose of any of its capital assets
that are material, individually or in the aggregate, to the Company and
its Subsidiaries taken as a whole, including any shares of the capital
stock of any of its Significant Subsidiaries, other than sales, leases or
other dispositions of machinery, equipment, tools, vehicles and other
operating assets no longer required in its operations made in the
ordinary course of business, consistent with past practice;
(f) in the case of the Company only, liquidate, dissolve or
effect any recapitalization or reorganization in any form;
(g) acquire any interest in any business (whether by
purchase of assets, purchase of stock, merger or otherwise) or enter
into any joint venture except for any interests in any business or
joint venture which does not involve an investment by the Company in
excess of $5 million;
(h) create, incur, assume or suffer to exist any indebtedness for
borrowed money (including capital lease obligations), other than (i)
indebtedness existing as of the date of this Agreement, (ii) borrowings
under existing credit lines in the ordinary course of business,
consistent with past practice, (iii) indebtedness that can be prepaid at
any time without premium or penalty and (iv) intercompany indebtedness
among the Company and its Subsidiaries arising in the ordinary course of
business, consistent with past practice;
(i) create, incur, assume or suffer to exist any Lien (other than
Permitted Liens) affecting any of its material assets or properties;
(j) except as required by GAAP, change any of the accounting
principles or practices used by it or revalue in any material respect any
of its assets or properties, other than write-downs of inventory or
accounts receivable in the ordinary course of business, consistent with
past practice;
(k) except in the ordinary course of business consistent with past
practice and except as required under the terms of any collective
bargaining agreement in effect as of the date of this Agreement or as
required by applicable law, grant any general or uniform
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increase in the rates of pay of its employees or grant any increase in
the benefits under any bonus or employee benefit plan or other
arrangement, contract or commitment;
(l) except in the ordinary course of business consistent with past
practice and except for any increase required under the terms of any
collective bargaining agreement or consulting, executive or employment
agreement in effect on the date of this Agreement or as required by
applicable law, increase the compensation payable or to become payable to
officers and salaried employees or increase any bonus, insurance, pension
or other benefit plan, payment or arrangement made to, for or with any
such officers or salaried employees;
(m) enter into any contract or commitment or engage in any
transaction with any affiliated person or entity (other than the Company
or its Subsidiaries) or enter into any contract or commitment or engage
in any transaction with any unaffiliated person or entity which, to the
Company's knowledge, is reasonably likely to have a Company Material
Adverse Effect;
(n) make any material Tax election or settle or compromise any
material Tax liability, except in the ordinary course of business;
(o) settle or compromise any material pending or
threatened suit, action or proceeding except to the extent any such
settlement or compromise is not reasonably likely to have a Company
Material Adverse Effect; or
(p) commit to do any of the foregoing.
Section 6.4 Preservation of Organization. Subject to compliance with the
provisions of Section 6.3, the Company will, and will cause each of its
Subsidiaries to, use its reasonable efforts to preserve its business
organization intact in all material respects, use its reasonable efforts to
keep available to the Company and its Subsidiaries, the present officers and
employees of the Company and its Subsidiaries as a group and use its
reasonable efforts to preserve the present relationships of the Company and
its Subsidiaries with suppliers and customers and others having business
relations with the Company and its Subsidiaries.
Section 6.5 Access. The Company will, and will cause its Subsidiaries and
their representatives to, afford the Parent and its representatives reasonable
access, upon reasonable notice at reasonable times to all premises,
properties, books, records, contracts and documents of or pertaining to the
Company and its Subsidiaries. Notwithstanding the foregoing, neither party
will be required to provide access or to disclose information (i) where such
access or disclosure would contravene any law or contract or would result in
the waiver of any legal privilege or work-product protection, or (ii) to the
extent that counsel for such party advises that such information should not be
disclosed in order to ensure compliance with the Antitrust Laws. Any
information disclosed pursuant to Section 6.5 will be subject to the
provisions of the Confidentiality Agreement, dated March 26, 2001, between the
Company and the Parent (the "Confidentiality Agreement").
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Section 6.6 Notice of Developments. The Company will give prompt written
notice to the Parent of any event which has had or is reasonably likely to
have a Company Material Adverse Effect. Each party will give prompt written
notice to the other of any material development which would give rise to a
failure of a condition set forth in Annex I. No such written notice of such a
material development will be deemed to have amended any of the disclosures set
forth in the Company Disclosure Letter, to have qualified the representations
and warranties contained herein or to have cured any misrepresentation or
breach of warranty that otherwise might have existed hereunder by reason of
such material development.
Section 6.7 Other Potential Acquirers.
(a) The Company shall not, nor shall it permit any Company
Subsidiary to, nor shall it authorize or knowingly permit any officer,
director or employee of, or any investment banker, attorney or other
advisor or representative of, the Company or any Company Subsidiary to,
(i) directly or indirectly solicit, initiate or encourage the submission
of, any Company Takeover Proposal (as defined in Section 6.7(e)), (ii)
enter into any agreement with respect to any Company Takeover Proposal
(except a confidentiality agreement in accordance with this Section
6.7(a)) or (iii) directly or indirectly participate in any discussions or
negotiations regarding, or furnish to any person any information with
respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to
lead to, any Company Takeover Proposal; provided, however, that prior to
Consummation of the Offer (the "Company Applicable Period"), if the
Company receives a proposal or offer that was not solicited by the
Company and that did not otherwise result from a breach or deemed breach
of this Section 6.7(a) and that the Board of Directors of the Company
(the "Company Board") believes in good faith could result in a third
party making a Company Superior Proposal, and subject to compliance with
Section 6.7(c), the Company may (A) furnish information with respect to
the Company to the person making such a proposal or offer pursuant to a
customary confidentiality agreement the terms of which shall be no less
favorable to the Company than the terms of the Confidentiality Agreement;
provided, that no such agreement will be required to contain the
provisions set forth in the sixth paragraph of the Confidentiality
Agreement; and (B) participate in discussions or negotiations with such
person regarding such proposal or offer. Without limiting the foregoing,
it is agreed that any violation of the restrictions set forth in the
preceding sentence by any executive officer of the Company or any Company
Subsidiary or any affiliate, director or investment banker, attorney or
other advisor or representative of the Company or any Company Subsidiary,
shall be deemed to be a breach of this Section 6.7(a) by the Company.
(b) If the Company receives any Company Takeover Proposal which the
Company Board determines is a Company Superior Proposal, the Company
Board shall within 24 hours deliver to the Parent written notice advising
the Parent that the Company Board has received such Company Superior
Proposal, specifying the material terms and conditions of such Company
Superior Proposal and identifying the person making
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such Company Superior Proposal. For purposes of this Agreement, a
"Company Superior Proposal" means any proposal made by a third party
to acquire, directly or indirectly, including pursuant to a tender
offer, exchange offer, merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction, for
consideration consisting of cash and/or securities, more than 50
percent of the combined voting power of the shares of the Company
Common Stock then outstanding or all or substantially all the assets
of the Company and otherwise on terms which the Company Board
determines in its good faith judgment (after consulting with a
financial advisor of nationally recognized reputation) (A) is
reasonably capable of being completed, taking into account all legal,
financial, regulatory and other aspects of the proposal and the third
party making such proposal, and (B) presents, in its entirety, more
favorable terms, financial and otherwise, taken as a whole, to the
Company's stockholders, than the terms of this Agreement.
(c) The Company promptly shall advise the Parent orally and in
writing of any Company Takeover Proposal or any inquiry with respect to
or that could reasonably be expected to lead to any Company Takeover
Proposal, the identity of the person making any such Company Takeover
Proposal or inquiry and the material terms of any such Company Takeover
Proposal or inquiry. The Company shall keep the Parent informed of the
status of any such Company Takeover Proposal or inquiry (including any
change to the material terms thereof).
(d) Neither the Company nor the Company Board nor any committee
thereof shall withdraw or modify, or propose publicly to withdraw or
modify, in a manner adverse to the Parent or the Purchaser, the
recommendation of the Company Board of this Agreement or the Merger, or
approve or recommend, or propose publicly to approve or recommend, a
Company Takeover Proposal, unless a withdrawal or modification of such
recommendation is, in the good faith judgment of the Company Board after
consultation with its outside counsel, required by its fiduciary duties.
Nothing contained in this Section 6.7 shall prohibit the Company from
taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any required
disclosure to the Company's stockholders if, in the good faith judgment
of the Company Board, after consultation with outside counsel, failure so
to disclose would be inconsistent with its obligations under applicable
law.
(e) For purposes of this Agreement, "Company Takeover Proposal"
means any proposal or offer for a merger, consolidation, dissolution,
liquidation, recapitalization or other business combination involving the
Company or any Significant Subsidiary, any proposal or offer for the
issuance by the Company of a material amount of its equity securities as
consideration for the assets or securities of any person or any proposal
or offer to acquire in any manner, directly or indirectly, a material
equity interest in any voting securities of, or a substantial portion of
the assets of, the Company or any Company Subsidiary.
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Section 6.8 Company Stockholder Meeting, Preparation of Proxy Statement.
Subject to Section 1.4, as promptly as practicable following Consummation of
the Offer, if required by applicable law in order to consummate the Merger,
the Company, acting through the Company Board, shall, in accordance with
applicable law:
(a) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Company Stockholder Meeting") for the purpose of
considering and taking action upon the adoption of this Agreement;
(b) prepare and file with the SEC a preliminary proxy or information
statement in accordance with the Exchange Act relating to the Merger and
this Agreement and use its reasonable efforts to obtain and furnish the
information required to be included by the Exchange Act and the SEC in
the Proxy Statement (as hereinafter defined) and, after consultation
with the Parent, to respond promptly to any comments made by the SEC with
respect to the preliminary proxy or information statement and cause a
definitive proxy or information statement, including any amendment or
supplement thereto (the "Proxy Statement"), to be mailed to its
stockholders, provided that no amendment or supplement to the Proxy
Statement will be made by the Company without consultation with the
Parent and its counsel;
(c) subject to the Company Board's fiduciary duties under Delaware
law and the provisions of this Agreement, include in the Proxy Statement
the recommendation of the Company Board that stockholders of the Company
vote in favor of adoption of this Agreement; and
(d) use reasonable efforts to solicit from its stockholders proxies,
and to take all other action necessary and advisable, to secure the vote
of stockholders required by applicable law and the Company's certificate
of incorporation or bylaws to obtain the approval for this Agreement and
the Merger (the "Company Stockholder Approval"). In the event a Company
Stockholder Meeting is required under the Delaware Act in order to
consummate the Merger, the Parent will provide the Company with the
information concerning the Parent and the Purchaser required to be
included in the Proxy Statement and will vote or cause to be voted all
shares of Company Common Stock held by the Parent or its Subsidiaries in
favor of the adoption and approval of this Agreement and the transactions
contemplated hereby.
Section 6.9 Indemnification.
(a) From and after the Closing Date, the Parent will cause the
Surviving Corporation to indemnify, defend and hold harmless each person
who is now, or has been at any time prior to the Effective Time, an
officer or director of the Company or any of its present or former
Subsidiaries or corporate parents (collectively, the "Indemnified
Parties") from and against all losses, claims, damages and expenses
(including reasonable attorney's fees and expenses) ("Indemnified
Losses") arising out of or relating to actions
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or omissions, or alleged actions or omissions, occurring at or prior
to the Effective Time to the fullest extent permitted from time to
time by the Delaware Act or any other applicable laws as presently or
hereafter in effect. Furthermore, from and after the Closing Date, the
Parent shall indemnify, defend and hold harmless the directors and
officers of the Company from all Indemnified Losses arising out of, or
pertaining to, actions or omissions with respect to this Agreement and
the transactions contemplated hereby.
(b) Any determination required to be made with respect to
whether any Indemnified Party may be entitled to indemnification will,
if requested by such Indemnified Party, be made by independent legal
counsel selected by the Indemnified Party and reasonably satisfactory
to the Surviving Corporation.
(c) For a period of six years after the Closing Date, the Parent
will cause to be maintained in effect the policies of directors and
officers liability insurance and fiduciary liability insurance currently
maintained by the Company with respect to claims arising from or relating
to actions or omissions, or alleged actions or omissions, occurring on or
prior to the Closing Date. The Parent may at its discretion substitute
for such policies currently maintained by the Company directors and
officers liability insurance and fiduciary liability insurance policies
with reputable and financially sound carriers providing for no less
favorable coverage. Notwithstanding the provisions of this Section
6.9(c), the Parent will not be obligated to make annual premium payments
with respect to such policies of insurance to the extent such premiums
exceed 300 percent of the annual premiums paid by the Company as of the
date of this Agreement. If the annual premium costs necessary to maintain
such insurance coverage exceed the foregoing amount, the Parent will
maintain the most advantageous policies of directors and officers
liability insurance and fiduciary liability insurance obtainable for an
annual premium equal to the foregoing amount.
(d) To the fullest extent permitted from time to time under the law
of the State of Delaware, the Parent will cause the Surviving Corporation
to pay on an as-incurred basis the reasonable fees and expenses of each
Indemnified Party (including reasonable fees and expenses of counsel) in
advance of the final disposition of any action, suit, proceeding or
investigation that is the subject of the right to indemnification,
subject to reimbursement in the event such Indemnified Party is not
entitled to indemnification.
(e) The provisions set forth in Article Sixth of the Restated
Certificate of Incorporation of the Company and in Section 14 of Article
IV of the By-Laws of the Company, as in effect as of the date hereof,
will apply to each director or officer, as applicable, of the Company
with respect to matters occurring on or prior to the Effective Time. The
foregoing will not be deemed to restrict the right of the Surviving
Corporation to modify the provisions of its certificate of incorporation
or by-laws with respect to events or occurrences after the Closing Date
but such modifications shall not adversely affect the rights of the
directors hereunder. The Parent shall cause the Surviving Corporation to
honor the provisions of this Section 6.9(e).
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(f) In the event of any action, suit, investigation or proceeding,
the Indemnified Party will be entitled to control the defense thereof
with counsel of its own choosing reasonably acceptable to the Parent, and
the Parent and the Surviving Corporation will cooperate in the defense
thereof, provided that neither the Parent nor the Surviving Corporation
will be liable for the fees of more than one counsel for all Indemnified
Parties, other than local counsel, unless the use of a single counsel
would make it impracticable or unethical for all Indemnified Parties to
be represented by a single counsel, and provided further that neither the
Parent nor the Surviving Corporation will be liable for any settlement
effected without its written consent (which consent will not be
reasonably withheld or delayed).
(g) The rights of each Indemnified Party hereunder will be in
addition to any other rights such Indemnified Party may have under the
certificate of incorporation or bylaws of the Surviving Corporation or
any of its Subsidiaries, under the Delaware Act or otherwise.
Notwithstanding anything to the contrary contained in this Agreement or
otherwise, the provisions of this Section 6.9 will survive the
consummation of the Merger.
(h) Nothing in this Section 6.9 will diminish any right or
entitlements available to any director or officer of the Company under
the Company's certificate of incorporation and by-laws as in effect as of
the date of this Agreement.
(i) The provisions of this Section 6.9 are intended for the benefit
of and will be enforceable by each Indemnified Party and his or her
heirs, executors and legal representatives.
Section 6.10 Public Announcements. The initial press release announcing
the transactions contemplated by this Agreement will be a Joint Press Release.
Thereafter, the Parent and the Company will consult with one another before
issuing any press releases or otherwise making any public announcements with
respect to the transactions contemplated by this Agreement and, except as may
be required by applicable law or by the rules and regulations of the New York
Stock Exchange, will not issue any such press release or make any such
announcement prior to such consultation.
Section 6.11 Actions Regarding Antitakeover Statutes. If any fair price,
moratorium, control share acquisition or other form of antitakeover statute,
rule or regulation is or becomes applicable to the transactions contemplated
by this Agreement, the Board of Directors of the Company will grant such
approvals and take such other actions as may be required so that the
transactions contemplated hereby may be consummated as promptly as practicable
on the terms and conditions set forth in this Agreement.
Section 6.12 Defense of Orders and Injunctions. In the event either party
becomes subject to any order or injunction of a court of competent
jurisdiction which prohibits the consummation of the transactions contemplated
by this Agreement, each party will use its best efforts to overturn or lift
such order or injunction. The foregoing will not be deemed to require
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the Parent to enter into any agreement, consent decree or other
commitment requiring the Parent or any of its Subsidiaries (i) to dispose
of or hold separate any material portion of its shares of Company Common
Stock or of the business or assets of the Company and its Subsidiaries, or
the Parent and its Subsidiaries, in each case taken as a whole or (ii) to
take any action which, individually or in the aggregate, is reasonably
likely to have a Parent Material Adverse Effect.
Section 6.13 Employee Benefit Matters.
(a) Subject to applicable collective bargaining agreements, with
respect to the period beginning as of the Consummation of the Offer and
ending on December 31, 2003, the Parent Corporation shall cause the
employees and former employees of the Company and its Subsidiaries (the
"Employees"), to receive employee benefits pursuant to the Company Plans
in effect immediately prior to the Consummation of the Offer.
Notwithstanding the foregoing, the covenant of this Section 6.13(a) shall
not apply to the following Company Plans: any annual cash bonus plan
(provided however, that the Company's Annual Incentive Plan shall be
maintained in respect of the period ending December 31, 2001, in
accordance with its terms as in effect immediately prior to the
Consummation of the Offer); the Continental Maritime Industries, Inc.
Employee Stock Ownership Plan (provided that any proceeds of unallocated
shares are allocated to participants after satisfaction of any
outstanding indebtedness); the ESPAP; the Company 401(k) Investment Plan
for Salaried Employees (the "Salaried 401(k) Plan") (provided that, for
the period of this covenant, as soon as practicable following the
Effective Time, Employees eligible to participate in the Salaried 401(k)
Plan shall be eligible to participate in the Parent's Savings and Stock
Investment Plan, as applicable to salaried employees located at the
Parent's headquarters (the "Parent SSIP") or otherwise be eligible under
the Salaried 401(k) Plan to receive the same benefits such Employees
would have received had they participated directly in the Parent SSIP);
the SECT; the Company's Deferred Compensation Plan and Deferred
Compensation Plan for Nonemployee Directors; and any Stock Plan or
similar equity or equity-based compensation plan, program or arrangement.
(b) The Parent Corporation will honor and will cause the Purchaser
to honor, in accordance with their respective terms, the obligations, as
of the Consummation of the Offer, under the Company Plans, including any
rights or benefits arising as a result of the transactions contemplated
by this Agreement (either alone or in combination with any other event).
The Parent and the Company acknowledge and agree that the Consummation of
the Offer and the transactions contemplated by this Agreement constitute
a "change in control" for all purposes under the Company Plans.
(c) For all purposes under the employee benefit plans of the
Parent and its Subsidiaries (including the Surviving Corporation)
providing benefits to any Employees after the Effective Time, each
Employee will be credited with his or her years of service with the
Company and its Subsidiaries (and any predecessor entities thereof)
before the Effective Time, to the same extent as such Employee was
entitled, before the Effective Time, to credit for such service under
any similar Company Plan; provided, however, that
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Employees shall not be entitled to any credit for benefit accrual
purposes under any defined benefit pension plan in which they commence
participation after the Effective Time in the absence of a transfer of
assets and liabilities from any applicable prior defined benefit
pension plan or to the extent that it would result in a duplication of
benefits for the same period of service. Following the Effective Time,
the Parent will, or will cause its Subsidiaries to, (i) waive any
pre-existing condition limitation under any Employee Welfare Benefit
Plan maintained by the Parent or any of its Subsidiaries in which
Employees and their eligible dependents participate except to the
extent that such pre-existing condition limitation would have been
applicable under the comparable Company Employee Welfare Benefit plans
immediately prior to the Effective Time), and (ii) provide each
Employee with credit for any co-payments and deductibles incurred
prior to the Effective Time (or such earlier or later transition date
to new Employee Welfare Benefits Plans) for the calendar year in which
the Effective Time (or such earlier or later transition date) occurs,
in satisfying any applicable deductible or out-of-pocket requirements
under any welfare plans that the Employees participate in after the
Effective Time.
(d) The Parent will, and will cause the Surviving Corporation and
their respective representatives to, afford any officer (as of
immediately prior to the Consummation of the Offer) of the Company and
any of his or her representatives reasonable access, upon reasonable
notice, to such books and records of the Company and the Surviving
Corporation as are reasonably required by such officer to determine
amounts owing to such officer under any Company Plan.
(e) The Company will amend the SECT as set forth in the Company
Disclosure Letter and will take all necessary actions to terminate the
SECT following Consummation of the Offer, in accordance with Section 6.13
of the Company Disclosure Letter.
(f) Nothing contained herein will create any rights in any third
party, including without limitation, any right to employment or right to
any particular benefit except as set forth in Section 6.13(b) and
6.13(d). Except as specifically provided in this Section 6.13, nothing
contained herein shall be construed as prohibiting or restricting in any
way the right of the Parent Corporation or the Company (or any successor
thereto) to modify, amend or terminate any employee benefit plan, program
or arrangement in whole or in part at any time after the Effective Time.
(g) As soon as practicable following the date of this Agreement, the
Board of Directors of the Company (or, if appropriate, any committee
administering the Employee Stock Purchase and Accumulation Plan (the
"ESPAP")) shall adopt such resolutions or take such other actions (if
any) as may be required to provide that (i) with respect to the offering
period under the ESPAP under way immediately prior to the Effective Time,
the scheduled exercise date shall be accelerated, and all unexercised
rights granted in respect of such offering period shall be exercised not
later than immediately prior to the Effective Time, (ii) all holding
periods with respect to shares of Company Common Stock under
-41-
the ESPAP shall be waived immediately prior to the Consummation of the
Offer so as to permit the holders thereof to accept the Offer, and
(iii) the ESPAP shall terminate at the Effective Time.
Section 6.14 Standstill Provisions. The restrictions on the
Parent and the Purchaser contained in the sixth paragraph of the
Confidentiality Agreement between the Parent and the Company are hereby
waived by the Company to the extent reasonably required to permit the
Parent and the Purchaser to comply with their obligations or enforce their
rights under this Agreement.
Section 6.15 Number of Shares Necessary for Minimum Condition. The
Company will promptly notify the Parent in the event that the number of shares
of Company Common Stock required to satisfy the Minimum Condition exceeds
19,307,716.
Section 6.16 Adjustment to Offer Price. In the event there shall occur a
Distribution Date (as defined in the Company Rights Agreement), at any time
during the period from the date of this Agreement to the Consummation of the
Offer, the Company and the Parent shall mutually agree to make such adjustment
to the Offer Price so as to preserve the economic benefits that the Company
and the Parent reasonably expected on the date of this Agreement to receive as
a result of the Consummation of the Offer and the Merger and the other
transactions contemplated by this Agreement.
Section 6.17 Parent Actions Following Consummation of the Offer.
Following the Consummation of the Offer, the Parent will appoint to its
Board of Directors Xxxxxxx X. Xxxxxx.
ARTICLE 7
CONDITIONS TO THE CONSUMMATION OF THE MERGER
Section 7.1 Conditions to the Obligations of Each Party. The respective
obligation of each party to effect the Merger is subject to the satisfaction
at or prior to the Closing Date of each of the following conditions:
(a) this Agreement shall have been adopted by the requisite vote
of the stockholders of the Company, if required by applicable law, in
order to consummate the Merger; and
(b) Consummation of the Offer shall have occurred; and
(c) no party will be subject to any order or injunction of a court
of competent jurisdiction or other legal restraint which prohibits the
consummation of the Merger.
Section 7.2 Frustration of Closing Conditions. None of the Company, the
Parent or the Purchaser may rely on the failure of any condition set forth in
Section 7.1, to be satisfied if
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such party's breach of this Agreement has been a principal reason that such
condition has not been satisfied.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after receipt of the Company
Stockholder Approval, if necessary:
(a) by mutual written consent of the Parent, the Purchaser and
the Company;
(b) by either the Parent or the Company:
(i) if Consummation of the Offer does not occur on or before
November 30, 2001 (the "Outside Date"), unless such
failure is the result of a material breach of this
Agreement by the party seeking to terminate this
Agreement; provided, however, that the Company may extend
such date to April 30, 2002, if at the initial Outside
Date the only conditions to the Offer not satisfied (or
waived by the Purchaser) are the Minimum Condition and the
conditions set forth in clauses (a)(ii) and (b)(i) of
Annex I;
(ii) if any court of competent jurisdiction in the United
States issues a final order, decree or ruling or takes any
other final action permanently enjoining, restraining or
otherwise prohibiting the Offer or the Merger and such
order, decree, ruling or other action shall have become
final and nonappealable, unless such order, decree, ruling
or other action is the result of a material breach of this
Agreement by the party seeking to terminate this
Agreement; or
(iii) if, upon a vote at a duly held meeting to obtain the
Company Stockholder Approval, if necessary, the Company
Stockholder Approval is not obtained, unless such failure
to obtain the Company Stockholder Approval is the result
of a material breach of this Agreement by the party
seeking to terminate this Agreement;
(c) by the Parent prior to the Consummation of the Offer:
(i) if the Company breaches or fails to perform in any
material respect any of its representations, warranties or
covenants contained in this Agreement, which breach or
failure to perform (A) would give rise to the failure of a
condition set forth in Annex I, and (B) cannot be or
-43-
has not been cured within 30 days after the giving of
written notice to the Company of such breach; or
(ii) if (A) the Company, or the Company Board, as the case
may be, shall have (1) after the date hereof, entered
into any agreement, other than a confidentiality
agreement permitted under Section 6.7(a), with respect
to any Company Takeover Proposal other than the Offer
or the Merger, (2) amended, conditioned, qualified,
withdrawn, modified or contradicted, or resolved to do
any of the foregoing, in a manner adverse to the Parent
or the Purchaser, its approval and recommendation of
the Offer, the Merger and this Agreement (regardless of
whether such action was permitted under this
Agreement), (3) solicited, approved or recommended any
Company Takeover Proposal other than the Offer or the
Merger, or (4) violated Section 6.7, or (B) the Company
or the Company Board, or any committee thereof, shall
have resolved or agreed, in writing or otherwise, to do
any of the foregoing; provided that (x) any disclosure
by the Company to its stockholders of information that
in its good faith judgment, after consultation with
outside counsel, is required by Law shall not be deemed
to constitute any of the actions referred to in the
foregoing clauses (A)(2) and A(3) so long as such
disclosure does not change the Company Board's approval
or recommendation of the Offer, the Merger or the
Agreement and (y) any action taken by the Company Board
consistent with Section 8.1(d)(ii), or any announcement
of any such action, shall not constitute any of the
actions described in the foregoing clauses (A)(2),
(A)(3) and (B);
(d) by the Company prior to the Consummation of the Offer:
(i) if the Parent breaches or fails to perform in any material
respect any of its representations, warranties or
covenants contained in this Agreement, which breach or
failure to perform (A) would give rise to the failure of a
condition set forth in Section 7.1(a) or 7.1(b), and (B)
cannot be or has not been cured within 30 days after the
giving of written notice to the Parent of such breach; or
(ii) if at any time prior to Consummation of the Offer (A) a
Company Superior Proposal is received by the Company
and (B) the Company complies with Section 6.7; provided
that the Company may not terminate this Agreement
pursuant to this Section 8.1(d)(ii) unless and until:
(1) three business days have elapsed following delivery
to the Parent of a written notice of such determination
by the Company Board and during such three business day
period the Company has given the Parent reasonable
opportunity to discuss with the Company
-44-
the Company Superior Proposal and any proposed
amendments to this Agreement; (2) at the end of such
three business day period the Company Takeover Proposal
continues to constitute a Company Superior Proposal
(taking into account any modifications to the terms
hereof proposed by the Parent) and the Company Board
confirms its determination (after consultation with
outside counsel) that it is a Company Superior
Proposal; (3) following such termination the Company
enters into a definitive acquisition, merger or similar
agreement to effect the Company Superior Proposal; and
(4) the Company prior to such termination pays to the
Parent in immediately available funds the Termination
Fee (as defined in Section 8.3).
Section 8.2 Effect of Termination. In the event of termination of this
Agreement by either the Company or the Parent as provided in Section 8.1, this
Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of the Parent, the Purchaser or the
Company, (except for any liability of any party then in willful material
breach of any covenant or agreement); provided that the provisions of this
Section 8.2 and Section 8.3 of this Agreement will continue in full force and
effect notwithstanding such termination and abandonment.
Section 8.3 Termination Fee.
(a) The Company shall pay to the Parent a fee of $50,000,000 (the
"Termination Fee") if:
(i) the Parent terminates this Agreement pursuant to Section
8.1(c)(ii) or the Company terminates this Agreement
pursuant to Section 8.1(d)(ii), which payment shall be
payable on the date this Agreement is terminated;
(ii) in the event (A) a Company Takeover Proposal shall have
been publicly announced or any person has publicly
announced an intention (whether or not conditional and
whether or not withdrawn) to make a Company Takeover
Proposal, (B) the Consummation of the Offer shall not
have occurred prior to the Outside Date, (C) on the
Outside Date, the only condition to the Offer that
shall not have been satisfied shall be the Minimum
Condition, (D) the Agreement is thereafter terminated
by either the Parent or the Company pursuant to Section
8.1(b)(i) and (E) within 12 months after such
termination, the Company or any of its Significant
Subsidiaries enters into an agreement with respect to,
or consummates, such Company Takeover Proposal; or
-45-
(iii) in the event (A) there is a publicly announced Company
Takeover Proposal, (B) the Company thereafter breaches
one of its covenants in this Agreement, (C) the Parent
thereafter terminates this Agreement under Section
8.1(c)(i) by reason of such breach, and (D) within 12
months after such termination, the Company or any of
its Significant Subsidiaries enters into an agreement
with respect to, or consummates, such Company Takeover
Proposal;
provided that with respect to clauses (ii) and (iii) no fee shall be
payable by the Company until and unless the agreement is entered into
or the Company Takeover Proposal is actually consummated within the 12
months following such termination and shall be payable on the earlier
of (y) the date the agreement is entered into or (z) the Company
Takeover Proposal is consummated. Any fee due under this Section 8.3
shall be paid to the Parent by certified check or wire transfer of
same-day funds on the date payable under this Section 8.3.
(b) Except as specifically provided in this Section 8.3, each party
will bear its own expenses incurred in connection with the transactions
contemplated by this Agreement, whether or not such transactions are
consummated.
(c) The Company acknowledges that the agreements regarding the
payment of fees contained in this Section 8.3 are an integral part of the
transactions contemplated by this Agreement and that, in the absence of
such agreements, the Parent and the Purchaser would not have entered into
this Agreement. The Company accordingly agrees that in the event the
Company fails to pay the Termination Fee promptly, the Company will in
addition to the payment of such amount also pay to the Parent all of the
reasonable costs and expenses (including reasonable attorneys' fees and
expenses) incurred by the Parent in the enforcement of its rights under
this Section 8.3, together with interest on such amount at a rate of 11
percent per annum from the date upon which such payment was due, to and
including the date of payment. Provided that the Company was not in
breach of the provisions of Section 6.7, payment of the Termination Fee
will constitute full and complete satisfaction, and will constitute the
Parent's sole and exclusive remedy for any loss, liability, damage or
claim arising out of or in connection with any such termination of this
Agreement or the facts and circumstances resulting in or related to this
Agreement.
ARTICLE 9
MISCELLANEOUS
Section 9.1 Nonsurvival of Representations. The representations and
warranties contained in this Agreement will not survive the Merger or the
termination of this Agreement.
Section 9.2 Remedies. The parties agree that irreparable damage would
occur in the event that the provisions of this Agreement were not performed in
accordance with their specific
-46-
terms. It is accordingly agreed that the parties will be entitled to
specific performance of the terms of this Agreement, without posting a bond
or other security, this being in addition to any other remedy to which they
are entitled at law or in equity.
Section 9.3 Successors and Assigns. No party hereto may assign or
delegate any of such party's rights or obligations under or in connection with
this Agreement without the written consent of the other parties hereto. Except
as otherwise expressly provided herein, all covenants and agreements contained
in this Agreement by or on behalf of any of the parties hereto or thereto will
be binding upon and enforceable against the respective successors and assigns
of such party and will be enforceable by and will inure to the benefit of the
respective successors and permitted assigns of such party.
Section 9.4 Amendment. This Agreement may be amended by the execution and
delivery of an written instrument by or on behalf of the Parent, the Purchaser
and the Company at any time before or after the Company Stockholder Approval,
provided that after the date of the Company Stockholder Approval, no amendment
to this Agreement will be made without the approval of stockholders of the
Company to the extent such approval is required under the Delaware Act.
Section 9.5 Extension and Waiver. At any time prior to the Effective
Time, the parties may extend the time for performance of or, subject to
applicable law, waive compliance with any of the covenants or agreements of
the other parties to this Agreement and may waive any breach of the
representations or warranties of such other parties. No agreement extending or
waiving any provision of this Agreement will be valid or binding unless it is
in writing and is executed and delivered by or on behalf of the party against
which it is sought to be enforced.
Section 9.6 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
Section 9.7 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, any one of which need not contain the signatures
of more than one party, but all such counterparts taken together will
constitute one and the same Agreement.
Section 9.8 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
Section 9.9 Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when delivered personally
to the recipient or when sent to the recipient by telecopy (receipt
confirmed), one business day after the date when sent to the recipient by
reputable express courier service (charges prepaid) or three business days
after the date when mailed to the recipient by certified or registered mail,
return receipt requested and
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postage prepaid. Such notices, demands and other communications will be
sent to the Parent and the Company at the addresses indicated below:
If to the Parent
Corporation General Dynamics Corporation
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Senior Vice President and
General Counsel
Facsimile No: (000) 000-0000
With a copy (which will
not constitute notice) to: Jenner & Block, LLC
Xxx XXX Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxxxx, Esq.
Facsimile No.:(000) 000-0000
If to the Company: Newport News Shipbuilding Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Vice President, General
Counsel & Secretary
Facsimile No.:(000) 000-0000
With a copy (which will
not constitute notice ) to: Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx Xxxx
Facsimile No.:(000) 000-0000
or to such other address or to the attention of such other party as the
recipient party has specified by prior written notice to the sending party.
Section 9.10 No Third Party Beneficiaries. This Agreement will not confer
any rights or remedies upon any person or entity other than the Parent, the
Purchaser and the Company and their respective successors and permitted
assigns, except for the provisions of Article 2 and Article 3 and except that
the respective beneficiaries as of the Closing Date of the provisions of
Section 6.9 and Section 6.13(f) will, for all purposes, be third party
beneficiaries of the covenants and agreements contained therein and,
accordingly, will be treated as a party to this
-48-
Agreement for purposes of the rights and remedies relating to enforcement
of such covenants and agreements and will be entitled to enforce any such
rights and exercise any such remedies directly against the Parent and the
Surviving Corporation.
Section 9.11 Entire Agreement. This Agreement (including the
Confidentiality Agreement, the Company Disclosure Letter and the other
documents referred to herein) constitutes the entire agreement among the
parties and supersedes any prior understandings, agreements or representations
by or among the parties, written or oral, that may have related in any way to
the subject matter hereof.
Section 9.12 Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent
and no rule of strict construction will be applied against any party. The use
of the word "including" in this Agreement means "including without limitation"
and is intended by the parties to be by way of example rather than limitation.
As used in this Agreement, the qualification "to the Company's knowledge" and
clauses of similar effect will mean the actual knowledge by any executive
officer of the Company or of its Subsidiaries of the existence or absence of
facts which would contradict a particular representation and warranty of the
Company.
Section 9.13 Submission to Jurisdiction. Each of the parties to this
Agreement submits to the jurisdiction of any state or federal court sitting in
the State of Delaware, in any action or proceeding arising out of or relating
to this Agreement, agrees that all claims in respect of the action or
proceeding may be heard and determined in any such court, and agrees not to
bring any action or proceeding arising out of or relating to this Agreement in
any other court. Each of the parties to this Agreement waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought
and waives any bond, surety or other security that might be required of any
other party with respect thereto.
Section 9.14 Governing Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY AND INTERPRETATION OF THIS AGREEMENT AND THE SCHEDULES HERETO
WILL BE GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF THE
STATE OF DELAWARE.
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* * * * *
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement on the date first written above.
GENERAL DYNAMICS CORPORATION
By /s/ Xxxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
GRAIL ACQUISITION CORPORATION
By /s/ Xxxx X. Xxxxx
--------------------------------------
Xxxx X. Xxxxx
President
NEWPORTS NEWS SHIPBUILDING INC.
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
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ANNEX I
CERTAIN CONDITIONS OF THE OFFER
The capitalized terms used in this Annex I which are not defined
herein shall have the meanings set forth in the Agreement to which this
Annex I is attached, except that the term the "Merger Agreement" shall be
deemed to refer to the Agreement to which this Annex I is attached.
Notwithstanding any other provision of the Offer, the Purchaser
shall not be required to accept for payment or, subject to any applicable
rules and regulations of the SEC, including Rule 14e-l(c) promulgated under
the Exchange Act (relating to the Purchaser's obligations to pay for or
return tendered shares of Company Common Stock promptly after termination
or withdrawal of the Offer), pay for any shares of Company Common Stock
tendered pursuant to the Offer, and may (subject to Section 1.1 of the
Merger Agreement) terminate or amend the Offer in accordance with the
Merger Agreement; if:
(a) immediately prior to any scheduled or extended expiration
date of the Offer:
(i) the Minimum Condition shall not have been satisfied; or
(ii) the applicable waiting period under the HSR Act shall
not have expired or been terminated;
(b) any of the following conditions exists as of the expiration
date of the Offer:
(i) there shall have been any action taken, or suit or
proceeding threatened or commenced, or any statute, rule,
regulation, legislation, judgment, order or injunction promulgated,
entered, enforced, enacted, issued or deemed applicable to the Offer
or the Merger, in each case by any domestic or foreign federal or
state governmental regulatory or administrative agency or authority
or court or legislative body or commission which is reasonably
likely to have the effect of (1) prohibiting, or imposing any
material limitations, on Parent's or the Purchaser's ownership or
operation (or that of any of their respective Subsidiaries) of all
or a material portion of the Company's and its Subsidiaries'
businesses or assets as a whole, or compelling the Parent or the
Purchaser or their respective Subsidiaries to dispose of or hold
separate any material portion of its shares of Company Common Stock
or of the business or assets of the Company and its Subsidiaries or
the Parent and its Subsidiaries, in each case taken as a whole,
other than limitations generally affecting the industries in which
the Company and the Parent and their respective Subsidiaries conduct
their business, (2) prohibiting, or making illegal, Consummation of
the Offer or consummation of the Merger or
A-1
the other transactions contemplated by the Merger Agreement, or
(3) imposing material limitations on the ability of the Purchaser
or the Parent or any of their Subsidiaries effectively to
exercise full rights of ownership of all or a substantial number
of the shares of the Company Common Stock including, without
limitation, the right to vote the shares of the Company Common
Stock purchased by it on all matters properly presented to the
Company's shareholders on an equal basis with all other holders
of such shares and the right to hold, transfer or dispose of such
shares;
(ii) since the date of the Merger Agreement, except as
disclosed in the Company Disclosure Letter and the Company SEC
Documents filed prior to the date of the Merger Agreement, there
shall have occurred any state of facts change, development, effect,
event, condition or occurrence that individually or in the aggregate
has had or is reasonably likely to have a Company Material Adverse
Effect;
(iii) (1) the representations of the Company contained in
the Merger Agreement shall not be true and correct with the same
effect as if made at and as of the expiration date of the Offer
or if such representations speak as of an earlier date, as of
such earlier date, except, in either such case to the extent that
the breach thereof would not have a Company Material Adverse
Effect, or (2) the Company shall have failed to comply in
material respects with its covenants and agreements contained in
the Merger Agreement;
(iv) the Merger Agreement shall have been terminated in
accordance with its terms; or
(v) there shall have occurred a Distribution Date (as defined
in the Company Rights Agreement) and any necessary adjustment to the
Offer Price under Section 6.16 of the Merger Agreement has not been
made as contemplated by the Merger Agreement;
which, in any such case, and regardless of the circumstances giving rise to
any such condition, make it inadvisable, in the sole and absolute
discretion of the Parent and the Purchaser, to proceed with such acceptance
for payment or payment.
Subject to the provisions of the Merger Agreement, the foregoing
conditions are for the sole benefit of the Parent and the Purchaser and may
be asserted by the Purchaser or, subject to the terms of the Merger
Agreement, may be waived by the Parent or the Purchaser, in whole or in
part at any time and from time to time in the sole discretion of the Parent
or the Purchaser. The failure by the Parent or the Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right
A-2
which may, subject to Section 1.1 of the Merger Agreement, be asserted at
any time and from time to time.
A-3
