1
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 17, 1994, among BJ
SERVICES COMPANY ("BJ"), WCNA ACQUISITION CORP., a wholly owned subsidiary of
BJ ("BJ Sub"), and THE WESTERN COMPANY OF NORTH AMERICA ("Western"), each a
Delaware corporation.
WHEREAS, the respective Boards of Directors of BJ, BJ Sub and Western
have approved the merger of Western with and into BJ Sub (the "Merger"), upon
the terms and subject to the conditions set forth herein; and
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of the premises, and the
representations, warranties and covenants contained herein, the parties hereto
agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions
hereof, at the Effective Time (as defined in Section 1.2) and in accordance
with the General Corporation Law of the State of Delaware (the "Delaware
Corporation Law"), Western shall be merged with and into BJ Sub, which shall be
the surviving corporation in the Merger (hereinafter sometimes referred to as
the "Surviving Corporation") whose corporate existence shall continue under the
Delaware Corporation Law. At the Effective Time the separate existence of
Western shall cease.
Section 1.2 Effective Time of the Merger. As soon as practicable
after the Closing (as defined in Section 1.3 hereof), BJ, BJ Sub and Western
shall cause this Agreement to be duly certified and acknowledged in accordance
with the Delaware Corporation Law, and as soon as practicable thereafter BJ
shall cause the Surviving Corporation to file with the Delaware Secretary of
State and the appropriate County Recorder a certificate of merger (the
"Certificate of Merger") in such form as required by, and executed in
accordance with, the Delaware Corporation Law. The Merger shall become
effective as of the time and date of the filing of the Certificate of Merger
with the Delaware Secretary of State, unless otherwise provided in the
Certificate of Merger (the "Effective Time").
Section 1.3 Closing and Closing Date. Unless this Agreement shall
have been terminated and the transactions herein contemplated shall have been
abandoned pursuant to the provisions of Section 10.1, the closing (the
"Closing") of this Agreement shall take place (a) at 10:00 a.m. (New York time)
on the fifth Trading Day (as defined in Section 3.1(b) hereof) immediately
following the date on which the waiting periods under the Xxxx Xxxxx Act (as
hereinafter defined) shall have expired or otherwise been terminated and all
other conditions to the respective obligations of the parties set forth in
Article IX hereof shall have been satisfied or waived or (b) at such other time
and date as BJ and Western shall agree (such date and time on and at which the
Closing occurs being referred to herein as the "Closing Date"). The Closing
shall take place at such location as BJ and Western shall agree.
Section 1.4 Effects of the Merger. The Merger shall have the effects
set forth in the Delaware Corporation Law. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time, all the properties,
rights, privileges, powers and franchises of Western and BJ Sub
2
shall vest in the Surviving Corporation, and all debts, liabilities,
obligations and duties of Western and BJ Sub shall become the debts,
liabilities, obligations and duties of the Surviving Corporation.
Section 1.5 Alternative Structure. Notwithstanding anything to the
contrary provided elsewhere in this Agreement, if BJ notifies Western in
writing prior to the Closing Date that BJ prefers to structure the Merger so
that Western merges into BJ and BJ is the Surviving Corporation after the
Effective Time, the parties hereto shall forthwith execute an appropriate
amendment to this Agreement which eliminates BJ Sub as a party hereto and
otherwise reflects the foregoing changes and any other changes required to be
made as a result thereof.
ARTICLE II
THE SURVIVING CORPORATION
Section 2.1 Certificate of Incorporation. The Certificate of
Incorporation of BJ Sub, as in effect immediately prior to the Effective Time,
shall be the Certificate of Incorporation of the Surviving Corporation after
the Effective Time, until amended in accordance with its terms, or as otherwise
provided by law.
Section 2.2 Bylaws. The Bylaws of BJ Sub as in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation
unless and until amended in accordance with their terms or the Certificate of
Incorporation of the Surviving Corporation, or as otherwise provided by law.
Section 2.3 Officers and Directors. The officers and directors of BJ
Sub immediately prior to the Effective Time shall be the officers and directors
of the Surviving Corporation until their respective successors are duly elected
and/or appointed and qualify in the manner provided in the Certificate of
Incorporation and Bylaws of the Surviving Corporation, or as otherwise provided
by law. The senior executive officers of Western, Western, BJ and BJ Sub will
enter into the Senior Executive Termination Agreements, dated the date hereof
(the "Senior Executive Termination Agreements").
ARTICLE III
CONVERSION AND EXCHANGE OF SECURITIES
Section 3.1 Conversion of Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of any of the parties hereto or
any holder of any of the following securities:
(a) Western Common Stock. Except as otherwise provided
herein and subject to Section 3.3, each share of common stock, par
value $.10 per share, of Western ("Western Common Stock") issued and
outstanding immediately prior to the Effective Time (other than
Dissenting Shares, as hereinafter defined, and shares of Western
Common Stock owned by BJ, BJ Sub or any other direct or indirect
subsidiary of BJ) shall be converted into, exchanged for and represent
the right to receive (without interest) (i) $20.00 in cash ("Cash
Consideration") and .2 warrants (the "BJ Warrants") to purchase one
share of BJ Common Stock in substantially the form annexed to the
Warrant Agreement (the "Warrant Agreement") attached hereto as Exhibit
A at an exercise price of $30 per share of BJ Common Stock (subject to
adjustment as provided in the Warrant Agreement) ("Warrant
Consideration"), or (ii) Stock Consideration (as defined in Section
3.1(b) (ii)) and Warrant Consideration, in each case as the holder
thereof shall have elected or be deemed to have elected, in accordance
with Section 3.3 (collectively, the "Merger Consideration"); provided,
however, that, in any event, if between the date of this Agreement and
the Effective Time the outstanding shares of BJ Common Stock or
Western Common Stock shall have been changed into a different number
of shares or a different class by reason of any stock dividend,
subdivision, reclassification, recapitalization, split,
2
3
combination or exchange of shares, the Cash Consideration, the Warrant
Consideration and the Stock Consideration shall be correspondingly
adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of
shares. All shares of Western Common Stock so converted or exchanged
shall no longer be outstanding and shall automatically be cancelled
and retired and shall cease to exist, and each certificate previously
evidencing any such shares shall thereafter represent the right to
receive, upon the surrender of such certificate in accordance with the
provisions of Section 3.6, the applicable Merger Consideration and any
cash to be paid in lieu of fractional shares of BJ Common Stock and
associated fractional rights ("BJ Purchase Rights") to purchase one
one-hundredth of a share of Series Two Junior Preferred Stock, without
par value, of BJ ("BJ Junior Preferred Stock") pursuant to the Rights
Agreement, dated as of January 12, 1994, as amended, between BJ and
First Chicago Trust Company of New York, as rights agent, to which
such holder is entitled pursuant to Section 3.4 (without interest
thereon). The holders of such certificates previously evidencing such
shares of Western Common Stock outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such
shares of Western Common Stock except as otherwise provided herein or
by law.
(b) Certain Definitions. As used in this Agreement:
(i) "Closing Price" means the average of the
midpoint of the daily high and low trading prices of BJ Common
Stock, rounded to four decimal places, as reported in The Wall
Street Journal's New York Stock Exchange Composite
Transactions Reports, for each of the first 20 consecutive
Trading Days in the period commencing 25 Trading Days prior to
the Closing Date.
(ii) "Stock Consideration" is (x) if the Closing
Price of BJ Common Stock is $17.25 or lower, 1.1594 shares of
BJ Common Stock, together with a corresponding number of BJ
Purchase Rights; (y) if the Closing Price of BJ Common Stock
is $22.25 or greater, .8989 shares of BJ Common Stock,
together with a corresponding number of BJ Purchase Rights; or
(z) if the Closing Price of the BJ Common Stock is greater
than $17.25 but less than $22.25, that portion of a share of
BJ Common Stock equal to the quotient of $20.00 divided by the
Closing Price of the BJ Common Stock, together with a
corresponding number of BJ Purchase Rights.
(iii) "Trading Day" means a day on which the New
York Stock Exchange, Inc. (the "NYSE") is open for trading.
(c) Western Common Stock Held by Western or BJ; Western
Preferred Stock. Each share of Western Common Stock held in the
treasury of Western or held by BJ, BJ Sub or any other direct or
indirect subsidiary of BJ immediately prior to the Effective Time
shall be cancelled and cease to exist, and no payment or other
consideration shall be made in respect thereof. The Western Preferred
Stock shall be cancelled, and no payment or other consideration shall
be made in respect thereof.
(d) BJ Sub Shares. Each share of common stock, par value
$0.01 per share, of BJ Sub issued and outstanding immediately prior to
the Effective Time shall remain outstanding and shall be unchanged
after the Merger and shall thereafter constitute all of the issued and
outstanding capital stock of the Surviving Corporation.
(e) Convertible Debentures. The 7 1/4% Convertible
Subordinated Debentures due January 15, 2015 of Western (the "Western
Convertible Debentures") which are outstanding at the Effective Time
shall continue to be outstanding subsequent to the Effective Time as
debt instruments of the Surviving Corporation, subject to their
respective terms and conditions and the execution and delivery of a
supplemental indenture in the form required thereby.
3
4
Following the Effective Time of the Merger, each outstanding Western
Convertible Debenture will be convertible into the amount of Stock
Consideration (and cash in lieu of fractional shares of BJ Common
Stock and associated BJ Purchase Rights), Cash Consideration and
Warrant Consideration which the holder thereof would have had the
right to receive after the Effective Time of the Merger if such
Western Convertible Debenture had been converted immediately prior to
the Effective Time of the Merger and the holder thereof had made the
Stock Election (as defined in Section 3.3(b)) with respect to 50% of
such holder's Western Convertible Debentures and the Cash Election (as
defined in Section 3.3(b)) with respect to the remaining 50% of such
holder's Western Convertible Debentures.
(f) Senior Notes. The 12-7/8% Senior Notes due December
1, 2002 of Western ("Western Senior Notes") that are outstanding at
the Effective Time shall continue to be outstanding subsequent to the
Effective Time as debt instruments of the Surviving Corporation,
subject to their respective terms and conditions and the execution and
delivery of a supplemental indenture in the form required thereby.
Section 3.2 Treatment of Western Options. (a) Immediately prior to
the Effective Time, Western shall take such action as may be necessary so that
each outstanding Western Option (as defined in Section 6.2) whether or not then
exercisable, shall be cancelled by Western, and each holder of a cancelled
Western Option shall be entitled to receive, as soon as practicable after the
Effective Time, in consideration for the cancellation of such Western Option an
amount in cash equal to the product (the "Spread") of (i) the total number of
shares of Western Common Stock subject to such holder's Western Option and (ii)
the excess, if any, of (x) $20.00 plus the "Warrant Consideration Value" (as
hereinafter defined) over (y) the exercise price per share of the Western
Common Stock previously subject to such Western Option. The "Warrant
Consideration Value" shall be equal to the greater of (i) $1.00 or (ii) .2
multiplied by the "Warrant Current Market Price" (as defined below).
(b) For the purpose of any computation hereunder, the "Warrant
Current Market Price" means the average of the midpoint of the daily high and
low trading prices of BJ Warrants, rounded to four decimal places, on a
when-issued basis as reported in The Wall Street Journal's New York Stock
Exchange Composite Transactions Reports, for each of the first 20 consecutive
Trading Days in the period commencing 25 Trading Days prior to the Closing Date
or, if the BJ Warrants are not then admitted to trading on the NYSE on a
when-issued basis, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which such securities are admitted to trading on a
when-issued basis or, if the BJ Warrants are not admitted to trading on any
national securities exchange on a when-issued basis, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ"), of BJ Warrants on a when-issued basis. If on any such Trading Day
or Days the BJ Warrants are not quoted on a when-issued basis by any such
organization, the 20 Trading Day period referred to above shall be reduced by
the number of such Trading Days on which the BJ Warrants are not so quoted. If
the BJ Warrants are not quoted on a when-issued basis on any Trading Day during
such 20 Trading Day period, the Warrant Current Market Price shall be deemed to
be $1.00.
Section 3.3 Allocation of Merger Consideration; Election Procedures.
(a) Allocation. Notwithstanding anything in this Agreement to the contrary,
the maximum number of shares of Western Common Stock (the "Cash Election
Number") to be converted into the right to receive Cash Consideration and
Warrant Consideration in the Merger shall be equal to (i) 50% of the number of
shares of Western Common Stock issued and outstanding immediately prior to the
Effective Time of the Merger less (ii) the sum of (A) the number of Dissenting
Shares (as defined in Section 3.5), if any, which are not to be treated as
Non-Election Shares pursuant to Section 3.5, and (B) the number of shares of
Western Common Stock to be cancelled in accordance with Section 3.1(c). The
number of shares of Western Common Stock to be converted into the right to
receive Stock Consideration and Warrant Consideration in the Merger (the "Stock
Election Number") shall be equal to the number of
4
5
shares of Western Common Stock issued and outstanding immediately prior to the
Effective Time of the Merger less the sum of (i) the Cash Election Number, (ii)
the number of Dissenting Shares, if any, which are not to be treated as
Non-Election Shares pursuant to Section 3.5 and (iii) the number of shares of
Western Common Stock to be cancelled in accordance with Section 3.1(c).
(b) Election. Subject to allocation and proration in accordance
with the provisions of this Section 3.1, each record holder of shares of
Western Common Stock (other than Dissenting Shares, if any, which are not to be
treated as Non-Election Shares pursuant to Section 3.5 and shares to be
cancelled in accordance with Section 3.1(c)) issued and outstanding immediately
prior to the Election Deadline (as defined below) shall be entitled to elect to
receive in respect of each such share (in addition to Warrant Consideration)
(i) Cash Consideration (a "Cash Election") or (ii) Stock Consideration (a
"Stock Election") or to indicate that such record holder has no preference as
to the receipt (in addition to Warrant Consideration) of Cash Consideration or
Stock Consideration for such shares (a "Non-Election"). Shares of Western
Common Stock in respect of which a Non-Election is made (including shares in
respect of which such an election is deemed to have been made pursuant to this
Section 3.3 and Section 3.5) (collectively, "Non-Election Shares") shall be
deemed by BJ, in its sole and absolute discretion, to be shares in respect of
which Cash Elections or Stock Elections have been made.
(c) Procedure for Elections. Elections pursuant to Section 3.3(b)
shall be made on a form to be mutually agreed upon by Western and BJ (a "Form
of Election") to be provided by the Exchange Agent (as defined in Section 3.6)
for that purpose to holders of record of Western Common Stock, together with
appropriate transmittal materials, at the time of mailing to holders of record
of Western Common Stock of the Joint Proxy Statement (as defined in Section
4.3) in connection with the Stockholders Meetings referred to in Section 8.3.
Elections shall be made by mailing to the Exchange Agent a duly completed Form
of Election. To be effective, a Form of Election must be (i) properly
completed, signed and submitted to the Exchange Agent at its designated office,
by 5:00 p.m., on the business day that is two Trading Days prior to the Closing
Date (which date shall be publicly announced by BJ as soon as practicable but
in no event less than five Trading Days prior to the Closing Date) (the
"Election Deadline") and (ii) accompanied by the certificates representing the
shares of Western Common Stock as to which the election is being made (or by an
appropriate guarantee of delivery of such certificates by a commercial bank or
trust company in the United States or a member of a registered national
security exchange or of the National Association of Securities Dealers, Inc.,
provided such certificates are in fact delivered to the Exchange Agent within
eight Trading Days after the date of execution of such guarantee of delivery).
Western shall use its best efforts to make a Form of Election available to all
persons who become holders of record of Western Common Stock between the date
of mailing described in the first sentence of this Section 3.3(c) and the
Election Deadline. BJ shall determine, in its sole and absolute discretion,
which authority it may delegate in whole or in part to the Exchange Agent,
whether Forms of Election have been properly completed, signed and submitted or
revoked. The decision of BJ (or the Exchange Agent, as the case may be) in
such matters shall be conclusive and binding. Neither BJ nor the Exchange
Agent will be under any obligation to notify any person of any defect in a Form
of Election submitted to the Exchange Agent. A holder of shares of Western
Common Stock that does not submit an effective Form of Election prior to the
Election Deadline shall be deemed to have made a Non-Election.
(d) Revocation of Election; Return of Certificates. An election
may be revoked, but only by written notice received by the Exchange Agent prior
to the Election Deadline. Any certificate(s) representing shares of Western
Common Stock which have been submitted to the Exchange Agent in connection with
an election shall be returned without charge to the holder thereof in the event
such election is revoked as aforesaid and such holder requests in writing the
return of such certificate(s). Upon any such revocation, unless a duly
completed Election Form is thereafter submitted in accordance with paragraph
(c), such shares shall be Non-Election Shares. In the event that this
Agreement is terminated pursuant to the provisions hereof and any shares of
Western Common Stock
5
6
have been transmitted to the Exchange Agent pursuant to the provisions hereof,
such shares shall promptly be returned without charge to the person submitting
the same.
(e) Proration of Cash Election Shares. In the event that the
aggregate number of shares in respect of which Cash Elections have been made
and, in the case of Non-Election Shares, are deemed to have been made
(collectively, the "Cash Election Shares") exceeds the Cash Election Number,
all shares of Western Common Stock in respect of which Stock Elections have
been made and all Non-Election Shares in respect of which Stock Elections are
deemed to have been made (collectively, the "Stock Election Shares") shall be
converted into the right to receive Stock Consideration (in addition to Warrant
Consideration), and the Cash Election Shares shall be converted into the right
to receive Stock Consideration or Cash Consideration (in addition to Warrant
Consideration) in the following manner:
(i) Cash Election Shares shall be deemed converted to
Stock Election Shares, on a pro-rata basis for each record holder of
Western Common Stock with respect to those shares of Western Common
Stock, if any, of such record holder which are Cash Election Shares,
so that the number of Cash Election Shares so converted, when added to
the other Stock Election Shares, shall equal as closely as practicable
the Stock Election Number, and all such Cash Election Shares so
converted shall be converted into the right to receive Stock
Consideration (and cash in lieu of fractional interests in accordance
with Section 3.4) (in addition to Warrant Consideration); and
(ii) any remaining Cash Election Shares shall be converted
into the right to receive Cash Consideration (in addition to Warrant
Consideration).
(f) Proration of Stock Election Shares. In the event that the
aggregate number of Stock Election Shares exceeds the Stock Election Number,
all Cash Election Shares shall be converted into the right to receive Cash
Consideration (in addition to Warrant Consideration), and all Stock Election
Shares shall be converted into the right to receive Stock Consideration or Cash
Consideration (in addition to Warrant Consideration) in the following manner:
(i) Stock Election Shares shall be deemed converted into
Cash Election Shares, on a pro-rata basis for each record holder of
Western Common Stock with respect to those shares of Western Common
Stock, if any, of such record holder which are Stock Election Shares,
so that the number of Stock Election Shares so converted, when added
to the other Cash Election Shares, shall equal as closely as
practicable the Cash Election Number, and all such shares of Western
Common Stock so converted shall be converted into the right to receive
the Cash Consideration (in addition to Warrant Consideration); and
(ii) the remaining Stock Election Shares shall be
converted into the right to receive the Stock Consideration (and cash
in lieu of fractional interests in accordance with Section 3.4) (in
addition to Warrant Consideration).
(g) No Proration. In the event that neither paragraph (e) nor
paragraph (f) of this Section 3.3 is applicable, all Cash Election Shares shall
be converted into the right to receive Cash Consideration (in addition to
Warrant Consideration) and all Stock Election Shares shall be converted into
the right to receive Stock Consideration (and cash in lieu of fractional
interests in accordance with Section 3.4) (in addition to Warrant
Consideration).
(h) Computations. The Exchange Agent, in consultation with BJ,
shall make all computations to give effect to this Section 3.3.
Section 3.4 Fractional Interests. No certificates or scrip
representing fractional shares of BJ Common Stock and associated BJ Purchase
Rights or fractions of BJ Warrants shall be issued in
6
7
connection with the Merger, and such fractional interests will not entitle the
owner thereof to any rights of a stockholder or warrantholder of BJ. In lieu
of any such fractional securities, each holder of shares of Western Common
Stock exchanged pursuant to Section 3.1(a) who would otherwise have been
entitled to receive a fraction of a share of BJ Common Stock and associated BJ
Purchase Rights or a fraction of a BJ Warrant (after taking into account all
shares of Western Common Stock then held of record by such holder) shall
receive (a) cash (without interest) in an amount equal to the product of such
fractional part of a share of BJ Common Stock multiplied by the Closing Price,
and/or (b) cash (without interest) in an amount equal to the product of such
fraction of a BJ Warrant multiplied by the Warrant Consideration Value.
Section 3.5 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, no share of Western Common Stock, the holder of
which shall have complied with the provisions of Section 262 of the Delaware
Corporation Law as to appraisal rights (a "Dissenting Share"), shall be deemed
converted into and to represent the right to receive Merger Consideration
hereunder; and the holders of Dissenting Shares, if any, shall be entitled to
payment, solely from the Surviving Corporation, of the appraised value of such
Dissenting Shares to the extent permitted by and in accordance with the
provisions of Section 262 of the Delaware Corporation Law; provided, however,
that (i) if any holder of Dissenting Shares shall, under the circumstances
permitted by the Delaware Corporation Law, subsequently deliver a written
withdrawal of his or her demand for appraisal of such Dissenting Shares, or
(ii) if any holder fails to establish his or her entitlement to rights to
payment as provided in such Section 262, or (iii) if neither any holder of
Dissenting Shares nor the Surviving Corporation has filed a petition demanding
a determination of the value of all Dissenting Shares within the time provided
in such Section 262, such holder or holders (as the case may be) shall forfeit
such right to payment for such Dissenting Shares pursuant to such Section 262
and each such Dissenting Share shall thereupon be treated as a Non-Election
Share for purposes of Section 3.3. Western shall give BJ (i) prompt notice of
any written demands for appraisal of any Western Common Stock, attempted
withdrawals of such demands, and any other instruments served pursuant to
applicable law received by Western relating to stockholders' rights of
appraisal and (ii) the opportunity to direct all negotiations and proceedings
with respect to demands for appraisal under the Delaware Corporation Law.
Western shall not, except with the prior written consent of BJ, voluntarily
make any payment with respect to any demands for appraisals of Western Common
Stock, offer to settle or settle any such demands or approve any withdrawal of
any such demands.
Section 3.6 Exchange of Certificates. (a) As soon as practicable
after the execution and delivery of this Agreement and, in any event, not less
than five Trading Days prior to the mailing to holders of Western Common Stock
of the Joint Proxy Statement, BJ shall designate a bank or trust company (or
such other person or persons as shall be reasonably acceptable to BJ and
Western) to act as exchange agent (the "Exchange Agent") in effecting the
exchange of certificates (the "Certificates") that, prior to the Effective
Time, represented shares of Western Common Stock for Merger Consideration
pursuant to Section 3.1(a) hereof (and cash in lieu of fractional interests in
accordance with Section 3.4). Upon the surrender of each such Certificate
representing shares of Western Common Stock, the Exchange Agent shall pay the
holder of such Certificate the Merger Consideration multiplied by the number of
shares of Western Common Stock formerly represented by such Certificate in
exchange therefor (and cash in lieu of fractional interests in accordance with
Section 3.4), and such Certificate shall forthwith be cancelled. Until so
surrendered and exchanged, each such Certificate that prior to the Effective
Time represented shares of Western Common Stock (other than Certificates
representing Dissenting Shares which are not to be treated as Non-Election
Shares pursuant to Section 3.3 or shares of Western Common Stock to be
cancelled in accordance with Section 3.1(c)) shall represent solely the right
to receive Merger Consideration (and cash in lieu of fractional interests in
accordance with Section 3.4). No interest shall be paid or accrue on Merger
Consideration.
7
8
(b) As of or promptly after the Effective Time, BJ shall deposit
or cause to be deposited, in trust with the Exchange Agent, for the benefit of
the holders of shares of Western Common Stock, for exchange in accordance with
this Article III, the aggregate Merger Consideration.
(c) The cash portion of the aggregate Merger Consideration shall
be invested by the Exchange Agent, as directed by and for the benefit of the
Surviving Corporation, provided that such investments shall be limited to
direct obligations of the United States of America, obligations for which the
full faith and credit of the United States of America is pledged to provide for
the payment of principal and interest, commercial paper rated of the highest
quality by Xxxxx'x Investors Service, Inc. ("Moody's") or Standard & Poor's
Ratings Group, a division of XxXxxx-Xxxx, Inc. ("S&P"), and certificates of
deposit issued by a commercial bank whose long-term debt obligations are rated
at least A2 by Moody's or at least A by S&P, in each case having a maturity not
in excess of one year.
(d) Promptly following the date which is six months after the
Effective Time, the Exchange Agent shall deliver to the Surviving Corporation
all cash, shares of BJ Common Stock, Certificates and other documents in its
possession relating to the transactions described in this Agreement, and the
Exchange Agent's duties shall terminate. Thereafter, each holder of a
Certificate may surrender such Certificate to the Surviving Corporation and
(subject to applicable abandoned property, escheat and similar laws and, in the
case of Dissenting Shares, subject to applicable law) receive in exchange
therefor the applicable Merger Consideration (and cash in lieu of fractional
interests in accordance with Section 3.4), without any interest or dividends or
other payments thereon.
(e) After the Effective Time, there shall be no transfers on the
stock transfer books of the Surviving Corporation of any shares of Western
Common Stock. If, after the Effective Time, Certificates formerly representing
shares of Western Common Stock are presented to the Surviving Corporation or
the Exchange Agent, they shall be cancelled and (subject to applicable
abandoned property, escheat and similar laws and, in the case of Dissenting
Shares, subject to applicable law) exchanged for Merger Consideration (and cash
in lieu of fractional interests in accordance with Section 3.4), as provided in
this Article III.
(f) No dividends or other distributions declared or made after the
Effective Time with respect to shares of BJ Common Stock shall be paid to the
holder of any unsurrendered Certificate with respect to the shares of BJ Common
Stock they are entitled to receive and no cash payment in lieu of fractional
interests shall be paid pursuant to Section 3.4 until the holder of such
Certificate shall surrender such Certificate, in accordance with the provisions
of this Agreement.
Section 3.7 No Liability. Neither BJ nor the Surviving Corporation
shall be liable to any holder of shares of Western Common Stock for any Merger
Consideration in respect of such shares (or dividends or distributions with
respect thereto) delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. In the event any Certificate shall
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming such Certificate to be lost, stolen or destroyed
and, if required by BJ, the posting by such person of a bond in customary form
and amount as indemnity against any claim that may be made against it with
respect to such Certificate, the Exchange Agent will issue in exchange for such
lost, stolen or destroyed Certificate the Merger Consideration (and cash in
lieu of fractional interests in accordance with Section 3.4), without any
interest or dividends or other payments thereon, upon due surrender of and
deliverable in respect of such Certificate pursuant to this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BJ
BJ represents and warrants to Western as follows, except as set forth
in the disclosure letter delivered to Western by BJ on or prior to the date
hereof(the "BJ Disclosure Memorandum"):
8
9
Section 4.1 Organization and Qualification. BJ is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to own its assets
and to carry on its business as it is now being conducted or proposed to be
conducted. BJ is duly qualified as a foreign corporation to do business, and
is in good standing, in each jurisdiction where the character of its properties
owned or held under lease or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified or be in
good standing is not reasonably likely, individually or in the aggregate, to
have a BJ Material Adverse Effect (as defined below).
As used in this Agreement, the term "BJ Material Adverse Effect" means
a material adverse effect on the business, properties, assets, financial
condition or results of operations of BJ and its subsidiaries taken as a whole;
provided, however, that any change or changes in, or caused by, the prices of
oil, gas or chemical products, general economic conditions or local, regional,
national or international industry conditions shall not be deemed to constitute
a BJ Material Adverse Effect, it also being understood that a BJ Material
Adverse Effect shall not include a change with respect to BJ resulting from any
change in law, rule or regulation or generally accepted accounting principles,
consistently applied, that applies to both BJ and Western.
Section 4.2 Capitalization. As of the date hereof, the authorized
capital stock of BJ consists of 40,000,000 shares of BJ Common Stock and
5,000,000 shares of preferred stock, without par value. As of November 11,
1994, 15,717,270 shares of BJ Common Stock (together with the associated BJ
Purchase Rights) were validly issued and outstanding, fully paid and
nonassessable and no other shares of BJ's capital stock were outstanding. Since
November 11, 1994, no shares of BJ's capital stock have been issued, except for
shares of BJ Common Stock issued pursuant to (i) the exercise of stock options
granted to employees under BJ's 1990 Stock Option Plan ("BJ Options") and (ii)
pursuant to other employee plans disclosed in the BJ SEC Documents (as defined
in Section 4.5 hereof) ("Other Plans"). Except for (i) BJ Options, (ii) the BJ
Purchase Rights and (iii) the Other Plans, as of the date hereof there are no
options, warrants, calls, subscriptions, rights, agreements, commitments or
other obligations outstanding obligating BJ to issue or sell shares of its
capital stock or any securities exercisable or exchangeable for or convertible
into any shares of its capital stock. There are no voting trusts or other
agreements or understandings to which BJ or any of its subsidiaries is a party
or by which BJ or any of its subsidiaries is bound with respect to the voting
of BJ Common Stock or the stock of any subsidiary of BJ. Except as disclosed
prior to the date hereof in the BJ SEC Documents (as defined in Section 4.5),
there are no agreements or other understandings to which BJ or any of its
subsidiaries is a party or by which BJ or any of its subsidiaries is bound with
respect to the repurchase, redemption or other acquisition of or payment in
respect of any shares of capital stock of BJ or any of its subsidiaries. Each
of the shares of BJ Common Stock issuable in accordance with this Agreement in
exchange for Western Common Stock at the Effective Time will be, when so
issued, duly authorized, validly issued, fully paid and nonassessable and free
of preemptive rights, and will include an associated BJ Purchase Right.
Section 4.3 BJ Subsidiaries. Each Significant Subsidiary (as defined
in Rule 12b-1 under the Exchange Act) of BJ is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority to own its
assets and to carry on its business as it is now being conducted or proposed to
be conducted. Each such Significant Subsidiary of BJ is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties directly or indirectly owned
or held under lease or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified or be in such good
standing is not, individually or in the aggregate, reasonably likely to have a
BJ Material Adverse Effect. Except as disclosed in the BJ SEC Documents and
except for directors' qualifying shares, all the outstanding shares of capital
stock of each such Significant Subsidiary of BJ are directly or indirectly
owned (of record and beneficially) by BJ or a wholly owned subsidiary of BJ.
All the outstanding shares of capital stock of such Significant Subsidiaries of
BJ are
9
10
validly issued, fully paid and nonassessable, and those shares owned by BJ or
by a subsidiary of BJ are owned free and clear of any pledges, liens, claims,
security interests or other encumbrances of any kind other than those arising
pursuant to the certificate of incorporation or bylaws or other organizational
document of such Significant Subsidiary, as required by law or pursuant to an
agreement among the equity owners of such Significant Subsidiary to which BJ,
directly or indirectly through a subsidiary, is a party. As of the date
hereof, there are no options, warrants, calls, subscriptions, rights,
agreements, commitments or other obligations of any character relating to the
issued or unissued capital stock or other securities of any of the Significant
Subsidiaries of BJ other than those arising pursuant to the certificate of
incorporation or bylaws or other organizational document of such Significant
Subsidiary, as required by law pursuant to an agreement among the equity owners
of such Significant Subsidiary to which BJ, directly or indirectly through a
subsidiary, is a party. BJ does not directly or indirectly have any investment
in any corporation, partnership, joint venture or other business association or
entity which equity investment was when initially made, or has a current market
value as of the date hereof, in excess of $750,000, except as disclosed prior
to the date of this Agreement in the BJ SEC Documents.
Section 4.4 Authority Relative to this Agreement. BJ has the
requisite corporate power and authority to enter into this Agreement and the
Warrant Agreement and to carry out its obligations hereunder and thereunder.
The execution and delivery of each of this Agreement and the Warrant Agreement
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by BJ's Board of Directors and, except for the approval of
its stockholders as contemplated in Section 8.3, no other corporate
proceedings on the part of BJ are necessary to authorize any of this Agreement,
the Warrant Agreement and the consummation of the transactions contemplated
hereby and thereby. This Agreement has been duly executed, acknowledged and
delivered by each of BJ and BJ Sub and (assuming the valid authorization,
execution and delivery of this Agreement by Western) is a valid and binding
obligation of BJ and of BJ Sub, enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting creditors'
rights generally or by equitable principles. When executed and delivered by BJ
at the Closing, the Warrant Agreement will be a valid and binding obligation of
BJ, enforceable in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting creditors' rights generally or by general equitable
principles and except that indemnification for certain matters pertaining to
federal and state securities laws may not be enforceable by reason of
applicable public policy. Neither BJ nor BJ Sub is subject to or obligated
under (i) any charter or bylaw provision or (ii) any other contract, indenture,
loan document, license, franchise, permit, order, decree or instrument binding
on BJ or any of its subsidiaries which would be breached or violated by its
executing and performing this Agreement and the transactions contemplated
hereby or, with respect to BJ, the Warrant Agreement (or pursuant to which the
transactions contemplated hereby may give rise to any right of termination,
cancellation, acceleration or payment) other than, in the case of clause (ii)
only, any breaches or violations (or rights of termination, cancellation,
acceleration or payment) which will not, either singly or in the aggregate,
have a BJ Material Adverse Effect or materially impair the ability of BJ to
perform its obligations hereunder or under the Warrant Agreement. Except as
referred to herein or in connection, or in compliance, with the provisions of
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 (the "Xxxx Xxxxx
Act"), the Securities Act of 1933, as amended, and the rules promulgated
thereunder (the "Securities Act"), the Securities Exchange Act of 1934, as
amended, and the rules promulgated thereunder (the "Exchange Act"), applicable
NYSE rules or rules promulgated by the National Association of Securities
Dealers, Inc. ("NASD") and the corporation, securities, takeover or blue sky
laws of the various states, no filing or registration with, or authorization,
consent or approval of, any public body or authority is necessary for the
consummation by BJ of the Merger or the other transactions contemplated by this
Agreement and the Warrant Agreement, other than such as may be required solely
because Western is a party to the Merger, except where the failure to so file
or register or to obtain such authorizations, consents or approvals is not
reasonably likely to have a BJ Material Adverse Effect.
10
11
Section 4.5 Reports and Financial Statements. BJ has filed with the
Securities and Exchange Commission (the "Commission") all prospectuses, proxy
statements and reports (including all exhibits and schedules thereto and
documents incorporated by reference therein) which were required under the
Securities Act or the Exchange Act to be filed with the Commission by BJ since
December 31, 1991, and will file all proxy statements and reports (including
all exhibits and schedules thereto and documents incorporated by reference
therein) required to be filed after the date hereof and prior to the Effective
Time (collectively, the "BJ SEC Documents"). As of their respective dates, the
BJ SEC Documents filed with the Commission prior to the date hereof complied in
all material respects with all material requirements of the Securities Act or
the Exchange Act, as the case may be, and the BJ SEC Documents to be filed with
the Commission after the date hereof will so comply. BJ has made available to
Western copies of all BJ SEC Documents filed with the Commission prior to the
date hereof and will deliver promptly to Western after they are filed with the
Commission all BJ SEC Documents filed after the date hereof. None of the BJ
SEC Documents contained, or will contain, as of its date, any untrue statement
of a material fact or omitted or will omit, to state a material fact required
to be stated therein or necessary to make the statements made, in light of the
circumstances under which they were made, not misleading. The (i) audited
fiscal year end consolidated statements of financial position and related
consolidated statements of operations, stockholders' equity and cash flows,
including the notes thereto, together with the reports thereon of BJ's
independent public accountants, and (ii) unaudited interim consolidated
statements of financial position and the related unaudited interim consolidated
statements of operations, stockholders' equity and cash flows, which are, or
will be, included in the BJ SEC Documents or incorporated by reference therein
present, or will present, in accordance with the books and records of BJ and
its subsidiaries, fairly the financial position, results of operations, cash
flows and financial position of BJ and its subsidiaries as of the dates and for
the periods indicated and are, or will be, in conformity with generally
accepted accounting principles, except, in the case of interim financial
statements, for the lack of explanatory footnote disclosures required by
generally accepted accounting principles, and subject to normal year end audit
adjustments. BJ's consolidated balance sheet at June 30, 1994 included in the
BJ SEC Documents is hereinafter called the "Latest BJ Balance Sheet." There is
no liability or obligation of any kind, whether accrued, absolute, fixed or
contingent, of BJ or any subsidiary of BJ required by generally accepted
accounting principles to be reflected or reserved against or otherwise
disclosed in the Latest BJ Balance Sheet which is not so reflected or reserved
against of which the executive officers of BJ have knowledge, that individually
or in the aggregate is reasonably likely to have a BJ Material Adverse Effect,
except for normal year-end adjustments and other adjustments described in the
Latest BJ Balance Sheet.
Section 4.6 Absence of Certain Changes or Events. Except as
disclosed prior to the date of this Agreement in BJ SEC Documents, since
September 30, 1993, the respective businesses of BJ and its subsidiaries have
been conducted only in the ordinary course and consistent with past practice
and there has not been (i) any change in the business, assets, liabilities,
financial condition or results of operations of BJ and its subsidiaries, taken
as a whole, that is reasonably likely to (x) have a BJ Material Adverse Effect
or (y) as of the date hereof, materially impair the ability of BJ to perform
its obligations hereunder or (ii) any material change by BJ or its subsidiaries
in accounting principles or methods except insofar as required by a change in
generally accepted accounting principles or rules of the Commission.
Section 4.7 Tax Matters. Each of BJ and each of its Significant
Subsidiaries, and any consolidated, combined, unitary or aggregate group for
tax purposes of which BJ or any of its Significant Subsidiaries is or has been
a member, has timely filed all material Tax Returns (as hereinafter defined)
required to be filed by it, has paid all Taxes (as hereinafter defined) shown
thereon to be due and has provided adequate reserves in its financial
statements for any Taxes that have not been paid but are properly accruable
under generally accepted accounting principles, whether or not shown as being
due on any returns. Except to the extent that the inaccuracy of any of the
following, individually or in the aggregate, is not reasonably likely to have a
BJ Material Adverse
11
12
Effect, no claim for unpaid Taxes has become a lien or encumbrance of any kind
against the property of BJ or any of its Significant Subsidiaries or is being
asserted against BJ or any of its Significant Subsidiaries; no audit of any Tax
Return of BJ or any of its Significant Subsidiaries is being conducted by a Tax
authority; and no extension of the statute of limitations on the assessment of
any Taxes has been granted by BJ or any of its Significant Subsidiaries and is
currently in effect. As used herein, "Taxes" shall mean any taxes of any kind,
including but not limited to those measured by or referred to as income, gross
receipts, sales, use, ad valorem, franchise, profits, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, value
added, property or windfall profits or assessments of any kind whatsoever,
together with any interest and any penalties, additions to tax or additional
amounts imposed by any governmental authority, domestic or foreign. Neither BJ
nor any of its Significant Subsidiaries has made an election under Section
341(f) of the Internal Revenue Code. As used herein, "Tax Return" shall mean
any return, report or statement required to be filed with any governmental
authority with respect to Taxes.
Section 4.8 Environmental Matters. (a) Except to the extent that
the inaccuracy of any of the following, individually or in the aggregate, is
not reasonably likely to have a BJ Material Adverse Effect, to the knowledge of
the executive officers of BJ:
(i) BJ and its subsidiaries hold, and are in compliance
with and have been in compliance with for the last two years, all
Environmental Permits (as hereinafter defined), and are otherwise in
substantial compliance and have been in substantial compliance for the
last two years with, all applicable Environmental Laws (as hereinafter
defined) and there is no condition that is reasonably likely to
prevent or materially interfere in the near future with compliance by
BJ and its subsidiaries with Environmental Laws;
(ii) no modification, revocation, reissuance, alteration,
transfer or amendment of any Environmental Permit, or any review by,
or approval of, any third party of any Environmental Permit is
required in connection with the execution or delivery of this
Agreement or the consummation by BJ of the transactions contemplated
hereby or the operation of the business of BJ or any of its
subsidiaries on the Closing Date;
(iii) neither BJ nor any of its subsidiaries has received
any Environmental Claim (as hereinafter defined), nor has any
Environmental Claim been threatened against BJ or any of its
subsidiaries;
(iv) neither BJ nor any of its subsidiaries has entered
into, agreed to or is subject to any outstanding judgment, decree,
order or consent arrangement with any governmental authority under any
Environmental Laws, including without limitation those relating to
compliance with any Environmental Laws or to the investigation,
cleanup, remediation or removal of Hazardous Materials (as hereinafter
defined);
(v) there are no circumstances that are reasonably likely
to give rise to liability under any agreements with any person
pursuant to which BJ or any subsidiary of BJ would be required to
defend, indemnify, hold harmless, or otherwise be responsible for any
violation by or other liability or expense of such person, or alleged
violation by or other liability or expense of such person, arising out
of any Environmental Law; and
(vi) there are no other circumstances or conditions that
are reasonably likely to give rise to liability of BJ or any of its
subsidiaries under any Environmental Laws.
(b) For purposes of this Agreement, the terms below shall have the
following meanings:
"Environmental Claim" means any written complaint, notice,
claim, demand, action, suit or judicial, administrative or arbitral
proceeding by any person to BJ or any of its
12
13
subsidiaries (or, for purposes of Section 6.10, Western or any of its
subsidiaries) asserting liability or potential liability (including
without limitation liability or potential liability for investigatory
costs, cleanup costs, governmental response costs, natural resource
damages, property damage, personal injury, fines or penalties) arising
out of, relating to, based on or resulting from (i) the presence,
discharge, emission, release or threatened release of any Hazardous
Materials at any location, (ii) circumstances forming the basis of any
violation or alleged violation of any Environmental Laws or
Environmental Permits, or (iii) otherwise relating to obligations or
liabilities under any Environmental Law.
"Environmental Permits" means all permits, licenses,
registrations, exemptions and other governmental authorizations
required under Environmental Laws for BJ or any of its subsidiaries
(or, for purposes of Section 6.10, Western or any of its subsidiaries)
to conduct their operations as presently conducted.
"Environmental Laws" means all applicable foreign, federal,
state and local statutes, rules, regulations, ordinances, orders,
decrees and common law relating in any manner to pollution or
protection of the environment, to the extent and in the form that such
exist at the date hereof.
"Hazardous Materials" means all hazardous or toxic substances,
wastes, materials or chemicals, petroleum (including crude oil or any
fraction thereof) and petroleum products, asbestos and
asbestos-containing materials, pollutants, contaminants and all other
materials and substances, including but not limited to radioactive
materials regulated pursuant to any Environmental Laws or that could
result in liability under any Environmental Laws.
Section 4.9 Litigation. Except as disclosed prior to the date hereof
in BJ SEC Documents, there is no suit, action, investigation or proceeding
pending or, to the knowledge of the executive officers of BJ, threatened
against or affecting BJ or any of its subsidiaries at law or in equity before
or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind, that is reasonably likely to have a BJ
Material Adverse Effect or (with respect to such matters that are pending or
threatened as of the date hereof) materially impair the ability of BJ to
perform its obligations hereunder and there is no judgment, decree, injunction,
rule or order of any court, governmental department,commission, board, bureau,
agency, instrumentality or arbitrator outstanding against or applicable to BJ
or any of its subsidiaries that is reasonably likely to have a BJ Material
Adverse Effect or (with respect to such items that are outstanding or
applicable as of the date hereof) materially impair the ability of BJ to
perform its obligations hereunder.
Section 4.10 Governmental Licenses and Permits; Compliance with Law.
Except as disclosed prior to the date hereof in the BJ SEC Documents, since
September 30, 1993 neither BJ nor any of its Significant Subsidiaries has
received notice of any revocation or modification of any federal, state, local
or foreign governmental license, certification, tariff, permit, authorization
or approval the revocation or modification of which has had or is reasonably
likely to have a BJ Material Adverse Effect. To the knowledge of the executive
officers of BJ, the conduct of the business of each of BJ and its subsidiaries
complies with all statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees or arbitration awards applicable thereto, except for violations
or failures to comply, if any, that, individually or in the aggregate, are not
reasonably likely to have a BJ Material Adverse Effect.
Section 4.11 Required Vote of BJ Stockholders. The affirmative vote
of holders of outstanding shares of BJ Common Stock provided for in NYSE Rule
312.05 is required to approve this Agreement and the issuance of BJ Common
Stock and BJ Warrants in the Merger. No other vote of the stockholders of BJ
is required by law, the Restated Certificate of Incorporation or Bylaws of BJ
or otherwise to approve this Agreement and the transactions contemplated
hereby.
13
14
Section 4.12 BJ Action. The Board of Directors of BJ (at a meeting
duly called and held on November 17, 1994) unanimously (a) determined that the
Merger is fair to and in the best interests of BJ and its stockholders, (b)
approved this Agreement and the issuance of BJ Common Stock and BJ Warrants in
the Merger, (c) resolved to recommend approval by BJ's stockholders of this
Agreement and the issuance of BJ Common Stock and BJ Warrants in the Merger and
(d) directed that this Agreement be submitted to BJ's stockholders for their
approval, including approval of the Stock Consideration and Warrant
Consideration to be issued pursuant to this Agreement.
Section 4.13 Opinion of Financial Advisor. On the date hereof, BJ
has received the opinion of Xxxxxxx Xxxxx & Co. to the effect that the Merger
is fair to BJ's stockholders.
Section 4.14 Brokers and Finders. Except for Xxxxxxx Xxxxx & Co, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with this Agreement or the Merger based
upon arrangements made by or on behalf of BJ or BJ Sub. Except as expressly
set forth in this Agreement, no valid claim against BJ or BJ Sub or, to the
knowledge of the executive officers of BJ, against Western exists for payment
of any fee or other compensation as a result of any of the transactions
contemplated hereby.
Section 4.15 Available Funds. BJ will have available to it at the
Effective Time all funds necessary to satisfy all of its obligations hereunder
and in connection with the transactions contemplated herein.
ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING BJ SUB
BJ and BJ Sub jointly and severally represent and warrant to Western
as follows:
Section 5.1 Organization. BJ Sub is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
BJ Sub has not engaged in any business since it was incorporated, except in
connection with the Merger and the other transactions contemplated hereby.
Section 5.2 Capitalization. The authorized capital stock of BJ Sub
consists of 1,000 shares of common stock, par value $0.01 per share, 100 shares
of which are validly issued and outstanding, fully paid and nonassessable and
are owned by BJ free and clear of all liens, claims and encumbrances.
Section 5.3 Authority Relative to this Agreement. BJ Sub has the
requisite corporate power and authority to enter into this Agreement and to
carry out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by BJ Sub's Board of Directors and its sole stockholder
and no other corporate proceedings on the part of BJ Sub are necessary to
authorize this Agreement and the consummation of the transactions contemplated
hereby. Except as referred to herein or in connection, or in compliance, with
the provisions of the Act, the Securities Act, the Exchange Act, applicable
NYSE rules and the corporation, securities, takeover or blue sky laws of the
various states, no filing or registration with, or authorization, consent or
approval of, any public body or authority is necessary for the consummation by
BJ Sub of the Merger or the other transactions contemplated by this Agreement,
other than such as may be required solely because Western is a party to the
Merger.
14
15
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF WESTERN
Western represents and warrants to BJ and BJ Sub, except as set forth
in the disclosure letter delivered to BJ by Western on or prior to the date
hereof (the "Western Disclosure Memorandum") as follows:
Section 6.1 Organization and Qualification. Western is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power and authority to own
its assets and to carry on its business as it is now being conducted or
proposed to be conducted. Western is duly qualified as a foreign corporation
to do business, and is in good standing, in each jurisdiction where the
character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to be
so qualified or be in such good standing is not reasonably likely to,
individually or in the aggregate, have a Western Material Adverse Effect (as
defined below).
As used in this Agreement, the term "Western Material Adverse Effect"
means a material adverse effect on the business, properties, assets, financial
condition or results of operations of Western and its subsidiaries taken as a
whole; provided, however, that any change or changes in, or caused by, the
prices of oil, gas or chemical products, general economic conditions or local,
regional, national or international industry conditions shall not be deemed to
constitute a Western Material Adverse Effect, it also being understood that a
Western Material Adverse Effect shall not include a change with respect to
Western resulting from any change in law, rule or regulation or generally
accepted accounting principles, consistently applied, that applies to both BJ
and Western.
Section 6.2 Capitalization. The authorized capital stock of Western
consists of 50,000,000 shares of Western Common Stock and 6,000,000 shares of
preferred stock, without par value ("Western Preferred Stock"). As of November
11, 1994, 18,243,238 shares of Western Common Stock were validly issued and
outstanding, fully paid and nonassessable and no other shares of Western's
capital stock were outstanding. As of November 9, 1994, Western had
outstanding options to purchase, in the aggregate, 1,018,714 shares of Western
Common Stock granted under the Western Plans (as defined in Section 6.7), which
includes options to purchase 268,750 shares of Western Common Stock granted
under an agreement, dated May 12, 1989, with an executive officer of Western,
options to purchase 37,500 shares of Western Common Stock granted under
Western's Non-Employee Directors' Plan and options to purchase 712,464 shares
of Western Common Stock granted under Western's Long-Term Performance Incentive
Plan (collectively, the "Western Options"). As of October 31, 1994, there was
outstanding $88,746,000 principal amount of Western Convertible Debentures
convertible into 5,220,352 shares of Western Common Stock. Since November 11,
1994, no shares of Western's capital stock have been issued. Except for
Western Options, Western Convertible Debentures and the preferred stock
purchase rights (the "Western Rights") issued pursuant to Western's
Stockholders Protection Rights Agreement dated as of March 5, 1990, as amended
(the "Western Rights Agreement"), there are no options, warrants, calls,
subscriptions, rights, agreements, commitments or other obligations outstanding
obligating Western to issue or sell any shares of its capital stock or any
securities exercisable or exchangeable for or convertible into any shares of
its capital stock. There are no voting trusts or other agreements or
understandings to which Western or any of its subsidiaries is a party or by
which Western or any of its subsidiaries is bound with respect to the voting of
Western Common Stock or the stock of any subsidiary of Western. Western has
provided to BJ true and correct lists of the record holders as of November 9,
1994 of all Western Options. Except as disclosed prior to the date hereof in
the Western SEC Documents (as defined in Section 6.5), there are no agreements
or other understandings to which Western or any of its subsidiaries is a party
or by which Western or any of its subsidiaries is bound with respect to the
repurchase, redemption or other acquisition of or payment in respect of any
shares of capital stock of Western or any of its subsidiaries.
15
16
Section 6.3 Western Subsidiaries. Each Significant Subsidiary (as
defined in Rule 12b-1 under the Exchange Act) of Western is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the requisite corporate power and
authority to own its assets and to carry on its business as it is now being
conducted or proposed to be conducted. Each such Significant Subsidiary of
Western is duly qualified as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of its properties
directly or indirectly owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to be
so qualified or be in such good standing is not, individually or in the
aggregate, reasonably likely to have a Western Material Adverse Effect. Except
as disclosed in the Western SEC Documents all the outstanding shares of capital
stock of each such Significant Subsidiary of Western are directly or indirectly
owned (of record and beneficially) by Western or a wholly owned subsidiary of
Western. All the outstanding shares of capital stock of such Significant
Subsidiaries of Western are validly issued, fully paid and nonassessable, and
those shares owned by Western or by a subsidiary of Western are owned free and
clear of any pledges, liens, claims, security interests or other encumbrances
of any kind other than those arising pursuant to the certificate of
incorporation or bylaws or other organizational document of such Significant
Subsidiary, as required by law or pursuant to an agreement among the equity
owners of such Significant Subsidiary to which Western, directly or indirectly
through a subsidiary, is a party. As of the date hereof, there are no options,
warrants, calls, subscriptions, rights, agreements, commitments or other
obligations of any character relating to the issued or unissued capital stock
or other securities of any of the Significant Subsidiaries of Western other
than those arising pursuant to the certificate of incorporation or bylaws or
other organizational document of such Significant Subsidiary, as required by
law or pursuant to an agreement among the equity owners of such Significant
Subsidiary to which Western, directly or indirectly through a subsidiary, is a
party. Western does not directly or indirectly have any equity investment in
any corporation, partnership, joint venture or other business association or
entity which equity investment was when initially made, or has a current market
value as of the date hereof, in excess of $750,000, except as disclosed prior
to the date of this Agreement in the Western SEC Documents.
Section 6.4 Authority Relative to this Agreement. Subject to the
approval of this Agreement by the holders of at least two-thirds of the
outstanding shares of Western Common Stock, Western has the requisite corporate
power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by Western's Board of Directors and, except for the approval of its
stockholders as contemplated in Section 8.3, no other corporate proceedings on
the part of Western are necessary to authorize this Agreement and the
consummation of the transactions contemplated hereby. This Agreement has been
duly executed, acknowledged and delivered by Western and (assuming the valid
authorization, execution and delivery of this Agreement and the transactions
contemplated hereby by each of BJ and BJ Sub) is a valid and binding obligation
of Western, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting creditors' rights generally
or by equitable principles and except that indemnification for certain matters
pertaining to federal and state securities laws may not be enforceable by
reason of applicable public policy. Western is not subject to or obligated
under (i) any charter or bylaw provision or (ii) any other contract, indenture,
loan document, license, franchise, permit, order, decree or instrument (except
for master service contracts which are terminable upon no more than 90 days'
notice) binding on Western or any of its subsidiaries which would be breached
or violated by its executing and performing this Agreement and the transactions
contemplated hereby (or pursuant to which the transactions contemplated hereby
may give rise to any right of termination, cancellation, acceleration or
payment) other than, in the case of clause (ii) only, any breaches or
violations (or rights of termination, cancellation, acceleration or payment)
which will not, either singly or in the aggregate, have a Western Material
Adverse Effect or materially impair the ability of Western to perform its
obligations hereunder. Except as referred to herein or in connection, or in
compliance, with the provisions of the Xxxx Xxxxx Act, the Securities Act, the
Exchange Act, applicable NYSE rules and the
16
17
corporation, securities, takeover or blue sky laws of the various states, no
filing or registration with, or authorization, consent or approval of, any
public body or authority is necessary for the consummation by Western of the
Merger or the other transactions contemplated by this Agreement, other than
such as may be required solely because BJ or BJ Sub is a party to the Merger,
except where the failure to so file or register or to obtain such
authorizations, consents or approvals is not reasonably likely to have a
Western Material Adverse Effect.
Section 6.5 Reports and Financial Statements. Western has filed with
the Commission all prospectuses, proxy statements and reports (including all
exhibits and schedules thereto and documents incorporated by reference therein)
which were required under the Securities Act or the Exchange Act to be filed
with the Commission by Western since December 31, 1991, and will file all proxy
statements and reports (including all exhibits and schedules thereto and
documents incorporated by reference therein) required to be filed after the
date hereof and prior to the Effective Time (collectively, the "Western SEC
Documents"). As of their respective dates, the Western SEC Documents filed with
the Commission prior to the date hereof complied in all material respects with
all material requirements of the Securities Act or the Exchange Act, as the
case may be, and the Western SEC Documents to be filed with the Commission
after the date hereof will so comply. Western has made available to BJ copies
of all Western SEC Documents filed with the Commission prior to the date hereof
and will deliver promptly to BJ after they are filed with the Commission all
Western SEC Documents filed after the date hereof. None of the Western SEC
Documents contained, or will contain, as of its date, any untrue statement of a
material fact or omitted, or will omit, to state a material fact required to be
stated therein or necessary to make the statements made, in light of the
circumstances under which they were made, not misleading. The (i) audited
fiscal year end consolidated balance sheets and related consolidated statements
of operations, stockholders' equity and cash flows, including the notes
thereto, together with the reports thereon of Western's independent public
accountants, and (ii) unaudited interim consolidated balance sheets and the
related unaudited interim consolidated statements of operations, stockholders'
equity and cash flows, which are, or will be, included in Western SEC Documents
or incorporated by reference therein, present, or will present, in accordance
with the books and records of Western and its subsidiaries, fairly the
financial position, results of income, cash flows and financial position of
Western and its subsidiaries as of the dates and for the periods indicated and
are, or will be, in conformity with generally accepted accounting principles,
except, in the case of interim financial statements, for the lack of
explanatory footnote disclosures required by generally accepted accounting
principles, and subject to normal year end audit adjustments. Western's
consolidated balance sheet at September 30, 1994 included in the Western SEC
Documents is hereinafter called the "Latest Western Balance Sheet." There is
no liability or obligation of any kind, whether accrued, absolute, fixed or
contingent, of Western or any subsidiary of Western required by generally
accepted accounting principles to be reflected or reserved against or otherwise
disclosed in the Latest Western Balance Sheet which is not so reflected or
reserved against of which the executive officers of Western have knowledge,
that individually or in the aggregate is reasonably likely to have a Western
Material Adverse Effect, except for normal year-end adjustments and other
adjustments described in the Latest Western Balance Sheet.
Section 6.6 Absence of Certain Changes or Events. Except as
disclosed prior to the date of this Agreement in the Western SEC Documents,
since December 31, 1993, (a) the respective businesses of Western and its
subsidiaries have been conducted only in the ordinary course and consistent
with past practice, (b) there has not been any change in the business, assets,
properties, financial condition or results of operations of Western and its
subsidiaries, taken as a whole, that is reasonably likely to (x) have a Western
Material Adverse Effect (it being acknowledged by BJ that the public
announcement on September 13, 1994 by BJ of its proposal to acquire Western and
subsequent events related thereto, including, without limitation, entering into
this Agreement and the transactions contemplated hereby, could have a negative
impact on operating results prior to the Effective Time) or (y) as of the date
hereof, materially impair the ability of Western to perform its obligations
hereunder and (c) there has not been:
17
18
(i) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of capital
stock of Western, or any repurchase, redemption or other acquisition
by Western of any outstanding shares of capital stock or other equity
securities of Western or any options, warrants or rights of any kind
to acquire any, or any securities exercisable or exchangeable for or
convertible into shares of, capital stock or other equity securities
of Western (other than the extinguishment of options upon the exercise
of Western Options and other than purchases of Western Common Stock by
the trustee under the Western Retirement Savings Plan);
(ii) any change in any method of accounting or accounting
practice by Western, except for any such change required to be
implemented pursuant to generally accepted accounting principles or
rules of the Commission; or
(iii) any (A) grant of any severance or termination pay to
any director, officer or employee of Western or any of its
subsidiaries (other than settlement arrangements with employees other
than officers in accordance with past practice and pursuant to which
Western or its subsidiaries obtain certain waivers of rights), (B)
entering into of any employment, deferred compensation or other
similar agreement (or any amendment to any such existing agreement)
with any director, officer or employee of Western or any subsidiary
thereof, (C) any increase in benefits payable under any existing
severance or termination pay policies or employment agreements, or (D)
any increase in compensation, bonus or other benefits payable to
directors, officers or employees of Western or any subsidiary thereof,
other than in the ordinary course (including normal individual
periodic performance reviews and related compensation and benefit
increases and bonus payments and awards under existing plans).
Section 6.7 Benefit Plans. (a) Section 6.7(a) of the Western
Disclosure Memorandum contains a complete list of each "employee benefit plan"
(within the meaning of section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")), and all other employee benefit plans,
agreements, programs, policies or other arrangements, whether or not subject to
ERISA (including, without limitation, multiemployer plans within the meaning of
ERISA section 3(37), stock purchase, stock option, severance, employment,
change-in-control, fringe benefit, bonus, incentive or deferred compensation
plans) under which any employee or director or former employee or director of
Western, including any beneficiary thereof, has any present or future right to
benefits or under which Western has any present or future liability (other than
payments by insurance companies under terminated insurance contracts). All
such plans, agreements, programs, policies and arrangements shall be
collectively referred to as the "Western Plans".
(b) With respect to each Western Plan, Western has delivered or,
in the case of clauses (i), (ii) and (iv) below, made available to BJ a
current, accurate and complete copy (or, to the extent no such copy exists, an
accurate description) thereof and, to the extent applicable: (i) any related
trust agreement, annuity contract or other funding instrument; (ii) the most
recent Internal Revenue Service determination letter; (iii) any summary plan
description and other written communications by Western to its employees which
are materially inconsistent with any summary plan description; and (iv) the
most recent (I) Form 5500 and attached schedules; (II) audited financial
statements; (III) actuarial valuation reports; and (IV) attorney's response to
an auditor's request for information.
(c) (i) Each Western Plan has been established and administered in
accordance with its terms, and in substantial compliance with the applicable
provisions of ERISA, the Internal Revenue Code of 1986, as amended (the "Code")
and other applicable laws, rules and regulations; (ii) each Western Plan which
is intended to be qualified within the meaning of Code section 401(a) is so
qualified and has received a favorable determination letter as to its
qualification and nothing has occurred to the knowledge of the executive
officers of Western, whether by action or failure to act, which would cause the
loss of such qualification; and (iii) with respect to any Western Plan, no
actions,
18
19
suits or claims (other than routine claims for benefits in the ordinary course)
are pending or, to the knowledge of the executive officers of Western,
threatened. Western will promptly notify BJ in writing of any pending or
threatened claims arising between the date hereof and the Closing Date (other
than routine claims for benefits in the ordinary course). No event has
occurred and no condition exists with respect to or relating to any Western
Plan that is reasonably likely to subject Western, either directly or by reason
of its affiliation with any member of its Controlled Group (defined as any
organization which is a member of a controlled group of organizations within
the meaning of Code sections 414(b), (c), (m) or (o)), to any material tax,fine
or penalty or other liability imposed by ERISA, the Code or other applicable
laws.
(d) (i) No Western Plan has incurred any "accumulated funding
deficiency" as such term is defined in ERISA section 302 and Code section 412
(whether or not waived); (ii) to the knowledge of the executive officers of
Western, no event or condition exists which could be deemed a reportable event
within the meaning of ERISA section 4043 with respect to any Western Plan that
is subject to Title IV of ERISA where the present value of accrued benefits
exceeds the fair market value of assets available for such benefits by a
material amount; (iii) Western and each member of its Controlled Group have
made all required premium payments when due to the PBGC; (iv) neither Western
nor any member of its Controlled Group is subject to any liability to the PBGC
for any plan termination; (v) no amendment has occurred which has required or
could require Western or any member of its Controlled Group to provide security
pursuant to Code section 401(a)(29); and (vi) neither Western nor any member of
its Controlled Group has engaged in a transaction which is reasonably likely to
subject it to liability under ERISA section 4069.
(e) Section 6.7(e) of the Western Disclosure Memorandum sets
forth, on a plan by plan basis, the present value of benefits payable presently
or in the future to present or former employees of Western under each unfunded
Western Plan which is a pension plan within the meaning of Section 3(2) of
ERISA.
(f) No Western Plan is a multiemployer plan (within the meaning of
Section 3(37) of ERISA) and neither Western nor any member of its Controlled
Group has incurred or is likely to incur any liability to any multiemployer
plan nor is engaged in a transaction which could subject Western to liability
under ERISA section 4212(c).
(g) (i) No Western Plan, by its terms, provides for an increase in
the rate of accrual or the amount of benefits thereunder on or after the
Closing Date (other than increases due to ordinary accruals or contributions
under the plan), (ii) each Western Plan may be amended or terminated under the
terms of such Western Plan without material obligation or liability (other than
those obligations and liabilities for which specific assets have been set aside
in a trust or other funding vehicle or reserved for on Western's balance
sheet); and (iii) except as specifically contemplated by this Agreement, no
Western Plan exists which could result in the payment to any Western employee
of any money or other property or rights or accelerate or provide any other
rights or benefits to any Western employee as a result of the transaction
contemplated by this Agreement, whether or not such payment would constitute a
parachute payment within the meaning of Code section 280G.
Section 6.8 Labor Matters. (i) Neither Western nor any of its
Significant Subsidiaries is party to any collective bargaining agreement or
other material contract or agreement with any labor organization or other
representative of employees nor is any such contract being negotiated; (ii)
there is no material unfair labor practice charge or complaint pending nor, to
the knowledge of the executive officers of Western, threatened, with regard to
employees of Western or any Significant Subsidiary; (iii) there is no labor
strike, material slowdown, material work stoppage or other material labor
controversy in effect, or, to the knowledge of the executive officers of
Western, threatened against Western or any of its Significant Subsidiaries;
(iv) as of the date hereof, no representation question exists, nor to the
knowledge of the executive officers of Western are there any campaigns being
conducted to solicit cards from the employees of Western or any Significant
Subsidiary of Western to
19
20
authorize representation by any labor organization; (v) neither Western nor any
Significant Subsidiary of Western is party to, or is otherwise bound by, any
consent decree with any governmental authority relating to employees or
employment practices of Western or any Significant Subsidiary of Western; and
(vi) Western and each Significant Subsidiary of Western are in compliance with
all applicable agreements, contracts and policies relating to employment,
employment practices, wages, hours and terms and conditions of employment of
the employees except where failure to be in compliance with each such
agreement, contract and policy is not, either singly or in the aggregate,
reasonably likely to have a Western Material Adverse Effect.
Section 6.9 Tax Matters. Each of Western and each of its Significant
Subsidiaries, and any consolidated, combined, unitary or aggregate group for
tax purposes of which Western or any of its subsidiaries is or has been a
member, has timely filed all material Tax Returns required to be filed by it,
has paid all Taxes shown thereon to be due and has provided adequate reserves
in its financial statements for any Taxes that have not been paid but are
properly accruable under generally accepted accounting principles, whether or
not shown as being due on any returns. Except to the extent that the inaccuracy
of any of the following, individually or in the aggregate, is not reasonably
likely to have a Western Material Adverse Effect, no claim for unpaid Taxes has
become a lien or encumbrance of any kind against the property of Western or any
of its Significant Subsidiaries or is being asserted against Western or any of
its Significant Subsidiaries; no audit of any Tax Return of Western or any of
its Significant Subsidiaries is being conducted by a Tax authority; and no
extension of the statute of limitations on the assessment of any Taxes has been
granted by Western or any of its Significant Subsidiaries and is currently in
effect. Neither Western nor any of its Significant Subsidiaries has made an
election under Section 341(f) of the Internal Revenue Code.
Section 6.10 Environmental Matters. Except to the extent that the
inaccuracy of any of the following, individually or in the aggregate, is not
reasonably likely to have a Western Material Adverse Effect, to the knowledge
of the executive officers of Western:
(i) Western and its subsidiaries hold, and are in
compliance with and have been in compliance with for the last two
years, all Environmental Permits, and are otherwise in substantial
compliance and have been in substantial compliance for the last two
years with, all applicable Environmental Laws and there is no
condition that is reasonably likely to prevent or materially interfere
prior to the Effective Time with compliance by Western and its
subsidiaries with Environmental Laws;
(ii) no modification, revocation, reissuance, alteration,
transfer or amendment of any Environmental Permit, or any review by,
or approval of, any third party of any Environmental Permit is
required in connection with the execution or delivery of this
Agreement or the consummation by Western of the transactions
contemplated hereby or the operation of the business of Western or any
of its subsidiaries on the Closing Date;
(iii) neither Western nor any of its subsidiaries has
received any Environmental Claim, nor has any Environmental Claim been
threatened against Western or any of its subsidiaries;
(iv) neither Western nor any of its subsidiaries has
entered into, agreed to or is subject to any outstanding judgment,
decree, order or consent arrangement with any governmental authority
under any Environmental Laws, including without limitation those
relating to compliance with any Environmental Laws or to the
investigation, cleanup, remediation or removal of Hazardous Materials;
(v) there are no circumstances that are reasonably likely
to give rise to liability under any agreements with any person
pursuant to which Western or any subsidiary of Western would be
required to defend, indemnify, hold harmless, or otherwise be
responsible for any
20
21
violation by or other liability or expense of such person, or alleged
violation by or other liability or expense of such person, arising out
of any Environmental Law; and
(vi) there are no other circumstances or conditions that
are reasonably likely to give rise to liability of Western or any of
its subsidiaries under any Environmental Laws.
Section 6.11 Litigation. Except as disclosed prior to the date
hereof in Western SEC Documents, there is no suit, action, investigation or
proceeding pending or, to the knowledge of the executive officers of Western,
threatened against Western or any of its subsidiaries at law or in equity
before or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind, that is reasonably likely to have a Western
Material Adverse Effect or, with respect to such matters that are pending or
threatened as of the date hereof, materially impair the ability of Western to
perform its obligations hereunder and there is no judgment, decree, injunction,
rule or order of any court, governmental department, commission, board, bureau,
agency, instrumentality or arbitrator to which Western or any of its
subsidiaries is subject that is reasonably likely to have a Western Material
Adverse Effect or, with respect to such items that are outstanding and
applicable as of the date hereof, materially impair the ability of Western to
perform its obligations hereunder.
Section 6.12 Governmental Licenses and Permits; Compliance with Law.
Except as disclosed prior to the date hereof in the Western SEC Documents,
since December 31, 1993 neither Western nor any of its Significant Subsidiaries
has received notice of any revocation or modification of any federal, state,
local or foreign governmental license, certification, tariff, permit,
authorization or approval the revocation or modification of which has had or is
reasonably likely to have a Western Material Adverse Effect. To the knowledge
of the executive officers of Western, the conduct of the business of each of
Western and its subsidiaries complies with all statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees or arbitration awards applicable
thereto, except for violations or failures to comply, if any, that,
individually or in the aggregate, are not reasonably likely to have a Western
Material Adverse Effect.
Section 6.13 Amendment to Western Rights Agreement. (a) The Board
of Directors of Western has taken all necessary action to amend the Western
Rights Agreement so that none of the execution and delivery of this Agreement,
the conversion of shares of Western Common Stock into the right to receive
Merger Consideration in accordance with Article III of this Agreement, and the
consummation of the Merger or any other transaction contemplated hereby will
cause (i) the Western Rights issued pursuant to the Western Rights Agreement to
become exercisable under the Western Rights Agreement, (ii) BJ or any of BJ's
direct or indirect subsidiaries to be deemed an "Acquiring Person" (as defined
in the Western Rights Agreement), (iii) any such event to be deemed a
"Flip-over Transaction or Event" (as defined in the Western Rights Agreement)
or (iv) the "Stock Acquisition Date" (as defined in the Western Rights
Agreement) to occur upon any such event.
(b) The "Expiration Time" (as defined in the Western Rights
Agreement) of the Western Rights will occur immediately prior to the Effective
Time.
(c) The "Separation Time" (as defined in the Western Rights
Agreement) has not occurred.
Section 6.14 Required Vote of Western Stockholders. The affirmative
vote of the holders of not less than 66-2/3% of the outstanding shares of
Western Common Stock is required to adopt this Agreement and approve the Merger
and the other transactions contemplated hereby. No other vote of the
stockholders of Western is required by law, the Restated Certificate of
Incorporation or Bylaws of Western or otherwise to adopt this Agreement and
approve the Merger and the other transactions contemplated hereby.
21
22
Section 6.15 Western Action. The Board of Directors of Western (at a
meeting duly called and held on November 17, 1994) unanimously (a) determined
that the Merger is fair to and in the best interests of Western and its
stockholders, (b) approved this Agreement and the Merger in accordance with the
Delaware Corporation Law, (c) resolved to recommend approval and adoption of
this Agreement and Merger by Western's stockholders and (d) directed that this
Agreement be submitted to Western's stockholders.
Section 6.16 Opinion of Financial Advisor. On the date hereof,
Western has received the opinion of Xxxxxxx, Xxxxx & Co. to the effect that
the consideration to be received in the Merger by Western's stockholders is
fair to such stockholders.
Section 6.17 Brokers and Finders. Except for Xxxxxxx, Sachs & Co.
and Alexander Corporate Financial Consulting, Inc., no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with this Agreement or the Merger based upon
arrangements made by or on behalf of Western. Except as expressly set forth in
this Agreement, no valid claim against Western or, to the knowledge of the
executive officers of Western, against BJ or BJ Sub exists for payment of any
fee or other compensation as a result of any of the transactions contemplated
hereby.
Section 6.18 Intellectual Property. Western and each of its
subsidiaries owns, or is licensed to use (in each case, clear of any material
liens or other encumbrances) all patents, trademarks, trade names, copyrights,
technology, know-how and processes used in or necessary for the conduct of its
business as currently conducted which are material to the business of Western.
To the knowledge of the executive officers of Western, the use of such patents,
trademarks, trade names, copyrights, technology, know-how and processes by
Western and its subsidiaries does not infringe on the rights of any person,
subject to such claims and infringements as do not, in the aggregate, give rise
to any liability that is reasonably likely to have a Western Material Adverse
Effect.
ARTICLE VII
CONDUCT OF BUSINESS PENDING THE MERGER
Section 7.1 Conduct of Business by Western Pending the Merger. Prior
to the Effective Time, unless BJ shall otherwise consent in writing (it being
understood that BJ must act in good faith whenever it withholds such consent),
Western shall, and shall cause its subsidiaries to, carry on their respective
businesses only in the ordinary course and consistent with past practice and,
to the extent consistent therewith and with the specific terms of this
Agreement, use all commercially reasonable efforts to preserve intact their
current business organizations, keep available the services of their current
employees and preserve their relationships with customers, suppliers and others
having business dealings with them. Without limiting the generality of the
foregoing, prior to the Effective Time, except as expressly contemplated by
this Agreement or unless BJ shall otherwise agree in writing, Western shall
not, and shall cause each of its subsidiaries not to:
(i) (A) sell or pledge or otherwise encumber or agree to
sell or pledge any stock owned by it in any direct or indirect
subsidiary of Western; (B) redeem, purchase or otherwise acquire any
shares of, or any options, warrants or rights of any kind to acquire
any shares of or any securities exercisable or exchangeable for or
convertible into shares of, the capital stock of Western or any of its
subsidiaries, other than the extinguishment of options outstanding as
of the date hereof upon the exercise of such options and other than
purchases of Western Common Stock by the trustee under the Western
Retirement Savings Plan; (C) amend the Restated Certificate of
Incorporation or Bylaws of Western or the certificate of incorporation
or bylaws or other governing documents of any of Western's
subsidiaries; (D) split, combine or reclassify any of Western's
capital stock or the capital stock of any of Western's subsidiaries;
or (E) declare, set aside or pay any dividend on, or make any other
distributions in respect of, any of Western's
22
23
capital stock or the capital stock of any of Western's subsidiaries,
other than dividends and distributions by a direct or indirect
subsidiary of Western to its stockholder or stockholders;
(ii) (A) issue, authorize the issuance of or agree to
issue any shares of, or any options, warrants or rights of any kind to
acquire any shares of, or any securities exercisable or exchangeable
for or convertible into shares of, Western's capital stock or the
capital stock of any of Western's subsidiaries (except to issue shares
of Western Common Stock (including associated Western Rights) upon the
due exercise of Western Options, or the due conversion of Western
Convertible Debentures, outstanding on the date hereof or the due
exercise of outstanding Western Rights) or issue or agree to issue any
other equity securities; (B) acquire or dispose of any business or
line of business or any assets, other than in the ordinary course of
business and consistent with past practice (or pursuant to the
agreement dated November 1, 1994 with respect to the sale of the
Alaskan Star Rig), or engage in any negotiations with any person or
entity concerning any such transaction (other than negotiations with
respect to the possible sale of offshore drilling rigs); (C) make any
(1) capital expenditures which have not been expressly provided for in
the list of currently authorized financial expenditures as of October
31, 1994 (a copy of which has been delivered to BJ), or (2) capital
expenditures in excess of $3,000,000 in the fourth calendar quarter of
1994 or in any calendar quarter of 1995, in addition to those
permitted by clause (1) above; (D) enter into any other transaction
not in the ordinary course of business and consistent with past
practice; (E) amend or modify any of the terms of any Western Option
or grant any stock option, stock appreciation rights or stock bonuses;
(F) amend or modify the Western Rights Agreement or redeem any Western
Rights; or (G) merge or consolidate with another corporation, other
than the merger of a wholly-owned subsidiary of Western with and into
Western or another wholly-owned subsidiary;
(iii) (A) lease, license, mortgage or otherwise encumber or
subject to any consensual lien any material assets other than in the
ordinary course of business and consistent with past practice; (B)
incur any indebtedness for borrowed money (other than letters of
credit entered into, or short-term borrowings for working capital
purposes incurred, in each case in the ordinary course of business and
consistent with past practice) or guarantee any such indebtedness of
another person or entity; or (C) make any loans, advances or capital
contributions to, or investments in, any other person or entity, other
than to Western or any direct or indirect subsidiary of Western, other
than as required under existing agreements with third parties and
other than in connection with the relocation of employees under
existing Western policies and consistent with past practice;
(iv) (A) pay, discharge or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), except for the payment, discharge or
satisfaction of its liabilities or its obligations in the ordinary
course of business or in accordance with their terms as in effect on
the date hereof; (B) adopt a plan of complete or partial liquidation
or resolutions providing for or authorizing such a liquidation or a
dissolution, restructuring, recapitalization or reorganization, other
than a plan or resolution authorizing the dissolution of a subsidiary
of Western with less than $100,000 in assets; (C) enter into any
collective bargaining agreement, successor collective bargaining
agreement or amended collective bargaining agreement; (D) change any
accounting principle used by it, except for such changes required to
be implemented prior to the Effective Time pursuant to generally
accepted accounting principles or rules of the Commission; or (E)
settle or compromise any litigation brought against it other than
settlements or compromises of any litigation where the amount paid in
settlement or compromise (including without limitation the cost to
Western and its subsidiaries of complying with any provision of such
settlement or compromise other than cash payments) does not exceed
$500,000, exclusive of amounts covered by insurance;
(v) (A) enter into any new, or amend any existing,
severance agreement or arrangement (other than settlement arrangements
with employees other than officers in
23
24
accordance with past practice and pursuant to which Western obtains
certain waivers of rights from such employees), deferred compensation
arrangement or employment agreement with any current officer, director
or employee, (B) adopt any new, or amend any existing, incentive,
retirement or welfare benefit arrangements, plans or programs for the
benefit of current, former or retired employees of Western and its
subsidiaries and their respective predecessors that would increase the
cost of aggregate benefits available by more than 1% (other than
amendments required by law or to maintain the tax qualified status of
such plans under the Code), or (C) grant any increases in employee
compensation, other than in the ordinary course or pursuant to
promotions, in each case consistent with past practice (which shall
include normal individual periodic performance reviews and related
compensation and benefit increases and bonus payments and awards under
existing plans and forgiveness of employee indebtedness incurred in
connection with relocation loans made under existing Western
policies); or
(vi) authorize or enter into any agreement to do any of
the foregoing.
ARTICLE VIII
ADDITIONAL AGREEMENTS
Section 8.1 Access and Information. Subject to the Confidentiality
Agreements (as defined in Section 10.2), upon reasonable notice, Western and BJ
shall each afford to the other and to the other's accountants, counsel and
other authorized representatives reasonable access during normal business hours
throughout the period prior to the Effective Time to all of its properties,
books, contracts, commitments and records (including but not limited to tax
returns) and, during such period, each shall furnish promptly to the other (i)
a copy of each report and other document filed by it pursuant to the
requirements of federal or state securities laws and (ii) all other information
concerning its business, properties and personnel as such other party may
reasonably request, provided that the foregoing shall not require Western or BJ
to permit any inspection, or to disclose any information, that in the
reasonable judgment of Western or BJ, as the case may be, would result in the
disclosure of any trade secrets of third parties or violate any obligation of
Western or BJ, as the case may be, with respect to confidentiality if Western
or BJ, as the case may be, shall have used reasonable efforts to obtain the
consent of such third party to such inspection or disclosure. All requests for
information made pursuant to this Section 8.1 shall be directed to an executive
officer of Western or BJ or such person as may be designated by either of their
respective officers, as the case may be. No investigation pursuant to this
Section 8.1 shall affect any representation or warranty in this Agreement of
any party hereto or any condition to the obligations of the parties hereto.
Section 8.2 Stock Exchange Listing. BJ shall use its best efforts to
list on the NYSE, prior to the Effective Time, subject to official notice of
issuance, (a) the BJ Common Stock (including associated BJ Purchase Rights) and
the BJ Common Stock issuable upon exercise of the BJ Warrants to be issued
pursuant to the Merger, and (b) the BJ Warrants to be issued pursuant to the
Merger. If the BJ Warrants are not so listed on the NYSE, BJ shall use its
best efforts to have the BJ Warrants listed on NASDAQ.
Section 8.3 Stockholders' Approval. Each of BJ and Western shall
take, in accordance with applicable law and their respective certificates of
incorporation and bylaws, all action necessary to convene a meeting of its
stockholders (collectively, the "Stockholders Meetings") as promptly as
practicable after the registration statement on Form S-4 to be filed with the
Commission by BJ in connection with the issuance of shares of BJ Common Stock
(including associated BJ Purchase Rights) and BJ Warrants (including shares of
BJ Common Stock issuable upon the exercise thereof) in the Merger (the "S-4")
is declared effective for the purpose of voting, in the case of Western, to
adopt this Agreement and approve the Merger and the other transactions
contemplated hereby and, in the case of BJ, to approve this Agreement and the
issuance of BJ Common Stock and BJ Warrants in the
24
25
Merger and, in each case, such other matters as may be appropriate at such
meetings and are consented to in writing by BJ and Western (which consent shall
not be unreasonably withheld), provided that no proxy statement for use in
connection with the stockholders' meeting of each of BJ and Western referred to
in Section 8.3 hereof (the "Joint Proxy Statement") shall be mailed by Western
or BJ without the prior approval of the other party hereto. Each of BJ and
Western will use its best efforts to hold such meetings no later than April 30,
1995, unless otherwise agreed by the parties hereto, and will use its best
efforts to hold such meetings on the same day. Unless otherwise required by
applicable law because of the fiduciary duties of the directors of Western to
its stockholders as determined by such directors in good faith after
consultation with and based upon the advice of Xxxxxxxx & Xxxxxxxx, as legal
counsel to Western, the Board of Directors of Western shall recommend to its
stockholders approval of the transactions contemplated by this Agreement,
Western shall use its best efforts to solicit from its stockholders proxies in
favor of the adoption of this Agreement and the approval of the Merger and the
other transactions contemplated hereby, and Western shall not take any actions
that are inconsistent with such best efforts obligation. BJ shall recommend to
its stockholders approval of the transactions contemplated by this Agreement,
shall use its best efforts to solicit from its stockholders proxies in favor of
the approval of this Agreement and the issuance of the Stock Consideration and
Warrant Consideration in the Merger as required by NYSE Rule 312.05, and shall
not take any actions that are inconsistent with such best efforts obligation.
Each of Western and BJ shall take all other action necessary or advisable to
secure the vote or consent of its stockholders required by Delaware Corporation
Law or NYSE rules, as the case may be, to obtain such approvals. Western will
cause its transfer agent to make stock transfer records relating to Western
available to the extent reasonably necessary to effectuate the intent of this
Agreement.
Section 8.4 No Solicitation. (a) Except with respect to BJ and its
affiliates, on or after the date hereof, Western shall not, and shall cause its
subsidiaries and its and its subsidiaries' officers, directors, affiliates,
agents and representatives (including without limitation any investment banker,
attorney or accountant retained by Western or any of its subsidiaries), and
shall use its best efforts to cause its and its subsidiaries' employees not to,
initiate, solicit or encourage, directly or indirectly, any inquiries or the
making of any proposal with respect to an Alternative Transaction (as
hereinafter defined), participate in any negotiations concerning, or provide to
any other person any information or data relating to Western or its
subsidiaries for the purpose of, or have any substantive discussions with, any
person relating to, or otherwise cooperate with or assist or participate in, or
facilitate, any inquiries or the making of any proposal which constitutes, or
would reasonably be expected to lead to, any effort or attempt by any other
person to seek to effect an Alternative Transaction, or agree to or endorse any
Alternative Transaction; provided, however, that nothing contained in this
Section 8.4 shall prohibit Western or its Board of Directors from taking and
disclosing to the stockholders of Western a position with respect to any such
Alternative Transaction that, in the judgment of the Board of Directors of
Western, as determined in good faith by such directors after consultation with
and based upon the advice of Xxxxxxxx & Xxxxxxxx, as counsel to Western, is
required by applicable law; and provided, further, that (x) the Board of
Directors of Western may (i) upon the unsolicited request of a third party
which executes a confidentiality agreement with Western in customary form,
furnish information or data (including without limitation confidential
information or data relating to Western or its subsidiaries) in order to allow
such third party to consider making a proposal with respect to, or entering
into, an Alternative Transaction involving such third party and Western, (ii)
participate in negotiations or have substantive discussions with a third party
who makes an unsolicited, bona fide proposal regarding an Alternative
Transaction, and (iii) in connection therewith, cooperate with or assist or
facilitate such third party in its attempt to effect such Alternative
Transaction, and (y) following receipt of an unsolicited, bona fide proposal
from a third party regarding an Alternative Transaction, the Board of Directors
of Western may withdraw or modify its recommendation referred to in Section
8.3, in each case to the extent that the Board of Directors of Western
determines in good faith, after consultation with and based upon the advice of
Xxxxxxxx & Xxxxxxxx, as counsel to Western, that such action may be required in
order for the Board of Directors to act in a manner that is consistent with its
fiduciary obligations under applicable law.
25
26
Western shall promptly advise BJ of any such request or proposal that Western
may receive. Prior to taking any such action, if Western intends to participate
in any such discussions or negotiations or provide any such information to any
such third party, Western shall give reasonable prior notice to BJ of each such
action. Nothing in this Section 8.4 shall (A) permit Western to terminate this
Agreement or (B) permit Western to enter into any written agreement with
respect to an Alternative Transaction during the term of this Agreement (it
being agreed that during the term of this Agreement Western shall not enter
into any written agreement with any person that provides for, or in any way
facilitates, an Alternative Transaction, other than a confidentiality agreement
in the form referred to above), it being understood that Section 10.1(f) sets
forth the rights of Western to terminate this Agreement in the circumstances
specified in clause (y) above.
(b) Western will immediately, and will cause its subsidiaries and
its and its subsidiaries' officers, directors, agents and representatives
(including without limitation any investment banker, attorney or accountant
retained by Western or any of its subsidiaries), and will use its best efforts
to cause its and its subsidiaries' employees, to immediately, cease and cause
to be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any possible Alternative
Transactions.
(c) Without limiting the foregoing, it is understood that any
violation of the restrictions set forth in the first sentence of Section 8.4(a)
by any officer or director or authorized employee, agent or representative of
Western or any of its subsidiaries (including, without limitation, any
investment banker, attorney or accountant retained by Western or any of its
subsidiaries), or otherwise shall be deemed to be a breach of Section 8.4(a) by
Western.
(d) As used herein, "Alternative Transaction" means (i) any
merger, consolidation or other business combination transaction involving
Western in which another corporation, partnership, person, other entity or
group (as defined in Section 13(d)(3) of the Exchange Act) would acquire
beneficial ownership of at least 20% of the aggregate voting power of all
voting securities of Western or the Surviving Corporation, as the case may be;
(ii) any tender offer or exchange offer for any securities of Western which, if
consummated, would result in another corporation, partnership, person, other
entity or group (as defined in Section 13(d)(3) of the Exchange Act) becoming
the beneficial owner of at least 20% or more of the aggregate voting power of
all voting securities of Western; (iii) any sale or other disposition of assets
of Western or any of its subsidiaries (excluding the offshore drilling rigs) in
a single transaction or in a series of related transactions if the fair market
value of such assets exceeds 20% of the aggregate fair market value of the
assets of Western and its subsidiaries taken as a whole before giving effect to
such sale or other disposition; (iv) the adoption by Western of a plan of
liquidation, the declaration or payment by Western of an extraordinary dividend
on any of its shares of capital stock or the effectuation by Western of a
recapitalization or other type of transaction which would involve either a
change in Western's outstanding capital stock or a distribution of assets of
any kind to the holders of such capital stock; or (v) the repurchase by Western
or any of its subsidiaries of shares of Western Common Stock representing at
least 20% or more of the aggregate voting power of all voting securities of
Western.
Section 8.5 Antitrust Filing and Divestitures. (a) Within two
Trading Days after the date hereof, Western and BJ shall file notification and
report forms under the Xxxx Xxxxx Act with the Federal Trade Commission (the
"FTC") and the Antitrust Division of the Department of Justice (the "Antitrust
Division") and shall promptly make all other necessary, proper or advisable
filings with the applicable federal, state or local government or any court,
administrative agency or commission or other governmental authority or agency,
domestic or foreign (a "Governmental Entity"), related to the transactions
contemplated by this Agreement and shall use their best efforts to respond as
promptly as practicable to all inquiries received from the FTC or the Antitrust
Division or such other Governmental Entities for additional information or
documentation. Each of the parties hereto agrees to furnish the others with
copies of all correspondence, filings and communications (and memoranda setting
forth the substance thereof) between it and its affiliates and their respective
representatives,
26
27
on the one hand, and the FTC the Antitrust Division or any other Governmental
Entity or members of their respective staffs, on the other hand, with respect
to this Agreement and the transactions contemplated hereby. Each party hereto
agrees to furnish the others with such necessary information and reasonable
assistance as such other parties and their respective affiliates may reasonably
request in connection with their preparation of necessary filings,
registrations or submissions of information to any Governmental Entities,
including without limitation any filings necessary under the provisions of the
Xxxx Xxxxx Act.
(b) Without limiting the generality of the undertakings pursuant
to this Section 8.5 and Section 8.14, BJ shall promptly take or cause to be
taken all actions as it may determine to be reasonably appropriate in order to
avoid the commencement of a proceeding by any Governmental Entity to restrain,
enjoin or to otherwise prohibit consummation of the Merger so as to permit
consummation of the Merger on a schedule as close as possible to that
contemplated by this Agreement.
Section 8.6 Indemnification and Insurance. (a) From and after the
Effective Time, BJ agrees that it or the Surviving Corporation will indemnify
and hold harmless each present and former director and officer of Western and
its subsidiaries (the "Indemnified Parties") against any and all costs or
expenses (including reasonable attorneys' fees), judgments, fines, losses,
claims, damages or liabilities (collectively, "Costs") incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil,
criminal, administrative or investigative, arising out of or pertaining to
matters existing or occurring at or prior to the Effective Time, whether
asserted or claimed prior to, at or after the Effective Time, to the fullest
extent allowed by law (and BJ or the Surviving Corporation will also advance
expenses as incurred to the fullest extent permitted under applicable law
provided the person to whom expenses are advanced provides an undertaking to
repay such advances if it is ultimately determined that such person is not
entitled to indemnification).
(b) Any Indemnified Party wishing to claim indemnification under
paragraph (a) of this Section 8.6, upon learning of any such claim, action,
suit, proceeding or investigation, shall promptly notify BJ and the Surviving
Corporation thereof, but the failure to so notify shall not relieve BJ or the
Surviving Corporation of any liability it may have to such Indemnified Party
except to the extent that such failure materially prejudices the indemnifying
party. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i) BJ or
the Surviving Corporation shall have the right to assume the defense thereof
(which it shall, in cooperation with the Indemnified Parties, vigorously
defend) and neither BJ nor the Surviving Corporation shall be liable to such
Indemnified Parties for any legal expenses of other counsel or any other
expenses subsequently incurred by such Indemnified Parties in connection with
the defense thereof, except that if neither BJ nor the Surviving Corporation
elects to assume such defense or there is a conflict of interest between BJ or
the Surviving Corporation, on the one hand, and the Indemnified Parties,
including situations in which there are one or more legal defenses available to
the Indemnified Party that are different from or additional to those available
to BJ or the Surviving Corporation, the Indemnified Parties may retain counsel
satisfactory to them, and BJ or the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; provided, however, that neither
BJ nor the Surviving Corporation shall, in connection with any one such action
or proceeding or separate but substantially similar actions or proceedings
arising out of the same general allegations, be liable for the fees and
expenses of more than one separate firm of attorneys at any time for all
Indemnified Parties except to the extent that local counsel, in addition to
such parties' regular counsel, is required in order to effectively defend
against such action or proceeding, (ii) the Indemnified Parties will cooperate
in the defense of any such matter and (iii) neither BJ nor the Surviving
Corporation shall be liable for any settlement effected without its prior
written consent, and provided, further, that neither BJ nor the Surviving
Corporation shall have any obligation hereunder to any Indemnified Party when
and if a court of competent jurisdiction shall ultimately determine, and such
determination shall have become
27
28
final, that the indemnification of such Indemnified Party in the manner
contemplated hereby is prohibited by applicable law.
(c) For a period of three years after the Effective Time, the
Surviving Corporation shall use its best efforts to maintain in effect the
current policies of directors' and officers' liability insurance maintained by
Western (the "Current D&O Policy") (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are no less advantageous ("Substitute
Coverage") and will, to the extent available, provide such Substitute Coverage
if the Current D&O Policy is not available) with respect to claims arising from
facts or events occurring at or prior to the Effective Time; provided, however,
if the Current D&O Policy expires, is terminated or cancelled during such three
year period and Substitute Coverage cannot be obtained, the Surviving
Corporation shall use its best efforts to obtain as much insurance as can be
obtained for the remainder of such period up to a maximum of the coverage
amount of the Current D&O Policy; provided further, that in no event shall the
Surviving Corporation be required to expend for insurance premiums pursuant to
this Section 8.6(b) more than 150% of the current annual premiums paid by
Western for such insurance (which premiums Western represents and warrants to
be $421,000 in the aggregate).
(d) If the Surviving Corporation or any of its successors or
assigns (i) shall consolidate with or merge into any other corporation or
entity and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) shall transfer all or substantially all of
its properties and assets to any individual, corporation or other entity, then
and in each such case, proper provisions shall be made so that the successors
and assigns of the Surviving Corporation shall assume all of the obligations of
the Surviving Corporation set forth in this Section 8.6.
(e) The provisions of this Section 8.6 are intended to be for the
benefit of, and shall be enforceable by, each of the directors and officers of
Western who are the beneficiaries of the indemnification arrangements specified
herein and their heirs and their representatives.
Section 8.7 Amendment of Western Plans. Western shall take such
action as is necessary to amend, as of the Effective Time, each Western Plan
providing for the issuance of, or related to, the securities of Western or the
Surviving Corporation to provide that on and after the Effective Time, no
option or other right shall be outstanding to acquire any security of Western
or the Surviving Corporation.
Section 8.8 Employee Arrangements. (a) The Surviving Corporation
agrees that, during the period commencing at the Effective Time and ending on
the first anniversary thereof, the employees of Western will continue to be
provided with benefits under employee benefit plans that are no less favorable
in the aggregate than those currently provided by Western to such employees;
provided, however, that nothing herein shall (i) prevent the amendment or
termination of any Western Plan, (ii) require the Surviving Corporation to
provide or permit investment in the securities of BJ, BJ Sub, Western or the
Surviving Corporation, or (iii) limit or restrict the ability of BJ,Western or
the Surviving Corporation to terminate the employment of any officer or
employee.
(b) Notwithstanding anything to the contrary in Section 8.8(a), BJ
will, and will cause the Surviving Corporation to honor all employee benefit
obligations to current and former employees and directors under the Western
Plans, under the Retirement Plan for Non-Employee Directors and, to the extent
set forth in Western SEC Documents or the Western Disclosure Memorandum, the
Special Severance Policy in existence on the date hereof and all employment or
severance agreements or indemnification agreements entered into by Western or
adopted by the Board of Directors of Western prior to the date hereof;
provided, however, that nothing shall prevent BJ or the Surviving Corporation
from taking any action with respect to such plans, obligations or agreements or
refraining from taking any such action which is permitted or provided for under
the terms thereof.
28
29
(c) Employees of the Surviving Corporation shall be given credit
for all service with Western and its subsidiaries under all employee benefit
plans, programs and policies of the Surviving Corporation or BJ in which they
become participants for all purposes thereunder; provided, however, that
employees of the Surviving Corporation who become participants in a defined
benefit pension plan sponsored by BJ or in a defined benefit pension plan
sponsored by the Surviving Corporation which is adopted on or after the
Effective Time shall not be given credit for benefit accrual purposes to the
extent such credit would result in a duplication of benefits under more than
one defined benefit pension plan.
(d) A special committee of the Board of Directors of BJ shall be
established (the "Special Committee") consisting of two current outside
directors of BJ and two current outside directors of Western who will become
directors of BJ after the Closing Date as specified in Section 8.16. Except as
otherwise specified in the last sentence of this Section 8.8(d), the provisions
of this Section 8.8 shall be enforceable exclusively by the Special Committee
for the benefit of the officers and employees of the Surviving Corporation and
its subsidiaries who were officers and employees of Western and its
subsidiaries prior to the Effective Time. If any such officer or employee has
any claim that the provisions of this Section 8.8 have not been complied with,
such officer or employee shall be required to submit such claim to the Special
Committee, and any decision rendered by a majority of the members of the
Special Committee shall be binding upon such officer or employee and shall be
dispositive of such claim for all purposes whatsoever. If (and only if) the
Special Committee is unable to reach a majority decision with respect to the
disposition of such claim, such officer or employee may pursue his claim in any
other appropriate manner.
Section 8.9 Publicity. Except with respect to matters concerning an
Alternative Transaction, the parties hereto shall consult with each other
concerning any proposed press release or public announcement pertaining to the
transactions contemplated by this Agreement and shall use their best efforts to
agree upon the text of any such press release or the making of such public
announcement prior to the public dissemination thereof and prior to making any
filings with any Governmental Entity or national securities exchange with
respect thereto, except as may be required by law or by obligations pursuant to
any listing agreement with or rules of any national securities exchange.
Section 8.10 Fees and Expenses. (a) Except as provided in Sections
8.10(b) through Section 8.10(g), whether or not the Merger is consummated, all
costs and expenses incurred in connection with the Merger, this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
cost or expense.
(b) If (i) Western terminates this Agreement pursuant to Section
10.1(f); (ii) BJ terminates this Agreement pursuant to Section 10.1(e)(i); or
(iii) either Western or BJ terminates this Agreement pursuant to Section
10.1(h) and, prior to such failure of Western stockholders to adopt this
Agreement and approve the Merger, another party shall have made a proposal to
effectuate an Alternative Transaction and such proposal shall have been
publicly announced, then in any such event Western shall pay to BJ, in
immediately available funds, (A) on the date on which such Alternative
Transaction is consummated, $16,000,000 (the "Topping Fee") and (B) within one
Trading Day after requested by BJ (accompanied by reasonably detailed
documentation) from time to time, all of BJ's Expenses up to a maximum payment
pursuant to this clause (B) of $3,500,000. The term "BJ's Expenses" shall
include all out-of-pocket expenses and fees (including without limitation fees
and expenses payable to all banks, investment banking firms and other financial
institutions and their respective agents and counsel for arranging or
providing, or agreeing to arrange or provide, financing for, or financing
advice with respect to, the Merger and all fees of counsel, accountants,
experts and consultants to BJ or BJ Sub) actually incurred by BJ and BJ Sub or
on their behalf in connection with the consummation of all transactions
contemplated by this Agreement, including the Merger.
(c) If the provisions of Section 8.10(b) are not applicable and BJ
terminates this Agreement pursuant to Section 10.1(e) (ii), then Western shall
pay to BJ, within one Trading Day after requested
29
30
by BJ (accompanied by reasonably detailed documentation) from time to time, all
of BJ's Expenses up to a maximum payment pursuant to this Section 8.10(c) of
$3,500,000.
(d) If Western terminates this Agreement pursuant to Section
10.1(g) and if (and only if) such termination occurs on or after the date of
consummation of the BJ Alternative Transaction which gave rise to such right of
termination under Section 10.1(g) then in such event BJ shall pay to Western,
in immediately available funds, (i) on the date of such termination,
$16,000,000 and (ii) within one Trading Day after requested by Western
(accompanied by reasonably detailed documentation) from time to time, all of
Western's Expenses up to a maximum payment pursuant to this clause (ii) of
$3,500,000. The term "Western's Expenses" shall include all out-of-pocket
expenses and fees (including without limitation fees and expenses payable to
all investment banking firms, counsel, accountants, experts and consultants to
Western) actually incurred by Western or on its behalf in connection with the
consummation of the transactions contemplated by this Agreement, including the
Merger.
(e) If either BJ or Western terminates this Agreement pursuant to
Section 10.1(j), then BJ shall pay to Western, within one Trading Day after
requested by Western (accompanied by reasonably detailed documentation) from
time to time, all of Western's Expenses up to a maximum payment pursuant to
this Section 8.10(e) of $3,500,000; provided, however, that BJ shall pay to
Western a termination fee of $20,000,000 and shall not make any additional
payment to Western in reimbursement of Western's Expenses, if either BJ or
Western terminates this Agreement pursuant to Section 10.1(j) and both of the
following conditions shall have been satisfied: (i) the meeting of BJ
stockholders shall have been held subsequent to the receipt of the first
Antitrust Termination Notice (as defined in Section 8.10(f)) sent by Western at
the end of the 100-day period referred to in Section 10.1(l) (the "Antitrust
Approval Period") (without regard to any extensions thereof) and (ii) BJ shall
have elected to extend the Antitrust Approval Period pursuant to clause (i) of
Section 8.10(f) rather than pursuant to clause (ii) of Section 8.10(f).
(f) If either BJ or Western terminates this Agreement pursuant to
Sections 10.1(i) or 10.1(l) (but only if, in the case of a termination pursuant
to Section 10.1(i), the action giving rise to an order or injunction sought to
enjoin or otherwise prohibit the Merger for alleged violations of the federal
or state antitrust laws), then BJ shall pay to Western a termination fee of
$20,000,000 within five Trading Days after written notice of termination under
Sections 10.1(i) or 10.1(l) (the "Antitrust Termination Notice") is received by
BJ from Western or received by Western from BJ; provided, however, that BJ
shall have the option to require Western to rescind any such Antitrust
Termination Notice sent by Western under Section 10.1(l) if either of the
conditions set forth below shall have been satisfied, in which event such
Antitrust Termination Notice shall be rescinded and the Antitrust Approval
Period shall be deemed to have been changed to 130 days:
(i) if at the time such Antitrust Termination Notice is
received, BJ has been engaged in active and continuous negotiations
with the Antitrust Division or the FTC with respect to the Consent
Decree Final Agreement (as defined in Section 10.1(l)), provided that
prior to the tenth day after receipt by BJ of the Western Compliance
Certificates (as defined in Section 10.1(l)), BJ and its outside
counsel each delivered to Western certificates that to the best of
their knowledge BJ is in "substantial compliance" with the Antitrust
Division's or FTC's "second request" for information from BJ under the
Act, or
(ii) if the foregoing clause (i) is not applicable, if BJ
shall have paid a fee of $2,500,000 to Western on or prior to the
fifth Trading Day after BJ's receipt of such Antitrust Termination
Notice;
provided, further, that at the end of such extended Antitrust Approval Period
BJ shall have the option to extend the Antitrust Approval Period for a second
30-day period by (x) paying a fee of $5,000,000 to Western if the Antitrust
Approval Period was extended pursuant to clause (i) above, or (y) paying an
30
31
additional fee of $2,500,000 to Western if the Antitrust Approval Period was
extended pursuant to clause (ii) above, in which event upon such payment the
Antitrust Approval Period shall be deemed to have been changed to 160 days.
(g) If either BJ or Western terminates this Agreement pursuant to
Section 10.1(m), then BJ shall pay to Western a termination fee of $20,000,000;
provided, however, that if Western's stockholders shall fail to have approved
the Merger or BJ's stockholders shall fail to have approved the issuance of BJ
Common Stock and BJ Warrants in the Merger and this Agreement at a meeting of
stockholders held to vote thereon and BJ is not in breach of its obligations
contained in this Agreement, BJ shall have no obligation to pay any termination
fee to Western pursuant to this Section 8.10(g).
Section 8.11 Preparation of Form S-4 and Joint Proxy Statement. As
promptly as practicable following the date of this Agreement, Western and BJ
shall prepare and file with the Commission the Joint Proxy Statement, and BJ
shall prepare and file with the Commission the S-4, in which the Joint Proxy
Statement will be included. Each of Western and BJ shall use its best efforts
to have the S-4 declared effective under the Securities Act as promptly as
practicable after such filing. Western will use its best efforts to cause the
Joint Proxy Statement to be mailed to Western's stockholders, and BJ will use
its best efforts to cause the Joint Proxy Statement to be mailed to BJ's
stockholders, in each case as promptly as practicable after the S-4 is declared
effective under the Securities Act. BJ shall also take any action required to
be taken under any applicable state securities laws in connection with the
issuance of BJ Common Stock (including associated BJ Purchase Rights) and BJ
Warrants (including the BJ Common Stock issuable upon exercise thereof) in the
Merger, and Western shall furnish all information concerning Western and the
holders of Western Common Stock as may be reasonably requested in connection
with any such action. BJ, BJ Sub and Western each covenant and agree that the
information provided and to be provided by such party for inclusion or
incorporation by reference in the S-4 shall not, at the time the S-4 becomes
effective and on the date of each Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading. Western, BJ
and BJ Sub each agree to correct promptly any information provided by it for
use in the S-4 which shall have become false or misleading prior to the times
referred to above.
Section 8.12 Affiliates. Prior to the Closing Date, Western shall
deliver to BJ a letter identifying all persons who are, at the time this
Agreement is submitted for approval to the stockholders of Western,
"affiliates" of Western for purposes of Rule 145 under the Securities Act.
Western shall use its reasonable best efforts to cause each such person to
deliver to BJ on or prior to the Closing Date an affiliates' agreement
substantially in the form attached hereto as Exhibit B.
Section 8.13 Conveyance Taxes. BJ and Western shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees, and any similar taxes which become payable in
connection with the transactions contemplated hereby that are required or
permitted to be filed on or before the Effective Time. Any liability with
respect to the transfer of the property of Western arising out of the New York
State Real Property Transfer Gains Tax, the New York State Real Estate Transfer
Tax or the New York City Real Property Transfer Tax shall be borne by BJ and
expressly shall not be the liability of the stockholders of Western.
Section 8.14 Additional Agreements. Subject to the terms and
conditions set forth herein, each of the parties hereto agrees to use its best
efforts to take, or cause to be taken, all action and to use its best efforts
to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations and to otherwise use its best efforts to
consummate and make effective the transactions contemplated by this Agreement,
including using its best efforts to satisfy the conditions
31
32
precedent to the obligations of any of the parties hereto, to obtain all
necessary waivers, consents and approvals, to obtain waivers or consents from
holders of, or to arrange to pay or for the prepayment of, indebtedness which
would be the subject of an event of default as a result of the Merger, to
effect all necessary registrations and filings (including but not limited to
filings under the Xxxx Xxxxx Act), and to cause to be lifted any injunction or
other legal bar to the Merger (and, in such case, to proceed with the Closing
and the Merger as expeditiously as possible), subject, however, to the
requisite vote of the stockholders of Western and BJ.
Section 8.15 Dividends. BJ shall not declare, set aside or pay any
dividend payable in cash, stock or property with respect to any capital stock
prior to the Effective Time.
Section 8.16 Election to BJ's Board of Directors. At the Effective
Time of the Merger, BJ shall promptly increase the size of its board of
directors in order to enable the three current outside directors of Western
listed on Exhibit C hereto (the "Western Representatives") to be appointed to
BJ's Board of Directors and for at least one year after the next annual meeting
of stockholders of BJ, subject to fiduciary obligations under applicable law,
shall use its best efforts to cause the Western Representatives to be elected
to BJ's Board of Directors by the stockholders of BJ.
Section 8.17 BJ Vote. BJ will vote (or consent with respect to) or
cause to be voted (or a consent to be given with respect to) any Western Common
Stock and any shares of common stock of BJ Sub beneficially owned by it or any
of its subsidiaries or with respect to which it or any of its subsidiaries has
the power (by agreement, proxy or otherwise) to cause to be voted (or to
provide a consent), in favor of the adoption and approval of this Agreement at
any meeting of stockholders of Western or BJ Sub, respectively, at which this
Agreement shall be submitted for adoption and approval and at all adjournments
or postponements thereof (or, if applicable, by any action of stockholders of
either Western or BJ Sub by consent in lieu of a meeting).
Section 8.18 Warrant Agreement; Reservation of BJ Common Stock.
Prior to the Effective Time, BJ shall execute and deliver to Western the
Warrant Agreement and shall reserve for issuance such number of shares of BJ
Common Stock to be issued upon conversion of the Western Convertible
Debentures.
Section 8.19 Supplemental Indentures. BJ Sub will use its best
efforts to execute and deliver to Western supplemental indentures with respect
to each of the Western Senior Notes and the Western Convertible Debentures.
Section 8.20 BJ Standstill. If this Agreement is terminated (a)
under the circumstances specified in Section 8.10(f) and BJ is thereby
obligated to pay to Western the $20 million fee specified in Section 8.10(f),
(b) pursuant to Section 10.1(j), or (c) pursuant to Section 10.1(k), then for
five years after the date of such termination in the case of a termination
under the circumstances specified in Section 8.10(f) or pursuant to Section
10.1(j), and for two years after the date of such termination in the case of a
termination pursuant to Section 10.1(k), BJ and each of its successors will
not, and will cause its affiliates not to:
(i) acquire, offer or propose to acquire, or agree to
acquire, directly or indirectly, by merger, purchase or otherwise,
beneficial ownership of any assets or voting securities of Western or
its affiliates or any direct rights or options to acquire (through
purchase, exchange, conversion or otherwise) any assets or voting
securities of Western or its affiliates;
(ii) make, or in any way participate in, directly or
indirectly, any "solicitation" of "proxies" (as such terms are defined
in Rule 14a-1 of Regulation 14A promulgated by the Commission,
disregarding clause (iv) of Rule 14a-1(1)(2), but including any
solicitation exempted pursuant to Rule 14a-2(b)(1)) to vote (including
by the execution of actions by written
32
33
consent), or seek to advise, encourage or influence any person or
entity with respect to the voting of, any voting securities of
Western;
(iii) call, or in any way participate in a call for, any
meeting of stockholders of Western (or take any action with respect to
stockholders acting by written consent);
(iv) form, join or in any way participate in a "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) with
respect to any voting securities of Western; or
(v) otherwise act to control or influence, or seek to
control or influence, Western or the management, Board of Directors,
policies or affairs of Western, including, without limitation, (A)
making any offer or proposal to acquire any securities or assets of
Western or any of its affiliates or soliciting or proposing to effect
or negotiate any form of business combination, restructuring,
recapitalization or other extraordinary transaction involving Western,
its affiliates or any of their respective securities or assets, (B)
seeking Board representation or the removal of any directors or a
change in the composition or size of the Board of Directors of
Western, (C) making any request to amend or waive any provision of
this Section 8.20, (D) disclosing any intent, purpose, plan or
proposal with respect to this Section 8.20 or Western, its affiliates
or the boards of directors, management, policies or affairs or
securities or assets of Western or its affiliates that is inconsistent
with this Section 8.20, including an intent, purpose, plan or proposal
that is conditioned on, or would require, waiver, amendment,
nullification or invalidation of any provision of this Section 8.20,
or take any action that could require Western or any of its affiliates
to make any public disclosure relating to any such intent, purpose,
plan, proposal or condition, or (E) assisting, advising or encouraging
any person with respect to, or seeking to do, any of the foregoing.
Section 8.21 Western Standstill. If this Agreement is terminated
under the circumstances specified in Section 8.10(f) and BJ pays to Western the
$20 million fee specified in Section 8.10(f), then for five years after the
date of such termination Western and each of its successors will not, and will
cause its affiliates not to:
(i) acquire, offer or propose to acquire, or agree to
acquire, directly or indirectly, by merger, purchase or otherwise,
beneficial ownership of any assets or voting securities of BJ or its
affiliates or any direct rights or options to acquire (through
purchase, exchange, conversion or otherwise) any assets or voting
securities of BJ or its affiliates;
(ii) make, or in any way participate in, directly or
indirectly, any "solicitation" of "proxies" (as such terms are defined
in Rule 14a-1 of Regulation 14A promulgated by the Commission,
disregarding clause (iv) of Rule 14a-1(1)(2), but including any
solicitation exempted pursuant to Rule 14a-2(b)(1)) to vote (including
by the execution of actions by written consent), or seek to advise,
encourage or influence any person or entity with respect to the voting
of, any voting securities of BJ;
(iii) call, or in any way participate in a call for, any
meeting of stockholders of BJ (or take any action with respect to
stockholders acting by written consent);
(iv) form, join or in any way participate in a "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) with
respect to any voting securities of BJ; or
(v) otherwise act to control or influence, or seek to
control or influence, BJ or the management, Board of Directors,
policies or affairs of BJ, including, without limitation, (A) making
any offer or proposal to acquire any securities or assets of BJ or any
of its affiliates or soliciting or proposing to effect or negotiate
any form of business combination, restructuring, recapitalization or
other extraordinary transaction involving BJ, its affiliates or any of
their
33
34
respective securities or assets, (B) seeking Board representation or
the removal of any directors or a change in the composition or size of
the Board of Directors of BJ, (C) making any request to amend or waive
any provision of this Section 8.21, (D) disclosing any intent,
purpose, plan or proposal with respect to this Section 8.21 or BJ, its
affiliates or the boards of directors, management, policies or affairs
or securities or assets of BJ or its affiliates that is inconsistent
with this Section 8.21, including an intent, purpose, plan or proposal
that is conditioned on, or would require, waiver, amendment,
nullification or invalidation of any provision of this Section 8.21,
or take any action that could require BJ or any of its affiliates to
make any public disclosure relating to any such intent, purpose, plan,
proposal or condition, or (E) assisting, advising or encouraging any
person with respect to, or seeking to do, any of the foregoing.
ARTICLE IX
CONDITIONS PRECEDENT
Section 9.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Closing Date of the following
conditions:
(a) This Agreement and the Merger and the other
transactions contemplated hereby shall have been adopted and approved
by the requisite vote of the holders of Western Common Stock.
(b) The waiting periods applicable to the consummation of
the Merger under the Xxxx Xxxxx Act shall have expired or been earlier
terminated.
(c) No preliminary or permanent injunction or other
order, decree or ruling by any United States federal or state court of
competent jurisdiction or by any United States federal or state
governmental, regulatory or administrative agency or authority which
prevents the consummation of the Merger shall have been issued and
remain in effect.
(d) No statute, rule or regulation shall have been
enacted by any United States federal or state governmental, regulatory
or administrative agency or authority that makes the consummation of
the Merger illegal or would otherwise prevent the consummation of the
Merger.
(e) The S-4 shall have become effective, and any required
post-effective amendment shall have become effective, under the
Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order, and any material "blue sky" and
other state securities laws applicable to the registration of the BJ
Common Stock (including associated BJ Purchase Rights) and BJ Warrants
(including the BJ Common Stock issuable upon exercise thereof) to be
exchanged for Western Common Stock shall have been complied with.
(f) The shares of BJ Common Stock (including associated
BJ Purchase Rights) issuable to Western's stockholders pursuant to
this Agreement shall have been approved for listing on the NYSE,
subject to official notice of issuance.
(g) The issuance of BJ Common Stock and BJ Warrants in
the Merger and this Agreement shall have been approved by the
affirmative vote of holders of BJ Common Stock required by NYSE Rule
312.05.
Section 9.2 Condition to Obligations of Western to Effect the Merger.
The obligations of Western to effect the Merger shall be subject to the
fulfillment at or prior to the Closing Date of the following additional
conditions:
34
35
(a) BJ and BJ Sub shall have performed or complied with
in all material respects their agreements and covenants contained in
this Agreement and the Senior Executive Termination Agreements
required to be performed or complied with at or prior to the Closing
Date, and the representations and warranties of BJ and BJ Sub
contained in this Agreement shall be true in all respects when made
and on and as of the Closing Date with the same force and effect as if
made on and as of such date, except as expressly contemplated or
otherwise expressly permitted by this Agreement and except that any
representation and warranty not modified by reference to a BJ Material
Adverse Effect that is not true in all respects shall nevertheless be
deemed, for purposes of this Section 9.2(a), to be true in all
respects unless the failure of such representation or warranty to be
so true has had, or is reasonably likely to have, a BJ Material
Adverse Effect.
(b) The Warrant Agreement shall have been executed and
delivered by BJ.
Section 9.3 Conditions to Obligations of BJ and BJ Sub to Effect the
Merger. The obligations of BJ and BJ Sub to effect the Merger shall be subject
to the fulfillment at or prior to the Closing Date of the following additional
conditions:
(a) Western shall have performed or complied with in all
material respects its agreements and covenants contained in this
Agreement required to be performed or complied with at or prior to the
Closing Date, and the representations and warranties of Western
contained in this Agreement shall be true in all respects when made
and on and as of the Closing Date with the same force and effect as if
made on and as of such date, except as expressly contemplated or
otherwise expressly permitted by this Agreement and except that any
representation and warranty not modified by reference to a Western
Material Adverse Effect that is not true in all respects shall
nevertheless be deemed, for purposes of this Section 9.3(a), to be
true in all respects unless the failure of such representation or
warranty to be so true has had, or is reasonably likely to have, a
Western Material Adverse Effect.
(b) The amendment to the Western Rights Agreement
referred to in Section 6.13(a) shall be in full force and effect and
shall be binding, valid and enforceable.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
Section 10.1 Termination. Except as provided in the concluding
sentence of this Section 10.1, this Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval by the
stockholders of Western:
(a) by mutual written consent of the Board of Directors
of BJ and the Board of Directors of the Western;
(b) by either BJ or Western, if the Merger shall not have
been consummated on or before August 31, 1995, which date may be
extended by the mutual written consent of the Board of Directors of BJ
and the Board of Directors of Western; provided, however, that such
right to terminate this Agreement shall not be available to any party
that has breached in any material respect its obligations under this
Agreement in any manner that shall have proximately contributed to the
failure of the Merger to occur on or before such date; provided,
further, that BJ shall have no right to terminate this Agreement
pursuant to this Section 10.1(b) if BJ shall have exercised its rights
under Sections 8.10(f) or 10.1(m) to extend either the Antitrust
Approval Period or the Section 10.1(m) Period (as defined below) until
after the Antitrust Approval Period and the Section 10.1(m) Period
shall have expired;
35
36
(c) by Western, if any of the conditions specified in
Sections 9.1(d) and 9.2 have not been met or waived by Western, but
only at and after such time as such condition can no longer be
satisfied;
(d) by BJ, if any of the conditions specified in Sections
9.1(d) and 9.3 have not been met or waived by BJ, but only at and
after such time as such condition can no longer be satisfied;
(e) by BJ, if (i) the Board of Directors of Western shall
have (A) withdrawn or modified, in any manner which is adverse to BJ
or BJ Sub, its recommendation or approval of the Merger or this
Agreement and the transactions contemplated hereby and (B) recommended
to stockholders of Western any proposal involving an Alternative
Transaction, or shall have resolved to do both of the foregoing, (ii)
the Board of Directors of Western shall have withdrawn or modified, in
any manner which is adverse to BJ or BJ Sub, its recommendation or
approval of the Merger or this Agreement and the transactions
contemplated hereby under any circumstances other than those specified
in clause (i) above, or (iii) any corporation, partnership, person,
other entity or group (as defined in Section 13(d)(3) of the Exchange
Act) other than BJ or any of its subsidiaries (collectively, "Third
Persons") shall have become an "Acquiring Person" (as defined in the
Western Rights Agreement);
(f) by Western, if it shall exercise the right specified
in clause (y) of Section 8.4(a), provided that Western may not effect
such termination pursuant to this Section 10.1(f) unless and until it
gives BJ at least three Trading Days' prior notice of its intention to
effect such termination pursuant to this Section 10.1(f);
(g) by Western, if BJ shall have entered into an
agreement to effectuate a BJ Alternative Transaction;
(h) by either BJ or Western, if the stockholders of
Western shall have failed to adopt this Agreement and approve the
Merger at the meeting of Western's stockholders referred to in Section
8.3;
(i) by either BJ or Western, if either is prohibited by a
final and nonappealable order or injunction of a United States federal
or state court of competent jurisdiction from consummating the Merger;
(j) by either BJ or Western, if the stockholders of BJ
shall have failed to approve the issuance of the Stock Consideration
and Warrant Consideration in the Merger at the meeting of BJ's
stockholders referred to in Section 8.3;
(k) by Western, if the Closing Price is below $14.00,
provided that Western may not effect such termination pursuant to this
Section 10.1(k) if BJ should offer to amend Section 3.1(b)(ii) so that
"Stock Consideration" will be defined so that each share of Western
Common Stock which is the subject of a Stock Election will be
converted into, exchangeable for and represent the right to receive,
together with a corresponding number of BJ Purchase Rights, a number
of shares of BJ Common Stock having the same aggregate value based on
the actual Closing Price as the aggregate value of the number of
shares of BJ Common Stock into which such share of Western Common
Stock would have been converted if the Closing Price had been $14.00;
(l) by either BJ or Western, if the final terms of a
consent decree between BJ and the Antitrust Division or the FTC (the
"Consenting Parties") with respect to the Merger (the "Consent Decree
Final Agreement") have not been agreed to by the Consenting Parties
(as confirmed by Western), or an order of a Federal District Court
adjudging that the Merger does
36
37
not violate the Federal antitrust laws shall not have been issued
(such Consent Decree Final Agreement or court order being collectively
referred to as the "Antitrust Disposition Action"), by 100 days after
Western and its outside counsel have each certified to BJ (the
"Western Compliance Certificates") that to the best of their knowledge
Western has "substantially complied" with the Antitrust Division's or
FTC's "second request" for information from Western under the Xxxx
Xxxxx Act, provided that such 100-day period may be extended for two
successive 30-day periods in the manner specified in Section 8.10(f)
(but in no event longer than a total of 160 days);
(m) by either BJ or Western, if the Merger shall not have
occurred by the thirtieth day after the later of (i) the date of the
Antitrust Disposition Action, (ii) the date on which Western's
stockholders shall have approved the Merger, or (iii) the date on
which BJ's stockholders shall have approved the Merger (provided the
meeting of BJ's stockholders shall have initially been scheduled to be
held prior to the thirtieth day after the date of the Antitrust
Disposition Action and adjourned for good reason to no later than the
Final Adjournment Date (as defined below)); provided, however, that BJ
and Western shall not have the right to terminate this Agreement
pursuant to this Section 10.1(m) if the Merger shall not have occurred
by such thirtieth day due to the existence of a preliminary or
permanent injunction or other order, decree or ruling by any United
States federal or state court of competent jurisdiction or by any
United States federal or state governmental, regulatory or
administrative agency or authority which prevents the consummation of
the Merger (unless the action giving rise to such injunction, order,
decree or ruling sought to enjoin or otherwise prohibit the Merger for
alleged violations of the federal or state antitrust laws or such
action was initiated by BJ); provided, further, that in the event any
such injunction, order, decree or ruling shall cause the 30-day period
referred to at the beginning of this Section 10.1(m) (the "Section
10.1(m) Period") to be delayed, the parties hereto shall use their
best efforts to cause such injunction, order, decree or ruling to be
lifted at the earliest practicable date; provided, further, that BJ
shall have the option to extend the Section 10.1(m) Period for a
period of 30 additional days (but in no event later than the Final
Adjournment Date) if either of the following conditions shall have
been satisfied:
(A) if the Antitrust Approval Period was not
extended pursuant to Section 8.10(f), by the delivery of
written notice of such extension by BJ to Western; or
(B) if the Antitrust Approval Period was not
extended for more than 30 days pursuant to Section 8.10(f), by
(i) paying a fee of $5,000,000 to Western if the Antitrust
Approval Period was extended pursuant to clause (i) of the
first sentence of Section 8.10(f), or (ii) by paying a fee of
$2,500,000 to Western if the Antitrust Approval Period was
extended pursuant to clause (ii) of the first sentence of
Section 8.10(f).
If the Antitrust Approval Period was not extended pursuant to Section 8.10(f),
the date of BJ's stockholders' meeting may not be adjourned for more than 60
days after the Antitrust Disposition Action (the "Final Adjournment Date"). If
the Antitrust Approval Period was extended for 30 days pursuant to Section
8.10(f), the Final Adjournment Date may not be more than 30 days after the
Antitrust Disposition Action; provided, however, that BJ may extend the Final
Adjournment Date for up to 60 days after the date of the Antitrust Disposition
Action by (x) paying a fee of $5,000,000 to Western if the Antitrust Approval
Period was extended pursuant to clause (i) of the first sentence of Section
8.10(f), or (y) by paying a fee of $2,500,000 to Western if the Antitrust
Approval Period was extended pursuant to clause (ii) of the first sentence of
Section 8.10(f). If the Antitrust Approval Period was extended for 60 days
pursuant to Section 8.10(f), the Final Adjournment Date may not be more than 30
days after the Antitrust Disposition Action. Notwithstanding anything to the
contrary provided elsewhere in this Section 10.1, BJ may not terminate this
Agreement pursuant to Sections 10.1(d) or 10.1(e)(iii) after the 100-day
Antitrust Approval Period.
37
38
Section 10.2 Effect of Termination. In the event of termination of
this Agreement by either BJ or Western, as provided above, this Agreement shall
forthwith become void and there shall be no liability or obligation on the part
of either Western or BJ or BJ Sub or their respective officers or directors
(except for this Section 10.2 and Sections 8.10, 8.20 and 8.21, which shall
survive termination of this Agreement and except as set forth in the
confidentiality agreements between BJ and Western dated October 7, 1994
(collectively with the confidentiality agreements among Xxxxxxx, Xxxxxxx, Xxxx
& Xxxxx, Xxxxxxxx & Xxxxxxxx and Xxxxxxx Xxxxxxx & Xxxxxxxx, the
"Confidentiality Agreements"), each of which Confidentiality Agreements shall
survive such termination) and except that nothing herein shall relieve any
party from liability for any breach of this Agreement; provided, however, that
the payment of any fees and expense reimbursements specified in Sections
8.10(b),(d) or (f) upon the termination of this Agreement under any of the
circumstances specified in Sections 8.10(b),(d) or (f) shall constitute the
parties' sole remedy for any breach of this Agreement which may have occurred
prior to such termination.
Section 10.3 Amendment. This Agreement may be amended by the parties
hereto, by or pursuant to action taken by their respective Boards of Directors,
at any time before or after approval hereof by the stockholders of Western but,
after any such approval, no amendment shall be made which changes the way in
which the Merger Consideration is calculated under Article III or which in any
way alters or changes any of the other terms or conditions of this Agreement if
such alteration or change would materially adversely affect the rights of such
stockholders, without the further approval of such stockholders. This
Agreement may not be amended except by an instrument in writing signed and
acknowledged on behalf of each of the parties hereto.
Section 10.4 Waiver. At any time prior to the Closing Date, each of
the parties hereto may (i) extend the time of the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto, (iii) waive compliance with any of the
agreements or conditions contained herein which may legally be waived and (iv)
grant any consents hereunder. Any agreement on the part of any party hereto to
any such extension or waiver shall be valid if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE XI
GENERAL PROVISIONS
Section 11.1 Notice of Breach. Each party will promptly give written
notice to each other party upon becoming aware of the occurrence of any breach
of any of its representations, warranties and covenants contained in this
Agreement and will use its best efforts to prevent or promptly remedy the same.
Section 11.2 Survival of Representations and Warranties. The
covenants of Western, BJ and BJ Sub contained in Sections 3.6, 8.6, 8.8, 8.10,
8.13 and 8.16 shall survive the consummation of the Merger. None of the
representations and warranties in this Agreement shall survive the Merger.
Section 11.3 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given (i) on the date delivered, if
delivered personally, (ii) on the first Trading Day following the deposit
thereof with Federal Express, if sent by Federal Express, and (iii) on the
fourth Trading Day following the mailing thereof with postage prepaid, if
mailed by registered or certified mail (return receipt requested), in each case
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
38
39
(a) If to BJ or BJ Sub, to:
BJ Services Company
0000 Xxxxxxxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xx. X.X. Xxxxxxx
Chairman and President
with copies to:
Xxxxxxx & Xxxxx
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: G. Xxxxxxx X'Xxxxx, Esq.
and
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
(b) if to Western, to:
The Western Company of North America
000 Xxxx Xxx Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
with a copy to:
Xxxxxx X. Xxxxxxx, Senior Vice
President, General Counsel and Secretary
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Section 11.4 Definitions. (a) For purposes of this Agreement, (i)
when a reference is made in this Agreement to subsidiaries of BJ or Western,
the term "subsidiaries" means any domestic or foreign corporation more than 50%
of whose outstanding voting securities are directly or indirectly owned by BJ
or Western, as the case may be, and (ii) the term "affiliate" shall have the
meaning set forth in Rule 12b-2 under the Exchange Act. The headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
(b) As used herein, "BJ Alternative Transaction" means (i) any
merger, consolidation or other business combination transaction involving BJ in
which another corporation, partnership, person, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act) would acquire beneficial
ownership of at least 50% of the aggregate voting power of all voting
securities of BJ or the
39
40
Surviving Corporation, as the case may be; (ii) any tender offer or exchange
offer for any securities of BJ which, if consummated, would result in another
corporation, partnership, person, other entity or group (as defined in Section
13(d)(3) of the Exchange Act) becoming the beneficial power of at least 50% or
more of the aggregate voting power of all voting securities of BJ; (iii) any
sale or other disposition of assets of BJ or any of its subsidiaries in a
single transaction or in a series of related transactions if the fair market
value of such assets exceeds 50% of the aggregate fair market value of the
assets of BJ and its subsidiaries taken as a whole before giving effect to such
sale or other disposition; (iv) the adoption by BJ of a plan of liquidation; or
(v) the repurchase by BJ or any of its subsidiaries of shares of BJ Common
Stock representing at least 50% or more of the aggregate voting power of all
voting securities of BJ.
Section 11.5 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.
Section 11.6 Entire Agreement; Assignment. This Agreement, together
with the Senior Executive Termination Agreements, the Warrant Agreement and the
Confidentiality Agreements, constitutes the entire agreement among the parties
with respect to the subject matter hereof and supersedes all prior agreements
and undertakings, both written and oral, among the parties, or any of them,
with respect to the subject matter hereof (except for the Senior Executive
Termination Agreements, the Warrant Agreement and the Confidentiality
Agreements). This Agreement shall not be assigned by operation of law or
otherwise, except that BJ and BJ Sub may assign all or any of their respective
rights and obligations hereunder to any direct or indirect wholly owned
subsidiary or subsidiaries of BJ, provided that no such assignment shall
relieve the assigning party of its obligations hereunder if such assignee does
not perform such obligations.
Section 11.7 Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement, except as provided in Section 8.6(e) and, to the
limited extent provided for therein, Section 8.8(d).
Section 11.8 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
Section 11.9 Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
Section 11.10 Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
40
41
IN WITNESS WHEREOF, BJ, BJ Sub and Western have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
BJ SERVICES COMPANY
By: /s/ X.X. XXXXXXX
__________________________________
Name: X.X. Xxxxxxx
Title: Chairman and President
WCNA ACQUISITION CORP.
By: /s/ X.X. XXXXXXX
__________________________________
Name: X.X. Xxxxxxx
Title: President
THE WESTERN COMPANY
OF NORTH AMERICA
By: /s/ XXXXXXX X. XXXXXXXX
__________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman and
Chief Executive Officer
41
42
EXHIBIT A
WARRANT AGREEMENT
FOR THE FORM OF AMENDED
WARRANT AGREEMENT,
SEE ANNEX I
TO EXHIBIT 2.2
42
43
Exhibit B
AFFILIATES' AGREEMENT
WHEREAS, BJ Services Company ("BJ"), Western Acquisition Corp. ("BJ
Sub") and The Western Company of North America ("Western") have entered into an
Agreement and Plan Merger dated as of November __, 1994 (the "Merger
Agreement"), pursuant to which, among other things, Western will be merged (the
"Merger") into BJ Sub (all capitalized terms used and not defined herein shall
have the meanings ascribed to them in the Merger Agreement); and
WHEREAS, upon the effectiveness of the Merger, each outstanding share
of Western common stock will be converted into the right to receive (without
interest) Warrant Consideration and either (i) Cash Consideration or (ii) Stock
Consideration, in each case as the holder thereof shall have elected or be
deemed to have elected in accordance with Section 3.3 of the Merger Agreement,
and certain outstanding stock options and stock appreciation rights of Western
will be assumed by BJ and each assumed option will become exercisable for
shares of BJ common stock; and
WHEREAS, a registration statement covering the shares of BJ common
stock and warrants to purchase BJ common stock to be issued in connection with
the Merger has been filed with the Securities and Exchange Commission as
required by the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Securities Act"); and
WHEREAS, the issuance of BJ common stock and warrants to purchase BJ
common stock pursuant to the Merger Agreement constitutes a transaction subject
to Rule 145 under the Securities Act; and
WHEREAS, the undersigned may be considered to be an "affiliate" of
Western for the purpose of Rule 145 in connection with the Merger (an
"Affiliate"), and may be subject to restrictions in connection with the sale or
other disposition of the BJ common stock and warrants to purchase BJ common
stock which may be issued to the undersigned pursuant to the Merger Agreement
in exchange for the shares of Western common stock which the undersigned then
owns.
NOW, THEREFORE, the undersigned hereby agrees for the benefit of BJ,
BJ Sub and Western that: (i) the undersigned will not offer to sell, sell,
transfer or otherwise dispose of any of the BJ common stock and warrants to
purchase BJ common stock which may be issued to the undersigned in the Merger
other than (a) pursuant to an effective registration statement under the
Securities Act covering such sale, transfer or other disposition by the
undersigned of such BJ securities or (b) in compliance with Rule 145 under the
Securities Act or another exemption from the registration requirements of the
Securities Act; (ii) the undersigned will not offer to sell, sell, transfer or
otherwise dispose of any of the BJ common stock and warrants to purchase BJ
common stock which may be issued to the undersigned in the Merger (other than
pursuant to an effective registration statement under the Securities Act)
without prior written notice to BJ specifying the manner of compliance with
this Agreement (including, in the case of a sale pursuant to Rule 145, a
statement to the effect that such sale of such securities is to be made
pursuant to a "brokers' transaction" as defined in Rule 144 under the
Securities Act); provided, however, that if two years shall have elapsed from
the date the undersigned acquired the above-mentioned BJ securities and the
two-year limitation of Rule 145(d)(2) is then available to the undersigned, no
such notice shall be required; (iii) BJ is under no obligation to register the
sale, transfer or other disposition of the BJ securities received by the
undersigned as a result of the Merger or to take any other action necessary for
the purpose of making an exemption from registration available; provided,
however, that in order to permit the undersigned to effect sales pursuant to
Rule 145, BJ will use its best efforts to make available adequate current
public information with respect to BJ within the meaning of paragraph (c) of
Rule 144; and (iv) the undersigned will not offer to sell, sell, transfer or
otherwise dispose of any of the BJ securities which may be issued to the
undersigned in the Merger prior to BJ publishing consolidated financial
statements which reflect at least thirty days of post-merger combined
operations of BJ and Western.
43
44
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
executed as of this ____ day of_______________, 1995.
________________________________
44
45
Exhibit C
WESTERN REPRESENTATIVES ON BJ BOARD
Xxxxx X. X. Xxxxx
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
