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AGREEMENT AND PLAN OF MERGER
by and among
HONEYWELL INC.,
HONEYWELL ACQUISITION CORP.
and
MEASUREX CORPORATION
dated as of
January 26, 1997
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Index of Defined Terms
Defined Term Section No.
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Agreement Recitals
Acquisition Proposal 5.4
Appointment Date 5.1
Balance Sheet 3.10(a)
By-laws 1.4
Certificate of Incorporation 1.2
Certificates 2.2(b)
Closing 1.6
Closing Date 1.6
Code 5.2(a)
Company Recitals
Company Agreements 3.4
Company Disclosure Schedule 3.0
Company ESPP 2.4(d)
Company Material Adverse Effect 3.1(a)
Company SEC Documents 3.5
Confidentiality Agreement 5.2
Copyrights 3.11(c)
Distribution Date 3.18
DGCL 1.2(a)
Dissenting Stockholders 2.1(c)
D&O Insurance 5.9(b)
Effective Time 1.5
Encumbrances 3.2(b)
Environmental Claim 3.15(g)
Environmental Laws 3.15(g)
ERISA 3.9(a)
ERISA Affiliate 3.9(a)
Exchange Act 1.1(a)
Financial Statements 3.5
fully diluted basis 1.1(a)
GAAP 3.5
Governmental Entity 3.4
Hazardous Materials 3.15(g)
HSR Act 3.4
Indemnified Party 5.9(a)
Independent Directors 1.3(c)
Intellectual Property 3.11(c)
Licenses 3.11(c)
Merger 1.4
Merger Consideration 2.1(c)
Minimum Condition 1.1(a)
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NYSE 2.4(a)
Offer 1.1(a)
Offer Documents 1.1(b)
Offer Price 1.1(a)
Offer to Purchase 1.1(a)
Option Exchange Ratio 2.4(a)
Option Plan 2.4(b)
Options 2.4(a)
Parent Recitals
Parent Common Stock 2.4(a)
Parent Material Adverse Effect 4.1
Parent Option 2.4(a)
Participant 5.11(b)
Patents 3.11(c)
Paying Agent 2.2(a)
PCBs 3.15(e)
Plans 3.9(a)
Preferred Stock 3.2(a)
Proxy Statement 1.8(a)
Purchaser Recitals
Purchaser Common Stock 2.1
Retention Bonus 5.11(b)
Retention Bonus Plan 5.11(b)
Rights 3.18
Rights Agreement 3.18
Severance Agreements 5.11(a)
Schedule 14D-1 1.1(b)
Schedule 14D-9 1.2(b)
SEC 1.1(b)
Secretary of State 1.5
Securities Act 3.5
Shares 1.1(a)
Shares Acquisition Date 3.18
Special Meeting 1.8(a)
Subsidiary 3.1
Superior Proposal 5.4(b)
Surviving Corporation 1.4
Tax 3.10(i)
Taxes 3.10(i)
Tax Return 3.10(i)
Termination Fee 8.1(b)
Trademarks 3.11(c)
Transactions 1.2(a)
Trigger Event 3.18
Unvested Portion 2.4(a)
Vested Portion 2.4(a)
Voting Debt 3.2(a)
1996 Premium 5.9(b)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter referred to as this
"Agreement"), dated as of January 26, 1997, by and among Honeywell Inc., a
Delaware corporation ("Parent"), Honeywell Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Parent (the "Purchaser"), and
Measurex Corporation, a Delaware corporation (the "Company").
WHEREAS, the Board of Directors of each of Parent, the Purchaser and
the Company has approved, and deems it advisable and in the best interests of
its respective stockholders to consummate, the acquisition of the Company by
Parent upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer.
(a) As promptly as practicable (but in no event later than five business
days after the public announcement of the execution hereof), the Purchaser shall
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) a tender offer (the "Offer") for all of
the outstanding shares of Common Stock, par value $.01 per share (the
"Shares"), of the Company (including the related Rights (as defined in Section
3.18 of this Agreement)) at a price of $35.00 per Share, net to the seller in
cash (such price, or any such higher price per Share as may be paid in the
Offer, being referred to herein as the "Offer Price"), subject to there being
validly tendered and not withdrawn prior to the expiration of the Offer, that
number of Shares which represents at least a majority of the Shares outstanding
on a fully diluted basis (the "Minimum Condition") and to the other conditions
set forth in Annex A hereto, and shall consummate the Offer in accordance with
its terms ("fully diluted basis" means issued and outstanding Shares and Shares
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subject to issuance under outstanding employee stock options). The obligations
of the Purchaser to accept for payment and to pay for any Shares validly
tendered on or prior to the expiration of the Offer and not withdrawn shall be
subject only to the Minimum Condition and the other conditions set forth in
Annex A hereto. The Offer shall be made by means of an offer to purchase (the
"Offer to Purchase") containing the terms set forth in this Agreement, the
Minimum Condition and the other conditions set forth in Annex A hereto. The
Purchaser shall not amend or waive the Minimum Condition and shall not decrease
the Offer Price or decrease the number of Shares sought, or amend any other
condition of the Offer in any manner adverse to the holders of the Shares
without the written consent of the Company; provided, however, that if on the
initial scheduled expiration date of the Offer which shall be 20 business days
after the date the Offer is commenced, the sole condition remaining unsatisfied
is the failure of the waiting period under the HSR Act (as defined below) to
have expired or been terminated, the Purchaser shall extend the expiration date
from time to time until two business days after the expiration of the waiting
period under the HSR Act. The Purchaser shall, on the terms and subject to the
prior satisfaction or waiver of the conditions of the Offer, accept for payment
and pay for Shares tendered as soon as it is legally permitted to do so under
applicable law; provided, however, that if, immediately prior to the initial
expiration date of the Offer (as it may be extended), the Shares tendered and
not withdrawn pursuant to the Offer equal less than 90% of the outstanding
Shares, the Purchaser may extend the Offer for a period not to exceed twenty
business days, notwithstanding that all conditions to the Offer are satisfied as
of such expiration date of the Offer.
(b) As soon as practicable on the date the Offer is commenced, Parent
and the Purchaser shall file with the United States Securities and Exchange
Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1 with respect
to the Offer (together with all amendments and supplements thereto and including
the exhibits thereto, the "Schedule 14D-l"). The Schedule 14D-1 will include,
as exhibits, the Offer to Purchase and a form of letter of transmittal and
summary advertisement (collectively, together with any amendments and
supplements thereto, the "Offer Documents"). The Offer Documents will comply in
all material respects with the provisions of applicable federal securities laws
and, on the date
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filed with the SEC and on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation
is made by Parent or the Purchaser with respect to information furnished by the
Company to Parent or the Purchaser, in writing, expressly for inclusion in the
Offer Documents. The information supplied by the Company to Parent or the
Purchaser, in writing, expressly for inclusion in the Offer Documents and by
Parent or the Purchaser to the Company, in writing, expressly for inclusion in
the Schedule 14D-9 (as hereinafter defined) will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(c) Each of Parent and the Purchaser will take all steps necessary to
cause the Offer Documents to be filed with the SEC and to be disseminated to
holders of the Shares, in each case as and to the extent required by applicable
federal securities laws. Each of Parent and the Purchaser, on the one hand, and
the Company, on the other hand, will promptly correct any information provided
by it for use in the Offer Documents if and to the extent that it shall have
become false or misleading in any material respect and the Purchaser will take
all steps necessary to cause the Offer Documents as so corrected to be filed
with the SEC and to be disseminated to holders of the Shares, in each case as
and to the extent required by applicable federal securities laws. The Company
and its counsel shall be given the opportunity to review the Schedule 14D-1
before it is filed with the SEC. In addition, Parent and the Purchaser will
provide the Company and its counsel in writing with any comments, whether
written or oral, Parent, the Purchaser or their counsel may receive from time to
time from the SEC or its staff with respect to the Offer Documents promptly
after the receipt of such comments.
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Section 1.2 Company Actions.
(a) The Company hereby approves of and consents to the Offer and
represents that its Board of Directors, at a meeting duly called and held, has
(i) unanimously determined that each of the Agreement, the Offer and the Merger
(as defined in Section 1.4) are fair to and in the best interests of the
stockholders of the Company, (ii) approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger (collectively, the
"Transactions"), and such approval constitutes approval of the Offer, this
Agreement and the Transactions, including the Merger, for purposes of Section
203 of the Delaware General Corporation Law, as amended (the "DGCL")and Article
Twelfth of the Company's Certificate of Incorporation ("Certificate of
Incorporation"), such that Section 203 of the DGCL and Article Twelfth of the
Company's Certificate of Incorporation will not apply to the transactions
contemplated by this Agreement, and (iii) resolved to recommend that the
stockholders of the Company accept the Offer, tender their Shares thereunder to
the Purchaser and approve and adopt this Agreement and the Merger; provided,
that such recommendation may be withdrawn, modified or amended if, in the
opinion of the Board of Directors, only after receipt of advice from outside
legal counsel, failure to withdraw, modify or amend such recommendation could
reasonably be expected to result in the Board of Directors violating its
fiduciary duties to the Company's stockholders under applicable law. The
Company represents that the actions set forth in this Section 1.2(a) and all
other actions it has taken in connection therewith are sufficient to render the
relevant provisions of such Section 203 of the DGCL and Article Twelfth of the
Company's Certificate of Incorporation inapplicable to the Offer and the Merger.
(b) Concurrently with the commencement of the Offer, the Company shall
file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9
(together with all amendments and supplements thereto and including the exhibits
thereto, the "Schedule 14D-9") which shall, subject to the provisions of Section
5.4(b), contain the recommendation referred to in clause (iii) of Section 1.2(a)
hereof. The Schedule 14D-9 will comply in all material respects with the
provisions of applicable federal securities laws and, on the date filed with the
SEC and on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue
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statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information furnished by
Parent or the Purchaser for inclusion in the Schedule 14D-9. The Company
further agrees to take all steps necessary to cause the Schedule 14D-9 to be
filed with the SEC and to be disseminated to holders of the Shares, in each case
as and to the extent required by applicable federal securities laws. Each of
the Company, on the one hand, and Parent and the Purchaser, on the other hand,
agrees promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that it shall have become false and
misleading in any material respect and the Company further agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and to be disseminated to holders of the Shares, in each case as and to the
extent required by applicable federal securities laws. Parent and its counsel
shall be given the opportunity to review the Schedule 14D-9 before it is filed
with the SEC. In addition, the Company agrees to provide Parent, the Purchaser
and their counsel with any comments, whether written or oral, that the Company
or its counsel may receive from time to time from the SEC or its staff with
respect to the Schedule 14D-9 promptly after the receipt of such comments or
other communications.
(c) In connection with the Offer, the Company will promptly furnish or
cause to be furnished to the Purchaser mailing labels, security position
listings and any available listing, or computer file containing the names and
addresses of all recordholders of the Shares as of a recent date, and shall
furnish the Purchaser with such additional information (including, but not
limited to, updated lists of holders of the Shares and their addresses, mailing
labels and lists of security positions) and assistance as the Purchaser or its
agents may reasonably request in communicating the Offer to the record and
beneficial holders of the Shares. Except for such steps as are necessary to
disseminate the Offer Documents, Parent and the Purchaser shall hold in
confidence the information contained in any of such labels and lists and the
additional information referred to in the preceding sentence, will use such
information only in connection with the Offer, and, if this Agreement is
terminated, will upon request of the Company deliver or
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cause to be delivered to the Company all copies of such information then in its
possession or the possession of its agents or representatives.
Section 1.3 Directors.
(a) Promptly upon the purchase of and payment for any Shares by
Parent or any of its subsidiaries which represents at least a majority of the
outstanding Shares (on a fully diluted basis, as defined in Section 1.1(a)),
Parent shall be entitled to designate such number of directors, rounded up to
the next whole number, on the Board of Directors of the Company as is equal to
the product of the total number of directors on such Board (giving effect to the
directors designated by Parent pursuant to this sentence) multiplied by the
percentage that the number of Shares so accepted for payment bears to the total
number of Shares then outstanding. In furtherance thereof, the Company shall,
upon request of the Purchaser, use its best reasonable efforts promptly either
to increase the size of its Board of Directors or secure the resignations of
such number of its incumbent directors, or both, as is necessary to enable
Parent's designees to be so elected to the Company's Board, and shall take all
actions available to the Company to cause Parent's designees to be so elected.
At such time, the Company shall, if requested by Parent, also cause persons
designated by Parent to constitute at least the same percentage (rounded up to
the next whole number) as is on the Company's Board of Directors of (i) each
committee of the Company's Board of Directors, (ii) each board of directors (or
similar body) of each Subsidiary (as defined in Section 3.1) of the Company and
(iii) each committee (or similar body) of each such board.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-l promulgated thereunder in order
to fulfill its obligations under Section 1.3(a), including mailing to
stockholders the information required by such Section 14(f) and Rule 14f-1 as is
necessary to enable Parent's designees to be elected to the Company's Board of
Directors. Parent or the Purchaser will supply the Company and be solely
responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1. The provisions of this Section 1.3 are in addition to and shall not
limit any rights which the Purchaser, Parent or any of their affiliates may have
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as a holder or beneficial owner of Shares as a matter of law with respect to
the election of directors or otherwise.
(c) In the event that Parent's designees are elected to the Company's
Board of Directors, until the Effective Time (as defined below), the Company's
Board shall have at least two directors who are directors on the date hereof and
who would constitute Continuing Directors for purposes of Article Twelfth of the
Company's Certificate of Incorporation (the "Independent Directors"), provided
that, in such event, if the number of Independent Directors shall be reduced
below two for any reason whatsoever, any remaining Independent Directors (or
Independent Director, if there be only one remaining) shall be entitled to
designate persons to fill such vacancies who shall be deemed to be Independent
Directors for purposes of this Agreement or, if no Independent Director then
remains, the other directors shall designate two persons to fill such vacancies
who shall not be stockholders, affiliates or associates of Parent or the
Purchaser and such persons shall be deemed to be Independent Directors for
purposes of this Agreement. Notwithstanding anything in this Agreement to the
contrary, in the event that Parent's designees are elected to the Company's
Board, after the acceptance for payment of Shares pursuant to the Offer and
prior to the Effective Time, the affirmative vote of a majority of the
Independent Directors shall be required to (a) amend or terminate this Agreement
by the Company, (b) exercise or waive any of the Company's rights, benefits or
remedies hereunder, or (c) take any other action by the Company's Board under or
in connection with this Agreement.
Section 1.4 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, the Company and the Purchaser shall consummate
a merger (the "Merger") pursuant to which (a) the Purchaser shall be merged with
and into the Company and the separate corporate existence of the Purchaser shall
thereupon cease, (b) the Company shall be the successor or surviving corporation
in the Merger (sometimes hereinafter referred to as the "Surviving Corporation")
and shall continue to be governed by the laws of the State of Delaware, and (c)
the separate corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger,
except as set forth in this Section 1.4. Pursuant to the Merger, (x) the
Certificate of Incorporation
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shall be amended in its entirety to read as the Certificate of Incorporation of
the Purchaser, in effect immediately prior to the Effective Time, except that
Article FIRST thereof shall read as follows: "FIRST: The name of the
corporation is HONEYWELL-MEASUREX CORPORATION." and, as so amended, shall be the
certificate of incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation, except that if
Purchaser shall acquire less than seventy-five percent of the outstanding Shares
pursuant to the Offer, the Certificate of Incorporation of the Company, as in
effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation, and (y) the By-Laws of the
Purchaser (the "By-laws"), as in effect immediately prior to the Effective Time,
shall be the By-laws of the Surviving Corporation until thereafter amended as
provided by law, by such Certificate of Incorporation or by such By-laws. The
Merger shall have the effects specified in the DGCL.
Section 1.5 Effective Time. Parent, the Purchaser and the Company
will cause a Certificate of Merger to be executed and filed on the Closing Date
(as defined in Section 1.6) (or on such other date as Parent and the Company may
agree) with the Secretary of State of Delaware (the "Secretary of State") as
provided in the DGCL. The Merger shall become effective on the date on which
the Certificate of Merger is duly filed with the Secretary of State or such time
as is agreed upon by the parties and specified in the Certificate of Merger, and
such time is hereinafter referred to as the "Effective Time."
Section 1.6 Closing. The closing of the Merger (the "Closing") shall
take place at 10:00 a.m. on a date to be specified by the parties, which shall
be no later than the second business day after satisfaction or waiver of all of
the conditions set forth in Article VI hereof (the "Closing Date"), at the
corporate offices of Parent, unless another date or place is agreed to in
writing by the parties hereto.
Section 1.7 Directors and Officers of the Surviving Corporation. The
directors of the Purchaser and the officers of the Company at the Effective Time
shall, from and after the Effective Time, be the directors and officers,
respectively, of the Surviving Corporation
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until their successors shall have been duly elected or appointed or qualified or
until their earlier death, resignation or removal in accordance with the
Certificate of Incorporation and the By-laws.
Section 1.8 Stockholders' Meeting.
(a) If required by applicable law in order to consummate the Merger,
the Company, acting through its Board of Directors, shall, in accordance with
applicable law.
(i) duly call, give notice of, convene and hold a special meeting
of its stockholders (the "Special Meeting") as promptly as practicable
following the acceptance for payment and purchase of Shares by the
Purchaser pursuant to the Offer for the purpose of considering and taking
action upon the approval of the Merger and the adoption of this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement and use its
best efforts (x) to obtain and furnish the information required to be
included by the SEC in the Proxy Statement (as hereinafter defined) and,
after consultation with Parent, to respond promptly to any comments made by
the SEC with respect to the preliminary proxy or information statement and
cause a definitive proxy or information statement, including any amendment
or supplement thereto (the "Proxy Statement") to be mailed to its
stockholders, provided that no amendment or supplement to the Proxy
Statement will be made by the Company without consultation with Parent and
its counsel and (y) to obtain the necessary approvals of the Merger and
this Agreement by its stockholders; and
(iii) include in the Proxy Statement the recommendation of the
Board that stockholders of the Company vote in favor of the approval of the
Merger and the adoption of this Agreement.
(b) Parent shall vote, or cause to be voted, all of the Shares then
owned by it, the Purchaser or any of its other subsidiaries and affiliates in
favor of the approval of the Merger and the approval and adoption of this
Agreement.
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Section 1.9 Merger Without Meeting of Stockholders. Notwithstanding
Section 1.8 hereof, in the event that Parent, the Purchaser and any other
Subsidiaries of Parent shall acquire in the aggregate at least 90% of the
outstanding shares of each class of capital stock of the Company, pursuant to
the Offer or otherwise, the parties hereto shall, at the request of Parent and
subject to Article VI hereof, take all necessary and appropriate action to cause
the Merger to become effective as soon as practicable after such acquisition,
without a meeting of stockholders of the Company, in accordance with Section 253
of the DGCL.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective Time,
by virtue of the Merger and without any action on the part of the holders of any
Shares or holders of common stock, par value $1.00 per share, of the Purchaser
(the "Purchaser Common Stock"):
(a) The Purchaser Common Stock. Each issued and outstanding share of
the Purchaser Common Stock shall be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. All Shares
that are owned by the Company as treasury stock and any Shares owned by Parent,
the Purchaser or any other wholly owned Subsidiary of Parent shall be cancelled
and retired and shall cease to exist and no consideration shall be delivered in
exchange therefor.
(c) Exchange of Shares. Each issued and outstanding Share (other
than Shares to be cancelled in accordance with Section 2.1(b) and any Shares
which are held by stockholders exercising appraisal rights pursuant to Section
262 of the DGCL ("Dissenting Stockholders")) shall be converted into the right
to receive the Offer Price, payable to the holder thereof, without interest (the
"Merger Consideration"), upon surrender of the certificate formerly representing
such Share in the manner provided in Section 2.2. All such Shares, when so
converted, shall no longer be outstanding and shall automat-
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ically be cancelled and retired and shall cease to exist, and each holder of a
certificate representing any such Shares shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration therefor
upon the surrender of such certificate in accordance with Section 2.2, without
interest, or the right, if any, to receive payment from the Surviving
Corporation of the "fair value" of such Shares as determined in accordance with
Section 262 of the DGCL.
Section 2.2 Exchange of Certificates.
(a) Paying Agent. Parent shall designate a bank or trust company
reasonably acceptable to the Company to act as agent for the holders of the
Shares in connection with the Merger (the "Paying Agent") to receive in trust
the funds to which holders of the Shares shall become entitled pursuant to
Section 2.1(c). Such funds shall be invested by the Paying Agent as directed by
Parent or the Surviving Corporation.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates, which immediately prior to the Effective Time
represented outstanding Shares (the "Certificates"), whose Shares were converted
pursuant to Section 2.1 into the right to receive the Merger Consideration (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and shall be in such form and have such other
provisions as Parent and the Company may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for payment of the Merger Consideration. Upon surrender of a Certificate for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Parent, together with such letter of transmittal, duly executed,
the holder of such Certificate shall be entitled to receive in exchange therefor
the Merger Consideration for each Share formerly represented by such Certificate
and the Certificate so surrendered shall forthwith be cancelled. If payment of
the Merger Consideration is to be made to a person other than the person in
whose name the surrendered Certificate is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed or shall
be otherwise in proper form for transfer and that
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the person requesting such payment shall have paid any transfer and other taxes
required by reason of the payment of the Merger Consideration to a person other
than the registered holder of the Certificate surrendered or shall have
established to the satisfaction of the Surviving Corporation that such tax
either has been paid or is not applicable. Until surrendered as contemplated by
this Section 2.2, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive the Merger Consideration
in cash as contemplated by this Section 2.2.
(c) Transfer Books; No Further Ownership Rights in the Shares. At
the Effective Time, the stock transfer books of the Company shall be closed and
thereafter there shall be no further registration of transfers of the Shares on
the records of the Company. From and after the Effective Time, the holders of
Certificates evidencing ownership of the Shares outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such Shares,
except as otherwise provided for herein or by applicable law. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be cancelled and exchanged as provided in this Article II.
(d) Termination of Fund; No Liability. At any time following six
months after the Effective Time, the Surviving Corporation shall be entitled to
require the Paying Agent to deliver to it any funds (including any interest
received with respect thereto) which had been made available to the Paying Agent
and which have not been disbursed to holders of Certificates, and thereafter
such holders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat or other similar laws) only as general creditors
thereof with respect to the Merger Consideration payable upon due surrender of
their Certificates, without any interest thereon. Notwithstanding the
foregoing, neither the Surviving Corporation nor the Paying Agent shall be
liable to any holder of a Certificate for Merger Consideration delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
Section 2.3 Dissenters' Rights. If any Dissenting Stockholder shall
be entitled to be paid the fair value of such holder's Shares, as provided in
Section 262 of the DGCL, the Company shall give Parent notice thereof and Parent
shall have the right to participate in all
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negotiations and proceedings with respect to any such demands. Neither the
Company nor the Surviving Corporation shall, except with the prior written
consent of Parent, voluntarily make any payment with respect to, or settle or
offer to settle, any such demand for payment. If any Dissenting Stockholder
shall fail to perfect or shall have effectively withdrawn or lost the right to
dissent, the Shares held by such Dissenting Stockholder shall thereupon be
treated as though such Shares had been converted into the Merger Consideration
pursuant to Section 2.1.
Section 2.4 Company Plans.
(a) Immediately prior to the Effective Time, each holder of then
outstanding options to purchase Shares granted by the Company (the "Options")
will be entitled to receive from the Company, and shall receive, in settlement
of each Option a Cash Amount with respect to the number of Shares for which the
Option is exercisable immediately prior to the Effective Time (the "Vested
Portion"), and the Parent shall assume the balance of the Option, if any (the
"Unvested Portion"). The Vested Portion of each Option shall terminate as of
the Effective Time. The Cash Amount payable for the Vested Portion of each
Option shall equal the product of (i) the Merger Consideration minus the
exercise price per Share of the Vested Portion of such Option and (ii) the
number of Shares covered by the Vested Portion of such Option. With respect to
any Option held by individuals who are parties to severance agreements
identified on Schedule 5.11 to the Company Disclosure Schedule (as defined
below) and Options held by directors of the Company, the entire Option shall be
treated as the Vested Portion of the Option for purposes of this Section 2.4. In
addition, with respect to the Unvested Portion, the Parent shall assume, as of
the Effective Time such Unvested Portion of an Option. Upon such assumption,
the Unvested Portion of the Option shall be converted into an option (a "Parent
Option") to purchase shares of common stock, par value $1.50 per share, of
Parent ("Parent Common Stock"). With respect to any such Parent Option (i) the
number of shares of Parent Common Stock subject to such Parent Option will be
determined by multiplying the number of Shares subject to the Unvested Portion
of the Option by the Option Exchange Ratio (as hereinafter defined), rounding
any fractional share up to the nearest whole share, and (ii) the exercise price
per share of such Parent Option will be determined by dividing the
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exercise price per share under the Unvested Portion of the Option by the Option
Exchange Ratio, and rounding the exercise price thus determined up to the
nearest whole cent. Except as provided above, the assumed Options shall be
subject to the same terms and conditions (including, without limitation,
expiration date, vesting and exercise provisions) as were applicable to the
Unvested Portion of the Option immediately prior to the Effective Time. Parent
agrees to take all actions which may be necessary so that, in the event that an
optionee's employment by the Company is terminated at any time during the
eighteen-month period immediately following the Effective Time, the Unvested
Options held by such optionee shall vest as of the date of termination and not
expire until three months following the date of termination. The "Option
Exchange Ratio" shall be (x) the Offer Price divided by (y) the average of the
closing prices of the Parent Common Stock on the New York Stock Exchange
("NYSE") during the ten trading days preceding the fifth trading day prior to
the Closing Date. If and to the extent required by the terms of the plans
governing Options or pursuant to the terms of any Option granted thereunder,
each of Parent and the Company shall use its best efforts to obtain the consent
of each holder of outstanding Options to the foregoing treatment of such
Options. Each share of Parent Common Stock underlying the Parent Options will
be covered by an effective registration statement under the Securities Act (as
defined below).
(b) Except as may be otherwise agreed to by Parent or the Purchaser
and the Company, the Company's 1993 Stock Option Plan (the "Option Plan") shall
terminate as of the Effective Time and the provisions in any other plan, program
or arrangement providing for the issuance or grant of any other interest in
respect of the capital stock of the Company or any of its Subsidiaries shall be
deleted as of the Effective Time.
(c) The Company has taken all actions so that following the Effective
Time no holder of employee stock options will have any right to receive Shares
upon exercise of an employee stock option.
(d) Outstanding purchase rights under the Company's Employee Stock
Purchase Plan (the "Company ESPP") shall be exercised upon the earlier of (i)
the next scheduled purchase date under the Company ESPP or (ii) immediately
prior to the Effective Time, and each
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participant in the Company ESPP shall accordingly be issued Shares at that time
which shall be cancelled at the Effective Time and converted into the right to
receive the Merger Consideration for those Shares. The Company ESPP shall
terminate with such exercise date, and no purchase rights shall be subsequently
granted or exercised under the Company ESPP.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Except as set forth in the schedule attached to this Agreement setting
forth exceptions to the Company's representations and warranties set forth
herein (the "Company Disclosure Schedule"), the Company represents and warrants
to Parent and the Purchaser as set forth below. The Company Disclosure Schedule
will be arranged in sections corresponding to sections of this Agreement to be
modified by such disclosure schedule.
Section 3.1 Organization. (a) Each of the Company and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
and has all requisite corporate power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power, authority, and
governmental approvals would not, individually or in the aggregate, have a
Company Material Adverse Effect (as defined below). As used in this Agreement,
the term "Subsidiary" shall mean all corporations or other entities in which the
Company or the Parent, as the case say be, owns a majority of the issued and
outstanding capital stock or similar interests. As used in this Agreement,
"Company Material Adverse Effect" with reference to any events, changes or
effects, shall mean such events, changes or effects that are materially adverse
to the Company and its Subsidiaries, taken as a whole. No breach of any
representation or warranty contained in Article III of this Agreement shall be
deemed to be a breach by the Company of this Agreement pursuant to Article VII
or otherwise unless the Company shall have failed to meet the condition set
forth in paragraph (f) of Annex A. As used in this Agreement, "to
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the knowledge of the Company" means the knowledge of the executive officers of
the Company, without having made any independent investigation in connection
with the execution of this Agreement.
(b) The Company and each of its Subsidiaries is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except where the failure
to be so duly qualified or licensed and in good standing would not individually
or in the aggregate have a Company Material Adverse Effect. Except as set forth
in Section 3.1 of the Company Disclosure Schedule, the Company does not own (i)
any equity interest in any corporation or other entity or (ii) marketable
securities where the Company's equity interest in any entity exceeds five
percent of the outstanding equity of such entity on the date hereof.
Section 3.2 Capitalization. (a) The authorized capital stock of the
Company consists of 50,000,000 Shares and 10,000,000 shares of preferred stock,
par value $.01 per share (the "Preferred Stock"). As of the date hereof, (i)
16,150,375 Shares are issued and outstanding, (ii) 2,747,074 Shares are issued
and held in the treasury of the Company, (iii) 250,000 shares of Preferred Stock
are designated as Series A Junior Participating Preferred Stock and none of
which are issued and outstanding, and (iv) 7,110,240 Shares are reserved for
issuance to employees and consultants pursuant to the Option Plan, of which
2,064,957 Shares have been issued pursuant to option exercises and 3,592,579
Shares are subject to outstanding, unexercised options; and (v) 1,225,000 Shares
are reserved for issuance to employees pursuant to the Company ESPP, of which
1,114,362 Shares have been issued. Since January 26, 1997, the Company has not
(i) issued or granted additional options under the Option Plan or (ii) accepted
new enrollments in the Company ESPP. All the outstanding shares of the
Company's capital stock are, and all Shares which may be issued pursuant to the
exercise of outstanding Company Options will be, when issued in accordance with
the respective terms thereof, duly authorized, validly issued, fully paid and
non-assessable. There are no bonds, debentures, notes or other indebtedness
having general voting rights (or convertible into securities having such rights)
("Voting Debt") of the Company or any of its Subsidiaries issued and
outstanding. Except as set forth
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above and except for the transactions contemplated by this Agreement, as of the
date hereof, (i) there are no shares of capital stock of the Company authorized,
issued or outstanding (ii) there are no existing options, warrants, calls,
pre-emptive rights, subscriptions or other rights, agreements, arrangements or
commitments of any character, relating to the issued or unissued capital stock
of the Company or any of its Subsidiaries, obligating the Company or any of its
Subsidiaries to issue, transfer or sell or cause to be issued, transferred or
sold any shares of capital stock or Voting Debt of, or other equity interest in,
the Company or any of its Subsidiaries or securities convertible into or
exchangeable for such shares or equity interests, or obligating the Company or
any of its Subsidiaries to grant, extend or enter into any such option, warrant,
call, subscription or other right, agreement, arrangement or commitment and
(iii) except as set forth in Section 3.2(a) of the Company Disclosure Schedule,
there are no outstanding contractual obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Shares, or the
capital stock of the Company, or any Subsidiary or affiliate of the Company or
to provide funds to make any investment (in the form of a loan, capital
contribution or otherwise) in any Subsidiary or any other entity other than
loans to Subsidiaries in the ordinary course of business. The current "Purchase
Period" (as defined in the Company ESPP) commenced under the Company ESPP on or
about December 2, 1996 and will end prior to the Effective Time as provided in
this Agreement, and except for the purchase rights granted on such commencement
date to participants in the current Purchase Period, there are no other purchase
rights or options outstanding under the Company ESPP.
(b) Except for director's qualifying shares which may be required in
certain jurisdictions, all of the outstanding shares of capital stock of each of
the Subsidiaries are beneficially owned by the Company, directly or indirectly,
and all such shares have been validly issued and are fully paid and
nonassessable and are owned by either the Company or one of its Subsidiaries
free and clear of all liens, charges, claims or encumbrances ("Encumbrances").
(c) There are no voting trusts or other agreements or understandings
to which the Company or any of its Subsidiaries is a party with respect to the
voting of
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the capital stock of the Company or any of the Subsidiaries.
Section 3.3 Authorization; Validity of Agreement; Company Action.
The Company has full corporate power and authority to execute and deliver this
Agreement and to consummate the Transactions. The execution, delivery and
performance by the Company of this Agreement, and the consummation by it of the
Transactions, have been duly authorized by its Board of Directors and, except
for obtaining the approval of its stockholders as contemplated by Section 1.8
hereof, no other corporate action on the part of the Company is necessary to
authorize the execution and delivery by the Company of this Agreement and the
consummation by it of the Transactions. This Agreement has been duly executed
and delivered by the Company and, assuming due and valid authorization,
execution and delivery hereof by Parent and the Purchaser, is a valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms.
Section 3.4 Consents and Approvals; No Violations. Except for the
filings set forth in Section 3.4 of the Company Disclosure Schedule and the
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), the laws of any foreign jurisdictions, state securities or blue sky laws,
and the DGCL, none of the execution, delivery or performance of this Agreement
by the Company, the consummation by the Company of the Transactions or
compliance by the Company with any of the provisions hereof will (i) conflict
with or result in any breach of any provision of the Certificate of
Incorporation, the By-laws or similar organizational documents of the Company or
any of its Subsidiaries, (ii) require any filing with, or permit, authorization,
consent or approval of, any court, arbitral tribunal, administrative agency or
commission or other governmental or other regulatory authority or agency (a
"Governmental Entity"), (iii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration) under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to which
the Company or any of its Subsidiar-
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ies is a party or by which any of them or any of their properties or assets may
be bound (the "Company Agreements") or (iv) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Company, any of its
Subsidiaries or any of their properties or assets, excluding from the foregoing
clauses (ii), (iii) and (iv) such violations, breaches or defaults which would
not, individually or in the aggregate, have a Company Material Adverse Effect or
have a material adverse effect on the ability of the Company to consummate the
Transactions. Section 3.4 of the Company Disclosure Schedule sets forth a list
of all third party consents and approvals required to be obtained in connection
with this Agreement under the Company Agreements prior to the consummation of
the transactions contemplated by this Agreement.
Section 3.5 SEC Reports and Financial Statements. The Company has
filed with the SEC, and has heretofore made available to Parent, true and
complete copies of, all forms, reports, schedules, statements and other
documents required to be filed by it since January 1, 1995 under the Exchange
Act or the Securities Act of 1933, as amended (the "Securities Act") (as such
documents have been amended since the time of their filing, collectively, the
"Company SEC Documents"). As of their respective dates or, if amended, as of
the date of the last such amendment, the Company SEC Documents, including,
without limitation, any financial statements or schedules included therein (a)
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be, and
the applicable rules and regulations of the SEC thereunder. None of the
Company's Subsidiaries is required to file any forms, reports or other documents
with the SEC. The financial statements of the Company included in the Company
SEC Documents (the "Financial Statements") have been prepared from, and are in
accordance with, the books and records of the Company and its consolidated
Subsidiaries, comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with United States generally
accepted accounting principles ("GAAP") applied on a consistent basis during the
period
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involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position and the consolidated results of operations
and cash flows (and changes in financial position, if any) of the Company and
its consolidated Subsidiaries as of the times and for the periods referred to
therein.
Section 3.6 Absence of Certain Changes. Except as disclosed in
Section 3.6 of the Company Disclosure Schedule or in the Company SEC Documents
filed prior to the date hereof, since September 1, 1996, the Company and its
Subsidiaries have conducted their respective businesses only in the ordinary and
usual course and (i) there has not occurred any events or changes (including the
incurrence of any liabilities of any nature, whether or not accrued, contingent
or otherwise) having, individually or in the aggregate, a Company Material
Adverse Effect (provided, however, that no event, change or effect that
materially results from the Transactions or the announcement thereof shall be
deemed to cause, either individually or in the aggregate, a Company Material
Adverse Effect for purposes of this Section 3.6) and the Company has not taken
any action which would have been prohibited under Section 5.1 hereof.
Section 3.7 No Undisclosed Liabilities. Except (a) as disclosed in
the Financial Statements and (b) for liabilities and obligations (i) incurred in
the ordinary course of business and consistent with past practice since
September 1, 1996, (ii) pursuant to the terms of this Agreement, (iii) as set
forth in Section 3.7 of the Company Disclosure Schedule, or (iv) as required to
be disclosed in Section 3.8 of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries has any liabilities or obligations of any
nature, whether or not accrued, contingent or otherwise, that would be required
by GAAP to be reflected in, reserved against or otherwise described in the
consolidated balance sheet of the Company (including the notes thereto) and
which would have a Company Material Adverse Effect.
Section 3.8 Litigation. Except as set forth in Section 3.8 of the
Company Disclosure Schedule, as of the date hereof, there are no suits, claims,
actions, proceedings, including, without limitation, arbitration proceedings or
alternative dispute resolution proceedings, or investigations pending or, to the
knowledge of the Company, threatened against the Company or any of its
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Subsidiaries before any Governmental Entity that, either individually or in the
aggregate, would be reasonably likely to have a Company Material Adverse Effect.
Section 3.9 Employee Benefit Plans.
(a) For purposes of this Agreement, the term "Plans" shall include:
each deferred compensation and each incentive compensation, stock purchase,
stock option and other equity compensation plan, program, agreement or
arrangement; each severance or termination pay, medical, surgical,
hospitalization, life insurance and other "welfare" plan, fund or program
(within the meaning of section 3(1) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")); each profit-sharing, stock bonus or other
"pension" plan, fund or program (within the meaning of section 3(2) of ERISA);
each employment, termination or severance agreement; and each other employee
benefit plan, fund, program, agreement or arrangement, in each case, that is
sponsored, maintained or contributed to or required to be contributed to by the
Company or by any trade or business, whether or not incorporated (an "ERISA
Affiliate"), that together with the Company would be deemed a "single employer"
within the meaning of section 4001(b) of ERISA, or to which the Company or an
ERISA Affiliate is party, whether written or oral, for the benefit of any
employee or former employee of the Company or any Subsidiary (the "Plans").
Each of the Plans that is subject to section 302 or Title IV of ERISA or section
412 of the Code (as defined below) is hereinafter referred to in this Section
3.9 as a "Title IV Plan." Neither the Company, any Subsidiary nor any ERISA
Affiliate has any commitment or formal plan, whether legally binding or not, to
create any additional employee benefit plan or modify or change any existing
Plan that would affect any employee or former employee of the Company or any
Subsidiary.
(b) No liability under Title IV or section 302 of ERISA has been
incurred by the Company or any ERISA Affiliate that has not been satisfied in
full, and no condition exists that presents a material risk to the Company or
any ERISA Affiliate of incurring any such liability. No Plan is a Title IV
Plan.
(c) Neither the Company or any Subsidiary, any Plan, any trust created
thereunder, nor any trustee or administrator thereof has engaged in a
transaction in connection with which the Company or any Subsidiary, any
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Plan, any such trust, or any trustee or administrator (as defined in Section
3(16)(A) of ERISA) thereof, or any party in interest (as defined in ERISA
Section 3(14)) or fiduciary with respect to any Plan or any such trust could be
subject to either a civil penalty assessed pursuant to section 409 or 502(i) of
ERISA or a tax imposed pursuant to section 4975 or 4976 of the Code.
(d) Each Plan has been operated and administered in all material
respects in accordance with its terms and applicable law, including but not
limited to ERISA and the Code.
(e) Each Plan intended to be "qualified" within the meaning of section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service with respect to the qualified status of such Plan under
the Code, including all amendments to the Code effected by the Tax Reform Act of
1986 and subsequent legislation, and nothing has occurred since the issuance of
such letter which could reasonably be expected to cause the loss of the
tax-qualified status of such Plan and the related trust maintained thereunder.
The Company has no Plans intended to satisfy the requirements of Section
501(c)(9).
(f) No Plan provides medical, surgical, hospitalization, death or
similar benefits (whether or not insured) for employees or former employees of
the Company or any Subsidiary for periods extending beyond their retirement or
other termination of service, other than (i) coverage mandated by applicable
law, (ii) death benefits under any "pension plan," or (iii) benefits the full
cost of which is borne by the current or former employee (or his beneficiary) or
(iv) post-death exercise periods in effect under outstanding Options.
(g) Except as disclosed in Schedule 3.9(g), or as set forth in Section
5.11 of this Agreement, the consummation of the transactions contemplated by
this Agreement will not, either alone or in combination with another event, (i)
entitle any current or former employee or officer of the Company or any ERISA
Affiliate to severance pay, unemployment compensation or any other payment,
except as expressly provided in this Agreement, or (ii) accelerate the time of
payment or vesting, or increase the amount of compensation due any such employee
or officer.
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(h) There are no pending, or to the knowledge of the Company,
threatened or anticipated claims by or on behalf of any Plan, by any employee or
beneficiary covered under any such Plan, or otherwise involving any such Plan
(other than routine claims for benefits) which would have a material adverse
effect upon the Plans or a Company Material Adverse Effect.
(i) Notwithstanding anything in this Section 3.9 to the contrary, the
representations and warranties set forth in Sections 3.9(b), (c), (d), (e), (f),
(g) and (h) shall not be deemed to be breached unless such breaches, either
individually or in the aggregate, would have a Company Material Adverse Effect.
Section 3.10 Tax Matters; Government Benefits.
(a) The Company and each of its Subsidiaries have duly filed all Tax
Returns (as hereinafter defined) that are required to be filed excluding only
such Tax Returns as to which any failure to file does not have a Company
Material Adverse Effect and have duly paid or caused to be duly paid in full or
made provision in accordance with GAAP (or there has been paid or provision has
been made on their behalf) for the payment of all Taxes (as hereinafter defined)
shown due on such Tax Returns. All such Tax Returns are correct and complete in
all material respects and accurately reflect all liability for Taxes for the
periods covered thereby. All Taxes owed and due by the Company and each of its
Subsidiaries for results of operations through September 1, 1996 (whether or not
shown on any Tax Return) have been paid or have been adequately reflected on the
Company's balance sheet as of September 1, 1996 included in the Financial
Statements (the "Balance Sheet") other than those Taxes the failure of which to
pay or provide reserves for will not have a Company Material Adverse Effect.
Since September 1, 1996, the Company has not incurred liability for any Taxes
other than in the ordinary course of business. Neither the Company nor any of
its Subsidiaries has received written notice of any claim made by an authority
in a jurisdiction where neither the Company nor any of its Subsidiaries file Tax
Returns, that the Company is or may be subject to taxation by that jurisdiction.
(b) The federal income Tax Returns of the Company and its Subsidiaries
have been examined by the Internal Revenue Service (or the applicable statutes
of
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limitation for the assessment of federal income Taxes for such periods have
expired) for all periods through and including November 28, 1993, and no
material deficiencies were asserted as a result of such examinations that have
not been resolved or fully paid. Neither the Company nor any of its
Subsidiaries has waived any statute of limitations in any jurisdiction in
respect of Taxes or Tax Returns or agreed to any extension of time with respect
to a Tax assessment or deficiency.
(c) No federal, state, local or foreign audits, examinations or other
administrative proceedings have been commenced or, to the Company's knowledge,
are pending with regard to any Taxes or Tax Returns of the Company or of any of
its Subsidiaries. No written notification has been received by the Company or
by any of its Subsidiaries that such an audit, examination or other proceeding
is pending or threatened with respect to any Taxes due from or with respect to
or attributable to the Company or any of its Subsidiaries or any Tax Return
filed by or with respect to the Company or any of its Subsidiaries. To the
Company's knowledge, there is no dispute or claim concerning any Tax liability
of the Company, or any of its Subsidiaries either claimed or raised by any
taxing authority in writing.
(d) Neither the Company nor any of its Subsidiaries is a party to any
agreement, plan, contract or arrangement that could result, separately or in the
aggregate, in a payment of any "excess parachute payments" within the meaning of
Section 280G of the Code.
(e) Neither the Company nor any of its Subsidiaries has filed a
consent pursuant to Section 341(f) of the Code (or any predecessor provision)
concerning collapsible corporations, or agreed to have Section 341(f)(2) of the
Code apply to any disposition of a "subsection (f) asset" (as such term is
defined in Section 341(f)(4) of the Code) owned by the Company or any of its
Subsidiaries.
(f) No taxing authority is asserting or, to the knowledge of the
Company, threatening to assert a claim against the Company or any of its
Subsidiaries under or as a result of Section 482 of the Code or any similar
provision of state, local or foreign law.
(g) Neither the Company nor any of its Subsidiaries is a party to any
material tax sharing, tax indem-
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nity or other agreement or arrangement with any entity not included in the
Company's consolidated financial statements most recently filed by the Company
with the SEC.
(h) None of the Company or any of its Subsidiaries has been a member
of any affiliated group within the meaning of Section 1504(a) of the Code, or
any similar affiliated or consolidated group for tax purposes under state, local
or foreign law (other than a group the common parent of which is the Company),
or has any liability for Taxes of any person (other than the Company and its
Subsidiaries) under Treasury Regulation Section 1.1502-6 or any similar
provision of state, local or foreign law as a transferee or successor, by
contract or otherwise.
(i) As used in this Agreement, the following terms shall have the
following meanings:
(i) "Tax" or "Taxes" shall mean all taxes, charges, fees,
duties, levies, penalties or other assessments imposed by any federal,
state, local or foreign governmental authority, including, but not limited
to, income, gross receipts, excise, property, sales, gain, use, license,
custom duty, unemployment, capital stock, transfer, franchise, payroll,
withholding, social security, minimum estimated, and other taxes, and shall
include interest, penalties or additions attributable thereto; and
(ii) "Tax Return" shall mean any return, declaration, report,
claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.
Section 3.11 Intellectual Property.
(a) The Company and its Subsidiaries own or have adequate rights
to use all items of Intellectual Property (as defined below) necessary to
conduct the business of the Company and its Subsidiaries as presently conducted
or as currently proposed to be conducted, free and clear of all Encumbrances
(other than Encumbrances which, individually or in the aggregate, are not
expected to have a Company Material Adverse Effect).
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(b) To the knowledge of the Company, the conduct of the Company's and
its Subsidiaries' business and the Intellectual Property owned or used by the
Company and its Subsidiaries, do not infringe any Intellectual Property rights
or any other proprietary right of any person other than infringements which,
individually or in the aggregate, are not expected to have a Company Material
Adverse Effect. The Company and its Subsidiaries have received no notice of any
allegations or threats that the Company's and its Subsidiaries' use of any of
the Intellectual Property infringes upon or is in conflict with any Intellectual
Property or proprietary rights of any third party other than infringements or
conflicts which individually or in the aggregate are not expected to have a
Company Material Adverse Effect.
(c) As used in this Agreement, "Intellectual Property" means all of
the following: (i) U.S. and foreign registered and unregistered trademarks,
trade dress, service marks, logos, trade names, corporate names and all
registrations and applications to register the same (the "Trademarks"); (ii)
issued U.S. and foreign patents and pending patent applications, patent
disclosures, and any and all divisions, continuations, continuations-in-part,
reissues, reexaminations, and extension thereof, any counterparts claiming
priority therefrom, utility models, patents of importation/confirmation,
certificates of invention and like statutory rights (the "Patents"); (iii) U.S.
and foreign registered and unregistered copyrights (including, but not limited
to, those in computer software and databases) rights of publicity and all
registrations and applications to register the same (the "Copyrights"); (iv) all
categories of trade secrets as defined in the Uniform Trade Secrets Act
including, but not limited to, business information; (v) all licenses and
agreements pursuant to which the Company has acquired rights in or to any
Trademarks, Patents, or Copyrights, or licenses and agreements pursuant to which
the Company has licensed or transferred the right to use any of the foregoing
("Licenses").
Section 3.12 Employment Matters. Neither the Company nor any of its
Subsidiaries has experienced any strikes, collective labor grievances, other
collective bargaining disputes or Claims of unfair labor practices in the last
five years. To the Company's knowledge, there is no organizational effort
presently being made or threatened by or on behalf of any labor union with
respect to employees of the Company and its Subsidiaries.
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Section 3.13 Compliance with Laws. To the knowledge of the Company,
the Company and its Subsidiaries are in compliance with, and have not violated
any applicable law, rule or regulation of any United States federal, state,
local, or foreign government or agency thereof which affects the business,
properties or assets of the Company and its Subsidiaries, and no notice, charge,
claim, action or assertion has been received by the Company or any of its
Subsidiaries or has been filed, commenced or, to the Company's knowledge,
threatened against the Company or any of its Subsidiaries alleging any such
violation, except for any matter otherwise covered by this sentence which does
not have, individually or in the aggregate, a Company Material Adverse Effect.
To the knowledge of the Company, all licenses, permits and approvals required
under such laws, rules and regulations are in full force and effect except where
the failure to be in full force and effect would not have a Company Material
Adverse Effect.
Section 3.14 Vote Required. The affirmative vote of the holders of a
majority of the outstanding Shares is the only vote of the holders of any class
or series of the Company's capital stock which may be necessary to approve this
Agreement or any of and the Transactions.
Section 3.15 Environmental Laws.
(a) Except as set forth in Section 3.15(a) of the Company Disclosure
Schedule, to the knowledge of the Company, the Company and its Subsidiaries are
in compliance with all applicable Environmental Laws (as defined below) (which
compliance includes, without limitation, the possession by the Company and its
Subsidiaries of all permits and other governmental authorizations required under
applicable Environmental Laws, and compliance with the terms and conditions
thereof), except where failure to be in compliance, either individually or in
the aggregate, would not have a Company Material Adverse Effect.
(b) Except as set forth in Section 3.15(b) of the Company Disclosure
Schedule, to the knowledge of the Company, there is no Environmental Claim (as
defined below) pending or, to the Company's knowledge, threatened against the
Company or any of the Subsidiaries or, to the Company's knowledge, against any
person or entity whose liability for any Environmental Claim the
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Company or any of its Subsidiaries has or may have retained or assumed either
contractually or by operation of law which Environmental Claim would have,
either individually or in the aggregate, a Company Material Adverse Effect.
(c) Except as set forth in Section 3.15(c) of the Company Disclosure
Schedule, to the knowledge of the Company, there are no past or present actions,
activities, circumstances, conditions, events or incidents, including, without
limitation, the release or presence of any Hazardous Material, which could form
the basis of any Environmental Claim against the Company or any of its
Subsidiaries, or to the Company's knowledge, against any person or entity whose
liability for any Environmental Claim the Company or any of its Subsidiaries has
or may have retained or assumed either contractually or by operation of law,
which Environmental Claim would have, either individually or in the aggregate, a
Company Material Adverse Effect.
(d) Except as set forth in Section 3.15(d) of the Company Disclosure
Schedule, to the knowledge of the Company, the Company and its Subsidiaries have
not, and to the Company's knowledge, no other person has, placed, stored,
deposited, discharged, buried, dumped or disposed of Hazardous Materials or any
other wastes produced by, or resulting from, any business, commercial or
industrial activities, operations or processes, on, beneath or adjacent to any
property currently or formerly owned, operated or leased by the Company or any
of its Subsidiaries, except (x) for inventories of such substances to be used,
and wastes generated therefrom, in the ordinary course of business of the
Company and its Subsidiaries, or (y) which would not, either individually or in
the aggregate, have a Company Material Adverse Effect.
(e) Without in any way limiting the generality of the foregoing,
except as set forth in Section 3.15(e) of the Company Disclosure Schedule, to
the knowledge of the Company, none of the properties owned, operated or leased
by the Company or any of its Subsidiaries contain any: underground storage
tanks; asbestos; polychlorinated biphenyls ("PCBs"); underground injection
xxxxx; radioactive materials; or septic tanks or waste disposal pits in which
process wastewater or any Hazardous Materials have been discharged or disposed
the existence of which, individually or in the aggregate,
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could reasonably be expected to have a Company Material Adverse Effect.
(f) The Company has made available to Parent for review copies of all
environmental reports or studies in its possession prepared since January 1,
1994.
(g) For purposes of this Agreement, (i) "Environmental Laws" means all
federal, state, local and foreign laws and regulations relating to pollution or
protection of human health or the environment, including, without limitation,
laws relating to releases or threatened releases of Hazardous Materials or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, release, disposal, transport or handling of Hazardous Materials and all
laws and regulations with regard to recordkeeping, notification, disclosure and
reporting requirements respecting Hazardous Materials; (ii) "Environmental
Claim" means any claim, action, cause of action, investigation or notice
(written or oral) by any person or entity alleging potential liability
(including, without limitation, potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resources damages, property
damages, personal injuries, or penalties) arising out of, based on or resulting
from (a) the presence, or release, of any Hazardous Materials at any location,
whether or not owned, leased or operated by the Company or any of its
Subsidiaries, or (b) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law; (iii) "Hazardous Materials" means
all substances defined as Hazardous Substances, Oils, Pollutants or Contaminants
in the National Oil and Hazardous Substances Pollution Contingency Plan, 40
C.F.R. Section 300.5, or defined as such by, or regulated as such under, any
Environmental Law.
Section 3.16 Information in Proxy Statement. The Proxy Statement, if
any (or any amendment thereof or supplement thereto), will, at the date mailed
to Company stockholders and at the time of the meeting of Company stockholders
to be held in connection with the Merger, not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, except that no
representation is made by the Company with respect to statements made therein
based on information supplied by Parent or the
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Purchaser for inclusion in the Proxy Statement. The Proxy Statement will comply
in all material respects with the provisions of the Exchange Act and the rules
and regulations thereunder.
Section 3.17 Opinion of Financial Advisor. The Company has received
the opinion of Xxxxxxx, Sachs & Co., dated the date hereof, to the effect that,
as of such date, the $35 per Share to be received by the holders of Shares
pursuant to this Agreement is fair to such holders, a copy of which opinion has
been delivered to Parent and the Purchaser; it being understood and acknowledged
by Parent and Purchaser, however, that such opinion is not for the benefit of
Parent, Purchaser or their respective affiliates or stockholders and may not be
referred to in the Offer Documents.
Section 3.18 Rights Agreement. The Company has taken all action which
may be necessary under the Rights Agreement dated as of December 14, 1988
between the Company and Bank of America NT&SA, as Rights Agent (the "Rights
Agreement"), so that (x) the execution of this Agreement and any amendments
thereto by the parties hereto and the consummation of the transactions
contemplated thereby shall not cause (i) the Parent and/or the Purchaser to
become an Acquiring Person (as defined in the Rights Agreement) or (ii) a
Distribution Date, a Shares Acquisition Date or a Trigger Event (as such terms
are defined in the Rights Agreement) to occur, irrespective of the number of
Shares acquired pursuant to the Offer, and (y) the Rights (as defined in the
Rights Agreement) shall expire upon the acceptance of Shares for payment
pursuant to the Offer.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
Except as set forth in the schedule attached to this Agreement setting
forth exceptions to the Parent's and Purchaser's representations and warranties
set forth herein (the "Parent Disclosure Schedule"), the Parent and Purchaser
represent and warrant to the Company as set forth below. The Parent Disclosure
Schedule will be arranged in sections corresponding to sections of this
Agreement to be modified by such disclosure schedule.
Section 4.1 Organization. Each of Parent and the Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware and has all requisite corporate or other power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power, authority, and
governmental approvals would not have, individually or in the aggregate, a
Parent Material Adverse Effect. As used in this Agreement, "Parent Material
Adverse Effect," with reference to any events, changes or effects, shall mean
such events, changes or effects that are materially adverse to the Parent and
its Subsidiaries, taken as a whole.
Section 4.2 Authorization; Validity of Agreement; Necessary Action.
Each of Parent and the Purchaser has full corporate power and authority to
execute and deliver this Agreement and to consummate the Transactions. The
execution, delivery and performance by Parent and the Purchaser of this
Agreement and the consummation of the Merger and of the Transactions have been
duly authorized by the Board of Directors of Parent and the Purchaser and by
Parent as the sole stockholder of the Purchaser and no other corporate action on
the part of Parent and the Purchaser is necessary to authorize the execution and
delivery by Parent and the Purchaser of this Agreement and the consummation of
the Transactions. This Agreement has been duly executed and delivered by Parent
and the Purchaser, as the case any be, and, assuming due and valid
authorization, execution and delivery hereof by the Company, is a valid and
binding obligation of each of Parent and the Purchaser, as the case may be,
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enforceable against each of them in accordance with its respective terms.
Section 4.3 Consents and Approvals; No Violations. Except for the
filings as set forth in Section 4.3 of the Parent Disclosure Schedule and except
for the filings, permits, authorizations, consents and approvals as may be
required under, and other applicable requirements of, the Exchange Act, the HSR
Act, the laws of any foreign jurisdiction, state securities or blue sky laws and
the DGCL, none of the execution, delivery or performance of this Agreement by
Parent or the Purchaser, the consummation by Parent or the Purchaser of the
Transactions or compliance by Parent or the Purchaser with any of the provisions
hereof will (i) conflict with or result in any breach of any provision of the
respective certificate of incorporation or by-laws of Parent or the Purchaser,
(ii) require any filing with, or permit, authorization, consent or approval of,
any Governmental Entity, (iii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation to which Parent, or any of
its Subsidiaries or the Purchaser is a party or by which any of them or any of
their respective properties or assets may be bound, or (iv) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to Parent, any
of its Subsidiaries or any of their properties or assets, excluding from the
foregoing clauses (ii), (iii) and (iv) such violations, breaches or defaults
which would not, individually or in the aggregate, have a Parent Material
Adverse Effect or have a material adverse effect on the ability of Parent and
Purchaser to consummate the Transactions.
Section 4.4 Information in Proxy Statement. None of the information
supplied by Parent or the Purchaser specifically for inclusion or incorporation
by reference in the Proxy Statement will, at the date mailed to stockholders and
at the time of the meeting of stockholders to be held in connection with the
Merger, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
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Section 4.5 Financing. At the closing of the Offer, and at the
Effective Time, Parent and Purchaser will have sufficient cash resources
available to finance the transactions contemplated herein.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company covenants
and agrees that, except (i) as expressly contemplated by this Agreement, or (ii)
as agreed in writing by Parent, after the date hereof, and prior to the time the
directors of the Purchaser have been elected to, and shall constitute a majority
of, the Board of Directors of the Company pursuant to Section 1.3 (the
"Appointment Date"):
(a) the business of the Company and its Subsidiaries shall be
conducted only in the ordinary and usual course and, to the extent consistent
therewith, each of the Company and its Subsidiaries shall use its best
reasonable efforts to preserve its business organization intact and maintain its
existing relations with customers, suppliers, employees, creditors and business
partners;
(b) the Company will not, directly or indirectly, (i) except upon
exercise of employee stock options or other rights to purchase shares of Common
Stock pursuant to the ESPP outstanding on the date hereof, issue, sell, transfer
or pledge or agree to sell, transfer or pledge any treasury stock of the Company
or any capital stock of any of its Subsidiaries beneficially owned by it, (ii)
amend its Certificate of Incorporation or By-laws or similar organizational
documents; or (iii) split, combine or reclassify the outstanding Shares or
Preferred Stock or any outstanding capital stock of any of the Subsidiaries of
the Company;
(c) neither the Company nor any of its Subsidiaries shall: (i)
declare, set aside or pay any dividend or other distribution payable in cash,
stock or property with respect to its capital stock other than dividends paid by
Subsidiaries of the Company to the Company or any of its Subsidiaries in the
ordinary course of business; (ii) issue, sell, pledge, dispose of or encumber
any additional shares of, or securities convertible into or
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exchangeable for, or options, warrants, calls, commitments or rights of any kind
to acquire, any shares of capital stock of any class of the Company or its
Subsidiaries, other than Shares reserved for issuance on the date hereof
pursuant to the exercise of Company Options outstanding on the date hereof;
(iii) transfer, lease, license, sell, mortgage, pledge, dispose of, or encumber
any assets other than in the ordinary and usual course of business and
consistent with past practice, or incur or modify any indebtedness or other
liability, other than in the ordinary and usual course of business and
consistent with past practice; or (iv) redeem, purchase or otherwise acquire
directly or indirectly any of its capital stock;
(d) neither the Company nor any of its Subsidiaries shall: (i) grant
any increase in the compensation payable or to become payable by the Company or
any of its Subsidiaries to any of its executive officers or (ii)(A) adopt any
new, or (B) amend or otherwise increase, or accelerate the payment or vesting of
the amounts payable or to become payable under any existing bonus, incentive
compensation, deferred compensation, severance, profit sharing, stock option,
stock purchase, insurance, pension, retirement or other employee benefit plan,
agreement or arrangement; or (iii) enter into any employment or severance
agreement with or, except in accordance with the existing written policies of
the Company, grant any severance or termination pay to any officer, director or
employee of the Company or any of its Subsidiaries;
(e) neither the Company nor any of its Subsidiaries shall permit any
insurance policy naming it as a beneficiary or a loss payable payee to be
cancelled or terminated without notice to Parent, except in the ordinary course
of business and consistent with past practice;
(f) neither the Company nor any of its Subsidiaries shall enter into
any contract or transaction relating to the purchase of assets other than in the
ordinary course of business consistent with prior practices;
(g) neither the Company nor any of its Subsidiaries shall change any
of the accounting methods used by it unless required by GAAP, neither the
Company nor any of its Subsidiaries shall make any material Tax election except
in the ordinary course of business consistent with past practice, change any
material Tax election already
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made, adopt any material Tax accounting method except in the ordinary course of
business consistent with past practice, change any material Tax accounting
method unless required by GAAP, enter into any closing agreement, settle any Tax
claim or assessment or consent to any Tax claim or assessment or any waiver of
the statute of limitations for any such claim or assessment; and
(h) neither the Company nor any of its Subsidiaries will take any
action with the intent of causing any of the conditions to the Offer set forth
in Annex A not to be satisfied.
Section 5.2 Access; Confidentiality. (a) Upon reasonable notice,
the Company shall (and shall cause each of its Subsidiaries to) afford to the
officers, employees, accountants, counsel, financing sources and other
representatives of Parent, access, during normal business hours during the
period prior to the Appointment Date, to all its properties, books, contracts,
commitments and records and, during such period, the Company shall (and shall
cause each of its Subsidiaries to) furnish promptly to the Parent (a) a copy of
each report, schedule, registration statement and other document filed or
received by it during such period pursuant to the requirements of federal
securities laws and (b) all other information concerning its business,
properties and personnel as Parent may reasonably request. Access shall include
the right to conduct such environmental studies and tests as Parent, in its
reasonable discretion, shall deem appropriate, provided, however, that such
studies and tests must be performed prior to February 23, 1997 and must be
performed in such a way as to not materially disrupt the Company's business.
After the Appointment Date, the Company shall provide Parent and such persons as
Parent shall designate with all such information, at such time as Parent shall
request. Unless otherwise required by law and until the Appointment Date,
Parent will hold any such information which is nonpublic in confidence in
accordance with the provisions of a letter agreement dated March 29, 1996
between the Company and the Parent (the "Confidentiality Agreement"). The
Company shall promptly, and in any event within ten business days following the
date of this Agreement, deliver to Parent true and complete copies of all Plans
not previously delivered to Parent and any amendments thereto (or if the Plan is
not a written Plan, a description thereof), any related trust or other funding
vehicle, any summary plan description required under ERISA or
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the Code and the most recent determination letter received from the Internal
Revenue Service with respect to each Plan intended to qualify under section 401
of the Internal Revenue Code of 1986, as amended (the "Code").
(b) Following the execution of this Agreement, Parent and the Company
shall cooperate with each other and make all reasonable efforts to minimize any
disruption to the business which may result from the announcement of the
Transactions.
Section 5.3 Consents and Approvals. (a) Each of the Company, Parent
and the Purchaser will take all reasonable actions necessary to comply promptly
with all legal requirements which may be imposed on it with respect to this
Agreement and the Transactions and will promptly cooperate with and furnish
information to each other in connection with any such requirements imposed upon
any of them or any of their Subsidiaries in connection with this Agreement and
the Transactions. Each of the Company, Parent and the Purchaser will, and will
cause its Subsidiaries to, take all reasonable actions necessary to obtain (and
will cooperate with each other in obtaining) any consent, authorization, order
or approval of, or any exemption by, any Governmental Entity or other public or
private third party required to be obtained or made by Parent, the Purchaser,
the Company or any of their Subsidiaries in connection with the Merger or the
taking of any action contemplated thereby or by this Agreement.
(b) The Company and Parent shall take all reasonable actions
necessary to file as soon as practicable notifications under the HSR Act and to
respond as promptly as practicable to any inquiries received from the Federal
Trade Commission and the Antitrust Division of the Department of Justice for
additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other Governmental Entity in connection with antitrust matters.
(c) The Company and Parent shall take all reasonable actions necessary
to file any other forms or notifications which may be required by any foreign
Governmental Entity and to obtain any approvals which may be required in
connection therewith.
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Section 5.4 No Solicitation. (a) Neither the Company nor any of its
Subsidiaries shall (and the Company shall use its best efforts to cause its
officers, directors, employees, representatives and agents, including, but not
limited to, investment bankers, attorneys and accountants, not to), directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent, any of its affiliates or
representatives) concerning any proposal or offer to acquire all or a
substantial part of the business and properties of the Company or any of its
Subsidiaries or any capital stock of the Company or any of its Subsidiaries,
whether by merger, tender offer, exchange offer, sale of assets or similar
transactions involving the Company or any Subsidiary, division or operating or
principal business unit of the Company (an "Acquisition Proposal"), except that
nothing contained in this Section 5.4 or any other provision hereof shall
prohibit the Company or the Company's Board from (i) taking and disclosing to
the Company's stockholders a position with respect to a tender or exchange offer
by a third party pursuant to Rules 14d-9 and 14e-2 promulgated under the
Exchange Act, or (ii) making such disclosure to the Company's stockholders as,
in the good faith judgment of the Board, after receiving advice from outside
counsel, is required under applicable law, provided that the Company may not,
except as permitted by Section 5.4(b), withdraw or modify, or propose to
withdraw or modify, its position with respect to the Offer or the Merger or
approve or recommend, or propose to approve or recommend any Acquisition
Proposal, or enter into any agreement with respect to any Acquisition Proposal.
The Company will immediately cease any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of the
foregoing.
(b) Notwithstanding the foregoing, prior to the acceptance of Shares
pursuant to the Offer, the Company may furnish information concerning the
Company and its Subsidiaries to any corporation, partnership, person or other
entity or group pursuant to appropriate confidentiality agreements, and may
negotiate and participate in discussions and negotiations with such entity or
group concerning an Acquisition Proposal if (x) such entity or group has on an
unsolicited basis submitted a bona fide written proposal to the Company relating
to any
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such transaction which the Board determines in good faith, after consulting with
a nationally recognized investment banking firm, represents a superior
transaction to the Offer and the Merger and (y) in the opinion of the Board of
Directors of the Company, only after receipt of advice from outside legal
counsel to the Company, the failure to provide such information or access or to
engage in such discussions or negotiations could reasonably be expected to cause
the Board of Directors to violate its fiduciary duties to the Company's
stockholders under applicable law (an Acquisition Proposal which satisfies
clauses (x) and (y) being referred to herein as a "Superior Proposal"). The
Company will within two business days following receipt of a Superior Proposal
notify Parent of the receipt of the same. The Company will promptly provide to
Parent any material non-public information regarding the Company provided to any
other party which was not previously provided to Parent. At any time after two
business days following notification to Parent of the Company's intent to do so
(which notification shall include the identity of the bidder and the material
terms and conditions of the proposal) and if the Company has otherwise complied
with the terms of this Section 5.4(b), the Board of Directors may withdraw or
modify its approval or recommendation of the Offer and may enter into an
agreement with respect to a Superior Proposal, provided it shall concurrently
with entering into such agreement pay or cause to be paid to Parent the
Termination Fee (as defined below) plus any amount payable at the time for
reimbursement of expenses pursuant to Section 8.1(b). If the Company shall have
notified Parent of its intent to enter into an agreement with respect to a
Superior Proposal in compliance with the preceding sentence and has otherwise
complied with such sentence, the Company may enter into an agreement with
respect to such Superior Proposal (with the bidder and on terms no less
favorable than those specified in such notification) after the expiration of the
initial two business day period without any further notification.
Section 5.5 Brokers or Finders. The Company represents, as to itself
and its Subsidiaries and affiliates, that no agent, broker, investment banker,
financial advisor or other firm or person is or will be entitled to any brokers'
or finder's fee or any other commission or similar fee from the Company or any
of its Subsidiaries in connection with any of the transactions contemplated
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by this Agreement except for Xxxxxxx, Xxxxx & Co., whose engagement letter has
been provided to Parent.
Section 5.6 Additional Agreements. Subject to the terms and
conditions herein provided, each of the parties hereto shall use all reasonable
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations, or to remove any injunctions or other impediments or delays, legal
or otherwise, to achieve the satisfaction of the Minimum Condition and all
conditions set forth in Annex A and Article VI, and to consummate and make
effective the Merger and the other transactions contemplated by this Agreement.
In case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of the Company, Parent and the Purchaser shall use all reasonable
efforts to take, or cause to be taken, all such necessary actions. The Company
shall use its reasonable best efforts to effect the retention of the individuals
set forth in Section 5.6 of the Company Disclosure Schedule as employees of the
Company following consummation of the Transactions.
Section 5.7 Publicity. The initial press release with respect to the
execution of this Agreement shall be a joint press release acceptable to Parent
and the Company. Thereafter, so long as this Agreement is in effect, neither
the Company, Parent nor any of their respective affiliates shall issue or cause
the publication of any press release or other announcement with respect to the
Merger, this Agreement or the other Transactions without the prior consultation
of the other party, except as such party believes, after receiving the advice of
outside counsel, may be required by law or by any listing agreement with a
national securities exchange or trading market.
Section 5.8 Notification of Certain Matters. The Company shall give
prompt notice to Parent and Parent shall give prompt notice to the Company, of
(i) the occurrence or non-occurrence of any event the occurrence or
non-occurrence of which would cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at or prior to
the Effective Time and (ii) any material failure of the
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Company, Parent or the Purchaser, as the case may be, to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
Section 5.8 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
Section 5.9 Directors' and Officers' Insurance and Indemnification.
(a) For six years after the Effective Time, the Surviving Corporation (or any
successor to the Surviving Corporation) shall indemnify, defend and hold
harmless the present and former officers and directors of the Company and its
Subsidiaries, and persons who become any of the foregoing prior to the Effective
Time (each an "Indemnified Party") against all losses, claims, damages,
liabilities, costs, fees and expenses (including reasonable fees and
disbursements of counsel and judgments, fines, losses, claims, liabilities and
amounts paid in settlement (provided that any such settlement is effected with
the written consent of the Parent or the Surviving Corporation which consent
shall not unreasonably be withheld)) arising out of actions or omissions
occurring at or prior to the Effective Time to the full extent required under
applicable Delaware law, the terms of the Company's Certificate of Incorporation
or the By-laws, as in effect at the date hereof, and the terms of any
indemnification agreement entered into with the Company prior to the date
hereof; provided that, in the event any claim or claims are asserted or made
within such six-year period, all rights to indemnification in respect of any
such claim or claims shall continue until disposition of any and all such
claims.
(b) Parent or the Surviving Corporation shall maintain the Company's
existing officers' and directors' liability insurance ("D&O Insurance") for a
period of not less than six years after the Effective Time; provided, that the
Parent may substitute therefor policies of substantially equivalent coverage and
amounts containing terms no less favorable to such former directors or officers;
provided, further, if the existing D&O Insurance expires, is terminated or
cancelled during such period, Parent or the Surviving Corporation will use all
reasonable efforts to obtain substantially similar D&O Insurance; provided,
further, however, that in no event shall the Company be required to pay
aggregate premiums for
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insurance under this Section 5.9(b) in excess of 150% of the aggregate premiums
paid by the Company in 1996 on an annualized basis for such purpose (the "1996
Premium"); and provided, further, that if the Parent or the Surviving
Corporation is unable to obtain the amount of insurance required by this Section
5.9(b) for such aggregate premium, Parent or the Surviving Corporation shall
obtain as much insurance as can be obtained for an annual premium not in excess
of 150% of the 1996 Premium.
Section 5.10 Purchaser Compliance. Parent shall cause the Purchaser
to comply with all of its obligations under or related to this Agreement.
Section 5.11 Severance Agreements.
(a) Parent shall cause the Surviving Corporation to honor the
severance agreements attached as Schedule 5.11 to the Company Disclosure
Schedule (the "Severance Agreements"), except to the extent modified or
superseded by a separate agreement entered into by the employee and the Company
or Parent or Purchaser. Upon any Involuntary Termination (as such term is
defined in Paragraph 1 of the Severance Agreement) other than a Termination for
Cause (as such term is defined in Paragraph 1 of the Severance Agreement) of the
employment of any individual covered by such Severance Agreement at any time
prior to December 31, 1998, such individual shall be immediately entitled to the
lump sum cash severance payment provided under Paragraph 2(b) of his Severance
Payment.
(b) In addition, the Parent shall establish or cause to be established
a retention bonus plan ("Retention Bonus Plan") which shall provide that each
individual ("Participant") who, as of the Effective Time is a party to a
Severance Agreement (and who is not a party to an employment agreement with the
Parent, Purchaser or the Surviving Corporation as of the Effective Time) shall
receive on or about December 31, 1998 (if such Participant has been continually
employed by the Parent or the Surviving Corporation through such date) a bonus
("Retention Bonus") equal to the Severance Payment (as defined in the applicable
Severance Agreement) that would have been payable to such Participant under the
applicable Severance Agreement if an Involuntary Termination (as defined in the
applicable Severance Agreement) of the Participant
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occurred immediately following the Effective Time; provided, however, that if a
Participant dies prior to December 31, 1998 and was continually employed by the
Parent or the Surviving Corporation through the date of his death, his estate or
beneficiary shall be entitled to a pro rata portion of such Participant's
Retention Bonus through the date of his death. Any payment of a Retention Bonus
under the Retention Bonus Plan shall be in lieu of any payment under the
Severance Agreement to which the Participant may otherwise be entitled. Except
as may otherwise be required by applicable law or interpretive guidance by a
regulatory agency then in effect, Parent and Company hereby agree that in
determining the amount of any cash lump sum cash severance payment payable
pursuant to Section 5.11(a) of this Agreement or any Retention Bonus, the offset
for the aggregate Option Parachute Payment (as such term is defined in the
Severance Agreement) attributable to the Options of the each covered individual
which vest on an accelerated basis in connection with the Merger shall be
determined (i) in accordance with the valuation procedures set forth in
Paragraphs (c)(1) and (c)(2) of Q&A 24 of proposed Treasury Regulation 1.280G-1
and Example 8 of such Q&A 24, (ii) the amount of the accelerated payment
attributable to each installment of Shares for which such Option is accelerated
in connection with the Merger shall, for purposes of applying the valuation
procedures of such Q&A 24, be limited solely to the spread between the Merger
Consideration payable per Share and the option exercise price times the number
of Shares for which the Option becomes exercisable on such an accelerated basis
and (iii) the amount to be taken into account under Paragraph (c)(2) of such Q&A
24 to reflect the lapse of the vesting requirements otherwise applicable to
those accelerated Shares shall be limited to 1% of the amount of the accelerated
payment (as determined in accordance with the foregoing) times the number of
months of acceleration.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction on or prior to the Closing Date of each of
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the following conditions, any and all of which may be waived in whole or in part
by the Company, Parent or the Purchaser, as the case may be, to the extent
permitted by applicable law:
(a) Shareholder Approval. This Agreement shall have been approved
and adopted by the requisite vote of the holders of the Shares, if required by
applicable law, in order to consummate the Merger;
(b) Statutes; Court Orders. No statute, rule or regulation shall
have been enacted or promulgated by any governmental authority which prohibits
the consummation of the Merger; and there shall be no order or injunction of a
court of competent jurisdiction in effect precluding consummation of the Merger.
(c) Purchase of Shares in Offer. Parent, the Purchaser or their
affiliates shall have purchased Shares pursuant to the Offer, except that this
condition shall not apply if Parent, the Purchaser or their affiliates shall
have failed to purchase Shares pursuant to the Offer in breach of their
obligations under this Agreement; and
(d) HSR Approval. The applicable waiting period under the HSR Act
shall have expired or been terminated.
Section 6.2 Condition to Parent's and the Purchaser's Obligations to
Effect the Merger. The obligations of Parent and the Purchaser to consummate
the Merger are further subject to the fulfillment of the condition that all
actions contemplated by Section 2.4 hereof shall have been taken, which may be
waived in whole or in part by Parent and the Purchaser.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated and the
Transactions contemplated herein may be abandoned at any time prior to the
Effective Time, whether before or after stockholder approval thereof:
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(a) By the mutual written consent of Parent and the Company.
(b) By either of the Company or Parent:
(i) if (x) the Offer shall have expired without any Shares being
purchased therein or (y) the Purchaser shall not have accepted for payment
all Shares tendered pursuant to the Offer by April 30, 1997; provided,
however, that the right to terminate this Agreement under this Section
7.1(b)(i) shall not be available (A) to any party whose failure to fulfill
any obligation under this Agreement has been the cause of, or resulted in,
the failure of Parent or the Purchaser, as the case may be, to purchase the
Shares pursuant to the Offer on or prior to such date or (B) after
Purchaser shall have purchased Shares pursuant to the Offer; or
(ii) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action (which order, decree, ruling or
other action the parties hereto shall use their reasonable efforts to
lift), which permanently restrains, enjoins or otherwise prohibits the
acceptance for payment of, or payment for, Shares pursuant to the Offer or
the Merger and such order, decree, ruling or other action shall have become
final and non- appealable.
(c) By the Company:
(i) if Parent, the Purchaser or any of their affiliates shall
have failed to commence the Offer on or prior to five business days
following the date of the initial public announcement of the Offer;
provided, that the Company may not terminate this Agreement pursuant to
this Section 7.1(c)(i) if the Company is at such time in breach of its
obligations under this Agreement such as to cause a material adverse effect
on the Company and its Subsidiaries, taken as a whole;
(ii) in connection with entering into a definitive agreement in
accordance with Section 5.4(b), provided it has complied with all
provisions thereof, including the notice provisions therein,
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and that it makes simultaneous payment of the Termination Fee, plus any
amounts then due as a reimbursement of expenses; or
(iii) if Parent or the Purchaser shall have breached in any
material respect any of their respective representations, warranties,
covenants or other agreements contained in this Agreement, which breach
cannot be or has not been cured, in all material respects, within 30 days
after the giving of written notice to Parent or the Purchaser, as
applicable.
(d) By Parent:
(i) if, due to an occurrence, not involving a breach by Parent
or the Purchaser of their obligations hereunder, which makes it impossible
to satisfy any of the conditions set forth in Annex A hereto, Parent, the
Purchaser, or any of their affiliates shall have failed to commence the
Offer on or prior to five business days following the date of the initial
public announcement of the Offer;
(ii) if prior to the purchase of Shares pursuant to the Offer,
the Company shall have breached any representation, warranty, covenant or
other agreement contained in this Agreement which (A) would give rise to
the failure of a condition set forth in paragraph (f) or (g) of Annex A
hereto and (B) cannot be or has not been cured, in all material respects,
within 30 days after the giving of written notice to the Company; or
(iii) if either Parent or the Purchaser is entitled to terminate
the Offer as a result of the occurrence of any event set forth in paragraph
(e) of Annex A hereto.
Section 7.2 Effect of Termination. In the event of the termination
of this Agreement pursuant to its terms, written notice thereof shall forthwith
be given to the other party or parties specifying the provision hereof pursuant
to which such termination is made, and this Agreement shall forthwith become
null and void, and there shall be no liability on the part of the Parent or the
Company except (A) for fraud or for breach of this
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Agreement prior to such termination and (B) as set forth in Sections 5.2(a) (the
penultimate sentence thereof), 7.2 and 8.1.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Fees and Expenses. (a) Except as contemplated by this
Agreement, including Section 8.1(b) hereof, all costs and expenses incurred in
connection with this Agreement and the consummation of the Transactions shall be
paid by the party incurring such expenses.
(b) If (w) the Company shall terminate this Agreement pursuant to
Section 7.1(c)(ii), (x) Parent shall terminate this Agreement pursuant to
Section 7.1(d)(iii) hereof, or (y) either the Company or Parent terminates this
Agreement pursuant to Section 7.1(b)(i) and (a) prior thereto there shall have
been publicly announced another Acquisition Proposal or an event set forth in
paragraph (h) of Annex A shall have occurred and (b) an Acquisition Proposal
shall be consummated on or prior to December 31, 1997, the Company shall pay to
Parent, an amount equal to $20,000,000 (the "Termination Fee"), plus an amount,
not to exceed $3.0 million, equal to Parent's actual and reasonably documented
out-of-pocket fees and expenses incurred by Parent and Purchaser in connection
with the Offer, the Merger, this Agreement and the consummation of the
Transactions, which shall be payable in same day funds; provided, however, that
no Termination Fee shall be payable if the Purchaser or Parent was in material
breach of its representations, warranties or obligations under this Agreement at
the time of its termination. The Termination Fee and Parent's good faith
estimate of its expenses shall be paid concurrently with any such termination,
together with delivery of a written acknowledgement by the Company of its
obligation to reimburse Parent for its actual expenses in excess of such
estimated expenses payment.
Section 8.2 Amendment and Modification. Subject to applicable law,
this Agreement may be amended, modified and supplemented in any and all
respects, whether before or after any vote of the stockholders of the Company
contemplated hereby, by written agreement of the
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parties hereto, by action taken by their respective Boards of Directors (which
in the case of the Company shall include approvals as contemplated in Section
1.3(b)), at any time prior to the Closing Date with respect to any of the terms
contained herein; provided, however, that after the approval of this Agreement
by the stockholders of the Company, no such amendment, modification or
supplement shall reduce the amount or change the form of the Merger
Consideration.
Section 8.3 Nonsurvival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the Effective Time.
Section 8.4 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or the Purchaser, to:
Honeywell Inc.
00000 X. Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: President, Industrial
Automation and Control
Telephone No.:(000) 000-0000
Telecopy No.:(000) 000-0000
with a copy to:
Honeywell Inc.
Honeywell Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Office of the General Counsel
Telephone No.:(000) 000-0000
Telecopy No.: (000) 000-0000
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
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New York, New York 10022
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
and
if to the Company, to:
Measurex Corporation
Xxx Xxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx Xxxxx, Vice-
President and General
Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxx, Phleger and Xxxxxxxx, LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Section 8.5 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. Whenever the words "include", "includes" or
"including" are used in this Agreement they shall be deemed to be followed by
the words "without limitation." As used in this Agreement, the term
"affiliates" shall have the meaning set forth in Rule 12b-2 of the Exchange Act.
Section 8.6 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties.
Section 8.7 Entire Agreement; No Third Party Beneficiaries. This
Agreement and the Confidentiality
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Agreement (including the documents and the instruments referred to herein and
therein): (a) constitute the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, and (b) except as provided in Sections 2.4
and 5.9 is not intended to confer upon any person other than the parties hereto
any rights or remedies hereunder.
Section 8.8 Severability. Any term or provision of this Agreement
that is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction or other authority declares that any term or
provision hereof is invalid, void or unenforceable, the parties agree that the
court asking such determination shall have the power to reduce the scope,
duration, area or applicability of the term or provision, to delete specific
words or phrases, or to replace any invalid, void or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision.
Section 8.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof.
Section 8.10 Assignment. Neither this Agreement not any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written content of the other parties, except that the Purchaser may assign, in
its sole discretion, any or all of its rights, interests and obligations
hereunder to Parent or to any direct or indirect wholly owned Subsidiary of
Parent. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
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IN WITNESS WHEREOF, Parent, the Purchaser and the Company have caused
this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
HONEYWELL INC.
By /s/ Xxxxxxxx X. Xxxxxxxxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxxxxxxxx
Title: Vice President- Corporate
Business Development
HONEYWELL ACQUISITION CORP.
By /s/ Xxxxxxxx X. Xxxxxxxxxxxx
---------------------------------
Name: Xxxxxxxx X. Xxxxxxxxxxxx
Title: Vice President
MEASUREX CORPORATION
By /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman and Chief Executive
Officer
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ANNEX A
Certain Conditions of the Offer. Notwithstanding any other provisions
of the Offer, and in addition to (and not in limitation of) the Purchaser's
rights to extend and amend the Offer at any time in its sole discretion (subject
to the provisions of the Merger Agreement), the Purchaser shall not be required
to accept for payment or, subject to any applicable rules and regulations of the
SEC, including Rule 14e-l(c) under the Exchange Act (relating to the Purchaser's
obligation to pay for or return tendered Shares promptly after termination or
withdrawal of the Offer), pay for, and may delay the acceptance for payment of
or, subject to the restriction referred to above, the payment for, any tendered
Shares, and may terminate or amend the Offer as to any Shares not then paid for,
if (i) any applicable waiting period under the HSR Act has not expired or
terminated, (ii) the Minimum Condition has not been satisfied, or (iii) at any
time on or after the date of the Merger Agreement and before the time of
acceptance for payment for any such Shares, any of the following events shall
have occurred:
(a) there shall be threatened or pending any suit, action or
proceeding by any Governmental Entity against the Purchaser, Parent, the Company
or any Subsidiary of the Company (i) seeking to prohibit or impose any material
limitations on Parent's or the Purchaser's ownership or operation (or that of
any of their respective Subsidiaries or affiliates) of all or a material portion
of their or the Company's businesses or assets, or to compel Parent or the
Purchaser or their respective Subsidiaries and affiliates to dispose of or hold
separate any material portion of the business or assets of the Company or Parent
and their respective Subsidiaries, in each case taken as a whole, (ii)
challenging the acquisition by Parent or the Purchaser of any Shares under the
Offer, seeking to restrain or prohibit the making or consummation of the Offer
or the Merger or the performance of any of the other transactions contemplated
by the Agreement, or seeking to obtain from the Company, Parent or the Purchaser
any damages that are material in relation to the Company and its Subsidiaries
taken as a whole, (iii) seeking to impose material limitations on the ability of
the Purchaser, or render the Purchaser
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unable, to accept for payment, pay for or purchase some or all of the Shares
pursuant to the Offer and the Merger, (iv) seeking to impose material
limitations on the ability of Purchaser or Parent effectively to exercise full
rights of ownership of the Shares, including, without limitation, the right to
vote the Shares purchased by it on all matters properly presented to the
Company's stockholders, or (v) which otherwise is reasonably likely to have a
Company Material Adverse Effect;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated, or deemed applicable,
pursuant to an authoritative interpretation by or on behalf of a Government
Entity, to the Offer or the Merger, or any other action shall be taken by any
Governmental Entity, other than the application to the Offer or the Merger of
applicable waiting periods under HSR Act, that is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses (i)
through (v) of paragraph (a) above;
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock Exchange for a
period in excess of 24 hours (excluding suspensions or limitations resulting
solely from physical damage or interference with such exchanges not related to
market conditions), (ii) a declaration of a banking moratorium or any suspension
of payments in respect of banks in the United States (whether or not mandatory),
(iii) a commencement of a war, armed hostilities or other international or
national calamity directly or indirectly involving the United States, (iv) any
limitation (whether or not mandatory) by any United States governmental
authority on the extension of credit generally by banks or other financial
institutions, or (v) a change in general financial, bank or capital market
conditions which materially and adversely affects the ability of financial
institutions in the United States to extend credit or syndicate loans or (vi) in
the case of any of the foregoing existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof;
(d) there shall have occurred any events after the date of the
Agreement which, either individually or in the aggregate, would have a Company
Material Adverse
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56
Effect; provided, however, that no event, change or effect that materially
results from the Transactions or the announcement thereof shall be deemed to
cause, either individually or in the aggregate, a Company Material Adverse
Effect;
(e)(i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to Parent or the Purchaser
its approval or recommendation of the Offer, the Merger or the Agreement, or
approved or recommended any Acquisition Proposal or (ii) the Company shall have
entered into any agreement with respect to any Superior Proposal in accordance
with Section 5.4(b) of the Agreement;
(f) the representations and warranties of the Company set forth in
the Agreement shall not be true and correct, in each case (i) as of the date
referred to in any representation or warranty which addresses matters as of a
particular date, or (ii) as to all other representations and warranties, as of
the date of the Agreement and as of the scheduled expiration of the Offer,
unless the inaccuracies (without giving effect to any materiality or material
adverse effect qualifications or materiality exceptions contained therein) under
such representations and warranties, taking all the inaccuracies under all such
representations and warranties together in their entirety, do not, individually
or in the aggregate, result in a Company Material Adverse Effect;
(g) the Company shall have failed to perform any obligation or to
comply with any agreement or covenant to be performed or complied with by it
under the Agreement other than any failure which would not have, either
individually or in the aggregate, a Company Material Adverse Effect;
(h) any person acquires beneficial ownership (as defined in Rule 13d-3
promulgated under the Exchange Act), of at least 20% of the outstanding Common
Stock of the Company (other than any person not required to file a Schedule 13D
under the rules promulgated under the Exchange Act);
(i) the Agreement shall have been terminated in accordance with its
terms; or
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57
(j) the diminution in the value of the Company and its Subsidiaries to
the Parent and the Purchaser as a result of breaches, if any, of the
representations and warranties set forth in Section 3.15 of the Agreement
(without giving effect to any materiality or material adverse effect
qualifications or materiality exceptions contained therein) in excess of
environmental liabilities and costs which would reasonably be expected to exist
based on the reports and information regarding environmental matters provided to
Parent as listed on the Company Disclosure Schedule (assuming there has been no
non-compliance with Environmental Laws, Environmental Claims, releases of
Hazardous Materials, contamination or other environmental conditions described
in Section 3.15 of the Agreement other than as specifically identified in such
reports) as estimated by an environmental consultant or consultants reasonably
satisfactory to Parent and the Company exceeds $16 million; provided, however,
that the foregoing amount shall not be used to define Company Material Adverse
Effect.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser, may be asserted by Parent or the Purchaser regardless of the
circumstances giving rise to such condition (including any action or inaction by
Parent or the Purchaser not in violation of the Agreement) and may be waived by
Parent or the Purchaser in whole or in part at any time and from time to time in
the sole discretion of Parent or the Purchaser, subject in each case to the
terms of the Merger Agreement. The failure by Parent or the Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
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Table of Contents
Page
ARTICLE I THE OFFER AND MERGER 1
Section 1.1 The Offer. 1
Section 1.2 Company Actions. 4
Section 1.3 Directors. 6
Section 1.4 The Merger 7
Section 1.5 Effective Time 8
Section 1.6 Closing 8
Section 1.7 Directors and Officers of the Surviving Corporation. 9
Section 1.8 Stockholders' Meeting. 9
Section 1.9 Merger Without Meeting of Stockholders. 10
ARTICLE II CONVERSION OF SECURITIES 10
Section 2.1 Conversion of Capital Stock 10
Section 2.2 Exchange of Certificates 11
Section 2.3 Dissenters' Rights. 13
Section 2.4 Company Plans. 13
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY 15
Section 3.1 Organization. 16
Section 3.2 Capitalization 17
Section 3.3 Authorization; Validity of Agreement; Company Action 18
Section 3.4 Consents and Approvals; No Violations 19
Section 3.5 SEC Reports and Financial Statements 20
Section 3.6 Absence of Certain Changes 20
Section 3.7 No Undisclosed Liabilities 21
Section 3.8 Litigation. 21
Section 3.9 Employee Benefit Plans 21
Section 3.10 Tax Matters; Government Benefits 24
Section 3.11 Intellectual Property. 26
Section 3.12 Employment Matters. 27
Section 3.13 Compliance with Laws. 28
Section 3.14 Vote Required. 28
Section 3.15 Environmental Laws 28
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Section 3.16 Information in Proxy Statement. 30
Section 3.17 Opinion of Financial Advisor. 31
Section 3.18 Rights Agreement 31
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER 32
Section 4.1 Organization. 32
Section 4.2 Authorization; Validity of Agreement; Necessary Action. 32
Section 4.3 Consents and Approvals; No Violations. 33
Section 4.4 Information in Proxy Statement. 33
Section 4.5 Financing 34
ARTICLE V COVENANTS 34
Section 5.1 Interim Operations of the Company. 34
Section 5.2 Access; Confidentiality. 36
Section 5.3 Consents and Approvals. 37
Section 5.4 No Solicitation. 38
Section 5.5 Brokers or Finders. 40
Section 5.6 Additional Agreements. 40
Section 5.7 Publicity. 40
Section 5.8 Notification of Certain Matters. 41
Section 5.9 Directors' and Officers' Insurance and Indemnification. 41
Section 5.10 Purchaser Compliance. 42
Section 5.11 Severance Agreements. 42
ARTICLE VI CONDITIONS 44
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger. 44
Section 6.2 Condition to Parent's and the Purchaser's Obligations to Effect the Merger. 45
ARTICLE VII TERMINATION 45
Section 7.1 Termination. 45
Section 7.2 Effect of Termination. 47
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ARTICLE VIII MISCELLANEOUS 47
Section 8.1 Fees and Expenses 47
Section 8.2 Amendment and Modification. 48
Section 8.3 Nonsurvival of Representations and Warranties. 48
Section 8.4 Notices. 48
Section 8.5 Interpretation 50
Section 8.6 Counterparts. 50
Section 8.7 Entire Agreement; No Third Party Beneficiaries. 50
Section 8.8 Severability. 50
Section 8.9 Governing Law. 51
Section 8.10 Assignment 51
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