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AGREEMENT AND PLAN OF MERGER
among
XXXXXXXXX-XXXX COMPANY,
IR MERGER CORPORATION
and
HUSSMANN INTERNATIONAL, INC.
Dated as of May 11, 2000
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TABLE OF CONTENTS
Page
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ARTICLE I
THE OFFER............................................................... 2
Section 1.1 THE OFFER.................................................. 2
Section 1.2 OFFER DOCUMENTS............................................ 3
Section 1.3 COMPANY ACTION............................................. 3
Section 1.4 DIRECTORS.................................................. 5
ARTICLE II
THE MERGER.............................................................. 6
Section 2.1 THE MERGER................................................. 6
Section 2.2 CLOSING.................................................... 7
Section 2.3 EFFECTIVE TIME............................................. 7
Section 2.4 EFFECTS OF THE MERGER...................................... 7
Section 2.5 CERTIFICATE OF INCORPORATION; BY-LAWS...................... 7
Section 2.6 DIRECTORS; OFFICERS........................................ 7
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES.................................. 8
Section 3.1 EFFECT ON CAPITAL STOCK.................................... 8
Section 3.2 OPTIONS: STOCK PLANS....................................... 9
Section 3.3 PAYMENT FOR SHARES.........................................10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES..........................................12
Section 4.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY..............12
Section 4.2 REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.....27
ARTICLE V
CONDUCT OF BUSINESS OF THE COMPANY......................................30
Section 5.1 CONDUCT OF BUSINESS OF THE COMPANY.........................30
ARTICLE VI
ADDITIONAL COVENANTS....................................................33
Section 6.1 THE COMPANY STOCKHOLDERS MEETING; PREPARATION OF THE
PROXY STATEMENT; SHORT-FORM MERGER.........................33
Section 6.2 ACCESS TO INFORMATION; NOTIFICATION OF CERTAIN MATTERS.....34
Section 6.3 REASONABLE BEST EFFORTS....................................34
Section 6.4 PUBLIC ANNOUNCEMENTS.......................................34
Section 6.5 NO SOLICITATION............................................35
Section 6.6 CONSENTS; APPROVALS AND FILINGS............................36
Section 6.7 EMPLOYEE BENEFIT PLANS.....................................36
Section 6.8 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE........38
Section 6.9 CERTAIN TAX MATTERS........................................39
ARTICLE VII
CONDITIONS PRECEDENT....................................................40
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Section 7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER.....................................................40
ARTICLE VIII
TERMINATION.............................................................40
Section 8.1 TERMINATION................................................40
Section 8.2 EFFECT OF TERMINATION......................................43
ARTICLE IX
GENERAL PROVISIONS......................................................43
Section 9.1 FEES AND EXPENSES..........................................43
Section 9.2 CERTAIN DEFINITIONS........................................44
Section 9.3 AMENDMENT AND MODIFICATION.................................44
Section 9.4 EXTENSION; WAIVER..........................................44
Section 9.5 NOTICES....................................................45
Section 9.6 INTERPRETATION.............................................45
Section 9.7 ENTIRE AGREEMENT: NO THIRD-PARTY BENEFICIARIES.............46
Section 9.8 GOVERNING LAW..............................................46
Section 9.9 ASSIGNMENT.................................................46
Section 9.10 ENFORCEMENT................................................46
Section 9.11 SEVERABILITY...............................................47
Section 9.12 COUNTERPARTS...............................................47
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 11, 2000 (this
"Agreement"), by and among XXXXXXXXX-XXXX COMPANY, a New Jersey corporation
("Parent"), IR MERGER CORPORATION, a Delaware corporation and wholly owned
subsidiary of Parent ("Purchaser"), and HUSSMANN INTERNATIONAL, INC., a Delaware
corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Purchaser and
the Company have determined that it would be advisable and in the best interests
of their respective stockholders for Parent to acquire the Company upon the
terms and subject to the conditions set forth in this Agreement;
WHEREAS, to effectuate the acquisition, it is proposed that Purchaser
commence a cash tender offer to purchase all of the issued and outstanding
shares of common stock, par value $.001 per share (the "Common Stock"), of the
Company, including the associated Preferred Stock Purchase Rights (the "Rights"
and, together with the Common Stock, the "Shares") issued pursuant to the
Amended and Restated Rights Agreement, dated as of July 15, 1999, between the
Company and First Chicago Trust Company of New York (the "Rights Agreement"), on
the terms and subject to the conditions set forth in this Agreement and the
Offer Documents (as defined in Section 1.2 hereof);
WHEREAS, to effectuate the acquisition, it is further proposed that
following consummation of the Offer (as defined in Section 1.1 hereof),
Purchaser will be merged with and into the Company, with the Company continuing
as the surviving corporation in such merger (the "Merger");
WHEREAS, the Board of Directors of the Company has, by the unanimous
vote of all directors present (i) determined that the Offer and the Merger are
fair to and in the best interests of the Company and its stockholders; (ii)
approved this Agreement and the transactions contemplated hereby, including the
Offer and the Merger, in accordance with the General Corporation Law of the
State of Delaware (the "DGCL"), and (iii) declared the advisability of this
Agreement and resolved to recommend that the holders of the Shares accept the
Offer and adopt this Agreement; and
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and other terms contained in this
Agreement, the parties hereto, intending to be legally bound hereby, agree as
follows:
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ARTICLE I
THE OFFER
Section 1.1 THE OFFER. (a) Provided that this Agreement has not been
terminated pursuant to Article VIII hereof and that none of the events set forth
in Exhibit A hereto (the "Offer Conditions") shall have occurred and be
continuing, as soon as is reasonably practicable (but no later than the fifth
business day after the public announcement by Parent and the Company of the
execution and delivery of this Agreement (counting the business day on which
such announcement is made)), Purchaser shall commence (within the meaning of
Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), an offer (the "Offer") to purchase all outstanding Shares, including the
associated Rights, at a price of $29.00 per share, net to the seller in cash (as
paid pursuant to the Offer, the "Offer Consideration"). The obligation of Parent
and Purchaser to commence the Offer, to consummate the Offer and to accept for
payment and pay for Shares validly tendered in the Offer and not withdrawn shall
be subject to the conditions set forth in Exhibit A hereto. Purchaser expressly
reserves the right, in its sole discretion, to waive any such condition (other
than the Minimum Condition as defined in the Offer Conditions) and make any
other changes in the terms and conditions of the Offer, PROVIDED that, unless
previously approved by the Company in writing, no change may be made which
changes the Minimum Condition or decreases the Offer Consideration, changes the
form of consideration payable in the Offer (other than by adding consideration),
reduces the maximum number of Shares to be purchased in the Offer, or amends the
terms or the conditions of the Offer in a manner which is adverse to the holders
of the Shares, or which imposes conditions or terms to the Offer in addition to
those set forth herein.
(b) On the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, Parent shall provide funds to Purchaser
and Purchaser shall accept for payment and pay for any and all Shares validly
tendered and not withdrawn pursuant to the Offer as soon as practicable after
the expiration date thereof.
(c) Without the prior written consent of the Company,
Purchaser shall not (i) extend the expiration date of the Offer beyond the
initial expiration date of the Offer (which shall be the 20th business day after
commencement of the Offer), except (A) as required by applicable law, (B) that
if, immediately prior
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to the expiration date of the Offer (as it may be extended), the Shares tendered
and not withdrawn pursuant to the Offer constitute less than 90% of the
outstanding Shares, Purchaser may, in its sole discretion, extend the Offer for
one or more periods not to exceed an aggregate of ten business days,
notwithstanding that all conditions to the Offer are satisfied as of such
expiration date of the Offer; PROVIDED that, after the initial such extension
the Offer shall not be subject to any conditions that are at the time of such
extension satisfied other than the Minimum Condition and the conditions set
forth in paragraph (a) or (f)(ii) of Exhibit A, or (C) that if any condition to
the Offer has not been satisfied or waived, Purchaser shall extend the
expiration date of the Offer for one or more periods but in no event later than
October 31, 2000; or (ii) waive the condition relating to the expiration of the
waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000
(xxx "XXX Xxx"); PROVIDED that the Offer may be extended in connection with an
increase in the consideration to be paid pursuant to the Offer so as to comply
with applicable rules and regulations of the United States Securities and
Exchange Commission (the "SEC").
Section 1.2 OFFER DOCUMENTS. (a) As soon as practicable on the date of
commencement of the Offer, Parent and Purchaser shall file or cause to be filed
with the SEC a Tender Offer Statement on Schedule TO (the "Schedule TO") with
respect to the Offer which shall contain the offer to purchase and related
letter of transmittal and other ancillary documents and instruments pursuant to
which the Offer will be made (collectively, and with any supplements or
amendments thereto, the "Offer Documents"). The Company will promptly supply to
Parent and Purchaser in writing, for inclusion in the Offer Documents, all
information concerning the Company required under the Exchange Act and the rules
and regulations thereunder to be included in the Offer Documents.
(b) The Offer Documents 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 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
Purchaser with respect to information supplied by the Company in writing for
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inclusion in the Offer Documents. Each of Parent and Purchaser further agrees to
take all steps necessary to cause the Offer Documents to be filed with the SEC
and to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Each of Parent, Purchaser and
the Company shall promptly correct any information provided by them for use in
the Offer Documents if and to the extent that such information shall be or have
become false or misleading in any material respect, and Parent and Purchaser
shall take all lawful action necessary to cause the Offer Documents as so
corrected to be filed promptly with the SEC and to be disseminated to holders of
Shares as and to the extent required by applicable law. The Company and its
counsel shall be given a reasonable opportunity to review and comment on the
Offer Documents and any amendments thereto prior to the filing thereof with the
SEC. Parent and Purchaser agree to provide the Company and its counsel any
comments Parent, Purchaser or their counsel may receive from the SEC or its
staff with respect to the Offer Documents promptly after the receipt of such
comments.
Section 1.3 COMPANY ACTION. (a) The Company hereby approves of and
consents to the Offer and the Merger and represents and warrants that (i) its
Board of Directors (at a meeting duly called and held) has by the unanimous vote
of all directors present (A) determined that each of this Agreement, the Offer
and the Merger are fair to and in the best interests of the Company's
stockholders, (B) approved this Agreement and the transactions contemplated
hereby, including the Offer and the Merger, and such approval is sufficient to
render the restrictions on "business combinations" (as defined in Section 203 of
the DGCL) set forth in Section 203 of the DGCL inapplicable to this Agreement
and the transactions contemplated hereby, including the Offer and the Merger,
and (C) declared the advisability of this Agreement and resolved to recommend
acceptance of the Offer and adoption of this Agreement by the holders of Shares;
PROVIDED, HOWEVER, that prior to the consummation of the Offer, the Board of
Directors of the Company may modify, withdraw or change such recommendation to
the extent that a majority of the entire Board of Directors concludes in good
faith, based on (among other things) the advice of outside counsel, that failure
to modify or withdraw its recommendation would constitute a breach of the
Board's fiduciary duties under applicable law, and (ii) Credit Suisse First
Boston Corporation (the "Financial Advisor") has delivered to the Board of
Directors of the Company its written opinion dated May 11, 2000, to the effect
that, based upon and subject to the matters set forth
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therein and as of the date thereof, the Offer Consideration to be received by
the holders of Shares pursuant to the Offer and the Merger is fair to such
holders (other than Parent and its affiliates), from a financial point of view.
The Company hereby consents to the inclusion in the Offer Documents of the
recommendations of the Company's Board of Directors described in this Section
1.3(a).
(b) The Company shall file with the SEC, as soon as
practicable on the date of commencement of the Offer, a Tender Offer
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
supplements or amendments thereto, the " Schedule 14D-9") containing the
recommendations of the Board of Directors of the Company in favor of the Offer
and the adoption of this Agreement and the transactions contemplated hereby,
including the Merger, and shall promptly mail the Schedule 14D-9 to the
stockholders of the Company. Parent will promptly supply to the Company in
writing, for inclusion in the Schedule 14D-9, any information concerning Parent
or Purchaser required under the Exchange Act and the rules and regulations
thereunder to be included in the Schedule 14D-9. 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 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 supplied by
Parent or Purchaser in writing 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 Shares, in each case as
and to the extent required by applicable federal securities laws. Each of the
Company, Parent and Purchaser shall promptly correct any information provided by
it for use in the Schedule 14D-9 if and to the extent that such information
shall be or have become false or misleading in any material respect and the
Company shall take all action necessary to cause the Schedule 14D-9 as so
corrected to be filed promptly with the SEC and disseminated to the holders of
Shares as and to the extent required by applicable law. Parent, Purchaser and
their counsel shall be given a reasonable opportunity to review and comment on
the Schedule 14D-9 and any amendments thereto prior to the filing thereof with
the SEC. The Company agrees to provide Parent and its counsel any comments the
Company or its
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counsel receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after receipt of such comments.
(c) In connection with the Offer, the Company shall promptly
furnish Parent and Purchaser with mailing labels, security position listings,
any non-objecting beneficial owner lists and all available listings or computer
files containing the names and addresses of the record holders of Shares as of
the latest practicable date and shall furnish Parent and Purchaser with such
additional information and assistance (including updated lists of stockholders,
mailing labels, lists of security positions and non-objecting beneficial owner's
lists) as Parent and Purchaser or their agents may reasonably request in
communicating the Offer to the record and beneficial holders of Shares.
Section 1.4 DIRECTORS. (a) Subject to Section 1.4(c), promptly after
the purchase of and payment for the Shares by Purchaser pursuant to the Offer,
Parent shall be entitled to designate such number of directors (the "Parent
Designees"), rounded up to the next whole number, on the Company's Board of
Directors as is equal to the product of the total number of directors on such
Board (after giving effect to any increase in the size of such Board pursuant to
this Section 1.4) multiplied by the percentage that the number of Shares
beneficially owned by Purchaser at such time (including Shares so accepted for
payment) bears to the total number of Shares then outstanding; PROVIDED that in
no event shall the Parent Designees constitute less than a majority of the
entire Board of Directors. In furtherance thereof, the Company shall, upon the
request of Parent, use its reasonable best efforts promptly either to increase
the size of its Board of Directors or to secure the resignations of such number
of its incumbent directors, or both, as is necessary to enable the Parent
Designees to be so elected or appointed to the Company's Board of Directors, and
the Company shall take all actions available to the Company to cause the Parent
Designees to be so elected or appointed. At such time, the Company shall,
subject to Section 1.4(c), if requested by Parent, also take all action
necessary to 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
9.2 hereof) of the Company and (iii) each committee (or similar body) of each
such board.
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(b) The Company's obligation to appoint Parent Designees to
the Company's Board of Directors shall be subject to Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly
take all actions required pursuant to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder in order to fulfill its obligations under Section
1.4(a), including mailing to stockholders the information required by such
Section 14(f) and Rule 14f-1 (or including such information in the Schedule
14D-9 initially filed with the SEC and distributed to the stockholders of the
Company) as is necessary to enable Parent Designees to be elected to the
Company's Board of Directors. Parent or Purchaser will supply to the Company in
writing and be solely responsible for any information with respect to Parent and
Purchaser and their nominees, officers, directors and affiliates to the extent
required by such Section 14(f) and Rule 14f-1. The provisions of this Section
1.4 are in addition to and shall not limit any rights which Purchaser, Parent or
any of their affiliates may have as a holder or beneficial owner of Shares as a
matter of applicable law with respect to the election of directors or otherwise.
(c) Notwithstanding the provisions of this Section 1.4, the
parties hereto shall use their respective reasonable best efforts to ensure that
at least two of the members of the Board shall, at all times prior to the
Effective Time (as defined in Section 2.3 hereof), be directors of the Company
who were directors of the Company on the date hereof (the "Continuing
Directors"), PROVIDED that, if there shall be in office less than two Continuing
Directors for any reason, the Board of Directors shall cause the person
designated by the remaining Continuing Director to fill such vacancy who shall
be deemed to be a Continuing Director for all purposes of this Agreement, or if
no Continuing Directors then remain, the other directors of the Company then in
office shall designate two persons to fill such vacancies who will not be
officers or employees or affiliates of the Company or Parent or any of their
respective subsidiaries and such persons shall be deemed to be Continuing
Directors for all purposes of this Agreement. From and after the time, if any,
that the Parent Designees constitute a majority of the Company's Board of
Directors and prior to the Effective Time, subject to the terms hereof, any
amendment or modification of this Agreement, any amendment to the Company's
Certificate of Incorporation or By-Laws, any termination of this Agreement by
the Company, any extension of time for performance of any of the obligations of
Parent or Purchaser hereunder, any waiver of any condition to the
11
Company's obligations hereunder or any of the Company's rights hereunder or
other action by the Company hereunder which adversely affects the holders of
Shares other than Parent or Purchaser may be effected only if there are in
office one or more Continuing Directors and such action is approved by the
action of unanimous vote of the entire Board of Directors of the Company.
ARTICLE II
THE MERGER
Section 2.1 THE MERGER. On the terms and subject to the conditions set
forth in this Agreement, and in accordance with the DGCL, the Merger shall be
effected and Purchaser shall be merged with and into the Company at the
Effective Time. At the Effective Time, the separate existence of Purchaser shall
cease and the Company shall continue as the surviving corporation (as such, the
"Surviving Corporation") and shall continue to be governed by the laws of the
State of Delaware. At Parent's election, any direct or indirect subsidiary of
Parent other than Purchaser may be merged with and into the Company instead of
the Purchaser. In the event of such an election, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect such election.
Section 2.2 CLOSING. Unless this Agreement shall have been terminated
and the transactions contemplated hereby shall have been abandoned pursuant to
Article VIII, and subject to the satisfaction or waiver of all of the conditions
set forth in Article VII, the closing of the Merger (the "Closing") will take
place as soon as practicable, but in no event later than 10:00 a.m. on the
second business day (the "Closing Date") following satisfaction or waiver of all
of the conditions set forth in Article VII, other than those conditions that by
their nature are to be satisfied at the Closing, but subject to the fulfillment
or waiver of those conditions, at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000
Xxxxxxxxx Xxx, Xxx Xxxx, Xxx Xxxx, 00000, unless another date, time or place is
agreed to in writing by the parties hereto.
Section 2.3 EFFECTIVE TIME. On the Closing Date (or on such other date
as Parent and the Company may agree), the parties hereto shall file with the
Secretary of State of Delaware a certificate of merger or, if applicable, a
certificate of ownership and merger and any other appropriate documents,
executed in accordance with the relevant provisions of the DGCL, and shall make
all other filings or recordings required under the
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DGCL and other applicable law in connection with the Merger. The Merger shall
become effective upon the filing of the certificate of merger or, if applicable,
the certificate of ownership and merger, with the Delaware Secretary of State,
or at such later time as is mutually agreed by the parties and set forth therein
(the "Effective Time").
Section 2.4 EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time, all
property of the Company and Purchaser shall vest in the Surviving Corporation,
and all liabilities and obligations of the Company and Purchaser shall become
liabilities and obligations of the Surviving Corporation.
Section 2.5 CERTIFICATE OF INCORPORATION; BY-LAWS. (a) The certificate
of incorporation of the Company shall be the certificate of incorporation of the
Surviving Corporation until thereafter changed or amended in accordance with the
provisions thereof and applicable law and (b) the by-laws of the Company shall
be the bylaws of the Surviving Corporation until thereafter changed or amended
in accordance with the provisions thereof and applicable law.
Section 2.6 DIRECTORS; OFFICERS. From and after the Effective Time, (a)
the directors of Purchaser shall be the directors of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be, and (b) the
officers of the Company shall be the officers of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 3.1 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue
of the Merger and without any action on the part of any holder of Shares or any
other shares of capital stock of the Company or Purchaser:
(a) COMMON STOCK OF PURCHASER. Each share of common stock, par
value $0.01 per share, of Purchaser issued and outstanding immediately prior to
the Effective Time shall be
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converted into and become one validly issued, fully paid and nonassessable share
of common stock, par value $0.001 per share, of the Surviving Corporation.
(b) CANCELLATION OF TREASURY SHARES AND PARENT-OWNED SHARES.
Each Share issued and outstanding immediately prior to the Effective Time that
is owned by the Company or by Parent, Purchaser or any other Subsidiary of
Parent (other than shares in trust accounts, managed accounts, custodial
accounts and the like that are beneficially owned by third parties) shall
automatically be canceled and shall cease to exist, and no cash or other
consideration shall be delivered or deliverable in exchange therefor.
(c) CONVERSION OF SHARES. At the Effective Time, each Share
issued and outstanding immediately prior to the Effective Time (other than
Shares to be canceled in accordance with Section 3.1(b) and any Dissenting
Shares (as defined in Section 3.1(d)) shall be converted into the right to
receive the Offer Consideration, payable to the holder thereof, without any
interest thereon (the "Merger Consideration"), less any required withholding
taxes, upon surrender and exchange of a Certificate (as defined in Section 3.3).
(d) DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, Shares issued and outstanding immediately prior to
the Effective Time held by any person who has not voted such Shares in favor of
the Merger and who has the right to demand, and who properly demands, an
appraisal of such Shares ("Dissenting Shares") in accordance with Section 262 of
the DGCL (or any successor provision) shall not be converted into a right to
receive the Merger Consideration unless such holder fails to perfect or
otherwise loses such holder's right to such appraisal, if any. If, after the
Effective Time, such holder fails to perfect or loses any such right to
appraisal, each such Share of such holder shall be treated as a Share that had
been converted as of the Effective Time into the right to receive the Merger
Consideration in accordance with Section 3.1(c). At the Effective Time, any
holder of Dissenting Shares shall cease to have any rights with respect thereto,
except the rights provided in Section 262 of the DGCL (or any successor
provision) and as provided in the immediately preceding sentence. The Company
shall give prompt notice to Parent of any demands received by the Company for
appraisal of Shares, and Parent shall have the right to participate in and
direct all negotiations and proceedings with respect to such demands. The
Company shall not, except with
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the prior written consent of Parent, make any payment with respect to, or offer
to settle, any such demands.
Section 3.2 OPTIONS: STOCK PLANS.
(a) Upon consummation of the Offer, each then outstanding
option to purchase Shares, whether or not otherwise vested and exercisable (a
"Stock Option") shall be cancelled by the Company and in consideration of such
cancellation and except to the extent that Parent and the holder of any such
Stock Option otherwise agree, the Company shall pay to such holders of Stock
Options an amount in respect thereof equal to the product of (A) the excess, if
any, of (i) the Merger Consideration over (ii) the exercise price per Share
subject to such Stock Option and (B) the number of Shares subject to such Stock
Option immediately prior to its cancellation. Such payment shall be less any
required withholding taxes and without interest.
(b) The Company shall be entitled to draw down on any of its
existing credit agreements an amount equal to the aggregate amount to be paid
pursuant to Section 3.2(a), before deducting any required withholding taxes. If
sufficient funding for such payment is not available under the Company's credit
lines, Parent agrees to make available to the Company as a loan sufficient
funds, when combined with funds available under the Company's credit lines, to
make the payment required by this Section 3.2.
(c) Except as otherwise permitted under the terms of this
Agreement, the Company shall ensure that following the consummation of the Offer
(i) no further issuance, transfer or grant of any capital stock of the Surviving
Corporation or any interest in respect of any capital stock of the Surviving
Corporation shall be made under the Company Stock Incentive Plan and (ii) no
holder of a Stock Option or any participant in any employee incentive or benefit
plans or programs or arrangements or non-employee director plans maintained by
the Company shall have any right thereunder to acquire any capital stock of the
Company, Parent or the Surviving Corporation.
(d) Prior to the consummation of the Offer, the Company shall,
if necessary, amend the terms of the Company Stock Incentive Plan to give effect
to the provisions of this Section 3.2.
Section 3.3 PAYMENT FOR SHARES.
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(a) PAYMENT FUND. Concurrently with the Effective Time, Parent
shall deposit, or shall cause to be deposited, with or for the account of a bank
or trust company designated by Parent (the "Paying Agent"), for the benefit of
the holders of Shares, cash in an amount sufficient to pay the aggregate Merger
Consideration payable upon the conversion of Shares pursuant to Section 3.1 (c)
(the "Payment Fund").
(b) LETTERS OF TRANSMITTAL; SURRENDER OF CERTIFICATES. (i) As
soon as reasonably practicable after the Effective Time, Parent shall instruct
the Paying Agent to mail to each holder of record (other than the Company or any
of its Subsidiaries or Parent, Purchaser or any other Subsidiary of Parent) of a
certificate or certificates that, immediately prior to the Effective Time,
evidenced outstanding Shares (the "Certificates"), (x) a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent, and shall be in such form and have such other
provisions as Parent may reasonably specify) and (y) instructions for use in
effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent together with such letter of transmittal, duly executed, and such other
customary documents as may be required pursuant to such instructions, the holder
of such Certificate shall be entitled to receive in exchange therefor cash in an
amount equal to the product of (A) the number of Shares formerly represented by
such Certificate and (B) the Merger Consideration, and the Certificate so
surrendered shall forthwith be canceled. No interest shall be paid or accrued on
any cash payable upon the surrender of any Certificate. If payment 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 otherwise in proper form for transfer
and that the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of the surrendered Certificate or established to the satisfaction of
Parent and the Surviving Corporation that such taxes have been paid or are not
applicable.
(ii) In the event any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the
person claiming such Certificate to be
16
lost, stolen or destroyed, the Paying Agent will issue in exchange for
such lost, stolen or destroyed Certificate the Merger Consideration
deliverable in respect thereof as determined in accordance with this
Article III, PROVIDED that the person to whom the Merger Consideration
is paid shall, as a condition precedent to the payment thereof, give
the Surviving Corporation a bond in such sum as it may direct or
otherwise indemnify the Surviving Corporation in a manner satisfactory
to it against any claim that may be made against the Surviving
Corporation with respect to the Certificate claimed to have been lost,
stolen or destroyed.
(c) CANCELLATION OF SHARES; NO FURTHER RIGHTS. As of the
Effective Time, all Shares (other than Shares to be canceled in accordance with
Section 3.1 (b)) issued and outstanding immediately prior to the Effective Time
shall cease to be outstanding and shall automatically be canceled and shall
cease to exist, and each holder of any such Shares shall cease to have any
rights with respect thereto or arising therefrom (including without limitation
the right to vote), except the right to receive the Merger Consideration,
without interest, upon surrender of such Certificate in accordance with Section
3.3(b), and until so surrendered, each such Certificate shall represent for all
purposes only the right to receive the Merger Consideration (without interest),
other than in the case of Dissenting Shares. The Merger Consideration paid upon
the surrender for exchange of Certificates in accordance with the terms of this
Section 3.3 shall be deemed to have been paid in full satisfaction of all rights
pertaining to the Shares formerly represented by such Certificates.
(d) INVESTMENT OF PAYMENT FUND. The Paying Agent shall invest
the Payment Fund, as directed by Parent, in (i) direct obligations of the United
States of America, (ii) obligations for which the full faith and credit of the
United States of America is pledged to provide for the payment of principal and
interest, (iii) commercial paper rated the highest quality by either Xxxxx'x
Investors Services, Inc. or Standard & Poor's Corporation, or (iv) certificates
of deposit, bank repurchase agreements or bankers' acceptances of commercial
banks with capital exceeding $500 million. Any net earnings with respect to the
Payment Fund shall be the property of and paid over to Parent as and when
requested by Parent.
(e) TERMINATION OF PAYMENT FUND. Any portion of the Payment
Fund which remains undistributed to the holders of
17
Certificates for 180 days after the Effective Time shall be delivered to Parent,
upon demand, and any holders of Certificates that have not theretofore complied
with this Section 3.3 shall thereafter look only to Parent, and only as general
creditors thereof, for payment of their claim for any Merger Consideration.
(f) NO LIABILITY. None of Parent, Purchaser, the Surviving
Corporation or the Paying Agent shall be liable to any person in respect of any
payments or distributions payable from the Payment Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
Subject to applicable law and public policy, if any Certificates shall not have
been surrendered immediately prior to such date on which any Merger
Consideration in respect of such Certificate would otherwise escheat to or
become the property of any Governmental Entity (as defined in Section 4.1 (c)),
any amounts payable in respect of such Certificate shall, to the extent
permitted by applicable law and public policy, become the property of the
Surviving Corporation, free and clear of all claims or interest of any person
previously entitled thereto.
(g) WITHHOLDING RIGHTS. Parent and Purchaser shall be entitled
to deduct and withhold, or cause to be deducted or withheld, from the
consideration otherwise payable pursuant to this Agreement to any holder of
Shares, Stock Options or Certificates such amounts as are required to be
deducted and withheld with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
applicable state, local or foreign tax law. To the extent that amounts are so
deducted and withheld, such deducted and withheld amounts shall be treated for
all purposes of this Agreement as having been paid to such holders in respect of
which such deduction and withholding was made.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as
set forth in the corresponding sections or subsections of the disclosure
schedule delivered by the Company to Parent and Purchaser upon or prior to
entering into this Agreement (the "Disclosure Schedule"), the Company represents
and warrants to Parent and Purchaser as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of the
Company and its Subsidiaries is duly organized, validly
18
existing and in good standing under the laws of the jurisdiction in which it is
organized and has the requisite corporate or other power and authority and any
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as now being conducted. Each of the Company and its
Subsidiaries is duly qualified to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification necessary, other than in such
jurisdictions where the failure to be so qualified would not, individually or in
the aggregate, have a Material Adverse Effect on the Company. For purposes of
this Agreement, a "Material Adverse Effect" with respect to any person means a
material adverse effect on (i) the ability of such person to perform its
obligations under this Agreement or to consummate the transactions contemplated
hereby or (ii) the financial condition, business, assets or results of
operations of such person and its Subsidiaries taken as a whole, other than
adverse effects resulting from (x) conditions, circumstances or changes in the
general economy, the capital markets or the industry in which the Company is
engaged or (y) any public disclosure of this Agreement. The Company has
delivered or made available to Parent true, complete and correct copies of the
certificate of incorporation and by-laws of the Company, in each case as amended
to the date of this Agreement. Such certificates of incorporation and by-laws
are in full force and effect and no other organizational documents are
applicable to or binding upon the Company. None of the Company or any of its
Subsidiaries is in violation of its respective certificate of incorporation,
bylaws, or comparable governing documents. Exhibit 21 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1999 sets forth a true,
correct and complete list of all Subsidiaries of the Company required to be so
reported. Except as set forth in such Exhibit 21, all Subsidiaries of the
Company are wholly owned directly or indirectly by the Company. Except as set
forth in Section 4.1 (a) of the Disclosure Schedule, the Company does not own,
directly or indirectly, any capital stock or other equity interest in any person
other than the Subsidiaries other than such capital stock and other equity
interests with a carrying value, in the aggregate, not in excess of $1,000,000.
(b) CORPORATE AUTHORIZATION. The Company has the requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated
19
hereby have been duly authorized, and this Agreement has been approved, by the
Board of Directors of the Company, and no other corporate proceeding, other than
the approval of the Company's stockholders, is necessary to authorize the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Company and, assuming that this Agreement constitutes a valid
and binding obligation of Parent and Purchaser, constitutes a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to laws concerning bankruptcy and creditor's rights and the
application of general principles of equity (regardless of whether enforcement
is considered in proceedings at law or equity). Subject to the applicability of
Section 253 of the DGCL, the affirmative vote of the holders of a majority of
the outstanding Shares is the only vote required to approve the Merger and adopt
this Agreement.
(c) CONSENTS AND APPROVALS; NO VIOLATIONS. Except as set forth
in Section 4.1(c) of the Disclosure Schedule, (i) the execution and delivery by
the Company of this Agreement do not, and the consummation by the Company of the
transactions contemplated hereby and compliance by the Company with the
provisions hereof will not, (x) violate any of the provisions of the certificate
of incorporation or by-laws of the Company or the comparable governing documents
of any Subsidiary of the Company, in each case as amended to the date of this
Agreement, (y) subject to the governmental filings and other matters referred to
in Section 4.1 (c)(ii), violate or result in a breach of or default (with or
without notice or lapse of time, or both) under, or give rise to a material
obligation, right of termination, cancellation or acceleration of any obligation
or loss of a material benefit under, or require the consent of any person under,
any indenture, credit agreement or other agreement, permit, concession,
franchise, license or other instrument or undertaking to which the Company or
any of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries or any of their respective assets is bound or affected or (z)
subject to the governmental filings and other matters referred to in Section 4.1
(c)(ii), violate any domestic or foreign law, rule or regulation applicable to
the Company or any of its Subsidiaries or any order, writ, judgment, injunction,
decree, determination or award applicable to the Company or any of its
Subsidiaries currently in effect, which, in the case of clauses (y) and (z)
above, would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company.
20
(ii) No consent, approval, order or authorization of, or
declaration, registration or filing with, or notice to, any domestic or
foreign court, arbitral tribunal, administrative agency or commission
or other governmental agency or regulatory authority (a "Governmental
Entity"), which has not been received or made, is required by or with
respect to the Company or any of its Subsidiaries in connection with
the execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated hereby,
except for (i) the filing of premerger notification and report forms
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act") or under any foreign statutes or regulations,
(ii) the filing with the SEC of (A) the Schedule 14D-9 and, if required
by applicable law, the Proxy Statement (as defined in Section 6.1 (b)),
(B) such reports under the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated
hereby, (iii) the filing of the certificate of merger or the
certificate of ownership and merger, as the case may be, with the
Delaware Secretary of State and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do
business, (iv) as required under the rules and regulations of the New
York Stock Exchange and (v) any other consents, approvals,
authorizations, filings or notices the failure to make or obtain which
would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company.
(d) CAPITAL STRUCTURE. As of the date of this Agreement, the
authorized capital stock of the Company consists solely of (A) 150,000,000
shares of Common Stock and (B) 20,000,000 shares of preferred stock, par value
$0.001 per share ("Preferred Stock"), of which no shares were outstanding but of
which 1,500,000 shares have been reserved for issuance upon exercise of the
Rights distributed to the holders of Common Stock pursuant to the Rights
Agreement. At the close of business on May 8, 2000, 50,593,522 shares of Common
Stock were outstanding, and 721,408 shares of capital stock of the Company were
held in the treasury of the Company. There were outstanding as of May 8, 2000 no
options, warrants or other rights to acquire capital stock from the Company
other than (x) the Rights and (y) options representing in the aggregate the
right to purchase up to 5,755,817 shares of Common Stock (collectively, the
"Company Stock Options") under the Hussmann International Stock Incentive Plan
(the "Company Stock Incentive Plan"). Since May 8, 2000, no options to purchase
shares of Common Stock have been
21
granted and no shares of Common Stock have been issued except for shares issued
pursuant to the exercise of Company Stock Options outstanding as of May 8, 2000.
Except (i) as set forth above or in Section 4.1(d) of the Disclosure Schedule or
(ii) as a result of the exercise of Company Stock Options outstanding as of May
8, 2000, there are outstanding (a) no shares of capital stock or other voting
securities of the Company, (b) no securities of the Company convertible into or
exchangeable for shares of capital stock or voting securities of the Company,
(c) no options or other rights to acquire from the Company, and no obligation of
the Company to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of the
Company and (d) no equity equivalents, interests in the ownership or earnings of
the Company or other similar rights. All outstanding shares of capital stock of
the Company and its Subsidiaries are duly authorized, validly issued, fully paid
and nonassessable and not subject to preemptive or similar rights, and, in the
case of the Subsidiaries, are owned by the Company, by one or more Subsidiaries
of the Company or by the Company and one or more such Subsidiaries (except as
disclosed in Section 4.1(a) or in Section 4.1(d) of the Disclosure Schedule),
free and clear of all pledges, claims, liens, charges, mortgages, conditional
sale or title retention agreements, hypothecations, collateral assignments,
security interests, easements and other encumbrances of any kind or nature
whatsoever (collectively, "Liens"). Except as described above, neither the
Company nor any Subsidiary of the Company has or is subject to or bound by or,
at or after the Effective Time will have or be subject to or bound by, any
outstanding option, warrant, call, subscription or other right (including any
preemptive or similar right), agreement or commitment which (i) obligates the
Company or any Subsidiary of the Company to issue, sell or transfer, or
repurchase, redeem or otherwise acquire, any shares of the capital stock of the
Company or any Subsidiary of the Company, (ii) obligates the Company or any of
its Subsidiaries to provide funds or make any investment (in the form of a loan,
capital contribution or otherwise) in any such Subsidiary or any other entity,
(iii) restricts the transfer of any shares of capital stock of the Company or
any of its Subsidiaries, or (iv) relates to the holding, voting or disposition
of any shares of capital stock of the Company or any of its Subsidiaries. No
bonds, debentures, notes or other indebtedness of the Company or any Subsidiary
of the Company having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which the
stockholders of the Company or any Subsidiary of the Company
22
may vote are issued or outstanding. Section 4.1(d) of the Disclosure Schedule
accurately sets forth information as of May 8, 2000 regarding the exercise
price, date of grant and number of granted Stock Options for each holder of
Stock Options pursuant to any stock option plan. Except as described above,
there are no other stock appreciation, phantom stock or other equity-based
awards outstanding under any employee incentive or benefit plan or program or
arrangement or non-employee director plan maintained by the Company.
(e) SEC DOCUMENTS. The Company has filed all required reports,
schedules, forms, statements and other documents with the SEC relating to
periods commencing on or after January 1, 1997 (such reports, schedules, forms,
statements and other documents being hereinafter referred to as the "SEC
Documents"). As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents as of such dates contained any untrue
statements of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The consolidated
financial statements of the Company included in the SEC Documents comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with U.S. generally accepted accounting principles
("GAAP") (except, in the case of unaudited consolidated quarterly statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may otherwise be indicated in the notes thereto) and
fairly present in all material respects the consolidated financial position of
the Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended (subject, in the case of unaudited quarterly statements, to normal
year-end audit adjustments).
(f) ABSENCE OF CERTAIN CHANGES OR EVENTS.
(i) Except as set forth in Section 4.1(f) of the Disclosure
Schedule, since December 31, 1999, the Company and its Subsidiaries
have conducted their businesses only in the ordinary course consistent
with past practice, and there has not been: (A)
23
any event, change, occurrence, or development of a state of facts or
circumstances having, or which would reasonably be expected to have, a
Material Adverse Effect on the Company; (B) any declaration, setting
aside or payment of any dividend (other than regular quarterly cash
dividends) or other distribution in respect of shares of the Company's
capital stock, or any redemption or other acquisition by the Company or
any of its Subsidiaries of any shares of its capital stock; (C) any (i)
grant of any severance or termination pay to (or amendment to any such
existing arrangement with) any director or officer of the Company or
any of its Subsidiaries or, other than in the ordinary course of
business consistent with past practice, any employee (other than
employees who receive less than $200,000 in total annual cash
compensation from the Company or any of its Subsidiaries) of the
Company or any of its Subsidiaries, (ii) entering into of any
employment, severance, change of control, deferred compensation or
other similar arrangement (or any amendment to any such existing
agreement) with any director or officer of the Company or any of its
Subsidiaries or, other than in the ordinary course of business
consistent with past practice, any employee (other than employees who
receive less than $200,000 in total annual cash compensation from the
Company or any of its Subsidiaries) of the Company or any of its
Subsidiaries, (iii) any increase in benefits payable under any existing
severance, change of control or termination pay policies or employment,
severance or change of control agreements with respect to any director
or officer of the Company or any of its Subsidiaries or, other than in
the ordinary course of business consistent with past practice, any
employee (other than employees who receive less than $200,000 in total
annual cash compensation from the Company or any of its Subsidiaries)
of the Company or any of its Subsidiaries, (iv) increase in (or
amendments to the terms of) compensation, bonus or other benefits
payable to directors, officers or employees (other than employees who
receive less than $200,000 in total annual cash compensation from the
Company or any of its Subsidiaries) of the Company or any of its
Subsidiaries, other than in the ordinary course of business consistent
with past practice, (v) any adoption or agreement to adopt any
collective bargaining agreement or any Company Plan or (vi) grant of
stock options or stock-based rights under any Company Plan; (D) any
change by the Company or any of its Subsidiaries in accounting methods,
principles or practices, except as required by generally accepted
accounting principles ; (E) any damage, destruction or loss (whether or
not covered by insurance) with respect to any assets of the Company or
any of its Subsidiaries which is reasonably likely, individually or in
the aggregate, to have a Material Adverse Effect; (F) any entry
24
by the Company or any of its Subsidiaries into any commitment or
transactions material to the Company and its Subsidiaries taken as a
whole (other than commitments or transactions entered into in the
ordinary course of business); (G) as of the date hereof, any
revaluation by the Company or any of its Subsidiaries of any of their
respective material assets, including but not limited to writing down
the value of inventory or writing off notes or accounts receivable
other than in the ordinary course of business; or (H) any agreement or
commitment by the Company or any of its Subsidiaries to do any of the
things described in the preceding clauses (A) through (G) otherwise
than as expressly provided for herein.
(g) NO UNDISCLOSED LIABILITIES. Except to the extent accrued
or reserved in the Company's financial statements (including the notes thereto)
included in the SEC Documents filed and publicly available prior to the date of
this Agreement (the "Filed SEC Documents") and as set forth in Section 4.1(g) of
the Disclosure Schedule, neither the Company nor any of its Subsidiaries has any
liabilities or obligations of any nature, whether accrued, contingent, absolute
or otherwise, except for those arising in the ordinary course of business
consistent with past practice and that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company.
(h) CERTAIN INFORMATION. The Schedule 14D-9 and the Proxy
Statement will contain all information which is required to be included therein
in accordance with the Exchange Act and the rules and regulations thereunder and
any other applicable law and will conform in all material respects with the
requirements of the Exchange Act and any other applicable law, and neither the
Schedule 14D-9 nor the Proxy Statement will, at the respective times they are
filed with the SEC or published, sent or given to the Company's stockholders,
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; PROVIDED, HOWEVER, that no representation or warranty is hereby made
by the Company with respect to any information supplied by Parent or Purchaser
in writing for inclusion in, or with respect to Parent or Purchaser information
derived from Parent's public SEC filings which is included or incorporated by
reference in, the Schedule 14D-9 or the Proxy Statement. None of the information
supplied or to be supplied by the Company in writing for inclusion or
incorporation by
25
reference in, or which may be deemed to be incorporated by reference in, any of
the Offer Documents will, at the respective times the Offer Documents are filed
with the SEC or published, sent or given to the Company's stockholders, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they are made, not misleading. If at any
time prior to the Effective Time any event with respect to the Company, or with
respect to any information supplied by the Company in writing for inclusion in
any of the Offer Documents, shall occur which is required to be described in an
amendment of, or a supplement to, any of the Offer Documents, the Company shall
so describe the event to Parent.
(i) REAL PROPERTY. (i) The real property owned by the Company
and its Subsidiaries and all property leased by the Company and its
Subsidiaries are referred to herein as the "Real Property".
(ii) The Company or one of its Subsidiaries has good and
marketable title to each parcel of Real Property owned by the Company
or its Subsidiaries and a valid leasehold interest in all Real Property
leased by the Company and its Subsidiaries free and clear of all Liens
except (A) those reflected or reserved against in the latest balance
sheet of the Company included in the Filed SEC Documents, (B) taxes and
general and special assessments not in default and payable without
penalty and interest, and (C) other Liens that individually or in the
aggregate would not reasonably be expected to have a Material Adverse
Effect on the Company.
(iii) Except to the extent that the inaccuracy of any of the
following (or the circumstances giving rise to such inaccuracy),
individually or in the aggregate, are not reasonably likely to have a
Material Adverse Effect: (A) each of the agreements by which the
Company has obtained a leasehold interest in all Real Property leased
by the Company (individually, a "LEASE" and collectively, the "LEASES")
is in full force and effect in accordance with its respective terms and
the Company or one of its Subsidiaries is the holder of the lessee's or
tenant's interest thereunder; (B) to the knowledge of the Company,
there exists no default under any Lease and no circumstance exists
which, with the giving of notice, the passage of time or both, is
reasonably likely to result in such a default; (C) the Company and its
Subsidiaries have complied with and timely performed all
26
conditions, covenants, undertakings and obligations on their parts to
be complied with or performed under each of the Leases; (D) the Company
and its Subsidiaries have paid all rents and other charges to the
extent due and payable under the Leases; and (E) there are no leases,
subleases, licenses, concessions or any other contracts or agreements
granting to any person or entity other than the Company or any of its
Subsidiaries any right to the possession, use, occupancy or enjoyment
of any Real Property or any portion thereof.
(j) INTELLECTUAL PROPERTY. Except in each case where the
failure would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on the Company, (A) the Company owns or has
rights to use and, except for Intellectual Property licensed to the Company to
the extent the terms of the applicable licenses restrict transfer, transfer all
Intellectual Property that is reasonably necessary to conduct the Company's
business as it is conducted on the date hereof, in each case free and clear of
all Liens, and (B) to the Company's knowledge, the conduct of the Company's and
its Subsidiaries' business does not (x) infringe on any patent, trademark,
copyright or other intellectual property right of any other person, or (y)
constitute a misuse or misappropriation of any trade secret, know-how, process,
proprietary information or other similar right of any other person. For purposes
of this Agreement, "Intellectual Property" shall mean all intellectual property
material to the operation or the conduct of business of the Company or its
Subsidiaries, including copyrights, trademarks, trade names, service marks,
domain names, trade dress, letters patent (including registrations or
applications for registration in any jurisdiction, and any renewals or
extensions thereof), the goodwill associated with the foregoing; confidential or
proprietary technical and business information, know-how and trade secrets, in
any jurisdiction, and any claims or causes of action arising out of or relating
to any infringement or misappropriation of any of the foregoing.
(k) CERTAIN CONTRACTS AND ARRANGEMENTS. (i) Except as
disclosed in Section 4.1(k) of the Disclosure Schedule or in the Filed SEC
Documents, neither the Company nor any of its Subsidiaries is a party to or
bound by any contracts, agreements, instruments or understandings ("contracts")
of the following nature (collectively, the "Material Contracts"): (i) contracts
pursuant to which the Company or any of its Subsidiaries licenses other persons
to use any material Intellectual Property (other than contracts entered into for
the licensing of data or software
27
in the ordinary course of business); (ii) contracts which restrict the Company
or any of its affiliates from competing in any line of business or with any
person in any geographical area; (iii) contracts involving (A) the acquisition,
merger or purchase of all or substantially all of the assets or business of a
third party involving aggregate consideration of $10.0 million or more or (B)
the purchase or sale of assets, or a series of purchases and sales of assets,
involving aggregate consideration of $10.0 million or more or (C) the grant to
any person of any preferential rights to purchase any material amount of its
assets; (iv) material contracts which contain a "change in control" or similar
provision; (v) contracts, including mortgages or other grants of security
interests, guarantees and notes, relating to the borrowing of money in an amount
in excess of $10.0 million in the aggregate; (vi) any contract or other
agreement to indemnify for any Environmental Claim (as defined herein) or any
other liability or cost with respect to any Environmental Law (as defined
herein); and (vii) any contract or other agreement which would prohibit or
materially delay the consummation of the Merger or any of the transactions
contemplated by this Agreement. Except as would not reasonably be expected to
have a Material Adverse Effect on the Company, neither the Company nor any of
its Subsidiaries is in breach or default under any Material Contract nor, to the
knowledge of the Company, is any other party to any Material Contract in breach
or default thereunder.
(ii) With respect to each of the Company's joint ventures, the
Company has disclosed and made available to Parent and Purchaser
correct and complete copies (or descriptions of oral agreements, if
any) of all agreements to which the Company or any of its subsidiaries
or joint ventures is a party which (i) contain any change of control
provisions, put options or call options related to the interests in the
joint venture, rights of first refusal or other similar provisions or
any provisions that are reasonably likely to affect the ability of
Parent or Purchaser together with the remaining co-owners of each such
entity, to direct and control such entity's business operations as a
result of the consummation of the Offer or the Merger or (ii) evidence
any commitment (whether or not contingent) for future investment of
capital or otherwise to be directly or indirectly made by Parent or
Purchaser, the Company or any of their respective subsidiaries.
(l) LITIGATION; COMPLIANCE WITH LAWS. (i) Except as set forth
in Section 4.1(1) of the Disclosure Schedule or in the
28
Filed SEC Documents, (A) there is no suit, claim, action, proceeding (at law or
in equity) or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries or any of
their respective properties before any arbitrator, court or other Governmental
Entity, and (B) neither the Company nor any of its Subsidiaries is subject to
any outstanding order, writ, judgment, injunction, decree or arbitration order
or award that, in any such case described in clauses (A) and (B), has had or
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company. As of the date hereof, there are no
suits, claims, actions, proceedings or investigations pending or, to the
knowledge of the Company, threatened, seeking to prevent, hinder, modify or
challenge the transactions contemplated by this Agreement.
(ii) Except as would not reasonably be expected to have a
Material Adverse Effect on the Company, the Company and its
Subsidiaries are in compliance with all applicable statutes, laws,
ordinances, rules, orders and regulations of any Governmental Entity
and have not received notification of any asserted present or past
failure to so comply. All federal, state, local and foreign
governmental approvals, authorizations, certificates, filings,
franchises, licenses, notices, permits and rights ("Permits") necessary
for each of the Company and its Subsidiaries to own, lease or operate
its properties and assets and to carry on its business as now conducted
have been obtained or made, and there has occurred no default under any
such Permit, except for the lack of Permits and for defaults under
Permits which lack or default would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
the Company.
(m) ENVIRONMENTAL LAWS. Except as disclosed in the Filed SEC
Reports and to the extent that the inaccuracy of any of the following (or the
circumstances giving rise to such inaccuracy), individually or in the aggregate,
is not reasonably likely to have a Material Adverse Effect:
(i) (A) the Company and its Subsidiaries are, and within the
period of all applicable statutes of limitation have been, in
compliance with all applicable Environmental Laws; and (B) the Company
and each of its Subsidiaries believes that each of them will, and will
not incur material expense to, timely attain or maintain compliance
with any Environmental Laws applicable to any of their current
operations or properties or to
29
any of their planned operations with respect to properties currently or
formerly owned or leased by the Company or any of its Subsidiaries;
(ii) (A) the Company and its Subsidiaries hold all
Environmental Permits (each of which is in full force and effect)
required for any of their current operations and for any property
owned, leased, or otherwise operated by any of them, and are, and
within the period of all applicable statutes of limitation have been,
in compliance with all such Environmental Permits; and (B) neither the
Company nor any of its Subsidiaries has knowledge that over the next
three years: any of their Environmental Permits will not be, or will
entail material expense to be, timely renewed or complied with; any
additional Environmental Permits required of any of them for current
operations or for any property owned, leased, or otherwise operated by
any of them, or for any of their planned operations with respect to
properties currently or formerly owned or leased by the Company or any
of its Subsidiaries, will not be timely granted or complied with; or
any transfer or renewal of, or reapplication for, any Environmental
Permit required as a result of the Merger will not be, timely effected;
and
(iii) neither the Company nor any of its Subsidiaries has
received any Environmental Claim (as hereinafter defined) against any
of them, and neither the Company nor any of its Subsidiaries has
knowledge of any such Environmental Claim being threatened; and to the
knowledge of the Company, no Hazardous Materials or other conditions
are present on any property owned, leased, or operated by the Company
or any of its Subsidiaries, or at any other location, that are
reasonably likely to form the basis of any Environmental Claim against
any of them or against any person or entity (including without
limitation any predecessor of the Company or any of its Subsidiaries)
whose liability the Company or any of its Subsidiaries retained or
assumed either contractually or by operation of law.
For purposes of this Agreement, the terms below shall have the
following meanings:
"ENVIRONMENTAL CLAIM" means any claim, demand, action, suit,
complaint, proceeding, directive, investigation, lien, demand letter,
or notice (written or oral) of noncompliance, violation, or liability,
by any person or entity asserting liability or potential liability
(including without
30
limitation liability or potential liability for enforcement,
investigatory costs, cleanup costs, governmental response costs,
natural resource damages, property damage, personal injury, fines or
penalties) arising out of, based on or resulting from (i) the presence,
discharge, emission, release or threatened release of any Hazardous
Materials at any location, (ii) circumstances forming the basis of any
violation or alleged violation of any Environmental Laws or
Environmental Permits, or (iii) otherwise relating to obligations or
liabilities under any Environmental Law.
"ENVIRONMENTAL LAWS" means any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, or other
legally enforceable requirement (including, without limitation, common
law) of any foreign government, the United States, or any state, local,
municipal or other governmental authority, regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment (including without limitation indoor air, ambient air,
surface water, groundwater, land surface, subsurface strata, or plant
or animal species) or human health as affected by the environment or
Hazardous Materials (including without limitation employee health and
safety).
"ENVIRONMENTAL PERMITS" means all permits, licenses,
registrations, approvals, exemptions and other filings with or
authorizations by any Governmental Authority under any Environmental
Law.
"ENVIRONMENTAL REPORT" means any report, study, assessment,
audit, or other similar document that addresses any issue of actual or
potential noncompliance with, actual or potential liability under or
cost arising out of, or actual or potential impact on business in
connection with, any Environmental Law or any proposed or anticipated
change in or addition to Environmental Law, that may affect the Company
or any of its Subsidiaries.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof and any entity (including,
without limitation, a court) exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.
"HAZARDOUS MATERIALS" means all hazardous or toxic
31
substances, wastes, materials or chemicals, petroleum (including crude
oil or any fraction thereof), petroleum products, asbestos,
asbestos-containing materials, pollutants, contaminants, radioactivity
and all other materials, whether or not defined as such, that are
regulated pursuant to or that could result in liability under any
applicable Environmental Laws.
(n) TAXES. Except as would not have a Material Adverse Effect,
the Company and each of its Subsidiaries, and any consolidated, combined,
unitary or aggregate group for tax purposes of which the Company or any of its
Subsidiaries is or has been a member has timely filed, taking into account
extensions, all Tax Returns required to be filed by it in the manner provided by
law, has paid all Taxes (including interest and penalties) shown as due on any
Tax Returns. All such Tax Returns were true, correct and complete in all
material respects. Except as would not have a Material Adverse Effect, no claim
has been made in writing by any Taxing authority in a jurisdiction where any of
the Company or its Subsidiaries does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. Except as would not have a Material
Adverse Effect: (i) no material claim for unpaid Taxes has become a lien or
encumbrance of any kind against the property of the Company or any of its
Subsidiaries or is being asserted in writing against the Company or any of its
Subsidiaries other than liens for Taxes not yet due, or Taxes being contested in
good faith for which adequate reserves have been established; (ii) neither the
Company nor any of its Subsidiaries has made a material disclosure on a federal
income Tax Return pursuant to Section 6662 of the Code; (iii) neither the
Company nor any of its Subsidiaries has requested or received a revenue ruling
from any taxing authority, or signed any binding agreement with any taxing
authority (including any advance pricing agreement), that would materially
affect the amount of Taxes to which it is subject after the Effective Time; (iv)
neither the Company nor any of its Subsidiaries has made any elections with
respect to Taxes affecting the Company and its Subsidiaries that are effective
as of the date hereof; (v) (A) there are no deficiencies for Taxes claimed,
proposed or assessed by any taxing or other governmental authority that have not
been fully paid or settled, (B) there are no current, pending or, to the best
knowledge of the Company and its Subsidiaries, threatened (in writing) audits,
investigations, disputes or claims for or relating to Taxes, and there are no
matters under discussion with any governmental authorities with respect to Taxes
that, in the reasonable judgment of the Company and its Subsidiaries, are likely
to result in additional Taxes
32
and (C) there are no extensions of any statutes of limitations in effect
relating to Taxes to which the Company or its Subsidiaries is subject; and (vi)
neither the Company nor any of its Subsidiaries has any liability arising from
its obligations under either (A) the Tax Sharing Agreement dated as of December
31, 1997, by and among Xxxxxxx Corporation, the Company and Hussmann
Corporation, a wholly owned subsidiary of the Company or (B) the Distribution
and Indemnity Agreement of even date therewith, by and among the parties listed
in the immediately preceding clause (A). Except as would not have a Material
Adverse Effect, the Company and each of its Subsidiaries (and any affiliated or
unitary group of which such person was a member) has timely withheld and paid
over to the proper taxing authorities all Taxes and other amounts required to be
so withheld and paid over. None of the Company and its Subsidiaries has filed a
consent under Code Section 341(f) concerning collapsible corporations. None of
the Company and its Subsidiaries has been required to include in income any
material adjustment pursuant to Code Section 481 (or any similar provision of
state, local or foreign tax law) by reason of a voluntary change in accounting
method initiated by the Company or any of its Subsidiaries, and, to the
Company's best knowledge, the IRS has not initiated or proposed any such
adjustment or change in accounting method. Except as would not have a Material
Adverse Effect, neither the Company nor any of its Subsidiaries (i) has been a
member of an affiliated group filing a consolidated federal income tax return
(other than a group the common parent of which was the Company or Xxxxxxx
Corporation) or (ii) is a party to a Tax allocation or Tax sharing agreement
(other than an agreement solely among members of a group the common parent of
which is the Company). Except as would have, individually or in the aggregate, a
Material Adverse Effect on the Company, neither the Company nor any of its
Subsidiaries has any liability for the Taxes of any person (other than any of
the Company or 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. The Company is not a "foreign person" as
defined in section 1445(f)(3) of the Code. As used herein, "TAXES" shall mean
any taxes of any kind, including but not limited to those on or measured by or
referred to as income, gross receipts, capital, sales, use, ad valorem,
franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, value added, property or windfall profits
taxes, customs, duties or similar fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any
33
governmental authority, domestic or foreign. As used herein, "TAX RETURN" shall
mean any return, report or statement required to be filed with any governmental
authority with respect to Taxes, including any schedule or attachment thereto or
amendment thereof.
(o) BENEFIT PLANS. (i) The Company will provide to the Parent
with respect to each U.S. Plan (as defined below) within five (5) business days
after the execution hereof and with respect to each Non-U.S. Plan (as defined
below) within fifteen (15) business days before the Closing, a true and complete
list of each "employee benefit plan" (within the meaning of section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
including, without limitation, multiemployer plans within the meaning of ERISA
section 3(37)), and all stock purchase, stock option, severance, employment,
change-in-control, fringe benefit, collective bargaining, bonus, incentive,
deferred compensation and all other employee benefit plans, agreements,
programs, policies or other arrangements, whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in the
future as a result of the transaction contemplated by this Agreement or
otherwise), whether formal or informal, written, legally binding or not, under
which any employee or former employee of the Company or its Subsidiaries (the
"Company Employees") has any present or future right to benefits or the Company
or its Subsidiaries has had or has any present or future liability. All such
plans, agreements, programs, policies and arrangements shall be collectively
referred to as the "Company Plans". All Company Plans which are maintained and
sponsored for any Company Employees residing in the United States of America are
referred to as "U.S. Plans". All Company Plans which are not U.S. Plans shall be
referred to as "Non-U.S. Plans." With respect to each U.S. Plan within ten (10)
business days from the execution hereof, with respect to each Non-U.S. Plan, and
within ten (10) business days before the Closing, the Company will furnish or
make available to the Parent a current, accurate and complete copy thereof and,
to the extent applicable: (w) any related trust agreement or other funding
instrument; (x) the most recent determination letters, if applicable; (y) any
summary plan description and other written communications (or a description of
any oral communications) by the Company or its Subsidiaries to their employees
concerning the extent of the benefits provided under a Company Plan; and (z) for
the two most recent years (A) the Form 5500 and attached schedules, (B) audited
financial statements, (C) actuarial valuation reports and (D) attorney's
response to an auditor's
34
request for information.
(ii) Except as set forth in the Filed SEC Documents or would
individually or in the aggregate not reasonably be expected to have a
Material Adverse Effect:
(A) each Company Plan has been established and administered in
accordance with its terms and in compliance with the applicable
provisions of ERISA, the Code and all other applicable laws, and no
reportable event, as defined in Section 4043 of ERISA, no prohibited
transaction described in Section 406 of ERISA or Section 4975 of the
Code or accumulated funding deficiency, as defined in Section 302 of
ERISA and 402 of the Code, has occurred with respect to any Company
Plan;
(B) each Company Plan intended to be qualified under Section
401(a) of the Code has received a favorable determination notification,
advisory and/or opinion letter, as applicable, from the Internal
Revenue Service that it is so qualified and nothing has occurred since
the date of such letter that would reasonably be expected to cause the
loss of such qualified status of such Company Plan;
(C) the aggregate accumulated benefit obligations of the
Company Plans subject to Title IV of ERISA (as of the date of the most
recent Actuarial valuation prepared for such Company Plan and based on
the discount rate and other actuarial assumptions used in such
valuation) do not exceed the fair market value of the assets of such
Company Plans in the aggregate (as of the date of such valuation);
(D) the Company is not aware of any (w) pending or threatened
actions, suits or claims relating to the Company Plans, other than
routine claims for benefits; (x) facts or circumstances that exist that
could give rise to any such actions, suits or claims, (y) written or
oral communication received from the Pension Benefit Guaranty
Corporation (the "PBGC") in respect of any Company Plan subject to
Title IV of ERISA concerning the funded status of any such plan, or (z)
administrative investigation, audit or other administrative proceeding
by the Department of Labor, the PBGC, the Internal Revenue Service or
the governmental agencies which are pending, threatened or in progress;
(E) with respect to any multiemployer plan (within the
35
meaning of ERISA section 3(37)) to which the Company, its Subsidiaries
or any member of their Controlled Group (defined as any organization
which is a member of a controlled group of organizations within the
meaning of Code sections 414(b), (c), (m) or (o)) has any liability or
contributed (or had at any time contributed or had an obligation to
contribute): (A) none of the Company, its Subsidiaries or any member of
their Controlled Group has incurred any withdrawal liability in the
past six years under Title IV of ERISA or to the Company's Knowledge
would be subject to such liability if, as of the Effective Time, the
Company, its Subsidiaries or any member of their Controlled Group were
to engage in a complete withdrawal (as defined in ERISA section 4203)
or partial withdrawal (as defined in ERISA section 4205) from any such
multiemployer plan; and (B) no such multiemployer plan is in
reorganization or insolvent (as those terms are defined in ERISA
sections 4241 and 4245, respectively);
(F) with respect to any Company Plan that provides retiree
welfare benefits, the FAS 106 liabilities of the Company or its
Subsidiaries and the assumptions used therefor accurately reflect the
costs associated with the rights and benefit of all Parent employees;
(G) neither the Company nor any of its Subsidiaries or members
of their Controlled Group has incurred any direct or indirect liability
under ERISA or the Code in connection with the termination of,
withdrawal from or failure to fund, any Company Plan or other
retirement plan or arrangement, and no fact or event exists that would
reasonably be expected to give rise to any such liability;
(H) none of the Company Plans provides for payment of a
benefit, the increase of a benefit amount, the payment of a contingent
benefit or the acceleration of the payment or vesting of a benefit
determined or occasioned, in whole or in part, by reason of the
execution of this Agreement or the consummation of the transactions
contemplated by this Agreement; and
(I) (A) neither the Company nor any Subsidiary is a party to
any agreement, contract, arrangement or plan that has resulted, or
would result, separately or in the aggregate, in the payment of any
"excess parachute payments" within the meaning of Section 280G of the
Code as a result of any transaction or event contemplated by this
Agreement
36
and (B) none of the payments required by this Agreement would be
non-deductible under Code Section 162(m) or 280(G).
(p) LABOR MATTERS. Except as set forth on Section 4.1(p) of
the Disclosure Schedule, neither the Company nor any of its Subsidiaries is a
party to any labor or collective bargaining agreement which pertain to employees
of the Company or any of its Subsidiaries. As of the date hereof, to the
knowledge of the Company, there are no organizing activities involving the
Company or any of its Subsidiaries pending with any labor organization or group
of employees of the Company or any of its Subsidiaries.
(q) OPINION OF FINANCIAL ADVISOR. The Company has received the
written opinion of Credit Suisse First Boston Corporation, dated May 11, 2000 (a
true, correct and complete copy of which will be promptly delivered to Parent by
the Company), to the effect that, based upon and subject to the matters set
forth therein and as of the date thereof, the Offer Consideration to be received
by the holders of Shares (other than Parent and affiliates) in the Offer and the
Merger, respectively, is fair, from a financial point of view.
(r) VOTING REQUIREMENTS. In the event that Section 253 of the
DGCL is inapplicable and unavailable to effectuate the Merger, the affirmative
vote of the holders of a majority of the outstanding Shares entitled to vote at
the Stockholders Meeting (as defined in Section 6.1 (a)) with respect to the
adoption of this Agreement is the only vote of the holders of any class or
series of the Company's capital stock or other securities required in connection
with the consummation by the Company of the Merger and the other transactions
contemplated hereby to be consummated by the Company. The Board of Directors has
taken all necessary actions so that the restrictions on "business combinations"
(as defined in Section 203 of the DGCL) set forth in Section 203 of the DGCL are
not applicable to this Agreement and the transactions contemplated hereby,
including the Offer and the Merger.
(s) RIGHTS AGREEMENT. The Company has amended its Rights
Agreement (the "Rights Amendment") to ensure that (a) neither a "Triggering
Event" nor a "Stock Acquisition Date" or a "Distribution Date" (in each case as
defined in the Rights Agreement) will occur, and none of Parent or Purchaser or
any of their "Affiliates" or "Associates" will be deemed to be an "Acquiring
Person" or "Beneficial Owner" of shares of Common Stock (in each case as defined
in the Rights Agreement), by reason
37
of the execution and delivery of this Agreement or the consummation of the
transactions to be effected pursuant to this Agreement, and (b) the Rights will
expire immediately prior to the consummation of the Offer. The Rights Amendment
is sufficient to render the Rights inoperative with respect to (i) the
acquisition of Shares by Parent, Purchaser or their affiliates pursuant to this
Agreement and the Offer and (ii) the Merger. A true and correct copy of the
Rights Amendment has been delivered or made available to Parent.
(t) BROKERS. No broker, investment banker, financial advisor
or other person, other than Credit Suisse First Boston Corporation, the fees and
expenses of which will be paid by the Company, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of the Company or any of its Subsidiaries. A complete and accurate copy
of Credit Suisse First Boston Corporation's engagement letter has been provided
or made available to Parent and will not be amended, without the consent of
Parent, to (i) increase the fees payable thereunder or (ii) extend the period
for which services are to be performed beyond the Effective Time.
Section 4.2 REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.
Parent and Purchaser represent and warrant to the Company as follows:
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of Parent
and Purchaser is a corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction in which it is incorporated and has
all requisite corporate power and authority and any necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as now being conducted and is duly qualified to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership or leasing of its properties makes such qualification necessary other
than in such jurisdictions where the failure to be so qualified would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Parent or Purchaser, taken as a whole. Parent has delivered or
made available to the Company complete and correct copies of the Certificate of
Incorporation and By-laws of Parent and Purchaser, in each case as in effect on
the date hereof.
38
(b) AUTHORIZATION. Each of Parent and Purchaser have the
requisite corporate power and authority to enter into this Agreement. The
execution and delivery of this Agreement by Parent and Purchaser and the
consummation by Parent and Purchaser of the transactions contemplated hereby
have been duly authorized by all corporate action on the part of each of Parent
and Purchaser, and no other corporate proceedings on the part of Parent or
Purchaser are necessary to authorize this Agreement, or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by each of Parent and Purchaser and, assuming this Agreement
constitutes a valid and binding obligation of the Company, constitutes a valid
and binding obligation of each of Parent and Purchaser, enforceable against each
such party in accordance with its terms.
(c) CONSENTS AND APPROVALS; NO VIOLATIONS. (i) The execution
and delivery of this Agreement by Parent and Purchaser do not, and the
consummation of the transactions contemplated hereby and compliance with the
provisions hereof will not (x) violate any of the provisions of the certificate
of incorporation or by-laws of Parent, Purchaser or any of their respective
Subsidiaries, in each case as amended to the date of this Agreement, (y) subject
to the governmental filings and other makers referred to in Section 4.2(c)(ii),
violate, result in a breach of or default (with or without notice or lapse of
time, or both) under, or give rise to a material obligation, a right of
termination, cancellation or acceleration of any obligation or loss of a
material benefit under, or require the consent of any person under, any
indenture, or other agreement, permit, concession, franchise, license or other
instrument or undertaking to which Parent, Purchaser or any of their respective
Subsidiaries is a party or by which Parent, Purchaser or any of their respective
Subsidiaries or any of their respective assets is bound or affected, or (z)
subject to the governmental filings and other makers referred to in Section
4.2(c)(ii), violate any law, rule or regulation applicable to Parent and
Purchaser, or any order, writ, judgment, injunc tion, decree, determination or
award applicable to Parent and Purchaser currently in effect, which, in the case
of clauses (y) and (z) above, could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect on Parent or Purchaser taken as a
whole.
(ii) No consent, approval, order or authorization of, or
declaration, registration or filing with, or notice to, any
Governmental Entity which has not been received or made is required by
or with respect to Parent or Purchaser or any of their respective
Subsidiaries in connection with the execution
39
and delivery of this Agreement by Parent or Purchaser or the
consummation by Parent, Purchaser of any of the transactions
contemplated hereby, except for (i) the filing of premerger
notification and report forms under the HSR Act, (ii) the filing with
the SEC of (A) the Schedule TO and (B) such reports under the Exchange
Act as may be required in connection with this Agreement and the
transactions contemplated hereby, (iii) the filing of the certificate
of merger or the certificate of ownership and merger, as the case may
be, with the Secretary of State of the State of Delaware and
appropriate documents with the relevant authorities of other states in
which the Company is qualified to do business, and (iv) any other
consents, approvals, authorizations, filings or notices the failure to
make or obtain which would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Parent or
Purchaser, taken as a whole.
(d) CERTAIN INFORMATION. Subject to the Company's fulfillment
of its obligations hereunder with respect thereto, the Offer Documents will
contain (or will be amended in a timely manner so as to contain) all information
which is required to be included therein in accordance with the Exchange Act and
the rules and regulations thereunder and any other applicable law and will
conform in all material respects with the requirements of the Exchange Act and
any other applicable law, and the Offer Documents will not, at the respective
times they are filed with the SEC or published, sent or given to the Company's
stockholders, 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; PROVIDED, HOWEVER, that no representation or warranty is hereby
made by Parent or Purchaser with respect to any information supplied by the
Company in writing for inclusion in, or with respect to the Company information
derived from the Company's public SEC filings which is included or incorporated
by reference in the Offer Documents. None of the information supplied or to be
supplied by Parent or Purchaser for inclusion or incorporation by reference in,
or which may be deemed to be incorporated by reference in, the Schedule 14D-9 or
the Proxy Statement will, at the respective times the Schedule 14D-9 and the
Proxy Statement are filed with the SEC or published, sent or given to the
Company's stockholders, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they are made,
not misleading. If at any time prior to the Effective Time any event
40
with respect to Parent or Purchaser, or with respect to any information supplied
by Parent or Purchaser for inclusion in the Schedule 14D-9 or the Proxy
Statement, shall occur which is required to be described in an amendment of, or
a supplement to, such document, Parent or Purchaser shall so describe the event
to the Company.
(e) VOTE REQUIRED. No vote of the holders of any class or
series of capital stock of Parent is necessary to approve this Agreement, the
Merger, the Offer or the other transactions contemplated hereby.
(f) NO BUSINESS ACTIVITIES. Purchaser has not conducted any
activities other than in connection with its organization, the negotiation and
execution of this Agreement and the consummation of the transactions
contemplated hereby.
(g) SUFFICIENT FUNDS. At the Closing, Purchaser will have
sufficient funds to enable Purchaser to pay in full (i) the Offer Consideration,
(ii) the Merger Consideration, (iii) any existing indebtedness that is required
to be repaid as a result of the transactions contemplated hereby, including the
financing thereof, and (iv) all fees and expenses payable by Parent and
Purchaser in connection with this Agreement and the transactions contemplated
hereby.
ARTICLE V
CONDUCT OF BUSINESS OF THE COMPANY
Section 5.1 CONDUCT OF BUSINESS OF THE COMPANY. Except as expressly
provided for herein or as set forth in Section 5.1 of the Disclosure Schedule,
during the period from the date of this Agreement to the Effective Time, the
Company shall, and shall cause each of its Subsidiaries to, act and carry on its
business in the ordinary course of business consistent with past practice and,
to the extent consistent therewith, use its reasonable best efforts to preserve
intact its current business organizations, keep available the services of its
current key officers and employees and preserve the goodwill of those engaged in
material business relationships with the Company. Without limiting the
generality of the foregoing, except as expressly provided herein, the Company
shall not, and shall not permit any of its Subsidiaries to, without the prior
consent of Parent:
(i) (A) declare, set aside or pay any dividends on, or make
any other distributions (whether in cash, securities or other property)
in respect of, any of its outstanding capital
41
stock (other than, with respect to a Subsidiary of the Company, to its
corporate parent), except regular quarterly dividends with respect to
the Shares on the regular quarterly record date and at a rate less than
or equal to the rate paid on the last quarterly dividend date, (B)
split, combine or reclassify any of its outstanding capital stock or
issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for shares of its outstanding capital
stock, or (C) purchase, redeem or otherwise acquire any shares of
outstanding capital stock or any rights, warrants or options to acquire
any such shares, except, in the case of this clause (C), for the
acquisition of Shares from holders of Options in full or partial
payment of the exercise price payable by such holder upon exercise of
Options to the extent required under the terms of such Options as in
effect on the date hereof;
(ii) issue, sell, grant, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any
securities convertible into or exchangeable for, or any rights,
warrants or options to acquire, any such shares, voting securities or
convertible or exchangeable securities, other than upon the exercise of
vested Options outstanding on the date of this Agreement;
(iii) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents;
(iv) directly or indirectly acquire, make any investment
(other than investments not exceeding $5.0 million in the aggregate)
in, or make any capital contributions to, any person (other than a
Subsidiary of the Company) other than in the ordinary course of
business consistent with past practice;
(v) make any new capital expenditure or expenditures in excess
of $10.0 million in the aggregate;
(vi) enter into, amend or terminate any Material Contract or
any contract involving amounts in excess of $2.0 million per year other
than in the ordinary course of business consistent with past practice;
(vii) directly or indirectly sell, pledge or otherwise dispose
of or encumber any of its properties or assets, except for sales,
pledges or other dispositions or encumbrances in the ordinary course of
business consistent with past practice;
(viii) (A) other than in connection with any
42
action permitted by Section 3.2 or this Section 5.1, incur any
indebtedness for borrowed money or guarantee any such indebtedness of
another person, other than indebtedness owing to or guarantees of
indebtedness owing to the Company or any direct or indirect wholly
owned Subsidiary of the Company or (B) make any loans or advances to
any other person, other than to the Company or to any direct or
indirect wholly owned Subsidiary of the Company and other than routine
advances to employees consistent with past practice, except, in the
case of clause (A), for borrowings under the Credit Agreement dated as
of January 23, 1998, among the Company, Bank of America National Trust
and Savings Association and the lenders named therein or under other
credit facilities described in the Company's Form 10-K for the fiscal
year ended December 31, 1999 in the ordinary course of business
consistent with past practice;
(ix) grant or agree to grant to any director or officer or,
other than in the ordinary course of business consistent with past
practice, to any employee (other than employees who receive less than
$200,000 in total annual cash compensation from the Company or any of
its Subsidiaries), any increase in wages or bonus, severance, profit
sharing, retirement (including any discretionary Company Contribution
Amounts under the ERP), deferred compensation, insurance or other
compensation or benefits to such officers and employees, or establish
any new compensation or benefit plans or arrangements, or amend or
agree to amend any existing Company Plans, except as may be required
under this Agreement, existing agreements or by law or other than in
the ordinary course of business consistent with past practice;
(x) except as set forth in this Agreement and except as
required under the existing Company Plans and existing collective
bargaining agreements, accelerate the payment, right to payment or
vesting of any bonus, severance, profit sharing, retirement, deferred
compensation, stock option, insurance or other compensation or
benefits;
(xi) enter into or amend any employment, severance or similar
agreement with any existing officers or, other than in the ordinary
course of business consistent with past practice, employees (other than
employees who receive less than $200,000 in total annual cash
compensation from the Company or any of its Subsidiaries), except for
severance agreements entered into to the extent required pursuant to
severance plans existing on the date hereof;
43
(xii) make or rescind any material tax election or settle or
compromise any material income tax liability of the Company or of any
of its Subsidiaries with any Governmental Entity or settle any action,
suit, claim, investigation or proceeding with any Government Entity
(legal, administrative or arbitrative) in an amount in excess of $1.0
million;
(xiii) pay, discharge or satisfy any claims, liabilities or
obligations, other than the payment, discharge or satisfaction (x) of
any such claims, liabilities or obligations in the ordinary course of
business or (y) of claims, liabilities or obligations reflected or
reserved against in, or contemplated by, the consolidated financial
statements (or the notes thereto) of the Company and its consolidated
Subsidiaries or (z) other than settlements which involve solely the
payment of money that would not result in an uninsured or underinsured
payment by or liability of the Company in excess of $2.0 million in the
aggregate above reserves established therefor on the books of the
Company;
(xiv) except as disclosed in the Filed SEC Documents or
required by a Governmental Entity, make any change in any method of
accounting or accounting practice or policy, except as required by
generally accepted accounting principles;
(xv) enter into any agreement, understanding or commitment
that restrains, limits or impedes the Company's ability to compete with
or conduct any line of business, including, but not limited to,
geographic limitations on the Company's activities;
(xvi) plan, announce, implement or effect any reduction in
force, lay-off, early retirement program, severance program or other
program or effort concerning the termination of employment of employees
of the Company or its Subsidiaries, PROVIDED, HOWEVER, that routine
employee terminations shall not be considered subject to this clause
(xvi);
(xvii) take any action, engage in any transaction or enter
into any agreement which would cause any of the representations or
warranties set forth in Section 4.1 to be untrue as of the Closing
Date;
(xviii) revalue any material assets of the Company or any of
its Subsidiaries, including but not limited to writing down the value
of inventory or writing off notes or accounts receivable other than in
the ordinary course of business, except for any revaluation resulting
from a change in circumstances or
44
conditions from those prevailing as of March 31, 2000; or
(xix) authorize any of, or commit or agree to take any of, the
foregoing actions in respect of which it is restricted by the
provisions of this Section 5.1 except to the extent such action is
otherwise expressly contemplated by this Agreement.
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.1 THE COMPANY STOCKHOLDERS MEETING; PREPARATION OF THE PROXY
STATEMENT; SHORT-FORM MERGER.
(a) As soon as practicable following the acceptance for
payment of and payment for Shares by Purchaser in the Offer, if required by law
to consummate the Merger, the Company shall with the cooperation of Parent take
all action necessary, in accordance with the DGCL, the Exchange Act and other
applicable law and its certificate of incorporation and by-laws to convene and
hold a special meeting of the stockholders of the Company (the "Stockholders
Meeting") for the purpose of considering and voting upon the adoption of this
Agreement and to solicit proxies pursuant to the Proxy Statement in connection
therewith. Subject to the Board of Directors' fiduciary duties under applicable
law, the Board of Directors of the Company shall recommend that the holders of
Shares vote in favor of the adoption of this Agreement at the Stockholders
Meeting and shall cause such recommendation to be included in the Proxy
Statement. At the Stockholders Meeting, Parent and Purchaser shall cause all of
the Shares owned by them to be voted in favor of the adoption of this Agreement.
(b) The Company, if requested by Parent, shall promptly
prepare and file with the SEC a proxy statement or information statement
(together with any supplement or amendment thereto, the "Proxy Statement")
relating to the Stockholders Meeting in accordance with the Exchange Act and the
rules and regulations thereunder. Parent, Purchaser and the Company will
cooperate with each other in the preparation of the Proxy Statement. Without
limiting the generality or effect of the foregoing, the Company shall use its
best efforts to respond to all SEC comments with respect to the Proxy Statement
and, subject to compliance with SEC rules and regulations, to cause the Proxy
Statement to be mailed to the Company's stockholders at the earliest practicable
date. Each of Parent and Purchaser shall promptly supply to the Company in
writing, for inclusion in the
45
Proxy Statement, all information concerning Parent and Purchaser required under
the Exchange Act and the rules and regulations thereunder to be included in the
Proxy Statement.
(c) Notwithstanding the foregoing clauses (a) and (b), in the
event that Purchaser shall acquire at least 90% of the outstanding Shares in the
Offer, Purchaser and Parent shall take all necessary actions to cause the Merger
to become effective, as soon as practicable after the expiration of the Offer,
without a meeting of stockholders of the Company, in accordance with Section 253
of the DGCL.
Section 6.2 ACCESS TO INFORMATION; NOTIFICATION OF CERTAIN MATTERS. (a)
The Company shall, and shall cause each of its Subsidiaries to, afford to Parent
and its officers, employees, counsel, financial advisors and other
representatives prompt, reasonable access during normal business hours prior to
the Effective Time to all of the Company's and its Subsidiaries' properties,
books, contracts, commitments, personnel and records and, during such period,
the Company shall, and shall cause each of its Subsidiaries to, furnish as
promptly as practicable to Parent such information concerning the Company's and
its Subsidiaries businesses, properties, financial condition, operations and
personnel as Parent may from time to time reasonably request; PROVIDED that the
Company may restrict the foregoing access to the extent that (i) it would
unreasonably interfere with the conduct of the Company's business or (ii) any
law, rule or regulation of any Governmental Entity applicable to the Company or
its Subsidiaries requires that the Company or its Subsidiaries restrict access
to any properties or information. Any such investigation by Parent shall not
affect the representations or warranties of the Company contained in this
Agreement. Parent will hold any information provided under this Section 6.2 that
is non-public in confidence to the extent required by, and in accordance with,
the provisions of the letter dated April 18, 2000 (the "Letter Agreement"),
between the Company and Parent.
(b) The Company shall give prompt notice to Parent of (i) the
occurrence or non-occurrence of any event 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 Company to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder, in either case which would
reasonably be expected to cause any of the conditions set forth in clause
(v)(b), (v)(c) or (v)(e) of Exhibit A hereto
46
to fail to be satisfied; PROVIDED, HOWEVER, that the delivery of any notice
pursuant to this Section 6.2(b) shall not limit or otherwise affect the rights
or remedies available hereunder to Parent.
Section 6.3 REASONABLE BEST EFFORTS. On the terms and subject to the
conditions set forth in this Agreement, each of the parties shall use its
reasonable best efforts to take, or cause to be taken, all actions, and do, or
cause to be done, and assist and cooperate with the other parties in doing, all
things necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the Offer, the Merger and the other
transactions contemplated hereby, including the satisfaction of the respective
conditions set forth in Article VII.
Section 6.4 PUBLIC ANNOUNCEMENTS. Parent and Purchaser, on the one
hand, and the Company, on the other hand, shall attempt in good faith to consult
with each other before issuing, and provide each other the opportunity to review
and comment upon, any press release, SEC filing (including without limitation
the Offer Documents, the Schedule 14D-9 and the Proxy Statement) or other public
statements with respect to the transactions contemplated hereby, including the
Offer and Merger, and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by
applicable law, by court process or by obligations pursuant to any listing
agreement with any securities exchange.
Section 6.5 NO SOLICITATION. From the date hereof, the Company shall
not (whether directly or indirectly through advisors, agents, representatives or
other intermediaries), and the Company shall use its reasonable best efforts to
cause its respective officers, directors, advisors, representatives and other
agents of the Company not to, directly or indirectly, (a) continue any
discussions or negotiations, if any, with any parties, other than Parent and
Purchaser, conducted heretofore with respect to any Acquisition Proposal (as
hereinafter defined) or which could reasonably be expected to lead to an
Acquisition Proposal, (b) solicit, initiate or knowingly encourage any inquiries
relating to, or the submission of, any Acquisition Proposal, (c) participate in
any discussions or negotiations regarding any Acquisition Proposal, or, in
connec tion with any Acquisition Proposal, furnish to any person any information
or data with respect to or access to the properties of the Company or any of its
Subsidiaries, or take any other action to facilitate the making of any proposal
that constitutes or may
47
reasonably be expected to lead to, any Acquisition Proposal or (d) enter into
any agreement with respect to any Acquisition Proposal or approve or resolve to
approve any Acquisition Proposal. Notwithstanding the foregoing, the Company or
its Board of Directors shall be permitted to furnish information with respect to
the Company and its Subsidiaries and participate in discussions or negotiations
regarding an unsolicited bonafide written Acquisition Proposal if, and only to
the extent that, a majority of the entire Board of Directors of the Company
determines in good faith that such Acquisition Proposal could reasonably be
expected to constitute a Superior Proposal, in which case the Company will not
disclose any information to such person without entering into a confidentiality
agreement substantially identical to the Letter Agreement; PROVIDED such
confidentiality agreement shall not prohibit the presentation of an Acquisition
Proposal to the Company's Board of Directors. The Company shall promptly (but in
no case later than 24 hours after receipt) provide Parent with a copy of any
written Acquisition Proposal received and a written statement with respect to
any non-written Acquisition Proposal received, which statement shall include the
identity of the parties making the Acquisition Proposal and the material terms
thereof. The Company shall keep Parent informed on a reasonably current basis of
the status and content of any discussions regarding any Acquisition Proposal
with a third party. For purposes of this Agreement, "Acquisition Proposal" means
any offer or proposal for a merger, consolidation, share exchange,
recapitalization, liquidation or other business combination involving the
Company or any of its Subsidiaries or the acquisition or purchase of 15% or more
of any class of equity securities of the Company or any of its Subsidiaries, or
any tender offer (including self-tenders) or exchange offer that if consummated
would result in any person beneficially owning 15% or more of any class of
equity securities of the Company or any of its Subsidiaries, or a substantial
portion of the assets of, the Company or any of its Subsidiaries, other than the
transactions contemplated by this Agreement. As used herein, a "Superior
Proposal" shall mean a bona fide written Acquisition Proposal to acquire
directly or indirectly all the Shares then outstanding or all or substantially
all of the assets of the Company which the Board of Directors concludes in good
faith (based on, among other things, the advice of its independent financial
advisors and outside counsel), taking into account all legal, financial,
regulatory and other aspects of the proposal and the person making such
proposal, (i) would if consummated, be more favorable to the Company's
shareholders, from a financial point of view, than the Offer and the Merger and
48
(ii) is reasonably likely to be consummated without undue delay. Nothing
contained in this Section 6.5 shall prohibit the Company or the Company's Board
of Directors from taking and disclosing to the Company's stockholders a position
contemplated by Rules 14d- 9 and 14e-2(a) promulgated under the Exchange Act (or
any similar communications in connection with the making or amendment of a
tender offer or exchange offer) or from making any disclosure required by
applicable law, provided that the Board of Directors of the Company shall not
recommend that the stockholders of the Company tender their Shares in connection
with any such tender or exchange offer unless the Board of Directors, by
majority vote of the entire board, shall have determined in good faith, based
upon (among other things) the advice of its independent financial advisors and
outside counsel, that the relevant Acquisition Proposal constitutes a Superior
Proposal.
Section 6.6 CONSENTS; APPROVALS AND FILINGS. Upon the terms and subject
to the conditions hereof, each of the parties hereto shall (i) make promptly its
respective filings, and thereafter make any other required submissions, under
the HSR Act, the Exchange Act and any other relevant statute, rule or
regulation, with respect to the Offer, the Merger and the other transactions
contemplated hereby and (ii) use reasonable best efforts to take, or cause to be
taken, all appropriate action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the Offer, the Merger and the other transactions
contemplated hereby, including without limitation using reasonable best efforts
to obtain all licenses, permits, consents, approvals, authorizations,
qualifications and orders of Governmental Entities and cooperate to obtain all
consents, approvals and authorizations of parties to contracts with the Company
and its Subsidiaries as are necessary for the consummation of the Offer, the
Merger and the other transactions contemplated hereby and to fulfill the
conditions to the Offer and the Merger. 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 each party to this
Agreement shall use their reasonable best efforts to take all such action.
Section 6.7 EMPLOYEE BENEFIT PLANS.
(a) Parent shall cause the Surviving Corporation to use
reasonable efforts to have those individuals who are employed by the Company or
any of its Subsidiaries immediately prior to the Effective Time continue to be
employed with the Surviving
49
Corporation as of the Effective Time (each such employee, an "Affected
Employee"); PROVIDED, HOWEVER, that this Section 6.7 shall not be construed to
limit the ability of the applicable employer to terminate the employment of any
Affected Employee at any time.
(b) Until at least December 31, 2001, Parent shall cause the
Surviving Corporation to, provide each Affected Employee (other than those
employees whose terms and conditions of employment are subject to a collective
bargaining agreement) with employee benefits (other than stock-based programs)
that are no less favorable in the aggregate than those provided to such Affected
Employees immediately prior to the Effective Time. Parent shall, until at least
December 31, 2000 maintain (or cause its Subsidiaries to maintain) a severance
pay practice, program or arrangement for the benefit of each Affected Employee
that is no less favorable than such practice, program or arrangement in effect
immediately prior to the Effective Time with respect to such Affected Employee;
PROVIDED, HOWEVER, that in no event shall anything contained in this Agreement
(i) prohibit Parent from amending or terminating any or all Company Plans and
establishing any new employee benefit plans for the benefit of the Affected
Employees, or (ii) require Parent or the Surviving Corporation to continue or
establish any equity-based program for Affected Employees.
(c) Parent shall, or shall cause the Surviving Corporation to,
recognize each Affected Employee's service with the Company for all purposes
under each employee benefit plan or arrangement maintained by Parent or the
Surviving Corporation in which such Affected Employees are or become eligible to
participate (with such eligibility determined taking into account such service),
but only to the extent that such service was recognized for such purposes under
the corresponding Company Plan; PROVIDED, HOWEVER, in no event shall any credit
be given to the extent it would result in duplicate benefits for the same period
of service.
(d) To the extent that Affected Employees become eligible to
participate in new plans after the Closing Date, Parent shall, or shall cause
the Surviving Corporation to, (i) waive all limitations as to preexisting
conditions exclusions and waiting periods with respect to participation and
coverage requirements applicable to the Affected Employees under any welfare
benefit plans in which such Affected Employees may be eligible to participate
after the Effective Time, other than
50
limitations or waiting periods that are already in effect with respect to such
Affected Employees and that have not been satisfied as of the Effective Time
under any welfare plan maintained for the Affected Employees immediately prior
to the Effective Time, and (ii) provide each Affected Employee with credit for
any co-payments and deductibles paid prior to the Effective Time in satisfying
any applicable deductible or out-of-pocket requirements under any welfare plans
that such Affected Employees are eligible to participate in after the Effective
Time.
Section 6.8 INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE.
(a) For a period of six years after the Effective Time, the
provisions with respect to indemnification, exculpation and advancement of
expenses set forth in the certificate of incorporation and by-laws of the
Company as in effect on the date of this Agreement (true, correct and complete
copies of which have been made available to Parent) shall not be amended,
repealed or otherwise modified in any manner that would adversely affect the
rights thereunder of individuals who at any time prior to the Effective Time
were directors or officers of the Company in respect of actions or omissions
occurring at or prior to the Effective Time (including without limitation the
transactions contemplated by this Agreement), unless such modification is
required by law.
(b) From and after the Effective Time, Parent shall indemnify,
defend and hold harmless each person who is now, or has been at any time prior
to the date hereof or who becomes prior to the Effective Time, an officer or
director of the Company (the "Covered Parties") against all losses, claims,
damages, costs, expenses (including reasonable attorneys' fees and expenses),
liabilities or judgments or amounts that are paid in settlement with the
approval of the indemnifying party (which approval shall not be unreasonably
withheld or delayed) incurred in connection with any threatened or actual
action, suit or proceeding based in whole or in part on or arising in whole or
in part out of the fact that such person is or was a director or officer of the
Company ("Indemnified Liabilities"), including all Indemnified Liabilities based
in whole or in part on, or arising in whole or in part out of, this Agreement or
the transactions contemplated hereby, in each case, to the full extent that
Parent or the Company is permitted under applicable law to so indemnify. In the
event any such claim, action, suit, proceeding or investigation is brought
against any Covered Party, the
51
indemnifying party shall assume and direct all aspects of the defense thereof,
including settlement, and the Covered Party shall cooperate in the vigorous
defense of any such matter. The Covered Party shall have a right to participate
in (but not control) the defense of any such matter with its own counsel and at
its own expense. Notwithstanding the right of the indemnifying party to assume
and control the defense of such litigation, claim or proceeding, such Covered
Party shall have the right to employ separate counsel and to participate in the
defense of such litigation, claim or proceeding, and the indemnifying party
shall bear the fees, costs and expenses of such separate counsel and shall pay
such fees, costs and expenses promptly after receipt of an invoice from such
Covered Party if (i) the use of counsel chosen by the indemnifying party to
represent such Covered Party would present such counsel with a conflict of
interest, (ii) the defendants in, or targets of, any such litigation, claim or
proceeding shall have been advised by counsel that there may be legal defenses
available to it or to other Covered Parties which are different from or in
addition to those available to the indemnifying party, or (iii) the indemnifying
party shall not have employed counsel satisfactory to such Covered Party, in the
exercise of the Covered Party's reasonable judgment, to represent such Covered
Party within a reasonable time after notice of the institution of such
litigation, claim or proceeding. The indemnifying party shall not settle any
such matter unless (i) the Covered Party gives prior written consent, which
shall not be unreasonably withheld or delayed, or (ii) the terms of the
settlement provide that the Covered Party shall have no responsibility for the
discharge of any settlement amount and impose no other obligations or duties on
the Covered Party and the settlement discharges all rights against Covered Party
with respect to such matter. In no event shall the indemnifying party be liable
for any settlement effected without its prior written consent. Any Covered Party
wishing to claim indemnification under this Section 6.8(b), upon learning of any
such claim, action, suit, proceeding or investigation, shall promptly notify
Parent and the Surviving Corporation (but the failure so to notify shall not
relieve the indemnifying party from any liability which it may have under this
Section 6.8(b) except to the extent such failure materially prejudices such
indemnifying party), and shall deliver to Parent and the Surviving Corporation
all undertakings required under applicable law. The Covered Parties as a group
will be represented by a single law firm (plus no more than one local counsel in
any jurisdiction) with respect to each such matter unless there is, under
applicable standards of professional conduct, a conflict on any significant
issue between the positions of any two or more Covered Parties. The rights to
52
indemnification under this Section 6.8(b) shall continue in full force and
effect for a period of six years from the Effective Time; PROVIDED, HOWEVER,
that all rights to indemnification in respect of any Indemnified Liabilities
asserted or made within such period shall continue until the disposition of such
Indemnified Liabilities.
(c) For a period of six years after the Effective Time, Parent
shall cause to be maintained in effect policies of directors' and officers'
insurance, for the benefit of those persons who are covered by the Company's
directors' and officers' liability insurance policies at the Effective Time,
providing coverage with respect to matters occurring prior to the Effective Time
that is at least equal to the coverage provided under the Company's current
directors' and officers' liability insurance policies, to the extent that such
liability insurance can be maintained at an annual cost to Parent not greater
than 150 percent of the premium for the current Company directors' and officers'
liability insurance (which the Company represents and warrants to be not more
than $242,000); PROVIDED that if such insurance cannot be so maintained at such
cost, Parent shall maintain as much of such insurance as can be so maintained at
a cost equal to 150 percent of the current annual premiums of the Company for
such insurance.
(d) In the event that Parent or the Surviving Corporation or
any of its successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or substantially
all of its properties and assets to any person, then, and in each such case,
proper provision shall be made so that the successors or assigns of Parent or
the Surviving Corporation shall succeed to the obligations set forth in Section
6.7 and this Section 6.8.
Section 6.9 CERTAIN TAX MATTERS. The Company will act in good faith and
use its reasonable best efforts (i) to obtain the opinion of Wachtell, Lipton,
Xxxxx & Xxxx referred to in clause (iii) of Exhibit A. Parent and the Company
will cause the appropriate officers of Parent and the Company to deliver the
representation letters addressed to counsel to Parent and counsel to the Company
in the form agreed upon by Parent, the Company and counsel to the Company on or
prior to the date hereof which counsel may rely upon in connection with issuing
such opinion.
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ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 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 or written waiver on or prior to the Closing Date of the
following conditions:
(a) COMPLETION OF THE OFFER. Purchaser shall have accepted for
payment and paid for all Shares validly tendered in the Offer and not withdrawn.
(b) STOCKHOLDER APPROVAL. This Agreement shall have been
adopted by the affirmative vote of the holders of the requisite number of shares
of capital stock of the Company if such vote is required pursuant to the
Company's certificate of incorporation, the DGCL or other applicable law.
(c) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect; PROVIDED, HOWEVER, that prior to
invoking this condition, the party so invoking this condition shall have
complied with its obligations under Section 6.3 and Section 6.6.
(d) HSR ACT. All necessary waiting periods under the HSR Act
applicable to the Merger shall have expired or been earlier terminated.
ARTICLE VIII
TERMINATION
Section 8.1 TERMINATION. This Agreement may be terminated and the
Merger contemplated herein may be abandoned at any time prior to the Effective
Time, whether before or after approval of matters presented in connection with
the Merger by the stockholders of Purchaser or, subject to the terms hereof, of
the Company:
(a) By the mutual written consent of Parent and the Company;
PROVIDED, HOWEVER that if Parent shall have nominated a majority of the
directors pursuant to Section 1.4, such consent of the Company may only be given
if approved by the Board of Directors of the Company in accordance with Section
1.4(c).
54
(b) By either of Parent or the Company if (i) a statute, rule
or executive order shall have been enacted, entered or promulgated prohibiting
the transactions contemplated hereby on the terms contemplated by this Agreement
or (ii) any Governmental Entity shall have issued an order, decree or ruling or
taken any other action, in each case permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated hereby and such order,
decree, ruling or other action shall have become final and non-appealable.
(c) By either of Parent or the Company if the consummation of
the Offer shall not have occurred on or before October 31, 2000 (the
"Termination Date"); PROVIDED, HOWEVER, that the party seeking to terminate this
Agreement pursuant to this Section 8.1(c) shall not have breached in any
material respect its obligations under this Agreement;
(d) By the Company:
(i) if, prior to the purchase of the Shares pursuant to the
Offer, (A) the Board of Directors of the Company, by majority vote of
the entire board, determines in good faith, based upon (among other
things) the advice of outside financial advisors and outside counsel to
the Company, that an Acquisition Proposal constitutes a Superior
Proposal, (B) the Board of Directors of the Company directs the Company
to notify Parent in writing that it intends to enter into an agreement
with respect to such Superior Proposal, attaching the most current
version of such agreement (or a description of all material terms and
conditions thereof) to such notice, (C) Parent does not make, within
four business days of receipt of the Company's written notification of
its intention to enter into a binding agreement for a Superior
Proposal, an offer that the Board of Directors of the Company
determines, in good faith after consultation with its financial
advisors, is at least as favorable to the stockholders of the Company
as such Superior Proposal, it being understood that the Company shall
not enter into any such binding agreement during such four-day period
and (D) the Company concurrently with such termination pursuant to this
clause (d)(i) pays to Parent in immediately available funds the
Termination Fee (as such term is defined in Section 9.1). The Company
agrees to notify Parent promptly if its intention to enter into a
written agreement referred to in its notification shall change at any
time after giving
55
effect to such notification; or
(ii) prior to the consummation of the Offer, if (A) there
shall be a breach of any representation or warranty of Parent or
Purchaser in this Agreement that is qualified as to Material Adverse
Effect, (B) there shall be a breach in any material respect of any
representation or warranty of Parent or Purchaser in this Agreement
that is not so qualified, other than any such breaches which, in the
aggregate, have not had or would not reasonably be likely to have a
Material Adverse Effect on Parent and Purchaser, taken as a whole, or
(C) there shall be a material breach by Parent or Purchaser of any of
its covenants or agreements contained in this Agreement, which breach,
in the case of clause (A), (B) or (C), either is not capable of being
cured or, if it is capable of being cured, has not been cured by the
earlier of (x) 10 business days following written notice to Parent from
the Company of such breach and (y) the expiration of the Offer,
PROVIDED that the Company may not terminate this Agreement pursuant to
this Section 8.1(d)(ii) if the Company is in material breach of this
Agreement.
(e) By Parent or Purchaser:
(i) if, prior to the purchase of the Shares pursuant to the
Offer, the Board of Directors of the Company shall have withdrawn, or
modified or changed in a manner adverse to Parent or Purchaser, its
approval or recommendation of the Offer, this Agreement or the Merger
or shall have recommended or approved an Acquisition Proposal; or
(ii) any Person or "group" (as defined in Section 13(d)(3) of
the Exchange Act), other than Parent, Purchaser or their affiliates or
any group of which any of them is a member shall have acquired
beneficial ownership (as determined pursuant to Rule 13d-3 under the
Exchange Act) of 15% or more of the Shares; or
(iii) if there shall have been a material breach by the
Company of any provision of Section 6.5; or
(iv) if the Company shall have (i) exempted for purposes of
Section 203 of the DGCL any acquisition of Shares by any person or
"group" (as defined in Section 13(d)(3) of the Exchange Act), other
than Parent, Purchaser or their affiliates, or (ii) amended (or agreed
to amend)
56
its Rights Agreement or redeemed (or agreed to redeem) its outstanding
Rights thereunder for the purpose of exempting an acquisition of Shares
(other than pursuant to this Agreement) from such Rights Agreement and
Rights; or
(v) prior to the consummation of the Offer if (i) there shall
be a breach of any representation or warranty of the Company in this
Agreement that is qualified as to Material Adverse Effect, (ii) there
shall be a breach in any material respect of any representation or
warranty of the Company in this Agreement that is not so qualified
other than any such breaches which, in the aggregate, have not had or
would not reasonably be likely to have a Material Adverse Effect on the
Company, or (iii) there shall be a material breach by the Company of
any of its covenants or agreements contained in this Agreement, which
breach, in the case of clause (i), (ii) or (iii), either is not capable
of being cured or, if it is capable of being cured, has not been cured
by the earlier of (x) 10 business days following written notice to the
Company from Parent or Purchaser of such breach and (y) the expiration
of the Offer; PROVIDED that Parent or Purchaser may not terminate this
Agreement pursuant to this Section 8.1 (e)(v) if Parent or Purchaser is
in material breach of this Agreement.
Section 8.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement by either the Company or Parent or Purchaser as provided in Section
8.1, this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of Parent, Purchaser or the Company, other
than the provisions of Section 6.2(a), this Section 8.2 and Article IX; provided
that nothing herein shall relieve any party from liability for any wilful breach
hereof.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 FEES AND EXPENSES. (a) Except as provided in Section 9.1(b)
below, all fees and expenses incurred in connection with the Offer, the Merger,
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such fees or expenses, whether or not the Offer or the Merger is
consummated.
(b) If (x) Parent or Purchaser terminates this Agreement
pursuant to Section 8.1 (e)(i), (iii) or (iv), or (y) the Company terminates
this Agreement pursuant to Section
57
8.1(d)(i), then in each case, the Company shall pay, or cause to be paid, to
Parent, concurrently with the time of termination in the case of a termination
pursuant to Section 8.1 (d)(i) or as promptly as is reasonably practicable (but
in no event later than two business days) in the case of a termination pursuant
to Section 8.1(e)(i), (iii) or (iv), an amount (the "Termination Fee") equal to
$58.0 million. In addition, if: (i)(x) this Agreement is terminated pursuant to
Section 8.1(c) (by the Company), or 8.1(e)(v) (where the breach by the Company
is willful), (y) prior to such termination an Acquisition Proposal has been
publicly announced, disclosed or communicated and (z) on the date of such
termination, Parent is not in material breach of this Agreement and the Minimum
Condition has not been satisfied and (ii) within fifteen months after such
termination pursuant to clause (i), the Company shall consummate or enter into
an agreement with respect to any Acquisition Proposal, then the Company shall
pay the Termination Fee concurrently with the earlier of entering into any such
agreement or consummating such transaction.
Section 9.2 CERTAIN DEFINITIONS. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person;
(b) "business day" means any day other than Saturday, Sunday
or any other day on which banks in the City of New York are required or
permitted to close;
(c) "counsel to Parent" means Xxxxxxx Xxxxxxx & Xxxxxxxx;
(d) "including" means including without limitation;
(e) "knowledge" means the actual knowledge of any officer of
the Company identified on Schedule A;
(f) a "person" means an individual, corporation, partnership,
joint venture, association, trust, unincorporated organization or other entity;
and
(g) a "Subsidiary" of any person means any other person of
which (i) such person or any Subsidiary thereof is a general
58
partner, (ii) such person and/or one or more of its Subsidiaries holds voting
power to elect a majority of the board of directors or others performing similar
functions, or (iii) such person, directly or indirectly, owns or controls more
than 50% of the equity interests of such other person.
Section 9.3 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified and supplemented in any and all respects, whether before or after any
vote of Purchaser or the stockholders of the Company contemplated hereby, by
written agreement of the parties hereto (which in the case of the Company shall
include approvals as contemplated in Section 1.4(c)), at any time prior to the
Closing Date with respect to any of the terms contained herein; PROVIDED,
HOWEVER, that after any such stockholder approvals shall have been obtained, no
amendment shall be made which, under applicable law, requires the further
approval of such stockholders without such approval.
Section 9.4 EXTENSION; WAIVER. Subject to Section 1.4 hereof, at any
time prior to the Effective Time, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other parties, (b)
waive any inaccuracies in the representations and warranties of the other
parties contained in this Agreement or in any document delivered pursuant to
this Agreement, or (c) subject to applicable law, waive compliance with any of
the agreements or conditions of the other parties contained in this Agreement.
Any agreement on the part of a party to any such extension or waiver shall be
valid only if set forth in a written instrument executed and delivered by a duly
authorized officer on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of such rights.
Section 9.5 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice) on the date of delivery, or if
by facsimile, upon confirmation of receipt:
(i) if to Parent or to Purchaser, to:
Xxxxxxxxx-Xxxx Company
000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxxx Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
Page>
59
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
(ii) if to the Company, to:
Hussmann International, Inc.
00000 Xx. Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
Section 9.6 INTERPRETATION. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for convenience of reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The inclusion of any
matter in the Company's Disclosure Schedule in connection with any
representation, warranty, covenant or agreement that is qualified as to
materiality or "Material Adverse Effect" shall not be an admission by the
Company that such matter is material or would have a Material Adverse Effect.
Matters disclosed in any section of the Company's Disclosure Schedule shall be
considered disclosed for all purposes
60
under Section 4.1 to the extent that such matter on its face would reasonably be
expected to be pertinent in light of the disclosure made.
Section 9.7 ENTIRE AGREEMENT: NO THIRD-PARTY BENEFICIARIES. This
Agreement constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement (except for the letter agreement referenced in
the last sentence of Section 6.2(a)). Other than the provisions of Section 6.8,
this Agreement is not intended to confer upon any person (including, without
limitation, any current or former employees of the Company), other than the
parties hereto, any rights or remedies.
Section 9.8 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 9.9 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement may be assigned or delegated, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties, and any such assignment without
such prior written consent shall be null and void, except that Parent and/or
Purchaser may assign this Agreement to any direct or indirect wholly owned
Subsidiary of Parent without the prior consent of the Company; PROVIDED that
Parent and/or Purchaser, as the case may be, shall remain liable for all of its
obligations under this Agreement. 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.
Section 9.10 ENFORCEMENT. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
Accordingly, the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in the Court of Chancery in and for New Castle
County in the State of Delaware (or, if such court lacks subject matter
jurisdiction, any appropriate state or federal court in New Castle County in the
State of Delaware), this being in addition to any other remedy to which they are
entitled at law or in equity. Each of the parties
61
hereto (i) shall submit itself to the personal jurisdiction of the Court of
Chancery in and for New Castle County in the State of Delaware (or, if such
court lacks subject matter jurisdiction, any appropriate state or federal court
in New Castle County in the State of Delaware) with respect to any dispute that
arises out of this Agreement or any of the transactions contemplated hereby,
(ii) shall not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, and (iii) shall not bring any
action relating to this Agreement or any of the transactions contemplated hereby
in any court other than the Court of Chancery in and for New Castle County in
the State of Delaware (or, if such court lacks subject matter jurisdiction, any
appropriate state or federal court in New Castle County in the State of
Delaware). By execution and delivery of this Agreement, Parent appoints The
Corporation Trust Company at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 as
its agent upon which process may be served in any such legal action or
proceeding.
Section 9.11 SEVERABILITY. Whenever possible, each provision or portion
of any provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
Section 9.12 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same instrument
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other parties.
62
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be signed by their respective officers hereunto duly authorized,
all as of the date first written above.
XXXXXXXXX-XXXX COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman, President and
Chief Executive Officer
IR MERGER CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President and Treasurer
HUSSMANN INTERNATIONAL, INC.
By: /s/ J. Xxxxx Xxxxxx
--------------------------------------------
Name: J. Xxxxx Xxxxxx
Title: President and Chief Executive Officer
EXHIBIT A
CONDITIONS TO THE OFFER
Capitalized terms used but not defined herein shall have the meanings
set forth in the Agreement and Plan of Merger (the "Agreement") of which this
Exhibit A is a part. Notwithstanding any other provision of the Offer and
subject to the terms of the Merger Agreement, 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 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 amend the Offer or terminate the Offer, in each case, consistent
with the terms of the Agreement and not accept for payment any tendered Shares,
if (i) there shall not have been validly tendered and not withdrawn prior to the
expiration of the Offer such number of Shares which would constitute at least a
majority of the Shares outstanding on a fully diluted basis on the date of
purchase ("on a fully-diluted basis" meaning the number of Shares outstanding,
together with the Shares which the Company may be required to issue pursuant to
warrants, options or obligations outstanding at that date under employee stock
or similar benefit plans or otherwise whether or not vested or then exercisable)
(the "Minimum Condition"), (ii) (x) any applicable waiting period under the HSR
Act or any applicable waiting periods under any foreign statutes or regulations
shall not have expired or been terminated, or (y) any necessary material
approval, permit, authorization or consent of any domestic or foreign
governmental, administrative or regulatory agency (federal, state, local,
provincial or otherwise) shall not have been obtained, (iii) there shall not
have been delivered to the Company and Parent an opinion of Wachtell, Lipton,
Xxxxx & Xxxx, counsel to the Company, to the effect that the transactions
contemplated by this Agreement will not result in (A) the January 30, 1998
spin-off of the Company (the "Spinoff") failing to qualify under Section 355(a)
of the Internal Revenue Code (the "Code") or (B) the shares of common stock of
the Company failing to qualify as qualified property for purposes of Section
355(c)(2) of the Code by reason of Section 355(e) of the Code, (iv) the
Agreement shall have been terminated in accordance with its terms, or (v) at any
time on or after the date of the Agreement and prior to the expiration date of
the Offer, any of the following events shall occur and be continuing and shall
not have resulted from the breach by Parent or Purchaser of any of their
obligations under the Agreement:
64
(a) there shall be any statute, rule, regulation, judgment,
order or injunction enacted, entered, enforced, promulgated or deemed
applicable to the Offer or the Merger that shall (i) prohibit or impose
any material limitations on Parent's or 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 compel Parent or Purchaser to dispose of or
hold separate all or any portion of the business or assets of the
Company or any of its subsidiaries or Parent or any of its
subsidiaries, which in any such case referred to in this clause (i)
accounted, in the aggregate, for more than $75.0 million in sales of
Parent or the Company, as the case may be, in the most recently fiscal
year completed, (ii) prohibit the making or consummation of the Offer
or the Merger, (iii) impose material limitations on the ability of
Purchaser, or render Purchaser unable, to accept for payment, pay for
or purchase some or all of the Shares pursuant to the Offer and the
Merger, or effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote the Shares
purchased by Purchaser or Parent on all matters properly presented to
the Company's stockholders or (iv) require the divestiture by Parent or
Purchaser of any Shares; or
(b) (i) any representation or warranty of the Company
contained in the Agreement that is qualified as to Material Adverse
Effect or materiality shall not be true and correct; or (ii) any
representation or warranty of the Company in the Agreement that is not
so qualified shall not be true and correct in all material respects, in
each case as of the date of consummation of the Offer as though made on
or as of such date (other than representations and warranties that by
their terms address matters only as of another specified date, which
shall be true and correct only as of such other specified date); or
(c) the Company shall have breached or failed in any material
respect to perform any material obligation or to comply with any
material agreement or covenant of the Company to be performed by or
complied with by it under the Agreement; or
(d) except as disclosed in the Filed SEC Documents or in
Section 4.1(f) of the Disclosure Schedule, there shall have occurred an
event, change, occurrence, or development
65
of a state of facts or circumstances having, or which would reasonably
be expected to have, a Material Adverse Effect on the Company; or
(e) (i) it shall have been publicly disclosed or Purchaser
shall have otherwise learned that beneficial ownership (determined for
the purposes of this paragraph as set forth in Rule 13d-3 promulgated
under the Exchange Act) of more than 15% of the outstanding Shares has
been acquired by any corporation (including the Company or any of its
subsidiaries or affiliates), partnership, person or other entity or
group (as defined in Section 13(d)(3) of the Exchange Act), other than
Parent or any of its affiliates or (ii) (A) the Board of Directors of
the Company or any committee thereof shall have withdrawn or modified
in a manner adverse to Parent or Purchaser the approval or
recommendation of the Offer, the Merger or the Agreement, or approved
or recommended any takeover proposal or any other acquisition of Shares
other than the Offer and the Merger, (B) any corporation, partnership,
person or other entity or group shall have entered into a definitive
agreement or an agreement in principle with the Company with respect to
an Acquisition Proposal, (C) the Board of Directors of the Company or
any committee thereof shall have resolved to do any of the foregoing or
(D) upon request of Purchaser, the Board of Directors of the Company
shall fail to reaffirm its approval or recommendation of the Offer, the
Agreement or the Merger;
which, in the reasonable judgment of Parent or Purchaser, in any such case set
forth in clauses (a) - (e), and regardless of the circumstances (including any
action or inaction by Parent or Purchaser) giving rise to such condition makes
it inadvisable to proceed with the Offer and/or with such acceptance for payment
or, of payment for, Shares.
Subject to the terms of the Agreement, the foregoing
conditions are for the sole benefit of Parent and Purchaser and may be waived by
Parent or Purchaser, in whole or in part, at any time and from time to time, in
the sole discretion of Parent or Purchaser. The failure by Parent or Purchaser
at any time to exercise any of the foregoing rights shall not be deemed a waiver
of any right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
Schedule A
[J. Xxxxx Vowel - President and CEO
Xxxxxx X. Xxxxxx - Senior Vice President and Chief Financial Officer
Xxxx X. Xxxxxxx - Executive Vice President - North American Operations
Xxxxxx Xxxxxxx - Vice President and General Counsel
Xxxxxx X. Xxxxxx - Senior Vice President - International
Xxxxxxxx X. Xxxxxx - Vice President - Asia Pacific
