1
Exhibit 2.1
EXECUTION COPY
BUSINESS COMBINATION AGREEMENT
among
DAIMLER-BENZ AKTIENGESELLSCHAFT
CHRYSLER CORPORATION
and
XXXXXXXXX AKTIENGESELLSCHAFT
Dated as of May 7, 1998
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TABLE OF CONTENTS
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ARTICLE I
DAIMLER-BENZ EXCHANGE OFFER
Section 1.1. The Daimler-Benz Exchange Offer ................................ 2
Section 1.2. Daimler-Benz Exchange Agent .................................... 3
Section 1.3. German Exchange Offer Documents ................................ 4
Section 1.4. U.S. Exchange Documents ........................................ 4
Section 1.5. Antidilution Protection for Daimler-Benz Exchange Offer Ratio .. 5
Section 1.6. Newco AG Name .................................................. 5
ARTICLE II
CHRYSLER MERGER
Section 2.1. Formation of Chrysler Merger Sub. .............................. 5
Section 2.2. Chrysler Merger ................................................ 6
Section 2.3. The U.S. Share Exchange ........................................ 6
Section 2.4. Conversion of Chrysler Common Stock in the Chrysler Merger ..... 6
Section 2.5. Exchange of Shares of Chrysler Common Stock .................... 8
Section 2.6. Treatment of Chrysler Stock Plans .............................. 10
Section 2.7. Redemption of Chrysler Preferred Stock ......................... 13
Section 2.8. Antidilution Protection for U.S. Exchange Ratio ................ 13
Section 2.9. Chrysler Merger Closing ........................................ 14
Section 2.10. Certificate of Incorporation ................................... 14
Section 2.11. By-laws ........................................................ 14
Section 2.12. Officers ....................................................... 14
Section 2.13. Board of Directors ............................................. 14
ARTICLE III
DAIMLER-BENZ MERGER
Section 3.1. Daimler-Benz Merger ............................................ 15
Section 3.2. Daimler-Benz Merger Closing .................................... 15
Section 3.3. Conversion of Daimler-Benz Ordinary Shares and Daimler-Benz ADSs
in the Daimler-Benz Merger ..................................... 15
Section 3.4. Exchange of Daimler-Benz ADSs .................................. 15
Section 3.5. Affiliates Letter .............................................. 17
Section 3.6. Treatment of Daimler-Benz Stock Plans .......................... 17
Section 3.7. Treatment of Daimler-Benz NEWS ................................. 18
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Section 3.8. Treatment of Daimler-Benz Subordinated Mandatory Convertible
Notes ...................................................... 18
Section 3.9. Antidilution Protection for Daimler-Benz Merger Exchange
Ratio ...................................................... 18
Section 3.10. Treatment of Fractional Shares ............................. 18
Section 3.11. Withholding Taxes .......................................... 19
Section 3.12. Singapore Depositary Shares ................................ 19
ARTICLE IV
NEWCO AG GOVERNANCE AFTER THE EFFECTIVE TIME
Section 4.1. Newco AG Governance after Effective Time ................... 20
Section 4.2. Integration Committee ...................................... 21
Section 4.3. Operational Headquarters ................................... 21
Section 4.4. Language ................................................... 21
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1. Corporate Organization ..................................... 21
Section 5.2. Subsidiaries ............................................... 22
Section 5.3. Capital Stock .............................................. 23
Section 5.4. Authority .................................................. 24
Section 5.5. Consents and Approvals; No Violation ....................... 24
Section 5.6. Financial Statements; SEC Filings .......................... 25
Section 5.7. Absence of Changes ......................................... 26
Section 5.8. Absence of Undisclosed Liabilities ......................... 26
Section 5.9. Litigation ................................................. 27
Section 5.10. Taxes ...................................................... 27
Section 5.11. Employee Benefit Plans ..................................... 28
Section 5.12. Labor and Employment Matters ............................... 28
Section 5.13. Information Provided By Representing Party ................. 29
Section 5.14. Ownership of Capital Stock ................................. 30
Section 5.15. Voting Requirements ........................................ 30
Section 5.16. Accounting Matters ......................................... 30
Section 5.17. Opinion of Financial Advisor ............................... 30
Section 5.18. Finders and Advisors ....................................... 31
Section 5.19. State Takeover Statutes; Stockholder Rights Plan ........... 31
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ARTICLE VI
NEWCO AG REPRESENTATIONS AND WARRANTIES
Section 6.1. Corporate Organization .................................... 31
Section 6.2. Capital Stock ............................................. 31
Section 6.3. Authority ................................................. 31
Section 6.4. Consents and Approvals; No Violation ...................... 32
Section 6.5. Information Provided By Newco AG .......................... 32
Section 6.6. Ownership of Capital Stock ................................ 33
Section 6.7. Accounting Matters ........................................ 33
Section 6.8. No Prior Activities ....................................... 33
ARTICLE VII
CONDUCT OF BUSINESS PENDING THE EFFECTIVE TIME
ARTICLE VIII
EMPLOYEE BENEFIT MATTERS
Section 8.1. Newco AG Retention/Personnel Policy ....................... 36
Section 8.2. Benefits .................................................. 36
Section 8.3. Employment Agreements ..................................... 37
ARTICLE IX
ADDITIONAL AGREEMENTS
Section 9.1. No Solicitation ........................................... 38
Section 9.2. Preparation of the F-4 Registration Statement, the Proxy
Statement/Prospectus and the U.S. Exchange Offer Documents;
Stockholders Meetings ..................................... 40
Section 9.3. Chrysler Stock Issuance ................................... 41
Section 9.4. Accountants' Comfort Letters .............................. 42
Section 9.5. Accountants' Pooling Letters .............................. 42
Section 9.6. Access to Information; Confidentiality .................... 42
Section 9.7. Takeover Statute .......................................... 43
Section 9.8. Indemnification, Exculpation and Insurance ................ 43
Section 9.9. Public Announcements ...................................... 44
Section 9.10. Affiliates ................................................ 44
Section 9.11. Stock Exchange Listings ................................... 45
Section 9.12. Stockholder Litigation .................................... 46
Section 9.13. Tax Treatment ............................................. 46
Section 9.14. Standstill Agreements; Confidentiality Agreements ......... 46
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Section 9.15. Conveyance Taxes ........................................ 46
Section 9.16. Certain Obligations of Newco AG ......................... 47
Section 9.17. Reasonable Best Efforts ................................. 47
ARTICLE X
CLOSING CONDITIONS
Section 10.1. Conditions to All Parties' Obligation to Close .......... 48
Section 10.2. Conditions to Daimler-Benz's and Newco AG's Obligation to
Close ................................................... 49
Section 10.3. Conditions to Chrysler's Obligation to Close ............ 50
Section 10.4. Further Condition to Obligations of Daimler-Benz and
Newco AG ................................................ 51
Section 10.5. Frustration of Closing Conditions ....................... 51
ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER
Section 11.1. Termination ............................................. 51
Section 11.2. Effect of Termination ................................... 53
ARTICLE XII
MISCELLANEOUS
Section 12.1. No Survival of Representations and Warranties ........... 53
Section 12.2. Fees and Expenses ....................................... 53
Section 12.3. Counterparts; Effectiveness ............................. 53
Section 12.4. Governing Law ........................................... 53
Section 12.5. Notices ................................................. 53
Section 12.6. Assignment; Binding Effect .............................. 55
Section 12.7. Severability ............................................ 55
Section 12.8. Enforcement of Agreement ................................ 56
Section 12.9. Entire Agreement; No Third-Party Beneficiaries .......... 56
Section 12.10.Reservation of Right to Revise Transaction .............. 56
Section 12.11.Extension of Time, Waiver, Etc .......................... 56
Section 12.12.Amendment ............................................... 57
Section 12.13.Interpretation .......................................... 57
Section 12.14.Responsibility for Obligations of Newco AG .............. 57
Section 12.15.Consent to Jurisdiction ................................. 57
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EXHIBIT INDEX
Exhibit A -- Annex of Defined Terms
Exhibit B-1 -- Form of Chrysler Affiliate Agreement
Exhibit B-2 -- Form of Daimler-Benz Affiliate Agreement
Exhibit C -- Form of Amended and Restated Certificate of Incorporation of
Chrysler Merger Sub
Exhibit D -- Form of By-laws of Chrysler Merger Sub
Exhibit E -- Designated Officers of Chrysler and Daimler-Benz
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BUSINESS COMBINATION AGREEMENT
BUSINESS COMBINATION AGREEMENT (this "Agreement"), dated as of May
7, 1998, among Daimler-Benz Aktiengesellschaft, an Aktiengesellschaft organized
and existing under the laws of the Federal Republic of Germany ("Daimler-Benz"),
Chrysler Corporation, a Delaware corporation ("Chrysler"), and Xxxxxxxxx
Aktiengesellschaft, an Aktiengesellschaft organized and existing under the laws
of the Federal Republic of Germany ("Newco AG").
WHEREAS, Daimler-Benz and Chrysler desire to combine their
respective businesses, stockholder groups, managements and other constituencies
in a merger-of-equals transaction upon the terms and subject to the conditions
of this Agreement;
WHEREAS, Daimler-Benz, Chrysler and Newco AG desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated by this Agreement;
WHEREAS, the Supervisory Board (Aufsichtsrat) of Newco AG and the
Management Board (Vorstand) of each of Daimler-Benz and Newco AG and the Board
of Directors of Chrysler have approved the transactions contemplated by this
Agreement in accordance with the laws of their respective jurisdictions of
organization and have authorized the execution and delivery of this Agreement;
WHEREAS, Deutsche Bank Atkiengesellschaft has informed Daimler-Benz
that such stockholder supports the transactions involving Daimler-Benz and Newco
AG contemplated by this Agreement;
WHEREAS, Tracinda Corporation has entered into a Stockholder's
Agreement, dated the date hereof, among Daimler-Benz, Chrysler and such
stockholder (the "Chrysler Stockholder's Agreement"), pursuant to which such
stockholder has agreed to vote all shares of Chrysler Common Stock owned by it
in favor of the transactions involving Chrysler contemplated by this Agreement
at the Chrysler Stockholders Meeting;
WHEREAS, for United States federal income tax purposes the parties
intend that (i) the Chrysler Exchange, (a) will qualify as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and/or (b) when integrated with the Daimler-Benz Exchange
Offer and taking into account the Daimler-Benz Merger, will be treated as a
transaction described in Section 351(a) of the Code, (ii) the Daimler-Benz
Exchange Offer either (a) when integrated with the Chrysler Merger and the U.S.
Share Exchange, will be treated as a transaction described in Section 351(a) of
the Code or (b) if integrated with the Daimler-Benz Merger, will qualify as a
reorganization within the meaning of Section 368(a) of the Code, and (iii) this
Agreement shall be, and is hereby, adopted as a plan of reorganization for
purposes of Section 368(a) of the Code;
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WHEREAS, the parties intend that the Chrysler Merger, together with
the U.S. Share Exchange, will qualify for an exception to the general rule of
Section 367(a)(1) of the Code;
WHEREAS, for German tax purposes the Daimler-Benz Exchange Offer and
the Daimler-Benz Merger are intended not to result in the recognition of any
gain or loss by Newco AG, Daimler-Benz and stockholders of Daimler-Benz;
WHEREAS, for financial reporting purposes the parties intend that
the transactions contemplated by this Agreement will be accounted for as a
"pooling-of-interests" transaction under United Stated generally accepted
accounting principles ("US GAAP"); and
WHEREAS, capitalized terms used in this Agreement and not elsewhere
defined shall have the respective meanings set forth in Exhibit A hereto;
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, Daimler-Benz, Chrysler and Newco AG agree
as follows:
ARTICLE I
DAIMLER-BENZ EXCHANGE OFFER
Section 1.1. The Daimler-Benz Exchange Offer. Promptly after the
Daimler-Benz Stockholder Approval and the vote necessary to obtain the Chrysler
Stockholder Approval and so long as this Agreement has not been terminated in
accordance with Section 11.1, Newco AG shall commence an offer (the
"Daimler-Benz Exchange Offer"), which may consist of one offer made in the
United States and one made elsewhere, to (i) the holders of Ordinary Shares of
DM 5 nominal value each of Daimler-Benz or the corresponding no par value share,
as the case may be (the "Daimler-Benz Ordinary Shares"), to exchange, subject to
the Daimler-Benz Exchange Offer Conditions, one no par value Ordinary Share of
Newco AG (the "Newco Ordinary Shares") for each Daimler-Benz Ordinary Share held
by such holder, and (ii) the holders of Daimler-Benz American Depositary Shares
representing Daimler-Benz Ordinary Shares ("Daimler-Benz ADSs") to exchange,
subject to the Daimler-Benz Exchange Offer Conditions, one Newco American
Depositary Share representing one Newco Ordinary Share ("Newco ADSs") for each
Daimler-Benz ADS held by such holder (such one-for-one exchange offered in the
foregoing clauses (i) and (ii) being referred to herein as the "Daimler-Benz
Exchange Offer Ratio"). The obligation of Newco AG to issue Newco Ordinary
Shares in exchange for Daimler-Benz Ordinary Shares and to cause the issuance of
Newco ADSs in exchange for Daimler-Benz ADSs, in each case tendered pursuant to
the Daimler-Benz Exchange Offer, shall be subject only to this Agreement not
having been terminated pursuant to Section 11.1 and to the satisfaction or
waiver (if permissible under this Agreement and effected in accordance with
Section 12.11) of (1) the condition that such number of Daimler-Benz Ordinary
Shares and Daimler-Benz ADSs which in the aggregate represent at least that
number of outstanding
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Daimler-Benz Ordinary Shares required for the transactions contemplated by this
Agreement to be accounted for as a "pooling-of-interests" under US GAAP shall
have been validly tendered, not withdrawn and available for purchase immediately
prior to the Daimler-Benz Exchange Offer Expiration Date (the "Minimum
Condition"); and (2) the conditions set forth in Article X of this Agreement,
other than the condition set forth in Section 10.1(i) (together with the Minimum
Condition, the "Daimler-Benz Exchange Offer Conditions"). The Minimum Condition
shall not be waived and the Daimler-Benz Exchange Offer Ratio shall not be
amended without the written consent of both Chrysler and Daimler-Benz; provided,
however, if the number of Daimler-Benz Ordinary Shares and Daimler-Benz ADSs
validly tendered, not withdrawn and available for purchase immediately prior to
the Daimler-Benz Exchange Offer Expiration Date shall not satisfy the Minimum
Condition, but shall be in excess of 80% of the capital stock of Daimler-Benz on
a Fully Diluted Basis (the "80% Minimum"), the Minimum Condition shall mean the
80% Minimum unless Chrysler and Daimler-Benz otherwise agree. The expiration
date of the Daimler-Benz Exchange Offer shall initially be the date which is 30
days after commencement of the Daimler-Benz Exchange Offer (such date, as it may
be extended as provided herein, the "Daimler-Benz Exchange Offer Expiration
Date") and, if any of the Daimler-Benz Exchange Offer Conditions is unsatisfied
at such time and if requested by either Chrysler or Daimler-Benz, or if
requested by either Chrysler or Daimler-Benz pursuant to clause (ii) below,
shall be extended by Newco AG from time to time thereafter until the earliest of
(i) the maximum period permitted under the German Takeover Code
(Ubernahmekodex der Borsensachverstandigenkommission beim Bundesministerium der
Finanzen) (the "German Takeover Code") or as otherwise approved by the Executive
Office of the Takeover Commission (Ubernahmekommission pursuant to the German
Takeover Code) (the "Executive Office of the Takeover Commission"), (ii) the
close of business (Frankfurt time) on the day on which Daimler-Benz and Newco AG
have publicly announced that all of the Daimler-Benz Exchange Offer Conditions
shall have been satisfied or that they have been duly waived (or, if later, a
date that is five business days following the initial expiration date, if either
Chrysler or Daimler-Benz shall have requested Newco AG to extend the
Daimler-Benz Exchange Offer Expiration Date to such date) and (iii) such time as
this Agreement is terminated in accordance with Section 11.1. Subject only to
the conditions set forth above, at the earliest practicable time following the
Daimler-Benz Exchange Offer Expiration Date, Newco AG shall accept for exchange
and shall exchange all Daimler-Benz Ordinary Shares and Daimler-Benz ADSs
validly tendered and not withdrawn (the "German Share Exchange") and shall
effect the German Share Exchange in accordance with applicable law by
registering the increase of the Newco AG stated share capital in kind with the
commercial register (Handelsregister) for Newco AG.
Section 1.2. Daimler-Benz Exchange Agent. Newco AG shall appoint a
bank or trust company or other independent financial institution reasonably
satisfactory to Daimler-Benz and Chrysler to act as exchange agent for the
Daimler-Benz Exchange Offer (the "Daimler-Benz Exchange Agent"). Newco AG shall
enter into an Exchange Agent Agreement with the Daimler-Benz Exchange Agent in
form and substance reasonably satisfactory to Daimler-Benz and Chrysler, which
agreement shall set forth the duties, responsibilities and obligations of the
Daimler-Benz Exchange Agent consistent with the terms of this Agreement. The
Daimler-Benz Exchange Agent shall accept the Daimler-Benz Ordinary Shares and
Daimler-Benz ADSs tendered pursuant to the
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Daimler-Benz Exchange Offer and contribute such Daimler-Benz Ordinary Shares and
Daimler-Benz ADSs upon satisfaction or waiver of the Daimler-Benz Exchange Offer
Conditions to Newco AG in exchange for Newco Ordinary Shares and Newco ADSs,
respectively. Subject to Section 9.16, such exchange shall be effected in
accordance with Sections 52 and 183 et seq. (including in particular
Section 187) of the German Stock Corporation Law (Aktiengesetz) by registering
the contribution in kind agreement (Einbringungsvertrag) and the increase of the
Newco AG stated share capital with the commercial register (Handelsregister) for
Newco AG.
Section 1.3. German Exchange Offer Documents. As soon as practicable
prior to the date that the Daimler-Benz Exchange Offer commences, Newco AG shall
inform all German stock exchanges on which the Daimler-Benz Ordinary Shares are
listed, the German Federal Supervisory Authority for Securities Trading
(Bundesaufsichtsamt fur den Wertpapierhandel) and the Executive Office of the
Takeover Commission about the content of the Daimler-Benz Exchange Offer. Not
later than one day prior to the date that the Daimler-Benz Exchange Offer
commences, Newco AG shall issue a combined listing and sales prospectus pursuant
to the German Stock Exchange Law (Borsengesetz) and the German Sales Prospectus
Law (Wertpapier-Verkaufsprospektgesetz) (the "German Prospectus"), and on the
date that the Daimler-Benz Exchange Offer commences, Newco AG shall publish an
exchange offer pursuant to the German Takeover Code, each with respect to the
Daimler-Benz Exchange Offer (the "German Exchange Offer Documents"). The German
Exchange Offer Documents shall contain the recommendation of the Board of
Management (Vorstand) of Daimler-Benz that holders of the Daimler-Benz Ordinary
Shares accept the Daimler-Benz Exchange Offer and tender the Daimler-Benz
Ordinary Shares into the Daimler-Benz Exchange Offer.
Section 1.4. U.S. Exchange Documents. (a) As promptly as practicable
on the date of commencement of the Daimler-Benz Exchange Offer, Newco AG shall
file with the U.S. Securities and Exchange Commission ("SEC") a Tender Offer
Statement on Schedule 14D-1 (together with all amendments and supplements
thereto, the "Schedule 14D-1"). The Schedule 14D-1 shall contain or shall
incorporate by reference an offer to purchase containing the information
included or incorporated by reference in the Proxy Statement/Prospectus and the
forms of the related letter of transmittal and all other ancillary offer
documents.
(b) As promptly as practicable on the date of commencement of
the Daimler-Benz Exchange Offer, Daimler-Benz shall file with the SEC a Tender
Offer Solicitation/Recommendation Statement on Schedule 14D-9 (together with
all amendments and supplements thereto, the "Schedule 14D-9"), which shall
contain the recommendation of the Board of Management (Vorstand) of Daimler-Benz
that holders of Daimler-Benz Ordinary Shares and Daimler-Benz ADSs who are U.S.
Persons accept the Daimler-Benz Exchange Offer and tender their Daimler-Benz
Ordinary Shares and Daimler-Benz ADSs into the Daimler-Benz Exchange Offer. The
Schedule 14D-1 and the Schedule 14D-9 together with all amendments and
supplements thereto are referred to herein collectively as the "U.S. Exchange
Offer Documents." The German Exchange Offer Documents together with the U.S.
Exchange Offer Documents are collectively referred to hereinafter as the
"Exchange Offer Documents."
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Section 1.5. Antidilution Protection for Daimler-Benz Exchange Offer
Ratio. If, between the date of this Agreement and the Daimler-Benz Exchange
Offer Expiration Date, the outstanding Newco Ordinary Shares, Daimler-Benz
Ordinary Shares or shares of Chrysler Common Stock shall have been changed into
a different number of shares or a different class by reason of any
reclassification, recapitalization, stock split, combination, or exchange of
shares or a stock dividend or dividend payable in any other securities shall be
declared with a record date within such period, or any similar event shall have
occurred, the Daimler-Benz Exchange Offer Ratio shall be appropriately adjusted
to provide to the holders of Daimler-Benz Ordinary Shares and Daimler-Benz ADSs
the same economic effect as contemplated by this Agreement prior to such event.
Section 1.6. Newco AG Name. Unless Newco AG's legally registered
name shall previously have been established as such, promptly following the
consummation of the Daimler-Benz Exchange Offer, Newco AG, Daimler-Benz and
Chrysler shall cause the name of Newco AG to be changed and legally registered
in all appropriate jurisdictions as "Daimler Chrysler Aktiengesellschaft."
ARTICLE II
CHRYSLER MERGER
Section 2.1. Formation of Chrysler Merger Sub. As promptly as
possible following the date hereof, Newco AG shall appoint a United States bank
or trust company or other independent financial institution in the United States
reasonably satisfactory to Daimler-Benz and Chrysler to act as exchange agent
for the U.S. Share Exchange and the delivery of the U.S. Merger Consideration to
former stockholders of Chrysler (the "U.S. Exchange Agent"). Following such
appointment, the U.S. Exchange Agent or Chrysler shall cause to be incorporated
pursuant to the DGCL a corporation which shall be a constituent company in the
Chrysler Merger ("Chrysler Merger Sub"). Daimler-Benz, Newco AG and Chrysler
shall enter into an Exchange Agent Agreement with the U.S. Exchange Agent in
form and substance reasonably satisfactory to Daimler-Benz and Chrysler, which
agreement shall set forth the duties, responsibilities and obligations of the
U.S. Exchange Agent consistent with the terms of this Agreement. Solely to
accommodate the transactions described in this Article II, the U.S. Exchange
Agent shall hold all of the issued and outstanding shares of common stock, par
value $.01 per share, of Chrysler Merger Sub (the "Chrysler Merger Sub Common
Stock").
Section 2.2. Chrysler Merger. Upon the terms and subject to the
conditions of this Agreement and in accordance with the DGCL, at the Effective
Time, Chrysler Merger Sub shall be merged with and into Chrysler (the "Chrysler
Merger"), and Chrysler shall be the surviving corporation in the Chrysler Merger
(the "U.S. Surviving Corporation"). The corporate existence of Chrysler, with
all its purposes, rights, privileges, franchises, powers and objects, shall
continue unaffected and unimpaired by the Chrysler Merger and, as the U.S.
Surviving Corporation, it shall
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be governed by the laws of the State of Delaware and succeed to all rights,
assets, liabilities and obligations of Chrysler Merger Sub in accordance with
Section 259(a) of the DGCL. The separate existence and corporate organization of
Chrysler Merger Sub shall cease at the Effective Time.
Section 2.3. The U.S. Share Exchange. Upon the terms and subject to
the conditions of this Agreement, as soon as possible after the Effective Time,
Newco AG will issue the U.S. Merger Consideration to the U.S. Exchange Agent for
the account of the former stockholders of Chrysler, and the U.S. Exchange Agent
will contribute, for the account of the former stockholders of Chrysler, all of
the issued and outstanding shares of Surviving Corporation Common Stock to Newco
AG as a transfer in kind (the "U.S. Share Exchange"). Subject to Section 9.16,
such exchange shall be effected in accordance with Sections 52 and 183 et
seq. (including in particular Section 187) of the German Stock Corporation Law
(Aktiengesetz) by registering the contribution in kind agreement
(Einbringungsvertrag) and the increase of the Newco AG stated share capital with
the commercial register (Handelsregister) for Newco AG. At the Effective Time,
the obligation of the parties to effect the U.S. Share Exchange shall be
unconditional.
Section 2.4. Conversion of Chrysler Common Stock in the Chrysler
Merger. At the Effective Time, by virtue of the Chrysler Merger and without any
action on the part of the holder of any share of common stock, par value $1.00
per share, of Chrysler (including the associated preferred share purchase
rights, the "Chrysler Common Stock"):
(a) The Chrysler Common Stock which is held by Chrysler as
treasury stock (or held by any wholly owned Subsidiary of Chrysler) shall
be cancelled and retired and shall cease to exist, without any conversion
thereof, and no payment shall be made with respect thereto.
(b) Each share of Chrysler Common Stock issued and outstanding
immediately prior to the Effective Time (other than any shares canceled
pursuant to Section 2.4(a)) shall be converted into the right to receive,
upon surrender of the certificate formerly representing such share of
Chrysler Common Stock pursuant to Section 2.5, that fraction of a Newco
ADS expressed as a decimal carried to 4 digits which results from the
computation in the Exchange Ratio Formula. Such decimal fraction of a
Newco ADS is referred to herein as the "U.S. Exchange Ratio" and the Newco
Ordinary Shares (including those represented by Newco ADSs) to be issued
in the Chrysler Merger are referred to herein as the "U.S. Merger
Consideration." Notwithstanding the foregoing, prior to the delivery of
the Newco ADSs to the U.S. Exchange Agent pursuant to Section 2.5 for the
account of the former stockholders of Chrysler in the U.S. Share Exchange,
each such stockholder shall, in addition to his, her or its right to
receive such Newco ADSs, have a continuing ownership interest in the U.S.
Surviving Corporation identical in all respects to his, her or its
ownership interest in Chrysler immediately prior to the Effective Time,
such ownership interest to be extinguished automatically upon such
delivery of Newco ADSs to the U.S. Exchange Agent.
(c) The Exchange Ratio Formula shall be the following:
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Exchange Ratio = 103.4929 x (DP x DAP) + SOP
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(DAP x DP) x (DAP + SOP)
As used in the Exchange Ratio Formula, the following terms have the
following meaning:
"DAP" refers to Daimler-Benz's adjusted price per Daimler-Benz
Ordinary Share and is herein defined to mean (i) that number of Deutsche
Marks equal to 190.8 minus the sum of (A) the per Daimler-Benz Ordinary
Share regular annual dividend in respect of the year 1997 payable on or
about May 28, 1998, plus (B) the per Daimler-Benz Ordinary Share amount of
the Special Distribution payable on or about June 15, 1998, or (ii) in the
event that Daimler-Benz fails to pay its previously announced Special
Distribution payable on or about June 15, 1998, that number of Deutsche
Marks equal to 185.09 minus the per Daimler-Benz Ordinary Share regular
annual dividend in respect to the year 1997 payable on or about May 28,
1998.
"SOP" refers to Daimler-Benz's Xxxxxx aus/Hol zuruck share
offering proceeds and is herein defined to mean (i) the aggregate amount
of net proceeds, expressed in Deutsche Marks, received by Daimler-Benz in
respect of its global offering of rights to acquire Daimler-Benz Ordinary
Shares and Daimler-Benz ADSs, which is currently scheduled to become
effective on or about June 8, 1998, and which is described generally in
the Registration Statement (File No. 333-8662) filed with the SEC on April
22, 1998 (the "Rights Offering"), divided by (ii) 516,748,337 if the
Rights are not distributed to the holders of the Notes or 523,299,381 if
the Rights are distributed to such holders; provided that SOP shall equal
0 if the Rights Offering is canceled or otherwise is not consummated.
"DP" refers to the Rights Offering discounted price expressed
as a percentage of the then current market price and is herein defined to
mean that decimal fraction carried to four digits determined by dividing
(1) the offering price per new Daimler-Benz Ordinary Share (expressed in
Deutsche Marks) in the Rights Offering by (2) the reported last sale price
per Daimler-Benz Ordinary Share on the FSE, as reported by the FSE, on the
last full trading day which immediately precedes the public announcement
of the price at which a holder of a Right will be entitled to purchase a
Daimler-Benz Ordinary Share pursuant to the Rights Offering; provided that
DP shall equal 1 if the Rights Offering is canceled or otherwise is not
consummated.
(d) Each share of Chrysler Merger Sub Common Stock issued and
outstanding immediately prior to the Effective Time shall continue to be
an issued and outstanding share of common stock, par value $.01 per share,
of the U.S. Surviving Corporation ("Surviving Corporation Common Stock").
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Section 2.5. Exchange of Shares of Chrysler Common Stock.
(a) U.S. Exchange Fund. The aggregate U.S. Merger
Consideration transferred by Newco AG to the U.S. Exchange Agent pursuant to
Section 2.3, together with any dividends or other distributions with respect to
Newco ADSs to be made pursuant to Section 2.5(c), is referred to herein as the
"U.S. Exchange Fund."
(b) Exchange Procedures. Promptly after the Effective Time,
the U.S. Exchange Agent will mail to each former record holder of shares of
Chrysler Common Stock entitled to receive U.S. Merger Consideration pursuant to
Section 2.4(b) a form of letter of transmittal which shall specify that the
delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of a certificate or certificates formerly representing shares of
Chrysler Common Stock ("Old Chrysler Certificates") to the U.S. Exchange Agent
and instructions for use in effecting the surrender to the U.S. Exchange Agent
of Old Chrysler Certificates in exchange for Newco ADSs. The letter of
transmittal shall contain such other terms and conditions as Daimler-Benz and
Chrysler reasonably specify. Upon surrender of an Old Chrysler Certificate to
the U.S. Exchange Agent, together with a letter of transmittal duly executed and
completed in accordance with the instructions thereto, and any other documents
reasonably required by the U.S. Exchange Agent or Daimler-Benz and Chrysler, (i)
the holder of such Old Chrysler Certificate shall be entitled to receive in
exchange therefor (x) a certificate registered in the name of such holder
representing the number of whole Newco ADSs and any fractional Newco ADS into
which the shares previously represented by such Old Chrysler Certificate shall
have been converted at the Effective Time and (y) if applicable, a check payable
to such holder representing the payment of any dividends and distributions
pursuant to Section 2.5(c), and (ii) such Old Chrysler Certificate shall
forthwith be cancelled. If any cash is to be paid to, or any certificate
representing Newco ADSs is to be issued in the name of, a person other than the
person in whose name the Old Chrysler Certificate so surrendered in exchange
therefor is registered, it shall be a condition of the payment or issuance that
the Old Chrysler Certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
exchange shall pay any transfer or other taxes required by reason of the payment
of cash to, or the issuance of a certificate representing Newco ADSs in the name
of, a person other than the registered holder of the Old Chrysler Certificate so
surrendered or shall establish to the satisfaction of the U.S. Exchange Agent
and Newco AG that such tax has been paid or is not applicable. Until surrendered
in accordance with the provisions of this Section 2.5 and subject to the third
sentence of Section 2.4(b), each Old Chrysler Certificate shall, at and after
the Effective Time, represent for all purposes only the right to receive Newco
ADSs and any dividends and distributions as provided in Section 2.5(c), if any.
(c) Dividends; Distributions. No dividends or other
distributions declared after the Effective Time on Newco Ordinary Shares
underlying the Newco ADSs and payable to the holders of record thereof after the
Effective Time shall be paid to the holder of any unsurrendered Old Chrysler
Certificates with respect to which the Newco ADSs shall have been issued in the
Chrysler Merger. All such dividends or other distributions shall be paid by
Newco AG to the U.S. Exchange Agent (on behalf of holders of unsurrendered Old
Chrysler Certificates) and shall be
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included in the U.S. Exchange Fund, in each case until such Old Chrysler
Certificates shall be surrendered as provided herein, but (i) upon such
surrender there shall be paid to the person in whose name the certificates
representing such Newco ADSs shall be issued the amount of dividends theretofore
paid with respect to such Newco ADSs as of any date subsequent to the Effective
Time, and (ii) at the appropriate payment date or as soon as practicable
thereafter, there shall be paid to such person the amount of dividends with a
record date after the Effective Time but prior to surrender and a payment date
subsequent to surrender payable with respect to such Newco ADSs, subject in any
case to any applicable abandoned property, escheat and similar laws. No interest
shall be payable with respect to the payment of such dividends on surrender of
outstanding Old Chrysler Certificates.
(d) Final Settlement. From and after the Effective Time, the
holders of Old Chrysler Certificates shall cease to have any rights with respect
to such shares except as otherwise provided herein or by applicable law. All
rights to receive cash, if any, and Newco ADSs into which shares of Chrysler
Common Stock shall have been converted pursuant to this Article II shall be
deemed to have been paid or issued, as the case may be, in full satisfaction of
all rights pertaining to such shares of Chrysler Common Stock.
(e) Transfer Books. After the Effective Time, there shall be
no further registration of transfers on the stock transfer books of the U.S.
Surviving Corporation of shares of Chrysler Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time, Old
Chrysler Certificates are presented to the U.S. Surviving Corporation, they
shall be cancelled and exchanged for cash or certificates representing Newco
ADSs, or both, in accordance with the procedures set forth in this Article II.
(f) Affiliates Letter. Notwithstanding anything to the
contrary contained herein, for purposes of qualifying the transactions
contemplated hereby for "pooling-of-interests" accounting treatment under
Opinion No. 16 "Business Combinations" of the Accounting Principles Board of the
American Institute of Certified Public Accountants ("APB No. 16") and applicable
SEC rules and regulations, no Newco ADSs or cash shall be delivered to a person
who is an affiliate of Chrysler unless such person has executed and delivered an
agreement in the form of Exhibit B-1 or unless Chrysler and Daimler-Benz shall
have determined that the transactions contemplated by this Agreement will not be
accounted for as a "pooling-of-interests" under US GAAP because of other
circumstances.
(g) Termination of U.S. Exchange Fund. Any portion of the U.S.
Exchange Fund that remains undistributed to the holders of the Old Chrysler
Certificates one year after the Effective Time shall be delivered by the U.S.
Exchange Agent to a depositary bank designated by Newco AG, upon demand,
whereupon such depositary bank shall hold the U.S. Exchange Fund on behalf of
holders of unsurrendered Old Chrysler Certificates, and any holders of the Old
Chrysler Certificates who have not theretofore complied with this Section 2.5
shall thereafter look only to Newco AG or such depositary bank for payment of
their claim for U.S. Merger Consideration and any dividends or distributions
with respect to Newco ADSs and Newco AG shall
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cause the depositary bank to satisfy such claim. Such depositary bank shall
maintain an office in the City of New York where holders of Old Chrysler
Certificates may comply with this Article II.
(h) Withholding Taxes. Each of the U.S. Exchange Agent and
Newco AG shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of Old Chrysler
Certificates such amounts as it is required to deduct and withhold with respect
to the making of such payment under the Code, or any provision of state, local
or non-U.S. tax law. To the extent that amounts are so withheld by the U.S.
Exchange Agent or Newco AG, as the case may be, such withholdings shall be
treated for all purposes of this Agreement as having been paid to the holder of
the Old Chrysler Certificate in respect of which such deduction and withholding
was made by the U.S. Exchange Agent or Newco AG, as the case may be.
(i) No Liability. None of Daimler-Benz, Chrysler, the U.S.
Surviving Corporation, Newco AG or the U.S. Exchange Agent shall be liable to
any person in respect of any Newco ADSs, any dividends or distributions with
respect to Newco Ordinary Shares underlying such Newco ADSs or any cash from the
U.S. Exchange Fund, in each case delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(j) Lost, Stolen or Destroyed Certificates. If any Old
Chrysler Certificate shall have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming such Old Chrysler
Certificate to be lost, stolen or destroyed and, if required by the U.S.
Surviving Corporation, Newco AG or the U.S. Exchange Agent, the posting by such
person of a bond in such reasonable amount as such entity may direct as
indemnity against any claim that may be made against it with respect to such Old
Chrysler Certificate, the U.S. Exchange Agent shall issue in exchange for such
lost, stolen or destroyed Old Chrysler Certificate the U.S. Merger Consideration
and, if applicable, any unpaid dividends and distributions on shares of Newco
Ordinary Shares deliverable in respect thereof, in each case pursuant to this
Agreement.
Section 2.6. Treatment of Chrysler Stock Plans. (a) Subject to the
consummation of the Chrysler Merger, immediately prior to the Effective Time
each outstanding Chrysler Employee Stock Option will become exercisable, and
shall be deemed to be exercised, and (i) if the transactions contemplated by
this Agreement are accounted for as a "pooling-of-interests" under APB No. 16,
will then be converted (and such Chrysler Employee Stock Option will be
extinguished) into a right to receive that number of whole Newco ADSs and any
fractional Newco ADS determined in accordance with the following formula:
Option Shares x (Closing Value - Exercise Price) x 1.02
-------------------------------------------------------
ADS Closing Price
or (ii) if subclause (i) is not applicable, will be settled (and such Chrysler
Employee Stock Option will be extinguished) in an amount of cash to be paid by
Chrysler (and not directly or indirectly reimbursed by Newco AG or Daimler-Benz)
and determined in accordance with the following formula: Option Shares x
(Closing Value - Exercise Price), where "Option Shares" is the number
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of shares of Chrysler Common Stock subject to the Chrysler Employee Stock
Option; "Closing Value" is the closing per share price of Chrysler Common Stock
as reported in The Wall Street Journal for the last trading day prior to the
Effective Time; "Exercise Price" is the per share exercise price for shares
subject to the Chrysler Employee Stock Option; and "ADS Closing Price" is the
closing per share price of a Daimler-Benz ADS as reported in The Wall Street
Journal for the last trading day prior to the Effective Time. As soon as
practicable following the Effective Time and immediately prior to the U.S. Share
Exchange, Chrysler shall deliver to the U.S. Exchange Agent the aggregate number
of shares of Chrysler Common Stock issuable pursuant to the deemed exercise
provided in this Section 2.6(a) and, subject to Section 9.16, for contribution
in kind to Newco AG by the U.S. Exchange Agent on behalf of the Chrysler
Employee Optionholders.
(b) Subject to the consummation of the Chrysler Merger,
immediately prior to the Effective Time each outstanding Chrysler performance
share award shall be deemed vested in accordance with the terms of Chrysler's
1991 Stock Compensation Plan and (i) if the transactions contemplated by this
Agreement are accounted for as a "pooling-of-interests" under APB No. 16, shall
be settled with that number of whole Newco ADSs and any fractional Newco ADS
determined in accordance with the following formula:
Performance Shares x Closing Value x 1.02
-----------------------------------------
ADS Closing Price
or (ii) if subclause (i) is not applicable, shall be settled in an amount of
cash to be paid by Chrysler (and not directly or indirectly reimbursed by Newco
AG or Daimler-Benz) and determined in accordance with the following formula:
Performance Shares x Closing Value where "Performance Shares" is the number of
shares of Chrysler Common Stock subject to the performance share award. As soon
as practicable following the Effective Time and immediately prior to the U.S.
Share Exchange, Chrysler shall transmit to the U.S. Exchange Agent the aggregate
number of shares of Chrysler Common Stock subject to outstanding performance
share awards, subject to Section 9.16, for contribution in kind into Newco AG by
the U.S. Exchange Agent on behalf of the holders of performance share awards.
(c) Subject to the consummation of the Chrysler Merger,
immediately prior to the Effective Time, each outstanding Chrysler stock unit
shall be deemed vested in accordance with the terms of Chrysler's 1996
Non-employee Director Stock Unit Plan and (i) if the transactions contemplated
by this Agreement are accounted for as a "pooling-of-interests" under APB No.
16, shall be settled with that number of whole Newco ADSs and any fractional
Newco ADS determined in accordance with the following formula:
Closing Value x 1.02
--------------------
ADS Closing Price
or (ii) if subclause (i) is not applicable, shall be settled in an amount of
cash to be paid by Chrysler (and not directly or indirectly reimbursed by Newco
AG or Daimler-Benz) and equal to the Closing
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Value. As soon as practicable following the Effective Time and immediately prior
to the U.S. Share Exchange, Chrysler shall transmit to the U.S. Exchange Agent
the aggregate number of shares of Chrysler Common Stock subject to outstanding
stock units, subject to Section 9.16, for contribution in kind into Newco AG by
the U.S. Exchange Agent on behalf of the holders of stock units.
(d) Subject to the consummation of the Chrysler Merger
immediately prior to the Effective Time, each outstanding Chrysler restricted
stock unit award shall be deemed vested in accordance with the terms of
Chrysler's 1991 Stock Compensation Plan and (i) if the transactions contemplated
by this Agreement are accounted for as a "pooling-of-interests" under APB No.
16, shall be settled with that number of whole Newco ADSs and any fractional
Newco ADS determined in accordance with the following formula:
Restricted Stock Units x Closing Value x 1.02
---------------------------------------------
ADS Closing Price
or (ii) if subclause (i) is not applicable, shall be settled in an amount of
cash to be paid by Chrysler (and not directly or indirectly reimbursed by Newco
AG or Daimler-Benz) and determined in accordance with the following formula:
Restricted Stock Units x Closing Value, where "Restricted Stock Units" is the
number of shares of Chrysler Common Stock subject to the restricted stock unit
award. As soon as practicable following the Effective Time and immediately prior
to the U.S. Share Exchange, Chrysler shall transmit to the U.S. Exchange Agent
the aggregate number of shares of Chrysler Common Stock subject to outstanding
restricted stock unit awards, subject to Section 9.16, for contribution in kind
into Newco AG by the U.S. Exchange Agent on behalf of the holders of restricted
stock unit awards.
(e) To the extent that any person would otherwise be entitled
to receive a fraction of a Newco ADS pursuant to this Section 2.6, such fraction
shall be treated in accordance with Section 3.10.
(f) If the transactions contemplated by this Agreement are
accounted for as a "pooling-of-interests" under APB No. 16, as soon as
practicable following the Effective Time, Newco AG shall cause the U.S. Exchange
Agent to deliver to the former holders of Chrysler Employee Stock Options,
Chrysler performance share awards, Chrysler stock units and Chrysler restricted
stock unit awards, the Newco ADSs payable pursuant to this Section 2.6. If the
transactions contemplated by this Agreement are not accounted for as a
"pooling-of-interests" under APB No. 16, as soon as practicable following the
Effective Time, Chrysler shall deliver to the former holders of Chrysler
Employee Stock Options, Chrysler performance share awards, Chrysler stock units
and Chrysler restricted stock unit awards, any cash amount payable pursuant to
this Section 2.6.
(g) If the transactions contemplated by this Agreement are
accounted for as a "pooling-of-interests" under APB No. 16, Newco AG and
Chrysler shall establish a mechanism whereby each person who is permitted to
sell Newco ADSs received pursuant to this Section 2.6 without registration under
the Securities Act can sell all or a portion of such Newco ADSs through
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open market sales of such Newco ADSs to be effected by a broker selected by
Chrysler and reasonably satisfactory to Daimler-Benz. Chrysler shall, at least
ten days prior to the Effective Time, identify the broker to whom such holders
may direct sales orders. Newco AG shall deliver (or cause the U.S. Exchange
Agent to deliver) the aggregate number of Newco ADSs subject to all such sales
orders received prior to the Effective Time to the broker as soon as practicable
thereafter, but no later than five business days after the Effective Time and
any holder directing such a sales order shall bear the cost of all expenses,
including all commissions, related thereto.
(h) Chrysler agrees to use its reasonable best efforts, if the
transactions contemplated by this Agreement shall be accounted for as a
"pooling-of-interests" under APB No. 16, to take such actions (including, but
not limited to, adopting all required amendments) with respect to (i) all
compensation and benefit plans and arrangements and (ii) all awards outstanding
under such plans or arrangements, in each case that are required to enable the
transactions contemplated by this Agreement to be accounted for as a
"pooling-of-interests" under XXX Xx.
00.
Section 2.7. Redemption of Chrysler Preferred Stock. Prior to the
Effective Time, Chrysler shall have redeemed all outstanding shares of Series A
Convertible Preferred Stock, par value $1.00 per share, of Chrysler (the
"Chrysler Preferred Stock") in the manner contemplated by and pursuant to the
terms and procedures set forth in the Certificate of Designation, Preferences
and Rights with respect to the Chrysler Preferred Stock.
Section 2.8. Antidilution Protection for U.S. Exchange Ratio. If,
between the date of this Agreement and the Effective Time, the outstanding Newco
Ordinary Shares, Daimler-Benz Ordinary Shares or shares of Chrysler Common Stock
shall have been changed into a different number of shares or a different class
by reason of any reclassification, recapitalization, stock split, combination or
exchange of shares or a stock dividend or dividend payable in any other
securities shall be declared with a record date within such period, or any
similar event shall have occurred, the U.S. Exchange Ratio shall be
appropriately adjusted to provide to the holders of Chrysler Common Stock the
same economic effect as contemplated by this Agreement prior to such event.
Section 2.9. Chrysler Merger Closing. Immediately following
consummation of the Daimler-Benz Exchange Offer, the closing of the Chrysler
Merger (the "Chrysler Merger Closing") shall be held at 10:00 a.m. at the
offices of Debevoise & Xxxxxxxx, 875 Third Avenue, New York, New York, or at
such other place and time as the parties shall agree. At the Chrysler Merger
Closing, a certificate of merger shall be executed and acknowledged by Chrysler
Merger Sub and Chrysler and delivered to the Secretary of State of the State of
Delaware for filing as provided by the DGCL and, upon completion of such filing,
the Chrysler Merger shall become effective as set forth herein and in such
certificate. The time the Chrysler Merger becomes effective is referred to
herein as the "Effective Time."
Section 2.10. Certificate of Incorporation. Upon the formation of
Chrysler Merger Sub, its Certificate of Incorporation shall be substantially in
the form of Exhibit C hereto (the "Chrysler Merger Sub Charter"), and such
Chrysler Merger Sub Charter will continue to be in effect
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immediately prior to the Effective Time. The Chrysler Merger Sub Charter shall
be the Certificate of Incorporation of the U.S. Surviving Corporation, until the
same shall thereafter be altered, amended or repealed in accordance with the
DGCL and such Certificate of Incorporation.
Section 2.11. By-laws. Newco AG, Daimler-Benz and Chrysler will take
all action necessary to ensure that the By-laws of Chrysler Merger Sub,
substantially in the form of Exhibit D hereto (the "Chrysler Merger Sub
By-laws"), will be in effect immediately prior to the Effective Time. The
Chrysler Merger Sub By-laws shall be the By-laws of the U.S. Surviving
Corporation, until the same shall thereafter be altered, amended or repealed in
accordance with the DGCL, the Amended and Restated Chrysler Merger Sub Charter
and such By-laws.
Section 2.12. Officers. The officers of Chrysler Merger Sub
immediately prior to the Effective Time, who shall be reasonably acceptable to
Chrysler and Daimler-Benz, shall be the officers of the U.S. Surviving
Corporation, and such individuals shall serve until their successors shall have
been elected and shall qualify.
Section 2.13. Board of Directors. The directors of Chrysler Merger
Sub immediately prior to the Effective Time, who shall be reasonably acceptable
to Chrysler and Daimler-Benz, shall be the directors of the U.S. Surviving
Corporation, and such individuals shall serve until their successors shall have
been elected and shall qualify.
ARTICLE III
DAIMLER-BENZ MERGER
Section 3.1. Daimler-Benz Merger. As soon as practicable following
the date hereof, Newco AG and Daimler-Benz shall enter into a merger agreement
pursuant to Section 5 of the German Transformation Act (Umwandlungsgesetz) which
shall be in form and substance reasonably satisfactory to Daimler-Benz and
Chrysler (the "German Merger Agreement"). In accordance with the German Merger
Agreement, the German Stock Corporation Law (Aktiengesetz) and the German
Transformation Act (Umwandlungsgesetz) (the "German Stock Corporation Law
(Aktiengesetz)" and, together with the German Transformation Act
(Umwandlungsgesetz), the "GSCL"), Daimler-Benz shall be merged with and into
Newco AG (the "Daimler-Benz Merger"), and Newco AG shall be the surviving
corporation in the Daimler-Benz Merger (the "German Surviving Corporation"). As
a consequence of the Daimler-Benz Merger, the corporate existence of
Daimler-Benz will cease and Newco AG will succeed to all rights, assets,
liabilities and obligations of Daimler-Benz in accordance with the GSCL.
Section 3.2. Daimler-Benz Merger Closing. As soon as possible
following the U.S. Share Exchange, the Daimler-Benz Merger shall be effected in
accordance with applicable law by registering the merger with the commercial
registers (Handelsregister) for Daimler-Benz and Newco AG, and the parties shall
make all other filings and recordings required under the GSCL. The time
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the Daimler-Benz Merger becomes effective is hereinafter referred to as the
"German Effective Time."
Section 3.3. Conversion of Daimler-Benz Ordinary Shares and
Daimler-Benz ADSs in the Daimler-Benz Merger. At the German Effective Time, by
virtue of the Daimler-Benz Merger and without any action on the part of the
holder of any Daimler-Benz Ordinary Shares, the stockholders of Daimler-Benz
(other than Daimler-Benz or Newco AG) shall automatically become stockholders of
Newco AG. Each Daimler-Benz Ordinary Share shall embody solely the right to
receive one Newco Ordinary Share in exchange for such Daimler-Benz Ordinary
Share, and each Daimler-Benz ADS shall embody solely the right to receive one
Newco ADS in exchange for such Daimler-Benz ADS (such exchange ratio being
referred to herein as the "Daimler-Benz Merger Exchange Ratio" and the Newco
Ordinary Shares, including those represented by the Newco ADSs, to be issued in
the Daimler-Benz Merger are referred to herein as the "Daimler-Benz Merger
Consideration").
Section 3.4. Exchange of Daimler-Benz ADSs.
(a) Exchange Procedures. Newco AG shall instruct the
depositary bank for the Newco ADSs to mail to each former holder of record of
Daimler-Benz ADSs entitled to receive the Daimler-Benz Merger Consideration
pursuant to Section 3.3 a form of letter of transmittal which shall specify that
the delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of a certificate or certificates formerly representing
Daimler-Benz ADSs ("Old Daimler-Benz ADRs") to the depositary bank and
instructions for use in effecting the surrender to the depositary bank of Old
Daimler-Benz ADRs in exchange for Newco ADSs. The letter of transmittal shall
contain such other terms and conditions as Newco AG specifies. Upon surrender of
an Old Daimler-Benz ADR to the depositary bank, together with a letter of
transmittal duly executed and completed in accordance with the instructions
thereto, and any other documents reasonably required by the depositary bank or
Newco AG, (i) the holder of such Old Daimler-Benz ADR shall be entitled to
receive in exchange therefor (x) an ADR registered in the name of such holder
representing the number of whole Newco ADSs into which the shares previously
represented by such Old Daimler-Benz ADR shall have been converted at the German
Effective Time and (y) if applicable, a check payable to such holder
representing the payment of any dividends and distributions pursuant to Section
3.4(b), and (ii) such Old Daimler-Benz ADR shall forthwith be cancelled. If any
cash is to be paid to, or any certificate representing Newco ADSs is to be
issued in the name of, a person other than the person in whose name the Old
Daimler-Benz ADR so surrendered in exchange therefor is registered, it shall be
a condition of the payment or issuance that the Old Daimler-Benz ADR so
surrendered shall be properly endorsed or otherwise in proper form for transfer
and that the person requesting such exchange shall pay any transfer or other
taxes required by reason of the payment of cash to, or the issuance of a
certificate representing Newco ADSs in the name of, a person other than the
registered holder of the Old Daimler-Benz ADR so surrendered or shall establish
to the satisfaction of Newco AG that such tax has been paid or is not
applicable. Until surrendered in accordance with the provisions of this Section
3.4, each Old Daimler-Benz ADR shall, at and after the German Effective Time,
represent for all purposes only
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the right to receive Newco ADSs and any dividends and distributions as provided
in Section 3.4(b), if any.
(b) Dividends; Distributions. No dividends or other
distributions declared after the German Effective Time on Newco Ordinary Shares
underlying Newco ADSs and payable to the holders of record thereof after the
German Effective Time shall be paid to the holder of any unsurrendered Old
Daimler-Benz ADR with respect to which the Newco ADSs shall have been issued in
the Daimler-Benz Merger until such Old Daimler-Benz ADRs shall be surrendered as
provided herein, but (i) upon such surrender there shall be paid to the person
in whose name the depositary receipt representing such Newco ADSs shall be
issued the amount of dividends theretofore paid with respect to such whole Newco
ADSs as of any date subsequent to the German Effective Time, and (ii) at the
appropriate payment date or as soon as practicable thereafter, there shall be
paid to such person the amount of dividends with a record date after the German
Effective Time but prior to surrender and a payment date subsequent to surrender
payable with respect to such whole Newco ADSs, subject to any applicable
abandoned property, escheat and similar laws. No interest shall be payable with
respect to the payment of such dividends on surrender of outstanding Old
Daimler-Benz ADRs.
(c) Final Settlement. From and after the German Effective
Time, the holders of Old Daimler-Benz ADRs shall cease to have any rights with
respect to the Daimler-Benz ADSs evidenced thereby except as otherwise provided
herein or by applicable law. All rights to receive cash, if any, and Newco ADSs
into which Daimler-Benz ADSs shall have been converted pursuant to this Article
III shall be deemed to have been paid or issued, as the case may be, in full
satisfaction of all rights pertaining to such Daimler-Benz ADSs.
(d) Transfer Books. After the German Effective Time, there
shall be no further registration of transfers on the transfer books of the
relevant depositary banks of Daimler-Benz ADSs which were outstanding
immediately prior to the German Effective Time. If, after the German Effective
Time, Old Daimler-Benz ADRs are presented to the relevant depositary, they shall
be cancelled and exchanged for cash or depositary receipts representing
depositary shares of Newco AG, or both, in accordance with the procedures set
forth in this Article III.
(e) Termination of Merger Exchange Fund. Any portion of Newco
ADSs or distributions payable pursuant to Section 3.4(b) that remains
undistributed to the holders of the Old Daimler-Benz ADRs one year after the
German Effective Time shall be delivered to a depositary bank designated by
Newco AG, upon demand by Newco AG, whereupon such depositary bank shall hold
such remaining portion on behalf of holders of unsurrendered Old Daimler-Benz
ADRs, and any holders of the Old Daimler-Benz ADRs who have not theretofore
complied with this Section 3.4 shall thereafter look only to Newco AG for
payment of their claim for the Daimler-Benz Merger Consideration and any
dividends or distributions with respect to Newco ADSs. Such depositary bank
shall maintain an office in the City of New York where holders of Old
Daimler-Benz ADRs may comply with this Article III.
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Section 3.5. Affiliates Letter. Notwithstanding anything to the
contrary contained herein, for "pooling-of-interests" accounting treatment under
XXX Xx. 00 and applicable SEC rules and regulations, no Newco Ordinary Shares
shall be delivered to a person who is an affiliate of Daimler-Benz for purposes
of qualifying the transactions contemplated hereby unless such person has
executed and delivered an agreement in the form of Exhibit B-2 or unless
Chrysler and Daimler-Benz shall have determined that the transactions
contemplated by this Agreement will not be accounted for as a
"pooling-of-interests" under US GAAP because of other circumstances.
Section 3.6. Treatment of Daimler-Benz Stock Plans. (a) Upon
effectiveness of the Daimler-Benz Merger, all outstanding Daimler-Benz Employee
Stock Options will become stock options of Newco AG in accordance with Section
23 of the German Transformation Act (Umwandlungsgesetz) (or such other
instruments as shall meet the requirements of such Section 23 and shall be
agreed to by Chrysler and Daimler-Benz), and from and after the date of the
effectiveness of the Daimler-Benz Merger shall be convertible into Newco
Ordinary Shares (rather than Daimler-Benz Ordinary Shares) in accordance with
their terms.
(b) Daimler-Benz agrees to take all actions (including, but
not limited to, adopting all required amendments) with respect to (i) all
compensation and benefit plans and arrangements and (ii) all awards outstanding
under such plans or arrangements, in each case that are required to enable the
transactions contemplated by this Agreement to be accounted for as a
"pooling-of-interests" under APB No. 16.
Section 3.7. Treatment of Daimler-Benz NEWS. Upon effectiveness of
the Daimler-Benz Merger, all Warrants which are convertible into newly issued
Daimler-Benz Ordinary Shares will become Warrants of Newco AG in accordance with
Section 23 of the German Transformation Act (Umwandlungsgesetz) and, from and
after the date of effectiveness of the Daimler-Benz Merger, will entitle the
holder thereof to purchase Newco Ordinary Shares (rather than Daimler-Benz
Ordinary Shares) in accordance with their terms. With respect to the Warrants
which are convertible into outstanding Daimler-Benz Ordinary Shares, Newco AG
and Daimler-Benz will take all actions necessary to ensure that such Warrants
will be convertible, as of the effectiveness of the Daimler-Benz Merger, into
Newco Ordinary Shares (rather than Daimler-Benz Ordinary Shares) in accordance
with the terms of the Warrants.
Section 3.8. Treatment of Daimler-Benz Subordinated Mandatory
Convertible Notes. Upon the effectiveness of the Daimler-Benz Merger, the 5 3/4%
Subordinated Mandatory Convertible Notes due June 14, 2002 (the "Notes"),
including Notes represented by American Depositary Notes ("ADNs") and DM Book
Entry Securities ("XX XXXx"), issued by Daimler-Benz will become Notes of Newco
AG in accordance with Section 23 of the German Transformation Act
(Umwandlungsgesetz) and, from and after the date of effectiveness of the
Daimler-Benz Merger, will be convertible into Newco Ordinary Shares (rather than
Daimler-Benz Ordinary Shares) in accordance with their terms. Newco AG and
Daimler-Benz will take all actions necessary to ensure that the ADNs and XX XXXx
will be convertible, as of the effectiveness of the Daimler-Benz Merger, into
Newco ADSs (rather than Daimler-Benz ADSs) in accordance with their terms.
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Section 3.9. Antidilution Protection for Daimler-Benz Merger
Exchange Ratio. If, between the date of this Agreement and the German Effective
Time, the outstanding Newco Ordinary Shares, Daimler-Benz Ordinary Shares or
shares of Chrysler Common Stock shall have been changed into a different number
of shares or a different class by reason of any reclassification,
recapitalization, stock split, combination, or exchange of shares or a stock
dividend or dividend payable in any other securities shall be declared with a
record date within such period, or any similar event shall have occurred, the
Daimler-Benz Merger Exchange Ratio shall be appropriately adjusted to provide to
the holders of Daimler-Benz Ordinary Shares the same economic effect as
contemplated by this Agreement prior to such event.
Section 3.10. Treatment of Fractional Shares.
(a) As promptly as practicable following the Effective Time,
the U.S. Exchange Agent will determine the excess of (i) the aggregate number of
Newco ADSs delivered to the U.S. Exchange Agent over (ii) the aggregate number
of whole Newco ADSs to be distributed in connection with the Chrysler Merger
(such excess being referred to herein as the "Excess Shares"). Following the
Effective Time the U.S. Exchange Agent will, on behalf of the former
stockholders of Chrysler, sell the Excess Shares at then-prevailing prices on
the New York Stock Exchange (the "NYSE") in the manner provided in Section
3.10(b).
(b) The sale of the Excess Shares by the U.S. Exchange Agent
will be executed on the NYSE through one or more member firms and will be
executed in round lots to the extent practicable. The U.S. Exchange Agent will
use reasonable efforts to complete the sale of the Excess Shares as promptly
following the Effective Time as, in its sole judgment, is practicable consistent
with obtaining the best execution of such sales in light of prevailing market
conditions. Until the net proceeds of such sale or sales have been distributed
to the holders of Chrysler Common Stock, the U.S. Exchange Agent will hold such
proceeds in trust for such holders (the "Common Shares Trust"). All commissions,
transfer taxes and other out-of-pocket transaction costs, including the expenses
and compensation of the U.S. Exchange Agent incurred in connection with such
sale of the Excess Shares shall be paid from the Common Shares Trust. The U.S.
Exchange Agent will determine the portion of the Common Shares Trust to which
each holder of Chrysler Common Stock is entitled, if any, by multiplying the
amount of the aggregate net proceeds comprising the Common Shares Trust by a
fraction, the numerator of which is the amount of the fractional share interest
to which such holder of Chrysler Common Stock is entitled (after taking into
account all such shares held at the Effective Time by such holder) and the
denominator of which is the aggregate amount of fractional share interests to
which all holders of Chrysler Common Stock are entitled pursuant to the Chrysler
Merger. Each of the former stockholders of Chrysler entitled to cash in lieu of
fractional Newco ADSs shall be responsible for all costs related to the sales of
Excess Shares pursuant to this Section 3.10(b).
(c) As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of Chrysler Common Stock with
respect to fractional share interests, the U.S. Exchange Agent will make
available such amounts to such holders.
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Section 3.11. Withholding Taxes. Newco AG shall be entitled to
deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any holder of Daimler-Benz Ordinary Shares or the Old Daimler-Benz
ADRs such amounts as it is required to deduct and withhold with respect to the
making of such payment under the Code, or any provision of state, local or
non-U.S. tax law. To the extent that amounts are so withheld by Newco AG, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of Daimler-Benz Ordinary Shares or the Old Daimler-Benz
ADRs in respect of which such deduction and withholding was made by Newco AG.
Section 3.12. Singapore Depositary Shares. Singapore Depositary
Shares representing Daimler-Benz Ordinary Shares shall for all purposes under
this Agreement be treated in the same manner as Daimler-Benz ADSs. Newco AG and
Daimler-Benz shall make appropriate arrangements with the depositary bank for
the Singapore Depositary Shares to fully effect this result.
ARTICLE IV
NEWCO AG GOVERNANCE AFTER THE EFFECTIVE TIME
Section 4.1. Newco AG Governance after Effective Time. Daimler-Benz,
Chrysler and Newco AG agree that after the Effective Time, Newco AG shall have a
corporate governance structure reflecting that the transactions contemplated
herein are a merger of equals. Without the intention to interfere with the
rights and powers of Newco's Shareholders meeting, Supervisory Board and the
Management Board (Vorstand) and subject to Sections 95 et seq., Section
84 of the German Stock Corporation Law and Sections 6 et seq. of the
Co-determination Law of 1976, they will recommend to their respective
shareholders and organizational bodies the following:
(a) Newco AG Articles of Association (Satzung) and Management Board
(Vorstand) Rules of Procedure (Geschaftsordnung). The Articles of Association
(Satzung) of Newco AG and the Management Board (Vorstand) Rules of Procedure
(Geschaftsordnung) of Newco AG, in each case, following the Effective Time,
shall be in form and substance reasonably acceptable to Daimler-Benz and
Chrysler.
(b) Newco AG Supervisory Board. Until the Newco AG Supervisory Board
has to be composed in accordance with the Co-determination Law of 1976, the
Newco AG Supervisory Board shall be composed of twelve members representing the
shareholders, six of whom shall have been recommended, immediately prior to the
Effective Time, by Daimler-Benz from the then-current non-employee
representative members (Anteilseignervertreter) of the Supervisory Board of
Daimler-Benz and six of whom shall have been recommended, immediately prior to
the Effective Time, by Chrysler from the then-current outside members of the
Board of Directors of Chrysler. For the period thereafter, the Newco AG
Supervisory Board shall consist of twenty members (Section 7 of the
Co-determination Law of 1976); five of the members of the restructured Newco AG
Supervisory Board shall have been recommended by Daimler-Benz from non-employee
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representative members (Anteilseignervertreter) of the Supervisory Board of
Daimler-Benz and five of the members shall have been recommended by Chrysler
from the outside members of the Board of Directors of Chrysler.
(c) Chairman of the Supervisory Board (Aufsichtsrat). For a
period of not less than two years following the Effective Time, the current
Chairman of Daimler-Benz's Supervisory Board (Aufsichtsrat) shall continue to be
Chairman of the Newco AG Supervisory Board.
(d) Composition of Newco AG Management Board (Vorstand). The
Management Board (Vorstand) of Newco AG shall consist of 18 members. In general,
50% of such members shall be those designated by Chrysler, and 50% of such
members shall be those designated by Daimler-Benz, and there will be two
additional members with responsibility for Daimler-Benz's non-automotive
businesses. For three years following the Effective Time, Xxxxxx X. Xxxxxxxx and
Xxxxxx X. Xxxxx shall be the Co-CEOs and Co-Chairmen (Vorstandsvorsitzende) of
the Management Board (Vorstand) of Newco AG and members of the Office of the
Chairmen of Newco AG. If any person designated as a member of the Office of the
Chairman or the Management Board of Newco AG ceases to be a full-time employee
of either Chrysler or Daimler-Benz at or before the Effective Time,
Daimler-Benz, in the case of any such employee of Daimler-Benz on the date
hereof or any such employee to be designated by Daimler-Benz, or Chrysler, in
the case of any such employee of Chrysler on the date hereof or any such
employee to be designated by Chrysler, shall designate another person to serve
in such person's stead.
Section 4.2. Integration Committee. The Newco AG Management Board
(Vorstand) shall establish an Integration Committee with consultative function
which shall consist of the Co-Chairmen of the Management Board of Newco AG, who
shall also serve as Co-Chairmen of the Integration Committee, and 12 members
(including such Co-Chairmen), 50% of which shall be designated by Chrysler and
50% of which shall be designated by Daimler-Benz.
Section 4.3. Operational Headquarters. Following the Effective Time,
Newco AG shall maintain two operational headquarters: one located at the current
headquarters of Daimler-Benz, and one located at the current headquarters of
Chrysler.
Section 4.4. Language. Following the Effective Time, English shall
be the official language for the management of Newco AG.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Except as set forth in the Daimler-Benz Disclosure Schedule or as
disclosed in the Daimler-Benz Pre-Agreement Filings or as otherwise contemplated
by this Agreement, Daimler-Benz hereby represents and warrants to Chrysler and
except as set forth in the Chrysler Disclosure Schedule or as disclosed in the
Chrysler Pre-Agreement Filings or as otherwise contemplated by this Agreement,
Chrysler hereby represents and warrants to Daimler-Benz, in each case as set
forth in this Article V, with the party making such representations and
warranties being referred to as the "Representing Party." Notwithstanding the
foregoing, any representation or warranty which expressly refers to Daimler-Benz
or Chrysler is being made solely by Daimler-Benz or Chrysler, as the case may
be.
Section 5.1. Corporate Organization. The Representing Party is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has the corporate power and
authority to own, operate and lease all of its properties and assets and to
carry on its business as it is now being conducted or presently proposed to be
conducted, except where the failure to be in good standing would not reasonably
be expected to have a Material Adverse Effect. The Representing Party is duly
qualified to do business and is in good standing (to the extent the concepts of
"qualification to do business" and "good standing" exist) in all jurisdictions
where its ownership, operation or leasing of property or assets or the conduct
of its business requires it to be so qualified, except in such jurisdictions, if
any, where the failure to be so qualified or in good standing would not,
individually or in the aggregate, have a Material Adverse Effect. The
Representing Party, its Subsidiaries and their respective employees hold all
permits, licenses, variances, exemptions, orders, registrations and approvals of
all Government Entities which are required for the operation of the businesses
of the Representing Party and its Subsidiaries as currently conducted (the
"Company Permits"), except where the failure to have any such Company Permits
individually or in the aggregate would not have a Material Adverse Effect.
Chrysler has made available to Daimler-Benz true and complete copies of its
Certificate of Incorporation and By-Laws and Daimler-Benz has made available to
Chrysler a true and complete copy of its Memorandum and Articles of Association
(Satzung), Management Board (Vorstand) Rules of Procedure (Geschaftsordnung) and
English translations thereof.
Section 5.2. Subsidiaries. (a) Each Subsidiary of the Representing
Party is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, has the corporate power and
authority to own, operate or lease all of its properties and assets and to carry
on its business as it is now being conducted or presently proposed to be
conducted and is duly qualified to do business and is in good standing (to the
extent the concepts of "qualification to do business" and "good standing" exist)
in each jurisdiction where its ownership, operation, or leasing of property or
the conduct of its business requires such qualification, except in such
jurisdictions, if any, where the failure to be so organized, existing, in good
standing or qualified would not have a Material Adverse Effect. Each
Representing Party has made available to the other
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Representing Party a copy of the certificate of incorporation, by-laws,
Memorandum and Articles of Association (Satzung), Management Board (Vorstand)
Rules of Procedure (Geschaftsordnung) or other similar documents for each of its
Significant Subsidiaries.
(b) Each Representing Party is, directly or indirectly, the
record and beneficial owner of approximately that percentage of the outstanding
shares of capital stock of each of its Significant Subsidiaries which is set
forth opposite the name of each such Significant Subsidiary in Section 5.2(b) of
the Representing Party's Disclosure Schedule. There are no outstanding (i)
securities of the Representing Party or any of its Significant Subsidiaries
convertible into or exchangeable or exercisable for shares of capital stock or
other voting securities or ownership interests in any of the Representing
Party's Significant Subsidiaries, (ii) warrants, calls, options or other rights
to acquire from the Representing Party or any of its Significant Subsidiaries,
or any obligations of the Representing Party or any of its Significant
Subsidiaries to issue, any capital stock, voting securities or other ownership
interests in, or any securities convertible into or exchangeable or exercisable
for, any capital stock, voting securities or ownership interests in any of the
Representing Party's Significant Subsidiaries, or (iii) obligations of the
Representing Party or any of its Significant Subsidiaries to repurchase, redeem
or otherwise acquire any such outstanding securities of the Representing Party's
Significant Subsidiaries or to issue, deliver or sell, or cause to be issued,
delivered or sold, any such securities. All of the outstanding shares of capital
stock of each of the Representing Party's Significant Subsidiaries have been
validly issued and are fully paid, non-assessable and free of preemptive rights,
and the shares owned, directly or indirectly, by such Representing Party are
owned free and clear of all Encumbrances, except for such Encumbrances which
would not, individually or in the aggregate, have a Material Adverse Effect.
Section 5.3. Capital Stock. (a) Section 5.3(a) of the Representing
Party's Disclosure Schedule sets forth as of April 30, 1998:
(i) the number of authorized shares of each class or series
of capital stock of the Representing Party;
(ii) the number of shares of each class or series of capital
stock of the Representing Party which are issued and
outstanding;
(iii) the number of shares of each class or series of capital
stock which are held in the treasury of such
Representing Party;
(iv) the number of shares of each class or series of capital
stock of the Representing Party which are reserved for
issuance, indicating each particular reservation; and
(v) the aggregate number of shares of each class or series
of capital stock subject to employee stock options or
other rights to purchase or receive capital stock
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granted under such Representing Party's stock option or
other stock based employee or non-employee director
benefit plans.
(b) Promptly following the date hereof, the Representing Party
shall furnish a supplement to its Disclosure Schedule setting forth as of a date
within 30 days preceding the date of this Agreement the number of shares of each
class or series of capital stock of such Representing Party which are subject to
employee stock options or other rights to purchase or receive capital stock
granted under such Representing Party's stock option or other stock based
employee benefit plans, indicating the name of the plan, identifying the
employee or director by number (not by name), the date of grant and the exercise
price thereof.
(c) There are no authorized, issued, reserved for issuance or
outstanding (i) shares of capital stock or voting securities of the Representing
Party, (ii) securities of the Representing Party convertible into or
exchangeable for shares of capital stock or voting securities of the
Representing Party, (iii) warrants, calls, options or other rights to acquire
from the Representing Party or any of its Subsidiaries, or any obligation of the
Representing Party or any of its Subsidiaries to issue, any shares of capital
stock or voting securities or securities convertible into or exchangeable or
exercisable for capital stock or voting securities of the Representing Party,
and (iv) there are no outstanding obligations of the Representing Party to
repurchase, redeem or otherwise acquire any such securities or to issue, deliver
or sell, or cause to be issued, delivered or sold, any such securities.
Section 5.4. Authority. The Representing Party has the corporate
power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by Chrysler and the consummation by Chrysler of the transactions contemplated
hereby have been duly authorized by the Board of Directors of Chrysler, and,
except for the Chrysler Stockholder Approval, no other corporate action on the
part of Chrysler is necessary to authorize this Agreement or the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
by Daimler-Benz, including the consummation by Daimler-Benz of the transactions
contemplated hereby, have been duly authorized by the Management Board
(Vorstand) of Daimler-Benz, and, except for the approval of the Supervisory
Board (Aufsichtsrat) of Daimler-Benz and the Daimler-Benz Stockholder Approval,
no other corporate action on the part of Daimler-Benz is necessary to authorize
this Agreement or the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Representing Party and (assuming
this Agreement constitutes a valid and binding obligation of the other
Representing Party and of Newco AG and assuming the Supervisory Board
(Aufsichtsrat) approval referred to in the preceding sentence) is a valid and
binding agreement of the Representing Party, enforceable against such
Representing Party in accordance with its terms.
Section 5.5. Consents and Approvals; No Violation. (a) Except where
the failure to make any filing with, or to obtain any permit, authorization,
consent or approval of, any Governmental Entity would not prevent or materially
delay the consummation of the transactions contemplated hereby or otherwise
prevent the Representing Party from performing in all material
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respects its obligations under this Agreement, or would not individually or in
the aggregate have a Material Adverse Effect, no filing with, and no permit,
authorization, consent or approval of, any Governmental Entity is necessary for
the execution, delivery and performance of this Agreement by the Representing
Party and the consummation by such Representing Party of the transactions
contemplated hereby.
(b) Neither the execution, delivery or performance of this
Agreement by the Representing Party nor the consummation by such Representing
Party of the transactions contemplated hereby, will (i) violate or conflict with
any provision of the certificate of incorporation, Memorandum and Articles of
Association (Satzung), the Management Board (Vorstand) Rules of Procedure
(Geschaftsordnung) or by-laws or other similar governing documents of the
Representing Party or any of its Subsidiaries, (ii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation, vesting,
payment, exercise, acceleration, suspension or revocation) under any of the
provisions of any note, bond, mortgage, deed of trust, security interest,
indenture, license, contract, agreement, plan or other instrument or obligation
to which the Representing Party or any of its Subsidiaries is a party or by
which any of them or any of their properties or assets may be bound, (iii)
violate any order, writ, injunction, decree, judgment, statute, rule or
regulation applicable to the Representing Party or its Subsidiaries or any of
their respective properties or assets, (iv) result in the creation or imposition
of any Encumbrance on any asset of the Representing Party or any of its
Subsidiaries, or (v) cause the suspension or revocation of any permit, license,
governmental authorization, consent or approval necessary for the Representing
Party or any of its Subsidiaries to conduct its business as currently conducted,
except in the case of clauses (ii), (iii), (iv) and (v) for violations,
breaches, defaults, terminations, cancellations, accelerations, creations,
impositions, suspensions or revocations which would not or would not be
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect or prevent the consummation of the transactions contemplated hereby.
Section 5.6. Financial Statements; SEC Filings. (a) The consolidated
balance sheets of the Representing Party and its consolidated Subsidiaries as of
December 31, 1996 and December 31, 1997, and the related consolidated statements
of earnings cash flows for each of the two fiscal years ended December 31, 1997
and 1996, incorporated by reference in the Annual Reports on Form 10-K in the
case of Chrysler and the Annual Reports on Form 20-F in the case of Daimler-Benz
for the fiscal years ended December 31, 1997 and 1996, respectively, as filed
with the SEC, and the unaudited consolidated balance sheet of Chrysler as of
March 30, 1997, and the related unaudited consolidated statements of income and
cash flows for the three-month period then ended included in the Quarterly
Report on Form 10-Q of Chrysler for the quarterly period ended March 30, 1997,
as filed with the SEC, copies of all of which have been made available by each
Representing Party to the other (collectively, the "Representing Party's
Financial Statements"), complied as to form, as of their respective dates of
filing with the SEC, 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 US GAAP applied on a consistent
basis, except as reflected in the Representing Party Financial Statements, and
present fairly the consolidated financial position
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of the Representing Party and its consolidated Subsidiaries at the dates and the
consolidated results of operations of the Representing Party and its
Subsidiaries for the periods stated therein subject, in the case of unaudited
interim statements, to normal year-end adjustments. The Representing Party
Financial Statements referred to in this Agreement shall be deemed to include
any notes to such financial statements.
(b) Since January 1, 1996, each Representing Party and its
Subsidiaries that is required to make filings under the Securities Act of 1933,
as amended (the "Securities Act"), or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), has filed with the SEC all forms, reports and
documents required to be filed by it pursuant to the Securities Act and the
Exchange Act, all of which, as of their respective filing dates, complied in all
material respects with all applicable requirements of the Securities Act and the
Exchange Act. Each Representing Party has heretofore made available to the other
a true and complete copy of (i) each final prospectus and definitive proxy
statement filed by it or any of its Subsidiaries with the SEC since January 1,
1996, and (ii) each report filed by it or any of its Subsidiaries with the SEC
since January 1, 1996 (the documents referred to in clauses (i) and (ii) being
hereinafter referred to as the "Representing Party's Filings" and such of the
Representing Party's Filings as have been filed on or before the date hereof
being referred to as the "Representing Party's Pre-Agreement Filings."). None of
the Representing Party's Pre-Agreement Filings as of the respective dates on
which they were filed with the SEC contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
Section 5.7. Absence of Changes. Except as disclosed in the
Representing Party's Pre-Agreement Filings and except as contemplated by this
Agreement, since the date of the Representing Party's latest financial
statements included in such Representing Party's Pre-Agreement Filings, the
Representing Party and its Subsidiaries have conducted their respective
businesses in the ordinary course consistent with past practice and there has
not been:
(a) any Material Adverse Effect;
(b) any material change in the method of accounting or
accounting practice of the Representing Party and its Subsidiaries, other than
changes required by US GAAP;
(c) any direct or indirect redemption, purchase or other
acquisition of any shares of capital stock of the Representing Party or any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) in respect of such capital stock, other
than regular quarterly cash dividends in the case of Chrysler and regular annual
cash dividends in the case of Daimler-Benz;
(d) (i) any increase in the compensation payable or to become
payable by the Representing Party or any of its Subsidiaries to any of their
respective officers or employees, other than increases in the ordinary course of
business and substantially consistent with past practice,
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increases required by union contracts and increases specifically approved in
writing by the other Representing Party or (ii) any increase or modification in
any bonus, pension, insurance or other employee benefit, plan, payment or
arrangement made to, for or with respect to employees not in the ordinary course
of business and consistent with past practice or (iii) entry into or amendment
of any employment agreement or other employment arrangement with any employee of
the Representing Party or any of its Subsidiaries which employment agreement or
amendment provides or may provide compensation and benefits in excess of
$1,000,000 to any individual in any 12-month period; or
(e) any issuance of shares of capital stock other than
pursuant to currently outstanding stock options or other similar stock based
employee benefit awards.
Section 5.8. Absence of Undisclosed Liabilities. There are no
liabilities of the Representing Party or any of its Subsidiaries of any kind
whatsoever, whether or not accrued and whether or not contingent or absolute,
determined or determinable, that are material to such Representing Party and its
Subsidiaries taken as a whole, other than (a) liabilities disclosed or provided
for in such Representing Party's Financial Statements, (b) liabilities disclosed
in the Representing Party's Filings or disclosed as liabilities on the
Representing Party's Disclosure Schedule, (c) liabilities incurred on behalf of
the Representing Party in connection with this Agreement and the transactions
contemplated hereby, (d) liabilities not required to be disclosed under US GAAP,
and (e) liabilities incurred in the ordinary course of business consistent with
past practice since the date of the Representing Party's latest financial
statements included in such Representing Party's Pre-Agreement Filings, none of
which, either individually or in the aggregate, are reasonably likely to have a
Material Adverse Effect.
Section 5.9. Litigation. There are no claims, actions, suits,
proceedings or investigations pending or, to the knowledge of the Representing
Party, threatened against such Representing Party or any of its Subsidiaries or
any of their respective assets before any Governmental Entity which,
individually or in the aggregate, have a reasonable likelihood of resulting in a
Material Adverse Effect. Neither the Representing Party nor any of its
Subsidiaries is subject to any outstanding order, writ, injunction or decree
which reasonably has had or could be expected to have a Material Adverse Effect.
Section 5.10. Taxes. (a) The Representing Party and each of its
Subsidiaries have timely filed or caused to be filed (or there has been timely
filed on their behalf) or will timely file or cause to be filed all income Tax
Returns and all other material Tax Returns required by applicable law to be
filed on or prior to the date hereof, or requests for extensions to file such
Tax Returns have been filed, granted and have not expired, except to the extent
that such failures to file or to have extensions granted that remain in effect
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect. All such Tax Returns are complete and accurate in all
material respects, except to the extent that such failures to be complete or
accurate individually or in the aggregate would not reasonably be expected to
have a Material Adverse Effect. The Representing Party and each of its
Subsidiaries have paid (or there has been paid on their behalf) all
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Taxes shown as due on such Tax Returns, and the most recent Representing Party's
Financial Statements contained in the Representing Party's Filings reflect an
adequate reserve in accordance with US GAAP for all Taxes payable by the
Representing Party and its Subsidiaries for all taxable periods and portions
thereof accrued through the date of such financial statements, except for
inadequately reserved Taxes that individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect. No deficiencies for
any Tax have been proposed in writing, asserted or assessed, in each case by any
taxing authority, against the Representing Party or any of its Subsidiaries for
which there are not adequate reserves, except for deficiencies that individually
or in the aggregate would not reasonably be expected to have a Material Adverse
Effect.
(b) Except as contemplated by Sections 2.6, 3.6 and 8.2 of
this Agreement, any amount or other entitlement that could be received (whether
in cash or property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer or director
of Chrysler or any of its affiliates who is a "disqualified individual" (as such
term is defined in proposed Treasury Regulation Section 1.280G-1) under any
employee benefit plan or other compensation arrangement currently in effect
would not be characterized as an "excess parachute payment" or a "parachute
payment" (as such terms are defined in Section 280G(b)(1) of the Code).
Section 5.11. Employee Benefit Plans. (a) As soon as practicable
(but in any event within 30 business days) following the date hereof, each
Representing Party shall provide the other with a true and complete list of each
material deferred compensation, incentive compensation, stock purchase, stock
option and other equity compensation plan, program, agreement or arrangement;
each material severance or termination pay, medical, surgical, hospitalization,
life insurance and other "welfare" plan, fund or program (within the meaning of
Section 3(1) of ERISA); each material profit-sharing, stock bonus or other
"pension" plan, fund or program (within the meaning of Section 3(2) of ERISA);
each material employment, termination or severance agreement; and each other
material employee benefit plan, fund, program, agreement or arrangement, in each
case that is sponsored, maintained or contributed to or required to be
contributed to by the Representing Party or by any trade or business, whether or
not incorporated (an "ERISA Affiliate"), that together with the Representing
Party would be deemed a "single employer" within the meaning of Section 4001(b)
of ERISA, or to which the Representing Party or an ERISA Affiliate is a party,
whether written or oral, for the benefit of any employee or former employee of
the Representing Party or any of the Representing Party's Subsidiaries and
whether or not subject to ERISA (with respect to a Representing Party, the
"Plans").
(b) Each Plan has been administered and operated in compliance
with its terms and applicable law in all material respects, including, without
limitation, in accordance with the Code and ERISA and the comparable provisions
of any foreign law.
(c) There are no liabilities of the Representing Party or any
ERISA Affiliate with respect to any Plan, other than (i) liabilities disclosed
or provided for in such
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Representing Party's Financial Statements and (ii) liabilities none of which,
either individually or in the aggregate, are reasonably likely to have a
Material Adverse Effect.
Section 5.12. Labor and Employment Matters. (a) Except as
contemplated by Sections 2.6, 3.6 and 8.2 of this Agreement and except for
employment agreements and other arrangements which do not require the payment of
more than $200,000 per person, as soon as practicable (but in any event within
30 business days) following the date hereof, each Representing Party shall
provide the other with a true and complete list of each employment agreement or
any other arrangement or understanding with any employee that provides for the
payment of any consideration (including severance pay) by such Representing
Party or any of its Subsidiaries to such person as a result of the consummation
of any of the transactions contemplated by this Agreement, either alone or in
conjunction with the termination of such person's employment.
(b) (i) Except as disclosed by a Representing Party in writing
as soon as practicable (but in any event within 30 business days) following the
date hereof, neither the Representing Party nor any of its Subsidiaries is a
party to, or bound by, any material collective bargaining agreement or other
material contract, agreement, arrangement or understanding with a labor union or
labor organization; (ii) except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, there is no (1) unfair
labor practice, labor dispute (other than routine individual grievances) or
labor arbitration proceeding pending or, to the knowledge of the Representing
Party, threatened against the Representing Party or its Subsidiaries; (2)
activity or proceeding by a labor union or representative thereof to organize
any employees of the Representing Party or any of its Subsidiaries; or (3)
lockout, strike, slowdown, work stoppage or threat thereof by or with respect to
such employees; and (iii) since December 31, 1997, there has not been any
adoption or amendment in any material respect by the Representing Party or any
of its Subsidiaries of any material collective bargaining agreement or other
contract, agreement, arrangement or understanding with a labor union or labor
organization. Each of the Representing Party and its Subsidiaries is in
compliance with all laws regarding employment, employment practices, terms and
conditions of employment and wages, except for such noncompliance that
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
Section 5.13. Information Provided By Representing Party. None
of the information provided or to be provided by the Representing Party
specifically for inclusion or incorporation by reference in (a) the F-4
Registration Statement will at the date the F-4 Registration Statement is
declared effective by the SEC contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading, (b) the Proxy Statement/Prospectus will, at the
date the Proxy Statement/Prospectus is first mailed to the Representing Party's
stockholders, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading, (c) the Exchange Offer Documents will, at the time of commencement
of the Daimler-Benz Exchange Offer or at the time of the expiration date of the
Daimler-Benz Exchange Offer, contain any untrue statement of a
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material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading, or (d) the merger report to be
prepared pursuant to Section 8 of the German Transformation Act
(Umwandlungsgesetz) in connection with the Daimler-Benz Merger will, at the time
the merger report is made available to the stockholders of Daimler-Benz in
connection with the Daimler-Benz Stockholders Meeting, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Notwithstanding
the foregoing, no representation or warranty is made by a Representing Party
with respect to any statements made in the F-4 Registration Statement, the Proxy
Statement/Prospectus or the Exchange Offer Documents based on information
provided by or on behalf of the other Representing Party for inclusion or
incorporation by reference in such documents or with respect to information
incorporated by reference in such documents from any of the other Representing
Party's Filings. Daimler-Benz represents and warrants to Chrysler that the F-4
Registration Statement and the Exchange Offer Documents will comply as to form
with all applicable provisions of law. Chrysler represents and warrants to
Daimler-Benz that the Proxy Statement/Prospectus will comply as to form with all
applicable provisions of law.
Section 5.14. Ownership of Capital Stock. To the knowledge of the
Representing Party, neither the Representing Party nor any of its affiliates
beneficially owns, directly or indirectly, any capital stock of the other
Representing Party or is a party to any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any capital stock
of the other Representing Party.
Section 5.15. Voting Requirements. (a) Chrysler represents and
warrants to Daimler-Benz that the affirmative vote at the Chrysler Stockholders
Meeting, which shall become effective upon consummation of the Daimler-Benz
Exchange Offer (the "Chrysler Stockholder Approval"), of the holders of a
majority of all outstanding shares of Chrysler Common Stock is the only vote of
holders of any class or series of Chrysler capital stock necessary to approve
and adopt this Agreement and the transactions contemplated hereby, including the
Chrysler Merger.
(b) Daimler-Benz represents and warrants to Chrysler that the
affirmative votes at the Daimler-Benz Stockholders Meeting (the "Daimler-Benz
Stockholder Approval") of the holders of 75% of the Daimler-Benz Ordinary Shares
represented at the Daimler-Benz Stockholders Meeting to approve and adopt (i)
this Agreement and the transactions contemplated hereby, including the
Daimler-Benz Exchange Offer, and (ii) the Daimler-Benz Merger are the only votes
of the holders of any class or series of Daimler-Benz capital stock necessary
for the consummation of the transactions contemplated by this Agreement.
Section 5.16. Accounting Matters. To its knowledge neither the
Representing Party nor any of its affiliates (as such term is used in Section
9.10) has taken or agreed to take any action that would prevent the transactions
contemplated by this Agreement from being accounted for as a
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"pooling-of-interests" under XXX Xx. 00 and the Representing Party has no reason
to believe that such transactions will not qualify for "pooling-of-interests"
accounting treatment under XXX Xx. 00.
Section 5.17. Opinion of Financial Advisors. Chrysler represents and
warrants to Daimler-Benz that Chrysler has received the opinion of CSFB, dated
the date of this Agreement, to the effect that, as of such date, the U.S.
Exchange Ratio is fair from a financial point of view to the holders of shares
of Chrysler Common Stock (other than Daimler-Benz and its affiliates).
Daimler-Benz represents and warrants to Chrysler that Daimler-Benz has received
the opinion of Xxxxxxx Xxxxx, dated the date of this Agreement, to the effect
that, as of such date, the Daimler-Benz Exchange Ratio pursuant to the Agreement
is fair from a financial point of view to the holders of Daimler-Benz Ordinary
Shares. For purposes of the opinion as expressed in this Agreement, the term
"Daimler-Benz Exchange Ratio" means the Daimler-Benz Exchange Offer Ratio and
the Daimler-Benz Merger Exchange Ratio, collectively, after taking into account
the Chrysler Merger.
Section 5.18. Finders and Advisors. Except for Xxxxxxx Sachs and
Deutsche Bank AG, whose fees shall be the sole responsibility of Daimler-Benz,
and CSFB, whose fees shall be the sole responsibility of Chrysler, no financial
advisor, broker, agent or finder has been retained by either Representing Party
in connection with this Agreement or any transaction contemplated hereby, and no
such financial advisor, broker, agent or finder is entitled to any fee or other
compensation on account of this Agreement or any transaction contemplated
hereby.
Section 5.19. State Takeover Statutes; Stockholder Rights Plan. (a)
Chrysler represents and warrants to Daimler-Benz that its Board of Directors has
taken all action necessary to ensure that Section 203 of the DGCL does not apply
to this Agreement and the transactions contemplated hereby.
(b) Chrysler represents and warrants to Daimler-Benz that its
Board of Directors has amended the Rights Agreement, dated as of February 5,
1998, between Chrysler and First Chicago Trust Company of New York (the
"Chrysler Rights Agreement") to render it inapplicable to the transactions
contemplated by this Agreement.
ARTICLE VI
NEWCO AG REPRESENTATIONS AND WARRANTIES
Newco AG represents and warrants to Chrysler as follows:
Section 6.1. Corporate Organization. Newco AG is an
Aktiengesellschaft duly incorporated and validly existing under the laws of the
Federal Republic of Germany and has the corporate power and authority to own,
operate and lease all of its properties and assets and to carry on its business
as it is now being conducted or presently proposed to be conducted.
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Section 6.2. Capital Stock. As of the date hereof, (a) 20,000 Newco
Ordinary Shares were issued and outstanding and owned by Xxx. Xxxxxxxxx jr. &
Cie.; and (b) no other shares of capital stock were issued or outstanding.
Except as set forth in this Section 6.2, (1) there are not issued, reserved for
issuance or outstanding (i) any shares of capital stock or other voting
securities of Newco AG, (ii) any securities of Newco AG convertible into or
exchangeable or exercisable for shares of capital stock or voting securities of
Newco AG, or (iii) any warrants, calls, options or other rights to acquire from
Newco AG, or any obligation of Newco AG to issue, any capital stock, voting
securities or securities convertible into or exchangeable for or exercisable for
capital stock or voting securities of Newco AG, and (2) there are no outstanding
obligations of Newco AG to repurchase, redeem or otherwise acquire any such
securities or to issue, deliver or sell, or cause to be issued, delivered or
sold, any such securities.
Section 6.3. Authority. Newco AG has the corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery and, subject to completion of the actions
to be performed pursuant to Section 9.16, the performance of this Agreement by
Newco AG and the consummation by Newco AG of the transactions contemplated
hereby have been duly authorized by the general meeting of stockholders
(Hauptversammlung) of Newco AG, by the Supervisory Board (Aufsichtsrat) of Newco
AG and by the Management Board (Vorstand) of Newco AG, and no other corporate
action on the part of Newco AG is necessary to authorize this Agreement or the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Newco AG and (assuming this Agreement constitutes a
valid and binding obligation of Daimler-Benz and Chrysler and, upon the actions
required by Section 9.16 being taken) is a valid and binding agreement of Newco
AG, enforceable against Newco AG in accordance with its terms. Newco AG has made
available to Daimler-Benz and Chrysler true and complete copies of its
Memorandum and Articles of Association (Satzung) and an English translation
thereof.
Section 6.4. Consents and Approvals; No Violation. (a) Except where
the failure to make any filing with, or to obtain any permit, authorization,
consent or approval of, any Governmental Entity would not prevent or delay the
consummation of the transactions contemplated hereby or otherwise prevent Newco
AG from performing its obligations under this Agreement, no filing with, and no
permit, authorization, consent or approval of, any Governmental Entity is
necessary for the execution, delivery and performance of this Agreement by Newco
AG and the consummation by Newco AG of the transactions contemplated hereby.
(b) Neither the execution, delivery or performance of this
Agreement by Newco AG nor the consummation by Newco AG of the transactions
contemplated hereby, will (i) violate or conflict with any provision of the
Memorandum and Articles of Association (Satzung) of Newco AG, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation,
vesting, payment, exercise, acceleration, suspension or revocation) under any of
the provisions of any note, bond, mortgage, deed of trust, security interest,
indenture, license, contract, agreement, plan or other instrument or obligation
to which Newco AG is a party or by which it or any of its properties or
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assets may be bound, (iii) violate any order, writ, injunction, decree,
judgment, statute, rule or regulation applicable to Newco AG or any of its
respective properties or assets, (iv) result in the creation or imposition of
any Encumbrance on any asset of Newco AG, or (v) cause the suspension or
revocation of any permit, license, governmental authorization, consent or
approval necessary for Newco AG to conduct its business as currently conducted.
Section 6.5. Information Provided By Newco AG. None of the
information provided or to be provided by Newco AG specifically for inclusion or
incorporation by reference in (a) the F-4 Registration Statement will, at the
date the F-4 Registration Statement is declared effective by the SEC, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading, (b) the Proxy Statement/Prospectus will, at the date the Proxy
Statement/Prospectus is first mailed to the Chrysler stockholders, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading, (c) the report
to be prepared pursuant to Section 183(3) of the German Stock Corporation Law
(Aktiengesetz) in connection with the U.S. Share Exchange will, at the time of
delivery of the report to the commercial register, and the report to be prepared
pursuant to Section 52(3) of the German Stock Corporation Law (Aktiengesetz) in
connection with the U.S. Share Exchange will, at the time of its presentation to
the general meeting of stockholders of Newco AG, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (d) the Exchange
Offer Documents will, at the time of commencement of the Daimler-Benz Exchange
Offer or on the Daimler-Benz Exchange Offer Expiration Date, the report to be
prepared pursuant to Section 183(3) of the German Stock Corporation Law
(Aktiengesetz) in connection with the German Share Exchange will, at the time of
delivery of the report to the commercial register, and the report to be prepared
pursuant to Section 52(3) of the German Stock Corporation Law (Aktiengesetz) in
connection with the German Share Exchange will, at the time of its presentation
to the general meeting of stockholders (Hauptversammlung) of Newco AG and at the
time of its filing with the commercial register (Handelsregister), contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they are made, not misleading. Notwithstanding
the foregoing, no representation or warranty is made by Newco AG with respect to
any statements made in the F-4 Registration Statement, the Proxy
Statement/Prospectus or the Exchange Offer Documents based on information
provided by or on behalf of Chrysler for inclusion or incorporation by reference
in such documents or with respect to information incorporated by reference in
such documents from any of the Representing Party's Filings. The F-4
Registration Statement and the Exchange Offer Documents will comply as to form
with all applicable provisions of law.
Section 6.6. Ownership of Capital Stock. To the knowledge of Newco
AG, neither Newco AG nor any of its affiliates beneficially owns, directly or
indirectly, any capital stock of Daimler-Benz or Chrysler or is a party to any
agreement, arrangement or understanding for the
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purpose of acquiring, holding, voting or disposing of any capital stock of
Daimler-Benz or Chrysler, other than as contemplated by this Agreement.
Section 6.7. Accounting Matters. To its knowledge neither Newco AG
nor any of its affiliates (as such term is used in Section 9.10) has taken or
agreed to take any action that would prevent the transactions contemplated by
this Agreement from being accounted for as a "pooling-of-interests" under APB
No. 16, and Newco AG has no reason to believe that such transactions will not
qualify for "pooling-of-interests" accounting treatment under XXX Xx. 00.
Section 6.8. No Prior Activities. Newco AG was formed solely for the
purpose of engaging in the transactions contemplated by this Agreement, has no
Subsidiaries and has undertaken no business or activities other than in
connection with entering into this Agreement and engaging in the transactions
contemplated hereby.
ARTICLE VII
CONDUCT OF BUSINESS PENDING THE EFFECTIVE TIME
From the date of this Agreement until the Effective Time, unless the
other parties shall agree in writing or except as otherwise contemplated by this
Agreement or Section 7 of the Representing Party's Disclosure Schedule, each of
the parties hereto shall, and shall cause their respective Subsidiaries to,
conduct their respective businesses in the ordinary course substantially
consistent with past practices and shall use all reasonable efforts to preserve
intact their business organizations and relationships with third parties
(including but not limited to their respective relationships with customers,
suppliers, employees and business partners) and to keep available the services
of their present officers and key employees. Without limiting the generality of
the foregoing, except as otherwise contemplated by this Agreement or except as
contemplated by the agenda published for the annual general meeting of
Daimler-Benz, a copy of which has been previously provided by Daimler-Benz, from
the date of this Agreement until the Effective Time, without the prior written
consent of Chrysler, in the case of any action proposed to be taken by
Daimler-Benz or any Subsidiary of Daimler-Benz, or by Daimler-Benz, in the case
of any action proposed to be taken by Chrysler or any Subsidiary of Chrysler, or
by Chrysler and Daimler-Benz, in the case of any action proposed to be taken by
Newco AG (which consent will not be unreasonably withheld or delayed by any
party from whom it is requested):
(a) none of the parties shall, and each shall cause its
respective Significant Subsidiaries not to, adopt or propose any amendment to
its certificate of incorporation, bylaws, Memorandum and Articles of Association
(Satzung) or other similar governing documents;
(b) none of the parties shall, and each shall cause its
respective Subsidiaries not to (i) declare, set aside or pay any dividend or
other distribution with respect to any
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shares of its capital stock, except in the case of Chrysler for regular
quarterly cash dividends on the outstanding shares of Chrysler Common Stock and
in the case of Daimler-Benz for the regular annual cash dividend on the
outstanding Daimler-Benz Ordinary Shares of DM 1.60 per Ordinary Share, the
Special Distribution and the Rights Offering and except for cash dividends or
distributions by a Subsidiary to its parent, (ii) split, combine or reclassify
any of its shares of capital stock, or (iii) issue or authorize the issuance of
any other securities in respect of, in lieu of or in substitution for shares of
such party's or such party's Subsidiary's capital stock, except for (1) the
issuance of shares of Chrysler Common Stock by Chrysler and Daimler-Benz
Ordinary Shares by Daimler-Benz upon conversion of such party's convertible
securities or upon the exercise of stock options or other rights to acquire such
party's capital stock, in each case which securities, options and rights are
outstanding as of the date hereof and such issuance is made in accordance with
the terms of such securities, options and rights in effect on the date of this
Agreement; (2) the grant of not more than 100,000 options to purchase shares of
Chrysler Common Stock in the ordinary course of business; (3) the issuance of
Daimler-Benz Ordinary Shares and Daimler-Benz ADSs in connection with the Rights
Offering; (4) the issuance of not more than 2 million Daimler-Benz Ordinary
Shares pursuant to Daimler-Benz's Employee Share Purchase Program and (5) the
issuance by Daimler-Benz of up to a maximum of 10,000,000 Daimler-Benz Ordinary
Shares pursuant to The Stock Option Plan of the Daimler-Benz Group (1998);
(c) none of the parties shall, and each shall cause its
respective Subsidiaries not to, repurchase, redeem or otherwise acquire any
shares of capital stock or other equity or equity equivalent securities of, or
other ownership interests in, such party or such Subsidiary, except that
Chrysler may redeem the Chrysler Preferred Stock in accordance with Section 2.7;
(d) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to, issue, deliver, sell, pledge or otherwise
encumber or subject to any Encumbrance any shares of its capital stock, any of
its other voting securities or any of its securities convertible into, or any
rights, warrants or options to acquire, any such shares, voting securities or
convertible securities, except as expressly provided in clause (iii) of
paragraph (b) above and except for the issuance by Chrysler of Chrysler Common
Stock in connection with the Chrysler Stock Issuance as provided in Section 9.3;
(e) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to, merge or consolidate with any other person or
acquire a material amount of assets of or make a material investment in or
otherwise engage in any similar extraordinary business transaction with any
other person, except for transactions in the automotive or automotive finance
businesses in which the party or its Subsidiaries are currently engaged;
(f) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to, sell, lease, license or otherwise surrender,
relinquish or dispose of (i) any facility owned or leased by such party or its
Subsidiary and material to such party and its Subsidiaries taken as a whole or
(ii) any assets or property which are material to such party and its
Subsidiaries taken
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as a whole, except pursuant to existing contracts or commitments (the terms of
which have been disclosed to the other party hereto prior to the date hereof);
(g) none of the parties shall, and none of the parties shall
permit any Subsidiary to, incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for the obligations of any person for borrowed
money, except for indebtedness which will not cause an adverse change in the
ratings of the party's or its Subsidiaries' rated debt securities by Standard &
Poor's Ratings Services and by Xxxxx'x Investor Service, Inc. from those in
effect as of the date hereof;
(h) none of the parties shall, and none of the parties shall
permit any of its Subsidiaries to, take any action that would reasonably be
expected to cause (1) the Chrysler Exchange, to (a) fail to qualify as a
reorganization within the meaning of Section 368(a) of the Code or (b) when
integrated with the Daimler-Benz Exchange Offer and taking into account the
Daimler-Benz Merger, fail to be treated as a transaction described in Section
351(a) of the Code; (2) the Daimler-Benz Exchange Offer to (a) when integrated
with the Chrysler Exchange, fail to be treated as a transaction described in
Section 351(a) of the Code or (b) if integrated with the Daimler-Benz Merger,
fail to qualify as a reorganization within the meaning of Section 368(a) of the
Code; or (3) the Daimler-Benz Exchange Offer or the Daimler-Benz Merger to
result in the recognition of any gain or loss by Newco AG, Daimler-Benz or
stockholders of Daimler-Benz under German law;
(i) none of the parties shall, and none of the parties shall
permit any of its Significant Subsidiaries to, take any actions which would, or
would be reasonably likely to, prevent accounting for the transactions
contemplated by this Agreement in accordance with the "pooling of interests"
method of accounting under the requirements of APB No. 16;
(j) none of the parties shall, and none of the parties shall
permit any of its Significant Subsidiaries to, take any action that would cause
any of the representations and warranties set forth in Article V to be untrue or
incorrect in any material respect; and
(k) none of the parties shall, and none of the parties shall
permit any of its Significant Subsidiaries to, authorize, agree or commit to do
any of the foregoing.
ARTICLE VIII
EMPLOYEE BENEFIT MATTERS
Section 8.1. Newco AG Retention/Personnel Policy. In general, and
subject to the specific provisions of this Article VIII, Daimler-Benz, Chrysler
and Newco AG have agreed that, consistent with the practices of Daimler-Benz and
Chrysler, Newco AG will seek to attract and retain superior quality executive,
managerial, technical and administrative personnel in every market in which it
conducts activities and will generally implement compensation and benefit plans
and
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policies necessary to achieve this objective. It is the specific intention
that Newco AG's compensation and benefit programs (including stock options) will
be competitive with those provided generally in the U.S. domestic automotive and
automotive finance industry and the German automotive and automotive finance
industry, respectively, both with respect to the type and variety of programs as
well as the level of benefits afforded.
Section 8.2. Benefits. (a) For at least two years following the
Effective Time (such period, the "Initial Period"), Newco AG shall provide or
cause to be provided to current and former employees and directors of Chrysler
and its Subsidiaries and Daimler-Benz and its Subsidiaries compensation and
benefits that are at least as favorable in the aggregate as the compensation and
benefits they were entitled to receive immediately prior to the Effective Time
(including, without limitation, benefits pursuant to pension plans, savings
plans, medical plans and programs, lay-off policies, deferred compensation
arrangements and retiree benefit plans, policies and arrangements); provided
that, with respect to employees who are subject to collective bargaining, all
benefits shall be provided in accordance with the applicable collective
bargaining or other labor agreements. Newco AG shall honor, and shall cause its
Subsidiaries to honor, pursuant to their terms all employee benefit obligations
to current and former employees and directors of Chrysler and Daimler-Benz.
(b) From and after the Effective Time, Newco AG shall, and
shall cause its Subsidiaries to, recognize service with Chrysler and Chrysler's
Subsidiaries and Daimler-Benz and Daimler-Benz's Subsidiaries prior to the
Effective Time for all purposes (including, without limitation, eligibility to
participate, vesting, benefit accrual, eligibility to commence benefits
(including, without limitation, subsidized early retirement benefits) and
severance) under any benefit plans of Newco AG or its Subsidiaries in which the
particular employee or former employee of Chrysler or Daimler-Benz (or their
respective Subsidiaries) participates; provided, however, that the foregoing
shall not result in any duplication of benefits. From and after the Effective
Time, Newco AG shall, and shall cause its Subsidiaries to, recognize any and all
out-of-pocket expenses of each employee or former employee of Chrysler and
Chrysler's Subsidiaries and Daimler-Benz and Daimler-Benz's Subsidiaries for
purposes of determining such employee's, former employee's, beneficiary's and
dependent's deductible and copayment expenses.
(c) Without limiting the generality of the foregoing, for at
least two years following the Effective Time, Newco AG shall provide or cause to
be provided to retirees and employees of Chrysler and its Subsidiaries and
Daimler-Benz and its Subsidiaries who, as of the Effective Time, have satisfied
the age and service requirements, or are within five years of satisfying the age
and service requirements, for eligibility to receive retiree medical and life
insurance benefits under the benefit plans, policies and arrangements of
Chrysler and its Subsidiaries or Daimler-Benz and its Subsidiaries, as the case
may be (the "Eligible Retirees"), retiree medical and life insurance benefits
that are at least as favorable as the retiree medical and life insurance
benefits provided under such plans, policies and arrangements immediately prior
to the Effective Time. Newco AG shall not, and shall cause its Subsidiaries not
to, amend, modify or terminate any retiree medical and life insurance benefits
provided to Eligible Retirees during any two-year period after the initial
two-year
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period in a manner that would increase the cost of such benefits to retirees,
their dependents and beneficiaries by more than 20% during any such two-year
period.
Section 8.3. Employment Agreements. (a) Except as otherwise
expressly provided in this Agreement, from and after the Effective Time, Newco
AG shall honor, and shall cause its Subsidiaries to honor, in accordance with
its terms, each existing employment, severance and termination agreement between
Daimler-Benz or Chrysler or any of their respective Subsidiaries, and any
officer, director or employee of any such company, so long as such agreement
shall have been identified to the other party in accordance with Section 5.11(a)
or 5.12 of this Agreement, if required to be so identified, and to the extent
such terms are in effect on the date hereof. To the extent that any such
employment, severance or termination agreement can be unilaterally amended by
the Representing Party, Newco AG agrees not to amend, and to cause its
Subsidiaries not to amend, any such plan or agreement prior to the second
anniversary of the Effective Time in a manner that will reduce or otherwise
impair the benefits that would be payable to any employee pursuant to such plan
or agreement who is covered thereby.
(b) At or prior to the Effective Time, Newco AG shall
recommend to its Supervisory Board (Aufsichtsrat) that Newco AG, represented by
its Supervisory Board, enter into employment agreements (Dienstvertrag)
substantially in the form previously provided by Daimler-Benz to Chrysler with
the Daimler-Benz and Chrysler officers identified on Exhibit E.
ARTICLE IX
ADDITIONAL AGREEMENTS
Section 9.1. No Solicitation. (a) Neither party shall, nor shall it
permit any of its Subsidiaries to, nor shall it authorize or permit any of its
directors, officers or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by it or any of its
Subsidiaries to, directly or indirectly through another person, (i) solicit,
initiate or encourage (including by way of furnishing information), or take any
other action designed to facilitate, any inquiries or the making of any proposal
which constitutes a Takeover Proposal or (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect to
a Takeover Proposal; provided, that if the party's Board of Directors (or the
Management Board (Vorstand) in the case of Daimler-Benz) determines in good
faith, after receiving the advice of outside counsel, that its failure to do so
may result in a breach of its fiduciary duties to its stockholders under
applicable law, such party may, in response to a Takeover Proposal which was not
solicited by it, which did not otherwise result from a breach of this Section
9.1(a) and which is made or received prior to the effectiveness of the Chrysler
Stockholder Approval (in the case of a Takeover Proposal relating to Chrysler)
or the Daimler-Benz Stockholder Approval (in the case of a Takeover Proposal
relating to Daimler-Benz), and subject to providing to the other party prior
written notice of its decision to take such action and of such party's
compliance with Section 9.1(c), (x) furnish information with respect to such
party and its Subsidiaries to any person making a
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Takeover Proposal pursuant to a customary confidentiality agreement (as
determined by such party after receiving the advice of its outside counsel) and
(y) participate in discussions or negotiations regarding such Takeover Proposal.
Each party shall promptly notify the other party of any Takeover Proposal
(including, without limitation, the material terms and conditions thereof and
the identity of the person making it) as promptly as practicable after its
receipt thereof and shall thereafter inform the other party of any material
change in the status of any discussions or negotiations with such third party,
and any material changes to the terms and conditions of such Takeover Proposal
and shall promptly give the other party a copy of any business or financial
information related to Chrysler or Daimler-Benz, as the case may be, delivered
to such person which has not previously been reviewed by such other party. For
purposes of this Agreement, "Takeover Proposal" means any bona fide inquiry,
proposal or offer from any person relating to any (1) tender or exchange offer
involving 25% or more of the capital stock of such party, (2) merger,
consolidation or other business combination involving such party or any of its
Significant Subsidiaries, (3) direct or indirect acquisition or purchase of a
business that constitutes 25% or more of the assets of such party and its
Subsidiaries, taken as a whole, or 25% or more of the equity securities of the
party, (4) recapitalization or restructuring of such party or any of its
Significant Subsidiaries, or (5) other transaction similar to any of the
foregoing with respect to such party or any of its Significant Subsidiaries,
other than the transactions contemplated by this Agreement. Effective as of the
date of this Agreement, each party shall immediately terminate any discussions
or negotiations with any other third parties, if any, that may be currently in
progress with respect to any Takeover Proposal and shall request that all
confidential information furnished on behalf of such party to any such third
parties be returned.
(b) Except as expressly permitted by this Section 9.1, neither
the Board of Directors of Chrysler or any committee thereof nor Daimler-Benz by
its Management Board (Vorstand) or any committee thereof shall (i) withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to the
other party, the approval or recommendation by such Board of Directors or
Management Board (Vorstand) or any such committee of the transactions
contemplated by this Agreement, (ii) approve or recommend, or propose publicly
to approve or recommend, any Takeover Proposal, or (iii) cause its company to
enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement (each, an "Acquisition Agreement") related to any
Takeover Proposal. Notwithstanding the foregoing, at any time prior to the
effectiveness of the Chrysler Stockholder Approval (in the case of Chrysler) or
the Daimler-Benz Stockholder Approval (in the case of Daimler-Benz), (x) the
Board of Directors of Chrysler, to the extent that it determines in good faith,
after receiving the advice of outside counsel, that its failure to do so may
result in a breach of its fiduciary duties to Chrysler's stockholders under
applicable law, may (subject to this and the following sentences) terminate this
Agreement solely in order to concurrently enter into an Acquisition Agreement
with respect to any Superior Proposal, but only at a time that is after the
third business day following Daimler-Benz's receipt of written notice advising
Daimler-Benz that the Board of Directors of Chrysler is prepared to accept a
Superior Proposal, specifying the material terms and conditions of such Superior
Proposal and identifying the person making such Superior Proposal, and (y) the
Management Board (Vorstand) of Daimler-Benz, to the extent that it determines in
good faith, after receiving the advice of outside counsel, that its failure to
do so may result in a breach of its fiduciary duties to Daimler-Benz's
stockholders under
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applicable law, may (subject to this and the following sentence) terminate this
Agreement solely in order to concurrently enter into an Acquisition Agreement
with respect to a Superior Proposal, but only at a time that is after the third
business day following Chrysler's receipt of written notice advising Chrysler
that such Board is prepared to accept a Superior Proposal, specifying the
material terms and conditions of such Superior Proposal and identifying the
person making such Superior Proposal. For purposes of this Agreement, "Superior
Proposal" means any Takeover Proposal on terms that the Board of Directors of
Chrysler or the Management Board (Vorstand) of Daimler-Benz, as the case may be,
determines in its good faith judgment (after receiving the advice of its
financial advisor) to be a superior financial alternative to that party's
stockholders when compared as a whole with the transactions contemplated by this
Agreement and for which financing, to the extent required, is then committed or
which, in the good faith judgment of such Board after receiving the advice of
its financial advisor, is reasonably likely to be obtained by such third party.
(c) Nothing contained in this Section 9.1 shall prohibit
either party from taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to its stockholders if, in the good faith judgment of the Board
of Directors of Chrysler, in the case of Chrysler, or the Management Board
(Vorstand) or the Supervisory Board (Aufsichtsrat) of Daimler-Benz, in the case
of Daimler-Benz, after consultation with outside counsel, failure so to disclose
may be inconsistent with its obligations under applicable law.
Section 9.2. Preparation of the F-4 Registration Statement, the
Proxy Statement/Prospectus and the U.S. Exchange Offer Documents; Stockholders
Meetings. (a) As soon as practicable following the date of this Agreement, (i)
Chrysler, Daimler-Benz and Newco AG shall prepare and file with the SEC the
preliminary Proxy Statement/Prospectus, (ii) Daimler-Benz and Newco AG shall
prepare and file with the SEC the F-4 Registration Statement, and (iii)
Daimler-Benz and Newco AG shall prepare and file with the SEC the U.S. Exchange
Offer Documents. Each of Chrysler, Daimler-Benz and Newco AG shall use
reasonable best efforts to have the F-4 Registration Statement declared
effective under the Securities Act as promptly as practicable after such filing.
Chrysler shall use reasonable best efforts to cause the Proxy
Statement/Prospectus to be delivered to Chrysler's stockholders, Daimler-Benz
shall use reasonable best efforts to cause the Proxy Statement/Prospectus to be
delivered to Daimler-Benz's stockholders, and Daimler-Benz and Newco AG shall
use reasonable best efforts to cause the Exchange Offer Documents to be
delivered to Daimler-Benz's stockholders (including the holders of the
Daimler-Benz ADRs), in each case as promptly as practicable after the F-4
Registration Statement is declared effective under the Securities Act.
Daimler-Benz and Newco AG shall also take any action reasonably required to be
taken under any applicable state securities laws in connection with the issuance
of Newco Ordinary Shares in the Daimler-Benz Exchange Offer and the Daimler-Benz
Merger and the issuance of Newco ADSs in the Daimler-Benz Exchange Offer, the
U.S. Share Exchange, the Chrysler Merger and the Daimler-Benz Merger, and
Chrysler shall furnish all information concerning Chrysler and the holders of
Chrysler Common Stock as may be reasonably requested in connection with any such
action. No filing of, or amendment or supplement to, the F-4 Registration
Statement, the Proxy Statement/Prospectus or the Exchange Offer Documents shall
be made by Daimler-Benz or Newco
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AG without providing Chrysler the opportunity to review and comment thereon.
Each of Daimler-Benz and Newco AG shall advise Chrysler, promptly after it
receives notice thereof, of the time when the F-4 Registration Statement has
become effective or any supplement or amendment has been filed, the issuance of
any stop order, the suspension of the qualification of the Newco Ordinary Shares
issuable in connection with the Daimler-Benz Exchange Offer and the Daimler-Benz
Merger or the Newco ADSs issuable in connection with the Daimler-Benz Exchange
Offer, the U.S. Share Exchange, the Chrysler Merger or the Daimler-Benz Merger
for offering or sale in any jurisdiction, or any request by the SEC for
amendment of the Proxy Statement/Prospectus or the F-4 Registration Statement or
comments thereon and responses thereto or requests by the SEC for additional
information. If at any time prior to the Effective Time any information relating
to Chrysler, Daimler-Benz or Newco AG, or any of their respective affiliates,
officers or directors, is discovered by Chrysler, Daimler-Benz or Newco AG,
which should be set forth in an amendment or supplement to any of the F-4
Registration Statement, the Proxy Statement/Prospectus or the Exchange Offer
Documents, so that any of such documents would not include any misstatement of a
material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, the party that discovers such information shall promptly notify
the other parties hereto and an appropriate amendment or supplement describing
such information shall be promptly filed with the SEC and, to the extent
required by law, disseminated to the stockholders of Chrysler and Daimler-Benz.
(b) Chrysler shall, as promptly as practicable after the F-4
Registration Statement is declared effective under the Securities Act, give
notice of, convene and hold a meeting of its stockholders (the "Chrysler
Stockholders Meeting") in accordance with the DGCL for the purpose of obtaining
the Chrysler Stockholder Approval and, subject to its rights to terminate this
Agreement pursuant to Section 11.1(f), shall, through its Board of Directors,
recommend to its stockholders the approval and adoption of this Agreement, the
Chrysler Merger and the other transactions contemplated hereby. The Chrysler
Stockholders Meeting shall be scheduled and, if necessary, adjourned as
appropriate so that the vote necessary to obtain the Chrysler Stockholder
Approval occurs simultaneously with the Daimler-Benz Stockholder Approval.
(c) Daimler-Benz shall, as promptly as practicable after the
F-4 Registration Statement is declared effective under the Securities Act, give
notice of, convene and hold a meeting of its stockholders (the "Daimler-Benz
Stockholders Meeting") in accordance with the GSCL for the purpose of obtaining
the Daimler-Benz Stockholder Approval and, subject to its rights to terminate
this Agreement pursuant to Section 11.1(d), shall, through its Management Board
(Vorstand) and Supervisory Board (Aufsichtsrat), recommend to its stockholders
the approval and adoption of this Agreement, the Daimler-Benz Exchange Offer,
the Daimler-Benz Merger and the other transactions contemplated hereby. The
Daimler-Benz Stockholders Meeting shall be scheduled and, if necessary,
adjourned as appropriate so that the Daimler-Benz Stockholder Approval occurs
simultaneously with the Chrysler Stockholder Approval.
Section 9.3. Chrysler Stock Issuance. Prior to the Effective Time
and unless the Minimum Condition has been changed to the 80% Minimum, Chrysler
shall issue and sell, in such
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manner as Chrysler reasonably determines and is reasonably acceptable to
Daimler-Benz, approximately 30 million shares of Chrysler Common Stock (or such
greater or lesser number as will allow the Mergers to be accounted for as a
"pooling-of-interests" under XXX Xx. 00 and applicable SEC rules and
regulations) (the "Chrysler Stock Issuance"). The Chrysler Stock Issuance shall
be accomplished on such terms and conditions as Chrysler reasonably believes are
appropriate and are reasonably acceptable to Daimler-Benz. Daimler-Benz and
Chrysler shall cooperate with each other with respect to the Chrysler Stock
Issuance. Shares of Chrysler Common Stock sold and issued pursuant to the
Chrysler Stock Issuance shall be treated for all purposes as issued and
outstanding shares of Chrysler Common Stock at the Effective Time.
Section 9.4. Accountants' Comfort Letters. Each of Daimler-Benz and
Chrysler shall use their reasonable best efforts to cause to be delivered to the
other two letters from their respective independent accountants, one dated a
date within two business days before the date on which the F-4 Registration
Statement shall become effective and one dated a date within two business days
before the Effective Time, in form and substance reasonably satisfactory to the
recipient and customary in scope and substance for comfort letters delivered by
independent accountants in connection with registration statements similar to
the F-4 Registration Statement.
Section 9.5. Accountants' Pooling Letters. Each of Daimler-Benz and
Chrysler shall use their reasonable best efforts to cause to be delivered to
each other and their respective accountants a letter from the other's
independent accountants addressed to Daimler-Benz and Chrysler, dated as of the
date the F-4 Registration Statement is declared effective and as of the Closing
Date, stating that accounting for the Mergers as a "pooling-of-interests" under
XXX Xx. 00 and applicable SEC rules and regulations is appropriate if the
Mergers are consummated as contemplated by this Agreement.
Section 9.6. Access to Information; Confidentiality. (a) Each of
Chrysler and Daimler-Benz shall, and shall cause each of their respective
Subsidiaries to, afford to the other party and to the officers, employees,
accountants, counsel, financial advisors and other representatives of such other
party, reasonable access during normal business hours during the period prior to
the Effective Time to all their respective properties, books, contracts,
commitments, personnel and records and, during such period, each of Chrysler and
Daimler-Benz shall, and shall cause each of its respective Subsidiaries to,
furnish promptly to the other party (i) a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of U.S. federal or state securities laws or German
securities laws and (ii) all other information concerning its business,
properties and personnel as such other party may reasonably request. No review
pursuant to this Section 9.6 shall affect any representation or warranty given
by the other party hereto.
(b) Each of Daimler-Benz, Chrysler and Newco AG will hold and
will cause each of their respective officers, directors, employees, attorneys,
investment bankers and other advisors ("representatives") to hold in strict
confidence (unless compelled to disclose by judicial or administrative process)
all non-public information obtained, whether prior to or after the date of this
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Agreement, from or provided on behalf of the other party, except to the extent
that such information can be shown to have been (i) previously known or
independently developed by the party receiving such information, (ii) in the
public domain through no fault of the receiving party, or (iii) later lawfully
acquired by the receiving party from other sources not known by the receiving
party to be bound by confidentiality obligations (the "Confidential
Information"). Each of Daimler-Benz, Chrysler and Newco AG will, and will cause
each of their respective representatives to, use the Confidential Information
received by it solely in connection with its evaluation of the transactions
contemplated by this Agreement and in furtherance of the consummation of such
transactions in accordance with the terms of this Agreement. In the event of the
termination of this Agreement, each of Daimler-Benz, Chrysler and Newco AG will,
and will cause each of their respective representatives to, (x) maintain the
confidentiality of the Confidential Information, and (y) return all written
Confidential Information promptly upon the written request of the other party.
In addition, each of Daimler-Benz, Chrysler and Newco AG, as a result of their
receipt of Confidential Information will, and will cause each of their
respective representatives not to, solicit any employee of the other for
employment, provided that each of Daimler-Benz, Chrysler and Newco AG may engage
in general solicitations of employment not specifically directed to employees of
Chrysler, Daimler-Benz and Newco AG, as the case may be.
Section 9.7. Takeover Statute. Chrysler and Daimler-Benz shall (i)
take all action necessary to ensure that no state takeover statute or similar
statute or regulation is or becomes applicable to the Chrysler Merger, this
Agreement, or any of the other transactions contemplated by this Agreement and
(ii) if any state takeover statute or similar statute or regulation becomes
applicable to the Chrysler Merger, this Agreement, or any other transaction
contemplated by this Agreement, take all action necessary to ensure that the
Chrysler Merger and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Chrysler Merger and the other transactions contemplated by this Agreement.
Section 9.8. Indemnification, Exculpation and Insurance. (a)
Daimler-Benz and Newco AG shall maintain in effect in accordance with their
terms all rights to indemnification and exculpation from liabilities for acts or
omissions occurring at or prior to the Effective Time now existing in favor of
the current or former directors or officers of Chrysler or Daimler-Benz or any
of their respective Subsidiaries as provided in their respective certificates of
incorporation or by-laws (or comparable organizational documents) and any
indemnification agreements of Chrysler or Daimler-Benz. In addition, from and
after the Effective Time, directors and officers of Chrysler who become
directors or officers of Newco AG or Daimler-Benz shall be entitled to the same
indemnity rights and protections as are afforded to other directors and officers
of Newco AG or Daimler-Benz, as the case may be, and Management Board members
(Mitglieder des Vorstands) and officers of Daimler-Benz who become directors or
officers of Newco AG or Chrysler shall be entitled to the same indemnity rights
and protections as are afforded to other directors and officers of Newco AG or
Chrysler, as the case may be.
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(b) If Newco AG, Daimler-Benz or any of their respective
successors or assigns (i) consolidates with or merges into any other person and
is not 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 will be made so that the successors and assigns of Newco AG or
Daimler-Benz, as the case may be, assume the obligations set forth in this
Section 9.8.
(c) From and after the Effective Time, Chrysler and Newco AG
will indemnify and hold harmless each present and former director and officer of
Chrysler and its Subsidiaries (the "Indemnified Parties"), against any costs or
expenses (including attorneys' fees), judgments, fines, losses, claims, damages
or liabilities (collectively, "Costs") incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of or pertaining to matters
existing or occurring at or prior to the Effective Time, to the fullest extent
that Chrysler or such Subsidiary would have been permitted under applicable law
and the Certificate of Incorporation or Bylaws of Chrysler or such Subsidiary in
effect on the date hereof to indemnify or to obtain insurance for such person
(and Newco AG or Chrysler shall also advance expenses as incurred to the fullest
extent permitted under applicable law provided the person to whom expenses are
advanced provides an undertaking to repay such advances if it is ultimately
determined that such person is not entitled to indemnification).
(d) The provisions of this Section 9.8 are intended to be for
the benefit of, and may be enforced by, each indemnified party, his or her heirs
and his or her representatives and are in addition to, and not in substitution
for, any other rights to indemnification or contribution that any such person
may have by contract or otherwise.
Section 9.9. Public Announcements. Daimler-Benz and Chrysler shall
consult with each other before issuing, and provide each other the opportunity
to review, comment upon and concur with and use reasonable best efforts to agree
on, any press release or other public statements with respect to the
transactions contemplated by this Agreement, including the Mergers, and shall
not issue any such press release or make any such public statement prior to such
consultation, except as either party may determine is required by applicable
law, court process or by obligations pursuant to any listing agreement with any
national securities exchange. The parties agree that the initial press release
to be issued with respect to the transactions contemplated by this Agreement
shall be in the form heretofore agreed to by the parties.
Section 9.10. Affiliates. Unless Chrysler and Daimler-Benz shall
have determined that, because of circumstances not related to the matters set
forth in this Section 9.10, the transactions contemplated by this Agreement will
not be accounted for as a "pooling of interests" under US GAAP: (a) As soon as
practicable after the date hereof, Chrysler shall deliver to Daimler-Benz a
letter identifying all persons who are, at the time this Agreement is submitted
for adoption by the stockholders of Chrysler, "affiliates" of Chrysler for
purposes of Rule 145 under the Securities Act or for purposes of qualifying the
Mergers for "pooling-of-interests" accounting treatment under XXX Xx. 00 and
applicable SEC rules and regulations, and such list shall be updated as
necessary
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to reflect changes from the date hereof. Chrysler shall use reasonable best
efforts to cause each person identified on such list to deliver to Daimler-Benz
not less than 30 days prior to the Effective Time, a written agreement
substantially in the form attached as Exhibit B-1. As soon as practicable after
the date hereof, Daimler-Benz shall deliver to Chrysler a letter identifying all
persons who are, at the time this Agreement is submitted for adoption by the
stockholders of Daimler-Benz, "affiliates" of Daimler-Benz for purposes of Rule
145 under the Securities Act or for purposes of qualifying the Mergers for
"pooling-of-interests" accounting treatment under XXX Xx. 00 and applicable SEC
rules and regulations, and such list shall be updated as necessary to reflect
changes from the date hereof. Daimler-Benz shall use reasonable best efforts to
cause all persons who are "affiliates" of Daimler-Benz for purposes of
qualifying the Mergers for "pooling-of-interests" accounting treatment under XXX
Xx. 00 and applicable SEC rules and regulations to deliver to Chrysler not less
than 30 days prior to the Effective Time, a written agreement substantially in
the form of Exhibit B-2.
(b) Newco AG shall publish no later than 45 days after the end
of the first month after the Effective Time in which there are at least 30 days
of post-Effective Time combined operations (which month may be the month in
which the Effective Time occurs), combined sales and net income figures as
contemplated by and in accordance with the terms of SEC Accounting Series
Release No. 135.
Section 9.11. Stock Exchange Listings. (a) As soon as practicable
following the date of this Agreement and in any event prior to the Daimler-Benz
Exchange Offer Expiration Date, Daimler-Benz and Newco AG shall prepare and file
all documents with the Frankfurt Stock Exchange Admission Board (the "Stock
Exchange Admission Board") and all other stock exchange admission boards on
which the Daimler-Benz Ordinary Shares are listed and use their reasonable best
efforts to cause the Newco Ordinary Shares to be issued by Newco AG in
connection with the transactions contemplated by this Agreement to be approved
for listing on the Frankfurt Stock Exchange (the "FSE") and such other stock
exchanges, subject to official notice of issuance. Newco AG shall prepare and
file with the Stock Exchange Admission Board the draft German Prospectus, and
Newco AG and Daimler-Benz shall promptly provide the Executive Office of the
Takeover Commission with all information required under the German Takeover
Code. Each of Chrysler, Daimler-Benz and Newco AG shall use its reasonable best
efforts to have the German Prospectus consented to by the Stock Exchange
Admission Board as promptly as practicable after such filings and the listing of
Newco Ordinary Shares obtained on all stock exchanges on which the Daimler-Benz
Ordinary Shares are listed. If at any time prior to the Effective Time, any of
the parties discover that an amendment or supplement to the documents or other
information filed with the Stock Exchange Admission Board, the other stock
exchange admission boards or the Executive Office of the Takeover Commission
should be filed so that any such documents or information would not include any
misstatement of a material fact or any omission of any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, the party that makes such discovery shall promptly
notify the other parties hereto and an appropriate amendment or supplement shall
be promptly filed with the Stock Exchange Admission Board, the stock exchange
admission boards of all other stock exchanges on which the
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Daimler-Benz Ordinary Shares are listed and the Executive Office of the Takeover
Commission and, to the extent required by law, such information shall be made
public.
(b) Daimler-Benz and Newco AG shall use reasonable best
efforts to cause the Newco ADSs to be approved for listing on the NYSE, subject
to official notice of issuance, as promptly as practicable after the date
hereof, and in any event prior to the Daimler-Benz Exchange Offer Expiration
Date.
Section 9.12. Stockholder Litigation. Each of Chrysler and
Daimler-Benz shall give the other the reasonable opportunity to participate in
the defense of any stockholder litigation against Chrysler, Daimler-Benz or
Newco AG, as applicable, and its directors relating to the transactions
contemplated by this Agreement.
Section 9.13. Tax Treatment. Each of Daimler-Benz and Chrysler shall
use its reasonable best efforts (i) to cause the Chrysler Exchange, either (a)
to qualify as a reorganization within the meaning of Section 368(a) of the Code
or (b) when integrated with the Daimler-Benz Exchange Offer and taking into
account the Daimler-Benz Merger, to be treated as a transaction described in
Section 351(a) of the Code, (ii) to cause the Daimler-Benz Exchange Offer either
(a) when integrated with the Chrysler Exchange, to be treated as a transaction
described in Section 351(a) of the Code or (b) if integrated with the
Daimler-Benz Merger, to qualify as a reorganization within the meaning of
Section 368(a) of the Code, (iii) to cause the Daimler-Benz Exchange Offer and
the Daimler-Benz Merger not to result in the recognition of any gain or loss by
Newco AG, Daimler-Benz or stockholders of Daimler-Benz under German law, and
(iv) to enable Chrysler to obtain from the Internal Revenue Service the private
letter ruling described in Section 10.3(d) and to meet the conditions thereof.
Chrysler agrees to consult with Daimler-Benz with respect to Chrysler's request
for the IRS private letter ruling described in Section 10.3(d). Prior to
submitting any written submissions or representations to the IRS in connection
with such request, Chrysler further agrees to provide such written submissions
and representations to Daimler-Benz for Daimler-Benz's review and approval,
which shall not be unreasonably withheld or delayed.
Section 9.14. Standstill Agreements; Confidentiality Agreements.
During the period from the date of this Agreement through the Effective Time,
neither Chrysler nor Daimler-Benz shall terminate, amend, modify or waive any
provision of any standstill agreement or waive any provision of any
confidentiality agreement to which it or any of its respective Subsidiaries is a
party, except as provided in the Chrysler Stockholders Agreement. During such
period, Chrysler or Daimler-Benz, as the case may be, shall enforce, to the
fullest extent permitted under applicable law, the provisions of any such
agreement, including by obtaining injunctions to prevent any breaches of such
agreements and to enforce specifically the terms and provisions thereof in any
court of the United States of America or of any state thereof or any court in
Germany or any political subdivision thereof, in each such case which has
jurisdiction of the parties and the subject matter.
Section 9.15. Conveyance Taxes. Daimler-Benz and Chrysler shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications or other documents
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regarding any real property transfer or gains, sales, use, transfer, value
added, stock transfer and stamp taxes, any transfer, recording, registration and
other fees or any similar taxes that become payable in connection with the
transactions contemplated by this Agreement that are required or permitted to be
filed on or before the Effective Time. Chrysler shall pay, without deduction or
withholding from any amount payable to the holders of Chrysler Common Stock (and
shall not directly or indirectly be reimbursed by Daimler-Benz or Newco AG for),
any such taxes or fees imposed by any taxing authority (and any penalties and
interest with respect to such taxes and fees) on Chrysler or any holder of
Chrysler Common Stock that become payable in connection with the transactions
contemplated by this Agreement. Daimler-Benz shall pay, without deduction or
withholding from any amount payable to the holders of Daimler-Benz Ordinary
Shares or Daimler-Benz ADSs (and shall not directly or indirectly be reimbursed
by Chrysler or Newco AG for), any such taxes or fees imposed by any taxing
authority (and any penalties and interest with respect to such taxes and fees)
on Daimler-Benz or any holder of Daimler-Benz Ordinary Shares or Daimler-Benz
ADSs that become payable in connection with the transactions contemplated by
this Agreement.
Section 9.16. Certain Obligations of Newco AG. Certain obligations
of Newco AG set forth in this Agreement, including those obligations designed to
survive the consummation of the U.S. Share Exchange, the German Share Exchange
or the Daimler-Benz Merger, require certain additional corporate actions by or
with respect to Newco AG specified in the German Stock Corporation Law
(Aktiengesetz) including Section 52 and Sections 183 et seq. (in particular
Section 187) of the German Stock Corporation Law (Aktiengesetz) and in the
German Transformation Act (Umwandlungsgesetz) be taken. Newco AG shall recommend
to its Supervisory Board (Aufsichtsrat) and to its shareholders meeting that
such actions be taken. As required by law, certain of such obligations of Newco
AG shall be incorporated in agreements in connection with the contributions in
kind to Newco AG, which agreements shall be entered into by Newco AG and the
U.S. Exchange Agent as well as the Daimler-Benz Exchange Agent and Chrysler,
respectively, in the context of the U.S. Share Exchange and the German Share
Exchange pursuant to Sections 52 and 183 et seq. of the German Stock Corporation
Law (Aktiengesetz).
Section 9.17. Reasonable Best Efforts. Upon the terms and subject to
the conditions set forth in this Agreement, each of the parties agrees to use
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to 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 transactions
contemplated by this Agreement, including (i) the obtaining of all necessary
actions or non-actions, waivers, consents and approvals from Governmental
Entities and the making of all necessary registrations and filings and the
taking of all steps as may be necessary to obtain an approval or waiver from, or
to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining
of all necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
transactions contemplated by this Agreement, including seeking to have any stay
or temporary restraining order entered by any court or other Governmental Entity
vacated or reversed, and (iv) the execution and
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delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement. Nothing
set forth in this Section 9.17 will limit or affect actions permitted to be
taken pursuant to Section 9.1.
ARTICLE X
CLOSING CONDITIONS
Section 10.1. Conditions to All Parties' Obligation to Close. The
obligation of all parties to consummate the Daimler-Benz Exchange Offer and the
German Share Exchange, the Daimler-Benz Merger and the Chrysler Merger and the
U.S. Share Exchange is subject to the satisfaction on or prior to the
consummation of the Daimler-Benz Exchange Offer of the following conditions:
(a) (i) Any applicable waiting period under the HSR Act
relating to the transactions contemplated by this Agreement shall have expired
or been terminated; and (ii) the Commission of the European Union shall have
approved the transactions contemplated by this Agreement under Regulation (EEC)
No. 4064/89 of the Council of the European Union, or such approval shall have
been deemed to have been granted.
(b) The F-4 Registration Statement shall have become effective
and no stop order suspending the effectiveness of the F-4 Registration Statement
shall have been issued and no proceeding for that purpose shall have been
initiated by the SEC.
(c) The Newco ADSs issuable pursuant to this Agreement shall
have been approved for listing on the NYSE, subject to official notice of
issuance, and the Newco Ordinary Shares issuable to Daimler-Benz's stockholders
pursuant to Article I and III shall have been approved for listing on the FSE.
(d) Each of the Chrysler Stockholder Approval and the
Daimler-Benz Stockholder Approval shall have been obtained.
(e) Other than the filing provided for under Section 2.9 and
filings pursuant to the HSR Act, and with the Commission of the European Union
under Regulation (EEC) No. 4064/89 of the Council of the European Union, all
consents, approvals and actions of, filings with and notices to any Governmental
Entity required of Chrysler, Daimler-Benz or any of their respective
Subsidiaries to consummate the transactions contemplated hereby, the failure of
which to be obtained or taken is reasonably likely to have a Material Adverse
Effect on Newco AG, shall have been obtained or made, all in form and substance
reasonably satisfactory to Chrysler and Daimler-Benz.
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(f) No judgment, order, decree, statute, law, ordinance, rule
or regulation, entered, enacted, promulgated, enforced or issued by any
Governmental Entity of competent jurisdiction or other legal restraint or
prohibition (collectively, "Restraints") shall be in effect (i) preventing the
consummation of the Daimler-Benz Exchange Offer, the Chrysler Merger, the U.S.
Share Exchange or the Daimler-Benz Merger, or (ii) which otherwise is reasonably
likely to have a Material Adverse Effect on Chrysler or Daimler-Benz; provided
that each of the parties shall have used its reasonable best efforts to prevent
the entry of any such Restraints and to appeal as promptly as possible any such
Restraints that may be entered.
(g) Each of Daimler-Benz and Chrysler shall have received the
accountants' letters contemplated by Sections 9.4 and (unless the Minimum
Condition has been changed to the 80% Minimum) 9.5.
(h) The Chrysler Stock Issuance shall have been completed in
accordance with Section 9.3 (unless the Minimum Condition has been changed to
the 80% Minimum).
(i) All conditions to the Daimler-Benz Exchange Offer shall
have been satisfied.
Section 10.2. Conditions to Daimler-Benz's and Newco AG's Obligation
to Close. The obligation of Daimler-Benz and Newco AG to consummate the U.S.
Share Exchange and the Daimler-Benz Merger is further subject to the
satisfaction on or prior to the Effective Time of the following additional
conditions:
(a) The representations and warranties of Chrysler set forth
herein shall be true and correct both when made and at and as of the Effective
Time, as if made at and as of such time (except to the extent expressly made as
of an earlier date, in which case as of such date), except where the failure of
such representations and warranties to be so true and correct (without giving
effect to any limitation as to "materiality" or "Material Adverse Effect" set
forth therein) would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Chrysler, and Daimler-Benz shall have
received a Certificate of an Executive Vice President of Chrysler as to the
satisfaction of this condition.
(b) Chrysler shall, in all material respects, have performed
and complied with all obligations required to be performed or complied with by
it under this Agreement at or prior to the Effective Time, and Daimler-Benz
shall have received a Certificate of an Executive Vice President of Chrysler as
to the satisfaction of this condition.
(c) Daimler-Benz and Newco AG shall have received from German
tax counsel to Daimler-Benz, based on reasonably requested representation
letters and customary assumptions, an opinion, dated as of the Chrysler Merger
Closing Date, substantially to the effect that neither the Daimler-Benz Exchange
Offer nor the Daimler-Benz Merger will result in the
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recognition of any gain or loss by stockholders of Daimler-Benz or by
Daimler-Benz or Newco AG under German law.
(d) Daimler-Benz and Newco AG shall have received from
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel to Daimler-Benz and
Newco AG, an opinion, based on reasonably requested representation letters and
customary assumptions, dated as of the Daimler-Benz Exchange Offer Expiration
Date, substantially to the effect that for U.S. federal income tax purposes the
Daimler-Benz Exchange Offer, taking into account the Chrysler Exchange and the
Daimler-Benz Merger, should be treated as a non-recognition transfer of
Daimler-Benz Ordinary Shares and Daimler-Benz ADSs by the holders thereof in
exchange for Newco Ordinary Shares and Newco ADSs, respectively.
(e) At any time after the date of this Agreement there shall
not have occurred and be continuing as of the Effective Time any Material
Adverse Effect on Chrysler.
Section 10.3. Conditions to Chrysler's Obligation to Close. The
obligation of Chrysler to consummate the Chrysler Merger is further subject to
the satisfaction on or prior to the Effective Time of the following additional
conditions:
(a) The respective representations and warranties of
Daimler-Benz and Newco AG set forth herein shall be true and correct both when
made and at and as of the Effective Time, as if made at and as of such time
(except to the extent expressly made as of an earlier date, in which case as of
such date), except, in the case of representations and warranties of
Daimler-Benz, where the failure of such representations and warranties to be so
true and correct (without giving effect to any limitation as to "materiality" or
"Material Adverse Effect" set forth therein) would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on
Daimler-Benz, and Chrysler shall have received a certificate of a member of the
Board of Management (Vorstand) of Daimler-Benz as to the satisfaction of this
condition by Daimler-Benz and a certificate of a member of the Board of
Management (Vorstand) of Newco AG as to the satisfaction of this condition by
Newco AG.
(b) Daimler-Benz and Newco AG shall, in all material respects,
have performed or complied with all obligations required to be performed or
complied with by it under this Agreement at or prior to the Effective Time, and
Chrysler shall have received a certificate of a member of the Board of
Management (Vorstand) of Daimler-Benz as to the satisfaction of this condition
by Daimler-Benz and a certificate of a member of the Board of Management
(Vorstand) of Newco AG as to the satisfaction of this condition by Newco AG.
(c) Chrysler shall have received from Debevoise & Xxxxxxxx,
special counsel to Chrysler, an opinion, based on a private letter ruling from
the IRS addressing certain issues under Section 367(a)(1) of the Code,
reasonably requested representation letters and customary assumptions, dated as
of the Chrysler Merger Closing Date, substantially to the effect that for U.S.
federal income tax purposes the Chrysler Exchange, and taking into account the
Xxxxxxx-
00
00
Benz Exchange Offer and the Daimler-Benz Merger, should be treated as a
non-recognition transfer of Chrysler Common Stock by the holders thereof in
exchange for Newco ADSs.
(d) Chrysler shall have received from the IRS a private letter
ruling addressing certain issues under Section 367(a)(1) of the Code, reasonably
satisfactory to Chrysler and sufficient to enable Debevoise & Xxxxxxxx to render
the opinion described in Section 10.3(c).
(e) The Rights Offering shall have been consummated and shall
have been fully subscribed.
(f) The Daimler-Benz Exchange Offer shall have been
consummated.
(g) At any time after the date of this Agreement there shall
not have occurred and be continuing as of the Effective Time any Material
Adverse Effect on Daimler-Benz.
Section 10.4. Further Condition to Obligations of Daimler-Benz and
Newco AG. After the Effective Time and the consummation of the U.S. Share
Exchange, the obligations of Daimler-Benz and Newco AG to complete the
Daimler-Benz Merger shall only be subject to the satisfaction on or prior to the
date of the Daimler-Benz Merger Closing of the condition set forth in Section
10.1(f)(i).
Section 10.5. Frustration of Closing Conditions. Neither
Daimler-Benz nor Chrysler may rely on the failure of any condition set forth in
Section 10.1, 10.2, 10.3 or 10.4, as the case may be, to be satisfied if such
failure was caused by such party's failure to use reasonable best efforts to
consummate the Daimler-Benz Exchange Offer, the Mergers and the other
transactions contemplated by this Agreement, as required by and subject to
Section 9.17.
ARTICLE XI
TERMINATION, AMENDMENT AND WAIVER
Section 11.1. Termination. This Agreement may be terminated at any
time prior to the Effective Time, and (except in the case of Section 11.1(d) or
Section 11.1(f)) whether before or after the Chrysler Stockholder Approval or
the Daimler-Benz Stockholder Approval:
(a) by mutual written consent of Daimler-Benz and Chrysler;
(b) by either Daimler-Benz or Chrysler:
(i) if the Chrysler Merger and the Daimler-Benz Exchange Offer
shall not have been consummated by January 31, 1999, provided that the
right to terminate this Agreement pursuant to this Section 11.1(b)(i)
shall not be available to any party whose
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failure to perform any of its obligations under this Agreement results in
the failure of the Chrysler Merger, the U.S. Share Exchange and the
Daimler-Benz Exchange Offer to be consummated on or prior to such date;
and provided, further, that this Agreement may be extended for up to 30
days by either Daimler-Benz or Chrysler by written notice to the other
party if the Daimler-Benz Exchange Offer or the Chrysler Merger shall not
have been consummated as a direct result of Daimler-Benz or Chrysler
having failed to receive all regulatory approvals required to be obtained
with respect thereto;
(ii) if the Chrysler Stockholder Approval or the Daimler-Benz
Stockholder Approval shall not have been obtained at the respective
Chrysler Stockholders Meeting or Daimler-Benz Stockholders Meeting or at
any adjournment or postponement thereof;
(iii) if any Restraint having either of the effects set forth
in Section 10.1(f) shall be in effect and shall have become final and
nonappealable, provided, that the party seeking to terminate this
Agreement pursuant to this Section 11.1(b)(iii) shall have used reasonable
best efforts to prevent the entry of and to remove such Restraint;
(iv) if this Agreement shall not have been finally approved by
the Supervisory Board (Aufsichtsrat) of Daimler-Benz on or prior to May
21, 1998.
(c) by Daimler-Benz if Chrysler shall have breached or failed to
perform in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement, which breach or
failure to perform (1) would give rise to the failure of a condition set forth
in Section 10.2(a) or (b), and (2) is incapable of being cured by Chrysler or is
not cured within 45 days after receipt of written notice thereof;
(d) prior to receipt of the Daimler-Benz Stockholder Approval, by
Daimler-Benz in accordance with Section 9.1(b);
(e) by Chrysler, if Daimler-Benz or Newco AG shall have breached or
failed to perform in any material respect any of their representations,
warranties, covenants or other agreements contained in this Agreement, which
breach or failure to perform (1) would give rise to the failure of a condition
set forth in Section 10.3(a) or (b), and (2) is incapable of being cured by
Daimler-Benz or Newco AG or is not cured within 45 days of written notice
thereof; or
(f) prior to receipt of the Chrysler Stockholder Approval, by
Chrysler in accordance with Section 9.1(b).
Section 11.2. Effect of Termination. In the event of termination of
this Agreement by either Chrysler or Daimler-Benz as provided in Section 11.1,
written notice thereof shall be given as promptly as possible to the other
parties hereto and this Agreement shall forthwith become void and have no
effect, without any liability or obligation on the part of Daimler-Benz,
Chrysler or
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Newco AG, except to the extent that such termination results from the willful
and material breach by a party of any of its representations, warranties,
covenants or agreements set forth in this Agreement. Notwithstanding the
foregoing, the provisions of Section 5.18, paragraph (b) of Section 9.6, this
Section 11.2 and Article XII shall survive termination of this Agreement in
accordance with Article XI.
ARTICLE XII
MISCELLANEOUS
Section 12.1. No Survival of Representations and Warranties. None of
the representations and warranties in this Agreement or in any instrument or
document delivered pursuant to this Agreement shall survive the Effective Time.
This Section 12.1 shall not limit any covenant or agreement of the parties which
by its terms contemplate performance after the Effective Time.
Section 12.2. Fees and Expenses. Except as otherwise provided in
Section 9.15, all fees and expenses incurred in connection with the Mergers,
this Agreement and the other transactions contemplated by this Agreement shall
be borne by the party incurring such fees or expenses, whether or not the
Mergers are consummated, and accordingly each of Daimler-Benz and Chrysler shall
bear and pay one-half of the costs and expenses incurred in connection with the
filing, printing and mailing of the F-4 Registration Statement and the Proxy
Statement/Prospectus (including SEC registration and filing fees).
Section 12.3. Counterparts; Effectiveness. This Agreement may be
executed in two or more separate counterparts, each of which shall be deemed to
be an original but all of which shall constitute one and the same agreement.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by each of the other parties hereto.
Section 12.4. Governing Law. The Daimler-Benz Merger, the
Daimler-Benz Exchange Offer (to the extent it is conducted in Germany) and the
capital contribution in kind included in the U.S. Share Exchange shall be
governed by and effected in accordance with German law. In all other respects,
this Agreement shall be governed by and effected in accordance with Delaware law
without regard to the principles of conflicts of laws thereof.
Section 12.5. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing (including
telecopy or similar writing) and shall be effective (a) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section 12.5 and the appropriate telecopy confirmation is received or (b) if
given by any other means, when delivered at the address specified in this
Section 12.5 (or at such other address for a party as shall be specified by like
notice):
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(a) if to Chrysler, to
Chrysler Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxx X. X'Xxxxx
Vice President, General
Counsel and Secretary
with a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxx
Xxxx X. Xxxxxx, Xx.
and a further copy to:
Bruckhaus Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxxx 00
X-00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
Telecopy No.: 000-00-00-00 26 64
Attention: Xx. Xxxxxx Xxxx
(b) if to Daimler-Benz, to
Daimler-Benz Aktiengesellschaft
Xxxxxxxxxxxx 000
00000 Xxxxxxxxx
Xxxxxxx
Telecopy No.: 011-49-711-17-94452
Attention: Xx. Xxxxxxxxx Schwung
Associate General Counsel
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with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: J. Xxxxxxx Xxxxxx
Xxxxxxxx X. Xxxxx
with a further copy to:
Shearman & Sterling
Xxxxxxxxx. 0
X-00000 Xxxxxxxxxx
Xxxxxxx
Telecopy No.: 011-49-211-17888-81
Attention: Xxxxx X. Xxxxx
(c) if to Newco AG, to
Xxxxxxxxx Aktiengesellschaft
c/o Xxx. Xxxxxxxxx jr. & Cie.
Unter Xxxxxxxxxxxxx 0
00000 Xxxx
Telecopy No.: 011-49-221-145-1034
Attention: Xxxxxxxx Xxxxx
Section 12.6. Assignment; Binding Effect. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other parties. Subject to the preceding sentence,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Any
assignment not permitted under this Section 12.6 shall be null and void.
Section 12.7. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable. Upon such determination that
any term or other provision is invalid or unenforceable, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in an
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acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
Section 12.8. Enforcement of Agreement. The parties hereto agree
that money damages or other remedy at law would not be sufficient or adequate
remedy for any breach or violation of, or any default under, this Agreement by
them and that in addition to all other remedies available to them, each of them
shall be entitled to the fullest extent permitted by law to an injunction
restraining such breach, violation or default or threatened breach, violation or
default and to any other equitable relief, including, without limitation,
specific performance, without bond or other security being required.
Section 12.9. Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the Exhibits hereto and the other agreements contemplated hereby and
instruments delivered pursuant hereto and thereto constitute the entire
agreement, and supersede all other prior agreements and understandings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof and thereof and, except as otherwise expressly provided herein, is
not intended to and shall not confer upon any person other than the parties
hereto any rights or remedies hereunder.
Section 12.10. Reservation of Right to Revise Transaction. If the
implementation and mechanics prove not to be operable, the parties will use
their reasonable best efforts to change the method of effecting the business
combination between Chrysler and Daimler-Benz contemplated hereby, and each
party will cooperate in such efforts, including to provide for a different form
of transaction to effect the business combination of Chrysler and Daimler-Benz,
provided, that no such change shall (a) alter or change the amount or kind of
consideration to be received by holders of Chrysler Common Stock, Daimler-Benz
Ordinary Shares or Daimler-Benz ADRs, (b) adversely affect the tax treatment to
Chrysler, Daimler-Benz, Newco AG or their respective stockholders as a result of
the transactions contemplated hereby, or (c) materially delay receipt of any
material approval referred to in this Agreement or the consummation of the
transactions contemplated hereby. Newco AG shall be bound by any changes to the
transactions contemplated hereby that are agreed to by Chrysler and Daimler-Benz
in accordance with this Section 12.10.
Section 12.11. Extension of Time, Waiver, Etc. At any time prior to
the Effective Time, either Daimler-Benz or Chrysler may (a) extend the time for
the performance of any of the obligations or acts of any other party hereto
(provided that Daimler-Benz may not extend the time for the performance of any
of the obligations of Newco AG without the written consent of Chrysler); (b)
waive any inaccuracies in the representations and warranties of any other party
hereto contained herein or in any document delivered pursuant hereto (provided
that Daimler-Benz may not waive any inaccuracies in the representations or
warranties made by Newco AG without the written consent of Chrysler); or (c)
subject to the proviso of Section 12.12 waive compliance with any of the
agreements or conditions of any other party hereto contained herein (provided
that Daimler-Benz may not waive compliance with any of the agreements or
conditions of Newco AG without the written consent of Chrysler). Notwithstanding
the foregoing, no failure or delay by Xxxxxxx-Xxxx
00
00
or Chrysler or Newco AG in exercising any right hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right hereunder.
Any agreement on the part of Daimler-Benz or Chrysler hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party.
Section 12.12. Amendment. This Agreement may be amended by the
parties at any time before or after the Chrysler Stockholder Approval or the
Daimler-Benz Stockholder Approval provided, that after any such approval, there
shall not be made any amendment that by law requires further approval by the
stockholders of Chrysler or Daimler-Benz without the further approval of such
stockholders. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.
Section 12.13. Interpretation. When a reference is made in this
Agreement to an Article, Section or Exhibit, such reference shall be to an
Article or Section of, or an Exhibit to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. All
terms defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. References to a person
are also to its permitted successors and assigns.
Section 12.14. Responsibility for Obligations of Newco AG. After
consummation of the Daimler-Benz Exchange Offer and until the German Effective
Time, Newco AG as majority shareholder of Daimler-Benz will cause Daimler-Benz
to comply with all of Daimler-Benz's obligations hereunder.
Section 12.15. Consent to Jurisdiction. Each of the parties hereto
(a) consents to submit itself to the personal jurisdiction of any federal court
located in the State of Delaware or any Delaware state court in the event any
dispute arises out of or relates to this Agreement or any of the transactions
contemplated by this Agreement, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, including, without limitation, a motion to dismiss on the grounds of
forum non conveniens, (c) agrees that it
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63
will not bring any action arising out of or relating to this Agreement or any of
the transactions contemplated by this Agreement in any court other than a
federal court sitting in the State of Delaware or a Delaware state court, and
(d) waives any right to a trial by jury with respect to any claim, counterclaim
or action arising out of or in connection with this Agreement or the
transactions contemplated hereby.
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IN WITNESS HEREOF, Daimler-Benz, Chrysler and Newco AG have caused this
Agreement to be duly executed as of the day and year first above written.
DAIMLER-BENZ AKTIENGESELLSCHAFT
By:__________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Management
Board
By:__________________________________
Name:
Title:
CHRYSLER CORPORATION
By:__________________________________
Name: Xxxxxx X. Xxxxx
Title: Chairman and Chief Executive
Officer
By:__________________________________
Name:
Title:
XXXXXXXXX AKTIENGESELLSCHAFT
By:__________________________________
Name: Xxxxxxxx Xxxxx
Title:
By:__________________________________
Name:
Title:
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EXHIBIT A
ANNEX OF DEFINED TERMS
1.1 "ACQUISITION AGREEMENT" shall have the meaning set forth in Section
9.1(b).
1.2 "AFFILIATE" of any person shall mean (except as otherwise
specifically defined), as to any person, any other person which, directly or
indirectly, controls, is controlled by, or is under common control with, such
person, where "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of securities or partnership or other
ownership interests, by contract or otherwise.
1.3 "ADNs" shall have the meaning set forth in Section 3.8.
1.4 "ADS CLOSING PRICE" shall have the meaning set forth in Section
2.6(a).
1.5 "AGREEMENT" shall have the meaning set forth in the first
paragraph.
1.6 "APB NO. 16" shall have the meaning set forth in Section 2.5(f).
1.7 "CHRYSLER" shall mean the corporate party to the Agreement
identified in the first paragraph.
1.8 "CHRYSLER COMMON STOCK" shall have the meaning set forth in Section
2.4.
1.9 "CHRYSLER EMPLOYEE OPTIONHOLDER" shall mean any person who holds a
Chrysler Employee Stock Option.
1.10 "CHRYSLER EMPLOYEE STOCK OPTION" shall mean an option to purchase
shares of Chrysler Common Stock granted pursuant to a Chrysler stock option plan
and listed on Section 5.3(b) of Chrysler's Disclosure Schedule or subsequently
granted as permitted by Article VII(b)(2).
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1.11 "CHRYSLER EXCHANGE" shall mean the Chrysler Merger together with
the U.S. Share Exchange.
1.12 "CHRYSLER MERGER" shall mean the transaction contemplated by
Section 2.2.
1.13 "CHRYSLER MERGER CLOSING" shall have the meaning set forth in
Section 2.9.
1.14 "CHRYSLER MERGER CLOSING DATE" shall mean the date on which the
Chrysler Merger Closing occurs.
1.15 "CHRYSLER MERGER SUB" shall have the meaning set forth in Section
2.1.
1.16 "CHRYSLER MERGER SUB BY-LAWS" shall have the meaning set forth in
Section 2.11.
1.17 "CHRYSLER MERGER SUB CHARTER" shall have the meaning set forth in
Section 2.10.
1.18 "CHRYSLER MERGER SUB COMMON STOCK" shall have the meaning set
forth in Section 2.1.
1.19 "CHRYSLER PREFERRED STOCK" shall have the meaning set forth in
Section 2.7.
1.20 "CHRYSLER RIGHTS AGREEMENT" shall have the meaning set forth in
Section 5.19(b).
1.21 "CHRYSLER STOCKHOLDER APPROVAL" shall have the meaning set forth
in Section 5.15(a).
1.22 "CHRYSLER STOCKHOLDERS MEETING" shall have the meaning set forth
in Section 9.2(c).
1.23 "CHRYSLER STOCK ISSUANCE" shall have the meaning set forth in
Section 9.3.
1.24 "CLOSING VALUE" shall have the meaning set forth in Section
2.6(a).
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1.25 "CODE" shall have the meaning set forth in the sixth WHEREAS
clause.
1.26 "COMMON SHARES TRUST" shall have the meaning set forth in Section
3.10(c).
1.27 "COMPANY PERMITS" shall have the meaning set forth in Section 5.1.
1.28 "CONFIDENTIAL INFORMATION" shall have the meaning set forth in
Section 9.6(b).
1.29 "COSTS" shall have the meaning set forth in Section 9.8(c).
1.30 "CSFB" shall mean Credit Suisse First Boston Corporation,
financial advisor to Chrysler.
1.31 "DAIMLER-BENZ" shall mean the corporate party to the Agreement
identified in the first paragraph.
1.32 "DAIMLER-BENZ ADSs" shall have the meaning set forth in Section
1.1.
1.33 "DAIMLER-BENZ EMPLOYEE OPTIONHOLDER" shall mean any person who
holds a Daimler-Benz Employee Stock Option.
1.34 "DAIMLER-BENZ EMPLOYEE STOCK OPTION" shall mean a convertible
bond, nominal value DM 1,000, issued pursuant to the Daimler-Benz stock option
plans and listed on Section 5.3(b) of Daimler-Benz's Disclosure Schedule.
1.35 "DAIMLER-BENZ EXCHANGE AGENT" shall have the meaning set forth in
Section 1.2.
1.36 "DAIMLER-BENZ EXCHANGE OFFER" shall mean the offer contemplated by
Section 1.1.
1.37 "DAIMLER-BENZ EXCHANGE OFFER CONDITIONS" shall have the meaning
set forth in Section 1.1.
1.38 "DAIMLER-BENZ EXCHANGE OFFER EXPIRATION DATE" shall have the
meaning set forth in Section 1.1.
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1.39 "DAIMLER-BENZ EXCHANGE OFFER RATIO" shall have the meaning set
forth in Section 1.1.
1.40 "DAIMLER-BENZ MERGER" shall mean the transaction contemplated by
Section 3.1.
1.41 "DAIMLER-BENZ MERGER CONSIDERATION" shall have the meaning set
forth in Section 3.3.
1.42 "DAIMLER-BENZ MERGER EXCHANGE RATIO" shall have the meaning set
forth in Section 3.3.
1.43 "DAIMLER-BENZ ORDINARY SHARES" shall have the meaning set forth in
Section 1.1.
1.44 "DAIMLER-BENZ STOCKHOLDER APPROVAL" shall have the meaning set
forth in Section 5.15(b).
1.45 "DAIMLER-BENZ STOCKHOLDERS MEETING" shall have the meaning set
forth in Section 9.2(c).
1.46 "DGCL" shall mean the General Corporation Law of the State of
Delaware.
1.47 "DISCLOSURE SCHEDULE" shall mean the disclosure schedule delivered
by each Representing Party to the other setting forth (organized by the number
and letter of the corresponding section and paragraph in the Business
Combination Agreement provided, that matters disclosed in any section of the
Disclosure Schedule shall be deemed to be disclosed for all purposes of such
disclosure schedule) the Representing Party's exceptions to the representations
and warranties of such Representing Party contained in Article V and to the
covenants set forth in Article VII, and provided further that inclusion of an
item in a disclosure schedule shall not be construed to mean that the item is
required to be disclosed or is material.
1.48 "DM BES" shall have the meaning set forth in Section 3.8.
1.49 "EFFECTIVE TIME" shall have the meaning set forth in Section 2.9.
1.50 "80% MINIMUM" shall have the meaning set forth in Section 1.1.
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1.51 "ELIGIBLE RETIREE" shall have the meaning set forth in Section
8.3(c).
1.52 "ENCUMBRANCE" shall mean any mortgage, pledge, lien, charge,
encumbrance, defect, security interest, claim, option or restriction of any
kind.
1.53 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.54 "ERISA AFFILIATE" shall have the meaning set forth in Section
5.11(a).
1.55 "EXCESS SHARES" shall have the meaning set forth in Section
3.10(b).
1.56 "EXCHANGE ACT" shall have the meaning set forth in Section 5.6(b).
1.57 "EXCHANGE OFFER DOCUMENTS" shall have the meaning set forth in
Section 1.4(b).
1.58 "EXECUTIVE OFFICE OF THE TAKEOVER COMMISSION" shall have the
meaning set forth in Section 1.1.
1.59 "EXERCISE PRICE" shall have the meaning set forth in Section
2.6(a).
1.60 "F-4 REGISTRATION STATEMENT" shall mean the Registration Statement
on Form F-4 of Newco AG registering Newco Ordinary Shares and Newco ADSs to be
issued in the Chrysler Merger and the Exchange Offer.
1.61 "FSE" shall have the meaning set forth in Section 9.11(a).
1.62 "FULLY DILUTED BASIS" shall mean a basis that takes into account
all outstanding Daimler-Benz Ordinary Shares (including all outstanding
Daimler-Benz ADSs) and the maximum aggregate number of Daimler-Benz Ordinary
Shares and Daimler-Benz ADSs that may be issued in respect of any warrants,
options, convertible instruments or other rights pursuant to which the holder
thereof may acquire Daimler-Benz Ordinary Shares or Daimler-Benz ADSs,
regardless of whether currently exercisable or convertible. For this purpose,
the number of Daimler-Benz Ordinary Shares or ADSs into which the Notes
(including Notes represented by ADNs and XX XXXx) may be converted shall be
deemed to be
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the higher of (i) the maximum aggregate number of Daimler-Benz Ordinary Shares
and Daimler-Benz ADSs into which the Notes can be converted and (ii) a number of
Daimler-Benz Ordinary Shares equal to 120% of the market value of the Notes on
the Daimler-Benz Exchange Offer Expiration Date divided by the per share closing
price of a Daimler-Benz Ordinary Share or Daimler-Benz ADS, as applicable, as
reported by the FSE or The Wall Street Journal, as applicable, on such date.
1.63 "GERMAN EFFECTIVE TIME" shall have the meaning set forth in
Section 3.2.
1.64 "GERMAN EXCHANGE OFFER DOCUMENTS" shall have the meaning set forth
in Section 1.3.
1.65 "GERMAN MERGER AGREEMENT" shall have the meaning set forth in
Section 3.1.
1.66 "GERMAN PROSPECTUS" shall have the meaning set forth in Section
1.3.
1.67 "GERMAN SHARE EXCHANGE" shall have the meaning set forth in
Section 1.1.
1.68 "GERMAN STOCK CORPORATION LAW (AKTIENGESETZ)" shall have the
meaning set forth in Section 3.1.
1.69 "GERMAN SURVIVING CORPORATION" shall have the meaning set forth in
Section 3.1.
1.70 "GERMAN TAKEOVER CODE" shall have the meaning set forth in Section
1.1.
1.71 "XXXXXXX SACHS" shall mean Xxxxxxx, Xxxxx & Co., financial advisor
to Daimler-Benz.
1.72 "GOVERNMENTAL ENTITY" shall mean any court, tribunal or
administrative, governmental or regulatory body, agency, commission, division,
department, public body or other authority, whether federal, state, local or
foreign.
1.73 "GSCL" shall have the meaning set forth in Section 3.1.
1.74 "HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
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1.75 "INDEMNIFIED PARTY" shall have the meaning set forth in Section
9.8(c).
1.76 "INITIAL PERIOD" shall have the meaning set forth in Section
8.3(a).
1.77 "IRS" shall mean the United States Internal Revenue Service.
1.78 "MATERIAL ADVERSE EFFECT" with respect to Daimler-Benz, Chrysler
or Newco AG shall mean any event or state of facts that is or would reasonably
be expected to be materially adverse to the business, assets, results of
operations or financial condition of such Party and its Subsidiaries, taken as a
whole, except for any events or states of facts relating to (i) the automotive
and automotive finance industry in general, and not relating specifically to the
business of Chrysler or Daimler-Benz, as the case may be, or (ii) the economy of
the United States of America, the Federal Republic of Germany or the world, in
general, and not relating specifically to the business of Chrysler or
Daimler-Benz, as the case may be or in the case of Newco AG, Newco AG and its
Subsidiaries immediately after the Effective Time, taken as a whole.
1.79 "MERGERS" shall mean the Daimler-Benz Merger and the Chrysler
Merger, collectively.
1.80 "MINIMUM CONDITION" shall have the meaning set forth in Section
1.1.
1.81 "NEWCO AG" shall mean the corporate party to the Agreement
identified in the first paragraph.
1.82 "NEWCO ADS" shall have the meaning set forth in Section 1.1.
1.83 "NEWCO ORDINARY SHARES" shall have the meaning set forth in
Section 1.1.
1.84 "NEWCO SATZUNG" shall have the meaning set forth in Section 4.1.
1.85 "NOTES" shall have the meaning set forth in Section 3.8.
1.86 "NYSE" shall have the meaning set forth in Section 3.10(b).
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72
1.87 "OLD CHRYSLER CERTIFICATES" shall have the meaning set forth in
Section 2.5(b).
1.88 "OLD DAIMLER-BENZ ADRS" shall have the meaning set forth in
Section 3.4(a).
1.89 "OPTION SHARES" shall have the meaning set forth in Section
2.6(a).
1.90 "PBGC" shall mean the Pension Benefit Guaranty Corporation.
1.91 "PERFORMANCE SHARES" shall have the meaning set forth in Section
2.6(b).
1.92 "PERSON" shall mean an individual, corporation, partnership,
association, trust, or any other entity or organization, including, without
limitation, a Governmental Entity.
1.93 "PLANS" shall have the meaning set forth in Section 5.11(a).
1.94 "PROXY STATEMENT/PROSPECTUS" shall mean the proxy statement of
Chrysler to be used in connection with the solicitation of proxies by Chrysler
for the Chrysler Stockholders Meeting and the prospectus of Newco AG for the
Newco ADSs being issued in connection with the transactions contemplated by the
Agreement, which Proxy Statement/Prospectus forms a part of the F-4 Registration
Statement.
1.95 "REPRESENTING PARTY" shall have the meaning set forth in the first
paragraph of Article V.
1.96 "REPRESENTING PARTY'S FILINGS" shall have the meaning set forth in
Section 5.6(b).
1.97 "REPRESENTING PARTY'S FINANCIAL STATEMENTS" shall have the meaning
set forth in Section 5.6(a).
1.98 "REPRESENTING PARTY'S PRE-AGREEMENT FILINGS" shall have the
meaning set forth in Section 5.6(b).
1.99 "RESTRAINTS" shall have the meaning set forth in Section 10.1(f).
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73
1.100 "RESTRICTED STOCK UNITS" shall have the meaning set forth in
Section 2.6(d).
1.101 "RIGHTS" shall mean the rights to purchase new Daimler-Benz
Ordinary Shares distributed to holders of the Daimler-Benz Ordinary Shares
pursuant to the Rights Offering.
1.102 "RIGHTS OFFERING" shall have the meaning set forth in Section
2.4(c).
1.103 "SCHEDULE 14D-1" shall have the meaning set forth in Section
1.4(a).
1.104 "SCHEDULE 14D-9" shall have the meaning set forth in Section
1.4(b).
1.105 "SEC" shall have the meaning set forth in Section 1.4(a).
1.106 "SECURITIES ACT" shall have the meaning set forth in Section
5.6(b).
1.107 "SIGNIFICANT SUBSIDIARY" shall mean have the meaning set forth in
Rule 1.02(w) of Regulation S-X promulgated by the SEC under the Exchange Act.
1.108 "SPECIAL DISTRIBUTION" shall mean the special distribution by
Daimler-Benz of DM 20 per Daimler-Benz Ordinary Share/Daimler-Benz ADS as
proposed to the Annual General Meeting of Daimler-Benz stockholders to be held
on May 27, 1998.
1.109 "STOCK EXCHANGE ADMISSION BOARD" shall have the meaning set forth
in Section 9.11(a).
1.110 "SUBSIDIARY" shall mean with respect to Daimler-Benz or Chrysler,
as the case may be, any person (i) of which fifty percent or more of either the
equity interests in, or the voting control of, such person is directly or
indirectly beneficially owned by Daimler-Benz or Chrysler, or (ii) Daimler-Benz
or Chrysler has the ability to elect fifty percent or more of the directors or
members of the governing board of such person, and in either such case, such
person is a consolidated entity in the consolidated financial statements of such
Representing Party.
1.111 "SUPERIOR PROPOSAL" shall have the meaning set forth in Section
9.1(b).
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74
1.112 "SURVIVING CORPORATION COMMON STOCK" shall have the meaning set
forth in Section 2.4(c).
1.113 "TAKEOVER PROPOSAL" shall have the meaning set forth in Section
9.1(a).
1.114 "TAXES" shall mean any and all taxes, duties, levies, imposts or
other governmental charges of any kind (together with any and all interest,
penalties, additions to tax and additional amounts imposed with respect thereto)
imposed by any taxing authority, including without limitation, taxes or other
charges on or with respect to income, net assets, franchises, windfall or other
profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation,
or net worth, and taxes or other charges in the nature of excise, withholding,
ad valorem or value added.
1.115 "TAX RETURNS" shall mean any return, report or similar statement
required to be filed with respect to any Taxes, including, without limitation,
any information return, claim for refund, amended return or declaration of
estimated Taxes.
1.116 "U.S. EXCHANGE AGENT" shall have the meaning set forth in Section
2.1.
1.117 "U.S. EXCHANGE FUND" shall have the meaning set forth in Section
2.5(a).
1.118 "U.S. EXCHANGE OFFER DOCUMENTS" shall have the meaning set forth
in Section 1.4(b).
1.119 "U.S. EXCHANGE RATIO" shall have the meaning set forth in Section
2.4(b).
1.120 "US GAAP" shall have the meaning set forth in the eighth WHEREAS
clause.
1.121 "U.S. MERGER CONSIDERATION" shall have the meaning set forth in
Section 2.4(b).
1.122 "U.S. PERSON" shall mean (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or organized in
or under the laws of the United States or any political subdivision thereof,
(iii) an estate whose income is subject to United States Federal Income taxation
regardless
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75
of its source or (iv) a trust if (a) a court within the United States is able to
exercise primary supervision over the administration of the trust and (b) one or
more U.S. Persons have the authority to control all substantial decisions of the
trust.
1.123 "U.S. SHARE EXCHANGE" shall have the meaning set forth in Section
2.3.
1.124 "U.S. SURVIVING CORPORATION" shall have the meaning set forth in
Section 2.2.
1.125 "WARRANTS" shall mean the warrants issued by Daimler-Benz in
connection with the 4 1/8% Deutsche Xxxx Xxxxxx Notes of 1996/2003 issued by
Daimler-Benz Capital (Luxembourg) XX.
X-00
00
XXXXXXX X-0
FORM OF AFFILIATE LETTER FOR AFFILIATES OF
CHRYSLER CORPORATION
Chrysler Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Daimler-Benz Aktiengesellschaft
225 Xxxxxxxxxxxx
00000 Xxxxxxxxx
Xxxxxxx
Xxxxxxxxx Aktiengesellschaft
Unter Xxxxxxxxxxxxx 0
00000 Xxxx
Xxxxxxx
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "affiliate" of Chrysler Corporation, a Delaware corporation
("Chrysler"), as the term "affiliate" is (i) defined for purposes of paragraphs
(c) and (d) of Rule 145 of the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Act"), and/or (ii) used in and for
purposes of Accounting Series Releases No. 130 and No. 135, as amended, of the
Commission. Pursuant to the terms of the Business Combination Agreement, dated
as of May 7, 1998 (the "Business Combination Agreement"), among Daimler-Benz
Aktiengesellschaft, an Aktiengesellschaft organized and existing under the laws
of the Federal Republic of Germany ("Daimler-Benz"), Chrysler, and Xxxxxxxxx
Aktiengesellschaft, an Aktiengesellschaft organized and existing under the laws
of the Federal Republic of Germany ("Newco AG"), pursuant to which (i) Newco AG
will exchange one ordinary share of no par value of Newco AG (the "Newco
Ordinary Shares") or one Newco American Depositary Share representing
77
one Newco Ordinary Share (the "Newco ADSs") for each outstanding ordinary share
of DM 5 nominal value of Daimler-Benz or the corresponding no par value share,
as the case may be (the "Daimler-Benz Ordinary Shares") or Daimler-Benz American
Depositary Share representing one Daimler-Benz Ordinary Share (the "Daimler-Benz
ADSs") tendered pursuant to an exchange offer being made by Newco to all holders
of Daimler-Benz Ordinary Shares and Daimler-Benz ADSs (the "Exchange Offer"),
(ii) simultaneously with the closing of the Exchange Offer, Chrysler Merger Sub,
a Delaware corporation, will merge with and into Chrysler (the "Chrysler
Merger") whereby the Chrysler stockholders will have the right to receive Newco
ADSs in exchange for their shares of common stock, par value $1.00 per share, of
Chrysler (the "Chrysler Common Stock"), and (iii) following the Exchange Offer,
Daimler-Benz will merge with and into Newco and all remaining outstanding
Daimler-Benz Ordinary Shares and Daimler-Benz ADSs will be converted into Newco
Ordinary Shares or Newco ADSs, as the case may be, and (iv) stockholders of each
of Chrysler and Daimler-Benz will become stockholders of Newco. Capitalized
terms used in this letter without definition shall have the meanings assigned to
them in the Business Combination Agreement.
As a result of the Chrysler Merger, I may receive Newco ADSs. I
would receive such Newco ADSs in exchange for shares (or upon exercise of
options for shares) owned by me of Chrysler Common Stock.
1. I hereby represent, warrant and covenant to Newco, Chrysler and
Daimler-Benz that in the event I receive any Newco ADSs as a result of the
Chrysler Merger:
A. I shall not make any offer, sale, pledge, transfer or other
disposition of the Newco ADSs in violation of the Act or the Rules and
Regulations.
B. I have carefully read this letter and the Business Combination
Agreement and discussed the requirements of such documents and other
applicable limitations upon my ability to sell, transfer or otherwise
dispose of the Newco ADSs, to the extent I felt necessary, with my counsel
or counsel for Chrysler.
C. I have been advised that the issuance of the Newco ADSs to me
pursuant to the Chrysler Merger has been registered with the Commission
under the Act on a Registration Statement on Form F-4. However, I have
also been advised that, because at the time the Chrysler Merger is
submitted for a vote of the stockholders of Chrysler, (a) I may be deemed
to be an affiliate of Chrysler
B-1-2
78
and (b) the distribution by me of the Newco ADSs has not been registered
under the Act, I may not sell, transfer or otherwise dispose of the Newco
ADSs issued to me in the Chrysler Merger unless (i) such sale, transfer or
other disposition is made in conformity with the volume and other
limitations of Rule 145 promulgated by the Commission under the Act, (ii)
such sale, transfer or other disposition has been registered under the
Act, or (iii) in the opinion of counsel reasonably acceptable to Newco, or
a "no action" letter obtained by the undersigned from the staff of the
Commission such sale, transfer or other disposition is otherwise exempt
from registration under the Act.
D. I understand that except as provided for in the Business
Combination Agreement, Newco is under no obligation to register the sale,
transfer or other disposition of the Newco ADSs by me or on my behalf
under the Act or, except as provided in paragraph 2 below, to take any
other action necessary in order to make compliance with an exemption from
such registration available.
E. I further represent to, and covenant with, Newco, Daimler-Benz
and Chrysler that I will not, during the 30 days prior to the Effective
Time, sell, transfer or otherwise dispose of or reduce my risk (as
contemplated by the SEC Accounting Series Release No. 135) with respect to
shares of Chrysler Common Stock that I may hold and, furthermore, that I
will not sell, transfer or otherwise dispose of or reduce my risk (as
contemplated by SEC Accounting Series Release No. 135) with respect to
the Newco ADSs received by me in the Chrysler Merger or any other shares
of the capital stock of Newco until after such time as results covering at
least 30 days of operations of Newco have been published by Newco, in the
form of a quarterly earnings report, an effective registration statement
filed with the Commission, a report to the Commission on Form 20-F or 6-K,
or any other public filing or announcement which includes the combined
results of operations of Chrysler and Daimler-Benz (the period commencing
30 days prior to the Effective Time and ending on the date of the
publication of the post-Chrysler Merger financial results is referred to
herein as the "Pooling Period"). Newco shall notify the "affiliates" of
the publication of such results. Notwithstanding the foregoing, I
understand that during the aforementioned period, subject to providing
written notice to Newco, I will not be prohibited from selling up to 10%
of the Newco ADSs (the "10% Shares") received by me or the shares of
Chrysler Common Stock owned by me or making charitable contributions or
bona fide gifts of the Newco ADSs received by me or the shares of Chrysler
Common Stock owned by me, subject to the same restrictions. The 10% Shares
shall be calculated in accordance with SEC Accounting Series Release No.
135 as amended by Staff Accounting Bulletin
X-0-0
00
Xx. 00. I covenant with Newco that I will not sell, transfer or otherwise
dispose of any 10% Shares during the period commencing on the Effective
Time and ending on the last day of the Pooling Period except in compliance
with Rule 145(d)(i) under the Act or pursuant to charitable contributions
or bona fide gifts.
F. Execution of this letter should not be considered an admission on
my part that I am an "affiliate" of Chrysler as described in the first
paragraph of this letter, or as a waiver of any rights I may have to
object to any claim that I am such an affiliate on or after the date of
this letter.
2. By Newco AG's acceptance of this letter, Newco AG hereby agrees
with me that for so long as and to the extent necessary to permit me to sell the
Newco ADSs pursuant to Rule 145 and, to the extent applicable, Rule 144 under
the Act, Newco AG shall (a) use its reasonable best efforts (i) to file, on a
timely basis, all reports and data required to be filed with the Commission by
it pursuant to Section 13 of the Securities Exchange Act of 1934, as amended,
and (ii) to furnish me upon request a written statement as to whether Newco AG
has complied with such reporting requirements during the 12 months preceding any
proposed sale of the Newco ADSs by me under Rule 145, and (b) otherwise use its
reasonable efforts to permit such sales pursuant to Rule 145 and Rule 144.
Very truly yours,
_____________________________________
Name:
B-1-4
80
Agreed and accepted this __ day
of ___________, 1998, by
DAIMLER-BENZ AKTIENGESELLSCHAFT
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
CHRYSLER CORPORATION
By:__________________________________
Name:
Title:
XXXXXXXXX AKTIENGESELLSCHAFT
By: _________________________________
Name:
Title:
By:__________________________________
Name:
Title:
X-0-0
00
XXXXXXX X-0
FORM OF AFFILIATE LETTER FOR AFFILIATES OF
DAIMLER-BENZ AKTIENGESELLSCHAFT
Chrysler Corporation
0000 Xxxxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Daimler-Benz Aktiengesellschaft
225 Xxxxxxxxxxxx
00000 Xxxxxxxxx
Xxxxxxx
Xxxxxxxxx Xxxxxxxxxxxxxxxxxx
Xxxxx Xxxxxxxxxxxxx
00000 Xxxx
Xxxxxxx
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be
deemed to be an "affiliate" of Daimler-Benz Aktiengesellschaft, an
Aktiengesellschaft organized and existing under the laws of the Federal Republic
of Germany ("Daimler-Benz"), as the term "affiliate" is (i) defined for purposes
of paragraphs (c) and (d) of Rule 145 of the rules and regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), and/or (ii) used in
and for purposes of Accounting Series Releases No. 130 and No. 135, as amended,
of the Commission. Pursuant to the terms of the Business Combination Agreement,
dated as of May 7, 1998 (the "Business Combination Agreement"), among
Daimler-Benz, Chrysler Corporation, a Delaware corporation ("Chrysler"), and
Xxxxxxxxx Aktiengesellschaft, an Aktiengesellschaft organized and existing under
the laws of the Federal Republic of Germany ("Newco AG"), pursuant to which (i)
Newco AG will exchange one ordinary share of no par value of Newco AG (the
"Newco Ordinary Shares") or one Newco American Depositary Share representing one
Newco Ordinary Share (the "Newco ADSs"), for each outstanding ordinary share of
DM 5 nominal value of Daimler-Benz or the corresponding no par value share, as
the case may be (the "Daimler-Benz Ordinary Shares") or Daimler-Benz American
82
Depositary Share representing one Daimler-Benz Ordinary Share (the "Daimler-Benz
ADSs") tendered pursuant to an exchange offer being made by Newco AG to all
holders of Daimler-Benz Ordinary Shares and Daimler-Benz ADSs (the "Exchange
Offer"), (ii) simultaneously with the closing of the Exchange Offer, Chrysler
Merger Sub, a Delaware corporation, will merge, with and into Chrysler whereby
the Chrysler stockholders will have the right to receive Newco ADSs in exchange
for their shares of common stock, par value $1.00 per share, of Chrysler, and
(iii) following the Exchange Offer, Daimler-Benz will merge with and into Newco
AG (the "Daimler-Benz Merger") and all remaining outstanding Daimler-Benz
Ordinary Shares and Daimler-Benz ADSs will be converted into Newco Ordinary
Shares or Newco ADSs, as the case may be, and (iv) stockholders of each of
Chrysler and Daimler-Benz will become stockholders of Newco AG. Capitalized
terms used in this letter without definition shall have the meanings assigned to
them in the Business Combination Agreement.
As a result of the Exchange Offer and/or the Daimler-Benz Merger, I
may receive Newco Ordinary Shares. I would receive such Newco Ordinary Shares in
exchange for Daimler-Benz Ordinary Shares owned by me.
1. I hereby represent, warrant and covenant to Newco AG, Chrysler
and Daimler-Benz that in the event I receive any Newco Ordinary Shares as a
result of the Exchange Offer and/or the Daimler-Benz Merger:
A. I shall not make any offer, sale, pledge, transfer or other
disposition of Newco Ordinary Shares in violation of the Act or the Rules
and Regulations.
B. I have carefully read this letter and the Business Combination
Agreement and discussed the requirements of such documents and other
applicable limitations upon my ability to sell, transfer or otherwise
dispose of Newco Ordinary Shares, to the extent I felt necessary, with my
counsel or counsel for Daimler-Benz.
C. I have been advised that the issuance of the Newco Ordinary
Shares to me pursuant to the Exchange Offer or the Daimler-Benz Merger has
been registered with the Commission under the Act on a Registration
Statement on Form F-4. However, I have also been advised that, because at
the time the Exchange Offer and Daimler-Benz Merger are submitted for a
vote of the stockholders of Daimler-Benz, (a) I may be deemed to be an
affiliate of Daimler-Benz and (b) the distribution by me of the Newco
Ordinary Shares has not been registered under the Act, I may not sell,
transfer or otherwise dispose of the Newco Ordinary Shares issued to me in
the Exchange Offer or the Daimler-Benz Merger unless (i) such sale,
transfer or other disposition is made in conformity
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with the volume and other limitations of Rule 145 promulgated by the
Commission under the Act, (ii) such sale, transfer or other disposition
has been registered under the Act, or (iii) in the opinion of counsel
reasonably acceptable to Newco AG, or a "no action" letter obtained by the
undersigned from the staff of the Commission such sale, transfer or other
disposition is otherwise exempt from registration under the Act.
D. I understand that except as provided for in the Business
Combination Agreement, Newco AG is under no obligation to register the
sale, transfer or other disposition of the Newco Ordinary Shares by me or
on my behalf under the Act or, except as provided in paragraph 2 below, to
take any other action necessary in order to make compliance with an
exemption from such registration available.
E. I further represent to, and covenant with, Newco AG, Daimler-Benz
and Chrysler that I will not, during the 30 days prior to the Effective
Time, sell, transfer or otherwise dispose of or reduce my risk (as
contemplated by the SEC Accounting Series Release No. 135) with respect to
Daimler-Benz Ordinary Shares and Daimler-Benz ADSs that I may hold and,
furthermore, that I will not sell, transfer or otherwise dispose of or
reduce my risk (as contemplated by SEC Accounting Series Release No. 135)
with respect to the Newco Ordinary Shares received by me in the Exchange
Offer and/or the Daimler-Benz Merger or any other shares of capital stock
of Newco AG until after such time as results covering at least 30 days of
operations of Newco AG have been published by Newco AG, in the form of a
quarterly earnings report, an effective registration statement filed with
the Commission, a report to the Commission on Form 20-F or 6-K, or any
other public filing or announcement which includes the combined results of
operations of Chrysler and Daimler-Benz (the period commencing 30 days
prior to the Effective Time and ending on the date of the publication of
the post-Chrysler Merger financial results is referred to herein as the
"Pooling Period"). Newco AG shall notify the "affiliates" of the
publication of such results. Notwithstanding the foregoing, I understand
that during the aforementioned period, subject to providing written notice
to Newco AG, I will not be prohibited from selling up to 10% of the Newco
Ordinary Shares (the "10% Shares") received by me or the Daimler-Benz
Ordinary Shares owned by me or making charitable contributions or bona
fide gifts of the Newco Ordinary Shares received by me or the Daimler-Benz
Ordinary Shares owned by me, subject to the same restrictions. The 10%
Shares shall be calculated in accordance with SEC Accounting Series
Release No. 135 as amended by Staff Accounting Bulletin No. 76. I covenant
with Newco AG that I will not sell, transfer or otherwise dispose of any
10% Shares during the period commencing on the Effective Time
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and ending on the last day of the Pooling Period except in compliance with
Rule 145(d)(i) under the Act or pursuant to charitable contributions or
bona fide gifts.
F. Execution of this letter should not be considered an admission on
my part that I am an "affiliate" of Daimler-Benz as described in the first
paragraph of this letter, or as a waiver of any rights I may have to
object to any claim that I am such an affiliate on or after the date of
this letter.
2. By Newco AG's acceptance of this letter, Newco AG hereby agrees
with me that for so long as and to the extent necessary to permit me to sell the
Newco Ordinary Shares pursuant to Rule 145 and, to the extent applicable, Rule
144 under the Act, Newco AG shall (a) use its reasonable best efforts (i) to
file, on a timely basis, all reports and data required to be filed with the
Commission by it pursuant to Section 13 of the Securities Exchange Act of 1934,
as amended, and (ii) to furnish me upon request a written statement as to
whether Newco has complied with such reporting requirements during the 12 months
preceding any proposed sale of the Newco Ordinary Shares by me under Rule 145,
and (b) otherwise use its reasonable efforts to permit such sales pursuant to
Rule 145 and Rule 144.
Very truly yours,
___________________________________
Name:
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Agreed and accepted this __ day
of ___________, 1998, by
DAIMLER-BENZ AKTIENGESELLSCHAFT
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
CHRYSLER CORPORATION
By:______________________________
Name:
Title:
XXXXXXXXX AKTIENGESELLSCHAFT
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
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EXHIBIT C
FORM OF
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CHRYSLER MERGER SUB
The undersigned, [Officer], certifies that he is the [Title] of
Chrysler Merger Sub, a corporation organized and existing under the laws of the
State of Delaware (the "Corporation"), and does hereby further certify as
follows:
(a) The name of the Corporation is Chrysler Merger Sub.
(b) The name under which the Corporation was originally
incorporated was Chrysler Merger Sub and the original
Certificate of Incorporation of the Corporation was
filed with the Secretary of State of the State of
Delaware on May , 1998.
(c) This Amended and Restated Certificate of
Incorporation was duly adopted in accordance with the
provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware.
(d) The text of the Certificate of Incorporation of the
Corporation as amended hereby is restated to read in
its entirety, as follows:
FIRST: The name of the Corporation is Chrysler Corporation
(hereinafter, the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 0000 Xxxxxx Xxxxxx, in the City of Wilmington, County of
New Castle. The name of its registered agent at that address is The Corporation
Trust Company.
87
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of the State of Delaware as set forth in Title 8 of the Delaware Code (the
"GCL").
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is 1,000 shares of Common Stock, each having a par value
of one xxxxx ($.01).
FIFTH: The name and mailing address of the Sole Incorporator is as
follows:
Name Address
[ ] [ ]
[ ]
SIXTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
(1) The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors.
(2) The directors shall have concurrent power with the
stockholders to make, alter, amend, change, add to or repeal the
By-Laws of the Corporation.
(3) The number of directors of the Corporation shall be as
from time to time fixed by, or in the manner provided in, the By-Laws
of the Corporation. Election of directors need not be by written ballot
unless the By-Laws so provide.
(4) No director shall be personally liable to the Corporation
or any of its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) pursuant to Section 174
of the GCL, or
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(iv) for any transaction from which the director derived an improper
personal benefit. Any repeal or modification of this Article SIXTH by
the stockholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing at the
time of such repeal or modification with respect to acts or omissions
occurring prior to such repeal or modification.
(5) In addition to the powers and authority hereinbefore or by
statute expressly conferred upon them, the directors are hereby
empowered to exercise all such powers and do all such acts and things
as may be exercised or done by the Corporation, subject, nevertheless,
to the provisions of the GCL, this Certificate of Incorporation, and
any By-Laws adopted by the stockholders; provided, however, that no
By-Laws hereafter adopted by the stockholders shall invalidate any
prior act of the directors which would have been valid if such By-Laws
had not been adopted.
SEVENTH: The Corporation shall indemnify its directors and officers to
the fullest extent authorized or permitted by law, as now or hereafter in
effect, and such right to indemnification shall continue as to a person who has
ceased to be a director or officer of the Corporation and shall inure to the
benefit of his or her heirs, executors and personal and legal representatives;
provided, however, that, except for proceedings to enforce rights to
indemnification, the Corporation shall not be obligated to indemnify any
director or officer (or his or her heirs, executors or personal or legal
representatives) in connection with a proceeding (or part thereof) initiated by
such person unless such proceeding (or part thereof) was authorized or consented
to by the Board of Directors. The right to indemnification conferred by this
Article SEVENTH shall include the right to be paid by the Corporation the
expenses incurred in defending or otherwise participating in any proceeding in
advance of its final disposition.
The Corporation may, to the extent authorized from time to time by the
Board of Directors, provide rights to indemnification and to the advancement of
expenses to employees and agents of the Corporation similar to those conferred
in this Article SEVENTH to directors and officers of the Corporation.
The rights to indemnification and to the advance of expenses conferred
in this Article SEVENTH shall not be exclusive of any other right which any
person may have or hereafter acquire under the Certificate of Incorporation or
the By-Laws of the Corporation, any statute, agreement, vote of stockholders or
disinterested directors or otherwise.
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Any repeal or modification of this Article SEVENTH by the stockholders
of the Corporation shall not adversely affect any rights to indemnification and
to the advancement of expenses of a director or officer of the Corporation
existing at the time of such repeal or modification with respect to any acts or
omissions occurring prior to such repeal or modification.
EIGHTH: Meetings of stockholders may be held within or without the
State of Delaware, as the By-Laws may provide. The books of the Corporation may
be kept (subject to any provision contained in the GCL) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the By-Laws of the Corporation.
NINTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
IN WITNESS WHEREOF, Chrysler Merger Sub has caused this Certificate to
be duly executed in its corporate name this day of , 1998.
CHRYSLER MERGER SUB
By:________________________
Name:
Title:
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EXHIBIT D
FORM OF
BY-LAWS
OF
CHRYSLER MERGER SUB
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Delaware as shall be designated
from time to time by the Board of Directors.
Section 2. Annual Meetings. The Annual Meetings of Stockholders for the
election of directors shall be held on such date and at such time as shall be
designated from time to time by the Board of Directors. Any other proper
business may be transacted at the Annual Meeting of Stockholders.
Section 3. Special Meetings. Unless otherwise required by law or by the
certificate of incorporation of the Corporation, as amended and restated from
time to time (the "Certificate of Incorporation"), Special Meetings of
Stockholders, for any purpose or purposes, may be called by either (i) the
Chairman, if there be one, or (ii) the
91
President, (iii) any Vice President, if there be one, (iv) the Secretary or (v)
any Assistant Secretary, if there be one, and shall be called by any such
officer at the request in writing of (i) the Board of Directors, (ii) a
committee of the Board of Directors that has been duly designated by the Board
of Directors and whose powers and authority include the power to call such
meetings or (iii) stockholders owning a majority of the capital stock of the
Corporation issued and outstanding and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting. At a Special Meeting of
Stockholders, only such business shall be conducted as shall be specified in the
notice of meeting (or any supplement thereto).
Section 4. Notice. Whenever stockholders are required or permitted to
take any action at a meeting, a written notice of the meeting shall be given
which shall state the place, date and hour of the meeting, and, in the case of a
special meeting, the purpose or purposes for which the meeting is called. Unless
otherwise required by law, the written notice of any meeting shall be given not
less than ten nor more than sixty days before the date of the meeting to each
stockholder entitled to vote at such meeting.
Section 5. Adjournments. Any meeting of the stockholders may be
adjourned from time to time to reconvene at the same or some other place, and
notice need not be given of any such adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At the
adjourned meeting, the Corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 6. Quorum. Unless otherwise required by law or the Certificate
of Incorporation, the holders of a majority of the capital stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business. A quorum, once established, shall not be broken by the
withdrawal of enough votes to leave less than a quorum. If, however, such quorum
shall not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, in the manner
provided in Section 5, until a quorum shall be present or represented.
Section 7. Voting. Unless otherwise required by law, the Certificate of
Incorporation or these By-laws, any question brought before any meeting of
stockholders, other than the election of directors, shall be decided by the
vote of the holders of a majority of the total number of votes of the capital
stock represented and entitled
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to vote thereat, voting as a single class. Unless otherwise provided in the
Certificate of Incorporation, and subject to Section 5 of Article V hereof,
each stockholder represented at a meeting of stockholders shall be entitled to
cast one vote for each share of the capital stock entitled to vote thereat held
by such stockholder. Such votes may be cast in person or by proxy but no proxy
shall be voted on or after three years from its date, unless such proxy provides
for a longer period. The Board of Directors, in its discretion, or the officer
of the Corporation presiding at a meeting of stockholders, in such officer's
discretion, may require that any votes cast at such meeting shall be cast by
written ballot.
Section 8. Consent of Stockholders in Lieu of Meeting. Unless otherwise
provided in the Certificate of Incorporation, any action required or permitted
to be taken at any Annual or Special Meeting of Stockholders of the Corporation
may be taken without a meeting, without prior notice and without a vote, if a
consent or consents in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the Corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. Delivery made to the Corporation's registered
office shall be by hand or by certified or registered mail, return receipt
requested. Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within sixty days of the
earliest dated consent delivered in the manner required by this Section 8 to the
Corporation, written consents signed by a sufficient number of holders to take
action are delivered to the Corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the Corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing and who, if the action
had been taken at a meeting, would have been entitled to notice of the meeting
if the record date for such meeting had been the date that written consents
signed by a sufficient number of holders to take the action were delivered to
the Corporation as provided above in this section.
Section 9. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing
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the address of each stockholder and the number of shares registered in the name
of each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected by any
stockholder of the Corporation who is present.
Section 10. Stock Ledger. The stock ledger of the Corporation shall be
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 9 of this Article II or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.
Section 11. Conduct of Meetings. The Board of Directors of the
Corporation may adopt by resolution such rules and regulations for the conduct
of the meeting of the stockholders as it shall deem appropriate. Except to the
extent inconsistent with such rules and regulations as adopted by the Board of
Directors, the chairman of any meeting of the stockholders shall have the right
and authority to prescribe such rules, regulations and procedures and to do all
such acts as, in the judgment of such chairman, are appropriate for the proper
conduct of the meeting. Such rules, regulations or procedures, whether adopted
by the Board of Directors or prescribed by the chairman of the meeting, may
include, without limitation, the following: (i) the establishment of an agenda
or order of business for the meeting; (ii) the determination of when the polls
shall open and close for any given matter to be voted on at the meeting; (iii)
rules and procedures for maintaining order at the meeting and the safety of
those present; (iv) limitations on attendance at or participation in the meeting
to stockholders of record of the corporation, their duly authorized and
constituted proxies or such other persons as the chairman of the meeting shall
determine; (v) restrictions on entry to the meeting after the time fixed for the
commencement thereof; and (vi) limitations on the time allotted to questions or
comments by participants.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The Board of Directors
shall consist of not less than one nor more than fifteen members, the exact
number of which shall initially be fixed by the Incorporator and thereafter from
time to time by the Board of Directors. Except as provided in Section 2 of this
Article III, directors shall
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be elected by a plurality of the votes cast at the Annual Meetings of
Stockholders and each director so elected shall hold office until the next
Annual Meeting of Stockholders and until such director's successor is duly
elected and qualified, or until such director's earlier death, resignation or
removal. Any director may resign at any time upon written notice to the
Corporation. Directors need not be stockholders.
Section 2. Vacancies. Unless otherwise required by law or the
Certificate of Incorporation, vacancies arising through death, resignation,
removal, an increase in the number of directors or otherwise may be filled only
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
the next Annual Meeting of Stockholders and until their successors are duly
elected and qualified, or until their earlier death, resignation or removal.
Section 3. Duties and Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of Directors
which may exercise all such powers of the Corporation and do all such lawful
acts and things as are not by statute or by the Certificate of Incorporation or
by these By-Laws required to be exercised or done by the stockholders.
Section 4. Meetings. The Board of Directors may hold meetings, both
regular and special, either within or without the State of Delaware. Regular
meetings of the Board of Directors may be held without notice at such time and
at such place as may from time to time be determined by the Board of Directors.
Special meetings of the Board of Directors may be called by the Chairman, if
there be one, the President, or by any director. Notice thereof stating the
place, date and hour of the meeting shall be given to each director either by
mail not less than forty-eight (48) hours before the date of the meeting, by
telephone or telegram on twenty-four (24) hours' notice, or on such shorter
notice as the person or persons calling such meeting may deem necessary or
appropriate in the circumstances.
Section 5. Quorum. Except as otherwise required by law or the
Certificate of Incorporation, at all meetings of the Board of Directors, a
majority of the entire Board of Directors shall constitute a quorum for the
transaction of business and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting of the time and
place of the adjourned meeting, until a quorum shall be present.
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Section 6. Actions by Written Consent. Unless otherwise provided in the
Certificate of Incorporation, or these By-Laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors or
committee.
Section 7. Meetings by Means of Conference Telephone. Unless otherwise
provided in the Certificate of Incorporation, members of the Board of Directors
of the Corporation, or any committee thereof, may participate in a meeting of
the Board of Directors or such committee by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to this
Section 7 shall constitute presence in person at such meeting.
Section 8. Committees. The Board of Directors may designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of any such committee. In the absence or disqualification
of a member of a committee, and in the absence of a designation by the Board of
Directors of an alternate member to replace the absent or disqualified member,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any absent or disqualified member. Any committee, to the
extent permitted by law and provided in the resolution establishing such
committee, shall have and may exercise all the powers and authority of the Board
of Directors in the management of the business and affairs of the Corporation,
and may authorize the seal of the Corporation to be affixed to all papers which
may require it. Each committee shall keep regular minutes and report to the
Board of Directors when required.
Section 9. Compensation. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as director, payable in cash or securities. No such payment shall
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
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Section 10. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers or have a financial interest, shall be void or voidable solely for this
reason, or solely because the director or officer is present at or participates
in the meeting of the Board of Directors or committee thereof which authorizes
the contract or transaction, or solely because the director or officer's vote is
counted for such purpose if (i) the material facts as to the director or
officer's relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and the Board
of Directors or committee in good faith authorizes the contract or transaction
by the affirmative votes of a majority of the disinterested directors, even
though the disinterested directors be less than a quorum; or (ii) the material
facts as to the director or officer's relationship or interest and as to the
contract or transaction are disclosed or are known to the stockholders entitled
to vote thereon, and the con tract or transaction is specifically approved in
good faith by vote of the stockholders; or (iii) the contract or transaction is
fair as to the Corporation as of the time it is authorized, approved or ratified
by the Board of Directors, a committee thereof or the stockholders. Common or
interested directors may be counted in determining the presence of a quorum at a
meeting of the Board of Directors or of a committee which authorizes the
contract or transaction.
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ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall include a President, a Secretary and a
Treasurer. The Board of Directors, in its discretion, also may choose a Chairman
of the Board of Directors (who must be a director) and one or more Vice
Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any
number of offices may be held by the same person, unless otherwise prohibited by
law or the Certificate of Incorporation. The officers of the Corporation need
not be stockholders of the Corporation nor, except in the case of the Chairman
of the Board of Directors, need such officers be directors of the Corporation.
Section 2. Election. The Board of Directors, at its first meeting held
after each Annual Meeting of Stockholders (or action by written consent of
stockholders in lieu of the Annual Meeting of Stockholders), shall elect the
officers of the Corporation who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Board of Directors; and all officers of the Corporation
shall hold office until their successors are chosen and qualified, or until
their earlier death, resignation or removal. Any officer elected by the Board of
Directors may be removed at any time by the affirmative vote of the Board of
Directors. Any vacancy occurring in any office of the Corporation shall be
filled by the Board of Directors. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors.
Section 3. Voting Securities Owned by the Corporation. Powers of
attorney, proxies, waivers of notice of meeting, consents and other instruments
relating to securities owned by the Corporation may be executed in the name of
and on behalf of the Corporation by the President or any Vice President or any
other officer authorized to do so by the Board of Directors and any such officer
may, in the name of and on behalf of the Corporation, take all such action as
any such officer may deem advisable to vote in person or by proxy at any meeting
of security holders of any corporation in which the Corporation may own
securities and at any such meeting shall possess and may exercise any and all
rights and power incident to the ownership of such securities and which, as the
owner thereof, the Corporation might have exercised and possessed if present.
The Board of Directors may, by resolution, from time to time confer like powers
upon any other person or persons.
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Section 4. Chairman of the Board of Directors. The Chairman of the
Board of Directors, if there be one, shall preside at all meetings of the
stockholders and of the Board of Directors. The Chairman of the Board of
Directors shall be the Chief Executive Officer of the Corporation, unless the
Board of Directors designates the President as the Chief Executive Officer, and,
except where by law the signature of the President is required, the Chairman of
the Board of Directors shall possess the same power as the President to sign all
contracts, certificates and other instruments of the Corporation which may be
authorized by the Board of Directors. During the absence or disability of the
President, the Chairman of the Board of Directors shall exercise all the powers
and discharge all the duties of the President. The Chairman of the Board of
Directors shall also perform such other duties and may exercise such other
powers as may from time to time be assigned by these By-Laws or by the Board of
Directors.
Section 5. President. The President shall, subject to the control of
the Board of Directors and, if there be one, the Chairman of the Board of
Directors, have general supervision of the business of the Corporation and shall
see that all orders and resolutions of the Board of Directors are carried into
effect. The President shall execute all bonds, mortgages, contracts and other
instruments of the Corporation requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except that the other officers of the Corporation may sign and
execute documents when so authorized by these By-Laws, the Board of Directors or
the President. In the absence or disability of the Chairman of the Board of
Directors, or if there be none, the President shall preside at all meetings of
the stockholders and the Board of Directors. If there be no Chairman of the
Board of Directors, or if the Board of Directors shall otherwise designate, the
President shall be the Chief Executive Officer of the Corporation. The President
shall also perform such other duties and may exercise such other powers as may
from time to time be assigned to such officer by these By-Laws or by the Board
of Directors.
Section 6. Vice Presidents. At the request of the President or in the
President's absence or in the event of the President's inability or refusal to
act (and if there be no Chairman of the Board of Directors), the Vice President,
or the Vice Presidents if there is more than one (in the order designated by the
Board of Directors), shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the President. Each Vice President shall perform such other duties and have such
other powers as the Board of Directors from time to time may prescribe. If there
be no Chairman of the Board of Directors and no Vice President, the Board of
Directors shall designate the officer of the Corporation who, in the absence of
the President or in the event of the inability or refusal of the
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President to act, shall perform the duties of the President, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
President.
Section 7. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for committees of the Board of
Directors when required. The Secretary shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors, the Chairman of the Board of Directors or the President, under
whose supervision the Secretary shall be. If the Secretary shall be unable or
shall refuse to cause to be given notice of all meetings of the stockholders and
special meetings of the Board of Directors, and if there be no Assistant
Secretary, then either the Board of Directors or the President may choose
another officer to cause such notice to be given. The Secretary shall have
custody of the seal of the Corporation and the Secretary or any Assistant
Secretary, if there be one, shall have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested by the signature
of the Secretary or by the signature of any such Assistant Secretary. The Board
of Directors may give general authority to any other officer to affix the seal
of the Corporation and to attest to the affixing by such officer's signature.
The Secretary shall see that all books, reports, statements, certificates and
other documents and records required by law to be kept or filed are properly
kept or filed, as the case may be.
Section 8. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all transactions as Treasurer and of the financial condition of the Corporation.
If required by the Board of Directors, the Treasurer shall give the Corporation
a bond in such sum and with such surety or sureties as shall be satisfactory to
the Board of Directors for the faithful performance of the duties of the office
of the Treasurer and for the restoration to the Corporation, in case of the
Treasurer's death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in the Treasurer's
possession or under the Treasurer's control belonging to the Corporation.
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Section 9. Assistant Secretaries. Assistant Secretaries, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Vice President,
if there be one, or the Secretary, and in the absence of the Secretary or in the
event of the Secretary's disability or refusal to act, shall perform the duties
of the Secretary, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the Secretary.
Section 10. Assistant Treasurers. Assistant Treasurers, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Vice President,
if there be one, or the Treasurer, and in the absence of the Treasurer or in the
event of the Treasurer's disability or refusal to act, shall perform the duties
of the Treasurer, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the Treasurer. If required by the Board of
Directors, an Assistant Treasurer shall give the Corporation a bond in such sum
and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of the office of Assistant
Treasurer and for the restoration to the Corporation, in case of the Assistant
Treasurer's death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in the Assistant
Treasurer's possession or under the Assistant Treasurer's control belonging to
the Corporation.
Section 11. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
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ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the Chairman of the Board of Directors, the President or a
Vice President and (ii) by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Corporation, certifying the number of
shares owned by such stockholder in the Corporation.
Section 2. Signatures. Any or all of the signatures on a certificate
may be a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if such person were such officer, transfer agent or registrar at the date of
issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or the owner's legal representative, to advertise the same in such
manner as the Board of Directors shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed or the issuance of such new certificate.
Section 4. Transfers. Stock of the Corporation shall be transferable in
the manner prescribed by law and in these By-Laws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by such person's attorney lawfully constituted in writing and upon the
surrender of the certificate therefor, which shall be cancelled before a new
certificate shall be issued. No transfer of stock shall be valid as against the
Corporation for any purpose until it shall have been entered in the stock
records of the Corporation by an entry showing from and to whom transferred.
Section 5. Record Date.
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(a) In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the board of directors may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which record date shall not be more
than sixty nor less than ten days before the date of such meeting. If no record
date is fixed by the Board of Directors, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; providing, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the Board
of Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which record date shall not be more than ten days after the date
upon which the resolution fixing the record date is adopted by the Board of
Directors. If no record date has been fixed by the Board of Directors, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in this State, its principal
place of business, or an officer or agent of the Corporation having custody of
the book in which proceedings of meetings of stockholders are recorded. Delivery
made to a corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board of Directors and prior action by the Board of Directors is required by
law, the record date for determining stockholders entitled to consent to
corporate action in writing without a meeting shall be at the close of business
on the day on which the Board of Directors adopts the resolutions taking such
prior action.
(c) In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than sixty days prior to such
action. If no record date is fixed, the record date
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for determining stockholders for any such purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
Section 6. Record Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise required by
law.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these By-Laws, to be given to any director,
member of a committee or stockholder, such notice may be given by mail,
addressed to such director, member of a committee or stockholder, at such
person's address as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the time when
the same shall be deposited in the United States mail. Written notice may also
be given personally or by telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law,
the Certificate of Incorporation or these By-Laws, to be given to any director,
member of a committee or stockholder, a waiver thereof in writing, signed, by
the person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto. Attendance of a person at a
meeting, present in person or represented by proxy, shall constitute a waiver of
notice of such meeting, except where the person attends the meeting for the
express purpose of objecting at the beginning of the meeting to the transaction
of any business because the meeting is not lawfully called or convened.
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ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the requirements of the DGCL and the provisions of the
Certificate of Incorporation, if any, may be declared by the Board of Directors
at any regular or special meeting of the Board of Directors (or any action by
written consent in lieu thereof in accordance with Section 6 of Article III
hereof), and may be paid in cash, in property, or in shares of the Corporation's
capital stock. Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the Board
of Directors from time to time, in its absolute discretion, deems proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for any proper
purpose, and the Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
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ARTICLE VIII
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings other
than those by or in the Right of the Corporation. Subject to Section 3 of this
Article VIII, the Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation) by
reason of the fact that such person is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director or officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such person's conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which such person reasonably believed to be in or not
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that such
person's conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in
the Right of the Corporation. Subject to Section 3 of this Article VIII, the
Corporation shall indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that such person is or was a director or officer of the Corporation, or is
or was a director or officer of the Corporation serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection with the defense or settlement of such action or suit
if such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Corporation;
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon
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application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
Section 3. Authorization of Indemnification. Any indemnification under
this Article VIII (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the circumstances
because such person has met the applicable standard of conduct set forth in
Section 1 or Section 2 of this Article VIII, as the case may be. Such
determination shall be made, with respect to a person who is a director or
officer at the time of such determination, (i) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even though
less than a quorum, or (ii) by a committee of such directors designated by a
majority vote of such directors, even though less than a quorum, or (iii) if
there are no such directors, or if such directors so direct, by independent
legal counsel in a written opinion or (iv) by the stockholders. Such
determination shall be made, with respect to former directors and officers, by
any person or persons having the authority to act on the matter on behalf of the
Corporation. To the extent, however, that a present or former director or
officer of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding described above, or in defense of any
claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection therewith, without the necessity of authorization in the
specific case.
Section 4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article VIII, a person shall be deemed to have acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the Corporation, or, with respect to any criminal action
or proceeding, to have had no reasonable cause to believe such person's conduct
was unlawful, if such person's action is based on the records or books of
account of the Corporation or another enterprise, or on information supplied to
such person by the officers of the Corporation or another enterprise in the
course of their duties, or on the advice of legal counsel for the Corporation or
another enterprise or on information or records given or reports made to the
Corporation or another enterprise by an independent certified public accountant
or by an appraiser or other expert selected with reasonable care by the
Corporation or another enterprise. The term "another enterprise" as used in this
Section 4 shall mean any other corporation or any partnership, joint venture,
trust, employee benefit plan or other enterprise of which such person is or was
serving at the request of the Corporation as a director, officer, employee or
agent. The provisions of this Section 4 shall not be deemed to be exclusive or
to limit in any way the circumstances in which a person may
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be deemed to have met the applicable standard of conduct set forth in Section 1
or 2 of this Article VIII, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article VIII, and
notwithstanding the absence of any determination thereunder, any director or
officer may apply to the Court of Chancery in the State of Delaware for
indemnification to the extent otherwise permissible under Sections 1 and 2 of
this Article VIII. The basis of such indemnification by a court shall be a
determination by such court that indemnification of the director or officer is
proper in the circumstances because such person has met the applicable standards
of conduct set forth in Section 1 or 2 of this Article VIII, as the case may be.
Neither a contrary determination in the specific case under Section 3 of this
Article VIII nor the absence of any determination thereunder shall be a defense
to such application or create a presumption that the director or officer seeking
indemnification has not met any applicable standard of conduct. Notice of any
application for indemnification pursuant to this Section 5 shall be given to the
Corporation promptly upon the filing of such application. If successful, in
whole or in part, the director or officer seeking indemnification shall also be
entitled to be paid the expense of prosecuting such application.
Section 6. Expenses Payable in Advance. Expenses incurred by a director
or officer in defending any civil, criminal, administrative or investigative
action, suit or proceeding shall be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation as authorized in this Article VIII.
Section 7. Nonexclusivity of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by or granted
pursuant to this Article VIII shall not be deemed exclusive of any other rights
to which those seeking indemnification or advancement of expenses may be
entitled under the Certificate of Incorporation, any By-Law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in another capacity while holding
such office, it being the policy of the Corporation that indemnification of the
persons specified in Sections 1 and 2 of this Article VIII shall be made to the
fullest extent permitted by law. The provisions of this Article VIII shall not
be deemed to preclude the indemnification of any person who is not specified in
Section 1 or 2 of this Article VIII but whom the Corporation has the power or
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obligation to indemnify under the provisions of the General Corporation Law of
the State of Delaware, or otherwise.
Section 8. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise against any liability asserted against such person and incurred
by such person in any such capacity, or arising out of such person's status as
such, whether or not the Corporation would have the power or the obligation to
indemnify such person against such liability under the provisions of this
Article VIII.
Section 9. Certain Definitions. For purposes of this Article VIII,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors or officers, so that any person who is or was a director or officer of
such constituent corporation, or is or was a director or officer of such
constituent corporation serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, shall stand in
the same position under the provisions of this Article VIII with respect to the
resulting or surviving corporation as such person would have with respect to
such constituent corporation if its separate existence had continued. For
purposes of this Article VIII, references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such director or officer with
respect to an employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner such person reasonably believed
to be in the interest of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to the best
interests of the Corporation" as referred to in this Article VIII.
Section 10. Survival of Indemnification and Advancement of Expenses.
The indemnification and advancement of expenses provided by, or granted pursuant
to, this Article VIII shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
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Section 11. Limitation on Indemnification. Notwithstanding anything
contained in this Article VIII to the contrary, except for proceedings to
enforce rights to indemnification (which shall be governed by Section 5 hereof),
the Corporation shall not be obligated to indemnify any director or officer in
connection with a proceeding (or part thereof) initiated by such person unless
such proceeding (or part thereof) was authorized or consented to by the Board of
Directors of the Corporation.
Section 12. Indemnification of Employees and Agents. The Corporation
may, to the extent authorized from time to time by the Board of Directors,
provide rights to indemnification and to the advancement of expenses to
employees and agents of the Corporation similar to those conferred in this
Article VIII to directors and officers of the Corporation.
ARTICLE IX
AMENDMENTS
Section 1. Amendments. These By-Laws may be altered, amended or
repealed, in whole or in part, or new By-Laws may be adopted by the stockholders
or by the Board of Directors, provided, however, that notice of such alteration,
amendment, repeal or adoption of new By-Laws be contained in the notice of such
meeting of stockholders or Board of Directors as the case may be. All such
amendments must be approved by either the holders of a majority of the
outstanding capital stock entitled to vote thereon or by a majority of the
entire Board of Directors then in office.
Section 2. Entire Board of Directors. As used in this Article IX and in
these By-Laws generally, the term "entire Board of Directors" means the total
number of directors which the Corporation would have if there were no vacancies.
* * *
Adopted as of: _____________________
Last Amended as of: ________________
110
EXHIBIT E
DESIGNATED OFFICERS
OF
DAIMLER-BENZ AG AND CHRYSLER CORPORATION
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxx
Xxxxxxx Xxxxx Xxxxxx X. Xxxxxxxxx
Xxxxxxx Xxxxxx Xxxx X. Xxxxxx
Xxxxxx Xxxxxxx Xxxxxxx X. Xxxxxxxxxx
Xxxxxxx Xxxxxxxx Xxxxxx X. Xxxx
Xxxx Xxxx Xxxxx X. Xxxxxx
Xxxxx Xxxxxxx Xxxxxx X. Xxxxxx
Xxxxxx Xxxxxxxxxx Xxxxxx X. Xxxxxx
Xxxxx-Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxx
