1
Exhibit 2.1
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
BETWEEN
MOTIVEPOWER INDUSTRIES, INC.
AND
WESTINGHOUSE AIR BRAKE COMPANY
DATED AS OF SEPTEMBER 26, 1999
2
TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER
PAGE
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ARTICLE I
THE MERGER
Section 1.1. The Merger..........................................................................................2
Section 1.2. Effective Time......................................................................................2
Section 1.3. Effects of the Merger...............................................................................3
Section 1.4. Charter and By-Laws; Board of Directors; Management Succession......................................3
Section 1.5. Conversion of Securities............................................................................3
Section 1.6. WABCO to Make Certificates Available................................................................4
Section 1.7. Dividends; Transfer Taxes; Withholding..............................................................4
Section 1.8. No Fractional Securities............................................................................5
Section 1.9. Return of Exchange Fund.............................................................................6
Section 1.10. No Further Ownership Rights in MotivePower Common Stock.............................................6
Section 1.11. Closing of MotivePower Transfer Books...............................................................6
Section 1.12. Lost Certificates...................................................................................6
Section 1.13. Further Assurances..................................................................................6
Section 1.14. Closing.............................................................................................7
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF WABCO
Section 2.1. Corporate Organization..............................................................................7
Section 2.2. Capitalization......................................................................................8
Section 2.3. Authority; No Violation.............................................................................9
Section 2.4. Consents and Approvals.............................................................................10
Section 2.5. SEC Documents and Other Reports....................................................................10
Section 2.6. Registration Statement and Joint Proxy Statement...................................................11
Section 2.7. Absence of Certain Changes or Events...............................................................11
Section 2.8. Permits and Compliance.............................................................................12
Section 2.9. Tax Matters........................................................................................12
Section 2.10. Actions and Proceedings............................................................................13
Section 2.11. Certain Agreements.................................................................................14
Section 2.12. ERISA..............................................................................................14
Section 2.13. Labor Matters......................................................................................16
Section 2.14. Intellectual Property; Year 2000 Compliance........................................................16
Section 2.15. Environmental and Safety Matters...................................................................17
Section 2.16. Insurance..........................................................................................18
Section 2.17. Parachute Payments to Disqualified Individuals.....................................................18
Section 2.18. Required Vote of WABCO Stockholders................................................................19
Section 2.19. State Takeover Laws................................................................................19
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PAGE
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Section 2.20. Pooling of Interests; Reorganization...............................................................19
Section 2.21. Opinion of Financial Advisor.......................................................................19
Section 2.22. Broker's Fees......................................................................................19
Section 2.23. Unlawful Payments and Contributions................................................................19
Section 2.24. Real Property......................................................................................20
Section 2.25. Material Contracts.................................................................................20
Section 2.26. Warranties.........................................................................................21
Section 2.27. Pooling Letter.....................................................................................21
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF MOTIVEPOWER
Section 3.1. Corporate Organization.............................................................................22
Section 3.2. Capitalization.....................................................................................22
Section 3.3. Authority; No Violation............................................................................23
Section 3.4. Consents and Approvals.............................................................................24
Section 3.5. SEC Documents and Other Reports....................................................................24
Section 3.6. Registration Statement and Joint Proxy Statement...................................................25
Section 3.7. Absence of Certain Changes or Events...............................................................25
Section 3.8. Permits and Compliance.............................................................................26
Section 3.9. Tax Matters........................................................................................26
Section 3.10. Actions and Proceedings............................................................................27
Section 3.11. Certain Agreements.................................................................................27
Section 3.12. ERISA..............................................................................................28
Section 3.13. Labor Matters......................................................................................30
Section 3.14. Intellectual Property; Year 2000 Compliance........................................................30
Section 3.15. Environmental and Safety Matters...................................................................31
Section 3.16. Insurance..........................................................................................32
Section 3.17. Parachute Payments to Disqualified Individuals.....................................................32
Section 3.18. Required Vote of MotivePower Stockholders..........................................................32
Section 3.19. State Takeover Laws: Certain Charter Provisions....................................................32
Section 3.20. Pooling of Interests; Reorganization...............................................................32
Section 3.21. Opinion of Financial Advisor.......................................................................32
Section 3.22. Broker's Fees......................................................................................33
Section 3.23. MotivePower Rights Agreement; Other Matters........................................................33
Section 3.24. Unlawful Payments and Contributions................................................................33
Section 3.25. Real Property......................................................................................33
Section 3.26. Material Contracts.................................................................................34
Section 3.27. Warranties.........................................................................................35
Section 3.28. Pooling Letter.....................................................................................35
ARTICLE IV
CONDUCT OF BUSINESS
Section 4.1. Conduct of WABCO...................................................................................35
Section 4.2. Conduct of MotivePower.............................................................................38
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PAGE
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ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1. No Solicitation....................................................................................40
Section 5.2. Joint Proxy Statement; Registration Statement......................................................42
Section 5.3. Shareholders Meetings..............................................................................43
Section 5.4. Access to Information..............................................................................44
Section 5.5. Notices of Certain Events..........................................................................44
Section 5.6. Appropriate Action; Consents; Filings..............................................................45
Section 5.7. Public Disclosure..................................................................................47
Section 5.8. Reorganization.....................................................................................47
Section 5.9. Comfort Letters....................................................................................47
Section 5.10. Compliance with the Securities Act and Pooling of Interests Restrictions...........................48
Section 5.11. Listing or Quotation of Stock......................................................................48
Section 5.12. Indemnification of Directors and Officers..........................................................49
Section 5.13. MotivePower Stock Options..........................................................................49
Section 5.14. Benefit Plans to be Honored........................................................................50
Section 5.15. State Takeover Laws................................................................................50
Section 5.17. Transfer Taxes.....................................................................................51
ARTICLE VI
CONDITIONS TO MERGER
Section 6.1. Conditions to Each Party's Obligations.............................................................51
Section 6.2. Additional Conditions to Obligations of MotivePower................................................52
Section 6.3. Additional Conditions to Obligations of WABCO......................................................53
ARTICLE VII
TERMINATION
Section 7.1. Termination........................................................................................54
Section 7.2. Effect of Termination..............................................................................56
Section 7.3. Fees and Expenses..................................................................................57
Section 7.4. Amendment..........................................................................................58
Section 7.5. Extension; Waiver..................................................................................58
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Nonsurvival of Representations, Warranties and Agreements..........................................58
Section 8.2. Notices............................................................................................59
Section 8.3. Interpretation.....................................................................................60
Section 8.4. Counterparts.......................................................................................60
Section 8.5. Entire Agreement; No Third Party Beneficiaries.....................................................60
Section 8.6. Governing Law......................................................................................60
Section 8.7. Assignment.........................................................................................61
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TABLE OF DEFINED TERMS
Term Section
---- -------
Affected Employees 5.14(b)
Agreement Preamble
Antitrust Laws 5.6(b)
Articles of Merger 1.2
Business Unit 5.6(b)
Certificate of Merger 1.2
Certificates 1.6(b)
Closing 1.14
Code Recitals
Computer Systems 2.14(b)
Confidentiality Agreement 5.4
Constituent Corporations Preamble
DGCL 1.1
Draft Letter 3.28
Effective Time 1.2
End Date 7.1(b)
Environmental Laws 2.15(a)
ERISA 2.12(a)
ERISA Affiliate 2.12(d)(iii)
ESPP 2.2(a)
Exchange Act 2.5
Exchange Agent 1.6(a)
Exchange Fund 1.6(a)
Exchange Ratio 1.5(b)
GAAP 2.5
Governmental Entity 2.4
HSR Act 2.4
Indemnified Parties 5.12(a)
Intellectual Property Rights 2.14(a)
IRS 2.9
Joint Proxy Statement 2.4
Knowledge of MotivePower 3.8
Knowledge of WABCO 2.8
Liens 2.2(b)
Material Adverse Effect 2.1(a)
Material Agreement 2.3(b)
MotivePower Preamble
MotivePower Articles of Incorporation 3.1(a)
MotivePower Common Stock Recitals
MotivePower Director Option Plan 3.2(a)
MotivePower Disclosure Letter Article III
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MotivePower Ex-U.S. Pension Plan 3.12(e)
MotivePower Fees and Expenses 7.3(b)
MotivePower Leased Property 3.25(b)
MotivePower Leases 3.25(b)
MotivePower Material Contracts 3.26
MotivePower Multiemployer Plan 3.12(d)(ii)
MotivePower Option Agreement Recitals
MotivePower Option Plan 3.2(a)
MotivePower Owned Real Property 3.25(a)
MotivePower Permits 3.8
MotivePower Plan 3.12(d)(i)
MotivePower Preferred Stock 3.2(a)
MotivePower Real Property 3.25(b)
MotivePower Rights 3.2(a)
MotivePower Rights Agreement 3.2(a)
MotivePower SAK 3.2
MotivePower Shareholders Meeting 5.3
MotivePower SEC Documents 3.5
MotivePower Series C Preferred Stock 3.2(a)
MotivePower Stock Account 5.13
MotivePower Stock Plans 3.2(a)
MotivePower Tax Certificate 5.8
Merger Recitals
NYSE 1.8
1995 Director Option Plan 2.2(a)
1995 Option Plan 2.2(a)
PBCL 1.1
Permits 2.8
Person 4.1(c)
Registration Statement 2.4
SEC 2.4
Securities Act 2.1(a)
Shareholders Meetings 5.3
Significant Proposal 5.1(a)
State and Foreign Approvals 2.4
Subsidiary 2.1(a)
Substitute Option 5.13
Substitute SAR 5.13
Substitute Stock Account 5.13
Superior Proposal 5.1(a)
Surviving Corporation 1.1
Takeover Proposal 5.1(a)
Tax Return 2.9
Taxes 2.9
Vestar 5.10(c)
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Voting Trust 5.10(c)
wholly-owned Subsidiary 2.1(a)
WABCO Preamble
WABCO Certificate of Incorporation 2.1(a)
WABCO Common Stock Recitals
WABCO Disclosure Letter Article II
WABCO Employee Stock Ownership Trust 3.23
WABCO Ex-U.S. Pension Plan 2.12(e)
WABCO Leased Property 2.24(b)
WABCO Leases 2.24(b)
WABCO Material Contracts 2.25
WABCO Multiemployer Plan 2.12(d)(ii)
WABCO Option Agreement Recitals
WABCO Owned Property 2.24(a)
WABCO Permits 2.8
WABCO Plan 2.12(d)(i)
WABCO Preferred Stock 2.2(a)
WABCO Real Property 2.24(b)
WABCO SEC Documents 2.5
WABCO Stock Options 2.2(a)
WABCO Stock Plans 2.2(a)
WABCO Stockholders Meeting 5.3
WABCO Tax Certificate 5.8
Worker Safety Laws 2.15(a)
Year 2000 Compliant 2.14(b)
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AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER,
dated as of September 26, 1999 (this "Agreement"), between MotivePower
Industries, Inc., a Pennsylvania corporation ("MotivePower"), and Westinghouse
Air Brake Company, a Delaware corporation ("WABCO") (MotivePower and WABCO being
hereinafter collectively referred to as the "Constituent Corporations").
W I T N E S S E T H:
WHEREAS, MotivePower and WABCO are parties to that certain
Agreement and Plan of Merger dated June 2, 1999, as amended as of July 19, 1999
(as so amended, the "Original Merger Agreement");
WHEREAS, MotivePower and WABCO wish to amend the Original
Merger Agreement to provide for the merger of MotivePower with and into WABCO
(the "Merger"), upon the terms and subject to the conditions set forth herein,
whereby each issued and outstanding share of Common Stock, par value $.01 per
share, of MotivePower ("MotivePower Common Stock"), together with any associated
MotivePower Right (as defined in Section 3.2(a)), not owned directly or
indirectly by MotivePower or WABCO will be converted into shares of Common
Stock, par value $.01 per share, of WABCO ("WABCO Common Stock");
WHEREAS, the respective Boards of Directors of MotivePower and
WABCO have approved and declared advisable the Merger, upon the terms and
subject to the conditions set forth herein;
WHEREAS, the respective Boards of Directors of MotivePower and
WABCO have determined that the Merger is in furtherance of and consistent with
their respective long-term business strategies and is in the best interest of
their respective stockholders;
WHEREAS, as a condition and inducement to WABCO entering into
this Agreement and incurring the obligations set forth herein, concurrently with
the execution and delivery of this Agreement, WABCO and MotivePower are entering
into the Amended and Restated MotivePower Stock Option Agreement (the
"MotivePower Option Agreement") pursuant to which MotivePower has granted WABCO
an option, exercisable under the circumstances specified therein, to purchase
shares of MotivePower Common Stock;
WHEREAS, as a condition and inducement to MotivePower entering
into this Agreement and incurring the obligations set forth herein, concurrently
with the execution and delivery of this Agreement, WABCO and MotivePower are
entering into the Amended and
9
Restated WABCO Stock Option Agreement (the "WABCO Option Agreement") pursuant to
which WABCO has granted MotivePower an option, exercisable under the
circumstances specified therein, to purchase shares of WABCO Common Stock;
WHEREAS, concurrently with the execution hereof, in order to
induce MotivePower to enter into this Agreement, MotivePower is entering into a
Voting Agreement (the "Voting Agreement") with Xxxxxxx X. Xxxxxxxx, Xxxxxx X.
Xxxxxx, Harvard Private Capital Holdings, Inc., a Massachusetts corporation, and
Vestar Equity Partners, L.P., a Delaware limited partnership (collectively, the
"Principal Shareholders") providing for certain voting and other restrictions
with respect to the shares of WABCO Common Stock beneficially owned by the
Principal Shareholders upon the terms and conditions specified therein;
WHEREAS, concurrently with the execution hereof, in order to
induce WABCO to enter into this Agreement, WABCO is entering into a Voting
Agreement with Xxxx X. Xxxx providing for certain voting and other restrictions
with respect to the shares of MotivePower Common Stock beneficially owned by
Xxxx X. Xxxx upon the terms and conditions specified therein;
WHEREAS, for federal income tax purposes, it is intended that
the Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, it is intended that the Merger shall be recorded for
accounting purposes as a pooling of interests.
NOW, THEREFORE, in consideration of the premises,
representations, warranties and agreements herein contained, the parties agree
as follows:
ARTICLE I
THE MERGER
Section 1.1. The Merger. Upon the terms and subject to the
conditions hereof, and in accordance with the Pennsylvania Business Corporation
Law (the "PBCL") and the Delaware General Corporation Law (the "DGCL"),
MotivePower shall be merged with and into WABCO at the Effective Time (as
defined in Section 1.2). Following the Merger, the separate corporate existence
of MotivePower shall cease and WABCO shall continue as the surviving corporation
(the "Surviving Corporation") and shall succeed to and assume all the rights and
obligations of MotivePower in accordance with the PBCL and the DGCL.
Section 1.2. Effective Time. As soon as practicable following
the Closing (as defined in Section 1.14), MotivePower and WABCO will cause
Articles of Merger (the "Articles of Merger"), executed in accordance with the
relevant provisions of the PBCL, to be filed with the Department of State of the
Commonwealth Pennsylvania and a Certificate of
10
Merger (the "Certificate of Merger"), executed in accordance with the relevant
provisions of the DGCL, to be filed with the Secretary of State of Delaware. The
Merger shall become effective on the date and at the time when the last of the
following actions shall have been completed: (i) the Articles of Merger have
been duly filed with the Department of State of the Commonwealth of Pennsylvania
and (ii) the Certificate of Merger has been duly filed with the Secretary of
State of Delaware (the "Effective Time").
Section 1.3. Effects of the Merger. The Merger shall have the
effects set forth in Section 1929 of the PBCL and Section 259 of the DGCL.
Section 1.4. Charter and By-Laws; Board of Directors;
Management Succession. (a) At the Effective Time, the Certificate of
Incorporation of WABCO, as in effect immediately prior to the Effective Time
shall be the Certificate of Incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law. At the
Effective Time, the By-Laws of WABCO shall be amended and restated in their
entirety as set forth in Exhibit 1.4(b) and such By-Laws, as so amended and
restated, shall be the By-Laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by the Certificate of Incorporation.
(b) From and after the Effective Time, until duly changed in
compliance with applicable law and the Certificate of Incorporation and By-Laws
of the Surviving Corporation, the Board of Directors of the Surviving
Corporation shall consist of the persons listed on Exhibit 1.4(c).
(c) At the Effective Time, Xx. Xxxxxxx X. Xxxxxxxx shall be
the Chairman and Chief Executive Officer of the Surviving Corporation. The other
officers of the Surviving Corporation shall include those persons listed on
Exhibit 1.4(d) who shall hold the office set forth opposite their respective
name.
Section 1.5. Conversion of Securities. As of the Effective
Time, by virtue of the Merger and without any action on the part of WABCO,
MotivePower or the holders of any securities of the Constituent Corporations:
(a) All shares of MotivePower Common Stock, together with any
associated MotivePower Rights, that are held in the treasury of
MotivePower or by any wholly-owned Subsidiary of MotivePower and any
shares of MotivePower Common Stock, together with any associated
MotivePower Rights, owned by WABCO or by any wholly-owned Subsidiary of
WABCO shall be cancelled and no capital stock of WABCO or other
consideration shall be delivered in exchange therefor.
(b) Subject to the provisions of Sections 1.8 and 1.10 hereof,
each share of MotivePower Common Stock, together with any MotivePower
Right, issued and outstanding immediately prior to the Effective Time
(other than shares and any associated Rights to be cancelled in
accordance with Section 1.5(a)) shall be converted into .66 (such
number being the "Exchange Ratio") validly issued, fully paid and
11
nonassessable shares of WABCO Common Stock. All such shares and any
associated Rights of MotivePower Common Stock, when so converted, shall
no longer be outstanding and shall automatically be cancelled and
retired and each holder of a certificate representing any such shares
shall cease to have any rights with respect thereto, except the right
to receive any dividends and other distributions in accordance with
Section 1.7, certificates representing the shares of WABCO Common Stock
into which such shares are converted and any cash, without interest, in
lieu of fractional shares to be issued or paid in consideration
therefor upon the surrender of such certificate in accordance with
Section 1.6.
(c) All MotivePower Stock Options (as defined in Section
2.2(a)) outstanding at the Effective Time shall become options to
purchase WABCO Common Stock pursuant to Section 5.13.
Section 1.6. WABCO to Make Certificates Available. (a)
Exchange of Certificates. WABCO shall authorize ChaseMellon Shareholder
Services, L.L.C. (or such other person or persons as shall be reasonably
acceptable to WABCO and MotivePower) to act as Exchange Agent hereunder (the
"Exchange Agent"). As soon as practicable after the Effective Time, WABCO shall
deposit with the Exchange Agent, in trust for the holders of shares of
MotivePower Common Stock converted in the Merger, certificates representing the
shares of WABCO Common Stock issuable pursuant to Section 1.5(b) in exchange for
outstanding shares of MotivePower Common Stock and cash, as required to make
payments in lieu of any fractional shares pursuant to Section 1.8 (such cash and
shares of WABCO Common Stock, together with any dividends or distributions with
respect thereto, being hereinafter referred to as the "Exchange Fund"). The
Exchange Agent shall deliver the WABCO Common Stock contemplated to be issued
pursuant to Section 1.5(b) out of the Exchange Fund.
(b) Exchange Procedures. As soon as practicable after the
Effective Time, the Exchange Agent shall mail to each record holder of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of MotivePower Common Stock converted in the
Merger (the "Certificates") a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon actual delivery of the Certificates to the Exchange Agent, and
shall contain instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing shares of WABCO Common
Stock and cash in lieu of fractional shares). Upon surrender for cancellation to
the Exchange Agent of all Certificates held by any record holder of a
Certificate, together with such letter of transmittal, duly executed, the holder
of such Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of WABCO Common Stock into
which the shares represented by the surrendered Certificate shall have been
converted at the Effective Time pursuant to this Article I, cash in lieu of any
fractional share in accordance with Section 1.8 and certain dividends and other
distributions in accordance with Section 1.7, and any Certificate so surrendered
shall forthwith be cancelled.
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Section 1.7. Dividends; Transfer Taxes; Withholding. No
dividends or other distributions that are declared on or after the Effective
Time on WABCO Common Stock, or are payable to the holders of record thereof on
or after the Effective Time, will be paid to any person entitled by reason of
the Merger to receive a certificate representing WABCO Common Stock until such
person surrenders the related Certificate or Certificates, as provided in
Section 1.6, and no cash payment in lieu of fractional shares will be paid to
any such person pursuant to Section 1.8 until such person shall so surrender the
related Certificate or Certificates. Subject to the effect of applicable law,
there shall be paid to each record holder of a new certificate representing such
WABCO Common Stock: (i) at the time of such surrender or as promptly as
practicable thereafter, the amount of any dividends or other distributions
theretofore paid with respect to the shares of WABCO Common Stock represented by
such new certificate and having a record date on or after the Effective Time and
a payment date prior to such surrender; (ii) at the appropriate payment date or
as promptly as practicable thereafter, the amount of any dividends or other
distributions payable with respect to such shares of WABCO Common Stock and
having a record date on or after the Effective Time but prior to such surrender
and a payment date on or subsequent to such surrender; and (iii) at the time of
such surrender or as promptly as practicable thereafter, the amount of any cash
payable with respect to a fractional share of WABCO Common Stock to which such
holder is entitled pursuant to Section 1.8. In no event shall the person
entitled to receive such dividends or other distributions be entitled to receive
interest on such dividends or other distributions. If any cash or certificate
representing shares of WABCO Common Stock is to be paid to or issued in a name
other than that in which the Certificate surrendered in exchange therefor is
registered, it shall be a condition of such exchange that the Certificate so
surrendered shall be properly endorsed and otherwise in proper form for transfer
and that the person requesting such exchange shall pay to the Exchange Agent any
transfer or other taxes required by reason of the issuance of certificates for
such shares of WABCO Common Stock in a name other than that of the registered
holder of the Certificate surrendered, or shall establish to the satisfaction of
the Exchange Agent that such tax has been paid or is not applicable. WABCO or
the Exchange Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement such amounts as WABCO
or the Exchange Agent is required to deduct and withhold with respect to the
making of such payment under the Code or under any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by WABCO or the
Exchange Agent and paid to the appropriate authority, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
person in respect of which such deduction and withholding was made by WABCO or
the Exchange Agent.
Section 1.8. No Fractional Securities. No certificates or
scrip representing fractional shares of WABCO Common Stock shall be issued upon
the surrender for exchange of Certificates pursuant to this Article I, and no
WABCO dividend or other distribution or stock split shall relate to any
fractional share, and no fractional share shall entitle the owner thereof to
vote or to any other rights of a security holder of WABCO. In lieu of any such
fractional share, each holder of MotivePower Common Stock who would otherwise
have been entitled to a fraction of a share of WABCO Common Stock upon surrender
of Certificates for exchange pursuant to this Article I will be paid an amount
in cash (without interest), rounded
13
to the nearest cent, determined by multiplying (i) the per share closing price
on the New York Stock Exchange (the "NYSE") of WABCO Common Stock (as reported
in the NYSE Composite Transactions) on the date of the Effective Time (or, if
the shares of WABCO Common Stock do not trade on the NYSE on such date, the
first date of trading of shares of WABCO Common Stock on the NYSE after the
Effective Time) by (ii) the fractional interest to which such holder would
otherwise be entitled. As promptly as practicable after the determination of the
amount of cash, if any, to be paid to holders of fractional share interests, the
Exchange Agent shall so notify WABCO, and WABCO shall deposit such amount with
the Exchange Agent and shall cause the Exchange Agent to forward payments to
such holders of fractional share interests subject to and in accordance with the
terms of Section 1.7 and this Section 1.8.
Section 1.9. Return of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the former stockholders of
MotivePower for six months after the Effective Time shall be delivered to WABCO,
upon demand of WABCO, and any such former stockholders who have not theretofore
complied with this Article I shall thereafter look only to WABCO for payment of
their claim for WABCO Common Stock, any cash in lieu of fractional shares of
WABCO Common Stock and any dividends or distributions with respect to WABCO
Common Stock. WABCO shall not be liable to any former holder of MotivePower
Common Stock for any such shares of WABCO Common Stock, cash and dividends and
distributions held in the Exchange Fund which is delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
Section 1.10. No Further Ownership Rights in MotivePower
Common Stock. All shares of WABCO Common Stock issued upon the surrender for
exchange of Certificates in accordance with the terms hereof (including any cash
paid pursuant to Section 1.8) shall be deemed to have been issued in full
satisfaction of all rights pertaining to the shares of MotivePower Common Stock
represented by such Certificates.
Section 1.11. Closing of MotivePower Transfer Books. At the
Effective Time, the stock transfer books of MotivePower shall be closed and no
transfer of shares of MotivePower Common Stock shall thereafter be made on the
records of MotivePower. If, after the Effective Time, Certificates are presented
to the Surviving Corporation, the Exchange Agent or WABCO, such Certificates
shall be cancelled and exchanged as provided in this Article I.
Section 1.12. Lost Certificates. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such Certificate to be lost, stolen or destroyed and, if
required by WABCO or the Exchange Agent, the posting by such person of a bond,
in such reasonable amount as WABCO or the Exchange Agent may direct as indemnity
against any claim that may be made against them with respect to such
Certificate, the Exchange Agent will issue in exchange for such lost, stolen or
destroyed Certificate the shares of WABCO Common Stock, any cash in lieu of
fractional shares of WABCO Common Stock to which the holders thereof are
entitled pursuant to Section 1.8 and any dividends or other distributions to
which the holders thereof are entitled pursuant to Section 1.7.
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Section 1.13. Further Assurances. If at any time after the
Effective Time the Surviving Corporation shall consider or be advised that any
deeds, bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties, permits,
licenses or assets of either of the Constituent Corporations, or (b) otherwise
to carry out the purposes of this Agreement, the Surviving Corporation and its
proper officers and directors or their designees shall be authorized to execute
and deliver, in the name and on behalf of either of the Constituent
Corporations, all such deeds, bills of sale, assignments and assurances and to
do, in the name and on behalf of either Constituent Corporation, all such other
acts and things as may be necessary, desirable or proper to vest, perfect or
confirm the Surviving Corporation's right, title or interest in, to or under any
of the rights, privileges, powers, franchises, properties or assets of such
Constituent Corporation and otherwise to carry out the purposes of this
Agreement.
Section 1.14. Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") and all actions specified in this
Agreement to occur at the Closing shall take place at the offices of Doepken
Keevican & Xxxxx, 58th Floor, USX Tower, 000 Xxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxx, at 10:00 a.m., local time, no later than the second business day
following the day on which the last of the conditions set forth in Article VI
shall have been fulfilled or waived (if permissible) or at such other time and
place as WABCO and MotivePower shall agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF WABCO
Except as disclosed in the letter delivered to MotivePower
concurrently herewith and designated therein as the WABCO Disclosure Letter (the
"WABCO Disclosure Letter"), in each case with specific reference to the Section
to which exception is taken, WABCO hereby represents and warrants to MotivePower
as follows:
Section 2.1. Corporate Organization. (a) WABCO is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. WABCO has the corporate power and authority to own or
lease all of its properties and assets and to carry on its business as it is now
being conducted, and is duly licensed or qualified to do business in each
jurisdiction in which the nature of the business conducted by it or the
character or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure to be so
licensed or qualified would not have a Material Adverse Effect on WABCO. As used
in this Agreement, the term "Material Adverse Effect" means, with respect to
MotivePower or WABCO, as the case may be, a material adverse effect on (i) the
business, operations, results of operations or financial condition of such party
and its Subsidiaries taken as a whole or (ii) the ability of such party to
consummate the transactions contemplated hereby, except to the extent (w)
resulting from any
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changes in general United States or global economic conditions, (x) resulting
from any changes affecting the railroad equipment and parts industry in general,
(y) resulting from matters disclosed in Section 3.1 of the MotivePower
Disclosure Letter (as hereinafter defined), or (z) as contemplated by the joint
press release issued by WABCO and MotivePower on August 18, 1999. As used in
this Agreement, the word "Subsidiary" means any corporation, partnership,
limited liability company, joint venture or other legal entity of which
MotivePower or WABCO, as the case may be (either alone or through or together
with any other Subsidiary), (i) owns, directly or indirectly, 50% or more of the
stock or other equity interests the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of such
corporation, partnership, limited liability company, joint venture or other
legal entity, (ii) is a general partner, trustee or other entity or person
performing similar functions or (iii) has control (as defined in Rule 405 under
the Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the "Securities Act")). For all purposes of this
Agreement, a "wholly-owned Subsidiary" shall be deemed to include those entities
which, for regulatory or other local law purposes, have issued nominal ownership
interests to persons other than WABCO or MotivePower or their respective
Subsidiaries. True and complete copies of the Restated Certificate of
Incorporation (the "WABCO Certificate of Incorporation") and Amended and
Restated By-Laws of WABCO, as in effect as of the date of this Agreement, have
previously been made available by WABCO to MotivePower.
(b) Each WABCO Subsidiary (i) is duly organized and validly
existing under the laws of its jurisdiction of organization, (ii) is duly
qualified to do business and in good standing in all jurisdictions (whether
federal, state, local or foreign) where its ownership or leasing of property or
the conduct of its business requires it to be so qualified and in which the
failure to be so qualified would have a Material Adverse Effect on WABCO and
(iii) has all requisite corporate power and authority to own or lease its
properties and assets and to carry on its business as now conducted.
(c) The minute books of WABCO accurately reflect in all
material respects all material corporate actions held or taken since January 1,
1997 of its stockholders and Board of Directors (including committees of the
Board of Directors of WABCO).
Section 2.2. Capitalization. (a) The authorized capital stock
of WABCO consists of (i) 100,000,000 shares of WABCO Common Stock, of which, as
of May 27, 1999, 33,966,897 shares were issued and outstanding and 13,459,703
shares were held in treasury, and (ii) 1,000,000 shares of Preferred Stock, par
value $.01 per share, of WABCO (the "WABCO Preferred Stock"), none of which, as
of the date hereof, were designated, issued and outstanding. All of the issued
and outstanding shares of WABCO Common Stock have been duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive rights,
with no personal liability attaching to the ownership thereof. As of the date of
this Agreement, except pursuant to the terms of options issued pursuant to the
WABCO 1995 Stock Incentive Plan, as amended (the "1995 Option Plan"), or the
1995 Non-Employee Directors' Fee and Stock Option Plan (the "1995 Director
Option Plan" and, together with the 1995 Option Plan, the "WABCO Stock Plans")
and except as contemplated hereby, WABCO
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does not have and is not bound by any outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character calling for the
purchase or issuance of any shares of WABCO Common Stock or any other equity
securities of WABCO or any securities representing the right to purchase or
otherwise receive any shares of WABCO Common Stock or WABCO Preferred Stock. As
of the date of this Agreement, no shares of WABCO Common Stock or WABCO
Preferred Stock are reserved for issuance, except for 4,800,000 shares of WABCO
Common Stock reserved for issuance upon exercise of stock options granted
pursuant to the WABCO Stock Plans (the "WABCO Stock Options") and 500,000 shares
of WABCO Common Stock reserved for issuance in connection with the WABCO 1998
Employee Stock Purchase Plan (the "ESPP"). Since December 31, 1998, WABCO has
not issued any shares of its capital stock or any securities convertible into or
exercisable for any shares of its capital stock, other than pursuant to the ESPP
and the exercise of WABCO Stock Options granted prior to such date. WABCO has
previously provided MotivePower with a list of the option holders, the date of
each option to purchase WABCO Common Stock granted, the number of shares subject
to each such option, the expiration date of each such option, and the price at
which each such option may be exercised under an applicable WABCO Stock Plan. In
no event will the aggregate number of shares of WABCO Common Stock outstanding
at the Effective Time exceed the number specified in Section 2.2(a) of the WABCO
Disclosure Letter.
(b) WABCO owns, directly or indirectly, all of the issued and
outstanding shares of capital stock or other equity ownership interests of each
of the WABCO Subsidiaries as set forth in Section 2.2(b) of the WABCO Disclosure
Letter, free and clear of any liens, pledges, charges, encumbrances and security
interests whatsoever ("Liens") other than as set forth in Section 2.2(b) of the
WABCO Disclosure Letter, and all of such shares or equity ownership interests
are duly authorized and validly issued and are fully paid, nonassessable and
free of preemptive rights, with no personal liability attaching to the ownership
thereof. No WABCO Subsidiary has or is bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character calling for
the purchase or issuance of any shares of capital stock or any other equity
security of such Subsidiary or any securities representing the right to purchase
or otherwise receive any shares of capital stock or any other equity security of
such Subsidiary.
Section 2.3. Authority; No Violation. (a) WABCO has full
corporate power and authority to execute and deliver this Agreement and the
WABCO Option Agreement and to consummate the transactions contemplated hereby
and thereby. The execution and delivery of this Agreement and the WABCO Option
Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly and validly approved and declared advisable by the Board
of Directors of WABCO. The Board of Directors of WABCO has directed that this
Agreement and the transactions contemplated hereby be submitted to WABCO's
stockholders for adoption at the WABCO Stockholders Meeting (as defined in
Section 5.3) and, except for the adoption of this Agreement by the affirmative
vote of the holders of a majority of the outstanding shares of WABCO Common
Stock, no other corporate proceedings on the part of WABCO are necessary to
approve and adopt this Agreement and the WABCO Option Agreement and to
consummate the transactions contemplated hereby and
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thereby. Each of this Agreement and the WABCO Option Agreement has been duly and
validly executed and delivered by WABCO and (assuming due authorization,
execution and delivery by MotivePower of this Agreement and the WABCO Option
Agreement) constitutes a valid and binding obligation of WABCO, enforceable
against WABCO in accordance with its terms.
(b) Neither the execution and delivery of this Agreement or
the WABCO Option Agreement by WABCO nor the consummation by WABCO of the
transactions contemplated hereby or thereby, nor compliance by WABCO with any of
the terms or provisions hereof or thereof, will (i) violate any provision of the
WABCO Certificate of Incorporation or the WABCO By-Laws or (ii) assuming that
the consents and approvals referred to in Section 2.4 are duly obtained, (x)
violate any statute, code, ordinance, rule, regulation, judgment, order, writ,
decree or injunction applicable to WABCO or any of its Subsidiaries or any of
their respective properties or assets, or (y) violate, conflict with, result in
a breach of any provision of or the loss of any benefit under, constitute a
default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of or a right of
termination or cancellation under, accelerate the performance required by, or
result in the creation of any Lien upon any of the respective properties or
assets of WABCO or any of its Subsidiaries under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture or other agreement,
instrument for borrowed money, any guarantee of any agreement or instrument for
borrowed money or any license, lease or any other agreement or instrument
("Material Agreement") to which WABCO or any of its Subsidiaries is a party, or
by which they or any of their respective properties or assets may be bound or
affected, except (in the case of clause (y) above) for such violations,
conflicts, breaches or defaults which, either individually or in the aggregate,
will not have a Material Adverse Effect on WABCO.
Section 2.4. Consents and Approvals. Except (i) in connection,
or in compliance, with the provisions of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (ii) for the filing of any
required applications or notices with any state or foreign agencies and approval
of such applications and notices (the "State and Foreign Approvals"), (iii) for
the filing with the Securities and Exchange Commission (the "SEC") of a joint
proxy statement in definitive form relating to the meetings of MotivePower's
shareholders and WABCO's stockholders to be held in connection with this
Agreement and the transactions contemplated hereby (the "Joint Proxy Statement")
and the registration statement on Form S-4 (the "Registration Statement") in
which the Joint Proxy Statement will be included as a prospectus, (iv) for the
filing of the Articles of Merger with the Department of State of the
Commonwealth of Pennsylvania and the filing of the Certificate of Merger with
the Secretary of State of Delaware, (v) for such filings and approvals as are
required to be made or obtained under the securities or "Blue Sky" laws of
various states or the NYSE in connection with the issuance or listing of the
shares of WABCO Common Stock pursuant to this Agreement, (vi) for the approval
of this Agreement by the requisite vote of the shareholders of MotivePower and
stockholders of WABCO and (vii) those consents listed in Section 2.4 of the
WABCO Disclosure Letter, no material consents or approvals of or filings or
registrations with any court, administrative agency or commission or other
governmental authority or instrumentality (each a "Governmental Entity") or with
any third party are
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necessary in connection with (A) the execution and delivery by WABCO of this
Agreement and the WABCO Option Agreement and (B) the consummation by WABCO of
the Merger and the other transactions contemplated by this Agreement and the
WABCO Option Agreement.
Section 2.5. SEC Documents and Other Reports. WABCO has filed
all required documents with the SEC since January 1, 1997 (the "WABCO SEC
Documents"). As of their respective dates, the WABCO SEC Documents complied in
all material respects with the requirements of the Securities Act or the
Securities Exchange Act of 1934, as amended (together with the rules and
regulations promulgated thereunder, the "Exchange Act"), as the case may be,
and, at the respective times they were filed, none of the WABCO SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
consolidated financial statements (including, in each case, any notes thereto)
of WABCO included in the WABCO SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto as of their respective dates of
filing, were prepared in accordance with generally accepted accounting
principles ("GAAP") (except, in the case of the unaudited statements, as
permitted by Regulation S-X of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes thereto)
and fairly presented in all material respects the consolidated financial
position of WABCO and its consolidated Subsidiaries as of the respective dates
thereof and the consolidated results of their operations and their consolidated
cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments and to any other adjustments
described therein). Except as disclosed in the WABCO SEC Documents or as
required by GAAP, WABCO has not, since December 31, 1998, made any change in the
accounting practices or policies applied in the preparation of its financial
statements.
Section 2.6. Registration Statement and Joint Proxy Statement.
None of the information to be supplied by WABCO for inclusion or incorporation
by reference in the Registration Statement or the Joint Proxy Statement will (i)
in the case of the Registration Statement, at the time it becomes effective,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein not misleading or (ii) in the case of the Joint Proxy Statement, at the
time of the mailing of the Joint Proxy Statement and at the respective times of
the Shareholders Meetings (as defined in Section 5.3), contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. If at any time
prior to the Effective Time any event with respect to WABCO, its officers and
directors or any of its Subsidiaries shall occur that is required to be
described in the Joint Proxy Statement or the Registration Statement, such event
shall be so described, and an appropriate amendment or supplement shall be
promptly filed with the SEC and, as required by law, disseminated to the
stockholders of WABCO. The Registration Statement will comply (with respect to
WABCO) as to form in all material respects with the provisions of the Securities
Act, and the Joint Proxy Statement will comply (with respect to WABCO) as to
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form in all material respects with the provisions of the Exchange Act.
Section 2.7. Absence of Certain Changes or Events. Except as
disclosed in the WABCO SEC Documents filed prior to the date of this Agreement,
since December 31, 1998, (A) WABCO and its Subsidiaries have not incurred any
material liability or obligation (indirect, direct or contingent), or entered
into any material oral or written agreement or other transaction, that is not in
the ordinary course of business or that would have a Material Adverse Effect on
WABCO, (B) WABCO and its Subsidiaries have not sustained any loss or
interference with their business or properties from fire, flood, windstorm,
accident or other calamity (whether or not covered by insurance) that has had or
that would have a Material Adverse Effect on WABCO, (C) there has been no change
in the capital stock of WABCO and no dividend or distribution of any kind
declared, paid or made by WABCO on any class of its stock, except for the
regular quarterly dividend of not more than $.01 per share of WABCO Common
Stock, (D) there has not been (y) any granting by WABCO or any of its
Subsidiaries to any executive officer or material modification of any severance
or termination benefits or (z) any entry by WABCO or any of its Subsidiaries
into or material modification of any employment, severance or termination
agreement with any such executive officer, (E) WABCO and its Subsidiaries have
not prepared or filed any Tax Return (as defined in Section 2.9) inconsistent in
any material respect with past practice or, on any such Tax Return, taken any
position, made any election, or adopted any method that is inconsistent with
positions taken, elections made or methods used in preparing or filing similar
Tax Returns in prior periods, and (F) there has been no other event causing a
Material Adverse Effect on WABCO, nor any development that would, individually
or in the aggregate, have a Material Adverse Effect on WABCO. Set forth in
Section 2.7 of the WABCO Disclosure Letter is a description of any material
changes, between December 31, 1998 and the date of this Agreement (excluding any
intervening fluctuations between such dates), to the amount and terms of the
indebtedness of WABCO and its Subsidiaries as described in WABCO's Annual Report
on Form 10-K for the year ended December 31, 1998, as filed with the SEC (other
than any changes in, or the incurrence of, indebtedness of WABCO or any of its
Subsidiaries with a principal amount not in excess of $1,000,000).
Section 2.8. Permits and Compliance. Each of WABCO and its
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, charters, easements, variances, exceptions, consents,
certificates, approvals and orders of any Governmental Entity (collectively,
"Permits") necessary for WABCO or any of its Subsidiaries to own, lease and
operate its properties or to carry on its business as it is now being conducted
(the "WABCO Permits"), except where the failure to have any of the WABCO Permits
would not, individually or in the aggregate, have a Material Adverse Effect on
WABCO, and, as of the date of this Agreement, no suspension or cancellation of
any of the WABCO Permits is pending or, to the Knowledge of WABCO, threatened,
except where the suspension or cancellation of any of the WABCO Permits,
individually or in the aggregate, would not have a Material Adverse Effect on
WABCO. Neither WABCO nor any of its Subsidiaries is in violation of (i) its
charter, by-laws or equivalent documents, (ii) any applicable law, ordinance,
administrative or governmental rule or regulation or (iii) any order, decree or
judgment of any Governmental Entity having jurisdiction over WABCO or any of its
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Subsidiaries, except, in the case of clauses (i), (ii) and (iii), for any
violations that, individually or in the aggregate, would not have a Material
Adverse Effect on WABCO. "Knowledge of WABCO" means the actual knowledge, after
reasonable investigation, of the individuals identified in Section 2.8 of the
WABCO Disclosure Letter.
Section 2.9. Tax Matters. Except as otherwise set forth in
Section 2.9 of the WABCO Disclosure Letter, (i) WABCO and each of its
Subsidiaries have filed all federal, and all material state, local, foreign and
provincial, Tax Returns required to have been filed or appropriate extensions
therefor have been properly obtained, and such Tax Returns are correct and
complete, except to the extent that any failure to so file or any failure to be
correct and complete, individually or in the aggregate, would not have a
Material Adverse Effect on WABCO; (ii) all Taxes shown to be due on such Tax
Returns have been timely paid or extensions for payment have been properly
obtained, or such Taxes are being timely and properly contested, (iii) WABCO and
each of its Subsidiaries have complied in all material respects with all rules
and regulations relating to the withholding of Taxes except to the extent that
any failure to comply with such rules and regulations, individually or in the
aggregate, would not have a Material Adverse Effect on WABCO; (iv) neither WABCO
nor any of its Subsidiaries has waived any statute of limitations in respect of
its Taxes which waiver is currently in effect; (v) any Tax Returns referred to
in clause (i) relating to federal and state income Taxes have been examined by
the Internal Revenue Service (the "IRS") or the appropriate state taxing
authority or the period for assessment of the Taxes in respect of which such Tax
Returns were required to be filed has expired; (vi) no issues that have been
raised in writing by the relevant taxing authority in connection with the
examination of the Tax Returns referred to in clause (i) are currently pending;
and (vii) all deficiencies asserted or assessments made as a result of any
examination of such Tax Returns by any taxing authority have been paid in full.
To the Knowledge of WABCO, the representations set forth in the WABCO Tax
Certificate (as defined in Section 5.8), if made on the date hereof (assuming
the Merger were consummated on the date hereof), would be true and correct. For
purposes of this Agreement: (i) "Taxes" means (A) any federal, state, local,
foreign or provincial income, gross receipts, property, sales, use, license,
excise, franchise, employment, payroll, withholding, alternative or add-on
minimum, ad valorem, value-added, transfer or excise tax, or other tax, custom,
duty, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty imposed by any Governmental
Entity, and (B) any liability for the payment of amounts with respect to
payments of a type described in clause (A) as a result of being a member of an
affiliated, consolidated, combined or unitary group, and (ii) "Tax Return" means
any return, report or similar statement (including the attached schedules)
required to be filed with respect to any Tax, including any information return,
claim for refund, amended return or declaration of estimated Tax.
Section 2.10. Actions and Proceedings. Except as set forth in
the WABCO SEC Documents filed prior to the date of this Agreement, there are no
outstanding orders, judgments, injunctions, awards or decrees of any
Governmental Entity against or involving WABCO or any of its Subsidiaries, or
against or involving any of the directors, officers or employees of WABCO or any
of its Subsidiaries, as such, any of its or their properties, assets or business
or any WABCO Plan that, individually or in the aggregate, would have a Material
21
Adverse Effect on WABCO. Except as set forth in Section 2.10 of the WABCO
Disclosure Letter, as of the date of this Agreement, there are no actions, suits
or claims or legal, administrative or arbitrative proceedings or investigations
pending or, to the Knowledge of WABCO, threatened against or involving WABCO or
any of its Subsidiaries or any of its or their directors, officers or employees
as such, or any of its or their properties, assets or business or any WABCO Plan
that, individually or in the aggregate, would have a Material Adverse Effect on
WABCO. There are no actions, suits, labor disputes or other litigation, legal or
administrative proceedings or governmental investigations pending or, to the
Knowledge of WABCO, threatened against or affecting WABCO or any of its
Subsidiaries or any of its or their officers, directors or employees, as such,
or any of its or their properties, assets or business relating to the
transactions contemplated by this Agreement or the WABCO Option Agreement.
Section 2.11. Certain Agreements. Except as set forth in
Section 2.11 of the WABCO Disclosure Letter, neither WABCO nor any of its
Subsidiaries is a party to any oral or written agreement or plan, including any
employment agreement, severance agreement, retention agreement, stock option
plan, stock appreciation rights plan, restricted stock plan or stock purchase
plan, any of the benefits of which will be increased, the vesting of the
benefits of which will be accelerated, or which will become payable or which at
the participant's or holder's option may become payable, due to or by the
occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will, or may at the option of the holder
or participant, be calculated on the basis of any of the transactions
contemplated by this Agreement. No holder of any option to purchase shares of
WABCO Common Stock, or shares of WABCO Common Stock granted in connection with
the performance of services for WABCO or its Subsidiaries, is or will be
entitled to receive cash from WABCO or any Subsidiary in lieu of or in exchange
for such option or shares as a result of the transactions contemplated by this
Agreement or the WABCO Option Agreement.
Section 2.12. ERISA. (a) Section 2.12(a)(X) of the WABCO
Disclosure Letter contains a list of each WABCO Plan. With respect to each WABCO
Plan, WABCO has made available to MotivePower a true and correct copy of (i) the
most recent annual report (Form 5500) filed with the IRS, (ii) such WABCO Plan
and all amendments thereto, (iii) each trust agreement, insurance contract or
administration agreement relating to such WABCO Plan, (iv) the most recent
summary plan description for each WABCO Plan for which a summary plan
description is required, (v) the most recent actuarial report or valuation
relating to a WABCO Plan subject to Title IV of the Employee Retirement Income
Security Act of 1974 and the regulations promulgated thereunder ("ERISA"), (vi)
the most recent determination letter, if any, issued by the IRS with respect to
any WABCO Plan intended to be qualified under section 401(a) of the Code, (vii)
any request for a determination currently pending before the IRS and (viii) all
correspondence with the IRS, the Department of Labor or the Pension Benefit
Guaranty Corporation relating to any outstanding controversy. Each WABCO Plan
complies with ERISA, the Code and all other applicable statutes and governmental
rules and regulations, except any failure to comply as would not have,
individually or in the aggregate, a Material Adverse Effect on WABCO. Except as
set forth in Section 2.12(a)(Y) of the WABCO Disclosure Letter, (i) no
"reportable event" (within the
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meaning of Section 4043 of ERISA) has occurred within the past three years with
respect to any WABCO Plan which could result in liability to WABCO, (ii) neither
WABCO nor any of its ERISA Affiliates (as hereinafter defined) has withdrawn
from any WABCO Multiemployer Plan (as hereinafter defined) at any time or
instituted, or is currently considering taking, any action to do so, and (iii)
no action has been taken, or is currently being considered, to terminate any
WABCO Plan subject to Title IV of ERISA.
(b) There has been no failure to make any contribution or pay
any amount due to any WABCO Plan as required by Section 412 of the Code, Section
302 of ERISA, or the terms of any such Plan, and no WABCO Plan, nor any trust
created thereunder, has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived.
(c) With respect to WABCO Plans, no event has occurred and, to
the Knowledge of WABCO, there exists no condition or set of circumstances in
connection with which WABCO or any of its ERISA Affiliates would be subject to
any liability under the terms of such WABCO Plans, ERISA, the Code or any other
applicable law which has had, or would have, individually or in the aggregate, a
Material Adverse Effect on WABCO. Except as listed on Section 2.12(c) of the
WABCO Disclosure Letter, all WABCO Plans that are intended to be qualified under
Section 401(a) of the Code have been determined by the IRS to be so qualified,
or a timely application for such determination is now pending or will be filed
on a timely basis and, except as listed on Section 2.12(c) of the WABCO
Disclosure Letter, to the Knowledge of WABCO there is no reason why any WABCO
Plan is not so qualified in operation. Neither WABCO nor any of its ERISA
Affiliates has been notified by any WABCO Multiemployer Plan that such WABCO
Multiemployer Plan is currently in reorganization or insolvency under and within
the meaning of Section 4241 or 4245 of ERISA or that such WABCO Multiemployer
Plan intends to terminate or has been terminated under Section 4041A of ERISA.
To the Knowledge of WABCO, neither the termination of any WABCO Multiemployer
Plan nor the complete or partial withdrawal by WABCO or any of its ERISA
Affiliates from any WABCO Multiemployer Plan would result in any liability of
WABCO or any of its ERISA Affiliates that would have, individually or in the
aggregate, a Material Adverse Effect on WABCO. Except as set forth in Section
2.12(c) of the WABCO Disclosure Letter, neither WABCO nor any of its ERISA
Affiliates has any liability or obligation under any welfare plan to provide
life insurance or medical benefits after termination of employment to any
employee or dependent other than as required by (i) Part 6 of Title 1 of ERISA
or (ii) the laws of a jurisdiction outside the United States.
(d) As used in this Agreement, (i) "WABCO Plan" means a
"pension plan" (as defined in Section 3(2) of ERISA (other than a WABCO
Multiemployer Plan (as hereinafter defined))), a "welfare plan" (as defined in
Section 3(1) of ERISA), or any material bonus, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, vacation, severance, death benefit, insurance or other
plan, arrangement or understanding, in each case established or maintained or
contributed to by WABCO or any of its ERISA Affiliates or as to which WABCO or
any of its ERISA Affiliates or otherwise may have any liability, whether or not
covered by ERISA (other than a
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WABCO Ex-U.S. Pension Plan (as hereinafter defined)), (ii) "WABCO Multiemployer
Plan" means a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA)
to which WABCO or any of its ERISA Affiliates is or has been obligated to
contribute or otherwise may have any liability, and (iii) with respect to any
person, "ERISA Affiliate" means any corporation or trade or business (whether or
not incorporated) which is under common control, or otherwise would be
considered a single employer with such person pursuant to Section 414(b), (c),
(m) or (o) of the Code and the regulations promulgated thereunder or pursuant to
Section 4001(b) of ERISA and the regulations promulgated thereunder.
(e) Section 2.12(e) of the WABCO Disclosure Letter contains a
list of each WABCO Ex-U.S. Pension Plan (as hereinafter defined) and WABCO has
provided to MotivePower a copy of any written plan document. Except as would not
have, individually or in the aggregate, a Material Adverse Effect on WABCO, each
such plan has been maintained in compliance with all applicable laws, orders and
regulations, and the fair market value of the assets of each such plan which is
intended to be a funded WABCO Ex-U.S. Pension Plan or arrangement equals or
exceeds the value of the accrued benefits. As used in this Agreement, the term
"WABCO Ex-U.S. Pension Plan" shall mean any arrangement (other than a WABCO
Plan) providing retirement pension benefits that is established or maintained by
WABCO or any Subsidiary for the benefit of employees who are or were employed
outside the United States.
(f) Section 2.12(f) of the WABCO Disclosure Letter contains a
list, as of the date of this Agreement, of all (i) severance and employment
agreements with officers of WABCO and each ERISA Affiliate, (ii) severance
programs and policies of WABCO with or relating to its employees and (iii)
plans, programs, agreements and other arrangements of WABCO with or relating to
its employees which contain change of control or similar provisions, in each
case involving a severance or employment agreement or arrangement with an
individual officer or employee, only to the extent such agreement or arrangement
provides for minimum annual payments in excess of $100,000. WABCO has provided
to MotivePower a true and complete copy of each of the foregoing.
Section 2.13. Labor Matters. Except as disclosed in Section
2.13 of the WABCO Disclosure Letter, neither WABCO nor any of its Subsidiaries
is party to any collective bargaining agreement or other labor agreement with
any union or labor organization and no union or labor organization has been
recognized by WABCO or any of its Subsidiaries as an exclusive bargaining
representative for employees of WABCO or any of its Subsidiaries. Neither WABCO
nor any of its Subsidiaries is the subject of any material proceeding asserting
that it or any of its Subsidiaries has committed an unfair labor practice or is
seeking to compel it to bargain with any labor union or labor organization nor
is there pending or, to the Knowledge of WABCO, threatened, nor has there been
for the past three years, any labor strike, dispute, walkout, work stoppage,
slow-down or lockout involving it or any of its Subsidiaries, except in each
case as would not, individually or in the aggregate, have a Material Adverse
Effect on WABCO.
Section 2.14. Intellectual Property; Year 2000 Compliance. (a)
WABCO and
24
its Subsidiaries own or have a valid, enforceable right to use free from any
encumbrances, other than those that would not have a Material Adverse Effect on
WABCO, all patents, patent rights, trademarks, trade names, service marks, trade
secrets, copyrights, inventions, know-how, processes, procedures, customer and
supplier lists, computer data, documentation and software, domain names,
applications for registration of any of the foregoing and other proprietary
intellectual property rights (collectively, "Intellectual Property Rights") as
are necessary in connection with the business of WABCO and its Subsidiaries,
taken as a whole, except where the failure to have such Intellectual Property
Rights, individually or in the aggregate, would not have a Material Adverse
Effect on WABCO. Except as set forth in Section 2.14 of the WABCO Disclosure
Letter, neither WABCO nor any of its Subsidiaries has infringed any Intellectual
Property Rights of any third party other than any infringements that,
individually or in the aggregate, would not have a Material Adverse Effect on
WABCO. Neither WABCO nor its Subsidiaries are aware of any infringement or
misappropriation by any person with respect to the Intellectual Property Rights
owned or used by WABCO or its Subsidiaries other than any such infringement or
misappropriation that would not have a Material Adverse Effect on WABCO. All
Intellectual Property Rights owned or used by WABCO or its Subsidiaries as of
the date hereof will be owned or available for use by WABCO and its Subsidiaries
on terms and conditions immediately following the Effective Date that are not
materially different from those existing prior to the Effective Date.
(b) WABCO and each of its Subsidiaries have conducted a
commercially reasonable inventory and assessment of the hardware, software and
embedded microcontrollers in non-computer equipment (the "Computer Systems")
used by WABCO and its Subsidiaries in its business, in order to determine which
parts of the Computer System are not yet Year 2000 Compliant (as defined below)
and to estimate the cost of rendering such Computer Systems Year 2000 Compliant
prior to January 1, 2000 or such earlier date on which the Computer Systems may
shut down or produce incorrect calculations or otherwise malfunction without
becoming totally inoperable. Based on the above inventory and assessment, the
estimated cost of rendering the Computer Systems Year 2000 Compliant is $10
million, a portion of which has already been expended and the rest of which has
been included in the current budget adopted by WABCO. For purposes of this
Agreement, "Year 2000 Compliant" means that all of the Computer Systems will
correctly recognize, manipulate and process (including calculating, comparing
and sequencing) date information relating to dates before, on or after January
1, 2000 including leap year calculations, and that the operation and
functionality of such Computer Systems will not be materially adversely affected
by the advent of the year 2000 or any manipulation of data featuring date
information relating to dates before, on or after January 1, 2000.
Section 2.15. Environmental and Safety Matters. (a) Except as
set forth in Section 2.15 of the WABCO Disclosure Letter, the properties, assets
and operations of WABCO and its predecessors and Subsidiaries have complied and
are in compliance with all applicable federal, state, local, regional and
foreign laws, rules and regulations, orders, decrees, common law, judgments,
permits and licenses relating to public and worker health and safety
(collectively, "Worker Safety Laws") and relating to the protection, regulation
and clean-up of the indoor and outdoor environment and activities or conditions
related thereto,
25
including, without limitation, those relating to the generation, handling,
disposal, transportation or release of hazardous or toxic materials, substances,
wastes, pollutants and contaminants including, without limitation, asbestos,
petroleum, radon and polychlorinated biphenyls (collectively, "Environmental
Laws"), except for any violations that, individually or in the aggregate, have
not had, and would not have, a Material Adverse Effect on WABCO. With respect to
such properties, assets and operations, including any previously owned, leased
or operated properties, assets or operations, there are no past, present or
reasonably anticipated future events, conditions, circumstances, activities,
practices, incidents, actions or plans of WABCO or any of its predecessors or
Subsidiaries that would interfere with or prevent compliance or continued
compliance with or give rise to any liabilities or investigatory, corrective or
remedial obligations under applicable Worker Safety Laws and Environmental Laws,
other than any such interference, prevention, liability or obligation that,
individually or in the aggregate, has not had, and would not have, a Material
Adverse Effect on WABCO.
(b) WABCO and its predecessors and Subsidiaries have not
caused or permitted any property, asset, operation, including any previously
owned property, asset or operation, to use, generate, manufacture, refine,
transport, treat, store, handle, dispose, transfer or process hazardous or toxic
materials, substances, wastes, pollutants or contaminants, except in material
compliance with all Environmental Laws and Worker Safety Laws, other than any
such activity that, individually or in the aggregate, has not had, and would not
have, a Material Adverse Effect on WABCO. WABCO and its Subsidiaries have not
reported to any Governmental Entity, or been notified by any Governmental Entity
of the existence of, any material violation of an Environmental Law or any
release, discharge or emission of any hazardous or toxic materials, substances,
wastes, pollutants or contaminants, other than any such violation, release,
discharge or emission that, individually or in the aggregate, has not had, and
would not have, a Material Adverse Effect on WABCO.
(c) With respect to WABCO, neither this Agreement nor the
consummation of the transactions that are the subject of this Agreement will
result in any obligations for site investigation or cleanup, or notification to
or consent of any Governmental Entity or third party, pursuant to any of the
so-called "transaction-triggered" or "responsible property transfer"
Environmental Laws, other than any such obligations that, individually or in the
aggregate, would not have a Material Adverse Effect on WABCO.
(d) This Section sets forth the sole representations and
warranties of WABCO with respect to environmental, health or safety matters,
including without limitation all matters arising under Environmental Laws and
Worker Safety Laws.
Section 2.16. Insurance. WABCO and its Subsidiaries have in
effect insurance coverage with reputable insurers, which in respect of amounts,
premiums, types and risks insured, constitutes reasonably adequate coverage
against all risks customarily insured against by companies of comparable size
and with similar operations.
Section 2.17. Parachute Payments to Disqualified Individuals.
Except as set forth in Section 2.17 of the WABCO Disclosure Letter, no payment
or other benefit, and no
26
acceleration of the vesting of any options, payments or other benefits, will, as
a direct or indirect result of the transactions contemplated by this Agreement,
be (or under Section 280G of the Code and the Treasury Regulations thereunder be
presumed to be) a "parachute payment" to a "disqualified individual" (as those
terms are defined in Section 280G of the Code and the Treasury Regulations
thereunder) with respect to WABCO or any of its Subsidiaries, without regard to
whether such payment or acceleration is reasonable compensation for personal
services performed or to be performed in the future. The approximate aggregate
amount of "parachute payments" related to the matters set forth in such Section
2.17 of the WABCO Disclosure Letter, assuming the Closing occurs on November 1,
1999 and termination of all listed individuals without cause on such date is set
forth in such Section 2.17 of the WABCO Disclosure Letter.
Section 2.18. Required Vote of WABCO Stockholders. The
affirmative vote of the holders of a majority of the outstanding shares of WABCO
Common Stock is required to adopt this Agreement. No other vote of the
stockholders of WABCO is required by law, the WABCO Certificate of Incorporation
or the WABCO By-Laws or otherwise in order for WABCO to consummate the Merger
and the transactions contemplated by this Agreement and the WABCO Stock Option
Agreement.
Section 2.19. State Takeover Laws. The Board of Directors of
WABCO has, to the extent such statute is applicable, taken all action (including
appropriate approvals of the Board of Directors of WABCO) necessary to exempt
MotivePower, its Subsidiaries and affiliates, the Merger, this Agreement, the
WABCO Option Agreement, the Voting Agreement and the transactions contemplated
hereby and thereby from Section 203 of the DGCL. To the Knowledge of WABCO, no
other state takeover statutes are applicable to the Merger, this Agreement, the
WABCO Option Agreement or the transactions contemplated hereby or thereby.
Section 2.20. Pooling of Interests; Reorganization. To the
Knowledge of WABCO, neither it nor any of its Subsidiaries has (i) taken any
action or failed to take any action which action or failure would jeopardize the
treatment of the Merger as a pooling of interests for accounting purposes or
(ii) taken any action or failed to take any action which action or failure would
jeopardize the qualification of the Merger as a reorganization within the
meaning of Section 368(a) of the Code.
Section 2.21. Opinion of Financial Advisor. WABCO has
received the written opinion of Credit Suisse First Boston Corporation, dated
the date hereof, to the effect that, as of the date hereof, the Exchange Ratio
is fair to WABCO from a financial point of view, a copy of which opinion has
been delivered to MotivePower.
Section 2.22. Broker's Fees. Except as set forth in the
engagement letter agreement between WABCO and Credit Suisse First Boston
Corporation, a true and complete copy of which has previously been provided to
MotivePower, neither WABCO nor any WABCO Subsidiary nor any of their respective
officers or directors has employed any broker or finder or incurred any
liability for any broker's fees, commissions or finder's fees in
27
connection with the Merger or related transactions contemplated by this
Agreement or the WABCO Option Agreement.
Section 2.23. Unlawful Payments and Contributions. To the
Knowledge of WABCO, neither WABCO, any Subsidiary nor any of their respective
directors, officers or any of their respective employees or agents has (i) used
any WABCO funds for any unlawful contribution, endorsement, gift, entertainment
or other unlawful expense relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or
employee; (iii) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment to any person.
Section 2.24. Real Property. (a) Section 2.24(a) of the WABCO
Disclosure Letter lists each material parcel of real property owned by WABCO or
any of its Subsidiaries (the "WABCO Owned Property"). WABCO or its applicable
Subsidiary has good and marketable title in and to all of the WABCO Owned
Property, subject to no Liens that would have a Material Adverse Effect on WABCO
or materially impair WABCO's rights to or ability to use any such property,
except as described on Section 2.24(a) of the WABCO Disclosure Letter.
(b) Section 2.24(b) of the WABCO Disclosure Letter sets forth
a list of all material leases, subleases and other occupancy agreements,
including all amendments, extensions and other modifications (the "WABCO
Leases") for real property (the "WABCO Leased Property"; the WABCO Owned
Property and the WABCO Leased Property collectively the "WABCO Real Property")
to which WABCO or any of its Subsidiaries is a party. WABCO or its applicable
Subsidiary has a good and valid leasehold interest in and to all of the WABCO
Leased Property, subject to no Liens except as described in Section 2.24(b) of
the WABCO Disclosure Letter. Each WABCO Lease is in full force and effect and is
enforceable in accordance with its terms. There exists no default or condition
which, with the giving of notice, the passage of time or both, could become a
default under any WABCO Lease in any case, that would have a Material Adverse
Effect on WABCO or materially impair WABCO's rights to or ability to use any
such property. WABCO has previously delivered to MotivePower true and complete
copies of all the WABCO Leases. Except as described on Section 2.24(b) of the
WABCO Disclosure Letter, no consent, waiver, approval or authorization is
required from the landlord under any WABCO Lease as a result of the execution of
this Agreement or the consummation of the transactions contemplated hereby the
failure to obtain would have a Material Adverse Effect on WABCO or materially
impair WABCO's rights to or ability to use any such property.
Section 2.25. Material Contracts. There have been made
available to MotivePower, its affiliates and their representatives true and
complete copies of all of the following contracts to which WABCO or any of its
Subsidiaries is a party or by which any of them is bound (collectively, the
"WABCO Material Contracts"): (i) contracts with any current officer or director
of WABCO or any of its Subsidiaries; (ii) contracts for the sale of any of the
assets of WABCO or any of its Subsidiaries other than in the ordinary course of
business
28
or for the grant to any person of any preferential rights to purchase any of its
assets other than inventory in the ordinary course of business; (iii) contracts
containing covenants of WABCO or any of its Subsidiaries not to compete in any
line of business or with any person in any geographical area or covenants of any
other person not to compete with WABCO or any of its Subsidiaries in any line of
business or in any geographical area; (iv) material indentures, credit
agreements, mortgages, promissory notes, and all contracts relating to the
borrowing of money; and (v) all other agreements contracts or instruments which,
in the reasonable opinion of WABCO, are material to WABCO or any of its
Subsidiaries. Except as set forth in Section 2.25 of the WABCO Disclosure Letter
or as would not have a Material Adverse Effect on WABCO, all of the WABCO
Material Contracts are in full force and effect and are the legal, valid and
binding obligation of WABCO or its Subsidiaries, enforceable against them in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). Except as set forth in Section 2.25 of the
WABCO Disclosure Letter, neither WABCO nor any Subsidiary is in default in any
material respect under any WABCO Material Contract nor, to the Knowledge of
WABCO, is any other party to any WABCO Material Contract in default thereunder
in any material respect except, in each case, for those defaults that,
individually or in the aggregate, would not have a Material Adverse Effect on
WABCO.
Section 2.26. Warranties. To WABCO's Knowledge, the accrual
for warranty related expenses as of December 31, 1998 reported in WABCO's
audited financial statement contained in WABCO's Form 10-K for the year ended
December 31, 1998, adequately reflects an amount required for satisfaction of
warranty claims due in respect of goods sold or services provided by WABCO or
any of its Subsidiaries prior to such date. Such provision has been established
in accordance with GAAP. Neither WABCO nor its Subsidiaries have agreed to
provide any express product or service warranties other than (a) standard
warranties, the terms of which have been provided to MotivePower and identified
as WABCO's standard warranties, (b) warranties that (i) parts and components are
free from defects in workmanship or comply with standard or agreed
specifications that are extended for terms of no more than two (2) years each
and that expressly provide that cure is to be effected by repair or replacement
of the defective or noncomplying products and (ii) original equipment is free
from defects in workmanship or complies with standard or agreed specifications
that are extended for terms of no more than seven (7) years each and that
expressly provide that cure is to be effected by repair or replacement of the
defective or noncomplying products and (c) other warranties that, individually
or in the aggregate, will not, if material claims are made thereunder, have a
Material Adverse Effect on WABCO.
Section 2.27. Pooling Letter. WABCO has received a letter from
Xxxxxx Xxxxxxxx LLP dated as of September 26, 1999 and addressed to WABCO, a
copy of which has been delivered to MotivePower, in which Xxxxxx Xxxxxxxx LLP
concurs with the WABCO management's conclusions that, as of September 26, 1999,
no conditions exist related to WABCO that would preclude MotivePower from
accounting for the Merger as a pooling of interests.
29
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF MOTIVEPOWER
Except as disclosed in the letter delivered to WABCO
concurrently herewith and designated therein as the MotivePower Disclosure
Letter (the "MotivePower Disclosure Letter"), in each case with specific
reference to the Section to which exception is taken, MotivePower hereby
represents and warrants to WABCO as follows:
Section 3.1. Corporate Organization. (a) MotivePower is a
corporation duly organized, validly existing and in good standing under the laws
of the Commonwealth of Pennsylvania. MotivePower has the corporate power and
authority to own or lease all of its properties and assets and to carry on its
business as it is now being conducted, and is duly licensed or qualified to do
business in each jurisdiction in which the nature of the business conducted by
it or the character or location of the properties and assets owned or leased by
it makes such licensing or qualification necessary, except where the failure to
be so licensed or qualified would not have a Material Adverse Effect on
MotivePower. True and complete copies of the Articles of Incorporation (the
"MotivePower Articles of Incorporation") and By-Laws of MotivePower, as in
effect as of the date of this Agreement, have previously been made available by
MotivePower to WABCO.
(b) Each MotivePower Subsidiary (i) is duly organized and
validly existing under the laws of its jurisdiction of organization, (ii) is
duly qualified to do business and in good standing in all jurisdictions (whether
federal, state, local or foreign) where its ownership or leasing of property or
the conduct of its business requires it to be so qualified and in which the
failure to be so qualified would have a Material Adverse Effect on MotivePower
and (iii) has all requisite corporate power and authority to own or lease its
properties and assets and to carry on its business as now conducted.
(c) The minute books of MotivePower accurately reflect in all
material respects all material corporate actions held or taken since January 1,
1997 of its shareholders and Board of Directors (including committees of the
Board of Directors of MotivePower).
Section 3.2. Capitalization. (a) The authorized capital stock
of MotivePower consists of (i) 55,000,000 shares of MotivePower Common Stock, of
which, as of May 27, 1999, 27,019,235 shares were issued and outstanding and no
shares were held in treasury, and (ii) 10,000,000 shares of Preferred Stock, par
value $.01 per share, of MotivePower (the "MotivePower Preferred Stock"),
1,600,000 shares of which, as of the date hereof, have been designated Series C
Junior Participating Preferred Stock (the "MotivePower Series C Preferred
Stock") and none of which, as of the date hereof, were, issued and outstanding.
All of the issued and outstanding shares of MotivePower Common Stock have been
duly authorized and validly issued and are fully paid, nonassessable and free of
preemptive rights, with no personal
30
liability attaching to the ownership thereof. As of the date of this Agreement,
except as contemplated hereby and except pursuant to (i) the terms of options
granted pursuant to MotivePower Stock Incentive Plan (the "MotivePower Option
Plan") or MotivePower Stock Option Plan for Non-Employee Directors (the
"MotivePower Director Option Plan" and, together with MotivePower Option Plan,
the "MotivePower Stock Plans"), (ii) the rights to purchase MotivePower Series C
Preferred Stock (the "MotivePower Rights"), issued pursuant to the Rights
Agreement, dated as of January 19, 1996, as amended (the "MotivePower Rights
Agreement"), between MotivePower and Chemical Mellon Shareholder Services,
L.L.C., (iii) the Stock Appreciation Right Agreement, dated as of July 1, 1996,
between MotivePower and Xxxxxxx X. Xxxx, as amended by a First Amendment to
Employment Agreement dated as of February 9, 1998 and an Amendment to Stock
Appreciation Right Agreement dated as of June 2, 1999 (the "MotivePower SAR");
and (iv) the MotivePower Industries, Inc. Deferred Compensation Plan, effective
April 23, 1994, as amended and restated as of February 10, 1997 and further
amended effective October 1, 1998 (the "MotivePower Deferred Compensation
Plan"), MotivePower does not have and is not bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of MotivePower
Common Stock or any other equity securities of MotivePower or any securities
representing the right to purchase or otherwise receive any shares of
MotivePower Common Stock or MotivePower Preferred Stock.
As of the date of this Agreement, no shares of MotivePower
Common Stock or MotivePower Preferred Stock are reserved for issuance, except
for 3,205,000 shares of MotivePower Common Stock reserved for issuance upon
exercise of stock options issued pursuant to the MotivePower Stock Plans. Since
December 31, 1998, MotivePower has not issued any shares of its capital stock or
any securities convertible into or exercisable for any shares of its capital
stock, other than pursuant to the exercise of employee stock options granted
prior to such date. MotivePower has previously provided WABCO with a list of the
option holders, the date of each option to purchase MotivePower Common Stock
granted, the number of shares subject to each such option, the expiration date
of each such option, and the price at which each such option may be exercised
under an applicable MotivePower Stock Plan. In no event will the aggregate
number of shares of MotivePower Common Stock outstanding immediately prior to
the Effective Time exceed the number specified in Section 3.2(a) of the
MotivePower Disclosure Letter.
(b) MotivePower owns, directly or indirectly, all of the
issued and outstanding shares of capital stock or other equity ownership
interests of each of the MotivePower Subsidiaries as set forth in Section 3.2(b)
of the MotivePower Disclosure Letter, free and clear of any Liens other than as
set forth in Section 3.2(b) of the MotivePower Disclosure Letter, and all of
such shares or equity ownership interests are duly authorized and validly issued
and are fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof.
No MotivePower Subsidiary has or is bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of capital stock or
any other equity security of such Subsidiary or any
31
securities representing the right to purchase or otherwise receive any shares of
capital stock or any other equity security of such Subsidiary.
Section 3.3. Authority; No Violation. (a) MotivePower has full
corporate power and authority to execute and deliver this Agreement and the
MotivePower Option Agreement and to consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement and the
MotivePower Option Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly and validly approved by the Board
of Directors of MotivePower. The Board of Directors of MotivePower has directed
that this Agreement and the transactions contemplated hereby be submitted to
MotivePower's shareholders for adoption at the MotivePower Shareholders Meeting
(as defined in Section 5.3) and, except for the adoption of this Agreement by
the affirmative vote of a majority of the votes cast by the holders of
MotivePower Common Stock at the MotivePower Shareholders Meeting, no other
corporate proceedings on the part of MotivePower are necessary to approve and
adopt this Agreement and the MotivePower Option Agreement and to consummate the
transactions contemplated hereby and thereby. Each of this Agreement and the
MotivePower Option Agreement has been duly and validly executed and delivered by
MotivePower and (assuming due authorization, execution and delivery by
MotivePower of this Agreement and the MotivePower Option Agreement) constitutes
a valid and binding obligation of MotivePower, enforceable against MotivePower
in accordance with its terms.
(b) Neither the execution and delivery of this Agreement or
the MotivePower Option Agreement by MotivePower nor the consummation by
MotivePower of the transactions contemplated hereby or thereby, nor compliance
by MotivePower with any of the terms or provisions hereof or thereof, will (i)
violate any provision of the MotivePower Articles of Incorporation or the
MotivePower By-Laws or (ii) assuming that the consents and approvals referred to
in Section 3.4 are duly obtained, (x) violate any statute, code, ordinance,
rule, regulation, judgment, order, writ, decree or injunction applicable to
MotivePower or any of its Subsidiaries or any of their respective properties or
assets, or (y) violate, conflict with, result in a breach of any provision of or
the loss of any benefit under, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, result in
the termination of or a right of termination or cancellation under, accelerate
the performance required by, or result in the creation of any Lien upon any of
the respective properties or assets of MotivePower or any of its Subsidiaries
under, any of the terms, conditions or provisions of any Material Agreement to
which MotivePower or any of its Subsidiaries is a party, or by which they or any
of their respective properties or assets may be bound or affected, except (in
the case of clause (y) above) for such violations, conflicts, breaches or
defaults which, either individually or in the aggregate, will not have a
Material Adverse Effect on MotivePower.
Section 3.4. Consents and Approvals. Except (i) in connection,
or in compliance, with the provisions of the HSR Act, (ii) for the filing of any
required State and Foreign Approvals, (iii) for the filing with the SEC of the
Joint Proxy Statement and the Registration Statement, (iv) for the filing of the
Articles of Merger with the Department of
32
State of the Commonwealth of Pennsylvania and the filing of the Certificate of
Merger with the Secretary of State of Delaware, (v) for such filings and
approvals as are required to be made or obtained under the securities or "Blue
Sky" laws of various states or the NYSE in connection with the issuance or
listing of the shares of WABCO Common Stock pursuant to this Agreement, (vi) for
the approval of this Agreement by the requisite vote of the shareholders of
MotivePower and stockholders of WABCO and (vii) those consents listed in Section
3.4 of the MotivePower Disclosure Letter, no material consents or approvals of
or filings or registrations with any Governmental Entity or with any third party
are necessary in connection with (A) the execution and delivery by MotivePower
of this Agreement and the MotivePower Option Agreement and (B) the consummation
by MotivePower of the Merger and the other transactions contemplated by this
Agreement and the MotivePower Option Agreement.
Section 3.5. SEC Documents and Other Reports. MotivePower has
filed all required documents with the SEC since January 1, 1997 (the
"MotivePower SEC Documents"). As of their respective dates, the MotivePower SEC
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and, at the respective
times they were filed, none of the MotivePower SEC Documents contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The consolidated
financial statements (including, in each case, any notes thereto) of MotivePower
included in the MotivePower SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto as of their respective dates of
filing, were prepared in accordance with GAAP (except, in the case of the
unaudited statements, as permitted by Regulation S-X of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated therein
or in the notes thereto) and fairly presented in all material respects the
consolidated financial position of MotivePower and its consolidated Subsidiaries
as at the respective dates thereof and the consolidated results of their
operations and their consolidated cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments and to any other adjustments described therein). Except as disclosed
in the MotivePower SEC Documents or as required by GAAP, MotivePower has not,
since December 31, 1998, made any change in the accounting practices or policies
applied in the preparation of its financial statements.
Section 3.6. Registration Statement and Joint Proxy Statement.
None of the information to be supplied by MotivePower for inclusion or
incorporation by reference in the Registration Statement or the Joint Proxy
Statement will (i) in the case of the Registration Statement, at the time it
becomes effective, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading or (ii) in the case of the Joint
Proxy Statement, at the time of the mailing of the Joint Proxy Statement and at
the respective times of the Shareholders Meetings, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
33
the circumstances under which they are made, not misleading. If at any time
prior to the Effective Time any event with respect to MotivePower, its officers
and directors or any of its Subsidiaries shall occur that is required to be
described in the Joint Proxy Statement or the Registration Statement, such event
shall be so described, and an appropriate amendment or supplement shall be
promptly filed with the SEC and, as required by law, disseminated to the
stockholders of MotivePower. The Registration Statement will comply (with
respect to MotivePower) as to form in all material respects with the provisions
of the Securities Act, and the Joint Proxy Statement will comply (with respect
to MotivePower) as to form in all material respects with the provisions of the
Exchange Act.
Section 3.7. Absence of Certain Changes or Events. Except as
disclosed in the MotivePower SEC Documents filed prior to the date of this
Agreement, since December 31, 1998, (A) MotivePower and its Subsidiaries have
not incurred any material liability or obligation (indirect, direct or
contingent), or entered into any material oral or written agreement or other
transaction, that is not in the ordinary course of business or that would have a
Material Adverse Effect on MotivePower, (B) MotivePower and its Subsidiaries
have not sustained any loss or interference with their business or properties
from fire, flood, windstorm, accident or other calamity (whether or not covered
by insurance) that has had or that would have a Material Adverse Effect on
MotivePower, (C) there has been no change in the capital stock of MotivePower
and no dividend or distribution of any kind declared, paid or made by
MotivePower on any class of its stock, (D) there has not been (y) any granting
by MotivePower or any of its Subsidiaries to any executive officer or material
modification of any severance or termination benefits or (z) any entry by
MotivePower or any of its Subsidiaries into or material modification of any
employment, severance or termination agreement with any such executive officer,
(E) MotivePower and its Subsidiaries have not prepared or filed any Tax Return
inconsistent in any material respect with past practice or, on any such Tax
Return, taken any position, made any election, or adopted any method that is
inconsistent with positions taken, elections made or methods used in preparing
or filing similar Tax Returns in prior periods, and (F) there has been no other
event causing a Material Adverse Effect on MotivePower, nor any development that
would, individually or in the aggregate, have a Material Adverse Effect on
MotivePower. Set forth in Section 3.7 of MotivePower Disclosure Letter is a
description of any material changes, between December 31, 1998 and the date of
this Agreement (excluding any intervening fluctuations between such dates), to
the amount and terms of the indebtedness of MotivePower and its Subsidiaries as
described in MotivePower's Annual Report on Form 10-K for the year ended
December 31, 1998, as filed with the SEC (other than any changes in, or the
incurrence of, indebtedness of MotivePower or any of its Subsidiaries with a
principal amount not in excess of $1,000,000).
Section 3.8. Permits and Compliance. Except as set forth in
Section 3.8 of the MotivePower Disclosure Letter, each of MotivePower and its
Subsidiaries is in possession of all Permits necessary for MotivePower or any of
its Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "MotivePower Permits"), except where
the failure to have any of the MotivePower Permits would not, individually or in
the aggregate, have a Material Adverse Effect on MotivePower, and, as of the
date of this Agreement, no suspension or cancellation of any of the MotivePower
Permits
34
is pending or, to the Knowledge of MotivePower, threatened, except where the
suspension or cancellation of any of the MotivePower Permits, individually or in
the aggregate, would not have a Material Adverse Effect on MotivePower. Neither
MotivePower nor any of its Subsidiaries is in violation of (i) its charter,
by-laws or equivalent documents, (ii) any applicable law, ordinance,
administrative or governmental rule or regulation or (iii) any order, decree or
judgment of any Governmental Entity having jurisdiction over MotivePower or any
of its Subsidiaries, except, in the case of clauses (i), (ii) and (iii), for any
violations that, individually or in the aggregate, would not have a Material
Adverse Effect on MotivePower. "Knowledge of MotivePower" means the actual
knowledge, after reasonable investigation, of the individuals identified in
Section 3.8 of the MotivePower Disclosure Letter.
Section 3.9. Tax Matters. Except as otherwise set forth in
Section 3.9 of the MotivePower Disclosure Letter, (i) MotivePower and each of
its Subsidiaries have filed all federal, and all material state, local, foreign
and provincial, Tax Returns required to have been filed or appropriate
extensions therefor have been properly obtained, and such Tax Returns are
correct and complete, except to the extent that any failure to so file or any
failure to be correct and complete, individually or in the aggregate, would not
have a Material Adverse Effect on MotivePower; (ii) all Taxes shown to be due on
such Tax Returns have been timely paid or extensions for payment have been
properly obtained, or such Taxes are being timely and properly contested, (iii)
MotivePower and each of its Subsidiaries have complied in all material respects
with all rules and regulations relating to the withholding of Taxes except to
the extent that any failure to comply with such rules and regulations,
individually or in the aggregate, would not have a Material Adverse Effect on
MotivePower; (iv) neither MotivePower nor any of its Subsidiaries has waived any
statute of limitations in respect of its Taxes which waiver is currently in
effect; (v) any Tax Returns referred to in clause (i) relating to federal and
state income Taxes have been examined by the IRS or the appropriate state taxing
authority or the period for assessment of the Taxes in respect of which such Tax
Returns were required to be filed has expired; (vi) no issues that have been
raised in writing by the relevant taxing authority in connection with the
examination of the Tax Returns referred to in clause (i) are currently pending;
and (vii) all deficiencies asserted or assessments made as a result of any
examination of such Tax Returns by any taxing authority have been paid in full.
MotivePower has not been a United States real property holding corporation
within the meaning of Code Section 897(c)(2) during the applicable period
(relative to the Effective Time) specified in Code Section 897(c)(1)(A)(ii). To
the Knowledge of MotivePower, the representations set forth in the MotivePower
Tax Certificate (as defined in Section 5.8), if made on the date hereof
(assuming the Merger were consummated on the date hereof), would be true and
correct.
Section 3.10. Actions and Proceedings. Except as set forth in
Section 3.10 of the MotivePower Disclosure Letter and in the MotivePower SEC
Documents filed prior to the date of this Agreement, there are no outstanding
orders, judgments, injunctions, awards or decrees of any Governmental Entity
against or involving MotivePower or any of its Subsidiaries, or against or
involving any of the directors, officers or employees of MotivePower or any of
its Subsidiaries, as such, any of its or their properties, assets or business or
any MotivePower Plan that, individually or in the aggregate, would have a
Material Adverse Effect on MotivePower. As of the date of this Agreement, there
are no
35
actions, suits or claims or legal, administrative or arbitrative proceedings or
investigations pending or, to the Knowledge of MotivePower, threatened against
or involving MotivePower or any of its Subsidiaries or any of its or their
directors, officers or employees as such, or any of its or their properties,
assets or business or any MotivePower Plan that, individually or in the
aggregate, would have a Material Adverse Effect on MotivePower. There are no
actions, suits, labor disputes or other litigation, legal or administrative
proceedings or governmental investigations pending or, to the Knowledge of
MotivePower, threatened against or affecting MotivePower or any of its
Subsidiaries or any of its or their officers, directors or employees, as such,
or any of its or their properties, assets or business relating to the
transactions contemplated by this Agreement or the MotivePower Option Agreement.
Section 3.11. Certain Agreements. Except as set forth in
Section 3.11 of the MotivePower Disclosure Letter, neither MotivePower nor any
of its Subsidiaries is a party to any oral or written agreement or plan,
including any employment agreement, severance agreement, retention agreement,
stock option plan, stock appreciation rights plan, restricted stock plan or
stock purchase plan, any of the benefits of which will be increased, the vesting
of the benefits of which will be accelerated, or which will become payable or
which at the participant's or holder's option may become payable, due to or by
the occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will, or may at the option of the holder
or participant, be calculated on the basis of any of the transactions
contemplated by this Agreement. No holder of any option to purchase shares of
MotivePower Common Stock, or shares of MotivePower Common Stock granted in
connection with the performance of services for MotivePower or its Subsidiaries,
is or will be entitled to receive cash from MotivePower or any Subsidiary in
lieu of or in exchange for such option or shares as a result of the transactions
contemplated by this Agreement or the MotivePower Option Agreement.
Section 3.12. ERISA. (a) Section 3.12 (a) of the MotivePower
Disclosure Letter contains a list of each MotivePower Plan. With respect to each
MotivePower Plan, MotivePower has made available to WABCO a true and correct
copy of (i) the most recent annual report (Form 5500) filed with the IRS, (ii)
such MotivePower Plan and all amendments thereto, (iii) each trust agreement,
insurance contract or administration agreement relating to such MotivePower
Plan, (iv) the most recent summary plan description for each MotivePower Plan
for which a summary plan description is required, (v) the most recent actuarial
report or valuation relating to a MotivePower Plan subject to Title IV of ERISA,
(vi) the most recent determination letter, if any, issued by the IRS with
respect to any MotivePower Plan intended to be qualified under section 401(a) of
the Code, (vii) any request for a determination currently pending before the IRS
and (viii) all correspondence with the IRS, the Department of Labor or the
Pension Benefit Guaranty Corporation relating to any outstanding controversy.
Each MotivePower Plan complies with ERISA, the Code and all other applicable
statutes and governmental rules and regulations, except any failure to comply as
would not have, individually or in the aggregate, a Material Adverse Effect on
MotivePower. Except as set forth in Section 3.12 of the MotivePower Disclosure
Letter, (i) no "reportable event" (within the meaning of Section 4043 of ERISA)
has occurred within the past three years with respect to any MotivePower Plan
which could result in liability to MotivePower, (ii) neither
36
MotivePower nor any of its ERISA Affiliates has withdrawn from any MotivePower
Multiemployer Plan (as hereinafter defined) at any time or instituted, or is
currently considering taking, any action to do so, and (iii) no action has been
taken, or is currently being considered, to terminate any MotivePower Plan
subject to Title IV of ERISA.
(b) There has been no failure to make any contribution or pay
any amount due to any MotivePower Plan as required by Section 412 of the Code,
Section 302 of ERISA, or the terms of any such Plan, and no MotivePower Plan,
nor any trust created thereunder, has incurred any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not waived.
(c) With respect to MotivePower Plans, no event has occurred
and, to the Knowledge of MotivePower, there exists no condition or set of
circumstances in connection with which MotivePower or any of its ERISA
Affiliates would be subject to any liability under the terms of such MotivePower
Plans, ERISA, the Code or any other applicable law which has had, or would have,
individually or in the aggregate, a Material Adverse Effect on MotivePower.
Except as listed on Section 3.12(c) of the MotivePower Disclosure Letter, all
MotivePower Plans that are intended to be qualified under Section 401(a) of the
Code have been determined by the IRS to be so qualified, or a timely application
for such determination is now pending or will be filed on a timely basis and,
except as listed on Section 3.12(c) of the MotivePower Disclosure Letter, to the
Knowledge of MotivePower there is no reason why any MotivePower Plan is not so
qualified in operation. Neither MotivePower nor any of its ERISA Affiliates has
been notified by any MotivePower Multiemployer Plan that such MotivePower
Multiemployer Plan is currently in reorganization or insolvency under and within
the meaning of Section 4241 or 4245 of ERISA or that such MotivePower
Multiemployer Plan intends to terminate or has been terminated under Section
4041A of ERISA. To the Knowledge of MotivePower, neither the termination of any
MotivePower Multiemployer Plan nor the complete or partial withdrawal by
MotivePower or any of its ERISA Affiliates from any MotivePower Multiemployer
Plan would result in any liability of MotivePower or any of its ERISA Affiliates
that would have, individually or in the aggregate, a Material Adverse Effect on
MotivePower. Except as disclosed in Section 3.12(c) of the MotivePower
Disclosure Letter, neither MotivePower nor any of its ERISA Affiliates has any
liability or obligation under any welfare plan to provide life insurance or
medical benefits after termination of employment to any employee or dependent
other than as required by (i) Part 6 of Title 1 of ERISA or (ii) the laws of a
jurisdiction outside the United States.
(d) As used in this Agreement, (i) "MotivePower Plan" means a
"pension plan" (as defined in Section 3(2) of ERISA (other than a MotivePower
Multiemployer Plan (as hereinafter defined))), a "welfare plan" (as defined in
Section 3(1) of ERISA), or any material bonus, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, vacation, severance, death benefit, insurance or other
plan, arrangement or understanding, in each case established or maintained or
contributed to by MotivePower or any of its ERISA Affiliates or as to which
MotivePower or any of its ERISA Affiliates or otherwise may have any liability,
whether or not covered by ERISA (other than a MotivePower Ex-U.S. Pension Plan
(as hereinafter defined)), and (ii) "MotivePower
37
Multiemployer Plan" means a "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA) to which MotivePower or any of its ERISA Affiliates is or
has been obligated to contribute or otherwise may have any liability.
(e) Section 3.12(e) of the MotivePower Disclosure Letter
contains a list of each MotivePower Ex-U.S. Pension Plan and MotivePower has
provided to WABCO a copy of any written plan document. Except as would not have,
individually or in the aggregate, a Material Adverse Effect on MotivePower, each
such plan has been maintained in compliance with all applicable laws, orders and
regulations, and the fair market value of the assets of each such plan which is
intended to be a funded MotivePower Ex-U.S. Pension Plan or arrangement equals
or exceeds the value of the accrued benefits. As used in this Agreement, the
term "MotivePower Ex-U.S. Pension Plan" shall mean any arrangement (other than a
MotivePower Plan) providing retirement pension benefits that is established or
maintained by MotivePower or any Subsidiary for the benefit of employees who are
or were employed outside the United States.
(f) Section 3.12(f) of the MotivePower Disclosure Letter
contains a list, as of the date of this Agreement, of all (i) severance and
employment agreements with officers of MotivePower and each ERISA Affiliate,
(ii) severance programs and policies of MotivePower with or relating to its
employees and (iii) plans, programs, agreements and other arrangements of
MotivePower with or relating to its employees which contain change of control or
similar provisions, in each case involving a severance or employment agreement
or arrangement with an individual officer or employee, only to the extent such
agreement or arrangement provides for minimum annual payments in excess of
$100,000. MotivePower has provided to WABCO a true and complete copy of each of
the foregoing.
Section 3.13. Labor Matters. Except as disclosed in Section
3.13 of the MotivePower Disclosure Letter, neither MotivePower nor any of its
Subsidiaries is party to any collective bargaining agreement or other labor
agreement with any union or labor organization and no union or labor
organization has been recognized by MotivePower or any of its Subsidiaries as an
exclusive bargaining representative for employees of MotivePower or any of its
Subsidiaries. Other than as described in Section 3.13 of the MotivePower
Disclosure Letter, neither MotivePower nor any of its Subsidiaries is the
subject of any material proceeding asserting that it or any of its Subsidiaries
has committed an unfair labor practice or is seeking to compel it to bargain
with any labor union or labor organization nor is there pending or, to the
Knowledge of MotivePower, threatened, nor has there been for the past three
years, any labor strike, dispute, walkout, work stoppage, slow-down or lockout
involving it or any of its Subsidiaries, except in each case as would not,
individually or in the aggregate, have a Material Adverse Effect on MotivePower.
Section 3.14. Intellectual Property; Year 2000 Compliance.
Except as set forth in Section 3.14 of the MotivePower Disclosure Letter, (a)
MotivePower and its Subsidiaries own or have a valid, enforceable right to use
free from any encumbrances, other than those that would not have a Material
Adverse Effect on MotivePower, Intellectual Property Rights as are necessary in
connection with the business of MotivePower and its Subsidiaries, taken as a
38
whole, except where the failure to have such Intellectual Property Rights,
individually or in the aggregate, would not have a Material Adverse Effect on
MotivePower. Neither MotivePower nor any of its Subsidiaries has infringed any
Intellectual Property Rights of any third party other than any infringements
that, individually or in the aggregate, would not have a Material Adverse Effect
on MotivePower. Neither MotivePower nor its Subsidiaries are aware of any
infringement or misappropriation by any person with respect to the Intellectual
Property Rights owned or used by MotivePower or its Subsidiaries other than any
such infringement or misappropriation that would not have a Material Adverse
Effect on MotivePower. All Intellectual Property Rights owned or used by
MotivePower or its Subsidiaries as of the date hereof will be owned or available
for use by MotivePower and its Subsidiaries on terms and conditions immediately
following the Effective Date that are not materially different from those
existing prior to the Effective Date.
(b) MotivePower and each of its Subsidiaries have conducted a
commercially reasonable inventory and assessment of the Computer Systems used by
MotivePower and its Subsidiaries in its business, in order to determine which
parts of the Computer System are not yet Year 2000 Compliant and to estimate the
cost of rendering such Computer Systems Year 2000 Compliant prior to January 1,
2000 or such earlier date on which the Computer Systems may shut down or produce
incorrect calculations or otherwise malfunction without becoming totally
inoperable. Based on the above inventory and assessment, the estimated cost to
be incurred after the date of this Agreement of rendering the Computer Systems
Year 2000 Compliant is $300,000, which has been included in the current budget
adopted by MotivePower.
Section 3.15. Environmental and Safety Matters. (a) Except as
set forth in Section 3.15 of the MotivePower Disclosure Letter, the properties,
assets and operations of MotivePower and its predecessors and Subsidiaries have
complied and are in compliance with all Worker Safety Laws and Environmental
Laws, except for any violations that, individually or in the aggregate, have not
had, and would not have, a Material Adverse Effect on MotivePower. With respect
to such properties, assets and operations, including any previously owned,
leased or operated properties, assets or operations, except as set forth in
Section 3.15 of the MotivePower Disclosure Letter, there are no past, present or
reasonably anticipated future events, conditions, circumstances, activities,
practices, incidents, actions or plans of MotivePower or any of its predecessors
or Subsidiaries that would interfere with or prevent compliance or continued
compliance with or give rise to any liabilities or investigatory, corrective or
remedial obligations under applicable Worker Safety Laws and Environmental Laws,
other than any such interference, prevention, liability or obligation that,
individually or in the aggregate, has not had, and would not have, a Material
Adverse Effect on MotivePower.
(b) Except as set forth in Section 3.15 of the MotivePower
Disclosure Letter, MotivePower and its predecessors and Subsidiaries have not
caused or permitted any property, asset, operation, including any previously
owned property, asset or operation, to use, generate, manufacture, refine,
transport, treat, store, handle, dispose, transfer or process hazardous or toxic
materials, substances, wastes, pollutants or contaminants, except in material
compliance
39
with all Environmental Laws and Worker Safety Laws, other than any such activity
that, individually or in the aggregate, has not had, and would not have, a
Material Adverse Effect on MotivePower. Except as set forth in Section 3.15 of
the MotivePower Disclosure Letter, MotivePower and its Subsidiaries have not
reported to any Governmental Entity, or been notified by any Governmental Entity
of the existence of, any material violation of an Environmental Law or any
release, discharge or emission of any hazardous or toxic materials, substances,
wastes, pollutants or contaminants, other than any such violation, release,
discharge or emission that, individually or in the aggregate, has not had, and
would not have, a Material Adverse Effect on MotivePower.
(c) With respect to MotivePower, neither this Agreement nor
the consummation of the transactions that are the subject of this Agreement will
result in any obligations for site investigation or cleanup, or notification to
or consent of any Governmental Entity or third party, pursuant to any of the
so-called "transaction-triggered" or "responsible property transfer"
Environmental Laws, other than any such obligations that, individually or in the
aggregate, would not have, a Material Adverse Effect on MotivePower.
(d) This Section sets forth the sole representations and
warranties of MotivePower with respect to environmental, health or safety
matters, including without limitation all matters arising under Environmental
Laws and Worker Safety Laws.
Section 3.16. Insurance. MotivePower and its Subsidiaries have
in effect insurance coverage with reputable insurers, which in respect of
amounts, premiums, types and risks insured, constitutes reasonably adequate
coverage against all risks customarily insured against by companies of
comparable size and with similar operations.
Section 3.17. Parachute Payments to Disqualified Individuals.
Except as set forth in Section 3.17 of the MotivePower Disclosure Letter, no
payment or other benefit, and no acceleration of the vesting of any options,
payments or other benefits, will, as a direct or indirect result of the
transactions contemplated by this Agreement, be (or under Section 280G of the
Code and the Treasury Regulations thereunder be presumed to be) a "parachute
payment" to a "disqualified individual" (as those terms are defined in Section
280G of the Code and the Treasury Regulations thereunder) with respect to
MotivePower or any of its Subsidiaries, without regard to whether such payment
or acceleration is reasonable compensation for personal services performed or to
be performed in the future. The approximate aggregate amount of "parachute
payments" related to the matters set forth in such Section 3.17 of the
MotivePower Disclosure Letter, assuming the Closing occurs on _________, 1999
and termination of all listed individuals without cause on such date is set
forth in such Section 3.17 of the MotivePower Disclosure Letter.
Section 3.18. Required Vote of MotivePower Stockholders. The
affirmative vote of a majority of the votes cast by holders of MotivePower
Common Stock at the MotivePower Shareholders Meeting is required to adopt this
Agreement. No other vote of the shareholders of MotivePower is required by law,
the MotivePower Articles of Incorporation or the MotivePower By-Laws or
otherwise in order for MotivePower to consummate the Merger
40
and the transactions contemplated by this Agreement and the MotivePower Option
Agreement.
Section 3.19. State Takeover Laws: Certain Charter Provisions.
The Board of Directors of MotivePower has, to the extent such provision is
applicable, taken all action (including appropriate approvals of the Board of
Directors of MotivePower) necessary to exempt WABCO, its Subsidiaries and
affiliates, the Merger, this Agreement, the MotivePower Option Agreement and the
transactions contemplated hereby and thereby from Article 12 of the MotivePower
Articles of Incorporation. To the Knowledge of MotivePower, no state takeover
statutes are applicable to the Merger, this Agreement, the MotivePower Option
Agreement or the transactions contemplated hereby or thereby.
Section 3.20. Pooling of Interests; Reorganization. To the
Knowledge of MotivePower, neither it nor any of its Subsidiaries has (i) taken
any action or failed to take any action which action or failure would jeopardize
the treatment of the Merger as a pooling of interests for accounting purposes or
(ii) taken any action or failed to take any action which action or failure would
jeopardize the qualification of the Merger as a reorganization within the
meaning of Section 368(a) of the Code.
Section 3.21. Opinion of Financial Advisor. MotivePower has
received the written opinion of Xxxxxxxxxxx Xxxxxxx & Co., Inc., dated the date
hereof, to the effect that, as of the date hereof, the Exchange Ratio is fair to
MotivePower's shareholders from a financial point of view, a copy of which
opinion has been delivered to WABCO.
Section 3.22. Broker's Fees. Except as set forth in the
engagement letter agreement between MotivePower and Xxxxxxxxxxx Xxxxxxx & Co.,
Inc., a true and complete copy of which has previously been provided to WABCO,
neither MotivePower nor any MotivePower Subsidiary nor any of their respective
officers or directors has employed any broker or finder or incurred any
liability for any broker's fees, commissions or finder's fees in connection with
the Merger or related transactions contemplated by this Agreement or the
MotivePower Option Agreement.
Section 3.23. MotivePower Rights Agreement; Other Matters. (a)
MotivePower has amended the MotivePower Rights Agreement to render the
MotivePower Rights Agreement inapplicable to the Merger and the other
transactions contemplated by this Agreement and the MotivePower Option Agreement
and to provide that the Distribution Date (as defined in the MotivePower Rights
Agreement) shall not be deemed to occur and the rights issuable pursuant to the
MotivePower Rights Agreement will not separate from the shares of MotivePower
Common Stock, as a result of entering into this Agreement and the MotivePower
Option Agreement, or consummating the Merger and the other transactions
contemplated hereby and thereby.
(b) On or prior to the date hereof, MotivePower has delivered
to WABCO true and correct copies of certain waivers executed by each of the
individuals who hold options with related limited stock appreciation rights
("LSAR") under the MotivePower Stock Incentive Plan, pursuant to which each such
individual has waived his or her LSAR rights.
41
Section 3.24. Unlawful Payments and Contributions. To the
Knowledge of MotivePower, neither MotivePower, any Subsidiary nor any of their
respective directors, officers or any of their respective employees or agents
has (i) used any MotivePower funds for any unlawful contribution, endorsement,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
any bribe, rebate, payoff, influence payment, kickback or other unlawful payment
to any person.
Section 3.25. Real Property. (a) Section 3.25(a) of the
MotivePower Disclosure Letter lists each parcel of real property owned by
MotivePower or any of its Subsidiaries (the "MotivePower Owned Property").
MotivePower or its applicable Subsidiary has good and marketable title in and to
all of the MotivePower Owned Property, subject to no Liens that would have a
Material Adverse Effect on MotivePower or materially impair MotivePower's rights
to or ability to use any such property, except as described on Section 3.25(a)
of the MotivePower Disclosure Letter.
(b) Section 3.25(b) of the MotivePower Disclosure Letter sets
forth a list of all material leases, subleases and other occupancy agreements,
including all amendments, extensions and other modifications (the "MotivePower
Leases") for real property (the "MotivePower Leased Property"; the MotivePower
Owned Property and the MotivePower Leased Property collectively the "MotivePower
Real Property") to which MotivePower or any of its Subsidiaries is a party.
MotivePower or its applicable Subsidiary has a good and valid leasehold interest
in and to all of the MotivePower Leased Property, subject to no Liens except as
described in Section 3.25(b) of the MotivePower Disclosure Letter. Each
MotivePower Lease is in full force and effect and is enforceable in accordance
with its terms. There exists no default or condition which, with the giving of
notice, the passage of time or both, could become a default under any
MotivePower Lease in any case, that would have a Material Adverse Effect on
MotivePower or materially impair MotivePower's rights to or ability to use any
such property. MotivePower has previously delivered to WABCO true and complete
copies of all the MotivePower Leases. Except as described on Section 3.25(b) of
the MotivePower Disclosure Letter, no consent, waiver, approval or authorization
is required from the landlord under any MotivePower Lease as a result of the
execution of this Agreement or the consummation of the transactions contemplated
hereby the failure to obtain would have a Material Adverse Effect on MotivePower
or materially impair MotivePower's rights to or ability to use any such
property.
Section 3.26. Material Contracts. Except as set forth in
Section 3.26 of the MotivePower Disclosure Letter, there have been made
available to WABCO, its affiliates and their representatives true and complete
copies of all of the following contracts to which MotivePower or any of its
Subsidiaries is a party or by which any of them is bound (collectively, the
"MotivePower Material Contracts"): (i) contracts with any current officer or
director of MotivePower or any of its Subsidiaries; (ii) contracts for the sale
of any of the assets of MotivePower or any of its Subsidiaries other than in the
ordinary course of business
42
or for the grant to any person of any preferential rights to purchase any of its
assets other than inventory in the ordinary course of business; (iii) contracts
containing covenants of MotivePower or any of its Subsidiaries not to compete in
any line of business or with any person in any geographical area or covenants of
any other person not to compete with MotivePower or any of its Subsidiaries in
any line of business or in any geographical area; (iv) material indentures,
credit agreements, mortgages, promissory notes, and all contracts relating to
the borrowing of money; and (v) all other agreements contracts or instruments
which, in the reasonable opinion of MotivePower, are material to MotivePower or
any of its Subsidiaries. Except as set forth or as would not have a Material
Adverse Effect on MotivePower, all of the MotivePower Material Contracts are in
full force and effect and are the legal, valid and binding obligation of
MotivePower or its Subsidiaries, enforceable against them in accordance with
their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding at law or in
equity). Except as set forth in Section 3.26 of the MotivePower Disclosure
Letter, neither MotivePower nor any Subsidiary is in default in any material
respect under any MotivePower Material Contract nor, to the Knowledge of
MotivePower, is any other party to any MotivePower Material Contract in default
thereunder in any material respect except, in each case, for those defaults
that, individually or in the aggregate, would not have a Material Adverse Effect
on MotivePower.
Section 3.27. Warranties. To MotivePower's Knowledge, the
accrual for warranty related expenses as of December 31, 1998 reported in
MotivePower's audited financial statement contained in MotivePower's Form 10-K
for the year ended December 31, 1998, adequately reflects an amount required for
satisfaction of warranty claims due in respect of goods sold or services
provided by MotivePower or any of its Subsidiaries prior to such date. Such
provision has been established in accordance with GAAP. Except as set forth in
Section 3.27 of the MotivePower Disclosure Letter, neither MotivePower nor its
Subsidiaries have agreed to provide any express product or service warranties
other than (a) standard warranties, the terms of which have been provided to
MotivePower and identified as MotivePower's standard warranties, (b) warranties
that products are free from defects in workmanship or comply with standard or
agreed specifications that are extended for terms of no more than two (2) years
each and that expressly provide that cure is to be effected by repair or
replacement of the defective or noncomplying products and (c) other warranties
that, individually or in the aggregate, will not, if material claims are made
thereunder, have a Material Adverse Effect on MotivePower.
Section 3.28. Pooling Letter. MotivePower has received a draft
of a letter (the "Draft Letter") from Deloitte & Touche LLP and addressed to
MotivePower, a copy of which has been delivered to WABCO, in which Deloitte &
Touche LLP concurs with the MotivePower management's conclusions that no
conditions exist related to MotivePower that would preclude MotivePower from
accounting for the Merger as a pooling of interests. MotivePower has also
received a letter from Deloitte & Touche LLP dated as of September 26, 1999 and
addressed to MotivePower, a copy of which has been delivered to WABCO, whereby
Deloitte & Touche LLP states, subject to certain conditions precedent, that it
expects
43
to able to issue the Draft Letter at the Closing.
ARTICLE IV
CONDUCT OF BUSINESS
Section 4.1. Conduct of WABCO. WABCO agrees that from the date
hereof until the Effective Time, except as set forth in Section 4.1 of the WABCO
Disclosure Letter or as otherwise expressly contemplated by this Agreement or
with the prior written consent of MotivePower, WABCO and its Subsidiaries shall
conduct their business in the ordinary course consistent with past practice and
shall use their reasonable best efforts to preserve intact their business
organizations and relationships with third parties and to keep available the
services of their present officers and employees. Without limiting the
generality of the foregoing, from the date hereof until the Effective Time,
except as set forth in the WABCO Disclosure Letter or as expressly contemplated
by this Agreement, without the prior written consent of MotivePower, WABCO will
not, and will not permit any of its Subsidiaries to:
(a) adopt or propose any change in its charter, bylaws or
equivalent documents;
(b) amend any material term of any outstanding security of
WABCO or any of its Subsidiaries;
(c) merge or consolidate with any corporation, limited
liability company, partnership, trust, association, individual or any other
entity or organization ("Person");
(d) issue, sell, pledge, dispose of, grant, transfer, lease,
license, guarantee, encumber, or authorize the issuance, sale, pledge,
disposition, grant, transfer, lease, license, guarantee or encumbrance of, (i)
any shares of capital stock of WABCO or any of its Subsidiaries (other than the
issuance of shares by a wholly-owned Subsidiary of WABCO to WABCO or another
wholly-owned Subsidiary of WABCO), or securities convertible or exchangeable or
exercisable for any shares of such capital stock, or any options, warrants or
other rights of any kind to acquire any shares of such capital stock or such
convertible or exchangeable securities, or any stock appreciation rights or
limited stock appreciation rights, or any other ownership interest of WABCO or
any of its Subsidiaries or (ii) except in the ordinary course of business and in
a manner consistent with past practice, any property or assets (tangible or
intangible) (including, without limitation, by merger, consolidation, spinoff or
other dispositions of stock or assets) of WABCO or any of its Subsidiaries,
except in the case of either clause (i) or (ii) (A) the issuance of WABCO Common
Stock upon the exercise of stock options issued pursuant to the WABCO Stock
Plans prior to the date hereof, (B) the award of options in connection with new
employee hires in the ordinary course of business and consistent with past
practice; provided, however, that no such new employee shall receive options to
purchase more than 5,000 shares of WABCO Common Stock, (C) pursuant to existing
obligations under contracts or agreements in force at the date of this Agreement
and (D) sales or other dispositions of property and assets of WABCO and its
Subsidiaries in an aggregate amount that does not exceed $1,000,000;
44
(e) create or incur any material Lien on any material asset
(tangible or intangible) other than in the ordinary course of business and
consistent with past practice;
(f) make any material loan, advance or capital contributions
to or investments in any Person other than loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries of WABCO made in
the ordinary course and consistent with past practices;
(g) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock (except for dividends paid by any direct or indirect
wholly-owned Subsidiary of WABCO to WABCO or to any other direct or indirect
wholly-owned Subsidiary of WABCO and except for the regular quarterly cash
dividend of $.01 per share of WABCO Common Stock with a record date consistent
with prior record dates) or enter into any agreement with respect to the voting
of its capital stock;
(h) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(i) (i) acquire (including, without limitation, by merger,
consolidation or acquisition of stock or assets) any interest in any Person or
any division thereof (other than a wholly-owned Subsidiary) or any assets, other
than acquisitions of assets in the ordinary course of business and consistent
with past practice and any other acquisitions for consideration that is not, in
the aggregate, in excess of $25,000,000, (ii) incur any indebtedness for
borrowed money or guarantee such indebtedness of another Person, or issue or
sell any debt securities or warrants or other rights to acquire any debt
security of WABCO or any of its Subsidiaries, except for (A) indebtedness for
borrowed money incurred in the ordinary course of business and consistent with
past practice or in connection with transactions otherwise permitted under this
Section 4.1, (B) other indebtedness for borrowed money with a maturity of not
more than one year in a principal amount not, in the aggregate, in excess of
$5,000,000, and (C) other indebtedness for borrowed money incurred under WABCO's
credit agreement for working capital purposes only, (iii) terminate, cancel,
waive any rights under or request any material change in, or agree to any
material change in, any material contract or agreement of WABCO or, except in
connection with transactions permitted under this Section 4.1(i), enter into any
contract or agreement material to the business, results of operations or
financial condition of WABCO and its Subsidiaries, taken as a whole, in either
case other than in the ordinary course of business and consistent with past
practice, (iv) make or authorize any capital expenditure, other than capital
expenditures that are not, in the aggregate, in excess of $5,000,000 from the
date of this Agreement through September 30, 1999 and $15,000,000 during any
calendar quarter thereafter, for WABCO and its Subsidiaries, taken as a whole
(provided that any capital expenditure allowance unused during any period may be
carried forward to increase the capital expenditure allowance for the succeeding
period), or (v) enter into or amend any contract, agreement, commitment or
arrangement that, if fully performed, would not be permitted under this Section
4.1(i);
45
(j) take any action with respect to accounting policies or
procedures, other than actions in the ordinary course of business and consistent
with past practice or except as required by changes in GAAP;
(k) make any material Tax election or take any position on any
Tax Return filed on or after the date of this Agreement or adopt any method
therefor that is inconsistent with elections made, positions taken or methods
used in preparing or filing similar Tax Returns in prior periods;
(l) except as may be required by contractual commitments or
corporate policies with respect to severance or termination pay in existence on
the date hereof, (i) increase the compensation payable or to become payable to
its officers or employees (except for increases in the ordinary course of
business and consistent with past practice in salaries or wages of employees of
WABCO or any of its Subsidiaries), (ii) establish, adopt, enter into or amend
any collective bargaining, bonus, profit sharing, thrift, compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director, officer or employee, except as
contemplated by this Agreement or to the extent required by applicable law or
the terms of a collective bargaining agreement, (iii) increase the benefits
payable under any existing severance or termination pay policies or employment
or other agreements or (iv) take any affirmative action to accelerate the
vesting of any stock-based compensation;
(m) take any action that would, individually or in the
aggregate, reasonably be expected to make any representation and warranty of
WABCO hereunder untrue in any material respect at, or as of any time prior to,
the Effective Time; or
(n) agree or commit to do any of the foregoing.
Section 4.2. Conduct of MotivePower. MotivePower agrees that
from the date hereof until the Effective Time, except as set forth in Section
4.2 of the MotivePower Disclosure Letter or as otherwise expressly contemplated
by this Agreement or with the prior written consent of WABCO, MotivePower and
its Subsidiaries shall conduct their business in the ordinary course consistent
with past practice and shall use their reasonable best efforts to preserve
intact their business organizations and relationships with third parties and to
keep available the services of their present officers and employees. Without
limiting the generality of the foregoing, from the date hereof until the
Effective Time, except as set forth in the MotivePower Disclosure Letter or as
expressly contemplated by this Agreement, without the prior written consent of
WABCO, MotivePower will not, and will not permit any of its Subsidiaries to:
(a) adopt or propose any change in its charter, bylaws or
equivalent documents;
(b) amend any material term of any outstanding security of
MotivePower or any of its Subsidiaries;
46
(c) merge or consolidate with any Person;
(d) issue, sell, pledge, dispose of, grant, transfer, lease,
license, guarantee, encumber, or authorize the issuance, sale, pledge,
disposition, grant, transfer, lease, license, guarantee or encumbrance of, (i)
any shares of capital stock of MotivePower or any of its Subsidiaries (other
than the issuance of shares by a wholly-owned Subsidiary of MotivePower to
MotivePower or another wholly-owned Subsidiary of MotivePower), or securities
convertible or exchangeable or exercisable for any shares of such capital stock,
or any options, warrants or other rights of any kind to acquire any shares of
such capital stock or such convertible or exchangeable securities, or any stock
appreciation rights or limited stock appreciation rights, or any other ownership
interest of MotivePower or any of its Subsidiaries or (ii) except in the
ordinary course of business and in a manner consistent with past practice, any
property or assets (tangible or intangible) (including, without limitation, by
merger, consolidation, spinoff or other dispositions of stock or assets) of
MotivePower or any of its Subsidiaries, except in the case of either clause (i)
or (ii) (A) the issuance of MotivePower Common Stock upon the exercise of stock
options issued pursuant to the MotivePower Stock Plans prior to the date hereof,
(B) the award of options in connection with new employee hires in the ordinary
course of business and consistent with past practice; provided, however, that no
such new employee shall receive options to purchase more than 5,000 shares of
MotivePower Common Stock, (C) pursuant to existing obligations under contracts
or agreements in force at the date of this Agreement and (D) sales or other
dispositions of property and assets of MotivePower and its Subsidiaries in an
aggregate amount that does not exceed $1,000,000;
(e) create or incur any material Lien on any material asset
(tangible or intangible) other than in the ordinary course of business and
consistent with past practice;
(f) make any material loan, advance or capital contributions
to or investments in any Person other than loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries of MotivePower made
in the ordinary course and consistent with past practices;
(g) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any
of its capital stock (except for dividends paid by any direct or indirect
wholly-owned Subsidiary of MotivePower to MotivePower or to any other direct or
indirect wholly-owned Subsidiary of MotivePower) or enter into any agreement
with respect to the voting of its capital stock;
(h) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
(i) (i) acquire (including, without limitation, by merger,
consolidation or acquisition of stock or assets) any interest in any Person or
any division thereof (other than a wholly-owned Subsidiary) or any assets, other
than acquisitions of assets in the ordinary course of business and consistent
with past practice and any other acquisitions for consideration that is
47
not, in the aggregate, in excess of $25,000,000, (ii) incur any indebtedness for
borrowed money or guarantee such indebtedness of another Person, or issue or
sell any debt securities or warrants or other rights to acquire any debt
security of MotivePower or any of its Subsidiaries, except for (A) indebtedness
for borrowed money incurred in the ordinary course of business and consistent
with past practice or in connection with transactions otherwise permitted under
this Section 4.2, (B) other indebtedness for borrowed money with a maturity of
not more than one year in a principal amount not, in the aggregate, in excess of
$5,000,000, and (C) other indebtedness for borrowed money incurred under
MotivePower's credit agreement for working capital purposes only, (iii)
terminate, cancel, waive any rights under or request any material change in, or
agree to any material change in, any material contract or agreement of
MotivePower or, except in connection with transactions permitted under this
Section 4.2(i), enter into any contract or agreement material to the business,
results of operations or financial condition of MotivePower and its
Subsidiaries, taken as a whole, in either case other than in the ordinary course
of business and consistent with past practice, (iv) make or authorize any
capital expenditure, other than capital expenditures that are not, in the
aggregate, in excess of $5,000,000 from the date of this Agreement through
September 30, 1999 and $15,000,000 during any calendar quarter thereafter, for
MotivePower and its Subsidiaries, taken as a whole (provided that any capital
expenditure allowance unused during any period may be carried forward to
increase the capital expenditure allowance for the succeeding period), or (v)
enter into or amend any contract, agreement, commitment or arrangement that, if
fully performed, would not be permitted under this Section 4.2(i);
(j) take any action with respect to accounting policies or
procedures, other than actions in the ordinary course of business and consistent
with past practice or except as required by changes in GAAP;
(k) make any material Tax election or take any position on any
Tax Return filed on or after the date of this Agreement or adopt any method
therefor that is inconsistent with elections made, positions taken or methods
used in preparing or filing similar Tax Returns in prior periods;
(l) except as may be required by contractual commitments or
corporate policies with respect to severance or termination pay in existence on
the date hereof, (i) increase the compensation payable or to become payable to
its officers or employees (except for increases in the ordinary course of
business and consistent with past practice in salaries or wages of employees of
MotivePower or any of its Subsidiaries), (ii) establish, adopt, enter into or
amend any collective bargaining, bonus, profit sharing, thrift, compensation,
employment, termination, severance or other plan, agreement, trust, fund, policy
or arrangement for the benefit of any director, officer or employee, except as
contemplated by this Agreement or to the extent required by applicable law or
the terms of a collective bargaining agreement, (iii) increase the benefits
payable under any existing severance or termination pay policies or employment
or other agreements or (iv) take any affirmative action to accelerate the
vesting of any stock-based compensation;
(m) take any action that would, individually or in the
aggregate, reasonably be
48
expected to make any representation and warranty of MotivePower hereunder untrue
in any material respect at, or as of any time prior to, the Effective Time; or
(n) agree or commit to do any of the foregoing.
ARTICLE V
ADDITIONAL AGREEMENTS
Section 5.1. No Solicitation. (a) WABCO and MotivePower each
agree that it shall not, nor shall it permit any of its Subsidiaries to, nor
shall it authorize or permit any officer, director or employee or any investment
banker, attorney, accountant, agent or other advisor or representative of WABCO
or MotivePower, as the case may be, or any of their respective Subsidiaries to,
(i) solicit, initiate or knowingly encourage the submission of any Takeover
Proposal, (ii) enter into any agreement with respect to a Takeover Proposal or
(iii) participate in any discussions or negotiations regarding, or furnish to
any Person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Takeover Proposal; provided, however,
that on or prior to 5:00 p.m., eastern time on the 45th calendar day after the
date hereof or if earlier, the date of the applicable Shareholders Meeting, to
the extent required by the fiduciary obligations of the Board of Directors of
WABCO or MotivePower, as the case may be, as determined in good faith by a
majority of the members thereof (after consultation with outside legal counsel),
such party may, in response to unsolicited requests therefor, participate in
discussions or negotiations with, or furnish information pursuant to a
confidentiality agreement no less favorable to such party than the
Confidentiality Agreement (as defined in Section 5.4) to, any Person who
indicates a willingness to make a Superior Proposal. Each of WABCO and
MotivePower immediately shall cease and cause to be terminated all existing
discussions or negotiations with any Persons conducted heretofore with respect
to, or that could reasonably be expected to lead to, any Takeover Proposal. For
all purposes of this Agreement, (i) "Takeover Proposal" means any proposal for a
merger, consolidation, share exchange, business combination or other similar
transaction involving WABCO or MotivePower, as the case may be, or any of their
respective Significant Subsidiaries (as hereinafter defined) or any proposal or
offer to acquire, directly or indirectly, an equity interest in, any voting
securities of, or a substantial portion of the assets of, WABCO or MotivePower,
as the case may be, or any of their respective Significant Subsidiaries, other
than the transactions contemplated by this Agreement, (ii) "Superior Proposal"
means a bona fide written proposal made by a third party to acquire all of the
outstanding equity interests in or substantially all of the assets of WABCO or
MotivePower, as the case may be, pursuant to a tender or exchange offer, a
merger, a share exchange, a sale of all or substantially all its assets or
otherwise on terms which a majority of the members of the Board of Directors of
WABCO or MotivePower, as the case may be, determines in good faith (taking into
account the advice of independent financial advisors) to be more favorable to
WABCO or MotivePower, as the case may be, and their respective stockholders than
the Merger (and any revised proposal made by the other party to this Agreement)
and for which financing, to the extent required, is then fully committed, and
(iii) a "Significant Subsidiary"
49
means any Subsidiary that would constitute a "significant subsidiary" within the
meaning of Rule 1-02 of Regulation S-X of the SEC.
(b) Except as otherwise provided in this Section 5.1(b),
neither the Board of Directors of WABCO nor any committee thereof shall (i)
withdraw or modify, or propose to withdraw or modify, in a manner adverse to
MotivePower, the approval or recommendation by the Board of Directors of WABCO
or any such committee of this Agreement or the Merger or (ii) approve or
recommend, or propose to approve or recommend, any Takeover Proposal. Except as
otherwise provided in this Section 5.1(b), neither the Board of Directors of
MotivePower nor any committee thereof shall (i) withdraw or modify, or propose
to withdraw or modify, in a manner adverse to WABCO, the approval or
recommendation by the Board of Directors of MotivePower or any such committee of
this Agreement or the Merger or (ii) approve or recommend, or propose to approve
or recommend, any Takeover Proposal. Notwithstanding the foregoing, (i) the
Board of Directors of WABCO or MotivePower, to the extent required by its
fiduciary obligations, as determined in good faith by a majority of the members
thereof (after consultation with outside legal counsel), may approve or
recommend a Superior Proposal or withdraw or modify its approval or
recommendation of this Agreement or the Merger and (ii) nothing contained in
this Agreement shall prevent the Board of Directors of WABCO or MotivePower from
complying with Rule 14d-9 and Rule 14e-2 promulgated under the Exchange Act with
regard to a Takeover Proposal.
(c) WABCO and MotivePower shall each notify the other party
promptly (but in no event later than 24 hours) after receipt by WABCO or
MotivePower (or its advisors), respectively, of any Takeover Proposal or any
request for nonpublic information in connection with a Takeover Proposal or for
access to the properties, books or records of such party by any Person or entity
that informs such party that it is considering making, or has made, a Takeover
Proposal. Such notice to the other party shall be made orally and in writing and
shall indicate the identity of the offeror and the terms and conditions of such
proposal, inquiry or contact. Such party shall keep the other party informed, on
a current basis, of the status and details (including amendments or proposed
amendments) of any such Takeover Proposal or request and the status of any
negotiations or discussions.
(d) During the period from the date of this Agreement through
the Effective Time, neither WABCO nor MotivePower shall terminate, amend, modify
or waive any provision of any confidentiality, standstill or similar agreement
to which WABCO, MotivePower or any of their respective Subsidiaries is a party
and which relates to any transaction that could constitute a Takeover Proposal
or that has as a counterparty any Person making a Takeover Proposal. During such
period, each of WABCO and MotivePower agrees to enforce, to the fullest extent
permitted under applicable law, the provisions of any such agreements, including
using its best efforts to obtain injunctions to prevent any threatened or actual
breach of such agreements and to enforce specifically the terms and any
provision thereof in any court of the United States or any state thereof having
jurisdiction.
Section 5.2. Joint Proxy Statement; Registration Statement.
(a) As promptly as practicable after the execution of this Agreement,
MotivePower and WABCO shall prepare
50
and file with the SEC the Joint Proxy Statement, and WABCO shall prepare and
file with the SEC the Registration Statement (in which the Joint Proxy Statement
will be included). MotivePower will be given the opportunity to review and
comment upon the Registration Statement. MotivePower and WABCO shall use their
reasonable best efforts to cause the Registration Statement to become effective
under the Securities Act as soon after such filing as practicable. The Joint
Proxy Statement shall include the recommendation of the Board of Directors of
WABCO in favor of approval and adoption of this Agreement and the Merger, except
to the extent the Board of Directors of WABCO, in accordance with the terms of
Section 5.1(b), shall have withdrawn or modified its approval or recommendation
of this Agreement or the Merger, and the recommendation of the Board of
Directors of MotivePower in favor of approval and adoption of this Agreement and
the Merger, except to the extent the Board of Directors of MotivePower, in
accordance with the terms of Section 5.1(b), shall have withdrawn or modified
its approval or recommendation this Agreement and the Merger. MotivePower shall
use its reasonable best efforts to cause the Joint Proxy Statement to be mailed
to its shareholders, and WABCO shall use its reasonable best efforts to cause
the Joint Proxy Statement to be mailed to its stockholders, in each case as
promptly as practicable after the Registration Statement becomes effective.
(b) MotivePower and WABCO shall make all necessary filings
with respect to the Merger and the transactions contemplated thereby under the
Securities Act and the Exchange Act and applicable "Blue Sky" laws and the rules
and regulations thereunder. No filing of, or amendment or supplement to, the
Registration Statement or the Joint Proxy Statement will be made by MotivePower
or WABCO without providing the other party the opportunity to review and comment
thereon. WABCO will advise MotivePower, promptly after it receives notice
thereof and in any event within 24 hours thereof, of the time when the
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 WABCO Common Stock issuable in connection with the Merger for offering or
sale in any jurisdiction, or any request by the SEC for amendment of the
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 MotivePower or WABCO, or any of their respective
affiliates, officers or directors, should be discovered by MotivePower or WABCO
which should be set forth in an amendment or supplement to any of the
Registration Statement or the Joint Proxy Statement, 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 which
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 shareholders of MotivePower and WABCO.
Section 5.3. Shareholders Meetings. WABCO shall duly call,
give notice of, convene and hold a meeting of its stockholders (the "WABCO
Stockholders Meeting") for the purpose of voting on the adoption and approval of
this Agreement and the Merger and, through its Board of Directors, will
recommend to its stockholders adoption and approval of
51
this Agreement and the Merger, except to the extent that the Board of Directors
of WABCO shall have withdrawn or modified its approval or recommendation of this
Agreement and the Merger as permitted by Section 5.1(b). MotivePower shall duly
call, give notice of, convene and hold a meeting of its shareholders (the
"MotivePower Shareholders Meeting" and, together with the WABCO Stockholders
Meeting, the "Shareholders Meetings") for the purpose of voting on the adoption
and approval of this Agreement and the Merger and, through its Board of
Directors, will recommend to its shareholders adoption and approval of this
Agreement and the Merger, except to the extent that the Board of Directors of
MotivePower shall have withdrawn or modified its approval or recommendation of
this Agreement and the Merger as permitted by Section 5.1(b). In a manner
consistent with their fiduciary duties to their respective stockholders and as
they may reasonably determine to be consistent with the objective of
consummating the Merger, MotivePower and WABCO will use their reasonable best
efforts to hold the MotivePower Shareholders Meeting and the WABCO Stockholders
Meeting on the same date and as soon as practicable after the date hereof.
Except to the extent that the Board of Directors of WABCO shall have withdrawn
or modified its approval or recommendation as aforesaid, WABCO will use its
reasonable best efforts to solicit from its stockholders proxies in favor of
adoption and approval of this Agreement and the Merger. Except to the extent
that the Board of Directors of MotivePower shall have withdrawn or modified its
approval or recommendation as aforesaid, MotivePower will use its reasonable
best efforts to solicit from its shareholders proxies in favor of adoption and
approval of this Agreement and the Merger. Notwithstanding anything to the
contrary in this Agreement, this Agreement shall be submitted to WABCO's
stockholders at the WABCO Stockholders Meeting whether or not the Board of
Directors of WABCO determines at any time that this Agreement is no longer
advisable and recommends that the stockholders reject it. Notwithstanding
anything to the contrary in this Agreement, this Agreement shall be submitted to
MotivePower's shareholders at the MotivePower Shareholders Meeting whether or
not the Board of Directors of MotivePower determines at any time that this
Agreement is no longer advisable and recommends that shareholders reject it.
Section 5.4. Access to Information. Upon reasonable notice and
subject to applicable law and other legal obligations, each of WABCO and
MotivePower shall, and shall cause each of its Subsidiaries to, afford to the
officers, employees, accountants, counsel and other representatives of the
other, access, during the period prior to the Effective Time, to all its
properties, books, contracts, commitments and records and, during such period,
each of WABCO and MotivePower shall, and shall cause each of its Subsidiaries
to, furnish promptly to the other (a) a copy of each report, schedule,
registration statement and other document filed or received by it during such
period pursuant to the requirements of federal securities laws and (b) all other
information concerning its business, properties and personnel as such other
party may reasonably request. Unless otherwise required by law, the parties will
hold any such information which is nonpublic in confidence in accordance with
the Mutual Confidentiality Agreement dated as of March 15, 1999 between
MotivePower and WABCO (the "Confidentiality Agreement"). No information or
knowledge obtained in any investigation pursuant to this Section 5.4 shall
affect or be deemed to modify any representation or warranty contained in this
Agreement or the conditions to the obligations of the parties to consummate the
Merger.
52
Section 5.5. Notices of Certain Events. (a) MotivePower and
WABCO shall promptly notify each other of:
(i) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement, the
WABCO Option Agreement or the MotivePower Option Agreement; and
(ii) any notice or other communication from any
Governmental Entity in connection with the transactions contemplated by
this Agreement, the WABCO Option Agreement or the MotivePower Option
Agreement.
(b) WABCO shall promptly notify MotivePower of any actions,
suits, claims, investigations or proceedings commenced or, to the Knowledge of
WABCO, threatened against, relating to or involving or otherwise affecting WABCO
or any of its Subsidiaries which, if pending on the date of this Agreement,
would have been required to have been disclosed pursuant to Section 2.10 or
which relate to the consummation of the transactions contemplated by this
Agreement, the WABCO Option Agreement or the MotivePower Option Agreement. In
addition, WABCO shall promptly notify MotivePower of (a) (i) it becoming aware
of any fact or event which would be reasonably likely to demonstrate that any
representation or warranty of any party hereto contained in this Agreement was
or is untrue or inaccurate in any material respect as of the date of this
Agreement or (ii) the occurrence or non-occurrence of any fact or event which
would be reasonably likely to cause any material covenant, condition or
agreement of any party hereto under this Agreement not to be complied with or
satisfied in all material respects and (b) any failure of any party hereto to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder in any material respect; provided, however, that no
such notification shall affect the representations or warranties of any party or
the conditions to the obligations of any party hereunder.
(c) MotivePower shall promptly notify WABCO of any actions,
suits, claims, investigations or proceedings commenced or, to the Knowledge of
MotivePower, threatened against, relating to or involving or otherwise affecting
MotivePower or any of its Subsidiaries which, if pending on the date of this
Agreement, would have been required to have been disclosed pursuant to Section
3.10 or which relate to the consummation of the transactions contemplated by
this Agreement, the WABCO Option Agreement or the MotivePower Option Agreement.
In addition, MotivePower shall promptly notify WABCO of (a) (i) it becoming
aware of any fact or event which would be reasonably likely to demonstrate that
any representation or warranty of any party hereto contained in this Agreement
was or is untrue or inaccurate in any material respect as of the date of this
Agreement or (ii) the occurrence or non-occurrence of any fact or event which
would be reasonably likely to cause any material covenant, condition or
agreement of any party hereto under this Agreement not to be complied with or
satisfied in all material respects and (b) any failure of any party hereto to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it
53
hereunder in any material respect; provided, however, that no such notification
shall affect the representations or warranties of any party or the conditions to
the obligations of any party hereunder.
Section 5.6. Appropriate Action; Consents; Filings. (a) (i)
Subject to the terms and conditions of this Agreement and except to the extent
that (x) the Board of Directors of WABCO shall have withdrawn or modified its
approval or recommendation of this Agreement or the Merger or (y) the Board of
Directors of MotivePower shall have withdrawn or modified its approval or
recommendation of this Agreement or the Merger, in each case as permitted by
Section 5.1(b), MotivePower and WABCO shall use their reasonable best efforts to
(A) take, or cause to be taken, all actions, and do, or cause to be done, all
things, necessary, proper or advisable under applicable laws to consummate the
Merger and the other transactions contemplated by this Agreement as promptly as
practicable, (B) obtain from any Governmental Entity any consents, licenses,
permits, waivers, approvals, authorizations or orders required to be obtained or
made by MotivePower and WABCO or any of their Subsidiaries, or to avoid any
action or proceeding by any Governmental Entity (including, without limitation,
those in connection with the HSR Act), in connection with the authorization,
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein, and (C) make all necessary filings, and
thereafter make any other required submissions, with respect to this Agreement
and the Merger required under the Securities Act, the Exchange Act and any other
applicable law; provided, however, that MotivePower and WABCO shall cooperate
with each other in connection with the making of all such filings, including
providing copies of all such documents to the non-filing party and its advisors
prior to filing and, if requested, accepting all reasonable additions, deletions
or changes suggested in connection therewith. MotivePower and WABCO shall
furnish to each other all information required for any application or other
filing to be made pursuant to the rules and regulations of any applicable law in
connection with the transactions contemplated by this Agreement. Subject to the
terms and conditions of this Agreement and except to the extent that (x) the
Board of Directors of WABCO shall have withdrawn or modified its approval or
recommendation of this Agreement or the Merger or (y) the Board of Directors of
MotivePower shall have withdrawn or modified its approval or recommendation of
this Agreement or the Merger, in each case as permitted by Section 5.1(b),
MotivePower and WABCO shall not take any action, or refrain from taking any
action, the effect of which would be to delay or impede the ability of
MotivePower and WABCO to consummate the transactions contemplated by this
Agreement, unless in such party's reasonable judgment, taking such action is
consistent with achieving the ultimate objective of consummating the Merger.
(ii) Notwithstanding any other provision of this Agreement and
except as provided in Section 5.6(b), in connection with seeking any approval of
a Governmental Entity relating to this Agreement or the consummation of the
transactions contemplated hereby, without the other party's prior written
consent, neither party shall, and neither party shall be required to, commit to
any divestiture transaction, agree to sell or hold separate, before or after the
Effective Time, any of MotivePower's or WABCO's businesses, product lines,
properties or assets, or agree to any changes or restrictions in the operation
of such businesses, product lines, properties or assets, in any such case if
such divestiture or such restrictions
54
would, individually or in the aggregate, be reasonably expected to have a
material adverse effect on the financial condition or results of operations of
MotivePower and its Subsidiaries, taken as a whole, after giving effect to the
Merger.
(b) In furtherance and not in limitation of the foregoing, the
parties shall use reasonable best efforts to resolve such objections, if any, as
may be asserted with respect to the transactions contemplated by this Agreement
under any antitrust, competition or trade regulatory laws, rules or regulations
of any domestic or foreign government or governmental authority or any
multinational authority ("Antitrust Laws"). If any suit is instituted
challenging any of the transactions contemplated by this Agreement as violative
of any Antitrust Law, the parties shall take such action (including without
limitation, agreeing to hold separate or to divest any of the businesses,
product lines or assets of WABCO or its Subsidiaries or of MotivePower or its
Subsidiaries (a "Business Unit") (but only if the Business Units required to be
held separate or divested do not in the aggregate have a fair market value of
more than $25,000,000 or revenues for the most recently completed 12 months of
more than $25,000,000) as may be required (a) by the applicable government or
governmental or multinational authority (including, without limitation, the
Antitrust Division of the United States Department of Justice or the Federal
Trade Commission) in order to resolve such objections as such government or
authority may have to such transactions under such Antitrust Law, or (b) by any
domestic or foreign court or similar tribunal, in any suit brought by a private
party or governmental or multinational authority challenging the transactions
contemplated by this Agreement as violative of any Antitrust Law, in order to
avoid the entry of, or to effect the dissolution of, any injunction, temporary
restraining order or other order that has the effect of preventing the
consummation of any of such transactions. The entry by a court, in any suit
brought by a private party or governmental or multinational authority
challenging the transactions contemplated by this Agreement as violative of any
Antitrust Law, of an order or decree permitting the transactions contemplated by
this Agreement, but requiring that any Business Unit of WABCO or its
Subsidiaries or MotivePower or its Subsidiaries be divested or held separate
(but only if such Business Units required to be held separate or divested do not
in the aggregate have a fair market value of more than $25,000,000 or revenues
for the most recently completed 12 months of more than $25,000,000), or that
would otherwise limit the Surviving Corporation's freedom of action with respect
to, or its ability to retain, the Subsidiaries, other assets or businesses of
the Constituent Corporations, shall not be deemed a failure to satisfy the
conditions specified in Section 6.1(b) or Section 6.1(c) hereof.
(c) (i) MotivePower and WABCO shall give, or shall cause their
respective Subsidiaries to give, any notices to third parties, and use, and
cause their respective Subsidiaries to use, their reasonable best efforts to
obtain any third party consents (A) necessary, proper or advisable in order to
consummate the transactions contemplated by this Agreement or (B) required to
prevent a Material Adverse Effect on MotivePower or a Material Adverse Effect on
WABCO from occurring prior to or after the Effective Time.
(ii) In the event that either party shall fail to obtain any
third party consent described in Section 5.6(b)(i) above, such party shall use
its reasonable best efforts, and shall take any such actions reasonably
requested by the other party hereto, to minimize any adverse
55
effect upon MotivePower and WABCO, their respective Subsidiaries, and their
respective businesses resulting, or which could reasonably be expected to result
after the Effective Time, from the failure to obtain such consent.
Section 5.7. Public Disclosure. MotivePower and WABCO shall
consult with each other before issuing any press release or otherwise making any
public statement with respect to the Merger or this Agreement or the
transactions contemplated hereby or press releases containing any
forward-looking statements and shall not issue any such press release or make
any such public statement prior to such consultation and the receipt of approval
therefor by the other party, which consent shall not be unreasonably withheld,
except as may be required by law, court process or by stock exchange rules.
Section 5.8. Reorganization; Pooling of Interests. MotivePower
shall make (to the extent it can truthfully do so) the representations of
MotivePower contained in a certificate of MotivePower (the "MotivePower Tax
Certificate") substantially to the effect of the MotivePower Tax Certificate
contained in the MotivePower Disclosure Letter, and WABCO shall make (to the
extent it can truthfully do so) the representations of WABCO contained in a
certificate of WABCO (the "WABCO Tax Certificate") substantially to the effect
of the WABCO Tax Certificate contained in the WABCO Disclosure Letter.
(b) Each of WABCO and MotivePower agrees to take, together
with their respective accountants, all actions reasonably necessary in order to
obtain a favorable determination (if required) from the SEC that the Merger may
be accounted for as a pooling of interests in accordance with generally accepted
accounting principles.
Section 5.9. Comfort Letters. (a) WABCO shall use its
reasonable best efforts to cause to be delivered to MotivePower "comfort"
letters of Xxxxxx Xxxxxxxx LLP, WABCO's independent public accountants, dated
the date on which the Registration Statement shall become effective and as of
the Effective Time, and addressed to WABCO and MotivePower, in form and
substance reasonably satisfactory to MotivePower and reasonably customary in
scope and substance for letters delivered by independent public accountants in
connection with transactions such as those contemplated by this Agreement.
(b) MotivePower shall use its reasonable best efforts to cause
to be delivered to WABCO "comfort" letters of Deloitte & Touche LLP,
MotivePower's independent public accountants, dated the date on which the
Registration Statement shall become effective and as of the Effective Time, and
addressed to WABCO and MotivePower, in form and substance reasonably
satisfactory to WABCO and reasonably customary in scope and substance for
letters delivered by independent public accountants in connection with
transactions such as those contemplated by this Agreement.
Section 5.10. Compliance with the Securities Act and Pooling
of Interests Restrictions; Termination of Voting Trust and Stockholders
Agreement. (a) Within 10 business days after the date hereof, MotivePower shall
cause to be prepared and delivered to WABCO a list (reasonably satisfactory to
counsel for WABCO) identifying all persons who
56
may be, at the time of the MotivePower Shareholders Meeting, deemed to be
"affiliates" of MotivePower as that term is used in paragraphs (c) and (d) of
Rule 145 under the Securities Act (the "Rule 145 Affiliates"). MotivePower shall
use its reasonable best efforts to cause each person who is identified as a Rule
145 Affiliate in such list to deliver to WABCO within 30 days of the date hereof
a written agreement in substantially the form of Exhibit 5.10(a) hereto,
executed by each of such persons identified in the foregoing list (which
agreements shall supersede any agreements entered into pursuant to Section
5.10(a) of the Original Merger Agreement). WABCO shall publish, in a manner that
satisfies the "publication" requirements under applicable SEC rules or
accounting releases, financial results (including combined sales and net income)
covering at least 30 days of post-Merger operations no later than 15 days
following the first month-end that is more than 30 days after the Effective
Date.
(b) Within 10 business days after the date hereof, WABCO shall
deliver to MotivePower a list (reasonably satisfactory to counsel for
MotivePower) identifying those persons who may be, at the time of the WABCO
Stockholders Meeting, affiliates of WABCO under applicable SEC accounting
releases with respect to pooling of interests accounting treatment. WABCO shall
use its reasonable best efforts to enter into a written agreement in
substantially the form of Exhibit 5.10(b) hereto within 30 days of the date
hereof with each of such persons identified in the foregoing list (which
agreements shall supersede any agreements entered into pursuant to Section
5.10(b) of the Original Merger Agreement).
(c) Prior to the Effective Time, WABCO shall cause the Voting
Trust created under the Second Amended WABCO Voting Trust/Disposition Agreement,
dated as of December 13, 1995 (the "Voting Trust") and the Amended and Restated
Stockholders Agreement, dated as of March 5, 1997, among the Voting Trust,
Harvard Private Capital Holdings, Inc., American Industrial Partners Capital
Fund II, L.P., Vestar Equity Partners, L.P. and WABCO to be terminated, unless
the accountants for MotivePower and WABCO mutually agree that such action is not
necessary to preserve the treatment of the Merger as "pooling of interests" for
accounting purposes.
Section 5.11. Listing or Quotation of Stock. WABCO shall use
its reasonable best efforts to cause the shares of WABCO Common Stock to be
issued in the Merger to be approved for listing on the NYSE on or prior to the
Closing Date, subject to official notice of issuance.
Section 5.12. Indemnification of Directors and Officers. (a)
After the Effective Time, the Surviving Corporation shall, to the same extent
and on the same terms and conditions provided for in the MotivePower Articles of
Incorporation and the MotivePower By-Laws, in each case as of the date of this
Agreement, to the extent consistent with applicable law, indemnify and hold
harmless, each present and former director or officer of MotivePower and each
Subsidiary of MotivePower (collectively, the "Indemnified Parties") against all
costs and expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages, liabilities and settlement amounts paid in connection
with any claim, action, suit, proceeding or investigation (whether arising
before or after the Effective Time), whether civil, administrative or
investigative, arising out of or pertaining to any action or omission in their
57
capacity as an officer or director, in each case occurring before the Effective
Time (including the transactions contemplated by this Agreement).
(b) For a period of six years from the Effective Time, the
Surviving Corporation shall provide to MotivePower's current directors and
officers liability insurance protection substantially equivalent in kind and
scope as that provided by MotivePower's current directors' and officers'
liability insurance policies (copies of which have been made available to
WABCO); provided, however, that in no event shall the Surviving Corporation be
required to expend in any one year an amount in excess of 150% of the annual
premiums currently paid by MotivePower for such insurance; provided, further,
that if during such period the annual premiums for such comparable insurance
coverage exceed such amount, the Surviving Corporation shall be obligated to
provide a policy which, in the reasonable judgment of the Surviving Corporation,
provides the best coverage available for a cost not exceeding such amount.
Section 5.13. MotivePower Stock Options; MotivePower SAR:
MotivePower Stock Account. At the Effective Time, each MotivePower Stock Option,
vested or unvested, which is outstanding immediately prior to the Effective Time
pursuant to the MotivePower Stock Plans in effect on the date hereof shall
become and represent an option to purchase the number of shares of WABCO Common
Stock (a "Substitute Option") (decreased to the nearest full share) determined
by multiplying (i) the number of shares of MotivePower Common Stock subject to
such MotivePower Stock Option immediately prior to the Effective Time by (ii)
the Exchange Ratio, at an exercise price per share of WABCO Common Stock
(rounded up to the nearest cent), equal to the exercise price per share of
MotivePower Common Stock immediately prior to the Effective Time divided by the
Exchange Ratio. It is the intention of the parties that the above formula shall
be applied in a manner consistent with Section 424(a) of the Code. At the
Effective Time, the MotivePower SAR, if outstanding immediately prior to the
Effective Time, shall become and represent an SAR exercisable for the number of
shares of WABCO Common Stock (the "Substitute SAR") (decreased to the nearest
full share) determined by multiplying (i) the number of shares of MotivePower
Common Stock for which such MotivePower SAR is exercisable immediately prior to
the Effective Time by (ii) the Exchange Ratio. At the Effective Time, the
Company stock account under the MotivePower Deferred Compensation Plan (the
"MotivePower Stock Account") immediately prior to the Effective Time shall
become and represent an account representing the number of shares of WABCO
Common Stock (the "Substitute Stock Account") (decreased to the nearest full
share) determined by multiplying (i) the number of shares of MotivePower Common
Stock, subject to such MotivePower Stock Account immediately prior to the
Effective Time by (ii) the Exchange Ratio. WABCO shall pay cash to holders of
MotivePower Stock Options and the MotivePower SAR in lieu of issuing fractional
shares of WABCO Common Stock upon the exercise of Substitute Options and the
Substitute SAR for shares of WABCO Common Stock and the payment of amounts in
the Substitute Stock Account, unless in the judgment of WABCO such payment would
adversely affect the ability to account for the Merger under the pooling of
interests method. After the Effective Time, except as provided above in this
Section 5.13, each Substitute Option and the Substitute SAR shall be exercisable
upon the same terms and conditions as were applicable under the related
MotivePower Stock Option or the
58
MotivePower SAR, as the case may be, at the Effective Time. WABCO shall take all
corporate action necessary to reserve for issuance a sufficient number of shares
of WABCO Common Stock for delivery upon exercise of MotivePower Stock Options
and the MotivePower SAR and distribution of the Substitute Stock Account.
Promptly following the Effective Time of the Merger, WABCO shall file a
registration statement on Form S-8 or another appropriate form with respect to
the shares of WABCO Common Stock subject to such Substitute Options, Substitute
SAR and Substitute Stock Account and shall use its reasonable best efforts to
maintain the effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such Substitute Options, Substitute SAR and
Substitute Stock Account remain outstanding. The Board of Directors of WABCO
shall prior to the Effective Time adopt resolutions specifically approving the
issuance of shares of WABCO Common Stock and the grant of Substitute Options to
each person who will become a director or officer of WABCO at the Effective
Time, such specific approvals to be given for the purpose of exempting such
issuances of WABCO Common Stock and such grants of Substitute Options under Rule
16b-3 promulgated under the Exchange Act. With respect to those individuals who
subsequent to the Merger will be subject to the reporting requirements under
Section 16(a) of the Exchange Act, where applicable, WABCO shall administer
MotivePower Option Plans in a manner that complies with Rule 16b-3 promulgated
under the Exchange Act to the extent MotivePower Option Plans complied with such
rule prior to the Merger. MotivePower and WABCO shall take all necessary action
to implement or to provide for the implementation of the provisions of this
Section 5.13.
Section 5.14. Benefit Plans to be Honored. (a) From and after
the Effective Time, WABCO shall honor and shall cause the MotivePower
Subsidiaries to honor all WABCO Plans, all MotivePower Plans and all employment
agreements entered into by WABCO or MotivePower (or their Subsidiaries) prior to
the date hereof; provided, however, that nothing in this Agreement shall be
interpreted as limiting the power of WABCO or the MotivePower Subsidiaries to
amend or terminate any MotivePower Plan or any other individual employee benefit
plan, program, agreement or policy or as requiring WABCO to offer to continue
(other than as required by its terms) any written employment contract.
(b) All individuals who are employees of MotivePower or a
MotivePower Subsidiary at the Effective Time (the "Affected Employees") shall be
given credit for all service with MotivePower and its Subsidiaries (or service
credited by MotivePower or such Subsidiaries) under all employee benefit plans
and arrangements currently maintained by WABCO or any of its Subsidiaries in
which they become participants for purposes of eligibility, vesting, level of
participant contribution and benefit accruals (except benefit accruals under
defined benefit pension plans) to the same extent as if rendered to WABCO or any
of its Subsidiaries. WABCO shall cause to be waived any pre-existing condition
limitation under its welfare plans that might otherwise apply to an Affected
Employee who may become covered by such plans. WABCO agrees to recognize (or
cause to be recognized) the dollar amount of all expenses incurred by Affected
Employees during the calendar year in which the Effective Time occurs for
purposes of satisfying the calendar year deductions and co-payment limitations
for such year under the relevant benefit plans of WABCO and its Subsidiaries
that
59
may cover such employees.
Section 5.15. State Takeover Laws. If any "fair price,"
"business combination" or "control share acquisition" statute or other similar
statute or regulation shall become applicable to the transactions contemplated
hereby, the MotivePower Option Agreement or the WABCO Option Agreement,
MotivePower and WABCO and their respective Boards of Directors shall use their
reasonable best efforts to grant such approvals and take such actions as are
necessary so that the transactions contemplated hereby and thereby may be
consummated as promptly as practicable on the terms contemplated hereby and
thereby and otherwise act to minimize the effects of any such statute or
regulation on the transactions contemplated hereby and thereby.
Section 5.17. Transfer Taxes. MotivePower or, after the
Effective Time, the Surviving Corporation on behalf of MotivePower, shall pay or
cause to be paid any real property transfer, gains or similar taxes imposed as a
result of the Merger.
ARTICLE VI
CONDITIONS TO MERGER
Section 6.1. Conditions to Each Party's Obligations. The
respective obligations of each party to this Agreement to consummate the Merger
and the transactions contemplated hereby shall be subject to the satisfaction of
the following conditions:
(a) Shareholder Approvals. (i) This Agreement and the Merger
shall have been approved and adopted by the stockholders of WABCO, and (ii) this
Agreement and the Merger shall have been approved and adopted by the
shareholders of MotivePower.
(b) Waiting Periods; Approvals. The waiting period applicable
to the consummation of the Merger under the HSR Act shall have expired or been
terminated and any other approvals required under applicable analogous foreign
laws shall have been obtained, except where the failure to obtain such approval
would not, individually or in the aggregate, have a Material Adverse Effect on
MotivePower and its Subsidiaries, taken as a whole, after giving effect to the
Merger.
(c) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal or regulatory restraint shall prohibit the
consummation of the Merger.
(d) Pooling of Interests. WABCO and MotivePower shall each
have received a letter from their respective independent accountants addressed
to WABCO or MotivePower, as the case may be, to the effect that the Merger will
qualify for "pooling of interests" accounting treatment.
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(e) Registration Statement. The Registration Statement shall
have become effective under the Securities Act and shall not be the subject of
any stop order or proceedings seeking a stop order.
(f) Listing of Stock. The shares of WABCO Common Stock to be
issued in the Merger shall have been approved for listing on the NYSE, subject
to official notice of issuance.
Section 6.2. Additional Conditions to Obligations of
MotivePower. The obligations of MotivePower to consummate the Merger and the
transactions contemplated hereby shall be subject to the satisfaction of the
following additional conditions, any of which may be waived in writing
exclusively by MotivePower:
(a) Representations and Warranties. The representations and
warranties of WABCO set forth in this Agreement that are qualified as to
materiality shall be true and correct as of the Closing Date and the
representations and warranties that are not so qualified, taken together, shall
be true and correct in all material respects, in each case as though made on and
as of the Closing Date (except to the extent any such representation or warranty
expressly speaks as of an earlier date); and MotivePower shall have received a
certificate signed on behalf of WABCO by an executive officer of WABCO to such
effect.
(b) Performance of Obligations. WABCO shall have performed in
all material respects each obligation and agreement and shall have complied in
all material respects with each covenant required to be performed and complied
with by it under this Agreement at or prior to the Effective Time; and
MotivePower shall have received a certificate signed on behalf of WABCO by an
executive officer of WABCO to such effect.
(c) Tax Opinion. MotivePower shall have received an opinion of
Sidley & Austin, in form and substance reasonably satisfactory to MotivePower,
dated the Effective Time, substantially to the effect that on the basis of
facts, representations and assumptions set forth in such opinion which are
consistent with the state of facts existing as of the Effective Time, for
federal income tax purposes:
(i) the Merger will constitute a "reorganization" within the
meaning of Section 368(a) of the Code, and WABCO and MotivePower will
each be a party to that reorganization within the meaning of Section
368(b) of the Code;
(ii) no gain or loss will be recognized by MotivePower or
WABCO as a result of the Merger;
(iii) no gain or loss will be recognized by the shareholders
of MotivePower upon the conversion of their shares of MotivePower
Common Stock, together with any associated MotivePower Rights, into
shares of WABCO Common Stock pursuant to the Merger, except with
respect to cash, if any, received in lieu of fractional shares of WABCO
Common Stock;
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(iv) the aggregate tax basis of the shares of WABCO Common
Stock received in exchange for shares of MotivePower Common Stock,
together with any associated MotivePower Rights, pursuant to the Merger
(including a fractional share of WABCO Common Stock for which cash is
paid) will be the same as the aggregate tax basis of such shares of
MotivePower Common Stock;
(v) the holding period for shares of WABCO Common Stock
received in exchange for shares of MotivePower Common Stock, together
with any associated MotivePower Rights, pursuant to the Merger will
include the holder's holding period for such shares of MotivePower
Common Stock, provided such shares of MotivePower Common Stock were
held as capital assets by the holder at the Effective Time; and
(vi) a stockholder of MotivePower who receives cash in lieu of
a fractional share of WABCO Common Stock will recognize gain or loss
equal to the difference, if any, between such stockholder's basis in
the fractional share (determined under clause (iv) above) and the
amount of cash received.
In rendering such opinion, Sidley & Austin may rely as to matters of fact upon
the representations contained herein and may receive and rely upon
representations from MotivePower, WABCO, and others, including representations
from MotivePower to the effect of the representations in the MotivePower Tax
Certificate and representations from WABCO to the effect of the representations
in the WABCO Tax Certificate.
Section 6.3. Additional Conditions to Obligations of WABCO.
The obligation of WABCO to effect the Merger is subject to the satisfaction of
each of the following additional conditions, any of which may be waived in
writing exclusively by WABCO:
(a) Representations and Warranties. The representations and
warranties of MotivePower set forth in this Agreement that are qualified as to
materiality shall be true and correct as of the Closing Date and the
representations and warranties that are not so qualified, taken together, shall
be true and correct in all material respects, in each case as though made on and
as of the Closing Date (except to the extent any such representation or warranty
expressly speaks as of an earlier date); and WABCO shall have received a
certificate signed on behalf of MotivePower by an executive officer of
MotivePower to such effect.
(b) Performance of Obligations. MotivePower shall have
performed in all material respects each obligation and agreement and shall have
complied in all material respects with each covenant required to be performed or
complied with by it under this Agreement at or prior to the Effective Time; and
WABCO shall have received a certificate signed on behalf of MotivePower by an
executive officer of MotivePower to such effect.
(c) Tax Opinion. WABCO shall have received an opinion of
Xxxxxxxx & Xxxxx, in form and substance reasonably satisfactory to WABCO, dated
the Effective Time, substantially to the effect that on the basis of facts,
representations and assumptions set forth in such opinion which are consistent
with the state of facts existing as of the Effective Time, for federal income
tax purposes:
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(i) the Merger will constitute a "reorganization" within the
meaning of Section 368(a) of the Code, and WABCO and MotivePower will
each be a party to that reorganization within the meaning of Section
368(b) of the Code;
(ii) no gain or loss will be recognized by MotivePower or
WABCO as a result of the Merger;
(iii) no gain or loss will be recognized by the shareholders
of MotivePower upon the conversion of their shares of MotivePower
Common Stock, together with any associated MotivePower Rights, into
shares of WABCO Common Stock pursuant to the Merger, except with
respect to cash, if any, received in lieu of fractional shares of WABCO
Common Stock;
(iv) the aggregate tax basis of the shares of WABCO Common
Stock received in exchange for shares of MotivePower Common Stock,
together with any associated MotivePower Rights, pursuant to the Merger
(including a fractional share of WABCO Common Stock for which cash is
paid) will be the same as the aggregate tax basis of such shares of
MotivePower Common Stock;
(v) the holding period for shares of WABCO Common Stock
received in exchange for shares of MotivePower Common Stock, together
with any associated MotivePower Rights, pursuant to the Merger will
include the holder's holding period for such shares of MotivePower
Common Stock, provided such shares of MotivePower Common Stock were
held as capital assets by the holder at the Effective Time; and
(vi) a stockholder of MotivePower who receives cash in lieu of
a fractional share of WABCO Common Stock will recognize gain or loss
equal to the difference, if any, between such stockholder's basis in
the fractional share (determined under clause (iv) above) and the
amount of cash received.
In rendering such opinion, Xxxxxxxx & Xxxxx may rely as to matters of fact upon
the representations contained herein and may receive and rely upon
representations from MotivePower, WABCO, and others, including representations
from MotivePower to the effect of the representations in the MotivePower Tax
Certificate and representations from WABCO to the effect of the representations
in the WABCO Tax Certificate.
ARTICLE VII
TERMINATION
Section 7.1. Termination. This Agreement may be terminated at
any time prior to the Effective Time (with respect to Sections 7.1(b) through
7.1(m), by written notice by the terminating party to the other party), whether
before or after approval of the matters presented in connection with the Merger
by the shareholders of MotivePower or the
63
stockholders of WABCO:
(a) by mutual written consent of MotivePower and WABCO; or
(b) by either MotivePower or WABCO, if the Merger shall not
have been consummated by January 31, 2000 (the "End Date"); provided, however,
that the right to terminate this Agreement under this Section 7.1(b) shall not
be available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the Merger to
occur on or before the End Date; or
(c) by either MotivePower or WABCO, if a court of competent
jurisdiction or other Governmental Entity shall have issued a final,
non-appealable order, decree or ruling, or taken any other action, having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Merger; or
(d) by either MotivePower or WABCO (i) if, at the WABCO
Stockholders Meeting (including any adjournment or postponement thereof), the
requisite vote of the stockholders of WABCO in favor of adoption of this
Agreement shall not have been obtained or (ii) if, at the MotivePower
Shareholders Meeting (including any adjournment or postponement thereof), the
requisite vote of the shareholders of MotivePower in favor of adoption of this
Agreement shall not have been obtained; or
(e) by WABCO, if the Board of Directors of MotivePower shall
not have recommended or shall have modified in a manner materially adverse to
WABCO its recommendation of this Agreement and the Merger; or
(f) by WABCO, if MotivePower or any of its Affiliates shall
have materially and knowingly breached the covenant contained in Section 5.1; or
(g) by WABCO or MotivePower at any time on or prior to 5:00
p.m., eastern time on the 45th day after the date hereof, or if earlier, the
date of the MotivePower Shareholders Meeting, if the Board of Directors of
MotivePower shall have determined to recommend a Takeover Proposal to its
shareholders and to enter into a binding written agreement concerning such
Takeover Proposal after determining, pursuant to Section 5.1, that such Takeover
Proposal constitutes a Superior Proposal; provided, however, that MotivePower
may not terminate this Agreement pursuant to this Section 7.1(g) unless (i)
MotivePower has delivered to WABCO a written notice of MotivePower's intent to
enter into such an agreement to effect the Superior Proposal, attaching the most
current version of such agreement to such notice (which version shall be updated
on a current basis), (ii) five business days have elapsed following delivery to
WABCO of such written notice by MotivePower and (iii) during such five business
day-period MotivePower has fully cooperated with WABCO, including informing
WABCO (to the extent not otherwise done so pursuant to clause (i) or Section
5.1(b)) of the terms and conditions of the Takeover Proposal, with the intent of
enabling WABCO to agree to a modification of the terms and conditions of this
Agreement so that the transactions contemplated hereby may be effected;
provided, further, that MotivePower may
64
not terminate this Agreement pursuant to this Section 7.1(g) unless at the end
of such five business day-period the Board of Directors of MotivePower continues
reasonably to believe that the Takeover Proposal constitutes a Superior Proposal
and prior to such termination MotivePower pays to WABCO the amounts specified
under Section 7.3(d); or
(h) by MotivePower, if a material breach of or failure to
perform any representation, warranty, covenant or agreement on the part of WABCO
set forth in this Agreement shall have occurred which would cause the conditions
set forth in Sections 6.2(a) or 6.2(b) not to be satisfied, and such conditions
are incapable of being satisfied by the End Date; or
(i) by MotivePower, if the Board of Directors of WABCO shall
not have recommended or shall have modified in a manner materially adverse to
MotivePower its recommendation of this Agreement and the Merger; or
(j) by MotivePower, if WABCO or any of its Affiliates shall
have materially and knowingly breached the covenant contained in Section 5.1; or
(k) by MotivePower or WABCO at any time on or prior to 5:00
p.m., eastern time on the 45th day after the date hereof, or if earlier, the
date of the WABCO Stockholders Meeting, if the Board of Directors of WABCO shall
have determined to recommend a Takeover Proposal to its stockholders and to
enter into a binding written agreement concerning such Takeover Proposal after
determining, pursuant to Section 5.1, that such Takeover Proposal constitutes a
Superior Proposal; provided, however, that WABCO may not terminate this
Agreement pursuant to this Section 7.1(k) unless (i) WABCO has delivered to
MotivePower a written notice of WABCO's intent to enter into such an agreement
to effect the Superior Proposal, attaching the most current version of such
agreement to such notice (which version shall be updated on a current basis),
(ii) five business days have elapsed following delivery to MotivePower of such
written notice by WABCO and (iii) during such five business day-period WABCO has
fully cooperated with MotivePower, including informing MotivePower (to the
extent not otherwise done so pursuant to clause (i) or Section 5.1(b)) of the
terms and conditions of the Takeover Proposal and the identity of the Person
making the Takeover Proposal, with the intent of enabling MotivePower to agree
to a modification of the terms and conditions of this Agreement so that the
transactions contemplated hereby may be effected; provided, further, that WABCO
may not terminate this Agreement pursuant to this Section 7.1(k) unless at the
end of such five business day-period the Board of Directors of WABCO continues
reasonably to believe that the Takeover Proposal constitutes a Superior Proposal
and prior to such termination WABCO pays to MotivePower the amounts specified
under Section 7.3(b); or
(l) by WABCO, if a material breach of or failure to perform
any representation, warranty, covenant or agreement on the part of MotivePower
set forth in this Agreement shall have occurred which would cause the conditions
set forth in Sections 6.3(a) or 6.3(b) not to be satisfied, and such conditions
are incapable of being satisfied by the End Date.
65
Section 7.2. Effect of Termination. In the event of
termination of this Agreement pursuant to Section 7.1, there shall be no
liability or obligation on the part of MotivePower, WABCO or their respective
officers, directors, stockholders or Affiliates, except as set forth in Section
7.3 and except to the extent that such termination results from the willful
breach by a party of any of its representations, warranties, covenants or
agreements contained in this Agreement; provided, however, that the provisions
of Sections 7.3, 8.2 and 8.7 of this Agreement and the Confidentiality
Agreement, the WABCO Option Agreement and the MotivePower Option Agreement shall
remain in full force and effect and survive any termination of this Agreement.
Section 7.3. Fees and Expenses. (a) Except as set forth in
this Section 7.3 or elsewhere in this Agreement, the WABCO Option Agreement or
the MotivePower Option Agreement, all fees and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses, whether or not the Merger is consummated;
provided, however, that MotivePower and WABCO shall share equally all fees and
expenses, other than attorneys' and accounting fees and expenses, incurred in
relation to the printing and filing of the Joint Proxy Statement (including any
related preliminary materials), the Registration Statement (including financial
statements and exhibits) and any pre- or post-effective amendments or
supplements thereto, the joint proxy statement dated July 22, 1999 of
MotivePower and WABCO (including any related preliminary materials) and the
registration statement on S-4 of MotivePower declared effective on July 22, 1999
(including financial statements and exhibits) and any pre- or post-effective
amendments thereto.
(b) If this Agreement is terminated pursuant to Section
7.1(i), 7.1(j) or 7.1(k), WABCO shall (i) reimburse MotivePower upon demand for
all out-of-pocket fees and expenses ("MotivePower Fees and Expenses") incurred
or paid by or on behalf of MotivePower or any Subsidiary of MotivePower in
connection with this Agreement and the transactions contemplated herein,
including all fees and expenses of counsel, investment banking firms,
accountants and consultants; provided, however, that WABCO shall not be required
to reimburse MotivePower for any MotivePower Fees and Expenses in excess of
$2,000,000 in the aggregate, and (ii) pay to MotivePower a termination fee of
$15 million in cash within one business day after such termination.
(c) If this Agreement is terminated pursuant to Section
7.1(d)(i) and either (I) a Takeover Proposal with respect to WABCO shall have
been made after the date of this Agreement and prior to the WABCO Stockholders
Meeting or (II) the Board of Directors of WABCO shall not have recommended or
shall have modified in a manner materially adverse to MotivePower its
recommendation of this Agreement and the Merger, WABCO shall (i) reimburse
MotivePower upon demand for all MotivePower Fees and Expenses; provided,
however, that WABCO shall not be obligated to reimburse MotivePower for any
MotivePower Fees and Expenses in excess of $2,000,000 in the aggregate, and (ii)
pay to MotivePower a termination fee of $15 million in cash within one business
day after such termination.
66
(d) If this Agreement is terminated pursuant to Section
7.1(e), 7.1(f) or 7.1(g), MotivePower shall (i) reimburse WABCO upon demand for
all out-of-pocket fees and expenses ("WABCO Fees and Expenses") incurred or paid
by or on behalf of WABCO or any Subsidiary of WABCO in connection with this
Agreement and the transactions contemplated herein, including all fees and
expenses of counsel, investment banking firms, accountants and consultants;
provided, however, that MotivePower shall not be obligated to reimburse WABCO
for any WABCO Fees and Expenses in excess of $2,000,000 in the aggregate, and
(ii) pay to WABCO a termination fee of $15 million in cash within one business
day after such termination.
(e) If this Agreement is terminated pursuant to Section
7.1(d)(ii) and either (I) a Takeover Proposal with respect to MotivePower shall
have been made after the date of this Agreement and prior to the MotivePower
Shareholders Meeting or (II) the Board of Directors of MotivePower shall not
have recommended or shall have modified in a manner materially adverse to WABCO
its recommendation of this Agreement and the Merger, MotivePower shall (i)
reimburse WABCO upon demand for all WABCO Fees and Expenses; provided, however,
that MotivePower shall not be obligated to reimburse WABCO for any WABCO Fees
and Expenses in excess of $2,000,000 in the aggregate, and (ii) pay to WABCO a
termination fee of $15 million in cash within one business day after such
termination.
(f) If one party fails to promptly pay to the other any fee or
expense due hereunder, the defaulting party shall pay the costs and expenses
(including legal fees and expenses) in connection with any action, including the
filing of any lawsuit or other legal action, taken to collect payment, together
with interest on the amount of any unpaid fee at the publicly announced prime
rate of Citibank, N.A. from the date such fee was required to be paid.
Section 7.4. Amendment. This Agreement may be amended by the
parties hereto, by action taken or authorized by their respective Boards of
Directors, at any time before or after approval of the matters presented in
connection with the Merger by the stockholders of WABCO or the shareholders of
MotivePower, but, after any such approval, no amendment shall be made which by
law requires further approval by such stockholders or shareholders without such
further approval. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
Section 7.5. Extension; Waiver. The parties hereto mutually
release and waive any claims that either party may have against the other
pursuant to or in connection with the Original Merger Agreement and the
transactions contemplated thereby. At any time prior to the Effective Time, the
parties hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto
contained herein, (ii) waive any inaccuracies in the representations and
warranties of the other parties hereto contained herein or in any document
delivered pursuant hereto and (iii) waive compliance with any of the agreements
or conditions of the other parties hereto contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party.
67
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Nonsurvival of Representations, Warranties and
Agreements. None of the representations, warranties, covenants and agreements in
this Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except for covenants and agreements which, by their
terms, are to be performed after the Effective Time and except for the
MotivePower Tax Certificate and WABCO Tax Certificate. The Confidentiality
Agreement shall survive the execution and delivery of this Agreement but shall
terminate and be of no further force and effect as of the Effective Time.
Section 8.2. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given when delivered
personally, one day after being delivered to a nationally recognized overnight
courier or when telecopied (with a confirmatory copy sent by such overnight
courier) to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice):
(a) if to MotivePower, to
Xxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
with copies to:
Doepken Keevican & Xxxxx
58th Floor, USX Tower
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xxx X. Xxxxxxxx, Xx.
Facsimile No.: (000) 000-0000
and
Sidley & Austin
Bank One Plaza
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
(b) if to WABCO, to:
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1001 Air Brake Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
with copies to:
Xxxx Xxxxx Xxxx XxXxxx
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx XxXxxxx
Facsimile No.: (000) 000-0000
and
Xxxxxxxx & Xxxxx
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx Xxxxx
Facsimile No.: (000) 000-0000
Section 8.3. Interpretation. When a reference is made in this
Agreement to a section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for 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 phrase "made available" in this
Agreement shall mean that the information referred to has been made available if
requested by the party to whom such information is to be made available.
Section 8.4. Counterparts. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
Section 8.5. Entire Agreement; No Third Party Beneficiaries.
This Agreement (including the documents and the instruments referred to herein),
the WABCO Option Agreement and the MotivePower Option Agreement (a) constitute
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, including without limitation the Original Merger Agreement, and (b)
except as provided in Section 5.12 of this Agreement and this Section 8.5, are
not intended to confer upon any Person other than the parties hereto any rights
or remedies hereunder or thereunder.
Section 8.6. Governing Law. Except to the extent that the laws
of the State of
69
Delaware are mandatorily applicable to the Merger, this Agreement shall be
governed by, and construed in accordance with, the laws of the Commonwealth of
Pennsylvania, regardless of the laws that might otherwise govern under the
applicable principles of conflicts of laws thereof.
Section 8.7. Assignment. 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, and any attempted assignment thereof
without such consent shall be null and void. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
70
IN WITNESS WHEREOF, MotivePower and WABCO have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
MOTIVEPOWER INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxx
Name: Xxxx X. Xxxx
Title: Chairman of the Board
WESTINGHOUSE AIR BRAKE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
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Exhibit 1.4(b)
The By-Laws of WABCO shall be amended and restated at the Effective Time to read
as follows:
AMENDED AND RESTATED BY-LAWS
OF
WESTINGHOUSE AIR BRAKE COMPANY
(hereinafter called the "Corporation")
(Adopted effective ____________ ___, 1999)
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 and stated in the notice
of the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meeting of stockholders
(the "Annual Meeting of Stockholders") shall be held on such date and at such
time as shall be designated from time to time by the Board of Directors and
stated in the notice of the meeting, at which meeting Directors shall be elected
and such other business as may properly be brought before the meeting shall be
transacted. Written notice of the Annual Meeting of Stockholders stating the
place, date and hour of the meeting shall be given to each stockholder entitled
to vote at such meeting not less than ten nor more than sixty days before the
date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by
law, special meetings of stockholders ("Special Meetings of Stockholders"), for
any purpose or purposes,
72
may be called by (i) the Chairman, if there be one, (ii) the Chief Executive
Officer (iii) Directors constituting not less than half of the members of the
Board of Directors then in office or (iv) stockholders owning a majority of the
capital stock of the Corporation issued and outstanding and entitled to vote,
in each case by delivering a written request to the Secretary. Such request
shall state the purpose or purposes of the proposed meeting. At any time,
upon the written request of any person or persons who have duly called a
Special Meeting of Stockholders, it shall be the duty of the Secretary to fix
the date of the Meeting, to be held not more than 75 days after the receipt of
the request, and to give due notice thereof. Special Meetings of Stockholders
shall be held at such place, either within or without the State of Delaware, and
at such time and date as the Board of Directors shall determine and as set forth
in the notice of the Meeting. Written notice of a Special Meeting of
Stockholders stating the place, date and hour of the Meeting and the purpose or
purposes for which the Meeting is called 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 4. Quorum. Except as otherwise provided by law or by
the Restated Certificate of Incorporation of the Corporation (the "Certificate
of Incorporation"), the holders of a majority of the shares of capital stock of
the Corporation 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. 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, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally noticed. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder entitled to vote at
the meeting.
Section 5. Voting. Unless otherwise required by law, the
Certificate of Incorporation, these By-Laws or any Certificate of Designation
with respect to any preferred stock of the Corporation ("Preferred Stock"), any
question brought before any meeting of stockholders shall be decided by the vote
of the holders of a majority of the stock represented and entitled to vote
thereat. 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 his
discretion, may require that any votes cast at such meeting shall be cast by
written ballot.
Section 6. 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 may be
taken without a meeting, without prior notice
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73
and without a vote, if a consent 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 such written consent is delivered to the Corporation by delivery to
its registered office in 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.
Section 7. 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 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 8. 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 7 of this Article II or the books
of the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
Section 9. Notice of Stockholder Business.
(a) Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board of
Directors of the Corporation and the proposal of business to be considered by
the stockholders at an annual meeting of stockholders must be (a) specified in
the notice of meeting (or any supplement thereto) given by or at the direction
of the Board of Directors (including by a Committee appointed by the Board of
Directors), or (b) otherwise properly brought before the meeting by or at the
direction of the Board of Directors (including by a Committee appointed by the
Board of Directors). Nominations of persons for election to the Board of
Directors of the corporation shall exclusively be made pursuant to Sections 1(b)
and 8 of Article III hereof.
(2) For business to be properly brought before an annual
meeting by a stockholder pursuant to paragraph (a)(1) of this Section 9, the
stockholder must have given timely notice thereof in writing to the Secretary of
the Corporation and such business must be a proper matter for stockholder
action. To be timely, a stockholder's notice shall be delivered to the Secretary
at the principal executive offices of the Corporation not later than the close
of business on the 60th day nor earlier than the close of business on the 120th
day prior to the first anniversary of the date of the preceding year's proxy
statement for the annual meeting; provided, however, that in the event that the
date of the annual meeting is more than 30 days before or more than 60 days
after the first anniversary of the preceding year's annual meeting, notice by
the stockholder to be timely must be so delivered not earlier than the close of
business on the 120th
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74
day prior to such annual meeting and not later than the close of business on the
later of the 90th day prior to such annual meeting or the 10th day following the
day on which public announcement of the date of such meeting is first made. In
no event shall the public announcement of an adjournment of an annual meeting
commence a new time period for the giving of a stockholder's notice as described
above. Such stockholder's notice shall set forth (a) as to any business that the
stockholder properly proposes to bring before the meeting, a brief description
of the business desired to be brought before the meeting, the reasons for
conducting such business at the meeting and any material interest in such
business of such stockholder and the beneficial owner, if any, on whose behalf
the proposal is made; (b) a representation that the stockholder intends to
appear in person or by proxy at the meeting to raise the proposal specified in
the notice; and (c) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the proposal is made (i) the name and address of
such stockholder, as they appear on the Corporation's books, and of such
beneficial owner and (ii) the class and number of shares of the Corporation
which are owned beneficially and of record by such stockholder and such
beneficial owner.
(b) Special Meetings of Stockholders. Only such business shall
be conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the notice of meeting.
(c) General.
(1) Only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this Section 9. Except as otherwise provided by law,
the Chairman of the meeting shall have the power and duty to determine whether
any business proposed to be brought before the meeting was proposed in
accordance with the procedures set forth in this Section 9 and, if any proposed
business is not in compliance with this Section 9, to declare that such
defective proposal shall be disregarded.
(2) For purposes of this Section 9, "public announcement"
shall mean disclosure in a press release reported by the Dow Xxxxx News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Securities Exchange Act of 1934, as amended
("Exchange Act").
(3) Notwithstanding the foregoing provisions of this
Section 9, a stockholder shall also comply with all applicable requirements of
the Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Section 9. Nothing in this Section 9 shall be deemed
to affect any rights of (i) stockholders to request inclusion of proposals in
the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act
or (ii) the holders of any series of Preferred Stock to elect directors under
specified circumstances.
ARTICLE III
Directors
Section 1. Number and Election of Directors.
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75
(a) The Board of Directors of the Corporation (the "Board")
shall consist of such number of persons as is determined from time to time by
the affirmative vote of a majority of the Directors then in office.
(b) Pursuant to Section 8 of this Article III, the Board shall
maintain a Nominating Committee, which Nominating Committee shall nominate
persons to be elected to the Board.
(c) Each director elected shall be elected to one of three
classes. The term of office of those directors of the first class shall expire
at the annual meeting next ensuing; of the second class one year thereafter; and
of the third class two years thereafter. Beginning at the annual meeting next
ensuing, directors shall be elected for three-year terms of office. In all such
cases, a director's term of office shall continue until his successor is duly
elected and qualified or until his earlier resignation or removal.
Section 2. Duties and Powers.
(a) The Board of Directors shall have full power to control,
manage and direct the business of WABCO and to take such actions as may be
necessary to further the purposes of WABCO.
(b) The management of the business of the Corporation shall be
the responsibility of a Chief Executive Officer, to be appointed by the Board of
Directors. Xxxxxxx X. Xxxxxxxx shall continue to be the Chief Executive Officer
of the Corporation and he shall continue to serve as Chief Executive Officer
until replaced by the Board of Directors in accordance with the provisions of
any employment agreement then in force between the Corporation and Xx. Xxxxxxxx.
The Chief Executive Officer of the Corporation, shall, subject to subsection (a)
above, be entitled to make all decisions regarding the ordinary course of
business operation of the Corporation according to good business practice.
(c) All of the Directors shall have one vote each.
Section 3. Meetings.
(a) Regular meetings of the Board of Directors shall be held
in Wilmerding, Pennsylvania, or at such other place as may be determined from
time to time by the Board of Directors. Regular meetings of the Board of
Directors shall be held no less frequently than quarterly and at such times as
may be determined by the Board of Directors. Any business that properly may be
transacted by the Board of Directors may be transacted at any regular meeting
thereof.
(b) Special meetings of the Board of Directors may be called
any time by the Chairman of the Board, the Chief Executive Officer or by a
majority of the Directors then in office. Any such person or persons desiring to
call a special meeting or to have a matter placed on the agenda for a special
meeting shall so notify the other members of the Board of Directors and the
Chief Executive Officer in writing at least three (3) days before the date such
meeting is called for. Such notifications shall be accompanied by such
supplemental and explanatory information as may be necessary or appropriate in
the circumstances. Notice of a special meeting stating the date, time, place and
purpose thereof shall be furnished by the Chief Executive Officer or the
Secretary in writing to each member of the Board of Directors not later than
twenty-four (24) hours before the date of such meeting. Notice of a special
meeting need
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not be given to any Director who signs a waiver of notice or a consent to
holding the meeting or an approval of the minutes thereof, whether before or
after the meeting, or who attends the meeting without protesting, prior thereto
or at its commencement, the lack of notice. Only matters placed on the agenda
pursuant to this subsection (b) may be considered at a special meeting unless
the members of the Board of Directors unanimously agree otherwise.
Section 4. Quorum. Except as may be otherwise specifically
provided by law, the Certificate of Incorporation, these By-Laws or any
Certificate of Designation with respect to Preferred Stock, at all meetings of
the Board of Directors, a majority of the 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.
Section 5. Actions of Board. Unless otherwise provided by 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 6. Meetings by Means of Conference Telephone. Unless
otherwise provided by the Certificate of Incorporation or these By-Laws, members
of the Board of Directors of the Corporation, or any committee designated by the
Board of Directors, 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 6 shall
constitute presence in person at such meeting. The Chief Executive Officer or
the Secretary shall provide to the Directors, within a reasonable time, written
minutes of each meeting.
Section 7. Committees. The Board of Directors may, by
resolution passed by a majority of the Board of Directors, 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 he or they 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 allowed 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. Each committee shall
keep regular minutes and report to the Board of Directors when required.
Section 8. Nominating Committee. In addition to any other
committees of the Board established pursuant to Section 7 of this Article III,
the Board shall at all times have a Nominating Committee consisting of such
number of directors as shall be designated by the Chairman of the Board from
time to time. The Chairman of the Board shall have exclusive authority to select
the members of the Board who will serve on the Nominating Committee. The
Nominating Committee shall have exclusive authority to nominate persons to be
elected to the Board. Subject to the provisions of Section 1 of Article III of
these By-Laws, the Nominating
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Committee shall review the size and composition of the Board and make
nominations with respect to the persons to be elected as directors.
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 or such other compensation (including without
limitation the grant of stock options) as the Board of Directors may from time
to time determine. 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.
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 his or their votes are counted
for such purpose if (i) the material facts as to his or their relationship or
interest and as to the contract or transaction are disclosed or are known to the
Board of Directors or the committee; or (ii) the material facts as to his or
their relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract 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 authorized the contract or
transaction.
ARTICLE IV
OFFICERS
Section 1. General. (a) The officers of the Corporation shall
be the Chief Executive Officer, the President, a Secretary and a Treasurer, and
may include a Chairman of the Board and one or more Vice-Chairmen of the Board
or Vice Presidents as the Board of Directors may from time to time determine.
Any number of offices may be held by the same person, unless otherwise
prohibited by law, the Certificate of Incorporation or these By-Laws. The
officers of the Corporation need not be stockholders of the Corporation or,
except in the case of the Chairman or Vice Chairman of the Board of Directors,
need such officers be directors of the Corporation.
Section 2. Election. The Board of Directors 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 resignation or removal. 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.
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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 Chief Executive Officer, the
President or any Vice President 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.
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. During the absence or disability of
the Chief Executive Officer, the Chairman of the Board of Directors shall
exercise all the powers and discharge all the duties of the Chief Executive
Officer. The Chairman and any Vice Chairman of the Board of Directors shall also
perform such other duties and may exercise such other powers as from time to
time may be assigned to them by these By-Laws or by the Board of Directors.
Section 5. Chief Executive Officer. The Chief Executive
Officer 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. He shall execute all bonds,
mortgages, contracts and other instruments of the Corporation requiring a seal,
under the seal of the Corporation, 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 Chief Executive Officer. In the absence or
disability of the Chairman of the Board of Directors and each Vice Chairman, or
if there be none, the Chief Executive Officer shall preside at all meetings of
the stockholders and the Board of Directors. The Chief Executive Officer shall
also perform such other duties and may exercise such other powers as from time
to time may be assigned to him by these By-Laws or by the Board of Directors.
Section 6. President. The President shall, subject to the
control of the Board of Directors, be the chief operating officer of the
Corporation and, in such capacity shall be responsible for the day-to-day
business operations of the Corporation. The President shall also perform such
other duties and may exercise such other powers as from time to time may be
assigned to him by the Chief Executive Officer or by the Board of Directors.
Section 7. Vice Presidents. At the request of the President or
Chief Executive Officer or in their absence or in the event of their inability
or refusal to act, 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 or Chief Executive Officer, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the President
or Chief Executive Officer. Each Vice President shall perform such other duties
and have such other powers as the Board of Directors, the Chief Executive
Officer or the President may from time to time may prescribe. If there be no
Vice President, the Board of Directors shall designate the officer of the
Corporation who, in the absence of the President or Chief Executive Officer or
in the event of the inability or refusal of the President or Chief Executive
Officer to act, shall perform the duties of the President or Chief Executive
Officer, and when so acting, shall have all the powers of and be subject to all
the restrictions upon the President or Chief Executive Officer.
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Section 8. 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 the standing committees 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 or the
Chief Executive Officer, under whose supervision he 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 meeting of the Board of Directors, and if there be
no Assistant Secretary, then either the Board of Directors or the Chief
Executive Officer 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 the affixing by
his 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 9. 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 Chief Executive Officer, the President
and the Board of Directors, at its regular meetings, or when the Board of
Directors so requires, an account of all his 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 his office and for the restoration to
the Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the Corporation.
Section 10. Assistant Secretaries. Except as may be otherwise
provided in these By-Laws, 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 Chief Executive Officer, the President, any Vice
President, if there be one or the Secretary, and in the absence of the Secretary
or in the event of his 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 11. 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 Chief Executive
Officer, the President, any Vice President, if there be one, or the Treasurer,
and in the absence of the Treasurer or in the event of his disability or refusal
to act, shall perform the duties of the Treasurer, and when so acting, shall
have all the powers of an 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 his office and for the restoration to the Corporation, in case of his
death, resignation,
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retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the Corporation.
Section 12. 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.
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 Chief Executive
Officer, 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 him in the Corporation.
Section 2. Signatures. Where a certificate is countersigned by
(i) a transfer agent other than the Corporation or its employee, or (ii) a
registrar other than the Corporation or its employee, any other signature on the
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 he 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 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 his 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.
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 his attorney lawfully constituted in writing and upon the
surrender of the certificate therefor, which shall be canceled before a new
certificate shall be issued.
Section 5. Record Date. 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, or entitled to express consent to
corporate action in writing without a meeting, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled to
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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,
in advance, a record date, which shall not be more than sixty days not less than
ten days before the date of such meeting, nor more than sixty days prior to any
other such action. 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; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 6. Beneficial 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 provided
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 his
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.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the 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.
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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 January 1 to December 31.
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 sell may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
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 he 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 of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, against
expenses (including attorneys' fees), payments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
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 his conduct was lawful. The termination of any
action, suit or proceeding by payment, order, settlement, conviction or upon a
plea of nolo contendre or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
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 his 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 he 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 of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he 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
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upon 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 he 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 (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) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (iii) by the stockholders. To
the extent, however, that a 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,
he shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him 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 he 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 his
conduct was unlawful, if his action is based on the records or books of account
of the Corporation or another enterprise, or on information supplied to him 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 or officer. 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 be deemed to have met the applicable
standard of conduct set forth in Sections 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 presence of any determination thereunder, any
director or officer may apply to any court of competent jurisdiction in the
State of Delaware for indemnification to the extent otherwise permissible under
Sections 1 or 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 he has met the
applicable standards of conduct set forth in Sections 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.
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Section 6. Expenses Payable in Advance. Expenses incurred by a
director or officer in defending or investigating a threatened or pending
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 can ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized in this Article VIII.
Section 7. Non-exclusivity 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 any By-Law, agreement, contract, vote of stockholders or
disinterested directors or pursuant to the direction (howsoever embodied) of any
court of competent jurisdiction or otherwise, both as to action in his 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 entitled in Sections 1
and 2 of this Article VIII but whom the Corporation has the power or 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 or 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 or officer of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Corporation
would have the right or obligation to indemnify him 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 connection to the
resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed by 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 or officer 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 he 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 or
officer 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 he 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 an 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
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85
has ceased to be a director or officer and shall inure to the benefit of the
heirs, executors and administrators or such a person.
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. These By-Laws may be altered, amended or repealed,
in whole or in part, or new By-Laws may be adopted by the stockholders at any
annual or special meeting 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 Board of Directors then in office. Notwithstanding the
foregoing, Article VIII hereof shall not be altered, amended or repealed in
whole or in part, unless such alteration, amendment or repeal is approved by the
stockholders of the Corporation pursuant to a vote which would be sufficient to
adopt an amendment to the Certificate of Incorporation of the Corporation.
-15-
86
Exhibit 1.4(c)
Class I with terms expiring in 2000
Xxxxxx X. Xxxxxx
Xxxxxxx T.H. Xxxxxx
Xxx X. Xxxxx
Xxxxxxxx X. Xxxxxxx
Class II with terms expiring in 2001
Xxxxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxxxxx, Xx.
Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx
Class III with terms expiring in 2002
Xxxxxx X. Xxxxxxxxx
Xxx X. Xxxxxx XX
Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxx
87
Exhibit 1.4(d)
Position Name
-------- ----
Chairman of the Board and Xxxxxxx X. Xxxxxxxx
Chief Executive Officer
President and Chief Xxxxxxx T.H. Davies
Operating Officer
Executive Vice President, Xxxxxx X. Xxxxxxxx
Friction Products
Executive Vice President, Xxxxxx X. Xxxxxxxx, Xx.
Railroad
Executive Vice President, Xxxx X. Xxxxxxx
Transit
Vice Chairman Xxxxxxx X. Xxxxxxxxxx
Vice Chairman Xxxxxx X. Xxxxxxxxx
Senior Vice President, Xxxxxx X. Xxxxxx
Chief Financial Officer
and Secretary
Vice President, Investor Xxxxxxx X. Xxxxxx
Relations and Corporate
Communications
Vice President, Human Xxxxx X. Xxxxxx
Resources
Vice President and Xxxxxx X. Xxxxx
Treasurer
Vice President and Xxxxx X. Xxxxxxxxx
Controller
Vice President, Internal Xxxxxx X. Xxxxxx
Audit
Vice President, Business Xxxxxxx X. Xxxx
Development
88
Exhibit 5.10(a)
FORM OF AFFILIATE LETTER FOR AFFILIATES OF MOTIVEPOWER
Westinghouse Air Brake Company
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may
be deemed to be an "affiliate" of MotivePower Industries, Inc., a Pennsylvania
corporation ("MotivePower"), 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 130 and 135, as amended, of the
Commission. Pursuant to the terms of the Amended and Restated Agreement and Plan
of Merger dated as of September 26, 1999 (the "Merger Agreement") between
MotivePower and Westinghouse Air Brake Company, a Delaware corporation
("WABCO"), MotivePower will be merged with and into WABCO (the "Merger").
Capitalized terms used in this letter without definition shall have the meanings
assigned to them in the Merger Agreement.
As a result of the Merger, I may receive shares of Common
Stock, par value $.01 per share, of WABCO (the "WABCO Shares") in exchange for
shares of Common Stock, par value $.01 per share, of MotivePower, together with
any associated preferred stock purchase rights (the "MotivePower Shares") owned
by me or purchasable upon exercise of stock options.
1. I represent, warrant and covenant to MotivePower that in the event I
receive any WABCO Shares as a result of the Merger:
A. I shall not make any sale, transfer or other disposition of
the WABCO Shares in violation of the Act or the Rules and Regulations.
B. I have carefully read this letter and the Merger Agreement
and discussed the requirements of such documents and other applicable
limitations upon my ability to sell, transfer or otherwise dispose of the WABCO
Shares, to the extent I felt necessary, with my counsel or counsel for
MotivePower.
C. I have been advised that the issuance of the WABCO Shares
to me pursuant to the Merger will be registered with the Commission under the
Act on a Registration Statement on Form S-4. However, I have also been advised
that, because at the time the
89
Merger is submitted for a vote of the stockholders of MotivePower, (a) I may be
deemed to be an affiliate of MotivePower and (b) the distribution by me of the
WABCO Shares has not been registered under the Act, I may not sell, transfer or
otherwise dispose of the WABCO Shares issued to me in the Merger unless (i) in
the opinion of counsel reasonably satisfactory to WABCO, 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 WABCO, such sale, transfer or other
disposition is otherwise exempt from registration under the Act.
D. I understand that WABCO is under no obligation to register
the sale, transfer or other disposition of the WABCO Shares by me or on my
behalf under the Act or, except as provided in paragraph 2(A) below, to take any
other action necessary in order to make compliance with an exemption from such
registration available.
E. I also understand that there will be placed on the
certificates for the WABCO Shares issued to me, or any substitutions therefor, a
legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES
ACT OF 1933 APPLIES. THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY ONLY BE TRANSFERRED IN ACCORDANCE WITH THE
TERMS OF AN AGREEMENT DATED [_____] [__], 1999 BETWEEN THE
REGISTERED HOLDER HEREOF AND WESTINGHOUSE AIR BRAKE COMPANY, A
COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF
WESTINGHOUSE AIR BRAKE COMPANY."
F. I also understand that unless a sale or transfer is made in
conformity with the provisions of Rule 145, or pursuant to a registration
statement, WABCO reserves the right to put the following legend on the
certificates issued to my transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED
FROM A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO
WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933
APPLIES. THE SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH
A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION
THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933 AND
MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933."
G. I further represent to, and covenant with, WABCO that I
will not, during the 30 days prior to the Effective Time (as defined in the
Merger Agreement), sell, transfer or otherwise dispose of or reduce my risk (as
contemplated by SEC Accounting Series Release
90
No. 135) with respect to MotivePower Shares or shares of the capital stock of
WABCO 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 WABCO Shares received by me in the Merger
or any other shares of the capital stock of WABCO until after such time as
results covering at least 30 days of combined operations of WABCO and
MotivePower have been published by WABCO, in the form of a quarterly earnings
report, an effective registration statement filed with the Commission, a report
to the Commission on Form 10-K, 10-Q, or 8-K, or any other public filing or
announcement which includes the combined results of operations.
H. Execution of this letter should not be considered an
admission on my part that I am an "affiliate" of MotivePower as described in the
first paragraph of this letter, nor 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 WABCO's acceptance of this letter, WABCO hereby agrees with me as
follows:
A. For so long as and to the extent necessary to permit me to
sell the WABCO Shares pursuant to Rule 145 and, to the extent applicable, Rule
144 under the Act, WABCO shall use its reasonable best efforts to (i) 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
(the "1934 Act"), and (ii) furnish to me upon request a written statement as to
whether WABCO has complied with such reporting requirements during the 12 months
preceding any proposed sale of the WABCO Shares by me under Rule 145. WABCO has
filed all reports required to be filed with the Commission under Section 13 of
the 1934 Act during the preceding 12 months.
B. It is understood and agreed that the certificates with the
legends set forth in paragraphs E and F above will be replaced with certificates
without such legend if (i) one year shall have elapsed from the date the
undersigned acquired the WABCO Shares received in the Merger and the provisions
of Rule 145(d)(2) are then available to the undersigned, (ii) two years shall
have elapsed from the date the undersigned acquired the WABCO Shares received in
the Merger and the provisions of Rule 145(d)(3) are then applicable to the
undersigned, or (iii) WABCO has received either an opinion of counsel, which
opinion and counsel shall be reasonably satisfactory to WABCO, or a "no action"
letter obtained by the undersigned from the staff of the Commission, to the
effect that the restrictions imposed by Rule 145 under the Act no longer apply
to the undersigned.
Very truly yours,
__________________________
Name:
Agreed and accepted this ___day
of [____], 1999, by
WESTINGHOUSE AIR BRAKE COMPANY
By_________________________
Name:
Title:
91
EXHIBIT 5.10(b)
FORM OF AFFILIATE LETTER FOR AFFILIATES OF WABCO
Westinghouse Air Brake Company
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may
be deemed to be an "affiliate" of Westinghouse Air Brake Company, a Delaware
corporation ("WABCO"), as the term "affiliate" is defined for purposes of
Accounting Series Releases 130 and 135, as amended, of the Securities and
Exchange Commission ("Commission"). Pursuant to the terms of the Amended and
Restated Agreement and Plan of Merger dated as of September 26, 1999 (the
"Merger Agreement") between WABCO and MotivePower Industries, Inc., a
Pennsylvania corporation ("MotivePower"), MotivePower will be merged with and
into WABCO (the "Merger").
I represent to, and covenant with, WABCO that I will not,
during the period beginning 30 days prior to the Effective Time (as defined in
the Merger Agreement) until after such time as results covering at least 30 days
of combined operations of WABCO and MotivePower have been published by WABCO, in
the form of a quarterly earnings report, an effective registration statement
filed with the Commission, a report to the Commission on Form 10-K, 10-Q, or
8-K, or any other public filing or announcement which includes the combined
results of operations, sell, transfer or otherwise dispose of or reduce my risk
with respect to any shares of the capital stock of WABCO or MotivePower that I
may hold.
Execution of this letter should not be considered an admission
on my part that I am an "affiliate" of WABCO as described in the first paragraph
of this letter, nor 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.
Very truly yours,
______________________________
Name:
Accepted this ___day of
[_____], 1999, by
WESTINGHOUSE AIR BRAKE COMPANY
By_________________________
Name:
