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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
THE PROCTER & XXXXXX COMPANY,
THE PROCTER & XXXXXX OHIO BRANDS COMPANY
AND
THE X.X. XXXXXXX COMPANY
Dated as of October 9, 2001
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ARTICLE I DEFINITIONS.................................................................................1
Section 1.01 Definitions.................................................................................1
ARTICLE II SPIN OFF AND MERGER.........................................................................8
Section 2.01 The Spin Off................................................................................8
Section 2.02 The Merger..................................................................................8
Section 2.03 Articles of Incorporation and Code of Regulations...........................................8
Section 2.04 Directors...................................................................................9
Section 2.05 Officers....................................................................................9
ARTICLE III CONVERSION OF SHARES AND RELATED MATTERS....................................................9
Section 3.01 Conversion of Capital Stock.................................................................9
Section 3.02 Exchange of Certificates...................................................................10
Section 3.03 Appraisal Rights...........................................................................12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF P&G......................................................12
Section 4.01 Due Organization, Good Standing and Corporate Power........................................12
Section 4.02 Authorization and Validity of Agreement....................................................13
Section 4.03 Consents and Approvals; No Violations......................................................13
Section 4.04 Information to be Supplied.................................................................14
Section 4.05 Capitalization of P&G and Newco............................................................14
ARTICLE V REPRESENTATIONS AND WARRANTIES OF JMS......................................................15
Section 5.01 Due Organization, Good Standing and Corporate Power........................................15
Section 5.02 Authorization and Validity of Agreement....................................................15
Section 5.03 Capitalization.............................................................................16
Section 5.04 Consents and Approvals; No Violations......................................................16
Section 5.05 JMS SEC Filings; Financial Statements......................................................17
Section 5.06 No Undisclosed Liabilities.................................................................17
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Section 5.07 Information to be Supplied.................................................................18
Section 5.08 Absence of Certain Events..................................................................18
Section 5.09 Litigation.................................................................................18
Section 5.10 Voting Requirements; Approval; Board Approval..............................................18
Section 5.11 Title to Properties; Encumbrances..........................................................19
Section 5.12 Compliance with Law........................................................................19
Section 5.13 Insurance..................................................................................19
Section 5.14 Employees and Employee Benefits............................................................19
Section 5.15 Regulatory Matters.........................................................................20
Section 5.16 JMS Rights Agreement.......................................................................20
Section 5.17 Broker's or Finder's Fee...................................................................21
Section 5.18 Tax Treatment..............................................................................21
Section 5.19 Intellectual Property......................................................................21
ARTICLE VI COVENANTS..................................................................................21
Section 6.01 Conduct of Jif/Crisco Business Pending the Effective Time..................................21
Section 6.02 Conduct of JMS Pending the Effective Time..................................................23
Section 6.03 Efforts to Close; Antitrust Clearance......................................................24
Section 6.04 Confidentiality............................................................................25
Section 6.05 Cooperation in Litigation..................................................................26
Section 6.06 Cooperation in Tax Matters.................................................................26
Section 6.07 Cooperation of Third Parties...............................................................27
Section 6.08 Additional Documents.......................................................................27
Section 6.09 Access.....................................................................................28
Section 6.10 Public Announcements.......................................................................28
Section 6.11 Transferring Employees.....................................................................28
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Section 6.12 Restrictions on Solicitation and Hiring....................................................30
Section 6.13 JMS Shareholder Meeting....................................................................31
Section 6.14 Preparation of Proxy Statement/Prospectus; Registration Statement..........................31
Section 6.15 Board Recommendation.......................................................................32
Section 6.16 No Solicitation............................................................................33
Section 6.17 Notification of Certain Matters............................................................33
Section 6.18 NYSE Listing...............................................................................34
Section 6.19 Affiliates.................................................................................34
Section 6.20 Ancillary Agreements.......................................................................34
Section 6.21 Consummation of the Spin Off...............................................................34
Section 6.22 Covenant Not to Compete....................................................................35
Section 6.23 Standstill.................................................................................35
Section 6.24 Interim Financial Information..............................................................36
Section 6.25 Indemnification............................................................................36
Section 6.26 Title Policies.............................................................................37
Section 6.27 Shareholder Agreement......................................................................37
ARTICLE VII CONDITIONS TO THE MERGER...................................................................37
Section 7.01 Conditions to the Merger...................................................................37
Section 7.02 Conditions to the Obligation of JMS........................................................38
Section 7.03 Conditions to the Obligation of P&G........................................................39
ARTICLE VIII TERMINATION AND ABANDONMENT................................................................40
Section 8.01 Termination................................................................................40
Section 8.02 Effect of Termination......................................................................41
ARTICLE IX MISCELLANEOUS..............................................................................41
Section 9.01 Nonsurvival of Representations, Warranties and Agreements..................................41
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Section 9.02 Amendment and Modification.................................................................41
Section 9.03 Waiver of Compliance.......................................................................41
Section 9.04 Notices....................................................................................42
Section 9.05 Third Party Beneficiaries..................................................................42
Section 9.06 Successors and Assigns.....................................................................42
Section 9.07 Entire Agreement...........................................................................43
Section 9.08 Severability...............................................................................43
Section 9.09 Captions...................................................................................43
Section 9.10 Counterparts...............................................................................43
Section 9.11 Governing Law..............................................................................43
Section 9.12 Expenses...................................................................................43
Section 9.13 Specific Performance.......................................................................43
Exhibit A: Contribution Agreement
Exhibit B: Shareholders Agreement
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "AGREEMENT"), dated as of October 9,
2001, by and among The Procter & Xxxxxx Company, an Ohio corporation ("P&G"),
The Procter & Xxxxxx Ohio Brands Company, an Ohio corporation and a wholly-owned
subsidiary of P&G ("NEWCO"), and The X.X. Xxxxxxx Company, an Ohio corporation
("JMS").
WHEREAS, P&G directly and indirectly through its wholly-owned
Subsidiaries is engaged in the Jif/Crisco Business (capitalized terms used
herein shall have the meaning given to them in Article I unless otherwise
defined herein);
WHEREAS, prior to the Effective Time on the Closing Date P&G shall, (i)
pursuant to the Contribution Agreement, transfer, or cause to be transferred,
substantially all of the assets, properties, rights and interests of P&G and its
Affiliates of the Jif/Crisco Business and certain of the liabilities of the
Jif/Crisco Business to Newco and (ii) distribute to all P&G Shareholders on the
Record Date, one share of Newco Common Stock for each share of P&G Common Stock
held by such holder on the Record Date (the "SPIN OFF");
WHEREAS, the boards of directors of P&G, Newco and JMS have each
approved and declared advisable the Merger of Newco with and into JMS
immediately following the Spin Off, upon the terms and subject to the conditions
set forth in this Agreement and in accordance with the Ohio Corporation Law;
WHEREAS, for federal income tax purposes, it is intended that (i) the
Spin Off shall be tax-free to P&G and to the P&G Shareholders pursuant to
Section 355 of the Code and (ii) the Merger shall qualify as a tax-free
reorganization within the meaning of Section 368 of the Code, and the parties
intend, by executing this Agreement, to adopt a plan of reorganization within
the meaning of Section 368 of the Code; and
WHEREAS, simultaneously with the execution of this Agreement, certain
shareholders of JMS have entered into the Shareholders Agreement.
NOW THEREFORE, in consideration of the foregoing premises and of the
mutual covenants, representations, warranties and agreements herein contained,
the parties hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. When used in this Agreement, the following
terms shall have the respective meanings specified therefore below (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined).
"Action" shall mean any dispute, controversy, claim, action,
litigation, suit, cause of action, arbitration, mediation, or any proceeding by
or before any mediator or Governmental Entity, or any investigation, subpoena,
or demand preliminary to any of the foregoing.
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"Affiliate" shall mean, with respect to a Person, another Person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person.
"Agreement" shall have the meaning set forth in the preamble.
"Ancillary Agreements" shall mean the Contribution Agreement, the
Shareholders Agreement and the other agreements and documents defined as
"Ancillary Agreements" in the Contribution Agreement.
"Antitrust Laws" shall mean the Xxxxxxx Act, as amended, the Xxxxxxx
Act, as amended, the HSR Act, the Federal Trade Commission Act, and all other
Law and Orders that are designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization or restraint of trade.
"Applicable Number" shall have the meaning set forth in Section
3.01(g).
"Applicable Percentage" shall have the meaning set forth in Section
3.01(e).
"Assertion" shall have the meaning set forth in Section 6.25(b).
"Authorization" shall mean any legally required consent, authorization,
approval, order, license, certificate or Permit of or from, or declaration or
filing with, any Governmental Entity, including, without limitation, any legally
required filing with any Governmental Entity and the subsequent expiration of
any legally required waiting period under any Antitrust Laws.
"Business Day" shall mean any day on which commercial banks in New
York, New York are open for business providing substantially all services
offered by such banks.
"Cash Amount" shall have the meaning set forth in Section 3.01(f).
"Certificate of Merger" shall have the meaning set forth in Section
2.02(c).
"Closing" shall have the meaning set forth in Section 2.02(b).
"Closing Date" shall have the meaning set forth in Section 2.02(b).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Competing Transaction" shall have the meaning set forth in Section
6.16(b).
"Contracts" shall mean any note, bond, mortgage, indenture, license,
franchise, permit, agreement, contract, lease, franchise agreement or other
instrument or legal obligation of any kind.
"Contribution Agreement" shall mean the Contribution Agreement in the
form of Exhibit A among Newco, P&G and The Procter & Xxxxxx Manufacturing
Company.
"Contributors" shall have the meaning set forth in the Contribution
Agreement.
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"Culinary Sol Business" shall mean the culinary education and retail
business for specialized cooking products as currently conducted by the
Contributors in Norwood, Ohio.
"Disclosing Party" shall have the meaning set forth in Section
6.04(b)(i).
"Dissenting Shares" shall have the meaning set forth in Section 3.03.
"Divestiture" shall have the meaning set forth in Section 6.03(e).
"Effective Time" shall have the meaning set forth in Section 2.02(c).
"Employees" shall mean:
(a) those employees of P&G and its Affiliates currently exclusively
employed to carry on the Jif/Crisco Business whose place of business is located
at the Jif/Crisco Real Property, and including all employees on disability or
other leave of absence; provided, however, that any such Employee who is on
disability or other leave of absence and who does not return to work within one
year from the Closing Date shall be deemed not to have been an Employee, and
(b) those employees of P&G and its Affiliates currently employed
outside the Jif/Crisco Business, but who will become available to JMS and its
Affiliates for employment in the Jif/Crisco Business prior to the Closing Date
pursuant to P&G and its Affiliates' obligations under P&G and its Affiliates'
collective bargaining agreement covering the employees at P&G's Ivorydale
Facility.
"Encumbrances" shall mean all liens, security interests, pledges,
mortgages, deeds of trusts, charges, options, or other encumbrances.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ESOP" shall mean The Employee Stock Ownership Trust of The Procter &
Xxxxxx Profit Sharing Trust and Employee Stock Ownership Plan.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Agent" shall have the meaning set forth in Section 3.02(a).
"Exchange Fund" shall have the meaning set forth in Section 3.02(b).
"FDA" shall mean the United States Food and Drug Administration.
"GAAP" shall mean generally accepted accounting principles of the
United States of America, as in effect from time to time.
"Geography" shall mean the United States of America and Canada.
"Governmental Entity" shall mean any arbitrator, court, judicial,
legislative, administrative or regulatory agency, commission, department, board
or bureau or body or other
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governmental authority or instrumentality or any person or entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, whether foreign, Federal, state, provincial, local or
other government.
"HSR Act" shall have the meaning set forth in Section 4.03.
"Information" shall have the meaning set forth in Section 6.04(a).
"IRS" means the United States Internal Revenue Service.
"Jif/Crisco Business" shall have the meaning assigned to such term in
the Contribution Agreement.
"Jif/Crisco Material Adverse Effect" shall mean a material adverse
effect on the business, financial condition, operations or results of operations
of the Jif/Crisco Business taken as a whole or the ability of P&G and Newco to
consummate the Merger and to perform their obligations under this Agreement and
the Ancillary Agreements or to consummate the Transactions.
"Jif/Crisco Real Property" shall mean all right, title and interest in
or to the improved and unimproved land related to the Jif/Crisco Business, and
all buildings, structures, erections, improvements, appurtenances, and fixtures
situated on or forming part of such land listed in Schedule 1.52 of the
Contribution Agreement.
"JMS" shall have the meaning set forth in the preamble.
"JMS Balance Sheet" shall have the meaning set forth in Section 5.06.
"JMS Board Recommendation" shall have the meaning set forth in Section
5.10(b).
"JMS Common Stock" shall have the meaning set forth in Section 5.03.
"JMS Compensation and Benefit Plans" shall have the meaning set forth
in Section 5.14(a).
"JMS Equity Interests" shall have the meaning set forth in Section
5.03.
"JMS Intellectual Property" shall have the meaning set forth in Section
5.19.
"JMS Material Adverse Effect" shall mean a material adverse effect on
the business, financial condition, operations or results of operations of JMS
and its Subsidiaries taken as a whole or the ability of JMS to consummate the
Merger and to perform their obligations under this Agreement and the Ancillary
Agreements or to consummate the Transactions.
"JMS Options" shall have the meaning set forth in Section 5.03.
"JMS Pension Plan" shall have the meaning set forth in Section 5.14(c).
"JMS Preferred Stock" shall have the meaning set forth in Section 5.03.
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"JMS Right" shall have the meaning set forth in Section 5.03.
"JMS Rights Agreement" shall have the meaning set forth in Section
5.03.
"JMS SEC Filings" shall have the meaning set forth in Section 5.05(a).
"JMS Series A Preferred Stock" shall have the meaning set forth in
Section 5.03.
"JMS Shareholder Approval" shall have the meaning set forth in Section
5.10(a).
"JMS Shareholders" shall mean the holders of JMS Common Stock.
"JMS Shareholder Meeting" shall have the meaning set forth in Section
6.13.
"Knowledge" shall mean, whether or not capitalized, in the case of an
entity, the actual knowledge after due inquiry of the officers of such entity as
of the date of the representation, warranty or statement.
"Law" shall mean any statute, law, ordinance, rule or regulation of any
Governmental Entity.
"Merger" shall have the meaning set forth in Section 2.02(a).
"Merger Registration Statement" shall have the meaning set forth in
Section 4.04.
"Newco" shall have the meaning set forth in the preamble.
"Newco Common Stock" shall have the meaning set forth in Section
4.05(b).
"Newco Employee" shall have the meaning set forth in Section 6.11(a).
"Newco Equity Interests" shall have the meaning set forth in Section
4.05(b).
"Newco Shareholder" shall mean the holders of Newco Common Stock.
"NYSE" shall mean the New York Stock Exchange.
"Ohio Corporation Law" shall mean the General Corporation Law of the
Ohio Revised Code.
"Old Certificates" shall mean certificates representing shares of JMS
Common Stock.
"Old JMS Shares" shall have the meaning set forth in Section 3.01(e).
"Order" shall mean any order, judgment, decree, writ, permit or license
of any Governmental Entity.
"Permits" shall mean all permits, approvals, licenses, authorizations,
certificates, rights, exemptions and orders from Governmental Entities.
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"Person" shall mean and include an association, an individual, a
partnership, a joint venture, joint stock company, a corporation, a trust, an
unincorporated organization, a limited liability company, a group, a government
or other department or agency thereof and any other entity.
"P&G" shall have the meaning set forth in the preamble.
"P&G Equity Interests" shall have the meaning assigned to such term in
Section 4.05(a).
"P&G Common Stock" shall have the meaning set forth in Section 4.05(a).
"P&G Options" shall have the meaning assigned to such term in Section
4.05(a).
"P&G Shareholders" shall mean the holders from time to time of the P&G
Common Stock.
"Proxy Statement/Prospectus" shall have the meaning assigned to such
term in Section 6.14(a)(i).
"Receiving Party" shall have the meaning set forth in Section 6.04(b).
"Record Date" shall mean the date with respect to which P&G
Shareholders of record on such date will receive Newco Common Stock in the Spin
Off.
"Restricted Business" shall have meaning set forth in Section 6.22.
"Rule 145 Affiliates" shall have the meaning set forth in Section 6.19.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Settlement" shall have the meaning set forth in Section 6.03(e).
"Shareholders Agreement" shall mean the agreement in the form attached
hereto as Exhibit B, between P&G and the JMS Shareholders that are parties
thereto.
"Spin Off" shall have the meaning set forth in the recitals.
"Spin Off Stock Certificate" shall have the meaning set forth in
Section 2.01.
"Standstill Period" shall have the meaning set forth in Section 6.23.
"Subsidiary" of any Person shall mean any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such limited
liability company,
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partnership or joint venture or (c) the beneficial interest in such trust or
estate is at the time directly or indirectly owned or controlled by such Person
and one or more of its other Subsidiaries or by one or more of such Person's
other Subsidiaries.
"Superior Proposal" shall mean a written Competing Transaction that is
for more than 50% of the outstanding shares of JMS Common Stock or all or
substantially all of the assets of JMS and its Subsidiaries, which is, in the
reasonable opinion of the board of directors of JMS, reasonably certain of being
completed and more favorable to JMS and the JMS Shareholders than the
Transactions, and which is not subject to any financing or due diligence
condition; provided, however, that, without limiting the foregoing, a Competing
Transaction shall not constitute a Superior Proposal unless, in the written
opinion (with only customary qualifications) of JMS's independent financial
advisors, such Competing Transaction is more favorable from a financial point of
view to the JMS Shareholders than the Transactions, including any proposed
alterations to the terms of the Transactions submitted by P&G in response to
such Competing Transaction.
"Supplemental Rulings" shall have the meaning set forth in Section
6.06(c).
"Surviving Corporation" shall have the meaning set forth in Section
2.02(a).
"Surviving Corporation Common Stock" shall have the meaning set forth
in Section 3.01(a).
"Target" shall have meaning set forth in Section 6.22.
"Tax" shall mean any United States federal, foreign, national, state,
provincial, local or other jurisdictional income, gross receipts, property,
sales, use, license, excise, franchise, employment, payroll, estimated,
alternative, or add on minimum, ad valorem, transfer or excise tax, or any other
tax, custom, duty, governmental fee or other like assessment or charge imposed
by any Governmental Entity, together with any interest or penalty imposed
thereon.
"Tax Return" shall mean a report, return or other information
(including any attached schedules or any amendments to such report, return or
other information) required to be supplied to or filed with a Governmental
Entity with respect to any Tax, including an information return, claim for
refund, amended return or declaration of estimated Tax.
"Termination Fee" shall have the meaning set forth in Section 8.02(b).
"Trading Day" shall mean any day on which there are sales of common
stock on the NYSE composite tape.
"Transactions" shall mean the transactions contemplated by this
Agreement, the Spin Off, the Merger and the Ancillary Agreements.
"Voting Securities" shall have the meaning set forth in Section 6.23.
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ARTICLE II
SPIN OFF AND MERGER
Section 2.01 THE SPIN OFF. Prior to the Effective Time, on the Closing
Date, P&G shall effect the Spin Off by executing the Contribution Agreement and
consummating the transactions contemplated thereby and delivering, or causing to
be delivered, to the Exchange Agent a certificate (the "SPIN OFF STOCK
CERTIFICATE") representing that number of shares of Newco Common Stock that is
equal to the number of shares of P&G Common Stock that are outstanding as of the
Record Date (other than treasury shares). The Exchange Agent shall hold the
shares of Newco Common Stock represented by the Spin Off Stock Certificate for
the P&G Shareholders on the Record Date. Except as directed by P&G in its sole
discretion, the shares of Newco Common Stock represented by the Spin Off Stock
Certificate shall not be transferable and the Exchange Agent shall not deliver
any shares of Newco Common Stock represented by the Spin Off Stock Certificate
to any P&G Shareholder.
Section 2.02 THE MERGER.
(a) Upon the terms and subject to the conditions of this Agreement,
Newco will be merged (the "MERGER") with and into JMS in accordance with the
provisions of the Ohio Corporation Law. Following the Merger, JMS will continue
as the surviving corporation (the "SURVIVING CORPORATION") and the separate
corporate existence of Newco will cease.
(b) Upon the terms and subject to the conditions set forth in this
Agreement, the consummation of the Spin Off and the Merger (the "CLOSING") will
take place at the offices of P&G, at 10:00 a.m., local time on the fifth
Business Day following satisfaction or waiver of the conditions set forth in
Article VII hereof (other than those conditions, including the Spin Off, that by
their nature or pursuant to the terms of this Agreement are to be satisfied at
the Closing, but subject to the satisfaction or, where permitted, the waiver of
those conditions), or at such other date, time or place as P&G and JMS may
agree. The date on which the Closing occurs is referred to as the "CLOSING
DATE."
(c) The Merger will be consummated by the filing of a certificate of
merger (the "CERTIFICATE OF MERGER") with the Secretary of State of the State of
Ohio in accordance with Section 1701.78 of the Ohio Corporation Law. The time
that the Merger becomes effective in accordance with Section 1701.78 of the Ohio
Corporation Law is referred to in this Agreement as the "EFFECTIVE TIME."
(d) The Merger will have the effects set forth in the Ohio Corporation
Law. Without limiting the generality of the foregoing, as of the Effective Time,
all properties, rights, privileges, powers and franchises of Newco and JMS will
vest in the Surviving Corporation and all debts, liabilities and duties of Newco
and JMS will become debts, liabilities and duties of the Surviving Corporation.
Section 2.03 ARTICLES OF INCORPORATION AND CODE OF REGULATIONS. The
articles of incorporation and code of regulations of the Surviving Corporation
as of the Effective Time shall be in the form of the articles of incorporation
and code of regulations of JMS as in effect as of
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the date hereof and as further amended so as to provide (a) that the provisions
of paragraph (a) of Division II of Article IV of the amended articles of
incorporation apply only to the voting of shares with respect to the matters set
forth on Schedule 2.03 hereto, and (b) that as to all other matters as to which
holders of shares of Surviving Corporation Common Stock are entitled to vote,
each outstanding share of Surviving Corporation Common Stock shall entitle the
holder to one vote for such share of Surviving Corporation Common Stock with
respect to each such other matter and (c) for such other amendments not
affecting or related to the voting power of shares of Surviving Corporation
Common Stock, as P&G and JMS shall mutually agree within ten Business Days of
the date hereof.
Section 2.04 DIRECTORS. The directors of JMS at the Effective Time will
be the initial directors of the Surviving Corporation and will hold office from
the Effective Time until their respective successors are duly elected or
appointed and qualified in the manner provided by the certificate of
incorporation and bylaws of the Surviving Corporation or as otherwise provided
by Law.
Section 2.05 OFFICERS. The officers of JMS at the Effective Time will
be the initial officers of the Surviving Corporation and will hold office from
the Effective Time until their respective successors are duly elected or
appointed and qualified in the manner provided by the certificate of
incorporation and bylaws of the Surviving Corporation or as otherwise provided
by Law.
ARTICLE III
CONVERSION OF SHARES AND RELATED MATTERS
Section 3.01 CONVERSION OF CAPITAL STOCK. At the Effective Time, by
virtue of the Merger and without any action on the part of Newco, JMS or the
holders of the following securities:
(a) Each share of Newco Common Stock issued and outstanding immediately
prior to the Effective Time (other than any shares of Newco Common Stock to be
cancelled pursuant to Section 3.01(b) or as to which appraisal rights are
perfected in accordance with Section 3.05) shall be converted, subject to
Section 3.02(e), into the right to receive one-fiftieth (1/50th) of a share of
the common stock of the Surviving Corporation, without par value ("SURVIVING
CORPORATION COMMON STOCK"). Following the Effective Time, all shares of Newco
Common Stock shall no longer be outstanding and shall automatically be cancelled
and retired and shall cease to exist.
(b) Each share of Newco Common Stock owned by JMS or any direct or
indirect wholly-owned Subsidiary of JMS (other than, in each case, trust
accounts, managed accounts, custodial accounts and the like that are
beneficially owned by third parties) immediately prior to the Effective Time
shall be cancelled and extinguished without any conversion thereof and no
payment shall be made with respect thereto.
(c) Intentionally Omitted.
(d) Each share of JMS Common Stock issued and outstanding immediately
prior to
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the Effective Time will, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into (i) that number of shares of
Surviving Corporation Common Stock equal to the Applicable Percentage of a share
of Surviving Corporation Common Stock and (ii) to the extent that one or more of
the Supplemental Rulings are not obtained in whole or in part, the Cash Amount.
Each JMS Option shall remain outstanding and the terms of each such JMS Option
shall be correspondingly adjusted to reflect the conversion of the JMS Common
Stock.
(e) The "APPLICABLE PERCENTAGE" shall mean a fraction, the numerator of
which is the product obtained by multiplying (1) the quotient obtained by
dividing (i) the total number of shares of Surviving Corporation Common Stock to
be issued upon the conversion of the Newco Common Stock pursuant to Section
3.01(a) by (ii) the sum of (xx) the product obtained by multiplying the total
number of shares of JMS Common Stock outstanding immediately prior to the
Effective Time (the "OLD JMS SHARES") and 1.1070 and (yy) the Applicable Number,
and (2) the difference obtained by subtracting the Applicable Number from the
Old JMS Shares; and the denominator of which is the Old JMS Shares. For
illustrative purposes, the Applicable Percentage is set forth as a formula on
Schedule 3.01(e) hereto. The Applicable Percentage shall be expressed as a
decimal and shall be rounded to the fourth decimal place. To the extent all of
the Supplemental Rulings are obtained in whole, the Applicable Number shall be
zero.
(f) The "CASH AMOUNT" shall mean, to the extent that one or more of the
Supplemental Rulings are not obtained in whole or in part, the quotient obtained
by dividing (i) the product obtained by multiplying (x) the Applicable Number by
(y) a cash price equal to the average closing price for the JMS Common Stock on
the NYSE for the five Trading Days ending two Trading Days prior to the
Effective Time by (ii) the Old JMS Shares.
(g) The "APPLICABLE NUMBER" shall mean, to the extent that one or more
of the Supplemental Rulings are not obtained in whole or in part, that number of
shares of JMS Common Stock that P&G determines in good faith and in its sole
discretion is required to be effectively redeemed by JMS through the Cash Amount
in (f) above in order to, together with the corresponding formulaic adjustment
to the Applicable Percentage in (e) above, reverse the potential tax effects of
failing to obtain any of the Supplemental Rulings in whole or in part (i.e. by
providing that the holders of shares of Newco Common Stock, as a group, and the
holders of Old JMS Shares, as a group, receive the same relative proportion of
the Surviving Corporation Common Stock to be issued in the Merger that they
would have received if the Supplemental Rulings had been obtained). For
avoidance of doubt, the parties intend that the Applicable Number be set so as
to reverse one half of the potential tax effects of failing to obtain any of the
Supplemental Rulings and that the balance of such effects are to be reversed
through the formulaic adjustment of the Applicable Percentage in (e) above.
Section 3.02 EXCHANGE OF CERTIFICATES.
(a) Prior to the Closing, P&G shall appoint a bank or trust company
reasonably acceptable to JMS as exchange agent (the "EXCHANGE AGENT") for the
purpose of holding the Spin Off Stock Certificate on behalf of the P&G
Shareholders on the Record Date and for exchanging the Spin Off Stock
Certificate and the Old Certificates for certificates representing that number
of shares of Surviving Corporation Common Stock that are to be issued pursuant
to Section 3.01 hereof and cash for payment of the Cash Amount. The costs and
expenses of the
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Exchange Agents shall be borne by Newco.
(b) As soon as practicable, but in any event no later than 5 Business
Days following the Effective Time, JMS shall deposit with the Exchange Agent as
nominee for the benefit of the holders of Newco Common Stock and JMS Common
Stock, certificates representing the shares of Surviving Corporation Common
Stock (such shares of Surviving Corporation Common Stock, together with cash for
payment of the Cash Amount and any dividends or distributions with respect
thereto being hereinafter referred to as the "EXCHANGE FUND") to be issued
pursuant to Sections 3.01(a) and 3.01(d).
(c) The Exchange Agent shall, as soon as practicable, but in any event
no later than 10 days following the Effective Time, distribute to each holder of
shares of Newco Common Stock immediately prior to the Effective Time (other than
holders of shares of Newco Common Stock that are cancelled pursuant to Section
3.01(b)) and each holder of shares of JMS Common Stock immediately prior to the
Effective Time (i) certificates representing the whole number of shares of
Surviving Corporation Common Stock into which the shares of Newco Common Stock
or JMS Common Stock, as the case may be, held by such Person have been converted
in accordance with Section 3.01(a) and Section 3.01(d), (ii) the amount of
dividends or other distributions, if any, with a record date on or after the
Effective Time which theretofore became payable with respect to such shares of
Surviving Corporation Common Stock and (iii) the Cash Amount, in each case which
such holder has the right to receive pursuant to the provisions of this Article
III, and the Spin Off Stock Certificate and the Old Certificates shall forthwith
be cancelled. In no event shall the holder of any shares of Newco Common Stock
or JMS Common Stock be entitled to receive interest on any funds to be received
in the Merger. From and after the Effective Time, the interest of the holders of
the Newco Common Stock immediately prior to the Merger in the Spin Off Stock
Certificate and the interest of the holders of shares of JMS Common Stock
immediately prior to the merger in the Old Certificates shall be limited to the
right to receive only (i) the whole number of shares of Surviving Corporation
Common Stock into which the shares of Newco Common Stock or JMS Common Stock
held by such Person have been converted in accordance with Sections 3.01(a) and
3.01(d), (ii) the amount of dividends or other distributions, if any, with a
record date on or after the Effective Time which theretofore became payable with
respect to such shares of Surviving Corporation Common Stock, (iii) the Cash
Amount and (iv) the cash amount payable in lieu of fractional shares of
Surviving Corporation Common Stock in accordance with Section 3.02(e).
(d) All shares of Surviving Corporation Common Stock issued upon
conversion of shares of Newco Common Stock or JMS Common Stock in accordance
with the terms hereof (including the Cash Amount paid pursuant to Section
3.02(e)) shall be deemed to have been issued at the Effective Time in full
satisfaction of all rights pertaining to such shares of Newco Common Stock or
JMS Common Stock.
(e) In lieu of any such fractional shares of Surviving Corporation
Common Stock, each holder of shares of Newco Common Stock or JMS Common Stock
who would otherwise have been entitled to a fraction of a share of Surviving
Corporation Common Stock in exchange for such shares of Newco Common Stock or
JMS Common Stock (after taking into account all shares of Newco Common Stock or
JMS Common Stock held by such holder immediately prior to the Effective Time)
shall receive from the Exchange Agent, as applicable, a cash payment in
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lieu of such fractional share of Surviving Corporation Common Stock. The cash
payment will be the amount whereby the Exchange Agent shall receive a number of
whole shares that represent the fractional shares, sells such shares and
distributes the proceeds to the holder of the Newco Common Stock and JMS Common
Stock who would otherwise have been entitled to a fraction of a share of
Surviving Corporation Common Stock (such amount not to exceed the value of one
share of Surviving Corporation Common Stock).
(f) JMS shall be entitled to deduct and withhold from the shares of
Surviving Corporation Common Stock any dividends and distributions thereon and
cash in lieu of fractional shares of Surviving Corporation Common Stock
otherwise payable hereunder to any holder of shares of Newco Common Stock such
amounts as it is required to deduct and withhold with respect to making of such
payment under any provisions of Federal, state, local or foreign income tax Law.
To the extent that JMS so withholds those amounts, such withheld amounts shall
be treated for all purposes of this Agreement as having been paid to the holder
of the shares of Newco Common Stock in respect of which such deduction and
withholding was made by JMS.
Section 3.03 APPRAISAL RIGHTS. Holders of JMS Common Stock that are
issued and outstanding immediately prior to the Effective Time and that are held
by a holder who has not voted those shares in favor of the adoption of this
Agreement, who shall have delivered a written demand for appraisal of those
shares in accordance with the Ohio Corporation Law and who, as of the Effective
Time, shall not have effectively withdrawn or lost this right to appraisal (the
"DISSENTING SHARES") shall be entitled to those rights (but only those rights)
as are granted by Section 1701.85 of the Ohio Corporation Law. Each holder of
Dissenting Shares who becomes entitled to payment for those Dissenting Shares
pursuant to Section 1701.85 of the Ohio Corporation Law shall receive payment
from the Surviving Corporation in accordance with the Ohio Corporation Law;
provided, however, that (i) if any holder of Dissenting Shares shall have failed
to establish their entitlement to appraisal rights as provided in Section
1701.85 of the Ohio Corporation Law, (ii) if any holder of Dissenting Shares
shall have effectively withdrawn the holder's demand for appraisal of the
holder's shares or lost the holder's right to appraisal and payment for the
holder's shares under Section 1701.85 of the Ohio Corporation Law or (iii) if
neither any holder of Dissenting Shares nor the Surviving Corporation shall have
filed a petition demanding a determination of the value of all Dissenting Shares
within the time provided in Section 1701.85 of the Ohio Corporation Law, the
holder shall forfeit the right to appraisal of those Dissenting Shares and each
Dissenting Share shall be exchanged pursuant to Section 3.01 of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF P&G
P&G hereby represents and warrants to JMS as follows:
Section 4.01 DUE ORGANIZATION, GOOD STANDING AND CORPORATE POWER. Each
of P&G and Newco is a corporation duly organized, validly existing and in good
standing under the laws of the state of Ohio. P&G and its Subsidiaries have all
requisite corporate power and authority to
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own, lease and operate their properties that will be contributed to Newco
pursuant to the Contribution Agreement and to carry on the Jif/Crisco Business
as now being conducted. Each of P&G and its Subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in which
the property owned, leased or operated by the Jif/Crisco Business that will be
contributed to Newco pursuant to the Contribution Agreement or the nature of the
Jif/Crisco Business conducted by it makes such qualification necessary, except
in such jurisdictions where the failure to be so qualified or licensed and in
good standing would not have or reasonably be expected to have, individually or
in the aggregate, a Jif/Crisco Material Adverse Effect.
Section 4.02 AUTHORIZATION AND VALIDITY OF AGREEMENT. Each of P&G and
Newco has full corporate power and authority to execute and deliver this
Agreement and the Ancillary Agreements to which it is a party, to perform its
obligations hereunder or thereunder and to consummate the Transactions. The
execution, delivery and performance of this Agreement and the Ancillary
Agreements by each of P&G and Newco and the consummation by each of them of the
Transactions, have been duly authorized and unanimously approved by their
respective boards of directors and by P&G as the sole shareholder of Newco and
no other corporate action on the part of P&G or Newco is necessary to authorize
the execution, delivery and performance of this Agreement and the Ancillary
Agreements or the consummation of the Transactions. This Agreement and the
Ancillary Agreements have been duly executed and delivered by each of P&G and
Newco, as applicable, and, to the extent it is a party thereto, each is a valid
and binding obligation of each of P&G and Newco enforceable against each of P&G
and Newco, in accordance with their terms, except to the extent that its
enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar Law affecting the enforcement of
creditors' rights generally and by general equitable principles.
Section 4.03 CONSENTS AND APPROVALS; NO VIOLATIONS. Assuming (a) the
filings required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976,
as amended (the "HSR ACT"), are made and the waiting periods thereunder (if
applicable) have been terminated or expired, (b) the applicable requirements of
the Securities Act and the Exchange Act are met, (c) the requirements under any
applicable state securities or blue sky laws are met, (d) the requirements of
the NYSE in respect of the listing of the shares of Surviving Corporation Common
Stock to be issued hereunder are met, and (e) the filing of the Certificate of
Merger and other appropriate merger documents, if any, as required by the Ohio
Corporation Law, are made, the execution and delivery of this Agreement and the
Ancillary Agreements by P&G and Newco, as applicable, and the consummation by
P&G and Newco of the Transactions do not and will not: (i) violate or conflict
with any provision of their respective articles of incorporation or code of
regulations, (ii) violate or conflict with any Law or Order of any Governmental
Entity applicable to P&G or Newco or by which any of their respective properties
or assets that will be contributed to Newco pursuant to the Contribution
Agreement may be bound; (iii) require any filing with, or Permit, consent or
approval of, or the giving of any notice to, any Governmental Entity; or (iv)
result in a violation or breach of, conflict with, constitute (with or without
due notice or lapse of time or both) a default under, or give rise to any right
of termination, cancellation or acceleration, or result in the creation of any
Encumbrance upon any of the properties or assets of P&G and its Subsidiaries
that will be contributed to Newco pursuant to the Contribution Agreement or give
rise to any obligation, right of termination, cancellation, acceleration or
increase of any obligation or a loss of a material benefit under, any of the
terms, conditions or provisions of any
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Contract to which P&G or Newco is a party that will be contributed to Newco
pursuant to the Contribution Agreement, or by which Newco or the properties or
assets that will be contributed to Newco pursuant to the Contribution Agreement
may be bound, excluding in the case of clauses (i) through (iv) above,
conflicts, violations, breaches, defaults, rights of payment and reimbursement,
terminations, modifications, accelerations and creations and impositions of
Encumbrances which would not have or reasonably be expected to have,
individually or in the aggregate, a Jif/Crisco Material Adverse Effect.
Section 4.04 INFORMATION TO BE SUPPLIED. The information supplied or to
be supplied by P&G for inclusion in the Proxy Statement/Prospectus registration
statement on Form S-4 to be filed with the SEC or incorporated by reference by
JMS in connection with the issuance of JMS Common Stock in the Merger (as
amended and supplemented from time to time, the "MERGER REGISTRATION STATEMENT")
will not, on the date of its filing or, in the case of the Merger Registration
Statement, at the time it becomes effective under the Securities Act, or on the
dates the Proxy Statement/Prospectus is mailed to the JMS Shareholders and the
P&G Shareholders and at the time of the JMS Shareholder Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
Section 4.05 CAPITALIZATION OF P&G AND NEWCO.
(a) The authorized capital stock of P&G consists solely of 5,800
million shares of capital stock, without par value, of which 600 million are
classified and designated as Series A Preferred Stock and 200 million are
classified as Series B Preferred Stock and of which 5,000 million shares are
classified and designated as common shares ("P&G COMMON STOCK"). As of August
31, 2001, there were 53,751,192 shares of Series A Preferred Stock, 36,464,839
shares of Series B Preferred Stock and 1,296,878,428 shares of P&G Common Stock
issued and outstanding and 103,404,387 shares of P&G Common Stock were reserved
for issuance upon the exercise of outstanding options (the "P&G OPTIONS") for
P&G Common Stock. All issued and outstanding shares of P&G Common Stock have
been duly authorized and validly issued and are fully paid and non-assessable.
As of the date of this Agreement and except for shares issuable pursuant to the
P&G Options and shares issuable upon conversion of the Series A Preferred Stock
and the Series B Preferred Stock, there are no outstanding options, warrants,
rights, calls, subscriptions, claims of any character, agreements, obligations,
convertible or exchangeable securities, or other commitments, contingent or
otherwise, relating to P&G Common Stock or any capital stock equivalent or other
nominal interest in P&G or any of its Subsidiaries which relate to P&G ("P&G
EQUITY INTERESTS") pursuant to which P&G or any of its Subsidiaries is or may
become obligated to issue shares of its capital stock or other equity interests
or any securities convertible into or exchangeable for, or evidencing the right
to subscribe for any P&G Equity Interests. Except as set forth on Schedule
4.05(a), there are no agreements, commitments or contracts to which P&G is a
party relating to the issuance, sale, transfer or voting of any equity
securities or other securities of P&G.
(b) At the Closing, there will be a number of common shares, without
par value, of Newco ("NEWCO COMMON Stock") issued and outstanding equal to the
number of shares of P&G Common Stock outstanding. At the Closing, all issued and
outstanding shares of Newco Common Stock will have been duly authorized and
validly issued and fully paid and non-
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assessable. At the Closing, and except for (i) shares issuable pursuant to this
Agreement and the Ancillary Agreements, there will be no outstanding options,
warrants, rights, calls, subscriptions, claims of any character, agreements,
obligations, convertible or exchangeable securities, or other commitments,
contingent or otherwise, relating to Newco Common Stock or any capital stock
equivalent or other nominal interest in Newco which relate to Newco ("NEWCO
EQUITY INTERESTS") pursuant to which Newco is or may become obligated to issue
shares of its capital stock or other equity interests or any securities
convertible into or exchangeable for, or evidencing the right to subscribe for
any Newco Equity Interests. At the Closing, there will be no outstanding
obligations of Newco to repurchase, redeem or otherwise acquire any outstanding
securities of Newco Equity Interests. Except pursuant to this Agreement and the
Ancillary Agreements, at the Closing, there will be no agreements, commitments
or contracts relating to the issuance, sale, transfer or voting of any equity
securities or other securities of Newco.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF JMS
JMS hereby represents and warrants to P&G as follows:
Section 5.01 DUE ORGANIZATION, GOOD STANDING AND CORPORATE POWER.
(a) JMS is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted.
(b) Each of JMS' Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation (except as would not have a JMS Material Adverse Effect), and has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
(c) Each of JMS and its Subsidiaries is duly qualified or licensed to
do business and is in good standing in each jurisdiction in which the property
owned, leased or operated by it or the nature of the business conducted by it
makes such qualification necessary, except in such jurisdictions where the
failure to be so qualified or licensed and in good standing would not have or
reasonably be expected to have, individually or in the aggregate, a JMS Material
Adverse Effect.
Section 5.02 AUTHORIZATION AND VALIDITY OF AGREEMENT. JMS has full
corporate power and authority to execute and deliver this Agreement and the
Ancillary Agreements to which it is a party, to perform its obligations
hereunder or thereunder and to consummate the Transactions. The execution,
delivery and performance of this Agreement and the Ancillary Agreements by JMS,
and the consummation by JMS of the Transactions, have been duly authorized and
unanimously approved by its board of directors and, except for the JMS
Shareholder Approval, no other corporate action on the part of JMS is necessary
to authorize the execution, delivery and performance of this Agreement and the
Ancillary Agreements or the consummation of the Transactions. This Agreement and
the Ancillary Agreements have been duly executed and
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delivered by JMS and to the extent that it is a party thereto each is a valid
and binding obligation of JMS enforceable against JMS in accordance with their
terms, except to the extent that its enforceability may be subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar Law affecting the
enforcement of creditors' rights generally and by general equitable principles.
Section 5.03 CAPITALIZATION. The authorized capital stock of JMS
consists of 70,000,000 shares of common stock, no par value ( the "JMS COMMON
STOCK") and 3,000,000 shares of serial preferred stock, no par value ("JMS
PREFERRED STOCK") of which 700,000 shares have been designated as "Series A
Junior Participating Preferred Shares" (hereinafter referred to as "JMS SERIES A
PREFERRED STOCK"). As of October 9, 2001, there were 24,404,754 shares of JMS
Common Stock issued and outstanding, 2,287,877 shares were reserved for issuance
upon the exercise of outstanding options (the "JMS OPTIONS") for JMS Common
Stock, and between such date and the date hereof, JMS has not issued shares of
JMS Common Stock other than pursuant to the exercise of such options to purchase
shares of JMS Common Stock. All issued and outstanding shares of JMS Common
Stock have been duly authorized and validly issued and are fully paid and
nonassessable. One right to purchase one-hundredth of a share of JMS Series A
Preferred Stock (each, a "JMS RIGHT"), issued pursuant to the Amended and
Restated Rights Agreement dated as of August 28, 2000 between JMS and
Computershare Investor Services, LLC (the "JMS RIGHTS AGREEMENT"), is associated
with and attached to each outstanding share of JMS Common Stock. As of the date
of this Agreement, and except for shares of JMS Common Stock issuable pursuant
to the JMS Rights Agreement and the JMS Options, there are no outstanding or
authorized options, warrants, rights, subscriptions, claims of any character,
agreements, obligations, convertible or exchangeable securities, or other
commitments, contingent or otherwise, relating to JMS Common Stock or any
capital stock equivalent or other nominal interest in JMS or any of its
Subsidiaries which relate to JMS (collectively, "JMS EQUITY INTERESTS") pursuant
to which JMS or any of its Subsidiaries is or may become obligated to issue
shares of its capital stock or other equity interests or any securities
convertible into, exchangeable for, or evidencing the right to subscribe for,
any JMS Equity Interests. There are no outstanding obligations of JMS to
repurchase, redeem or otherwise acquire any outstanding securities of JMS Equity
Interests.
Section 5.04 CONSENTS AND APPROVALS; NO VIOLATIONS. Assuming (a) the
filings required under the HSR Act are made and the waiting periods thereunder
(if applicable) have been terminated or expired, (b) the applicable requirements
of the Securities Act and the Exchange Act are met, (c) the requirements under
any applicable state securities or blue sky laws are met, (d) the requirements
of the NYSE in respect of the listing of the shares of JMS Common Stock to be
issued hereunder are met, (e) the filing of the Certificate of Merger and other
appropriate merger documents, if any, as required by the Ohio Corporation Law,
are made, and (f) the JMS Shareholder Approval is obtained, the execution and
delivery of this Agreement and the Ancillary Agreements by JMS and the
consummation by JMS of the Transactions do not and will not: (i) violate or
conflict with any provision of its articles of incorporation or code regulations
or the comparable governing documents of JMS or any of JMS's Subsidiaries; (ii)
violate or conflict with any Law or Order of any Governmental Entity applicable
to JMS or any of JMS's Subsidiaries or by which any of their respective
properties or assets may be bound; (iii) require any filing with, or Permit,
consent or approval of, or the giving of any notice to, any Governmental Entity;
or (iv) result in a violation or breach of, conflict with, constitute (with or
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without due notice or lapse of time or both) a default under, or give rise to
any right of termination, cancellation or acceleration, or result in the
creation of any Encumbrance upon any of the properties or assets of JMS or any
of its Subsidiaries under, or give rise to any obligation, right of termination,
cancellation, acceleration or increase of any obligation or a loss of a material
benefit under, any of the terms, conditions or provisions of any Contract to
which JMS or any of JMS's Subsidiaries is a party, or by which JMS or any of
JMS's Subsidiaries or by which any of their respective properties or assets may
be bound, excluding from the foregoing clauses, conflicts, violations, breaches,
defaults, rights of payment and reimbursement, terminations, modifications,
accelerations and creations and impositions of Encumbrances which would not have
or reasonably be expected to have, individually or in the aggregate, a JMS
Material Adverse Effect.
Section 5.05 JMS SEC FILINGS; FINANCIAL STATEMENTS.
(a) JMS has timely filed, or will after the date of this Agreement,
timely file, all registration statements, prospectuses, forms, reports and
documents and related exhibits required to be filed by it under the Securities
Act or the Exchange Act, as the case may be, since December 31, 1998
(collectively, including all SEC filings filed after the date of this Agreement
and prior to the Closing, the "JMS SEC FILINGS"). The JMS SEC Filings (i) were
prepared or will after the date of this Agreement be prepared in all material
respects in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and (ii) did not at the time they were filed
and will not when filed after the date of this Agreement contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. No
Subsidiary of JMS is subject to the periodic reporting requirements of the
Exchange Act.
(b) Each of the consolidated financial statements of JMS (including, in
each case, any notes thereto) contained in the JMS SEC Filings was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto and except with
respect to unaudited statements as permitted by Form 10-Q under the Exchange Act
and to normal and recurring adjustment) and each presented fairly in all
material respects the consolidated financial position of JMS and its
consolidated Subsidiaries as of the respective dates thereof and for the
respective periods indicated therein, except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring
adjustments, which are not material). The books and records of JMS and its
Subsidiaries have been, and are being, maintained in accordance with GAAP and
any other applicable legal and accounting requirements.
Section 5.06 NO UNDISCLOSED LIABILITIES. Except as and to the extent
set forth on the consolidated balance sheet of JMS as of April 30, 2001 included
in JMS's Form 10-K for the year ended April 30, 2001 (the "JMS BALANCE SHEET"),
including the notes thereto, neither JMS nor any of its Subsidiaries have any
liabilities or obligations of any nature (whether accrued, absolute, contingent
or otherwise) that would be required to be reflected on a balance sheet or in
the notes thereto prepared in accordance with GAAP, except for liabilities or
obligations incurred since April 30, 2001 in the ordinary course of business
that would not have or reasonably be expected to have, individually or in the
aggregate, a JMS Material Adverse Effect.
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Section 5.07 INFORMATION TO BE SUPPLIED. The Merger Registration
Statement and the other documents required to be filed by JMS with the SEC in
connection with the Transactions will comply as to form, in all material
respects, with the requirements of the Exchange Act and the Securities Act, as
the case may be, and will not, on the date of their filing or, in the case of
the Merger Registration Statement, at the time it becomes effective under the
Securities Act, or on the dates the Proxy Statement/Prospectus is mailed to the
JMS Shareholders and the P&G Shareholders and at the time of the JMS Shareholder
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading, except that JMS makes no representation or warranty with respect to
statements made or incorporated by reference in the Merger Registration
Statement based on information supplied by P&G expressly for inclusion or
incorporation by reference therein.
Section 5.08 ABSENCE OF CERTAIN EVENTS. Except as required or expressly
permitted by this Agreement, since April 30, 2001, JMS and its Subsidiaries have
operated their respective businesses only in the ordinary course of business and
there has not occurred any event, occurrence or condition which would have or
reasonably be expected to have, individually or in the aggregate, a JMS Material
Adverse Effect.
Section 5.09 LITIGATION. Except as disclosed in JMS's Form 10-K for the
year ended April 30, 2001, there are no investigations, actions, suits,
proceedings or claims pending against JMS or any of its Subsidiaries or, to the
Knowledge of JMS, threatened against JMS or any of its Subsidiaries (or any of
their respective properties, rights or franchises), at law or in equity, or
before or by any Governmental Entity or any arbitrator or arbitration tribunal,
that has had or would reasonably be expected to have, individually or in the
aggregate, a JMS Material Adverse Effect, and, to the Knowledge of JMS, no
development has occurred with respect to any pending or threatened Action that
has had or reasonably be expected to have, individually or in the aggregate, a
JMS Material Adverse Effect. Neither JMS nor any of its Subsidiaries are subject
to any Order that has had or would reasonably be expected to have, individually
or in the aggregate, a JMS Material Adverse Effect.
Section 5.10 VOTING REQUIREMENTS; APPROVAL; BOARD APPROVAL.
(a) The affirmative vote of the holders of at least two-thirds of votes
entitled to be cast by the holders of the outstanding shares of JMS Common Stock
is the only vote of any class or series of JMS's capital stock necessary to
approve this Agreement, the Ancillary Agreements, the Merger and the
Transactions (the "JMS SHAREHOLDER APPROVAL").
(b) The board of directors of JMS has, at a meeting duly called and
held, by unanimous vote, (i) determined that the Merger is advisable and in the
best interest of JMS and the JMS Shareholders, (ii) approved this Agreement, the
Ancillary Agreements, the Merger and the Transactions and (iii) resolved to
recommend (the "JMS BOARD RECOMMENDATION") that the JMS Shareholders approve and
adopt this Agreement, the Ancillary Agreements, the Merger and the Transactions.
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Section 5.11 TITLE TO PROPERTIES; ENCUMBRANCES. Each of JMS and its
Subsidiaries has good, valid and marketable title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its tangible
properties and assets except where the failure to have such good, valid and
marketable title would not have or reasonably be expected to have, individually
or in the aggregate, a JMS Material Adverse Effect, in each case subject to no
Encumbrances, except for (a) Encumbrances reflected in the JMS Balance Sheet,
(b) Encumbrances consisting of zoning or planning restrictions, easements,
permits and other restrictions or limitations on the use of real property or
irregularities in title thereto which do not materially detract from the value
of, or impair the use of, such property by JMS or any of its Subsidiaries, (c)
Encumbrances for current Taxes, assessments or governmental charges or levies on
property not yet due or which are being contested in good faith and for which
appropriate reserves in accordance with GAAP have been created and (d)
Encumbrances which would not have or reasonably be expected to have,
individually or in the aggregate, a JMS Material Adverse Effect.
Section 5.12 COMPLIANCE WITH LAW.
(a) Each of JMS and its Subsidiaries is in compliance with all
applicable Law and Orders except where the failure to so comply would not have
or reasonably be expected to have, individually or in the aggregate, a JMS
Material Adverse Effect.
(b) Each of JMS and its Subsidiaries hold, to the extent legally
required, all Permits that are required for its operation as now conducted,
except where the failure to hold any such Permit would not have or reasonably be
expected to have, individually or in the aggregate, a JMS Material Adverse
Effect, and there has not occurred any default under any such Permit, except to
the extent that such default would not have or reasonably be expected to have,
individually or in the aggregate, a JMS Material Adverse Effect.
Section 5.13 INSURANCE. JMS and its Subsidiaries maintain insurance
coverage with reputable insurers in such amounts and covering such risks as are
in accordance with normal industry practice for companies engaged in business
similar to that of JMS.
Section 5.14 EMPLOYEES AND EMPLOYEE BENEFITS.
(a) JMS has provided P&G access to (i) all bonus, vacation, deferred
compensation, pension, retirement, profit-sharing, thrift, savings, employee
stock ownership, stock bonus, stock purchase, restricted stock and stock option,
incentive, severance or change-in-control plans or other similar contracts, (ii)
all employment contracts, (iii) all medical, dental, disability, health and life
insurance plans or other contracts, and (iv) all other employee benefit and
fringe benefit plans or other contracts, in the case of each of (i) through (iv)
maintained or contributed to by JMS or any of its Subsidiaries for the benefit
of any of their employees or the beneficiaries of any of the foregoing, or
pursuant to which JMS or any of its Subsidiaries may have any liability
(collectively, the "JMS COMPENSATION AND BENEFIT PLANS") (but disregarding, for
purposes of scheduling and the first sentence of Section 5.14(b) hereof only,
any JMS Compensation and Benefit Plan that is not material).
(b) JMS has provided P&G access to true and correct copies of all JMS
Compensation and Benefit Plans, including all amendments thereto, and, with
respect to each of
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the JMS Compensation and Benefit Plans, as applicable, the trust documents,
determination, opinion and notification letters issued by the IRS, most recent
annual valuation reports, summary plan descriptions, employee booklets, most
recent nondiscrimination tests, most recent annual reports (Form 5500), COBRA
forms and notices, correspondence or inquiries by the IRS, the Department of
Labor or the Pension Benefit Guaranty Corporation, written contracts, including
administrative service agreements, group annuity contracts and group insurance
contracts, and employee communications.
(c) Except as would not have or reasonably be expected to have,
individually or in the aggregate, a JMS Material Adverse Effect, each JMS
Compensation and Benefit Plan has been and is being administered in accordance
with the terms thereof and all applicable Law. Each JMS Compensation and Benefit
Plan which is an "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) (each such plan, a "JMS PENSION PLAN") and is intended to be qualified
under Section 401(a) of the Code is so qualified and has received a favorable
determination letter from the IRS, and JMS is not aware of any circumstances
which could result in the revocation or denial of any such favorable
determination letter.
Section 5.15 REGULATORY MATTERS.
(a) Except as would not have or reasonably be expected to have,
individually or in the aggregate, a JMS Material Adverse Effect, to the
Knowledge of JMS, there are no facts:
(i) which would furnish a substantial basis for the
recall, withdrawal or suspension of any products of
JMS or its Subsidiaries by the FDA or any other
competent Governmental Entity;
(ii) which would otherwise reasonably be expected to cause
JMS or its Subsidiaries to withdraw, recall or
suspend any products of JMS or its Subsidiaries from
the market or to change the marketing classification
of any products of JMS or its Subsidiaries or to
terminate or suspend testing of any products of JMS
or its Subsidiaries.
(b) There are no:
(i) products which have been recalled by JMS or its
Subsidiaries (whether voluntarily or otherwise) at
any time during the past year; and
(ii) proceedings (whether completed or pending) at any
time during the past year seeking the recall,
suspension or seizure of any products of JMS or its
Subsidiaries.
Section 5.16 JMS RIGHTS AGREEMENT. None of the execution and delivery
of this Agreement, the Ancillary Agreements and the consummation of the
Transactions, will cause (i) the JMS Rights to become exercisable under the JMS
Rights Agreement, (ii) P&G or any of its Subsidiaries or, based on publicly
available information, shareholders to be deemed an "ACQUIRING PERSON" (as
defined in the JMS Rights Agreement), (iii) any "TRIGGERING EVENT" (as defined
in the JMS Rights Agreement) or (iv) the "SHARE ACQUISITION DATE" or the
"DISTRIBUTION DATE" (each as defined in the JMS Rights Agreement) to occur upon
any such event. JMS has
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made available to P&G a true and complete copy of the JMS Rights Agreement, as
amended to date.
Section 5.17 BROKER'S OR FINDER'S FEE. Except for Rhone Group LLC and
Xxxxxxx Xxxxx & Co. LLC, no agent, broker, Person or firm acting on behalf of
JMS is, or will be, entitled to any investment banking or broker's or finder's
fee for which JMS or any of its Affiliates could have any liabilities in
connection with this Agreement or any of the Transactions.
Section 5.18 TAX TREATMENT. None of JMS or any of its Subsidiaries have
taken or have failed to take any action, or are aware of any facts or
circumstances, that would prevent the Merger from constituting a tax-free
reorganization within the meaning of Section 368(a) of the Code.
Section 5.19 INTELLECTUAL PROPERTY. JMS and its Subsidiaries own, or
have the right to use without infringing or violating the rights of any third
parties, except where such infringement or violation would not have, or
reasonably be expected to have, individually or in the aggregate, a JMS Material
Adverse Effect: (i) each trademark, trade name, brand name, service xxxx or
other trade designation used, owned or licensed by or to JMS or any of its
Subsidiaries, each patent, copyright and similar intellectual property owned or
licensed to or by JMS and each license, royalty, assignment or other similar
agreement and each registration and application relating to the foregoing that
is material to the conduct of the business of JMS and its Subsidiaries taken as
a whole; and (ii) each agreement relating to technology, know-how or processes
that JMS or its Subsidiaries is licensed or authorized to use, or which it
licenses or authorizes others to use, that is material to the conduct of the
business of JMS and its Subsidiaries taken as a whole (collectively, the "JMS
INTELLECTUAL PROPERTY"). No consent of third parties will be required for the
use of the JMS Intellectual Property after the Effective Time, except where the
failure to obtain such consent would not have or reasonably be expected to have,
individually or in the aggregate, a JMS Material Adverse Effect. No claim has
been asserted by any Person against JMS or any of its Subsidiaries regarding the
ownership of or the right to use any JMS Intellectual Property or challenging
the rights of JMS or any of its Subsidiaries with respect to any of the JMS
Intellectual Property which would have or reasonably be expected to have,
individually or in the aggregate, a JMS Material Adverse Effect.
ARTICLE VI
COVENANTS
Section 6.01 CONDUCT OF JIF/CRISCO BUSINESS PENDING THE EFFECTIVE TIME.
(a) P&G agrees that, between the date of this Agreement and the
Effective Time, P&G and each of its Subsidiaries shall conduct the Jif/Crisco
Business in all material respects only according to the ordinary and usual
course of business consistent with past practice, and shall use their reasonable
best efforts to keep available the services of its Employees, maintain
satisfactory relationships with licensors, suppliers, distributors, clients,
joint venture partners and others having significant business relationships with
the Jif/Crisco Business in the ordinary course, including, without limitation,
managing inventory levels consistent with past practice;
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(b) P&G agrees that, between the date of this Agreement and the
Effective Time, P&G and each of its Subsidiaries shall use their reasonable best
efforts to (i) cause the Merger to qualify as a reorganization under the
provisions of Section 368(a) of the Code and (ii) not take, and prevent any
Affiliate from taking, any actions that could prevent the Merger from qualifying
as a reorganization under the provisions of Section 368(a) of the Code; and
(c) Without limiting the generality of the foregoing, and except as
otherwise provided in this Agreement, P&G shall not, without the prior written
consent of JMS (which consent in the case of clause (i) and (ii) below and in
the case of clause (v) insofar as it relates to clauses (i) and (ii), will not
be unreasonably withheld or delayed), nor will it permit any of its Subsidiaries
to:
(i) sell, pledge, dispose of, grant, transfer, lease,
license, guarantee, encumber, or authorize the sale,
pledge, disposition, grant, transfer, lease,
guarantee or encumbrance of, other than (x) in the
ordinary course of business and consistent with past
practice and (y) otherwise not in excess of
$1,000,000 individually, any property or assets of
P&G or any of its Subsidiaries that will be assumed
by Newco pursuant to the Contribution Agreement;
(ii) (A) other than (x) in the ordinary course of business
in a manner consistent with past practice and (y)
otherwise not in excess of $1,000,000 individually,
acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any
interest in any Person or any division thereof or any
assets that will be assumed by Newco pursuant to the
Contribution Agreement; (B) incur any indebtedness
for borrowed money or issue any debt securities or
assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations
of any Person if such liabilities will be assumed by
Newco pursuant to the Contribution Agreement, or (c)
enter into media buy commitments for the Jif/Crisco
Business through March 2002 in excess of the budget
therefor disclosed to JMS prior to the date of this
Agreement;
(iii) take any action that is intended or may reasonably be
expected to result in any of its representations and
warranties set forth in this Agreement being or
becoming untrue in any material respect at any time
prior to the Effective Time, or in any of the
conditions set forth in Article VII not being
satisfied or in a violation of any provision of this
Agreement, except, in every case, as may be required
by applicable Law;
(iv) at any time after the Record Date and prior to the
Closing issue or authorize the issuance of any shares
of its capital stock (other than in connection with
the exercise of currently outstanding stock options
for P&G Common Stock) or any other securities
exercisable or exchangeable for or convertible into
shares of its capital stock, or repurchase, redeem,
purchase or otherwise acquire for value any shares of
its capital stock or any other securities exercisable
or exchangeable for or convertible into shares of
capital stock or reclassify combine, split or
subdivide, directly or indirectly, any of its capital
stock; or
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(v) agree, in writing or otherwise, to take any of the foregoing actions.
Section 6.02 CONDUCT OF JMS PENDING THE EFFECTIVE TIME.
(a) Except as contemplated by this Agreement or any Ancillary
Agreement, JMS agrees that, between the date of this Agreement and the Effective
Time, JMS and each of its Subsidiaries shall conduct their respective operations
in all material respects only according to the ordinary and usual course of
business consistent with past practice.
(b) JMS agrees that, between the date of this Agreement and the
Effective Time, JMS and each of its Subsidiaries shall use their reasonable best
efforts to (i) cause the Merger to qualify as a reorganization under the
provisions of Section 368(a) of the Code and (ii) not take, and prevent any
Affiliate from taking, any actions that could prevent the Merger from qualifying
as a reorganization under the provisions of Section 368(a) of the Code.
(c) Without limiting the generality of the foregoing, and except as
otherwise provided in this Agreement, before the Effective Time, JMS shall not,
without the prior written consent of P&G (which consent will, in the case of
clause (ii) and (v) below and in the case of clause (vii) insofar as it relates
to clauses (ii) and (v), not be unreasonably withheld or delayed), nor will it
permit any of its Subsidiaries to:
(i) amend or otherwise change its certificate of
incorporation or bylaws of equivalent organization
documents;
(ii) sell, pledge, dispose of, grant, transfer, lease,
license, guarantee, encumber, or authorize the sale,
pledge, disposition, grant, transfer, lease,
guarantee or encumbrance of, other than (x) in the
ordinary course of business and consistent with past
practice, (y) otherwise not in excess of $50,000,000
in the aggregate after the date of this Agreement or
(z) previously disclosed to P&G in writing, any
property or assets of JMS or any of its Subsidiaries;
(iii) declare, set aside, make or pay any dividends or
other distribution, payable in cash, stock, property
or otherwise, with respect to any of its capital
stock (other than (i) regular quarterly cash
dividends at a rate not in excess of $0.60 per share
of JMS Common Stock declared and paid in the ordinary
course and consistent with past practice and (ii)
dividends payable by a wholly-owned Subsidiary of JMS
to JMS or another wholly-owned Subsidiary), or enter
any agreement with respect to the voting of its
capital stock, issue or authorize the issuance of any
shares of its capital stock (other than in connection
with the exercise of currently outstanding stock
options for JMS Common Stock) or any other securities
exercisable or exchangeable for or convertible into
shares of its capital stock, or repurchase, redeem,
purchase or otherwise acquire for value any shares of
its capital stock or any other securities exercisable
or exchangeable for or convertible into shares of its
capital stock;
(iv) reclassify, combine, split or subdivide, directly or
indirectly, any of its capital stock;
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(v) (A) other than (x) in the ordinary course of business
in a manner consistent with past practice, (y)
otherwise not in excess of $50,000,000 in the
aggregate after the date of this Agreement or (z)
previously disclosed to P&G in writing, acquire
(including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any
interest in any Person or any division thereof or any
assets; or (B) incur any indebtedness for borrowed
money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations
of any Person for borrowed money, except for (1)
indebtedness for borrowed money incurred in the
ordinary course of business or in connection with
transactions otherwise permitted by this Agreement or
any Ancillary Agreement, (2) indebtedness incurred to
refinance any existing indebtedness or (3) other
indebtedness for borrowed money under existing credit
facilities;
(vi) take any action that is intended or may reasonably be
expected to result in any of its representations and
warranties set forth in this Agreement being or
becoming untrue in any material respect at any time
prior to the Effective Time, or in any of the
conditions set forth in Article VII not being
satisfied or in a violation of any provision of this
Agreement, except, in every case, as may be required
by applicable Law; or
(vii) agree, in writing or otherwise, to take any of the
foregoing actions.
Section 6.03 EFFORTS TO CLOSE; ANTITRUST CLEARANCE.
(a) P&G and JMS will use their reasonable best efforts to cause all of
the conditions, as specified in Article VII of this Agreement, to the
obligations of the other to consummate the Transactions to be met as soon as
practicable after the date of this Agreement.
(b) P&G and JMS will comply fully with all applicable notification,
reporting and other requirements. P&G and JMS, within ten (10) Business Days
after the date of this Agreement, will file the required notifications with the
appropriate Governmental Entities pursuant to and in compliance with the
respective Antitrust Laws. P&G and JMS will as soon as practicable file any
additional information reasonably requested by any Governmental Entity.
(c) P&G and JMS will each use its reasonable best efforts to obtain, as
soon as practicable, the Authorizations that may be or become necessary for the
performance of its obligations under this Agreement, the Ancillary Agreements
and the consummation of the Transactions and will cooperate fully with each
other in promptly seeking to obtain such Authorizations.
(d) In furtherance and not in limitation of the covenants of the
parties contained in this Section 6.03, each of P&G and JMS shall use its
reasonable best efforts to resolve such objections if any, as may be asserted
with respect to the transactions contemplated hereby under any Antitrust Law. In
connection with the foregoing, if any administrative or judicial action or
proceeding, including any proceeding by a private party, is instituted (or
threatened to be instituted) challenging any transaction contemplated by this
Agreement as violative of any
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Antitrust Law, each of P&G and JMS shall cooperate in all respects with each
other and use its respective reasonable best efforts to contest and resist any
such action or proceeding and to have vacated, lifted, reversed or overturned,
any decree, judgment, injunction or other order, whether temporary, preliminary
or permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transaction contemplated by this Agreement, including,
without limitation, vigorously defending in litigation on the merits any claim
asserted in any court by any party through a final and nonappealable judgment.
(e) If any objections are asserted with respect to the transactions
contemplated hereby under any Antitrust Law or if any suit is instituted by any
Governmental Entity or any other Person challenging any of the transactions
contemplated hereby as violative of any Antitrust Law, each of P&G and JMS shall
use its reasonable best efforts to resolve such objections or challenge as such
Governmental Entity or other Person may have to such transactions contemplated
by this Agreement. In furtherance and not in limitation of the foregoing, each
of P&G and JMS (and to the extent required by any Governmental Entity, its
respective Subsidiaries and Affiliates over which it exercises control) shall be
required to pursue a resolution with any Governmental Entity and if acceptable
to any Governmental Entity, enter into a settlement, undertaking, consent
decree, stipulation or other agreement with such Governmental Entity regarding
antitrust matters in connection with the transactions contemplated by this
Agreement (each a "SETTLEMENT"). Notwithstanding anything else contained in this
Agreement, neither P&G nor JMS shall be required to enter into any Settlement
that requires P&G or JMS to sell or otherwise dispose of the Jif/Crisco Assets
(as defined in the Contribution Agreement) or any assets of JMS and its
Subsidiaries (any such action, a "DIVESTITURE") if such Divestiture would have a
material adverse effect on the pro forma combined business of Newco (after the
Contribution) and JMS.
Section 6.04 CONFIDENTIALITY.
(a) The parties acknowledge that in connection with the Transactions,
the parties have disclosed to each other technical and business information
which the parties consider proprietary and confidential. This information may
include, by way of example and without limitation, new products, commercial
plans, financial projections, technical or non-technical data, financial data,
know-how, formulae, processes, patterns, strategies, compilations, programs,
devices, methods, techniques, drawings, designs, sketches, photographs, plans,
specifications, samples, reports, pricing information, lists of actual or
potential customers and suppliers, studies, findings, inventions, ideas, and
trade secrets. Such information is herein referred to as the "INFORMATION." The
parties agree that, after the Effective Time, Information relating to the
Jif/Crisco Business shall be Information of the Surviving Corporation and P&G
shall be deemed to be the Receiving Party of such Information for purposes of
Section 6.04(b).
(b) Each party receiving Information (the "RECEIVING PARTY") recognizes
and acknowledges (i) that Information of the other party may be commercially
valuable proprietary products of such party, the design and development of which
may have involved the expenditure of substantial amounts of money and the use of
skilled development experts over a long period of time and which afford such
party a commercial advantage over its competitors; (ii) that the loss of this
competitive advantage due to unauthorized disclosure or use of Information of
such party may cause great injury and harm to such party; and (iii) that the
restrictions imposed upon the
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parties under this Section 6.04 are necessary to protect the secrecy of
Information and to prevent the occurrence of such injury and harm. The parties
agree that:
(i) disclosure of Information will be received and held
in confidence by the Receiving Party and that such
Receiving Party will not, without the prior written
consent of the party from whom such Information was
obtained (the "DISCLOSING PARTY"), disclose, divulge
or permit any unauthorized person to obtain any
Information disclosed by the Disclosing Party
(whether or not such Information is in written or
tangible form);
(ii) the Receiving Party will take such steps as may be
reasonably necessary to prevent the disclosure of
Information to others; and
(iii) the Receiving Party will use the Information only in
connection with the Transactions unless otherwise
authorized in writing by the Disclosing Party.
(c) The commitments set forth above shall not extend to any portion of
Information:
(i) which is already known to the Receiving Party, or is
information generally available to the public; or
(ii) which, hereafter, through no act on the part of the
Receiving Party becomes generally available to the
public; or
(iii) which corresponds in substance to a disclosure
furnished to the Receiving Party by any third party
having a bona fide right to do so and not having any
confidential obligation, direct or indirect, to the
Disclosing Party with respect to the same; or
(iv) which is required to be disclosed by Law, provided
that the Receiving Party provides reasonable prior
written notice of such required disclosure to the
Disclosing Party.
The commitments set forth in this Section 6.04 shall promptly and
automatically terminate in their entirety upon the lapse of a period of three
(3) years from the Closing Date.
Section 6.05 COOPERATION IN LITIGATION. For a period of three (3) years
after the Effective Time, P&G and JMS will, in the defense of any third-party
Action relating to the Jif/Crisco Business, make available during normal
business hours, but without unreasonably disrupting their respective businesses,
all personnel and records of the Jif/Crisco Business reasonably necessary to
permit the effective defense or investigation of such Action. If information
other than that pertaining to the Jif/Crisco Business is contained in such
records, P&G and JMS will either agree that such information may be omitted or
redacted by the producing party, or will enter into appropriate secrecy
commitments to protect such information.
Section 6.06 COOPERATION IN TAX MATTERS.
(a) Following the Effective Time, neither JMS nor its Affiliates
(including the
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Surviving Corporation) shall take any action, cause any action to be taken, fail
to take any action or fail to cause any action to be taken, which action or
failure to act could (i) cause the Merger to fail to qualify as a reorganization
under Section 368(a) of the Code, or (ii) cause (x) gain or loss to be
recognized by the P&G Shareholders in the Spin Off, or (y) gain or loss to be
recognized by P&G in the Spin Off.
(b) P&G and JMS will make available to each other during normal
business hours, but without unreasonably disrupting their respective businesses,
all personnel and records of the Jif/Crisco Business reasonably necessary in
connection with the filing of any Tax Return, amended return or claim for
refund; determining a liability for Taxes or a right to refund for Taxes; or in
conducting an audit or other proceeding in respect of Taxes.
(c) P&G and JMS will each use its reasonable best efforts to enable P&G
to prepare and submit, as promptly as practicable after the date hereof, such
submissions as are reasonably necessary to obtain the letter ruling referred to
in Section 7.03(d). P&G and JMS will cooperate in good faith with each other in
making such submissions, including by allowing each other to receive and comment
upon all such materials. The parties further agree that the parties will further
seek a letter ruling to the effect that (i) any Surviving Corporation Common
Stock acquired by employees or directors of Surviving Corporation after the
Merger in connection with the performance of services for Surviving Corporation
in a transaction to which Section 83 of the Code applies, including without
limitation pursuant to the exercise of stock options, whether granted before or
after the Merger, and that is not excessive by reference to the services
performed, will not be treated for purposes of Section 355(e) as acquired as
part of plan or series of related transactions that includes the Spin Off; (ii)
fractional shares of Surviving Corporation Common Stock sold by the Exchange
Agent pursuant to Section 3.02(e) will be treated for purposes of applying
Section 355(e) as received by the Newco Shareholders and then disposed of in
transactions which qualify under Safe Harbor V of Reg. 1.355-7T(e) or which
otherwise are not treated for purposes of Section 355(e) as part of a plan or
series of related transactions that includes the Spin Off; and (iii) for
purposes of applying Section 355(e) all shares of Surviving Corporation Common
Stock received by the ESOP in the Merger which are unallocated shares, will be
taken into account in determining the percentage of Surviving Corporation Common
stock (as successor the Newco) described in Section 355(e)(3)(A)(ii) and (iii)
and the subsequent disposition by the ESOP of such stock will be treated as
pursuant to transactions that qualify under Safe Harbor V of Reg. 1.355-7T(e) or
which otherwise are not treated for purposes of Section 355(e) as part of a plan
or series of related transactions that includes the Spin Off. The rulings
described in clauses (i) through (iii) above are collectively referred to as
"SUPPLEMENTAL RULINGS."
Section 6.07 COOPERATION OF THIRD PARTIES. Where the cooperation of
third parties such as insurers or trustees would be necessary in order for a
party hereto to completely fulfill its obligations under this Agreement and the
Ancillary Agreements, such party will use its reasonable best efforts to cause
such third parties to provide such cooperation.
Section 6.08 ADDITIONAL DOCUMENTS. From time to time after the
Effective Time, P&G and JMS will, and will cause their officers, attorneys,
accountants and other respective representatives and Affiliates to, execute and
deliver, without further consideration, such documents as any of them may
reasonably request, in such form as may be appropriate, if
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necessary or advisable in connection with the consummation of the Transactions.
Section 6.09 ACCESS. From the date hereof to the Effective Time, each
of P&G and JMS shall allow all designated officers, attorneys, accountants and
other representatives of P&G or JMS, as the case may be, access at reasonable
times upon reasonable notice and in a manner as will not adversely impact the
conduct of the business of either party or the Jif/Crisco Business to the
personnel, records files, correspondence, audits and properties, as well as to
all information relating to commitments, contracts, titles and financial
position, or otherwise pertaining to the business and affairs of the Jif/Crisco
Business and JMS and its Subsidiaries, as the case may be, including inspection
of such properties; provided that no investigation pursuant to this Section 6.09
shall affect any representation or warranty given by any party hereunder, and
provided further that notwithstanding the provision of information or
investigation by any party, no party shall be deemed to make any representation
or warranty except as expressly set forth in this Agreement. Notwithstanding the
foregoing, no party shall be required to provide any information which it
reasonably believes it may not provide to the other party by reason of
applicable Law, which such party reasonably believes constitutes information
protected by attorney/client privilege, or which it is required to keep
confidential by reason of Contracts with third parties. The parties hereto will
make reasonable and appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply. Each of
P&G and JMS agrees that it will not, and will cause its respective
representatives not to, use any information obtained pursuant to this Section
6.09 for any purpose unrelated to the consummation of the Transactions All
information provided by a party to the other party hereunder shall be subject to
the confidentiality provisions of Section 6.04.
Section 6.10 PUBLIC ANNOUNCEMENTS. P&G and JMS will consult with each
other before issuing any press releases or otherwise making any public
statements with respect to this Agreement and the Transactions and neither of
them shall issue any such press release or make any such public statement
without the prior approval of the other, except as may be required by Law or by
obligations pursuant to any listing agreement with any national securities
exchange.
Section 6.11 TRANSFERRING EMPLOYEES.
(a) Continued Employment. JMS shall offer continued employment,
effective from the Closing, to the Employees, as soon as reasonably practicable
after the date of this Agreement upon the terms and conditions as set forth in
this Section 6.11. JMS will provide P&G with a copy of its offer of employment
to the Employees Following the Effective Time, any such person who accepts such
offer prior to the Effective Time (each, a "NEWCO EMPLOYEE") shall continue in
the employment of the Surviving Corporation. Subject to paragraph (f) hereof,
and clauses (i) and (iii) of this sentence below, the terms and conditions of
such continued employment shall be the same in all material respects to the
terms and conditions as in effect immediately prior to the Effective Time,
including but not limited to the following:
(i) the same salary, shift premiums, and overtime pay as
provided to the Employee immediately prior to the
Effective Time;
(ii) a pension, savings and/or other benefit plan which
provides a 3% aggregate increase for the Newco
Employees over amounts currently contributed by
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JMS to similar JMS plans, but otherwise the terms of
such plans shall be the same as the JMS pension,
savings, and benefit plans in effect on the Closing
Date;
(iii) compensation plans and insurance plans which provide
for (a) short term disability coverage for all Newco
Employees upon the terms set forth in the JMS
salaried short term disability plan as in effect on
the date hereof, (b) life insurance for each Newco
Employee in an amount equal to one years' salary, (c)
vacation accrual as provided for under the JMS
vacation policy; PROVIDED, HOWEVER, that no Newco
Employee will be entitled to a lower vacation accrual
than he or she is entitled to under the P&G plan as
in effect on the date hereof, and (d) all other
compensation and insurance benefits which are
provided to employees of JMS and its Subsidiaries on
the Closing Date.
Notwithstanding the foregoing, JMS acknowledges its obligations to comply with
Laws regarding any changes in benefits to which the Employees who are covered by
the collective bargaining agreement for the Ivorydale facility were entitled
prior to the Closing Date.
JMS agrees to cause the terms and conditions of employment of any Newco Employee
not to be changed in a manner that is unfavorable to such Newco Employee
(including but not limited to termination or layoff, other than termination for
cause and company wide terminations due to reductions in demand affecting the
business of the Surviving Corporation) for at least one year after the Effective
Time.
(b) Cessation of Participation in P&G Plans. As of the Effective Time,
neither the Surviving Corporation nor any Newco Employees shall continue to
participate in, be a member of or have any rights under any employee benefit
plan or arrangement of P&G or any of its Affiliates (except rights that
Surviving Corporation and Newco Employees may have under any such plan or
arrangement relating to participation therein prior to the Effective Time), and
P&G and the Surviving Corporation shall take, or cause to be taken, all such
action as may be necessary to effect the cessation of participation of the
Surviving Corporation and Newco Employees as of the Effective Time.
(c) Transition Incentive Payments. JMS may, in its discretion, cause
the Surviving Corporation to offer one or more non-exempt Newco Employees a
transition payment to facilitate the transition of non-exempt Newco Employees to
JMS.
(d) Employee Transition. P&G and JMS will use reasonable best efforts
to cause the Employees to maintain their employment in the Jif/Crisco Business.
P&G or any of its Affiliates will, however, have no liability nor make any
representation or warranty on the employment decisions of the Employees
whatsoever. JMS, P&G and Newco shall cooperate with each other in facilitating
the transition of Newco Employees from the plans, programs and arrangements of
P&G and its Affiliates to the plans, programs and arrangements of JMS and its
Affiliates, including but not limited to (i) meeting with the Employees at such
times as shall be agreed in advance by P&G and JMS and (ii) distributing to the
Employees such forms and other documents relating thereto as JMS shall
reasonably request. To the extent permitted by Law, P&G will make available to
JMS all information regarding the Employees in its possession as
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may be reasonably requested to assist JMS in such transition. Where provisions
in this Agreement would require the cooperation of third parties such as
insurers or trustees, JMS and P&G agree to take reasonable best efforts to cause
such third parties to cooperate with JMS.
(e) Certain Employee Liabilities. JMS and P&G acknowledge that (i) P&G
and its Affiliates shall be responsible for all liabilities and obligations
relating to the Newco Employees and their dependents that arise or are incurred
on or before the day on which the Effective Time occurs, whether or not reported
as of the Effective Time, and (ii) JMS and its Affiliates shall be responsible
for all liabilities and obligations relating to the Newco Employees and their
dependents that arise or are incurred after the day on which the Effective Time
occurs. For purposes of medical, dental, health and life insurance benefits, a
liability or obligation shall be deemed to have arisen or to have been incurred
upon the incurrence by a Newco Employee or dependent of a qualified expense for
which reimbursement or payment is sought. As soon as practicable following the
first anniversary of the Closing Date, P&G shall reimburse JMS for the costs and
expense incurred by JMS, if any, relating to any Newco Employee who is on
disability or other leave of absence and who is deemed not to have been an
Employee pursuant to this Agreement.
(f) Credit for Seniority. JMS will cause to be extended to each Newco
Employee full credit for the entire period of continuous service preceding the
Effective Time rendered to P&G and Newco as if such service had occurred with
JMS, for purposes of eligibility to participate and vesting under any of JMS's
and its Affiliates' benefit plans, pension, retirement and/or profit sharing
plans, insurance and vacation; provided, however, that this sentence shall not
apply to eligibility for equity-based compensation, and JMS shall, for this
purpose, be permitted to consider Newco Employees newly hired. JMS will further
cause to be extended full credit for service preceding the Effective Time
rendered to P&G and Newco by a Newco Employee (i) whose employment is terminated
by JMS at any time after the Effective Time for purposes of determining the
severance or other termination pay due to such terminated Newco Employee under
the applicable severance or termination plan or policy of JMS, if any, and (ii)
as to early retirement subsidies and the entitlement to higher levels of
benefits (such as matching combinations under a 401(k) plan, credits under a
cash balance plan and other similar benefits) in respect of service following
the Effective Time under any JMS pension and/or profit sharing plan, if any.
Section 6.12 RESTRICTIONS ON SOLICITATION AND HIRING.
(a) Notwithstanding any other provision of this Agreement or the
Confidentiality Agreement, and except as P&G and JMS agree otherwise in writing,
JMS agrees that it will not (and JMS will cause its Affiliates not to), for a
period of two (2) years from the date of this Agreement, hire, or enter into any
form of consulting arrangement or agreement with, any employee, other than Newco
Employees, employed by P&G in P&G's Food and Beverage business as of the
Effective Time, or any other employee of P&G whom JMS came into contact with as
a result of the Transactions, nor will JMS (and JMS will cause its Affiliates
not to) solicit (other than by means of general advertisement not directed to
such employees) or otherwise induce any such employees of P&G to enter into any
type of employment or consulting arrangement or agreement that would be
prohibited by this Section 6.12(a). JMS acknowledges that (i) this provision is
reasonable, (ii) P&G would not enter into this Agreement without JMS
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agreeing to and complying with this Section 6.12(a), (iii) P&G would suffer
irreparable harm upon JMS's violation of this provision and (iv) P&G shall be
entitled to obtain a temporary restraining order and/or injunction upon JMS's
breach of this provision.
(b) Notwithstanding any other provision of this Agreement or the
Confidentiality Agreement, and except as P&G and JMS agree otherwise in writing,
P&G agrees that it will not (and P&G will cause its Affiliates not to), for a
period of two (2) years from the date of this Agreement, hire, or enter into any
form of consulting arrangement or agreement with, any employee employed by JMS
as of the Effective Time, nor will P&G (and P&G will cause its Affiliates not
to) solicit (other than by means of general advertisement not directed to such
employees) or otherwise induce any such employees of JMS to enter into any type
of employment or consulting arrangement or agreement that would be prohibited by
this Section 6.12(b). P&G acknowledges that (i) this provision is reasonable,
(ii) JMS would not enter into this Agreement without P&G agreeing to and
complying with this Section 6.12(b), (iii) JMS would suffer irreparable harm
upon P&G's violation of this provision and (iv) JMS shall be entitled to obtain
a temporary restraining order and/or injunction upon P&G's breach of this
provision.
Section 6.13 JMS SHAREHOLDER MEETING. JMS shall call and hold a meeting
of the JMS Shareholders (the "JMS SHAREHOLDER MEETING") as promptly as
practicable after the Merger Registration Statement shall have become effective
for the purpose of obtaining the JMS Shareholder Approval.
Section 6.14 PREPARATION OF PROXY STATEMENT/PROSPECTUS; REGISTRATION
STATEMENT.
(a) As promptly as practicable after the execution of this Agreement,
(i) JMS shall prepare and file with the SEC the Proxy Statement/Prospectus
relating to the JMS Shareholder Meeting to be held in connection with the Merger
(the "PROXY STATEMENT/PROSPECTUS") and (ii) JMS shall prepare and file with the
SEC the Merger Registration Statement in which the Proxy Statement/Prospectus
shall be included as a prospectus, in connection with the registration under the
Securities Act of the shares of Surviving Corporation Common Stock to be issued
to the holders of Newco Common Stock pursuant to the Merger. Prior to filing the
Proxy Statement/Prospectus and the Merger Registration Statement with the SEC,
JMS will deliver to P&G for P&G's review and approval the Proxy
Statement/Prospectus and the Merger Registration Statement (which approval will
not be unreasonably withheld or delayed). JMS will use its reasonable best
efforts to cause the Merger Registration Statement to become effective as
promptly as practicable, and, prior to the effective date of the Merger
Registration Statement, JMS shall take all or any Action required under any
applicable federal or state securities laws in connection with the issuance of
shares of JMS Common Stock in the Merger. JMS shall furnish all information
concerning it and the holders of its capital stock as required in connection
with such actions and the preparation of the Merger Registration Statement and
the Proxy Statement/Prospectus. As promptly as practicable after the Merger
Registration Statement shall have become effective, JMS shall mail the Proxy
Statement/Prospectus to the JMS Shareholders and the P&G Shareholders. The Proxy
Statement/Prospectus shall include the JMS Board Recommendation.
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(b) No amendment or supplement to the Proxy Statement/Prospectus or the
Merger Registration Statement will be made by JMS without the consent of P&G
(which consent shall not be unreasonably withheld or delayed). JMS will advise
P&G, promptly after it receives notice thereof, of the time which the Merger
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 Surviving Corporation 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 Proxy Statement/Prospectus or the Merger Registration Statement
or comments thereon and responses thereon or requests by the SEC for additional
information.
(c) The information supplied by JMS for inclusion in the Merger
Registration Statement and the Proxy Statement/ Prospectus shall not, at (i) the
time the Merger Registration Statement is declared effective, (ii) the time the
Proxy Statement/Prospectus (or any amendment thereof of supplement thereto) is
first mailed to the JMS Shareholders and the P&G Shareholders and (iii) the time
of the JMS Shareholder Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading. If at any time prior to the
Effective Time, any event or circumstances relating to JMS or any of its
Subsidiaries, or their respective officers or directors, should be discovered by
JMS and such information should be set forth in the Merger Registration
Statement or the Proxy Statement/Prospectus, JMS shall promptly inform P&G. All
documents that JMS is responsible for filing with the SEC in connection with the
Transactions will comply as to form and substance in all material aspects with
the applicable requirements of the Securities Act and the rules and regulations
thereunder and the Exchange Act and the rules and regulations thereunder.
(d) P&G will provide JMS with the information concerning the Jif/Crisco
Business, including financial statements and other financial information, in the
form required to be included in the Merger Registration Statement and the Proxy
Statement/Prospectus (including by reason of any SEC comments thereto or
subsequent requests thereon). Such information shall not, at (i) the time the
Merger Registration Statement is declared effective, (ii) the time the Proxy
Statement/Prospectus (or any amendment thereof of supplement thereto) is first
mailed to the JMS Shareholders and the P&G Shareholders and (iii) the time of
the JMS Shareholder Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading. If at any time prior to the
Effective Time, any event or circumstance relating to P&G or any of its
Subsidiaries, or their respective officers or directors, should be discovered by
P&G and such information should be set forth in the Merger Registration
Statement or Proxy Statement/Prospectus, P&G shall promptly inform JMS. All
documents that P&G is responsible for filing with the SEC in connection with the
Transactions will comply as to form and substance in all material aspects with
the applicable requirements of the Securities Act and the rules and regulations
thereunder and the Exchange Act and the rules and regulations thereunder.
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Section 6.15 BOARD RECOMMENDATION. JMS's board of directors has made
the JMS Board Recommendation and shall, as promptly as practicable, cause JMS to
take all lawful action to solicit the JMS Shareholder Approval. Subject to
Section 6.16(d), neither the board of directors of JMS nor any committee thereof
shall withdraw or modify, or propose to withdraw or modify, in a manner adverse
to P&G, the JMS Board Recommendation, except as may be required by Law.
Section 6.16 NO SOLICITATION.
(a) JMS shall immediately cease and cause to be terminated and shall
not continue any discussions or negotiations, if any, with any Person conducted
before the date of this Agreement with respect to any Competing Transaction and,
without limitation, shall promptly, following the execution of this Agreement,
request the return of all confidential information provided by JMS to all
Persons who have had such discussions or negotiations or who have entered into
confidentiality agreements with JMS pertaining to a Competing Transaction.
(b) JMS will not, and will cause its respective Affiliates and
representatives not to, directly or indirectly solicit, initiate, or encourage
any inquiries or proposals from, discuss or negotiate with, or provide any
non-public information to, any Person (other than P&G and its representatives)
relating to any transaction regarding (i) any merger, consolidation, share
exchange, business combination or other similar transaction or series of
transactions involving JMS, (ii) any sale, lease, exchange, transfer or other
disposition (including by way of merger, consolidation or share exchange), in a
single transaction or a series of related transactions, of any material portion
(which, for greater certainty, shall be deemed to be anything in excess of 20%
of book value) of the assets of JMS and its Subsidiaries, taken as a whole,
(iii) any tender offer, exchange offer or similar transaction or series of
related transactions made by any Person or group of Persons, directly or
indirectly, involving the acquisition or lock-up of, or any acquisition by any
Person or group of Persons, directly or indirectly, of beneficial ownership of,
or the formation of any group of Persons to acquire beneficial ownership of,
that number of shares of JMS Common Stock which, when added to the number of
shares of JMS Common Stock then beneficially owned, directly or indirectly, by
such Person or group of Persons, is 10% or more of the then outstanding shares
of JMS Common Stock, or (iv) any other substantially similar transaction or
series of related transactions that would hinder or delay the consummation of,
or otherwise defeat the purposes of, the Transactions (a "COMPETING
TRANSACTION").
(c) JMS will promptly (and in any event within two calendar days)
advise P&G in writing of the receipt of any inquiries or proposals relating to a
Competing Transaction, including the identity of the Person submitting such
inquiry or proposal and the terms thereof.
(d) Nothing contained in this Section 6.16 will prevent the board of
directors of JMS from taking, and disclosing to the JMS Shareholders, a position
contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange Act with
respect to any publicly announced unsolicited tender offer if, in its good faith
judgment based on the opinion of outside legal counsel, failure to so disclose
would be inconsistent with its obligations under applicable Law; provided,
however, that the board of directors of JMS will not recommend that the JMS
Shareholders tender their shares of JMS Common Stock in connection with any such
tender offer unless (i) such tender offer is determined to be a Superior
Proposal, (ii) after consultation with
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outside legal counsel, the board of directors of JMS concludes that failure to
do so would constitute a breach of its fiduciary duties under applicable Law.
Section 6.17 NOTIFICATION OF CERTAIN MATTERS. Each of P&G and JMS shall
give prompt written notice to the 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, (ii) any Action commenced or threatened in
writing against, relating to or involving or otherwise affecting it or any of
its Subsidiaries that relate to the consummation of the Transactions, and (iii)
any change that is reasonably likely to have, individually or in the aggregate,
a Jif/Crisco Material Adverse Effect or reasonably likely to have, individually
or in the aggregate, a JMS Material Adverse Effect, as the case may be.
Section 6.18 NYSE LISTING. JMS shall use its reasonable best efforts to
cause the shares of Surviving Corporation Common Stock to be issued in
connection with the Merger to be listed on the NYSE as of the Effective Time,
subject to official notice of issuance.
Section 6.19 AFFILIATES. At least ten days prior to the mailing of the
Proxy Statement/Prospectus, (i) P&G shall deliver to JMS a letter identifying
all persons who may be deemed to be Affiliates of Newco as of the date on which
P&G, as sole shareholder of Newco, approves and adopts the Merger (the "RULE 145
AFFILIATES") and (ii) P&G shall advise the persons identified in such letter of
the resale restrictions imposed by applicable securities law and shall use
reasonable best efforts to obtain from each person identified in such letter a
written agreement in customary form and substance.
Section 6.20 ANCILLARY AGREEMENTS. The parties hereto agree to execute,
deliver and perform their respective obligations under each of the Ancillary
Agreements at or prior to the Effective Time.
Section 6.21 CONSUMMATION OF THE SPIN OFF. P&G will use its reasonable
best efforts to consummate the Spin Off on the Closing Date.
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Section 6.22 COVENANT NOT TO COMPETE. For a period of 24 months after
the Closing Date, neither P&G nor any of its Affiliates shall, without the prior
consent of JMS, engage in the Geography in the manufacturing, packaging,
distributing and marketing of (i) peanut butter, peanut butter-based spreads for
human consumption and/or (ii) shortening and/or oil products for human
consumption (the "RESTRICTED BUSINESS"), and PROVIDED, HOWEVER, that the
foregoing shall not restrict P&G or its Affiliates from making any acquisition
of or investment in any business or Person (the "TARGET") if the annual net
sales attributable to the Restricted Business for the Target's most recent
fiscal year constitute less than 5% of the total net sales of the Target for
such year PROVIDED, FURTHER that if such net sales of the Restricted Business
for the Target's most recent fiscal year exceed $25 million, P&G shall sell or
otherwise dispose of the Restricted Business in a commercially reasonable manner
after the consummation of the acquisition of the Target. The parties agree that
the covenants included in this Section 6.22 are, taken as a whole, reasonable in
their geographic and temporal coverage and no party shall raise any issue of
geographic or temporal reasonableness in any proceeding to enforce such
covenant. P&G acknowledges and agrees that in the event of a breach by P&G of
the provisions of this Section 6.22, monetary damages shall not constitute a
sufficient remedy. Consequently, in the event of any such breach, JMS may, in
addition to any other rights and remedies existing in its favor, apply to any
court of law or equity of competent jurisdiction for specific performance and/or
injunctive relief or other relief in order to enforce or prevent any violation
of the provisions hereof. Any purchaser or successor in interest to P&G's
Olestra facility or the Culinary Sol Business shall not be bound by this Section
6.22 and P&G shall accordingly be released from any obligations relating
thereto. Notwithstanding anything contained in this Section 6.22, the parties
agree that the following shall not be violations of the covenants contained in
this Section 6.22: (x) continuation of the Culinary Sol Business by P&G or any
successor thereto; and (y) production and sale by P&G or any successor thereto
of any products produced at P&G's Olestra facility other than packaged goods and
oils substantially similar to the products produced by the Jif/Crisco Business.
Section 6.23 STANDSTILL. As of the date of this Agreement, except as
previously disclosed to JMS in writing, none of P&G or any of its Subsidiaries
beneficially owns any JMS Common Shares or any options or other rights to
acquire any such securities (collectively, "VOTING SECURITIES"). For a period of
three years from the date of this Agreement (the "STANDSTILL PERIOD"), except
within the terms of a specific written request from JMS, P&G will not, and will
cause its Subsidiaries not to, propose or publicly announce or otherwise
disclose an intent to propose (i) any form of business combination, acquisition
or other transaction relating to JMS, (ii) any form of restructuring,
recapitalization or similar transaction with respect to JMS, (iii) any demand,
request or proposal to amend, waive or terminate any provision of this Section
6.23, (iv) acquire, or offer, propose or agree to acquire, by purchase or
otherwise, any Voting Securities, (v) make, or in any way participate in, any
solicitation of proxies with respect to any such Voting Securities (including by
the execution of action by written consent), become a participant in any
election contest with respect to JMS, seek to influence any Person with respect
to any such Voting Securities or demand a copy of the list of JMS Shareholders
or other books and records of JMS, (vi) participate in or encourage the
formation of any partnership, syndicate or other group which owns or seeks or
offers to acquire beneficial ownership of any such Voting Securities or which
seeks to affect control of the other party or has the purpose of circumventing
any provision of this Section 6.23, (vii) otherwise act, alone or in concert
with others (including by providing financing for another Person), to seek or to
offer to control or influence, in any
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manner, JMS' management, board of directors, or policies, (viii) make any
proposal or other communication designed to compel another party to make a
public announcement thereof in respect of any matter referred to in this Section
6.23.
Section 6.24 INTERIM FINANCIAL INFORMATION. P&G shall, prior to the
Closing, provide to JMS within a reasonable period after it closes its books for
each monthly (or other) accounting period for the Jif/Crisco Business with
unaudited profit and loss statements for such period, together with statements
of inventory as of the end of such period. Such financial information shall be
in the same format and prepared on the same basis as the comparable portions of
the audited statements, except that such information may exclude footnotes and
are subject to normal audit adjustment.
Section 6.25 INDEMNIFICATION.
(a) Subject to the terms and conditions of this Agreement, each of P&G
and JMS will indemnify and hold harmless the other from and against all claims,
losses, liabilities, damages, costs and expenses (including without limitation
reasonable fees and expenses of attorneys incurred in investigation or defense
of any third-party Action, but excluding fees, costs and expenses of attorneys,
accountants, consultants and other experts and witnesses incurred in the
investigation or prosecution of any non-third-party Action) arising out of or
related to a breach by such party of the representations and warranties made by
the indemnifying party in Sections 4.04 and 5.07, respectively.
(b) Promptly after receipt by the indemnified party of notice of any
third-party Action in respect of which indemnity may be sought against the
indemnifying party hereunder (for purposes of this Section 6.25, an
"ASSERTION"), the indemnified party will notify the indemnifying party in
writing of the Assertion, but the failure to so notify the indemnifying party
will not relieve the indemnifying party of any liability it may have to the
indemnified party, except to the extent the indemnifying party has suffered
actual prejudice thereby. The indemnifying party will be entitled to participate
in and, to the extent the indemnifying party elects by written notice to the
indemnified party within thirty (30) days after receipt by the indemnifying
party of notice of such Assertion, to assume the defense of such Assertion, at
the indemnifying party's own expense, with counsel chosen by it which will be
reasonably satisfactory to the indemnified party. With respect to any such
Assertion, the indemnified party will promptly provide the indemnifying party
with: (i) notice and copies of any documents served upon the indemnified party;
and (ii) all reasonable cooperation which the indemnifying party deems necessary
to defend such Assertion, including, without limitation, providing the
indemnifying party and its outside attorneys access to any potentially-relevant
documents, information, or individuals within the control of the indemnified
party, other than any privileged documents. If business information of the
indemnified party other than that pertaining to the Jif/Crisco Business is
contained in such documents or information, the indemnifying party and the
indemnified party will enter into appropriate secrecy commitments to protect
such documents or information. Notwithstanding that the indemnifying party may
have elected by written notice to assume the defense of any Assertion, the
indemnified party will have the right to participate in the investigation and
defense thereof, with separate counsel chosen by the indemnified party, but in
such event the fees and expenses of the indemnified party (above those which
would otherwise have been incurred) and such separate counsel will be paid by
the indemnified party.
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(c) Notwithstanding anything in this Section 6.25 to the contrary: (i)
the indemnifying party will have no obligation with respect to any Assertion if,
in connection therewith, the indemnified party, without the written consent of
the indemnifying party, settles or compromises any Action or consents to the
entry of any judgment; and (ii) the indemnifying party will not, without the
written consent of the indemnified party with respect to any Assertion: (A)
settle or compromise any Action or consent to the entry of any judgment which
does not include as an unconditional term thereof the delivery by the claimant
or plaintiff to the indemnified party of a duly executed written release of the
indemnified party from all liability in respect of such Action, which release
will be reasonably satisfactory in form and substance to counsel for the
indemnified party; or (B) settle or compromise any Action in any manner that, in
the reasonable judgment of the indemnified party or its counsel, will materially
adversely affect the indemnified party other than as a result of money damages
or other money payments.
(d) Upon the payment of any settlement or judgment pursuant to this
Section 6.25 with respect to any Assertion, the indemnifying party will be
subrogated to all rights and remedies of the indemnified party against any third
party in respect of such the Assertion to the extent of the amount so paid by
the indemnifying party.
Section 6.26 TITLE POLICIES. P&G shall, if so requested by JMS and at
JMS' sole expense, cooperate with JMS in obtaining prior to the Closing title
insurance policies covering the Jif/Crisco Real Property in a customary form.
Section 6.27 SHAREHOLDER AGREEMENT. JMS shall use its reasonable best
efforts to cause Mrs. H. Xxx Xxxxx to execute and deliver a shareholders
agreement, substantially in the form attached hereto as Exhibit B.
ARTICLE VII
CONDITIONS TO THE MERGER
Section 7.01 CONDITIONS TO THE MERGER. The respective obligation of P&G
and JMS to effect the Merger is subject to the satisfaction or waiver of the
following conditions:
(a) the JMS Shareholder Approval shall have been obtained at the JMS
Shareholder Meeting;
(b) no preliminary or permanent injunction or other order will have
been issued that would make unlawful the consummation of the Transactions;
(c) the Surviving Corporation Common Stock to be issued in the Merger
shall have been authorized for listing on the NYSE, subject to notice of
official issuance;
(d) the Merger Registration Statement shall have become effective in
accordance with the provision of the Securities Act, no stop order suspending
the effectiveness of the Merger Registration Statement shall have been issued by
the SEC and no proceedings for that purpose shall have been initiated by the SEC
and not concluded or withdrawn and all state securities or blue sky
authorizations necessary to carry out the Transactions shall have been obtained
and be in effect;
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(e) all applicable waiting periods under the HSR Act will have
terminated or expired; and
(f) all other Authorizations of or filings with any Governmental Entity
required in connection with the consummation of the Transactions will have been
made or obtained, except where the failure to obtain or make such consents,
authorizations, orders, approvals or filings would not, individually or in the
aggregate, have a material adverse effect on the Jif/Crisco Business and JMS,
taken as a whole.
Section 7.02 CONDITIONS TO THE OBLIGATION OF JMS. The obligation of JMS
to effect the Merger is subject to the satisfaction of each of the following
conditions (each of which is for the exclusive benefit of JMS and may be waived
by JMS):
(a) all covenants of P&G under this Agreement and the Ancillary
Agreements to be performed on or before the Closing shall have been duly
performed by P&G in all material respects;
(b) the representations and warranties of P&G in this Agreement and of
the Contributors in the Contribution Agreement (which for purposes of this
paragraph shall be read as though none of them contained any materiality or
material adverse effect qualifications) shall be true and correct in all
respects as of the Closing with the same effect as though made as of the
Closing, except that any representation and warranty made as of a date other
than the date of this Agreement will continue on the Closing Date to be true and
correct in all respects as of the specified date and except where the failure of
the representations and warranties to be true and correct in all respects would
not in the aggregate have, a Jif/Crisco Material Adverse Effect, and JMS shall
have received a certificate of P&G addressed to JMS and dated the Closing Date,
signed on behalf of P&G by an executive officer of P&G (on P&G's behalf and
without personal liability), confirming the matters set forth in Section 7.02(a)
and this Section 7.02(b); and
(c) JMS will have received a written opinion, dated as of the Closing,
from Ernst & Young, tax advisor to JMS, to the effect that the Merger will be
treated for federal income tax purposes as a reorganization within the meaning
of Section 368(a) of the Code. In rendering the foregoing opinion, counsel will
be permitted to rely upon and assume the accuracy of certificates executed by
officers of Newco, P&G and JMS substantially in compliance with IRS published
advanced ruling guidelines, with customary exceptions and modification thereto
to enable such firms to deliver the legal opinions;
(d) the total number of shares of Surviving Corporation Common Stock
that will be issued to holders of shares of JMS Common Stock outstanding
immediately prior to the Effective Time shall be at least equal to 45% of the
outstanding shares of Surviving Corporation Common Stock issued in the Merger;
and
(e) P&G and the Contributors shall have performed all obligations
required to be performed by them under the Contribution Agreement and the Spin
Off shall have been consummated.
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Section 7.03 CONDITIONS TO THE OBLIGATION OF P&G. The obligation of P&G
to effect the Merger is subject to the satisfaction of each of the following
conditions (each of which is for the exclusive benefit of P&G and may be waived
by P&G):
(a) all covenants of JMS under this Agreement and the Ancillary
Agreements to be performed on or before the Closing Date shall have been duly
performed by JMS in all material respects;
(b) the representations and warranties of JMS (which for purposes of
this paragraph shall be read as though none of them contained any materiality or
material adverse effect qualifications) shall be true and correct in all
respects as of the Closing Date with the same effect as though made as of the
Closing Date, except that any representation and warranty made as of a date
other than the date of this Agreement will continue on the Closing Date to be
true and correct in all respects as of the specified date and except where the
failure of the representations and warranties to be true and correct in all
respects would not in the aggregate have a JMS Material Adverse Effect, and P&G
shall have received a certificate of JMS addressed to P&G and dated the Closing
Date, signed on behalf of JMS by an executive officer of JMS (on JMS's behalf
and without personal liability), confirming the matters set forth in Section
7.03(a) and this Section 7.03(b);
(c) P&G will have received a written opinion, dated as of the Closing
Date, from Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, counsel to P&G, to the
effect that the Merger will be treated for federal income tax purposes as a
reorganization within the meaning of Section 368(a) of the Code. In rendering
the foregoing opinion, counsel will be permitted to rely upon and assume the
accuracy of certificates executed by officers of Newco, P&G and JMS
substantially in compliance with IRS published advanced ruling guidelines, with
customary exceptions and modification thereto to enable such firm to deliver the
legal opinions;
(d) P&G shall have received a letter ruling from the IRS, reasonably
satisfactory to P&G to the effect that (i) no gain or loss will be recognized by
(and no amount will be includible in the income of) the P&G Shareholders as a
result of the Spin Off pursuant to Section 355(a) of the Code, (ii) no gain will
be recognized by P&G as a result of the Spin Off pursuant to Section 361(c)(1),
(iii) consummation of the Merger will not adversely affect the rulings described
in clauses (i) or (ii) above, (iv) for purposes of applying Section 355(e) of
the Code to the Spin Off, each share of Surviving Corporation Common Stock will
be considered to have one vote per share for all periods after the Merger and
(v) for purposes of determining whether the Merger qualifies as a reorganization
under Section 368(a)(1)(A) of the Code, the Merger will be respected as a
separate transaction occurring after the Distribution; provided that the
condition described in this clause (v) shall be deemed satisfied if P&G has
received written advice from the IRS, reasonably satisfactory to P&G, to the
same effect and that written advice clearly indicates that the only reason the
IRS is not providing a favorable formal ruling is because the request does not
raise a significant issue within the meaning of Section 3.01(29) of Rev. Proc.
2001-3 and as such issuing a formal ruling would violate the Revenue Procedure's
prohibition against "comfort rulings;" and
(e) the Cash Amount to be paid in the Merger will not be greater than
$50,000,000.
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ARTICLE VIII
TERMINATION AND ABANDONMENT
Section 8.01 TERMINATION. Except as otherwise provided in this Section
8.01, this Agreement may be terminated at any time prior to the Effective Time,
whether before or after the JMS Shareholder Approval:
(a) by mutual written consent of P&G and JMS;
(b) by JMS (provided that JMS is not then in material breach of any
covenant, representation or warranty or other agreement contained herein), if
there has been a breach by P&G of any of its representations, warranties,
covenants or agreements contained in this Agreement or of the Contributors in
the Contribution Agreement, or any such representation and warranty shall have
become untrue, in either case such that Section 7.02(a) or Section 7.02(b) would
be incapable of being satisfied, and such breach or condition has not been cured
within thirty days following receipt by JMS of notice of such breach;
(c) by P&G (provided that P&G is not then in material breach of any
covenant, representation or warranty or other agreement contained herein), if
(i) there has been a breach by JMS of any of its representations, warranties,
covenants or agreements contained in this Agreement, or any such representation
and warranty shall have become untrue, in either case such that Section 7.03(a)
or Section 7.03(b) would be incapable of being satisfied, and such breach or
condition has not been cured within thirty days following receipt by P&G of
notice of such breach or (ii) the condition contained in Section 7.03(d) shall
be incapable of being satisfied;
(d) by either P&G or JMS if any Order by any Governmental Entity
preventing or prohibiting consummation of the Transactions shall have become
final and nonappealable;
(e) by either P&G or JMS if the Merger shall not have occurred prior to
June 30, 2002, unless the failure of the Merger to have occurred by such date
shall be due to the failure of the party seeking to terminate this Agreement to
perform or observe in all material respects the covenants and agreements of such
party set forth herein;
(f) by either P&G or JMS if the JMS Shareholder Approval is not
obtained at the JMS Shareholder Meeting;
(g) by P&G if the board of directors of JMS shall not have recommended
or shall have modified the JMS Board Recommendation or failed to confirm the JMS
Board Recommendation within seven (7) Business Days of P&G's request; or
(h) by P&G on or prior to the Closing Date if the product of (x)
0.5254, (y) the aggregate number of shares of Surviving Corporation Common Stock
to be issued in the Merger, and (z) the average closing price of JMS Common
Stock on the NYSE for the preceding fifteen Trading Days ending two Trading Days
prior to the Closing Date is less than $715,000,000.
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Section 8.02 EFFECT OF TERMINATION.
(a) In the event of termination of this Agreement by either P&G or JMS
pursuant to Section 8.01, this Agreement shall forthwith become void and there
shall be no liability under this Agreement on the part of P&G or JMS, except to
the extent that such termination results from the material breach by a party of
any of its covenants or agreements set forth in this Agreement; provided
however, that the provisions of Sections 6.04, 9.12 and this Section 8.02 shall
remain in full force and effect and shall survive any termination of this
Agreement.
(b) If P&G terminates this Agreement pursuant to Section 8.01(g), JMS
shall pay to P&G, within one Business Day following the delivery of notice of
such termination, a termination fee of $20 million (the "TERMINATION Fee") by
wire transfer of immediately available funds.
(c) If P&G terminates this Agreement pursuant to Section 8.01(f) if a
Competing Transaction shall have been publicly announced prior to the JMS
Shareholders Meeting, JMS shall pay to P&G, within one (1) Business Day
following the delivery of notice of such termination, the amount of $10 million
by wire transfer of immediately available funds.
ARTICLE IX
MISCELLANEOUS
Section 9.01 NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
None of the representations, warranties and agreements in this Agreement or in
any Ancillary Agreements shall survive the Merger; provided, however, that the
agreements contained in Article II, Article III and in Sections 6.04, 6.05,
6.06, 6.07, 6.08, 6.11, 6.12, 6.20 and this Article IX that by their terms apply
or are to be performed in whole or part after the Effective Time shall survive
the Merger and that the representations and warranties of the Contributors
contained in the Contribution Agreement shall survive in accordance with the
terms of the Contribution Agreement.
Section 9.02 AMENDMENT AND MODIFICATION. Subject to applicable Law,
this Agreement and the Ancillary Agreements may be amended, modified, or
supplemented only by the written agreement by the parties hereto in any and all
respects before the Effective Time and at any time before or after the JMS
Shareholder Approval; provided, however that after the JMS Shareholder Approval
is obtained there shall not be any amendment that by Law requires further
approval by the shareholders of JMS without further approval of such
shareholders.
Section 9.03 WAIVER OF COMPLIANCE. Except as otherwise provided in this
Agreement and the Ancillary Agreements, the failure by any Person to comply with
any obligation, covenant, agreement or condition under such agreements may be
waived by the Person entitled to the benefit thereof only by a written
instrument signed by the Person granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, covenant, agreement or
condition will not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. The failure of any Person to enforce at any time
any of the provisions of such agreements will in no way be construed to be a
waiver of any such provision, nor in any way to
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affect the validity of such agreements or any part thereof or the right of any
Person thereafter to enforce each and every such provision. No waiver of any
breach of such provisions will be held to be a waiver of any other or subsequent
breach.
Section 9.04 NOTICES. All notices required or permitted pursuant to
this Agreement will be in writing and will be deemed to be properly given when
actually received by the Person entitled to receive the notice at the address
stated below, or at such other address as a party may provide by notice to the
other:
If to P&G or Newco:
MAILING
The Procter & Xxxxxx Company
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Attention: Secretary
DELIVERY
The Procter & Xxxxxx Company
Xxx Xxxxxxx & Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Secretary
If to JMS:
The X.X. Xxxxxxx Company
Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
With a copy to:
The X.X. Xxxxxxx Company
Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attention: General Counsel
Section 9.05 THIRD PARTY BENEFICIARIES. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any Person other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
Section 9.06 SUCCESSORS AND ASSIGNS. This Agreement and the Ancillary
Agreements will be binding upon and will inure to the benefit of the signatories
hereto and their respective successors and permitted assigns. Neither P&G, Newco
nor JMS may assign this Agreement or any of the Ancillary Agreements, or any of
their rights or liabilities thereunder, without the prior written consent of the
other parties thereto, provided that P&G and Newco may so assign, in
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whole or in part, to one or more of its wholly-owned Subsidiaries. Any such
assignment will not relieve the party making the assignment from any liability
under such agreements. Notwithstanding anything contained in this Agreement to
the contrary, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations or liabilities under or
by reason of this Agreement; provided that the third parties referenced in
Section 6.20 shall be third-party beneficiaries of the agreement contained in
such Section.
Section 9.07 ENTIRE AGREEMENT. This Agreement and the Ancillary
Agreements constitute the entire agreement between the parties hereto with
respect to the subject matter thereof and will supersede all previous
negotiations, commitments, and writings with respect to such subject matter,
including the Confidentiality Agreement.
Section 9.08 SEVERABILITY. The illegality or partial illegality of any
or all of this Agreement or any of the Ancillary Agreements, or any provision
thereof, will not affect the validity of the remainder of such agreements, or
any provision thereof, and the illegality or partial illegality of any such
agreements will not affect the validity of any such agreements in any
jurisdiction in which such determination of illegality or partial illegality has
not been made, except in either case to the extent such illegality or partial
illegality causes such agreements to no longer contain all of the material
provisions reasonably expected by the parties to be contained therein.
Section 9.09 CAPTIONS. The captions appearing in this Agreement and the
Ancillary Agreements are inserted only as a matter of convenience and as a
reference and in no way define, limit or describe the scope or intent of such
agreements or any of the provisions thereof.
Section 9.10 COUNTERPARTS. This Agreement and the Ancillary Agreements
may be executed in one or more counterparts, each of which will be deemed to be
an original, but all of which will constitute one agreement.
Section 9.11 GOVERNING LAW. This Agreement and the Ancillary Agreements
will be governed by and construed in accordance with the laws of Ohio, whether
common law or statutory, without reference to the choice of law provisions
thereof.
Section 9.12 EXPENSES. Except as otherwise expressly provided in this
Agreement or the Ancillary Agreements, whether or not the Transactions are
consummated, each of P&G and JMS will bear its own costs and expenses.
Section 9.13 SPECIFIC PERFORMANCE. The parties hereby acknowledge and
agree that the failure of any party to perform its agreements and covenants
hereunder, including its failure to take all actions as are necessary on its
part to the consummation of the Transactions, will cause irreparable injury to
the other parties for which damages, even if available, will not be an adequate
remedy. Accordingly, each party hereby consents to the issuance of injunctive
relief by any court of competent jurisdiction to compel performance of such
party's obligations and to the granting by any court of the remedy of specific
performance of its obligations hereunder.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.
THE PROCTER & XXXXXX
COMPANY
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President - Treasurer
THE PROCTER & XXXXXX OHIO BRANDS COMPANY
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President - Treasurer
THE X. X. XXXXXXX COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------------------
Title: Chairman & Co-CEO
-----------------------------------------
