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CONFORMED COPY
Exhibit (c)(1)
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AGREEMENT AND PLAN OF MERGER
among
XXXXXXX & XXXXXXX,
LIB ACQUISITION CORP.
and
DEPUY, INC.
Dated as of July 21, 1998
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TABLE OF CONTENTS
AGREEMENT AND PLAN OF MERGER
ARTICLE I
THE OFFER
Page
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Section 1.01 The Offer .................................................... 2
Section 1.02 Company Actions .............................................. 4
ARTICLE II
THE MERGER
Section 2.01 The Merger ................................................... 6
Section 2.02 Closing ...................................................... 6
Section 2.03 Effective Time ............................................... 7
Section 2.04 Effects of the Merger ........................................ 7
Section 2.05 Certificate of Incorporation and Bylaws ...................... 7
Section 2.06 Directors .................................................... 7
Section 2.07 Officers ..................................................... 7
ARTICLE III
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
Section 3.01 Effect on Capital Stock ...................................... 8
Section 3.02 Exchange of Certificates ..................................... 9
ARTICLE IV
REPRESENTATIONS & WARRANTIES OF THE COMPANY
Section 4.01 Organization ................................................ 12
Section 4.02 Company Subsidiaries; Equity Interests ...................... 12
Section 4.03 Capitalization .............................................. 13
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Section 4.04 Authority ................................................... 14
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Section 4.05 Consent and Approvals; No Violations ........................ 14
Section 4.06 SEC Documents; Financial Statements ......................... 15
Section 4.07 Information Supplied ........................................ 16
Section 4.08 Absence of Certain Changes or Events ........................ 17
Section 4.09 Litigation .................................................. 18
Section 4.10 Contracts ................................................... 18
Section 4.11 Compliance with Laws ........................................ 18
Section 4.12 Environmental Matters ....................................... 19
Section 4.13 Absence of Changes in Benefit Plans; Labor Relations ........ 20
Section 4.14 ERISA Compliance ............................................ 20
Section 4.15 Taxes ....................................................... 23
Section 4.16 No Excess Parachute Payments ................................ 24
Section 4.17 Title to Properties ......................................... 25
Section 4.18 Intellectual Property ....................................... 25
Section 4.19 Agreements for Distribution Outside the United States ....... 26
Section 4.20 Voting Requirements ......................................... 26
Section 4.21 State Takeover Statutes ..................................... 26
Section 4.22 Brokers; Schedule of Fees and Expenses ...................... 26
Section 4.23 Opinion of Financial Advisor ................................ 27
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB
Section 5.01 Organization ................................................ 27
Section 5.02 Authority ................................................... 27
Section 5.03 Consents and Approvals; No Violations ....................... 28
Section 5.04 Information Supplied ........................................ 28
Section 5.05 Interim Operations of Sub. .................................. 29
Section 5.06 Brokers ..................................................... 29
Section 5.07 Financing ................................................... 29
ARTICLE VI
COVENANTS
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Section 6.01 Conduct of Business ......................................... 30
Section 6.02 No Solicitation ............................................. 33
Section 6.03 Certain Tax Matters ......................................... 34
Section 6.04 Other Actions ............................................... 35
Section 6.05 Advice of Changes; Filings .................................. 35
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.01 Company Stockholder Approval; Preparation of Proxy
Statement ................................................. 35
Section 7.02 Access to Information; Confidentiality ...................... 36
Section 7.03 Reasonable Efforts; Notification ............................ 37
Section 7.04 Cooperation ................................................. 38
Section 7.05 Stock Option Plans .......................................... 38
Section 7.06 Indemnification, Exculpation and Insurance .................. 40
Section 7.07 Directors ................................................... 41
Section 7.08 Fees and Expenses ........................................... 42
Section 7.09 Transfer Taxes .............................................. 43
Section 7.10 Public Announcements ........................................ 43
Section 7.11 Severance Agreements ........................................ 43
Section 7.12 Continuation of Benefits .................................... 44
Section 7.13 Stop Transfer ............................................... 44
Section 7.14 Purchase of Foreign Subsidiaries ............................ 44
ARTICLE VIII
CONDITIONS
Section 8.01 Conditions to Each Party's Obligation to
Effect the Merger ......................................... 45
ARTICLE IX
TERMINATION AND AMENDMENT
Section 9.01 Termination ................................................. 46
Section 9.02 Effect of Termination ....................................... 47
Section 9.03 Amendment ................................................... 47
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Section 9.04 Extension; Waiver ........................................... 47
Section 9.05 Procedure for Termination, Amendment, Extension or
Waiver .................................................... 48
ARTICLE X
MISCELLANEOUS
Section 10.01 Nonsurvival of Representations, Warranties and Agreements .. 48
Section 10.02 Notices .................................................... 48
Section 10.03 Interpretation ............................................. 50
Section 10.04 Counterparts ............................................... 50
Section 10.05 Entire Agreement; Third Party Beneficiaries ................ 51
Section 10.06 Governing Law .............................................. 51
Section 10.07 Assignment ................................................. 51
Section 10.08 Enforcement ................................................ 51
Section 10.09 Severability ............................................... 52
Section 10.10 Compliance with Law ........................................ 52
EXHIBIT A Conditions of the Offer A-1
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AGREEMENT AND PLAN OF MERGER dated as of July 21, 1998,
among XXXXXXX & XXXXXXX, a New Jersey corporation ("Parent"),
LIB ACQUISITION CORP., a Delaware corporation and a
wholly-owned subsidiary of Parent ("Sub"), and DEPUY, INC., a
Delaware corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved and found advisable this Agreement and the acquisition of
the Company by Parent on the terms and subject to the conditions set forth in
this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to
cause Sub to make a tender offer to purchase all the outstanding shares of
Common Stock, par value $0.01 per share, of the Company (the "Company Common
Stock"; all the outstanding shares of Company Common Stock being hereinafter
collectively referred to as the "Shares") at a purchase price of $35 per Share
(the "Offer Price"), net to the seller in cash, without interest thereon, upon
the terms and subject to the conditions set forth in this Agreement (as it may
be amended from time to time as permitted under this Agreement, the "Offer");
and the Board of Directors of the Company has adopted resolutions approving the
Offer and the Merger (as defined below), recommending that the Company's
stockholders accept the Offer and approving the acquisition of Shares by Sub
pursuant to the Offer and the Stockholder Agreement (as defined below);
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have each approved the merger of Sub into the Company (the "Merger"),
upon the terms and subject to the conditions set forth in this Agreement,
whereby each Share, other than Shares owned directly or indirectly by Parent or
the Company and Dissenting Shares (as defined in Section 3.01(d)), will be
converted into the right to receive the price per Share paid in the Offer;
WHEREAS, as an inducement to Parent to enter into this Agreement,
Parent, Sub and certain stockholders of the Company have entered into a
Stockholder Agreement dated as of the date hereof pursuant to which such
stockholders have, among other things, agreed to sell all such stockholders'
Shares to Sub at a cash price per Share equal to the Offer Price, upon the terms
and subject to the conditions set
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forth in such Stockholder Agreement (the "Stockholder Agreement"); and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger and also to prescribe various conditions to the Offer and
the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Sub and the Company hereby agree as follows:
ARTICLE I
The Offer
SECTION 1.01. The Offer. (a) Provided that none of the conditions
set forth on Exhibit A hereto shall have occurred and be continuing, as promptly
as practicable but in no event later than five business days after the date of
the public announcement (on the date hereof or the following day) by Parent and
the Company of this Agreement, Sub shall, and Parent shall cause Sub to,
commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act")), the Offer. The obligation of Sub to, and
of Parent to cause Sub to, commence the Offer, conduct and consummate the Offer
and accept for payment, and pay for, any Shares tendered and not withdrawn
pursuant to the Offer shall be subject only to the conditions set forth in
Exhibit A (the "Offer Conditions") (any of which may be waived in whole or in
part by Sub in its sole discretion; provided that, without the express written
consent of the Company, Sub may not waive the Stockholder Agreement Condition
(as defined in Exhibit A)). Sub expressly reserves the right, subject to
compliance with the Exchange Act, to modify the terms of the Offer, except that,
without the express written consent of the Company, Sub shall not (i) reduce the
number of Shares subject to the Offer, (ii) reduce the Offer Price, (iii) add to
or modify the Offer Conditions, (iv) except as provided in the next sentence,
extend the Offer, (v) change the form of consideration payable in the Offer or
(vi) amend or alter any other term of the Offer in any manner adverse to the
holders of the Shares. Notwithstanding the foregoing, Sub may, without the
consent of the Company, (A) extend the
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Offer for a specified period, if at the scheduled or any extended expiration
date of the Offer any of the Offer Conditions shall not be satisfied or waived,
until such time as such conditions are satisfied or waived, (B) extend the Offer
for any period required by any rule, regulation, interpretation or position of
the Securities and Exchange Commission (the "SEC") or the staff thereof
applicable to the Offer, (C) extend the Offer for up to ten business days if
there have not been validly tendered and not withdrawn prior to the expiration
of the Offer such number of Shares that, together with Shares subject to the
Stockholder Agreement which have not been validly tendered, would constitute at
least 90% of the fully diluted Shares as of the date of determination and (D)
extend the Offer for any reason for up to two business days; provided that no
more than three extensions shall be permitted under clauses (C) and (D) of this
sentence. Subject only to the conditions set forth in Exhibit A, Sub shall, and
Parent shall cause Sub to, accept for payment, and pay for, all Shares validly
tendered and not withdrawn pursuant to the Offer that Sub becomes obligated to
accept for payment, and pay for, pursuant to the Offer as soon as practicable
after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall
file with the SEC a Tender Offer Statement on Schedule 14D-1 (such Schedule
14D-1, as supplemented or amended from time to time, the "Schedule 14D-1") with
respect to the Offer, which shall contain an offer to purchase and a related
letter of transmittal and summary advertisement (such Schedule 14D-1 and the
documents included therein pursuant to which the Offer will be made, together
with any supplements or amendments thereto, the "Offer Documents"). Parent and
Sub agree that the Offer Documents shall comply as to form in all material
respects with the Exchange Act and the rules and regulations promulgated
thereunder, and the Offer Documents, on the date first published, sent or given
to the Company's stockholders, shall not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation or warranty is made by Parent or Sub with respect to written
information supplied by the Company or any of its stockholders specifically for
inclusion or incorporation by reference in the Offer Documents. Parent, Sub and
the Company each agrees promptly to correct any written information provided by
it for use in the Offer
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Documents if and to the extent that such information shall have become false or
misleading in any material respect, and Parent and Sub further agree to take all
steps necessary to cause the Schedule 14D-1 as so corrected to be filed with the
SEC and the other Offer Documents as so corrected to be disseminated to holders
of Shares, in each case as and to the extent required by applicable Federal
securities laws. The Company and its counsel shall be given reasonable
opportunity to review and comment upon the Offer Documents prior to their filing
with the SEC or dissemination to the stockholders of the Company. Parent and Sub
agree to provide the Company and its counsel any comments Parent, Sub or their
counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt of such comments.
(c) Parent shall provide or cause to be provided to Sub on a timely
basis the funds sufficient to accept for payment, and pay for, any and all
Shares that Sub becomes obligated to accept for payment, and pay for, pursuant
to the Offer.
(d) Sub shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to the Offer such amounts as may be
required to be deducted and withheld with respect to the making of such payment
under the Internal Revenue Code of 1986, as amended (the "Code"), or under any
provision of state, local or foreign tax law; provided, however, that Sub shall
promptly pay any amounts deducted and withheld hereunder to the applicable
governmental authority, shall promptly file all tax returns and reports required
to be filed in respect of such deductions and withholding, and shall promptly
provide to the Company proof of such payment and a copy of all such tax returns
and reports.
SECTION 1.02. Company Actions. (a) The Company hereby approves of
and consents to the Offer and represents that the Board of Directors of the
Company, at a meeting duly called and held, duly adopted resolutions approving
this Agreement and the Stockholder Agreement, the Offer and the Merger,
determining that the terms of the Offer and the Merger are fair to, and in the
best interests of, the Company's stockholders and recommending that the
Company's stockholders accept the Offer, tender their Shares pursuant to the
Offer and approve and adopt this Agreement (if required). The Company represents
that its Board of Directors has received the opinion of Bear, Xxxxxxx & Co. Inc.
("Bear, Xxxxxxx") that, as of such date and based upon
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and subject to the matters set forth therein, the cash consideration to be
received by the holders of Shares pursuant to the Offer and the Merger was fair
from a financial point of view to such holders, and a complete and correct
signed copy of such opinion has been delivered by the Company to Parent.
(b) On the date the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/ Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as supplemented
or amended from time to time, the "Schedule 14D-9") containing the
recommendation described in Section 1.02(a) and shall mail the Schedule 14D-9 to
the stockholders of the Company. The Schedule 14D-9 shall comply as to form in
all material respects with the requirements of the Exchange Act and the rules
and regulations promulgated thereunder and, on the date filed with the SEC and
on the date first published, sent or given to the Company's stockholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that no representation or warranty is made by the Company
with respect to written information supplied by Parent or Sub specifically for
inclusion in the Schedule 14D-9. The Company, Parent and Sub each agree promptly
to correct any written information provided by it for use in the Schedule 14D-9
if and to the extent that such information shall have become false or misleading
in any material respect, and the Company further agrees to take all steps
necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule
14D-9 as so amended or supplemented to be filed with the SEC and disseminated to
the Company's stockholders, in each case as and to the extent required by
applicable Federal securities laws. Parent and its counsel shall be given
reasonable opportunity to review and comment upon the Schedule 14D-9 prior to
its filing with the SEC or dissemination to stockholders of the Company. The
Company agrees to provide Parent and its counsel any comments the Company or its
counsel may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments.
(c) In connection with the Offer and the Merger, the Company shall
cause its transfer agent to furnish Sub promptly with mailing labels containing
the names and addresses of the record holders of Shares as of a recent date and
of those persons becoming record holders subsequent
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to such date, together with copies of all lists of stockholders, security
position listings and computer files and all other information in the Company's
possession or control regarding the beneficial owners of Shares, and shall
furnish to Sub such information and assistance (including updated lists of
stockholders, security position listings and computer files) as Parent may
reasonably request in communicating the Offer to the Company's stockholders.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Parent and Sub and their agents shall hold in
confidence the information contained in any such labels, listings and files,
will use such information only in connection with the Offer and the Merger and,
if this Agreement shall be terminated, will, upon request, promptly deliver, and
will use their best efforts to cause their agents promptly to deliver, to the
Company all copies of such information (and all copies of information derived
therefrom) then in their possession or control.
ARTICLE II
The Merger
SECTION 2.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), Sub shall be merged with and into the
Company at the Effective Time. Following the Effective Time, the separate
corporate existence of Sub shall cease and the Company shall continue as the
surviving corporation (the "Surviving Corporation") and shall succeed to and
assume all the rights and obligations of Sub in accordance with the DGCL. At the
election of Parent, any direct or indirect wholly-owned subsidiary (as defined
in Section 10.03) of Parent may be substituted for Sub as a constituent
corporation in the Merger. In such event, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect the foregoing.
SECTION 2.02. Closing. The closing of the Merger will take place at
10:00 a.m. (New York City time) on a date to be specified by Parent or Sub,
which shall be no later than the second business day after satisfaction or
waiver of the conditions set forth in Article VIII (the "Closing Date"), at the
offices of Cravath, Swaine & Xxxxx, Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, unless
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another date, time or place is agreed to in writing by the parties hereto.
SECTION 2.03. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on or after the Closing Date, the parties
shall file a certificate of merger or other appropriate documents (in any such
case, the "Certificate of Merger") executed in accordance with the relevant
provisions of the DGCL and shall make all other filings or recordings required
under the DGCL and other applicable law. The Merger shall become effective at
such time as the Certificate of Merger is duly filed with the Delaware Secretary
of State, or at such other time specified in the Certificate of Merger as Sub
and the Company shall agree (the time the Merger becomes effective being
hereinafter referred to as the "Effective Time").
SECTION 2.04. Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL.
SECTION 2.05. Certificate of Incorporation and Bylaws. (a) The
Certificate of Incorporation of the Company (the "Certificate of
Incorporation"), as in effect immediately prior to the Effective Time, shall be
the certificate of incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(b) The bylaws of the Company (the "Bylaws") as in effect
immediately prior to the Effective Time shall be the bylaws of the Surviving
Corporation, until thereafter changed or amended as provided therein or by
applicable law.
SECTION 2.06. Directors. The directors of Sub immediately prior to
the Effective Time, and Xxxxxxx X. Xxxxxx and Xxxxx X. Xxxx, shall be the
directors of the Surviving Corporation, until the earlier of their resignation
or removal or until their respective successors are duly elected and qualified,
as the case may be.
SECTION 2.07. Officers. The officers of the Company immediately
prior to the Effective Time shall be the officers of the Surviving Corporation,
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
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ARTICLE III
Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates
SECTION 3.01. Effect on Capital Stock. As of the Effective Time, by
virtue of the Merger and without any action on the part of the holder of any
Shares or any shares of capital stock of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of
capital stock of Sub shall be converted into and become one fully paid and
nonassessable share of Common Stock, par value $.01 per share, of the
Surviving Corporation.
(b) Cancelation of Treasury Stock and Parent Owned Stock. Each Share
that is owned by the Company and each Share that is owned by Parent or Sub
shall automatically be canceled and retired and shall cease to exist, and
no consideration shall be delivered in exchange therefor. Each Share that
is owned by any direct or indirect wholly-owned subsidiary of Parent
(other than Sub) or the Company shall remain outstanding without change.
(c) Conversion of Company Common Stock. Subject to Section 3.01(d),
each issued and outstanding Share (other than Shares to be canceled or to
remain outstanding in accordance with Section 3.01(b) and other than
Dissenting Shares) shall be converted into the right to receive from the
Surviving Corporation in cash, without interest, the Offer Price (the
"Merger Consideration"). As of the Effective Time, all such Shares shall
no longer be outstanding and shall automatically be canceled and retired
and shall cease to exist, and each holder of a certificate representing
any such Shares shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration, without interest.
(d) Shares of Dissenting Stockholders. Notwithstanding anything in
this Agreement to the contrary, any issued and outstanding Shares held by
a person (a "Dissenting Stockholder") who has neither voted in favor of
the Merger nor consented in writing thereto and otherwise complies with
all the applicable provisions of the DGCL concerning the right of holders
of Company Common Stock to dissent from the Merger and
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require appraisal of their Shares ("Dissenting Shares") shall not be
converted as described in Section 3.01(c) but shall be converted into the
right to receive such consideration as may be determined to be due to such
Dissenting Stockholder pursuant to the laws of the State of Delaware. If,
after the Effective Time, such Dissenting Stockholder withdraws his demand
for appraisal or fails to perfect or otherwise loses his right to
appraisal, in any case pursuant to the DGCL, his Shares shall be deemed to
be converted as of the Effective Time into the right to receive the Merger
Consideration. The Company shall give Parent (i) prompt notice of any
demands for appraisal of Shares received by the Company and (ii) if and
after Sub shall have accepted for payment Shares pursuant to and subject
to the Offer Conditions, the opportunity to participate in and direct all
negotiations and proceedings with respect to any such demands. The Company
shall not, without the prior written consent of Parent, make any payment
with respect to, or settle, offer to settle or otherwise negotiate, any
such demands.
SECTION 3.02. Exchange of Certificates. (a) Paying Agent. Prior to
the Effective Time, Parent shall designate a substantial bank or trust company
to act as paying agent in the Merger (the "Paying Agent"). Parent shall cause
the Surviving Corporation to deposit with the Paying Agent in separate trust for
holders of the Certificates (as defined in Section 3.02(b)) immediately
available funds in an amount sufficient for the payment of the aggregate Merger
Consideration for the Shares converted pursuant to Section 3.01(c) (it being
understood that any and all interest earned on funds made available to the
Paying Agent pursuant to this Agreement shall be turned over to Parent).
(b) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates that immediately prior to the Effective Time
represented Shares (the "Certificates"), (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Paying
Agent and shall be in a form and have such other provisions as Parent may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for the Merger Consideration. Upon
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surrender of a Certificate for cancelation to the Paying Agent or to such other
agent or agents as may be appointed by Parent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor, and the Paying Agent shall pay pursuant to
irrevocable instructions given by Sub or Parent, the amount of cash into which
the Shares theretofore represented by such Certificate shall have been converted
pursuant to Section 3.01, and the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of Shares that is not
registered in the transfer records of the Company, payment may be made to a
person other than the person in whose name the Certificate so surrendered is
registered, if such Certificate shall be properly endorsed or otherwise be in
proper form for transfer and the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a person other than
the registered holder of such Certificate or establish to the satisfaction of
the Surviving Corporation that such tax has been paid or is not applicable.
Until surrendered as contemplated by this Section 3.02, each Certificate shall
be deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the amount of cash, without interest, into which the
Shares theretofore represented by such Certificate shall have been converted
pursuant to Section 3.01. No interest will be paid or will accrue on the cash
payable upon the surrender of any Certificate.
(c) No Further Ownership Rights in Company Common Stock. All cash
paid upon the surrender of Certificates in accordance with the terms of this
Article III shall be deemed to have been paid in full satisfaction of all rights
pertaining to the Shares theretofore represented by such Certificates. At the
Effective Time, the stock transfer books of the Company shall be closed, and
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of the Shares that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation or the Paying Agent for any reason,
except notation thereon that a stockholder has elected to exercise his right to
appraisal pursuant to the DGCL, they shall be canceled and exchanged as provided
in this Article III.
(d) No Liability. Any funds deposited with the Paying Agent that
remain unclaimed by the former
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stockholders of the Company for six months after the Effective Time shall be
paid to the Surviving Corporation upon demand, and any former stockholders of
the Company who have not theretofore complied with the instructions for
exchanging their Certificates provided herein shall thereafter look only to the
Surviving Corporation for payment of their claims for the Merger Consideration
set forth in Section 3.01 hereof for each Share held by such stockholder,
without any interest thereon. None of Parent, Sub, the Company or the Paying
Agent shall be liable to any person in respect of any cash delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any Certificates shall not have been surrendered prior to seven years after
the Effective Time (or immediately prior to such earlier date on which any
payment pursuant to this Article III would otherwise escheat to or become the
property of any Governmental Entity (as defined in Section 4.05)), the cash
payment in respect of such Certificate shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interests of any person previously entitled thereto.
(e) Lost, Stolen or Destroyed Certificates. In the event any
Certificates evidencing Shares shall have been lost, stolen or destroyed, the
Paying Agent shall pay to such holder the Merger Consideration required pursuant
to Section 3.01, in exchange for such lost, stolen or destroyed Certificates,
upon the making of an affidavit of that fact by the holder thereof with such
assurances as the Paying Agent, in its discretion and as a condition precedent
to the payment of the Merger Consideration, may require of the holder of such
lost, stolen or destroyed Certificates.
(f) Withholding Rights. Parent and the Surviving Corporation shall
be entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement such amounts as may be required to be deducted and
withheld with respect to the making of such payment under the Code, or under any
provision of state, local or foreign tax law; provided, however, that Parent and
the Surviving Corporation shall promptly pay any amounts deducted and withheld
hereunder to the applicable governmental authority, shall promptly file all tax
returns and reports required to be filed in respect of such deductions and
withholding, and shall promptly provide to the Company proof of such payment and
a copy of all such tax returns and reports.
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ARTICLE IV
Representations and Warranties of the Company
Except as disclosed in the SEC Documents (as defined in Section
4.06) filed or publicly available prior to the date of this Agreement (the
"Filed SEC Documents") or set forth on the Disclosure Schedule delivered by the
Company to Parent prior to the execution of this Agreement (the "Company
Disclosure Schedule"), it being agreed that any matter disclosed in the Company
Disclosure Schedule with respect to any subsection of this Agreement shall be
deemed to have been disclosed with respect to all subsections of this Agreement,
the Company represents and warrants to Parent and Sub as follows:
SECTION 4.01. Organization. Each of the Company and its subsidiaries
is a corporation, partnership, limited liability company or other company duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated or organized and has all requisite
power and authority to carry on its business as now being conducted. Each of the
Company and its subsidiaries is duly qualified or licensed to do business and in
good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except in such jurisdictions where the
failure to be so duly qualified or licensed and in good standing individually or
in the aggregate would not reasonably be expected to have a material adverse
effect (as defined in Section 10.03) on the Company. The Company has made
available to Parent complete and correct copies of its Certificate of
Incorporation and Bylaws, and the certificate of incorporation and bylaws or
other organizational documents of each of its subsidiaries, in each case as
amended to the date of this Agreement.
SECTION 4.02. Company Subsidiaries; Equity Interests. (a) Exhibit
21.1 to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 lists each subsidiary of the Company. All the outstanding
shares of capital stock of each subsidiary of the Company have been validly
issued and are fully paid and nonassessable and (with the exception, in the case
of certain non-U.S. subsidiaries, of shares held of record by nominees of the
Company) are owned by the Company, by another subsidiary of the Company or by
the Company and another subsidiary of the Company, free and clear of all
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pledges, liens, charges, mortgages, encumbrances and security interests of any
kind or nature whatsoever (collectively, "Liens") and free of any other
restriction (including any restriction on the right to vote, sell or otherwise
dispose of such capital stock or other ownership interests).
(b) Except for its interests in its subsidiaries, the Company does
not own, directly or indirectly, any capital stock, membership interest,
partnership interest, limited liability interest, joint venture interest or
other ownership interest with a fair market value as of the date of this
Agreement in excess of $5,000,000 in any person.
SECTION 4.03. Capitalization. The authorized capital stock of the
Company consists of 130,000,000 shares of Company Common Stock and 10,000,000
shares of preferred stock, par value $1.00 per share ("Company Preferred
Stock"). At the close of business on June 30, 1998, (i) 98,816,286 Shares were
issued and outstanding, (ii) the Company did not hold any Shares in its
treasury, (iii) 2,216,553 Shares were reserved for issuance upon exercise of
outstanding Company Stock Options under the Stock Option Plans (each as defined
in Section 7.05), (iv) 513,574 Shares were reserved for issuance pursuant to the
Company's Employee Stock Purchase Plan and (v) no shares of Company Preferred
Stock were issued and outstanding. Except as set forth above, since June 30,
1998, 7,964 shares of capital stock or other voting securities of the Company
were issued, and no other shares of such stock or securities were reserved for
issuance, issuable or outstanding. All outstanding Shares are, and all Shares
which may be issued will be, when issued in accordance with the terms of the
agreements, plans or other documents governing their issuance, duly authorized,
validly issued, fully paid and nonassessable and not subject to or issued in
violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the DGCL, the Certificate of Incorporation or the Bylaws of the Company or any
contract, agreement, arrangement or understanding to which the Company is a
party or otherwise bound. There are no bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
stockholders of the Company may vote. Except as set forth above, there are not
any securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the
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Company or any of its subsidiaries is a party or by which any of them is bound
obligating the Company or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other voting securities of the Company or any of its subsidiaries, or securities
convertible into or exercisable for or exchangeable into any such shares, or
obligating the Company to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or undertaking.
There are not any outstanding contractual obligations of the Company or any of
its subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its subsidiaries. Neither the Company nor
any of its subsidiaries is a party to any voting agreement with respect to the
voting of any of its securities. The Shares set forth in Exhibit A to the
Stockholder Agreement represent in excess of 80% of the outstanding shares of
Company Common Stock on a fully diluted basis.
SECTION 4.04. Authority. The Company has the requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval and adoption of this Agreement by the holders of a majority of the
Shares if required by law (the "Company Stockholder Approval")). The execution,
delivery and performance of this Agreement and the consummation by the Company
of the Merger and of the other transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated (in
each case, other than, with respect to the Merger, the Company Stockholder
Approval if required by law). This Agreement has been duly executed and
delivered by the Company and, assuming this Agreement constitutes a valid and
binding obligation of Parent and Sub, constitutes a valid and binding obligation
of the Company enforceable against the Company in accordance with its terms.
SECTION 4.05. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act (including the
filing with the SEC of the Schedule 14D-9 and a proxy or information statement
relating to any required approval by or meeting of the Company's stockholders
with respect to
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this Agreement (the "Proxy Statement")), the Merger Control Laws (as defined
below), the DGCL and the laws of other states in which the Company is qualified
to do or is doing business, neither the execution, delivery and performance of
this Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby will (i) conflict with or result in any breach
of any provision of the Certificate of Incorporation or the Bylaws of the
Company, (ii) require any filing with, or permit, authorization, consent or
approval of, any Federal, state or local government or any court, tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency, domestic, foreign or supranational (a "Governmental
Entity"), (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancelation or acceleration) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, lease,
license, contract, agreement or other instrument or obligation to which the
Company or any of its subsidiaries is a party or by which any of them or any of
their properties or assets may be bound or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company or any
of its subsidiaries or any of their properties or assets, except in the case of
clause (ii), (iii) and (iv) for failures, violations, breaches or defaults that
individually or in the aggregate would not reasonably be expected to have a
material adverse effect on the Company. "Merger Control Laws" means (i) the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and (ii) Council Regulation (EEC) No. 4064/89 of 21 December 1989 and
(iii) all amendments of, and all other applicable bills, acts, decrees,
regulations or ordinances relating to, the foregoing legislative acts.
SECTION 4.06. SEC Documents; Financial Statements. The Company has
filed with the SEC all reports, forms, schedules and statements and other
documents required to be filed by it since January 1, 1997 (the "SEC
Documents"). As of their respective filing dates, (i) the SEC Documents complied
in all material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and (ii) none of the SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the
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statements therein, in light of the circumstances under which they were made,
not misleading. Except to the extent that information contained in any SEC
Document has been revised or superseded by a later-filed SEC Document, none of
the SEC Documents contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present,
in all material respects, the consolidated financial position of the Company as
of the dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). Except as set forth or reflected in the most recent
financial statements included in the Filed SEC Documents, or incurred in the
ordinary course of business consistent with past practice since the date of such
statements, neither the Company nor any of its subsidiaries has any liabilities
of any nature (whether accrued, absolute, contingent or otherwise) which
individually or in the aggregate would reasonably be expected to have a material
adverse effect on the Company.
SECTION 4.07. Information Supplied. None of the information supplied
or to be supplied by the Company in writing for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
information to be filed by the Company in connection with the Offer pursuant to
Rule 14f-1 promulgated under the Exchange Act (the "Information Statement") or
(iv) the Proxy Statement will, in the case of the Offer Documents, the Schedule
14D-9 and the Information Statement at the respective times the Offer Documents,
the Schedule 14D-9 and the Information Statement are filed with the SEC or first
published, sent or given to the Company's stockholders, or in the case of the
Proxy Statement, at the time the Proxy Statement is first mailed to the
Company's stockholders or at the time of the Stockholders Meeting (as defined in
Section 7.01), as such Proxy Statement may be amended or supplemented, contain
any untrue statement of a material
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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. The Schedule 14D-9, the Information
Statement and the Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made by the Company
with respect to statements made or incorporated by reference therein based on
written information supplied by Parent or Sub specifically for inclusion or
incorporation by reference therein.
SECTION 4.08. Absence of Certain Changes or Events. Since the date
of the most recent financial statements included in the Filed SEC Documents, the
Company and its subsidiaries have conducted their respective businesses only in
the ordinary course consistent with past practice, and there has not been (i)
any material adverse change (as defined in Section 10.03) in the Company, (ii)
any declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of the Company's
capital stock, (iii) any split, combination or reclassification of any of its
capital stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, (iv) (x) any granting by the Company or any of its subsidiaries
to any director, officer or key employee (as defined below) of any increase in
compensation, except in the ordinary course of business consistent with past
practice or as was required under employment agreements in effect as of the date
of the most recent financial statements included in the Filed SEC Documents, (y)
any granting by the Company or any of its subsidiaries to any director, officer
or key employee of any increase in severance or termination pay, except as was
required under any employment, severance or termination agreements in effect as
of the date of the most recent financial statements included in the Filed SEC
Documents or (z) any entry by the Company or any of its subsidiaries into, or
amendment of, any employment, severance or termination agreement with any
director, officer or key employee, (v) any damage, destruction or loss to
property, whether or not covered by insurance, that individually or in the
aggregate has or would reasonably be expected to have a material adverse effect
on the Company, (vi) any change in accounting methods, principles or practices
by the Company materially affecting its assets, liabilities or business,
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except insofar as may have been required by a change in generally accepted
accounting principles or (vii) any tax election that individually or in the
aggregate would reasonably be expected to have a material adverse effect on the
Company.
SECTION 4.09. Litigation. There is no suit, action or proceeding
pending or, to the knowledge of the Company, threatened against the Company or
any of its subsidiaries that individually or in the aggregate would reasonably
be expected to have a material adverse effect on the Company, nor is there any
judgment, decree, injunction, rule or order of any Governmental Entity or
arbitrator outstanding against the Company having, or which would reasonably be
expected to have, any such effect.
SECTION 4.10. Contracts. (a) There are no contracts or agreements
that are material contracts (as defined in Securities Act Regulation 601(b)(10))
with respect to the Company and its subsidiaries taken as a whole. Neither the
Company nor any of its subsidiaries is in violation of or in default under (nor
does there exist any condition which upon the passage of time or the giving of
notice or both would cause such a violation of or default under) any lease,
permit, concession, franchise, license or any other contract or agreement to
which it is a party or by which it or any of its properties or assets is bound,
except for violations or defaults that individually or in the aggregate would
not reasonably be expected to result in a material adverse effect on the
Company.
(b) Section 4.10(b) of the Company Disclosure Schedule sets forth a
complete list of each contract or agreement to which the Company or any of its
subsidiaries is a party or bound (x) with any affiliate of the Company other
than any direct or indirect wholly-owned subsidiary of the Company or (y) that
includes any non-competition or similar provisions. The Company has made
available to Parent and its representatives true and correct copies of all the
agreements, contracts and arrangements set forth in Section 4.10(b) of the
Company Disclosure Schedule.
SECTION 4.11. Compliance with Laws. Each of the Company and its
subsidiaries is in compliance with all applicable statutes, laws, ordinances,
regulations, rules, judgments, decrees and orders of any Governmental Entity
applicable to its business or operations, except for instances of actual or
possible noncompliance that individually or in the aggregate would not
reasonably be
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expected to have a material adverse effect on the Company. Each of the Company
and its subsidiaries has in effect all Federal, state, local and foreign
governmental approvals, authorizations, certificates, filings, franchises,
licenses, notices, permits and rights, including all authorizations under
Environmental Laws (as defined in Section 4.12(a)) ("Permits"), necessary for it
to own, lease or operate its properties and assets and to carry on its business
as now conducted, except for the failure to have such Permits that individually
or in the aggregate would not reasonably be expected to have a material adverse
effect on the Company. There has occurred no default under any Permit, except
for defaults under Permits that individually or in the aggregate would not
reasonably be expected to have a material adverse effect on the Company. No
investigation or review by any Governmental Entity with respect to the Company
or any of its subsidiaries is pending or, to the best knowledge of the Company,
threatened, nor has any Governmental Entity indicated an intention to conduct
any investigation or review, other than, in each case, those the outcome of
which individually or in the aggregate would not reasonably be expected to have
a material adverse effect on the Company.
SECTION 4.12. Environmental Matters. (a) Each of the Company and its
subsidiaries is, and has been, in compliance with all applicable Environmental
Laws, except for actual or possible noncompliance which individually or in the
aggregate would not reasonably be expected to have a material adverse effect on
the Company. The term "Environmental Laws" means any Federal, state, provincial,
regional, municipal, local or foreign judgment, order, decree, statute, law,
ordinance, rule, regulation, code, permit, consent, approval, license, writ,
decree, directive, injunction or other enforceable requirement, including any
registration requirement, relating to: (A) Releases (as defined below) or
threatened Releases of Hazardous Materials (as defined below) into the
environment; (B) the generation, treatment, storage, disposal, use, handling,
manufacturing, transportation or shipment of Hazardous Materials; or (C)
otherwise relating to pollution or protection of health or safety or the
environment.
(b) There has been no Release or threatened Release of Hazardous
Materials, in, on, under or affecting any property owned, leased or operated by
the Company or any of its subsidiaries or, to the knowledge of the Company, any
adjacent site or any property previously owned, leased or operated by the
Company or any of its subsidiaries, except in each case for those Releases which
individually or in the
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aggregate would not reasonably be expected to have a material adverse effect on
the Company. The term "Release" has the meaning set forth in 42 U.S.C. ss.
9601(22). The term "Hazardous Materials" means any pollutant, contaminant,
hazardous, radioactive or toxic substance, material, constituent or waste, or
any other waste, substance, chemical or material regulated under any
Environmental Law, including (1) petroleum, crude oil and any fractions thereof,
(2) natural gas, synthetic gas and any mixtures thereof, (3) asbestos or
asbestos-containing material, (4) radon and (5) polychlorinated biphenyls
("PCBs"), or materials or fluids containing PCBs.
(c) Neither the Company nor any of its subsidiaries has received any
written or, to the knowledge of the Company, oral notice of a pending or
threatened action, demand, investigation or inquiry by any Governmental Entity
or other person relating to any actual or potential violations of Environmental
Law or any actual or potential obligation to investigate or remediate a Release
or threatened Release of any Hazardous Materials.
(d) Neither the Company nor any of its subsidiaries has assumed,
whether by contract or, to the Company's knowledge based on written notification
or opinion of counsel, operation of law, any liabilities or obligations arising
under Environmental Laws in connection with formerly owned, leased or operated
properties or facilities or in connection with any formerly owned divisions,
subsidiaries, companies or other entities, except in each case for those which
individually or in the aggregate would not reasonably be expected to have a
material adverse effect on the Company.
SECTION 4.13. Absence of Changes in Benefit Plans; Labor Relations.
Since the date of the most recent financial statements included in the Filed SEC
Documents, there has not been any adoption or amendment in any material respect
by the Company or any of its subsidiaries of any employment contract, collective
bargaining agreement or any bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock purchase, stock
option, phantom stock, retirement, vacation, severance, disability, death
benefit, hospitalization, medical or other plan or arrangement providing
benefits to any current or former employee, officer or director of the Company
or any of its subsidiaries. There exist no employment, consulting, severance,
termination or indemnification agreements or arrangements between the
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Company or any of its subsidiaries and any current or former key employee,
officer or director of the Company or any of its subsidiaries. There are no
collective bargaining or other labor union agreements to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound. To the best knowledge of the Company, since January 1,
1997, neither the Company nor any of its subsidiaries has encountered any labor
union organizing activity, or had any actual or threatened employee strikes,
work stoppages, slowdowns or lockouts.
SECTION 4.14. ERISA Compliance. (a) Schedule 4.14(a) to the Company
Disclosure Schedule contains a list of all "employee pension benefit plans" (as
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) (sometimes referred to herein as "Pension Plans"),
severance, termination or change in control plans and all other stock option,
stock purchase, equity based, deferred compensation or incentive plans or
programs (in each case, whether or not subject to ERISA) maintained or
contributed to by the Company, any of its subsidiaries or any other person or
entity that, together with the Company and its subsidiaries, is treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code (the Company
and each such other person or entity, a "Commonly Controlled Entity") for the
benefit of any current or former employees, officers or directors of the Company
or any of its subsidiaries (collectively, "Benefit Plans"). The Company has
delivered or made available to Parent true, complete and correct copies of (i)
each Benefit Plan (or, in the case of any unwritten Benefit Plans, descriptions
thereof), (ii) the most recent annual report on Form 5500 filed with the
Internal Revenue Service with respect to each Benefit Plan (if any such report
was required), (iii) the most recent summary plan description for each Benefit
Plan for which such summary plan description is required, (iv) the most recent
financial or actuarial valuation prepared with respect to any Benefit Plan and
(v) each trust agreement and group annuity contract relating to any Benefit
Plan. Each Benefit Plan has been administered in all material respects in
accordance with its terms. Each of the Company and its subsidiaries and all the
Benefit Plans are all in compliance in all material respects with applicable
provisions of ERISA, the Code and all other applicable laws, rules or
regulations.
(b) All Pension Plans intended to qualify under Section 401(a) of
the Code have been the subject of determination letters from the Internal
Revenue Service to
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the effect that such Pension Plans are qualified and exempt from Federal income
taxes under Section 401(a) and 501(a), respectively, of the Code, and no such
determination letter has been revoked nor has any such Pension Plan been amended
since the date of its most recent determination letter or application therefor
in any respect that would adversely affect its qualification or materially
increase its costs. All amendments to Pension Plans required under ERISA and the
Code to be adopted by the Company by the date of this Agreement have been
adopted.
(c) Neither the Company nor its subsidiaries has within the
five-year period immediately preceding the date of this Agreement maintained,
contributed to or been obligated to contribute to any Benefit Plan that is
subject to Title IV of ERISA. Neither the Company nor its subsidiaries is
required to contribute to any "multiemployer plan" (as defined in Section
4001(a)(3) of ERISA) or has withdrawn from any multiemployer plan where such
withdrawal has resulted or would result in any "withdrawal liability" (within
the meaning of Section 4201 of ERISA) that has not been fully paid. There is no
material unsatisfied liability with respect to any Benefit Plan. No event has
occurred with respect to any Pension Plan, other than a Benefit Plan, maintained
or contributed to by any Commonly Controlled Entity which has resulted or will
likely result in the Company or any of its subsidiaries becoming subject to
liability under Title IV of ERISA or the minimum funding requirements of Section
412 of the Code or Part 3 of Title I of ERISA, including withdrawal liability
with respect to any multiemployer plan.
(d) With respect to any plan that is an employee welfare benefit
plan of the Company or its subsidiaries, (i) no such plan provides
post-retirement benefits to former employees and (ii) there are no
understandings, agreements or undertakings, written or oral, that would prevent
any such plan (including any such plan covering retirees or other former
employees) from being amended or terminated without material liability to the
Company on or at any time after the Effective Time.
(e) Schedule 4.14(e) to the Company Disclosure Schedule lists all
outstanding Stock Options as of June 30, 1998, showing for each such Option: (i)
the number of Shares issuable, (ii) the number of vested Shares, (iii) the date
of grant and (iv) the exercise price.
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(f) No employee of the Company or any of its subsidiaries will be
entitled to any additional compensation or benefits or any acceleration of the
time of payment or vesting of any compensation or benefits under any Benefit
Plan as a result of the transactions contemplated by this Agreement. Any
equity-related, bonus or incentive compensation program maintained by the
Company or its subsidiaries to provide payments or benefits to any current or
former employee or director of the Company or any of its subsidiaries satisfies
the requirements of Section 162(m) of the Code. Actions taken by Parent or the
Company after the Effective Time shall not be taken into account for purposes of
the preceding sentence.
(g) There are no pending or, to the knowledge of the Company,
threatened claims, suits, investigations or audits involving the Benefit Plans
(other than claims for benefits in the ordinary course).
(h) As a result of the transactions contemplated by this Agreement,
no current or former employee or director of the Company or any of its
subsidiaries shall be eligible for compensation or benefits duplicative of those
provided or made available as a result of the acquisition of the shares of
Corange Limited by an indirect wholly-owned subsidiary of Roche Holding Ltd in
March, 1998.
SECTION 4.15. Taxes. (a) Each of the Company and its subsidiaries
has filed all tax returns and reports required to be filed by it, which tax
returns and reports are true, complete and accurate in all material respects,
and has paid all material taxes due and required to be paid by it, and the most
recent financial statements contained in the Filed SEC Documents reflect an
adequate reserve for all taxes payable by the Company and its subsidiaries for
all taxable periods and portions thereof through the date of such financial
statements. No deficiencies for any taxes which remain outstanding have been
proposed, asserted or assessed against the Company or any of its subsidiaries,
and no requests for waivers of the time to assess any such taxes are pending.
Neither the Company nor any of its subsidiaries has or will have any material
liability with respect to taxes of any person (other than the Company or any of
its subsidiaries) which, immediately prior to the consummation of the Offer, is
an affiliate of the Company or of any of its subsidiaries.
(b) The Federal consolidated income tax returns of the Company and
each of its affiliates that have joined
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in the filing of such returns have been examined by and settled with the United
States Internal Revenue Service for all years through the year ended December
31, 1992. The statute of limitations on assessment or collection of any Federal
income taxes due from the Company or any other members of the affiliated group
with which the Company files Federal consolidated income tax returns has expired
for all taxable years of the Company and such group through the year ended
December 31, 1992.
(c) Section 4.15 of the Company Disclosure Schedule sets forth a
complete list of each tax sharing agreement, tax indemnity obligation or similar
agreement or arrangement with respect to taxes pursuant to which the Company or
any of its subsidiaries would have any material obligation after the date of
this Agreement.
(d) As used in this Agreement, "taxes" shall mean all Federal,
state, local and foreign income, franchise, property, sales, excise, employment,
payroll, social security, value-added, ad valorem, transfer, withholding and
other taxes, tariffs, levies, impositions, assessments or other governmental
charges in the nature of a tax as well as any interest, penalties and additions
to tax.
SECTION 4.16. No Excess Parachute Payments. No amount that would be
received, or benefit provided, in connection with any of the transactions
contemplated by this Agreement by any employee, officer or director of the
Company or any of its subsidiaries who is a "disqualified individual" (as such
term is defined in proposed Treasury Regulation Section 1.280G-1) under any
employment, severance or termination agreement, other compensation arrangement
or Benefit Plan currently in effect would be an "excess parachute payment" (as
such term is defined in Section 280G(b)(1) of the Code). To the best knowledge
of the Company, no disqualified individual is entitled to receive any additional
payment from the Company or any of its subsidiaries, the Surviving Corporation,
or any other person referred to in Q&A 10 under proposed Treasury Regulation
Section 1.280G-1 (a "Parachute Gross-Up Payment") in the event that the excise
tax of Section 4999(a) of the Code is imposed on such person. The Board of
Directors of the Company has not during the six months prior to the date of this
Agreement granted to any officer, director or employee of the Company any right
to receive any Parachute Gross-Up Payment.
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SECTION 4.17. Title to Properties. (a) Each of the Company and its
subsidiaries has good and marketable title to, or valid leasehold interests in
or valid rights to, all its material properties and assets except for such as
are no longer used or useful in the conduct of its businesses or as have been
disposed of in the ordinary course of business and except for defects in title,
easements, restrictive covenants and similar encumbrances that individually or
in the aggregate do not materially interfere with its ability to conduct its
business as currently conducted. All such material assets and properties, other
than assets and properties in which the Company or any of its subsidiaries has a
leasehold interest, are free and clear of all Liens except for Liens that
individually or in the aggregate do not materially interfere with the ability of
the Company and its subsidiaries to conduct their respective businesses as
currently conducted.
(b) Each of the Company and its subsidiaries has complied in all
material respects with the terms of all material leases to which it is a party
and under which it is in occupancy, and all such leases are in full force and
effect. Each of the Company and its subsidiaries enjoys peaceful and undisturbed
possession under all such material leases, except for failures to do so that
individually or in the aggregate would not reasonably be expected to have a
material adverse effect on the Company.
SECTION 4.18. Intellectual Property. Each of the Company and its
subsidiaries owns, or is validly licensed or otherwise has the right to use,
without any obligation to make any fixed or contingent payments, including any
royalty payments, all patents, patent rights, trademarks, trademark rights,
trade names, trade name rights, service marks, service xxxx rights, copyrights
and other proprietary intellectual property rights and computer programs
(certain of which computer programs may require royalty payments) that are
material to the conduct of its business as now operated (collectively,
"Intellectual Property Rights"). Schedule 4.18 to the Company Disclosure
Schedule sets forth a description of all patents, trademarks and copyrights and
applications therefor owned by or licensed to the Company or any of its
subsidiaries that are material to the conduct of the business of the Company or
any of its subsidiaries as now operated. No claims are pending or, to the
knowledge of the Company, threatened that the Company or any of its subsidiaries
is infringing or otherwise adversely affecting the rights of any person with
regard to any Intellectual Property Right. To the knowledge of the Company, no
person
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is infringing the rights of the Company or any of its subsidiaries with respect
to any Intellectual Property Right. Neither the Company nor any of its
subsidiaries has licensed, or otherwise granted, to any third party, any rights
in or to any Intellectual Property Rights.
SECTION 4.19. Agreements for Distribution Outside the United States.
Schedule 4.19 to the Company Disclosure Schedule is a complete list of all
material contracts or agreements to which the Company or any of its subsidiaries
is a party, other than contracts between the Company and its wholly-owned
subsidiaries or between wholly-owned subsidiaries of the Company, relating to
the distribution, sale or marketing outside of the United States by third
parties of the products of, or products licensed by, the Company or any of its
subsidiaries. The Company has made available to Parent and its representatives
true and correct copies of all contracts and agreements to which the Company or
any of its subsidiaries is a party relating to the distribution, sale or
marketing outside of the United States by third parties of the products of, or
products licensed by, the Company or any of its subsidiaries.
SECTION 4.20. Voting Requirements. The affirmative vote of the
holders of a majority of the outstanding Shares is the only vote of the holders
of any class or series of the Company's capital stock necessary to approve this
Agreement and the transactions contemplated by this Agreement.
SECTION 4.21. State Takeover Statutes. The Board of Directors of the
Company has approved the Merger, this Agreement and the Stockholder Agreement,
and such approval is sufficient to render inapplicable to the Merger, this
Agreement, the Stockholder Agreement, and the transactions contemplated by this
Agreement and the Stockholder Agreement, the provisions of Section 203 of the
DGCL.
SECTION 4.22. Brokers; Schedule of Fees and Expenses. No broker,
investment banker, financial advisor or other person, other than Bear, Xxxxxxx,
the fees and expenses of which will be paid by the Company, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. Such fees and expenses
incurred and to be incurred in connection with this Agreement and the
transactions contemplated by this Agreement (other than printing and mailing
costs and
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expenses), including the fees and expenses of Bear, Xxxxxxx, shall be as set
forth on Schedule 4.22 to the Company Disclosure Schedule.
SECTION 4.23. Opinion of Financial Advisor. The Board of Directors
of the Company has received the opinion of Bear, Xxxxxxx that, as of such date
and based upon and subject to the matters set forth therein, the cash
consideration to be received by holders of Shares pursuant to the Offer and the
Merger was fair from a financial point of view to such holders, a signed copy of
which opinion has been delivered to Parent.
ARTICLE V
Representations and Warranties
of Parent and Sub
Parent and Sub represent and warrant to the Company as follows:
SECTION 5.01. Organization. Each of Parent and Sub 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 carry on its business as now being conducted. Each of Parent and
Sub is duly qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualifications or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed individually
or in the aggregate would not reasonably be expected to prevent or materially
delay the consummation of the Offer or the Merger. Parent has made available to
the Company complete and correct copies of its certificate of incorporation and
bylaws and the certificate of incorporation and bylaws of Sub, in each case as
amended to the date of this Agreement.
SECTION 5.02. Authority. Parent and Sub have the requisite corporate
power and authority to execute and deliver this Agreement and the Stockholder
Agreement, and to consummate the transactions contemplated by this Agreement and
the Stockholder Agreement. The execution, delivery and performance of this
Agreement and the Stockholder Agreement, and the consummation of the
transactions contemplated by this Agreement and the Stockholder Agreement, have
been duly authorized by all necessary corporate action on the part of
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Parent and Sub and no other corporate proceedings on the part of Parent and Sub
are necessary to authorize this Agreement or the Stockholder Agreement or to
consummate the transactions contemplated hereby or thereby. No vote of Parent
stockholders is required to approve this Agreement or the Stockholder Agreement
or the transactions contemplated hereby or thereby. Each of this Agreement and
the Stockholder Agreement has been duly executed and delivered by Parent and
Sub, and, assuming each such agreement constitutes a valid and binding
obligation of the other parties thereto, constitutes a valid and binding
obligation of Parent and Sub enforceable against Parent and Sub in accordance
with its terms.
SECTION 5.03. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act (including the
filing with the SEC of the Offer Documents), the Merger Control Laws, the DGCL
and the laws of other states in which Parent is qualified to do or is doing
business, neither the execution, delivery and performance of this Agreement and
the Stockholder Agreement by Parent and Sub, nor the consummation by Parent and
Sub of the transactions contemplated hereby and thereby will (i) conflict with
or result in any breach of any provision of the respective certificate of
incorporation or bylaws of Parent and Sub, (ii) require any filing with, or
permit, authorization, consent or approval of, any Governmental Entity, (iii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
amendment, cancelation or acceleration) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which Parent or any of its
subsidiaries is a party or by which any of them or any of their properties or
assets may be bound or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Parent or any of its subsidiaries or
any of their properties or assets, except in the case of clauses (ii), (iii) and
(iv) for violations, breaches or defaults that individually or in the aggregate
would not reasonably be expected to prevent or materially delay the consummation
of the Offer or the Merger.
SECTION 5.04. Information Supplied. None of the information supplied
or to be supplied by Parent or Sub in writing for inclusion or incorporation by
reference in
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(i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the Information
Statement or (iv) the Proxy Statement will, in the case of the Offer Documents,
the Schedule 14D-9 and the Information Statement, at the respective times the
Offer Documents, the Schedule 14D-9 and the Information Statement are filed with
the SEC or first published, sent or given to the Company's stockholders, or, in
the case of the Proxy Statement, at the time the Proxy Statement is first mailed
to the Company's stockholders or at the time of the Stockholders Meeting, as
such Proxy Statement may be amended or supplemented, 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. The Offer Documents
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by Parent or Sub with respect to statements
made or incorporated by reference therein based on written information supplied
by the Company specifically for inclusion or incorporation by reference therein.
SECTION 5.05. Interim Operations of Sub. Sub (and any other
wholly-owned subsidiary of Parent which may be used to effect the Offer and the
Merger pursuant to Section 2.01) was formed solely for the purpose of engaging
in the transactions contemplated hereby, has engaged in no other business
activities and has conducted its operations only as contemplated hereby.
SECTION 5.06. Brokers. No broker, investment banker, financial
advisor or other person, other than Credit Suisse First Boston Corporation, the
fees and expenses of which will be paid by Parent, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Parent or Sub.
SECTION 5.07. Financing. At the expiration of the Offer and at the
Effective Time, Parent and Sub will have available all the funds necessary to
purchase all the Shares pursuant to the Offer and the Merger and to pay all fees
and expenses payable by Parent or Sub related to the transactions contemplated
by this Agreement.
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ARTICLE VI
Covenants
SECTION 6.01. Conduct of Business. During the period from the date
of this Agreement to the Effective Time or termination of this Agreement
pursuant to Section 9.01 hereof, except as otherwise contemplated hereby or to
the extent that Parent shall otherwise consent in writing, the Company shall,
and shall cause each of its subsidiaries to, carry on its business in the
ordinary course consistent with past practice and, to the extent consistent
therewith, use reasonable efforts to preserve intact its current business
organization, keep available the services of its current officers and employees
and preserve its relationships with customers, suppliers, licensors, licensees,
distributors and others having significant business dealings with it. Without
limiting the generality of the foregoing, during the period from the date of
this Agreement to the Effective Time, the Company shall not, and shall not
permit any of its subsidiaries to (except as expressly permitted by this
Agreement or as set forth in Schedule 6.01 to the Company Disclosure Schedule or
to the extent that Parent shall otherwise consent in writing):
(i) other than dividends and distributions by a direct or indirect
wholly-owned subsidiary of the Company to its parent, (x) declare, set
aside or pay any dividends on, or make any other distributions in respect
of, any of its capital stock, (y) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities
in respect of, in lieu of or in substitution for shares of its capital
stock, or (z) purchase, redeem or otherwise acquire any shares of its
capital stock or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any shares
of its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities (other than the
issuance of shares of Company Common Stock upon the exercise of Company
Stock Options outstanding on the date of this Agreement in accordance with
their present terms);
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(iii) amend its Certificate of Incorporation or Bylaws or other
comparable charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or consolidating
with, or by purchasing a substantial portion of the assets or any stock
of, or by any other manner, any business or any corporation, partnership,
joint venture, association or other business organization or division
thereof or (B) except as set forth on Schedule 6.01(iv) to the Company
Disclosure Schedule, any assets that are material, individually or in the
aggregate, to the Company, except purchases of inventory in the ordinary
course of business consistent with past practice;
(v) sell, lease, license, mortgage or otherwise encumber or subject
to any Lien or otherwise dispose of any of its properties or assets,
except sales of inventory or sales or licenses of immaterial assets, in
each case in the ordinary course of business consistent with past
practice;
(vi) (y) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or
any of its subsidiaries, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having
the economic effect of any of the foregoing, except for short-term
borrowings incurred in the ordinary course of business consistent with
past practice, or (z) make any loans, advances (other than to employees of
the Company in the ordinary course of business) or capital contributions
to, or investments in, any other person;
(vii) except as set forth on Schedule 6.01(vii) to the Company
Disclosure Schedule, make or agree to make any capital expenditure or
expenditures with respect to property, plant or equipment which exceeds in
the aggregate (a) with respect to the year ended December 31, 1998, 110%
of the amount set forth in the Company's capital budget for such year, (b)
with respect to any quarterly period thereafter, 25% of the amount in (a)
above, and (c) $10 million for a new computer system in the United
Kingdom;
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(viii) make any material tax election or settle or compromise any
material income tax liability or, except as required by generally accepted
accounting principles, make any change in accounting methods, principles
or practices;
(ix) pay, discharge, settle or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or
satisfaction, in the ordinary course of business consistent with past
practice or in accordance with their terms, of liabilities reflected or
reserved against in, or contemplated by, the most recent consolidated
financial statements (or the notes thereto) of the Company included in the
Filed SEC Documents or incurred thereafter in the ordinary course of
business consistent with past practice, or waive any material benefits of,
or agree to modify in any material respect, any confidentiality,
standstill or similar agreements to which the Company or any of its
subsidiaries is a party;
(x) except in the ordinary course of business, modify, amend or
terminate any material contract or agreement to which the Company or any
of its subsidiaries is a party, or waive, release or assign any material
rights or claims;
(xi) enter into any material contracts or agreements relating to the
distribution, sale or marketing by third parties of the products of, or
products licensed by, the Company or any of its subsidiaries;
(xii) except as required to comply with applicable law or
agreements, plans or arrangements existing on the date hereof or as set
forth in Schedule 6.01(xii) of the Company Disclosure Schedule, (A) adopt,
enter into, terminate or amend any employment agreement or Benefit Plan or
other arrangement for the benefit or welfare of any director, officer or
current or former employee, (B) increase in any manner the compensation or
fringe benefits of, or pay any bonus to, any director, officer or key
employee (except for normal increases of cash compensation or cash bonuses
to individuals (and not across the board actions), in the ordinary course
of business consistent with past practice), (C) pay any benefit not
provided for under
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any Benefit Plan, (D) except as permitted in clause (B), grant any awards
under any bonus, incentive, performance or other compensation plan or
arrangement or Benefit Plan (including the grant of stock options, stock
appreciation rights, stock based or stock related awards, performance
units or restricted stock, or the removal of existing restrictions in any
Benefit Plans or agreement or awards made thereunder) or (E) take any
action other than in the ordinary course of business to fund or in any
other way secure the payment of compensation or benefits under any
employee plan, agreement, contract or arrangement or Benefit Plan; or
(xiii) authorize any of, or commit or agree to take any of, the
foregoing actions.
SECTION 6.02. No Solicitation. (a) The Company shall not, and shall
not authorize or permit any of its subsidiaries or any of its or their officers,
directors or employees to, and shall use its reasonable efforts to cause any
investment banker, financial advisor, attorney, accountant or other
representative of the Company or of any of its subsidiaries not to, directly or
indirectly, (i) solicit, initiate or encourage (including by way of furnishing
information), or take any other action to facilitate, any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Takeover Proposal (as defined below) or (ii) participate in any
discussions or negotiations regarding any Takeover Proposal. For purposes of
this Agreement, "Takeover Proposal" means any proposal or offer from any person
relating to any direct or indirect acquisition or purchase of 20% or more of the
assets of the Company and its subsidiaries, taken as a whole, or 20% or more of
any class of outstanding equity securities of the Company or any of its
subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning 20% or more of any class of equity
securities of the Company or any of its subsidiaries or any merger,
consolidation, business combination, sale of substantially all the assets,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its subsidiaries, other than the transactions contemplated by
this Agreement.
(b) Neither the Board of Directors of the Company nor any committee
thereof shall (i) withdraw or modify, or propose to withdraw or modify, in a
manner adverse to Parent, the approval or recommendation by such Board of
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Directors or such committee of the Offer, this Agreement or the Merger, (ii)
approve or recommend, or propose to approve or recommend, any Takeover Proposal
or (iii) cause the Company to enter into any letter of intent, agreement in
principle, acquisition agreement or other agreement (an "Acquisition Agreement")
with respect to any Takeover Proposal.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 6.02, the Company shall immediately
advise Parent orally and in writing of any Takeover Proposal, any request for
information concerning the Company or its subsidiaries in relation to or any
inquiry regarding the making of a Takeover Proposal, the material terms and
conditions of such Takeover Proposal, request for information or inquiry and the
identity of the person making such Takeover Proposal, request for information or
inquiry. The Company will keep Parent fully informed of the status and details
(including amendments or proposed amendments) of any such Takeover Proposal,
request for information or inquiry.
(d) Nothing contained in this Section 6.02 shall prohibit the
Company from at any time taking and disclosing to its stockholders a position
contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act;
provided, however, neither the Company nor its Board of Directors nor any
committee thereof shall withdraw or modify, or propose to withdraw or modify,
its position with respect to the Offer, the Merger or this Agreement or approve
or recommend, or propose to approve or recommend, a Takeover Proposal.
SECTION 6.03. Certain Tax Matters. From the date hereof until the
Effective Time, (i) the Company and each of its subsidiaries will timely file
all tax returns and reports ("Post-Signing Returns") required to be filed (in
each case, at the Company's own cost and expense and in a manner that is
consistent with past practice and that is not likely to materially defer income
to a tax period that ends after the Closing Date or to materially accelerate
deductions to a tax period that ends on or before the Closing Date, except to
the extent that any such deferral of income or acceleration of deductions is
required by applicable law); (ii) the Company and each of its subsidiaries will
timely pay all taxes shown as due and payable on their Post-Signing Returns that
are so filed; (iii) the Company and each of its subsidiaries will make provision
for all taxes payable by the Company and each of its subsidiaries for which no
Post-Signing Return is due
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prior to the Effective Time; and (iv) the Company will promptly notify Parent of
any action, suit, proceeding, claim or audit pending against or with respect to
the Company or any of its subsidiaries in respect of any tax where there is a
possibility of a determination or decision which would reasonably be expected to
have a significant adverse effect on the tax liabilities or tax attributes of
the Company or any of its subsidiaries.
SECTION 6.04. Other Actions. Neither the Company nor any of its
subsidiaries, on the one hand, nor the Parent nor Sub or any of their respective
subsidiaries on the other hand, shall take any action that would reasonably be
expected to result in (i) any of the representations and warranties of the
Company on the one hand, or of Parent or Sub on the other hand, set forth in
this Agreement that are qualified as to materiality becoming untrue, (ii) any of
such representations and warranties that are not so qualified becoming untrue in
any material respect or (iii) any of the Offer Conditions not being satisfied.
SECTION 6.05. Advice of Changes; Filings. The Company shall confer
with Parent on a regular and frequent basis as reasonably requested by Parent
concerning operational matters and promptly advise Parent orally and, if
requested by Parent, in writing of any material adverse change with respect to
the Company. The Company shall promptly provide to Parent (or its counsel)
copies of all filings made by the Company with any Governmental Entity in
connection with this Agreement and the transactions contemplated hereby.
ARTICLE VII
Additional Agreements
SECTION 7.01. Company Stockholder Approval; Preparation of Proxy
Statement. (a) If the Company Stockholder Approval is required by law, the
Company will, as soon as practicable following the acceptance for payment of,
and payment for, Shares by Sub pursuant to and subject to the conditions of the
Offer (including the Stockholder Agreement Condition), duly call, give notice
of, convene and hold a meeting of its stockholders (the "Stockholders Meeting")
for the purpose of obtaining the Company Stockholder Approval. The Company will,
through its Board of Directors, recommend to its stockholders that the Company
Stockholder Approval be given. Notwithstanding the
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foregoing, if Sub or any other subsidiary of Parent shall acquire at least 90%
of the outstanding Shares, the parties shall, at the request of Parent, take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the expiration of the Offer without a stockholders meeting
in accordance with Section 253 of the DGCL.
(b) If the Company Stockholder Approval is required by law, the
Company will, at Parent's request, as soon as practicable following the
expiration of the Offer, prepare and file a preliminary Proxy Statement with the
SEC and will use its best efforts to respond to any comments of the SEC or its
staff and to cause the Proxy Statement to be mailed to the Company's
stockholders as promptly as practicable after responding to all such comments to
the satisfaction of the staff. The Company will notify Parent promptly of the
receipt of any comments from the SEC or its staff and of any request by the SEC
or its staff for amendments or supplements to the Proxy Statement or for
additional information and will supply Parent with copies of all correspondence
between the Company or any of its representatives, on the one hand, and the SEC
or its staff, on the other hand, with respect to the Proxy Statement or the
Merger. If at any time prior to the Stockholders Meeting there shall occur any
event that should be set forth in an amendment or supplement to the Proxy
Statement, the Company will promptly prepare and mail to its stockholders and
file with the SEC such an amendment or supplement. The Company will not mail any
Proxy Statement, or any amendment or supplement thereto, to which Parent
reasonably objects; provided, that Parent shall identify its objections and
fully cooperate with the Company to create a mutually satisfactory Proxy
Statement.
(c) Parent agrees to cause all Shares purchased pursuant to the
Offer and all other Shares owned by Parent or any subsidiary of Parent to be
voted in favor of the Company Stockholder Approval.
SECTION 7.02. Access to Information; Confidentiality. The Company
shall, and shall cause each of its subsidiaries to, afford to Parent, and to
Parent's officers, employees, accountants, counsel, financial advisers and other
representatives, reasonable access during normal business hours during the
period prior to the Effective Time to all their respective properties, books,
contracts, commitments, personnel and records and, during such period, the
Company shall furnish promptly to Parent
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(a) a copy of each report, schedule, registration statement and other document
filed by it during such period pursuant to the requirements of Federal or state
securities laws and (b) all other information concerning its business,
properties and personnel as Parent may reasonably request. Except as required by
law, Parent will hold, and will cause its officers, employees, accountants,
counsel, financial advisers and other representatives and affiliates to hold,
any and all information received from the Company or any of its subsidiaries,
directly or indirectly, in confidence, according to the terms of the
confidentiality agreement dated July 11, 1998, as amended, between the Company
and Parent (the "Confidentiality Agreement").
SECTION 7.03. Reasonable Efforts; Notification. (a) Upon the terms
and subject to the conditions set forth in this Agreement, each of the parties
agrees to use all reasonable efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to consummate and
make effective, in the most expeditious manner practicable, the Offer and the
Merger, and the other transactions contemplated by this Agreement and the
Stockholder Agreement, including (i) the obtaining of all necessary actions or
nonactions, waivers, consents and approvals from Governmental Entities and the
making of all necessary registrations and filings (including filings with
Governmental Entities, if any) and the taking of all reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties, (iii) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the Stockholder Agreement or the consummation of
any of the transactions contemplated hereby or thereby, including seeking to
have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed, and (iv) the execution and delivery of
any additional instruments necessary to consummate the transactions contemplated
by, and to fully carry out the purposes of, this Agreement. In connection with
and without limiting the foregoing, the Company and its Board of Directors shall
(i) take all reasonable actions available to them to ensure that no state
takeover statute or similar statute or regulation is or becomes applicable to
the Offer, the Merger, this Agreement, the Stockholder Agreement or any of the
other transactions contemplated by this Agreement or
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the Stockholder Agreement and (ii) if any state takeover statute or similar
statute or regulation becomes applicable to the Offer, the Merger, this
Agreement, the Stockholder Agreement or any other transaction contemplated by
this Agreement or the Stockholder Agreement, take all reasonable actions
available to them to ensure that the Offer, the Merger and the other
transactions contemplated by this Agreement and the Stockholder Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and the Stockholder Agreement and otherwise to minimize the effect of
such statute or regulation on the Offer, the Merger, this Agreement, the
Stockholder Agreement and the other transactions contemplated by this Agreement
or the Stockholder Agreement. Nothing in this Agreement shall be deemed to
require Parent to agree to dispose of any significant assets or businesses of
the Company, Parent or any of their respective subsidiaries.
(b) The Company shall give prompt notice to Parent of (i) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
SECTION 7.04. Cooperation. Without limiting the generality of
Section 7.03, Parent, Sub and Company shall together, or pursuant to an
allocation of responsibility to be agreed between them, coordinate and cooperate
(i) in determining whether any action by or in respect of, or filing with, any
governmental body, agency or official, or authority is required and (ii) in
promptly seeking any such action or making any such filing, furnishing
information required in connection therewith and seeking timely to obtain any
such actions.
SECTION 7.05. Stock Option Plans. (a) As soon as practicable
following the date of this Agreement but in no event later than the consummation
of the Offer, the Company (or, if appropriate, the Board of Directors of the
Company or any committee administering the Stock Option Plans (as defined
below)) shall take actions such that
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(including by adopting resolutions or taking any other actions) each outstanding
option to purchase Shares (a "Company Stock Option") heretofore granted under
any stock option, stock appreciation rights or stock purchase plan, program or
arrangement of the Company (collectively, the "Stock Option Plans") that is
outstanding immediately prior to the consummation of the Offer, whether or not
then exercisable, shall be canceled immediately prior to the Effective Time in
exchange for an amount in cash, payable at the time of such cancelation, equal
to the product of (y) the number of Shares subject to such Company Stock Option
immediately prior to the Effective Time and (z) the excess of the price per
Share to be paid in the Offer over the per Share exercise price of such Company
Stock Option. The Company (or, if appropriate, the Board of Directors of the
Company or any committee administering the Stock Option Plans) shall take
actions such that immediately prior to the Effective Time the Company Stock
Options set forth on Schedule 7.05(a) to the Company Disclosure Schedule are
canceled as set forth above. The Company shall not make, or agree to make, any
payment of any kind to any holder of a Company Stock Option (except for the
payment described above) without the consent of Parent.
(b) Notwithstanding Section 7.05(a), in the case of the Company's
Savings-Related Share Option Scheme (the "Scheme") under the Company's Employee
Stock Option/Purchase Plan, the provisions of Section 7.05(a) shall not apply
and, in lieu thereof, (i) the Board of Directors of the Company shall take
action under Section 12.3(b) of the Company's Employee Stock Option/Purchase
Plan to provide that, in the case of outstanding options under the Scheme,
participants shall, upon any exercise of an option in accordance with the Scheme
(or at any earlier time as may be permitted) and the payment of the applicable
exercise price, be entitled to receive only a cash payment for each share of
Company Common Stock reserved for purposes of the Scheme to which such
participant would otherwise be entitled upon such exercise equal to the price
per Share to be paid in the Offer and (ii) as soon as practicable following the
date of this Agreement but in no event later than the consummation of the Offer,
the Company shall use its best efforts to obtain the approval of each
participant holding an option under the Scheme to the surrender and cancellation
thereof in consideration of a cash payment to be made by the Company in such
amount or in accordance with such formula as shall have been reviewed and
consented to by Parent prior to the seeking of any such approval by the Company.
In addition, and only to the extent permitted by applicable law, the
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Company shall take action to cease employee contributions to the Scheme no later
than the consummation of the Offer. The Company and the Parent agree to take
such other actions as shall reasonably be required to accomplish the surrender
and cancellation of the options under the Scheme as contemplated by the
foregoing.
(c) Subject to Section 7.05(a) and Section 7.05(b), all Stock Option
Plans shall terminate as of the Effective Time and the provisions in any other
Benefit Plan providing for the issuance, transfer or grant of any capital stock
of the Company or any interest in respect of any capital stock of the Company
shall be deleted as of the Effective Time. The Company shall ensure that
following the consummation of the Offer no holder of a Company Stock Option or
any participant in any Stock Option Plan shall have any right thereunder to
acquire any capital stock of the Company, Parent or the Surviving Corporation,
and the Company shall use its reasonable best efforts to ensure that following
the Effective Time, no holder of a Company Stock Option set forth on Schedule
7.05(a) to the Company Disclosure Schedule or any participant in any Stock
Option Plan shall have any right thereunder to acquire any capital stock of the
Company, Parent or the Surviving Corporation.
SECTION 7.06. Indemnification, Exculpation and Insurance. (a) Parent
agrees that all rights to indemnification and exculpation (including the
advancement of expenses) from liabilities for acts or omissions occurring at or
prior to the Effective Time (including with respect to the transactions
contemplated by this Agreement) existing now or at the Effective Time in favor
of the current or former directors or officers of the Company as provided in its
Certificate of Incorporation, its Bylaws (each as in effect on the date hereof)
and indemnification agreements shall be assumed by the Surviving Corporation in
the Merger, without further action, as of the Effective Time and shall survive
the Merger and shall continue in full force and effect without amendment,
modification or repeal in accordance with their terms for a period of not less
than six years after the Effective Time; provided, however, that if any claims
are asserted or made within such six year period, all rights to indemnification
(and to advancement of expenses) hereunder in respect of any such claims shall
continue, without diminution, until disposition of any and all such claims.
(b) In the event that Parent, the Surviving Corporation or any of
their successors or assigns
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(i) consolidates with or merges into any other person and is not the continuing
or surviving corporation or entity of such consolidation or merger or (ii)
transfers or conveys all or substantially all of its properties and assets to
any person, then, and in each such case, proper provision will be made so that
the successors and assigns of Parent or the Surviving Corporation, as the case
may be, shall expressly assume the obligations set forth in this Section 7.06.
In the event the Surviving Corporation transfers any material portion of its
assets, in a single transaction or in a series of transactions, Parent will
either guarantee the indemnification obligations referred to in Section 7.06(a)
or take such other action to insure that the ability of the Surviving
Corporation, legal and financial, to satisfy such indemnification obligations
will not be diminished in any material respect.
(c) For six years after the Effective Time, Parent shall, unless
Parent agrees in writing to guarantee the indemnification obligations set forth
in Section 7.06(a), provide officers' and directors' liability insurance in
respect of acts or omissions occurring at or prior to the Effective Time,
covering each person currently covered by the Company's officers' and directors'
liability insurance policy, or who becomes covered by such policy prior to the
Effective Time, on terms with respect to coverage and amount no less favorable
than those of such policy in effect on the date hereof; provided that in
satisfying its obligation under this Section 7.06(c) Parent shall not be
obligated to pay premiums in excess of 200% of the amount per annum paid by the
Company in its last full fiscal year; and provided further that Parent shall
nevertheless be obligated to provide such coverage as may be obtained for such
200% amount. The Company represents that it paid officers' and directors'
liability insurance premiums as set forth in Schedule 7.06(c).
(d) The provisions of this Section 7.06 (i) are intended to be for
the benefit of, and will be enforceable by, each indemnified party, his or her
heirs and his or her representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
SECTION 7.07. Directors. Promptly upon the acceptance for payment
of, and payment for, any Shares by Sub pursuant to and subject to the conditions
(including the Stockholder Agreement Condition) of the Offer, Sub shall be
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entitled to designate such number of directors on the Board of Directors of the
Company as will give Sub, subject to compliance with Section 14(f) of the
Exchange Act, a majority of such directors, and the Company shall, at such time,
cause Sub's designees to be so elected by its existing Board of Directors;
provided, however, that in the event that Sub's designees are elected to the
Board of Directors of the Company, until the Effective Time such Board of
Directors shall have at least two directors who are directors of the Company on
the date of this Agreement and who are not officers of the Company or any of its
subsidiaries (the "Independent Directors") and; provided further that, in such
event, if the number of Independent Directors shall be reduced below two for any
reason whatsoever, the remaining Independent Director shall designate a person
to fill such vacancy who shall be deemed to be an Independent Director for
purposes of this Agreement or, if no Independent Directors then remain, the
other directors of the Company on the date hereof shall designate two persons to
fill such vacancies who shall not be officers or affiliates of the Company or
any of its subsidiaries, or officers or affiliates of Parent or any of its
subsidiaries, and such persons shall be deemed to be Independent Directors for
purposes of this Agreement. Subject to applicable law, the Company shall take
all action requested by Parent necessary to effect any such election, including
mailing to its stockholders the Information Statement containing the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, and the Company agrees to make such mailing with the mailing of the
Schedule 14D-9 (provided that Sub shall have provided to the Company on a timely
basis in writing all information required to be included in the Information
Statement with respect to Sub's designees). In connection with the foregoing,
the Company will promptly, at the option of Parent, either increase the size of
the Company's Board of Directors or use its best efforts to obtain the
resignation of such number of its current directors as is necessary to enable
Sub's designees to be elected or appointed to, and to constitute a majority of,
the Company's Board of Directors as provided above.
SECTION 7.08. Fees and Expenses. All fees and expenses incurred in
connection with the Offer, the Merger, this Agreement and the Stockholder
Agreement and the transactions contemplated by this Agreement and the
Stockholder Agreement shall be paid by the party incurring such fees or
expenses, whether or not the Offer or the Merger is consummated.
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SECTION 7.09. Transfer Taxes. All state, local or foreign sales,
use, real property transfer, stock transfer or similar taxes (including any
interest or penalties with respect thereto) attributable to the Merger shall be
timely paid by the Company.
SECTION 7.10. Public Announcements. Parent and Sub, on the one hand,
and the Company, on the other hand, will consult with each other before issuing,
and provide each other with a reasonable opportunity to review and comment upon,
any press release or other public statements with respect to the transactions
contemplated by this Agreement and the Stockholder Agreement, including the
Offer and the Merger, and shall not issue, or permit any of their respective
subsidiaries to issue, any such press release or make any such public statement
prior to such consultation, except as may be required by applicable law, court
process or by obligations pursuant to any listing agreement with any national
securities exchange or national securities quotation system, in which case the
party making such release will use reasonable efforts to obtain comments from
the other party before issuance of such release or statement. The parties agree
that the initial press release to be issued with respect to the transactions
contemplated by this Agreement shall be in the form heretofore agreed to by the
parties.
SECTION 7.11. Severance Agreements. Parent acknowledges and agrees
that (1) the letter agreements dated May 1, 1996 in effect between the Company
and Xxxxxx X. Xxxxxx, X. Xxxxxx Xxxxxx and Xxxxxx X. Xxxxxxxxxx, respectively
(collectively, the "Severance Agreements"), are, and following consummation of
the transactions contemplated by this Agreement will continue to be, valid, in
full force and effect and enforceable in accordance with their respective terms
by the parties thereto; (2) Parent shall honor the Severance Agreements in
accordance with their terms; (3) each of the three individuals subject to a
Severance Agreement shall be entitled, on any date within sixty days following
the Effective Time, to declare that he has been "constructively terminated" (by
virtue of the Offer and the Merger resulting in an involuntary material change
in such person's duties) and to discontinue his duties with the Company,
whereupon the "Company's Notice Period" (as such term is defined in each of the
Severance Agreements) shall be deemed to have commenced; provided that if such
person continues his employment with the Company (or its successor) for more
than sixty days following the Effective
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Time, any right arising solely by virtue of (3) above shall terminate.
SECTION 7.12. Continuation of Benefits. It is Parent's intention
that, for a period of not less than one year after the Effective Time, employees
of the Company who continue their employment after the Effective Time will be
provided compensation and employee benefits which are substantially comparable
in the aggregate to those provided for such employees as of the date hereof.
Neither the Parent nor the Surviving Corporation will have any obligation to
issue, or adopt any plans or arrangements providing for the issuance of, shares
of capital stock, warrants, options, stock appreciation rights or other rights
in respect of any shares of capital stock of any entity or any securities
convertible or exchangeable into such shares pursuant to any such plans or
arrangements. Any plans or arrangements of the Company providing for such
issuance shall be disregarded in determining whether employee benefits are
substantially comparable in the aggregate.
SECTION 7.13. Stop Transfer. The Company shall not register the
transfer of any certificate representing any Subject Shares (as defined in the
Stockholder Agreement), unless such transfer is made to Parent or Sub or
otherwise in compliance with the Stockholder Agreement. The Company will
inscribe upon any certificates representing Subject Shares tendered by a
Stockholder (as defined in the Stockholder Agreement) for such purpose the
following legend: "The shares of Common Stock, $.01 par value, of DePuy, Inc.
represented by this certificate are subject to a Stockholder Agreement dated as
of July 21, 1998, and may not be sold or otherwise transferred, except in
accordance therewith. Copies of such Agreement may be obtained at the principal
executive offices of DePuy, Inc."
SECTION 7.14. Purchase of Foreign Subsidiaries. Parent and its
affiliates shall have the right, at the option of Parent, to purchase
immediately prior to the consummation of the Offer any subsidiary of the Company
that is not incorporated or organized under the laws of a jurisdiction within
the United States at a price and on such terms as may be determined by mutual
agreement of the Parent and the Company; provided that all of the conditions set
forth in Exhibit A have been satisfied or waived and Parent and Sub are
unconditionally obligated to consummate the Offer. If the Parent and the Company
are unable to agree upon a price or terms for such sale, Parent and the Company
shall elect an independent appraisal firm to determine such
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price or terms. The conclusions of such appraisal firm shall be conclusive and
binding. The fees of such appraisal firm shall be shared equally by Parent and
the Company. Parent agrees that in no event will the Company be deemed to have
breached any of its representations, warranties, covenants or other obligations
under this Agreement (including Section 4.15) by reason of (whether directly or
indirectly, whether in whole or in part) any taxes or liabilities incurred, any
payments made, or any action taken or any omissions of any necessary action as a
result of or in connection with (i) Parent's exercise of its right to purchase
the Company's foreign subsidiaries prior to the consummation of the Offer
pursuant to this Section 7.14 or (ii) any other transaction or agreement
contemplated by this Section 7.14 or entered into in connection therewith.
ARTICLE VIII
Conditions
SECTION 8.01. Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction or waiver prior to the Closing Date of the following
conditions:
(a) Company Stockholder Approval. If required by applicable law, the
Company Stockholder Approval shall have been obtained; provided that
Parent and Sub shall vote all their Shares in favor of the Merger.
(b) No Injunctions or Restraints. No statute, rule, decision,
regulation, executive order, decree, temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other Governmental Entity or other legal
restraint or prohibition preventing the consummation of the Merger shall
be in effect; provided, however, that the party seeking to invoke such
condition shall have performed its obligations under Sections 7.03 and
7.04.
(c) Purchase of Shares. Sub shall have previously accepted for
payment and paid for Shares pursuant to and subject to the conditions
(including the Stockholder Agreement Condition) of the Offer and, if any
Subject Shares were not purchased pursuant to the Offer, pursuant to the
Stockholder Agreement.
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ARTICLE IX
Termination and Amendment
SECTION 9.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after approval of the terms
of this Agreement by the stockholders of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company:
(i) if Sub shall not have accepted for payment Shares pursuant
to the Offer prior to March 31, 1999; provided, however, that the
right to terminate this Agreement pursuant to this Section
9.01(b)(i) shall not be available to any party whose failure to
perform any of its obligations under this Agreement results in the
failure of any Offer Condition or if the failure of such condition
results from facts or circumstances that constitute a willful and
intentional material breach of representation or warranty under this
Agreement by such party; or
(ii) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the acceptance for payment of,
or payment for, Shares pursuant to the Offer or the Merger and such
order, decree or ruling or other action shall have become final and
nonappealable; provided, however, that the Party seeking to
terminate this Agreement pursuant to the provision shall have
performed its obligations under Section 7.03 and 7.04.
(c) by Parent or Sub prior to Sub's obligation to accept Shares for
payment pursuant to the Offer in the event of a breach by the Company of
any representation, warranty, covenant or other agreement contained in
this Agreement which (i) would give rise to the failure of a condition set
forth in paragraph (d) or (e) of Exhibit A and (ii) cannot be or has not
been cured within 20 days after the giving of written notice to the
Company; or
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(d) by the Company, if Sub or Parent shall have (A) failed to
commence the Offer within five business days of the public announcement
(on the date hereof or the following day) by Parent and the Company of
this Agreement, (B) failed to pay for Shares pursuant to the Offer in
accordance with Section 1.01(a) hereof or (C) breached in any material
respect any of their respective representations, warranties, covenants or
other agreements contained in this Agreement, which breach or failure to
perform in respect of clause (C) is incapable of being cured or has not
been cured within 20 days after the giving of written notice to Parent or
Sub, as applicable, except, in any case under clause (C), such breaches
and failures which individually or in the aggregate are not reasonably
likely to affect adversely Parent's or Sub's ability to complete the Offer
or the Merger subject to the terms and conditions of this Agreement.
SECTION 9.02. Effect of Termination. In the event of a termination
of this Agreement by either the Company or Parent as provided in Section 9.01,
this Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Sub or the Company or their respective
officers or directors, except with respect to the last sentence of Section
1.02(c), Section 5.06, the last sentence of Section 7.02, Section 7.08, this
Section 9.02 and Article X; provided, however, that nothing herein shall relieve
any party for liability for any willful and intentional breach hereof.
SECTION 9.03. Amendment. This Agreement may be amended by the
parties hereto, by action taken or authorized by their respective Boards of
Directors, at any time before or after obtaining the Company Stockholder
Approval (if required by law), but, after any such approval, no amendment shall
be made which by law requires further approval by such shareholders without
obtaining such further approval. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
SECTION 9.04. Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (iii) subject
to
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Section 9.03, waive compliance with any of the agreements or conditions
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written instrument
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of those rights.
SECTION 9.05. Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 9.01, an amendment
of this Agreement pursuant to Section 9.03 or an extension or waiver pursuant to
Section 9.04 shall, in order to be effective, require in the case of Parent, Sub
or the Company, action by its Board of Directors or the duly authorized designee
of its Board of Directors; provided, however, that in the event that Sub's
designees are appointed or elected to the Board of Directors of the Company as
provided in Section 7.07, after the acceptance for payment and payment of Shares
pursuant to and subject to the Conditions (including the Stockholder Agreement
Condition) of the Offer and prior to the Effective Time, the affirmative vote of
a majority of the directors of the Company that were not designated by Parent or
Sub shall be required by the Company to (i) amend or terminate this Agreement by
the Company, (ii) exercise or waive any of the Company's rights or remedies
under this Agreement, (iii) extend the time for performance of Parent's and
Sub's respective obligations under this Agreement or (iv) take any action to
amend or otherwise modify the Company's Certificate of Incorporation or Bylaws.
ARTICLE X
Miscellaneous
SECTION 10.01. Nonsurvival of Representations, Warranties and
Agreements. Except as otherwise provided in this Section 10.01, none of the
representations, warranties or covenants in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time or, in the
case of the Company, shall survive the acceptance for payment of, and payment
for, any Shares by Sub pursuant to the Offer. This Section 10.01 shall not limit
any covenant or agreement of the parties which by its terms contemplates
performance after the Effective Time.
SECTION 10.02. Notices. All notices and other communications
hereunder shall be in writing and shall be
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deemed given if delivered personally, telecopied (which is confirmed), sent by
overnight courier (providing proof of delivery) or mailed by registered or
certified mail (return receipt requested) to the parties at the following
addresses or telecopier numbers (or at such other address or telecopier number
for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Xxxxxxx & Xxxxxxx
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: General Counsel
Telecopy No.: (000) 000-0000
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
and
(b) if to the Company, to
DePuy, Inc.
000 Xxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000-0000
Attention: President
Telecopy No.: (000) 000-0000
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with a copy to:
Coudert Brothers
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopy No.: (000) 000-0000
SECTION 10.03. Interpretation. When a reference is made in this
Agreement to an Article or a Section, such reference shall be to an Article or a
Section of this Agreement unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement. Whenever
the words "include", "includes" or "including" are used in this Agreement,
including Exhibit A, they shall be deemed to be followed by the words "without
limitation". As used in this Agreement, including Exhibit A, the term
"subsidiary" of any person means another person whether foreign or domestic, an
amount of the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its Board of
Directors or other governing body (or, if there are no such voting interests,
50% or more of the equity interests of which) is owned directly or indirectly by
such first person. As used in this Agreement, including Exhibit A, the term
"affiliate" of any person means any person, whether foreign or domestic, that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such first person. As used in
this Agreement, including Exhibit A, the term "key employee" means an employee
of the Company or any of its subsidiaries with annual cash compensation in
excess of $300,000. As used in this Agreement, including Exhibit A, "material
adverse effect" means, when used in connection with the Company, any effect that
is materially adverse to the business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole, or would
prevent or materially delay the consummation of the Offer or the Merger. As used
in this Agreement, including Exhibit A, "material adverse change" means any
change that is reasonably likely to have a material adverse effect.
SECTION 10.04. Counterparts. This Agreement may be executed in two
or more counterparts, all of which shall
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be considered one and the same agreement and shall become effective when two or
more counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
SECTION 10.05. Entire Agreement; Third Party Beneficiaries. This
Agreement and the Confidentiality Agreement (including the documents and the
instruments referred to herein) (a) constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, and (b) except as
provided in Section 7.06 and Section 7.11, Articles II and III are not intended
to confer upon any person other than the parties hereto any rights or remedies
hereunder.
SECTION 10.06. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware regardless
of the laws that might otherwise govern under applicable principles of conflicts
of law thereof.
SECTION 10.07. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
Parent or to any direct or indirect wholly-owned subsidiary of Parent. Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
SECTION 10.08. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the
United States located in the State of Delaware or in a Delaware state court,
this being in addition to any other remedy to which they are entitled at law or
in equity. In addition, each of the parties hereto (i) consents to submit such
party to the personal jurisdiction of any Federal court located in the State of
Delaware or any Delaware state court
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in the event any dispute arises out of this Agreement or any of the transactions
contemplated hereby, (ii) agrees that such party will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, (iii) agrees that such party will not bring any action relating to
this Agreement or any of the transactions contemplated hereby in any court other
than a Federal court sitting in the State of Delaware or a Delaware state court
and (iv) waives any right to trial by jury with respect to any claim or
proceeding related to or arising out of this Agreement or any of the
transactions contemplated hereby.
SECTION 10.09. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
SECTION 10.10. Compliance with Law. Nothing in this Agreement,
including Section 1.02 or 6.02, shall in any way prevent the Company or the
Board of Directors of the Company from making any disclosure to the stockholders
of the Company, or taking any position, that is required by Federal or state
law. Nothing in this Agreement, including Section 6.01, shall require the
Company or any of its subsidiaries to take any action prohibited by, or refrain
from taking any action required by, applicable Merger Control Laws.
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
XXXXXXX & XXXXXXX,
by /S/ XXXXX X. XXXXXX
---------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
LIB ACQUISITION CORP.,
by /s/ XXXXX X. XXXXXX
---------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
DEPUY, INC.,
by /s/ XXXXX X. XXXX
---------------------------
Name: Xxxxx X. Xxxx
Title: Chairman and Chief
Executive Officer
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EXHIBIT A
Conditions of the Offer
Notwithstanding any other term of the Offer, Sub shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Sub's obligation to pay for or return tendered Shares after the termination
or withdrawal of the Offer), to pay for any Shares tendered pursuant to the
Offer unless (i) the Stockholder Agreement is valid, binding and in full force
and effect and enforceable by Parent and Sub in accordance with its terms and no
party thereto (other than Parent or Sub) is in material breach thereof, and the
Shares subject to the Stockholder Agreement shall have been either tendered into
the Offer or delivered to Sub for purchase immediately following the Offer (the
"Stockholder Agreement Condition"), (ii) any waiting period under the HSR Act
applicable to the purchase of Shares pursuant to the Offer shall have expired or
been terminated and (iii) Parent, Sub and Company shall have received in respect
of the Merger and any matters arising therefrom confirmation by way of a
decision from the Commission of the European Union under Regulation 4064.89
(with or without the initiation of proceedings under Article 6(1)(c) thereof)
that the Merger and any matters arising therefrom are compatible with the common
market. Furthermore, notwithstanding any other term of the Offer, Sub shall not
be required to accept for payment or, subject as aforesaid, to pay for any
Shares not theretofore accepted for payment or paid for, and may terminate the
Offer if, at any time on or after the date of this Agreement and before the
acceptance of such Shares for payment or the payment therefor, any of the
following conditions exists:
(a) there shall be instituted or pending by any Governmental Entity
any suit, action or proceeding (or by any other person any suit, action or
proceeding that has a reasonable likelihood of success) (i) challenging
the acquisition by Parent or Sub of any Shares under the Offer or pursuant
to the Stockholder Agreement, seeking to restrain or prohibit the making
or consummation of the Offer or the Merger or the performance of any of
the other transactions contemplated by this Agreement or the Stockholder
Agreement, or seeking to obtain from the Company, Parent or Sub any
damages in connection with the aforesaid transactions that are material in
relation to the Company and its subsidiaries taken as a whole, (ii)
seeking to prohibit or materially limit the ownership or operation by the
Company, Parent or any of their respective subsidiaries of a material
portion of
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the business or assets of the Company and its subsidiaries, or Parent and
its subsidiaries, in each case taken as a whole, or to compel the Company
or Parent to dispose of or hold separate any material portion of the
business or assets of the Company and its subsidiaries, or Parent and its
subsidiaries, in each case taken as a whole, as a result of the Offer or
any of the other transactions contemplated by this Agreement or the
Stockholder Agreement, (iii) seeking to impose material limitations on the
ability of Parent or Sub to acquire or hold, or exercise full rights of
ownership of, any Shares to be accepted for payment pursuant to the Offer
or purchased under the Stockholder Agreement including, without
limitation, the right to vote such Shares on all matters properly
presented to the stockholders of the Company or (iv) seeking to prohibit
Parent or any of its subsidiaries from effectively controlling in any
material respect any significant portion of the business or operations of
the Company and its subsidiaries taken as a whole;
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, or any other action shall be taken by any
Governmental Entity or court, other than the application to the Offer or
the Merger of the applicable waiting period under the Merger Control Laws,
that is reasonably likely to result, directly or indirectly, in any of the
consequences referred to in clauses (i) through (iv) of paragraph (a)
above;
(c) there shall have occurred any material adverse change with
respect to the Company;
(d) any of the representations and warranties of the Company set
forth in this Agreement that are qualified as to materiality shall not be
true and correct or any such representations and warranties that are not
so qualified shall not be true and correct in any material respect, in
each case at the date of this Agreement and at the scheduled or extended
expiration of the Offer;
(e) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any
material agreement or material covenant of the Company to be
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performed or complied with by it under this Agreement; or
(f) this Agreement shall have been terminated in accordance with its
terms;
which, in the reasonable judgment of Parent or Sub in any such case, and
regardless of the circumstances (including any action or omission by Parent or
Sub) giving rise to any such condition, makes it inadvisable to proceed with
such acceptance for payment or payments therefor.
The foregoing conditions in paragraphs (a) through (f) are for the
sole benefit of Sub and Parent and may, subject to the terms of this Agreement,
be waived by Sub and Parent in whole or in part at any time and from time to
time in their sole discretion. The failure by Parent or Sub at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time. Terms used herein but not defined
herein shall have the meanings assigned to such terms in the Agreement of which
this Exhibit A is a part.
