AGREEMENT AND PLAN OF MERGER among V.F. CORPORATION, VF ENTERPRISES, INC. and THE TIMBERLAND COMPANY Dated as of June 12, 2011
Exhibit 2.1
EXECUTION COPY
among
V.F. CORPORATION,
VF ENTERPRISES, INC.
and
THE TIMBERLAND COMPANY
Dated as of June 12, 2011
TABLE OF CONTENTS
Page | ||||
ARTICLE I. THE MERGER |
1 | |||
SECTION 1.1. The Merger |
1 | |||
SECTION 1.2. Closing; Effective Time |
1 | |||
SECTION 1.3. Effects of the Merger |
2 | |||
SECTION 1.4. Certificate of Incorporation; By-Laws |
2 | |||
SECTION 1.5. Directors and Officers |
3 | |||
ARTICLE II. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS |
3 | |||
SECTION 2.1. Conversion of Securities |
3 | |||
SECTION 2.2. Company Stock Options; Company Restricted Stock; Company Restricted Units;
Company ESPP |
4 | |||
SECTION 2.3. Dissenting Shares |
5 | |||
SECTION 2.4. Surrender of Shares; Payment Procedures |
5 | |||
SECTION 2.5. Adjustments |
8 | |||
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
8 | |||
SECTION 3.1. Organization and Qualification; Subsidiaries |
8 | |||
SECTION 3.2. Certificate of Incorporation and By-Laws |
9 | |||
SECTION 3.3. Capitalization |
9 | |||
SECTION 3.4. Authority |
10 | |||
SECTION 3.5. No Conflict; Required Filings and Consents |
11 | |||
SECTION 3.6. Compliance |
11 | |||
SECTION 3.7. SEC Filings; Financial Statements |
12 | |||
SECTION 3.8. Absence of Certain Changes or Events |
13 | |||
SECTION 3.9. No Undisclosed Material Liabilities |
13 | |||
SECTION 3.10. Absence of Litigation |
14 | |||
SECTION 3.11. Employee Benefit Plans |
14 | |||
SECTION 3.12. Labor and Employment Matters |
16 | |||
SECTION 3.13. Insurance |
16 | |||
SECTION 3.14. Properties |
16 | |||
SECTION 3.15. Tax Matters |
16 |
i
Page | ||||
SECTION 3.16. Information Statement |
17 | |||
SECTION 3.17. Opinion of Financial Advisor |
17 | |||
SECTION 3.18. Brokers |
17 | |||
SECTION 3.19. Takeover Statutes and Rights Agreement |
18 | |||
SECTION 3.20. Intellectual Property |
18 | |||
SECTION 3.21. Environmental Matters |
19 | |||
SECTION 3.22. Contracts |
20 | |||
SECTION 3.23. Affiliate Transactions |
21 | |||
SECTION 3.24. No Other Representations or Warranties |
22 | |||
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB |
22 | |||
SECTION 4.1. Organization; Certificate of Incorporation and By-Laws |
22 | |||
SECTION 4.2. Authority |
22 | |||
SECTION 4.3. No Conflict; Required Filings and Consents |
23 | |||
SECTION 4.4. Absence of Litigation |
23 | |||
SECTION 4.5. Information Statement |
24 | |||
SECTION 4.6. Brokers |
24 | |||
SECTION 4.7. Financing |
24 | |||
SECTION 4.8. Capitalization of Merger Sub; Operations of Merger Sub |
24 | |||
SECTION 4.9. Ownership of Shares |
24 | |||
SECTION 4.10. Vote/Approval Required |
24 | |||
SECTION 4.11. No Other Representations or Warranties |
24 | |||
ARTICLE V. CONDUCT OF BUSINESS PENDING THE MERGER |
25 | |||
SECTION 5.1. Conduct of Business of the Company Pending the Merger |
25 | |||
SECTION 5.2. Conduct of Business of Parent and Merger Sub Pending the Merger |
27 | |||
SECTION 5.3. No Control of Other Party’s Business |
27 | |||
ARTICLE VI. ADDITIONAL AGREEMENTS |
27 | |||
SECTION 6.1. Information Statement; Merger Consent |
27 | |||
SECTION 6.2. Resignation of Directors |
28 | |||
SECTION 6.3. Access to Information; Confidentiality |
28 | |||
SECTION 6.4. Acquisition Proposals |
29 | |||
SECTION 6.5. Employment and Employee Benefits Matters |
32 |
ii
Page | ||||
SECTION 6.6. Directors’ and Officers’ Indemnification and Insurance |
34 | |||
SECTION 6.7. Further Action; HSR Act and Antitrust Laws |
35 | |||
SECTION 6.8. Financing Cooperation |
36 | |||
SECTION 6.9. Public Announcements |
37 | |||
SECTION 6.10. Notices of Certain Events |
37 | |||
SECTION 6.11. Approval by Sole Stockholder of Merger Sub |
38 | |||
ARTICLE VII. CONDITIONS OF MERGER |
38 | |||
SECTION 7.1. Conditions to Obligation of Each Party to Effect the Merger |
38 | |||
SECTION 7.2. Conditions to Obligations of Parent and Merger Sub |
38 | |||
SECTION 7.3. Conditions to Obligations of the Company |
39 | |||
ARTICLE VIII. TERMINATION, AMENDMENT AND WAIVER |
40 | |||
SECTION 8.1. Termination |
40 | |||
SECTION 8.2. Effect of Termination |
41 | |||
SECTION 8.3. Expenses |
42 | |||
SECTION 8.4. Amendment |
42 | |||
SECTION 8.5. Waiver |
42 | |||
ARTICLE IX. GENERAL PROVISIONS |
42 | |||
SECTION 9.1. Non-Survival of Representations, Warranties, Covenants and Agreements |
42 | |||
SECTION 9.2. Notices |
42 | |||
SECTION 9.3. Certain Definitions |
43 | |||
SECTION 9.4. Severability |
46 | |||
SECTION 9.5. Entire Agreement; Assignment |
46 | |||
SECTION 9.6. Parties in Interest |
46 | |||
SECTION 9.7. Governing Law |
46 | |||
SECTION 9.8. Headings |
46 | |||
SECTION 9.9. Counterparts |
46 | |||
SECTION 9.10. Specific Performance; Jurisdiction; Waiver of Jury Trial |
46 | |||
SECTION 9.11. Parent Guarantee |
47 | |||
SECTION 9.12. Interpretation |
47 | |||
SECTION 9.13. SEC Document References |
47 |
iii
INDEX OF DEFINED TERMS
2011 Bonus Program |
32 | |||
Acquisition Proposal |
30 | |||
Adverse Recommendation Change |
30 | |||
affiliate |
44 | |||
Agreement |
1 | |||
Antitrust Authorities |
44 | |||
Antitrust Laws |
36 | |||
applicable law |
44 | |||
beneficial owner |
44 | |||
beneficially owned |
44 | |||
Board |
1 | |||
Book-Entry Shares |
6 | |||
business day |
44 | |||
By-Laws |
9 | |||
Capitalization Date |
9 | |||
Certificate of Incorporation |
9 | |||
Certificate of Merger |
2 | |||
Certificates |
6 | |||
Class A Common Stock |
3 | |||
Class A Shares |
3 | |||
Class B Common Stock |
3 | |||
Class B Shares |
3 | |||
Closing |
1 | |||
Closing Date |
2 | |||
Code |
4 | |||
Company |
1 | |||
Company Common Stock |
3 | |||
Company Defined Contribution Plan |
33 | |||
Company Disclosure Schedule |
8 | |||
Company Employees |
14 | |||
Company ESPP |
4 | |||
Company Owned IP |
19 | |||
Company Plans |
14 | |||
Company SEC Reports |
12 | |||
Company Securities |
10 | |||
Company Stock Plans |
44 | |||
Company Subsidiary Securities |
10 | |||
Company Termination Fee |
41 | |||
Condition Date |
2 | |||
Contract |
11 | |||
control |
44 | |||
controlled |
44 | |||
controlled by |
44 | |||
Costs |
34 | |||
DGCL |
1 | |||
Dissenting Shares |
5 | |||
Effective Time |
2 | |||
employee benefit plan |
14 | |||
Environmental Laws |
20 | |||
Environmental Permits |
20 | |||
Equity Awards Schedule |
9 | |||
ERISA |
14 | |||
Exchange Act |
11 | |||
Financial Advisor |
17 | |||
Foreign Corrupt Practices Act |
12 | |||
generally accepted accounting principles |
44 | |||
Governmental Entity |
11 | |||
HSR Act |
11 | |||
Indemnified Parties |
34 | |||
industries in which the Company and its subsidiaries operate |
45 | |||
Information Statement |
17 | |||
Intellectual Property |
19 | |||
IRS |
15 | |||
knowledge |
45 | |||
Licenses |
12 | |||
Lien |
45 | |||
Material Adverse Effect |
8 | |||
Material Contract |
21 | |||
Materials of Environmental Concern |
20 | |||
Merger |
1 | |||
Merger Consent |
27 | |||
Merger Consideration |
3 | |||
Merger Sub |
1 | |||
Option |
4 | |||
Option Consideration |
4 | |||
Parent |
1 | |||
Parent Defined Contribution Plan |
33 | |||
Parent Disclosure Schedule |
22 | |||
Parent Plan |
33 | |||
Parent SEC Reports |
45 | |||
Paying Agent |
5 | |||
Permitted Liens |
45 | |||
person |
45 | |||
Preferred Stock |
9 | |||
Registered Intellectual Property |
18 | |||
Restricted Share Consideration |
4 | |||
Restricted Shares |
4 |
iv
Restricted Unit Consideration |
4 | |||
Restricted Xxxxx |
0 | |||
Xxxxxxxx-Xxxxx Xxx |
13 | |||
SEC |
12 | |||
Securities Act |
12 | |||
Shares |
3 | |||
Stockholder Approval |
45 | |||
subsidiaries |
45 | |||
subsidiary |
45 | |||
Superior Proposal |
30 | |||
Surviving Corporation |
1 | |||
Xxxxxx Family Group |
46 | |||
Tax Return |
17 | |||
Taxes |
17 | |||
Termination Date |
40 | |||
Trade Secrets |
19 | |||
Trademarks |
19 | |||
U.S. Company Plan |
15 | |||
under common control with |
44 | |||
Voting Agreement |
1 |
v
AGREEMENT AND PLAN OF MERGER, dated as of June 12, 2011 (this “Agreement”), among V.F.
Corporation, a Pennsylvania corporation (“Parent”), VF Enterprises, Inc., a Delaware
corporation and a direct or indirect wholly-owned subsidiary of Parent (“Merger Sub”), and
The Timberland Company, a Delaware corporation (the “Company”).
WHEREAS, the Board of Directors of the Company (the “Board”) has (i) determined that
it is in the best interests of the Company and the stockholders of the Company, and declared it
advisable, to enter into this Agreement with Parent and Merger Sub providing for the merger (the
“Merger”) of Merger Sub with and into the Company in accordance with the General
Corporation Law of the State of Delaware (the “DGCL”), upon the terms and subject to the
conditions set forth herein, (ii) approved this Agreement in accordance with the DGCL, upon the
terms and subject to the conditions set forth herein, and (iii) resolved to recommend adoption of
this Agreement by the stockholders of the Company;
WHEREAS, the Boards of Directors of Parent and Merger Sub have each approved, and the Board of
Directors of Merger Sub has declared it advisable for Merger Sub to enter into, this Agreement
providing for the Merger in accordance with the DGCL, upon the terms and subject to the conditions
set forth herein; and
WHEREAS, as an inducement and condition to Parent’s willingness to enter into this Agreement,
members of the Xxxxxx Family Group holding approximately 73.5% of the combined voting power of the
Shares outstanding as of the date hereof are entering into a voting agreement with Parent
simultaneously with the execution of this Agreement (the “Voting Agreement”), whereby,
among other things, such persons have agreed to execute and deliver, upon the terms and subject to
the conditions set forth therein, an irrevocable written consent in favor of the adoption of this
Agreement, which consent when executed and delivered will be sufficient to adopt this Agreement and
to approve the Merger without any further action by any other stockholder of the Company.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
herein contained, and intending to be legally bound hereby, Parent, Merger Sub and the Company
hereby agree as follows:
ARTICLE I.
THE MERGER
SECTION 1.1. The Merger. Upon the terms and subject to the conditions of this Agreement and in accordance with the
DGCL, at the Effective Time (as defined below), Merger Sub shall be merged with and into the
Company. As a result of the Merger, the separate corporate existence of Merger Sub shall cease and
the Company shall continue as the surviving corporation of the Merger (the “Surviving
Corporation”).
SECTION 1.2. Closing; Effective Time. Subject to the provisions of Article VII, the closing of the Merger (the “Closing”)
shall take place at the offices of Ropes & Xxxx LLP, Prudential Tower, 000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, as soon as practicable, but in no event later than the third business day
after the satisfaction or waiver of the conditions set forth in Article
1
VII (other than those conditions that by their nature are to be satisfied by actions taken
at the Closing, but subject to the satisfaction or (to the extent permitted by applicable law)
waiver of those conditions), or at such other place or on such other date as Parent and the Company
may mutually agree; provided, however, that notwithstanding the satisfaction or
waiver of the conditions set forth in Article VII, if the date that would otherwise be the Closing
Date (the “Condition Date”) would occur during the last 15 days of any fiscal quarter of
Parent, except to the extent the provisions of this proviso are waived in writing by Parent, Parent
shall not be required to effect the Closing until the first business day of Parent’s immediately
succeeding fiscal quarter on which, subject to the immediately succeeding proviso, the conditions
set forth in Article VII are satisfied or waived (other than those conditions that by their nature
are to be satisfied by actions taken at the Closing, but subject to the satisfaction or (to the
extent permitted by applicable law) waiver of those conditions); provided, further,
that if the Closing is delayed due to the application of the preceding proviso, the parties agree
that the conditions set forth in Section 7.2(a) and Section 7.2(c) (as it relates to the conditions
set forth in Section 7.2(a)) shall be deemed satisfied if the conditions set forth in Section
7.2(a) would have been satisfied as of the Condition Date in the absence of the preceding proviso,
and Parent receives the certificate contemplated by Section 7.2(c) (as it relates to the conditions
set forth in Section 7.2(a)) to the foregoing effect as of the Condition Date. The date on which
the Closing actually occurs is hereinafter referred to as the “Closing Date”. If Parent
desires to delay the Closing due to the application of the first proviso of this Section 1.2,
Parent shall deliver to the Company a written notice to that effect (stating its good faith
determination of the Condition Date) on or prior to the date specified as the Condition Date in
such notice; it being understood that following the delivery of such notice, Parent shall not
thereafter be entitled to assert the failure of the Company to, prior to the date of such notice,
comply with any covenant or agreement to be performed by the Company hereunder that was known to
Parent prior to the delivery of such notice as the basis for the condition set forth in Sections
7.2(b) not being satisfied or as the basis for terminating the Agreement pursuant to Section
8.1(e). At the Closing, the parties hereto shall cause the Merger to be consummated by filing a
certificate of merger (the “Certificate of Merger”) with the Secretary of State of the
State of Delaware, in such form as required by, and executed in accordance with, the relevant
provisions of the DGCL (the date and time of the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, or such later time as is specified in the Certificate
of Merger and as is agreed to by the Company and Parent, being hereinafter referred to as the
“Effective Time”) and shall make all other filings or recordings required under the DGCL in
connection with the Merger.
SECTION 1.3. Effects of the Merger. From and after the Effective Time, the Merger shall have the effects set forth in the
applicable provisions of the DGCL. Without limiting the generality of the foregoing and subject
thereto, at the Effective Time, all the property, rights, privileges, immunities, powers and
franchises of the Company and Merger Sub shall vest in the Surviving Corporation and all debts,
liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties
of the Surviving Corporation.
SECTION 1.4. Certificate of Incorporation; By-Laws.
(a) At the Effective Time and by virtue of the Merger, the certificate of incorporation of the
Company shall be amended and restated to be identical to the certificate of incorporation of Merger
Sub, as in effect immediately prior to the Effective Time, except (i) for Article FIRST, which
shall read “The name of the corporation is The Timberland Company” and (ii) that the provisions of
the certificate of incorporation of Merger Sub relating to the incorporator of
Merger Sub shall be omitted, and as so amended shall be the amended and restated certificate
of
2
incorporation of the Surviving Corporation until thereafter amended in accordance with its terms
and provided by applicable law.
(b) At the Effective Time, the by-laws of the Company shall be amended to read in their
entirety as the by-laws of Merger Sub as in effect immediately prior to the Effective Time, and as
so amended shall be the by-laws of the Surviving Corporation until thereafter amended in accordance
with their terms, the amended and restated certificate of incorporation of the Surviving
Corporation and as provided by applicable law.
SECTION 1.5. Directors and Officers. From and after the Effective Time (i) the directors of Merger Sub at the Effective Time
shall be the directors of the Surviving Corporation and (ii) the officers of the Company at the
Effective Time shall be the officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified or until the earlier of their
death, resignation or removal.
ARTICLE II.
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
OF THE CONSTITUENT CORPORATIONS
SECTION 2.1. Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of Merger
Sub, the Company or the holders of any of the following securities:
(a) Except as set forth in Section 2.1(b), each share of Class A Common Stock, par value $0.01
per share, of the Company (the “Class A Common Stock”) and Class B Common Stock, par value
$0.01 per share, of the Company (the “Class B Common Stock” and, together with the Class A
Common Stock, the “Company Common Stock”) issued and outstanding immediately prior to the
Effective Time (other than any Dissenting Shares (as defined in Section 2.3(a)) shall be converted
into the right to receive $43.00 in cash (the “Merger Consideration”) payable to the holder
thereof, without interest, upon surrender of such Shares in the manner provided in Section 2.4,
less any required withholding Taxes;
(b) (i) Each share of Class A Common Stock (collectively, “Class A Shares”) and each
share of Class B Common Stock (collectively, “Class B Shares” and, together with the Class
A Shares, the “Shares”) held in the treasury of the Company and each Share owned by Parent
or Merger Sub immediately prior to the Effective Time shall be automatically canceled and retired
without any conversion thereof and no payment or distribution shall be made with respect thereto
and (ii) each Share held by any direct or indirect subsidiary of the Company or Parent (other than
Merger Sub) immediately prior to the Effective Time shall be converted into such number of shares
of common stock of the Surviving Corporation such that each such subsidiary owns the same
percentage of the outstanding capital stock of the Surviving Corporation immediately following the
Effective Time as such subsidiary owned in Company Common Stock immediately prior to the Effective
Time; and
(c) Each share of common stock of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into one validly issued, fully paid and nonassessable share
of common stock, par value $0.01 per share, of the Surviving Corporation and
3
shall (except for any such shares resulting from the conversion of Shares pursuant to clause (ii)
of Section 2.1(b)) constitute the only outstanding shares of capital stock of the Surviving
Corporation.
SECTION 2.2. Company Stock Options; Company Restricted Stock; Company Restricted Units;
Company ESPP.
(a) At or immediately prior to the Effective Time, each option to purchase shares of Company
Common Stock granted under the Company Stock Plans (an “Option”) that is
outstanding and unexercised as of the Effective Time, whether vested or unvested, shall be
canceled, with the holder of each such Option becoming entitled to receive an amount in cash (the
“Option Consideration”) equal to the product of (A) the number of Shares previously subject
to such Option and (B) the excess, if any, of the Merger Consideration over the exercise price per
Share previously subject to such Option, less any required withholding Taxes.
(b) At the Effective Time, each Share granted subject to vesting or other restrictions
pursuant to any Company Stock Plan or pursuant to any Contract (collectively, “Restricted
Shares”) which is then outstanding shall vest and become free of such restrictions and, at the
Effective Time, the holder thereof shall be entitled to receive the Merger Consideration with
respect to each such Restricted Share, less any required withholding Taxes (including any
withholding Taxes required in respect of the vesting of such Restricted Shares) (the
“Restricted Share Consideration”).
(c) At the Effective Time, each restricted stock unit and performance stock unit granted
subject to vesting or other restrictions pursuant to any Company Stock Plan or pursuant to any
Contract (collectively, “Restricted Units”) which is then outstanding shall vest and become
free of such restrictions and, at the Effective Time, the holder thereof shall be entitled to
receive an amount in cash (the “Restricted Unit Consideration”) equal to the product of (A)
the number of Shares previously subject to such restricted stock unit or performance stock unit and
(B) the Merger Consideration, less any required withholding Taxes. For the avoidance of
doubt, for purposes of applying the immediately preceding sentence to any Restricted Unit that is a
performance stock unit, the number of Shares treated as previously subject to such Restricted Unit
shall be equal to the number of Shares which the holder would have been eligible to receive had
performance criteria applicable to such Restricted Unit been achieved at target levels (and which
number of Shares is set forth, for the avoidance of doubt, on the Equity Awards Schedule under the
“PUs Outstanding” column with respect to the applicable Restricted Unit).
(d) The foregoing provisions of this Section 2.2 shall not apply to the Company’s 1991
Employee Stock Purchase Plan or any other plan, program or arrangement intending to qualify as a
stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended (the
“Code”) (the “Company ESPP”). With respect to the Company ESPP, the Company shall
as soon as practicable take all actions necessary to provide that (i) participants may not increase
their payroll deductions or purchase elections prospectively; (ii) no purchase period or offering
period shall commence under the Company ESPP following the date of this Agreement; (iii) each
participant’s outstanding right to purchase shares of Company Common Stock under the Company ESPP
shall be suspended immediately following the end of the purchase or offering period in effect on
the date of this Agreement or, if earlier, the end of the Business Day immediately prior to the
Effective Time; provided that each participant’s accumulated payroll deductions as of the
Effective Time shall be used to purchase shares of Company Common Stock
4
immediately prior to the Effective Time in accordance with the terms of the Company ESPP, and
the shares of Company Common Stock purchased thereunder shall be canceled at the Effective Time and
converted into the right to receive the Merger Consideration pursuant to Section 2.1(a); and (iv)
as promptly as reasonably practicable following the purchase of shares of Company Common Stock in
accordance with the preceding clause (iii), the funds, if any, that remain in a participant’s
accounts after such purchase shall be returned to the participant. The Company shall cause the
Company ESPP to terminate at the Effective Time, and no further purchase rights shall be granted or
exercised under the Company ESPP thereafter.
(e) As soon as reasonably practicable following the date of this Agreement, the Board (or, if
appropriate, any committee thereof) shall adopt such resolutions or take such actions as it may
deem necessary or appropriate to effect the treatment of Options, Restricted Shares and Restricted
Units contemplated by Section 2.2(a), Section 2.2(b) and Section 2.2(c). The Company shall provide
Parent with drafts of such resolutions prior to their execution.
SECTION 2.3. Dissenting Shares.
(a) Notwithstanding anything in this Agreement to the contrary, Shares that are issued and
outstanding immediately prior to the Effective Time and which are held by holders of Shares who
have not voted in favor of or consented to the Merger and who have properly demanded and perfected
their rights to be paid the fair value of such Shares in accordance with Section 262 of the DGCL
(the “Dissenting Shares”) shall not be converted into the right to receive the Merger
Consideration, and the holders thereof shall be entitled to only such rights as are granted by
Section 262 of the DGCL; provided, however, that if any such holder shall fail to
perfect or shall effectively waive, withdraw or lose such holder’s rights under Section 262 of the
DGCL, such holder’s shares of Company Common Stock shall thereupon be deemed to have been
converted, at the Effective Time, into the right to receive the Merger Consideration therefor, as
set forth in Section 2.1 of this Agreement, without any interest thereon.
(b) The Company shall give Parent (i) prompt notice of any appraisal demands received by the
Company, withdrawals thereof and any other instruments served pursuant to Section 262 of the DGCL
and received by the Company and (ii) the opportunity to direct all negotiations and proceedings
with respect to the exercise of appraisal rights under Section 262 of the DGCL. The Company shall
not, except with the prior written consent of Parent (which consent shall not be unreasonably
withheld or delayed) or as otherwise required by applicable law, make any payment with respect to
any such exercise of appraisal rights, offer to settle or settle any such rights or approve any
withdrawal of any such demands.
SECTION 2.4. Surrender of Shares; Payment Procedures.
(a) Prior to the Effective Time, Parent shall appoint an agent reasonably acceptable to the
Company to act as paying agent for the stockholders of the Company in connection with the Merger
(the “Paying Agent”) and to receive the Merger Consideration to which the stockholders of
the Company shall become entitled pursuant to this Article II. At or prior to the Effective Time,
Parent shall cause to be deposited with the Paying Agent sufficient funds to make all payments
pursuant to Sections 2.4(c). Such funds may be invested by the Paying Agent as directed by
Parent; provided that no such investment or losses thereon shall affect the Merger
Consideration payable to the holders of Company Common Stock, and following any losses Parent shall
promptly provide additional funds to the Paying Agent for the benefit of the stockholders of the
Company in the amount of any such losses and such investments shall be in (A) obligations of the
United States
5
of America or guaranteed by the United States of America and backed by the full faith and credit of
the United States of America, (B) certificates of deposit, bank repurchase agreements or banker’s
acceptances of commercial banks with capital exceeding $1 billion (based on the most recent
financial statements of such bank which are then publicly available), (C) commercial paper
obligations rated A-1 or P-1 or better by Xxxxx’x Investors Service, Inc. or Standard & Poor’s
Corporation, respectively or (D) money market funds substantially all the assets of which are
comprised of investments in the obligations described in clauses (A) through (C). Any interest or
income produced by, or profit resulting from, such investments will be payable to the Surviving
Corporation or Parent, as Parent directs.
(b) Immediately after the Effective Time, Parent shall cause to be deposited with the
Surviving Corporation sufficient funds to make all payments pursuant to Section 2.4(d).
(c) Promptly after the Effective Time, but in any event within five business days following
the Effective Time, the Surviving Corporation shall cause to be mailed to each record holder, as of
the Effective Time, of (i) an outstanding certificate or certificates which immediately prior to
the Effective Time represented Shares (the “Certificates”) or (ii) Shares represented by
book-entry (“Book-Entry Shares”), a form of letter of transmittal (which shall be in such
form and have provisions reasonably acceptable to the Company and Parent and shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon
proper delivery of the Certificates to the Paying Agent or, in the case of Book-Entry Shares, upon
adherence to the procedures set forth in the letter of transmittal) and instructions for use in
effecting the surrender of the Certificates or, in the case of Book-Entry Shares, the surrender of
such Shares for payment of the Merger Consideration therefor. Upon surrender to the Paying Agent
of a Certificate or of Book-Entry Shares, together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions thereto, and such other documents as may
be required pursuant to such instructions, the holder of such Certificate or Book-Entry Shares
shall be entitled to receive in exchange therefor the Merger Consideration for each Share formerly
represented by such Certificate or Book-Entry Shares and such Certificate or book-entry shall then
be canceled. No interest shall be paid or accrued for the benefit of holders of the Certificates
or Book-Entry Shares on the Merger Consideration payable in respect of the Certificates or
Book-Entry Shares. If payment of the Merger Consideration is to be made to a person other than the
person in whose name the surrendered Certificate or Book-Entry Share is registered, it shall be a
condition of payment that the Certificate or Book-Entry Share so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer or be accompanied by all documents
required to evidence transfer and that the person requesting such payment shall have paid any
transfer and other Taxes required by reason of the payment of the Merger Consideration to a person
other than the registered holder of the Certificate or Book-Entry Share surrendered or shall have
established to the satisfaction of the Surviving Corporation that such Tax either has been paid or
is not applicable. Any other transfer Taxes payable as a result of the consummation of the Merger
will be paid by Parent, Merger Sub or the Surviving Corporation. Until surrendered as contemplated
by this Section 2.4(c), each Certificate and each Book-Entry Share shall be deemed at any time
after the Effective Time to represent only the right to receive upon such surrender the applicable
Merger Consideration as contemplated by this Article II. For the avoidance of doubt, no payment
shall be made under this Section 2.4(c) in respect of any Share that was a Restricted Share vesting
at or prior to the Effective Time as to which withholding Taxes have not been withheld; payment for
any such Share shall instead be provided pursuant to Section 2.4(d).
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(d) All payments with respect to canceled Options, Restricted Units and Restricted Shares,
shall be made by the Surviving Corporation as promptly as reasonably practicable after the
Effective Time from funds deposited by or at the direction of Parent pursuant to Section 2.4(b).
No interest shall be paid or accrued for the benefit of holders of Options on the Option
Consideration payable in respect of the Options, to holders of Restricted Units on the Restricted
Unit Consideration payable in respect of the Restricted Units, or to the holders of Restricted
Shares on the Restricted Share Consideration in respect of the Restricted Shares. For purposes of
this Section 2.4(d) and Section 2.4(e), the term “Restricted Share” shall include any Share that
was previously a Restricted Share and that vested at or prior to the Effective Time but as to which
required withholding Taxes had not been withheld at or prior to the Effective Time.
(e) At any time following the date that is twelve months after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to deliver to it any funds
(including any interest received with respect thereto) which have been made available to the Paying
Agent and which have not been disbursed to holders of Certificates or Book-Entry Shares and, after
such funds have been delivered to the Surviving Corporation, such holders shall be entitled to look
to Parent and the Surviving Corporation (subject to abandoned property, escheat or other similar
laws) as general creditors thereof with respect to the Merger Consideration payable upon due
surrender of their Certificates or Book-Entry Shares. The holders of Options, Restricted Units and
Restricted Shares shall be entitled to look to Parent and Surviving Corporation (subject to
abandoned property, escheat or similar laws) as general creditors thereof with respect to the
Option Consideration payable with respect to their canceled Options, with respect to the Restricted
Unit Consideration payable with respect to their cancelled Restricted Units, and with respect to
the Restricted Share Consideration payable with respect to their cancelled Restricted Shares. The
Surviving Corporation shall pay all charges and expenses, including those of the Paying Agent, in
connection with the exchange of Shares for the Merger Consideration and the payment of Option
Consideration, Restricted Unit Consideration, and Restricted Share Consideration. Neither the
Surviving Corporation, Parent nor the Paying Agent will be liable to any person entitled to payment
under this Article II for any consideration which is properly delivered to a public official
pursuant to any abandoned property, escheat or similar law.
(f) At the Effective Time the stock transfer books of the Company shall be closed and
thereafter there shall be no further registration of transfers of Shares that were outstanding
prior to the Effective Time. After the Effective Time, all Certificates or Book-Entry Shares
presented to the Surviving Corporation for transfer shall be canceled and exchanged for the
consideration provided for, and in accordance with the procedures set forth in, this Article II.
(g) Notwithstanding anything in this Agreement to the contrary, Parent, the Surviving
Corporation and the Paying Agent shall be entitled to deduct and withhold from the consideration
otherwise payable to any former holder of Shares, Options or Restricted Units pursuant to this
Agreement any amount as Parent, the Surviving Corporation or the Paying Agent determines may be
required to be deducted and withheld with respect to the making of such payment under applicable
Tax laws. To the extent that amounts are so properly withheld by the Paying Agent, the Surviving
Corporation or Parent, as the case may be, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of the Shares, Options or Restricted Units, as
the case may be, in respect of which such deduction and withholding was made by the Paying Agent,
the Surviving Corporation or Parent, as the case may be.
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(h) In the event that any Certificate shall have been lost, stolen or destroyed, upon the
holder’s compliance with the replacement requirements established by the Paying Agent, and, if
required by the Surviving Corporation, the posting by the holder of a bond in customary amount as
indemnity against any claim that may be made against it with respect to the Certificate, the Paying
Agent will deliver in exchange for the lost, stolen or destroyed Certificate the applicable Merger
Consideration payable in respect of the Shares represented by such Certificate pursuant to this
Article II.
SECTION 2.5. Adjustments. If, during the period between the date of this Agreement and the Effective Time, any change
in the outstanding Shares shall occur, including by reason of any reclassification,
recapitalization, stock split or combination, exchange or readjustment of Shares, or stock dividend
thereon with a record date during such period, but excluding any change that results from any
exercise of Options or settlement of Restricted Units, in each case outstanding as of the date
hereof and granted under any Company Stock Plan or pursuant to any Contract, with such exercise or
settlement in accordance with the terms of such Option or Restricted Unit as of the date hereof,
the Merger Consideration and any other amounts payable pursuant to this Agreement (including any
Option Consideration and any Restricted Unit Consideration) shall be appropriately adjusted.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger Sub that, except as set forth
on the Company Disclosure Schedule delivered by the Company to Parent and Merger Sub prior to the
execution of this Agreement (the “Company Disclosure Schedule”) (it being understood that
any information set forth in one section or subsection of the Company Disclosure Schedule shall be
deemed to apply to each other section or subsection of this Agreement to the extent that it is
reasonably apparent that such information is relevant to such other section or subsection) and
except as disclosed in any Company SEC Report (as defined below) filed on or after December 31,
2010 and prior to the date of this Agreement (but subject to Section 9.13):
SECTION 3.1. Organization and Qualification; Subsidiaries. The Company and each of its subsidiaries is duly organized, validly existing and in good
standing (with respect to jurisdictions that recognize the concept of good standing) under the laws
of the jurisdiction of its organization and has all requisite corporate or similar power and
authority to own, lease and operate its properties and to carry on its business as it is now being
conducted, except where any such failure to be so organized, existing or in good standing or to
have such power or authority would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect (as defined below). The Company and each of its subsidiaries is
duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its activities makes
such qualification or licensing necessary, other than in such jurisdictions where any such failure
to be so qualified or licensed or in good standing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. “Material Adverse Effect” means
any change, effect, event, circumstance, occurrence or state of facts that is materially
adverse to (a) the business, financial condition, results of operations, assets or liabilities of
the Company and its subsidiaries taken as a whole or (b) the Company’s ability to consummate the
Merger; provided, however, that, in the case of the immediately preceding clause
(a), none of the following, or any changes, effects, events,
8
circumstances, occurrence or state of facts relating to or resulting therefrom, shall be deemed in
themselves, either alone or in combination, to constitute, and none of them shall be taken into
account in determining whether there has been or could or would be, a Material Adverse Effect: (i)
economic, financial market, or geopolitical conditions in general, (ii) general changes or
developments in the industries in which the Company and its subsidiaries operate, (iii) the
announcement of this Agreement and the transactions contemplated hereby, (iv) changes in Tax laws
or regulations or applicable accounting regulations or principles or interpretations thereof, (v)
changes in the market price or trading volume of the Company Common Stock (but the reasons or
causes of such changes may constitute a Material Adverse Effect and may be taken into account in
determining whether there has been or could or would be a Material Adverse Effect), (vi) the
failure, in and of itself, by the Company to meet any expected or projected financial or operating
performance target, as well as any change by the Company in any expected or projected financial or
operating performance target (but the reasons or causes of such failures or changes may constitute
a Material Adverse Effect and may be taken into account in determining whether there has been or
could or would be a Material Adverse Effect), (vii) acts of God, national or international
hostilities, war (whether or not declared) or terrorism, or (viii) any litigation brought or
threatened by the stockholders of the Company or any of its non-wholly-owned subsidiaries (whether
on behalf of the Company or such subsidiaries or otherwise) arising out of or in connection with
the existence, announcement or performance of this Agreement or the transactions contemplated
hereby, so long as, in the case of clauses (i), (ii), (iv) and (vii), the effect on the Company and
its subsidiaries, taken as a whole, is not disproportionate to that on other companies in the
industry in which the Company operates.
SECTION 3.2. Certificate of Incorporation and By-Laws. The Company has heretofore furnished or otherwise made available to Parent a complete and
correct copy of the restated certificate of incorporation, as amended (the “Certificate of
Incorporation”), and the by-laws (the “By-Laws”) of the Company, each as currently in
effect. The Certificate of Incorporation of the Company and the By-Laws are in full force and
effect and no other organizational documents are applicable to or binding upon the Company. The
Company is not in violation of any provisions of its Certificate of Incorporation or By-Laws in any
material respect.
SECTION 3.3. Capitalization. (a) The authorized capital stock of the Company consists of (i) 120,000,000 Class A
Shares, (ii) 20,000,000 Class B Shares and (iii) 2,000,000 shares of preferred stock, par value
$0.01 per share (the “Preferred Stock”). As of June 10, 2011 (the “Capitalization
Date”), (i) 40,146,141 shares of Class A Common Stock were issued and outstanding, all of which
were validly issued, fully paid and nonassessable and were issued free of preemptive rights, (ii)
10,568,389 shares of Class B Common Stock were issued and outstanding, all of which were validly
issued, fully paid and nonassessable and were issued free of preemptive rights, (iii) an aggregate
of 5,676,264 Class A Shares were reserved for issuance upon or otherwise deliverable in connection
with the grant of equity-based awards, the exercise of outstanding Options or the settlement of
outstanding Restricted Units issued pursuant to the Company Stock Plans and the Company ESPP, (iv)
36,845,237 shares of Class A Common Stock were issued and held in treasury, (v) no shares of Class
B Common Stock were issued and held in treasury and (vi) no shares of Preferred Stock were
outstanding. On June 11, 2011 at 9:12 p.m., Boston time, the Company’s counsel provided to
Parent’s counsel a list (the “Equity Awards Schedule”) of (x) all Options issued as of the
Capitalization Date, the number of shares of Company Common Stock subject thereto, the expiration
date and the exercise price thereof and (y) all Restricted Units issued as of the Capitalization
Date, the number of shares of Company Common Stock subject thereto. From the Capitalization Date,
no shares of Company Common Stock or Preferred Stock have been issued,
9
except for Shares issued (x) upon the exercise of Options or in connection with other
equity-based awards outstanding as of the Capitalization Date, in each case, in accordance with
their terms or (y) pursuant to the Company ESPP as in effect on the date of this Agreement and in
accordance with Section 2.2(d). Except as set forth above: (A) there are not outstanding or
authorized any (I) shares of capital stock or other voting securities of the Company, (II)
securities of the Company convertible into or exchangeable for shares of capital stock or voting
securities of the Company or (III) options or other rights to acquire from the Company, and no
obligation of the Company to issue, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of the Company (collectively,
“Company Securities”), (B) there are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any Company Securities and (C) there are no other options,
calls, warrants or other rights, agreements, arrangements or commitments of any character relating
to the issued or unissued capital stock of the Company or any of its subsidiaries to which the
Company or any of its subsidiaries is a party. None of the Company Securities are owned by any of
the Company’s subsidiaries.
(b) Where such concepts are legally applicable, each of the outstanding shares of capital
stock of each of the Company’s subsidiaries is duly authorized, validly issued, fully paid and
nonassessable. All shares of capital stock in any of the Company’s subsidiaries are owned by the
Company or another wholly-owned subsidiary of the Company and are owned free and clear of all Liens
other than Permitted Liens. (A) There are not authorized or outstanding any (i) securities of the
Company or any of its subsidiaries convertible into or exchangeable for shares of capital stock of
or other voting securities or ownership interests in any subsidiary of the Company or (ii) options
or other rights to acquire from the Company or any of its subsidiaries, or other obligation of the
Company or any of its subsidiaries to issue, any capital stock, voting securities or securities
convertible into or exchangeable for any capital stock or other voting securities of any subsidiary
of the Company (the items in clauses (i) and (ii) being referred to collectively as the
“Company Subsidiary Securities”) and (B) there are no outstanding obligations of the
Company or any of its subsidiaries to repurchase, redeem or otherwise acquire any of the Company
Subsidiary Securities.
SECTION 3.4. Authority. (a) The Company has all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the transactions contemplated
hereby, subject, in the case of the Merger, to receipt of the Stockholder Approval (as defined
below). Assuming the accuracy of Parent’s representations and warranties in Section 4.9, the
execution, delivery and performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action and no other corporate proceeding on the part of the Company is
necessary to authorize this Agreement or to consummate the transactions so contemplated (other than
the Stockholder Approval and the filing with the Secretary of State of the State of Delaware of the
Certificate of Merger as required by the DGCL). This Agreement has been duly and validly executed
and delivered by the Company and, assuming the due authorization, execution and delivery hereof by
Parent and Merger Sub, constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally, general equitable principles (whether considered in a proceeding in
equity or at law) and any implied covenant of good faith and fair dealing. The only vote of the
stockholders of the Company required to adopt this Agreement and approve the transactions
contemplated hereby is the Stockholder Approval.
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(b) At a meeting duly called and held, the Board has (i) unanimously determined that this
Agreement and the transactions contemplated hereby are fair to and in the best interests of the
Company’s stockholders, (ii) unanimously approved this Agreement, the Voting Agreement and the
transactions contemplated hereby and thereby and (iii) unanimously resolved, subject to Section
6.4, to recommend approval and adoption of this Agreement by its stockholders.
(c) When so executed and delivered in accordance with the Voting Agreement, the Merger Consent
shall constitute a valid and effective Stockholder Approval in compliance with applicable law and
the Certificate of Incorporation and By-Laws, and no other vote or action of the holders of any
class or series of the capital stock of the Company will be necessary under applicable law, the
Certificate of Incorporation or By-Laws or otherwise to consummate the transactions contemplated
hereby.
SECTION 3.5. No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this Agreement by the Company do not and will
not (i) contravene, conflict with or result in any violation or breach of the Certificate of
Incorporation or By-Laws of the Company, (ii) assuming that all consents, approvals and
authorizations contemplated by clauses (i) through (v) of subsection (b) below have been obtained,
and all filings described in such clauses have been made, conflict with or violate any applicable
law, rule, regulation, order, judgment or decree applicable to the Company or any of its
subsidiaries or by which its or any of their respective properties are bound or (iii) require any
consent or other action by any person under, result in any breach or violation of or constitute a
default (or an event which with notice or lapse of time or both would become a default) or result
in the loss or change of a benefit or right under, or give rise to any right of termination,
cancellation, amendment or acceleration of, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise, approval or similar authorization or other instrument
or obligation (each, a “Contract”) to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or its or any of their respective
properties are bound, except, in the case of clauses (ii) and (iii), for any such conflict,
violation, breach, default, loss, right or other occurrence which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(b) The execution, delivery and performance of this Agreement by the Company and the
consummation of the Merger by the Company do not and will not require any consent, approval,
authorization or permit of, action by, filing with or notification to, any governmental or
regulatory (including stock exchange) authority, agency, court, commission, or other governmental
body, domestic, foreign or supranational (each, a “Governmental Entity”), except for (i)
applicable requirements of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and the rules and regulations promulgated thereunder (including the filing of the
Information Statement (as defined below)), the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the “HSR Act”), and state securities, takeover and “blue sky” laws, (ii)
the applicable requirements of the New York Stock Exchange, (iii) the filing with the Secretary of
State of the State of Delaware of the Certificate of Merger as required by the DGCL, (iv) the
applicable requirements of Antitrust Laws of jurisdictions other than the United States and (v) any
such consent, approval, authorization, permit, action, filing or notification the failure of which
to make or obtain would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
SECTION 3.6. Compliance.
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(a) (i) Neither the Company nor any of its subsidiaries is, or since January 1, 2009 has been,
in violation of (or threatened to be charged with or given notice of any violation of) any
applicable law, rule, regulation, order, judgment or decree applicable to the Company or any of its
subsidiaries or by which its or any of their respective properties are bound, except for any such
violation which would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, and (ii) the Company and its subsidiaries have all permits, licenses,
authorizations, exemptions, orders, consents, approvals and franchises (collectively,
“Licenses”) from Governmental Entities required to conduct their respective businesses as
now being conducted, except for any such Licenses the absence of which would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. This Section 3.6(a)
does not relate to matters relating to the Foreign Corrupt Practices Act, which are the subject of
Section 3.6(b), matters relating to the Xxxxxxxx-Xxxxx Act (as defined in Section 3.7(c)), which
are the subject of Section 3.7(c), employee benefit matters, which are the subject of Section 3.11,
and Taxes, which are the subject of Section 3.15.
(b) To the knowledge of the Company, neither the Company nor any of its subsidiaries has taken
any action which would cause the Company or any of its subsidiaries to be in violation of the
Foreign Corrupt Practices Act of 1977, as amended (the “Foreign Corrupt Practices Act”), or
any applicable law of similar effect.
SECTION 3.7. SEC Filings; Financial Statements.
(a) The Company has filed or otherwise transmitted all forms, reports, statements,
certifications and other documents (including all exhibits, amendments and supplements thereto)
required to be filed by it with the Securities and Exchange Commission (the “SEC”) since
January 1, 2009 (all such forms, reports, statements, certificates and other documents filed since
January 1, 2009, collectively, the “Company SEC Reports”). Each of the Company SEC
Reports, as amended, complied as to form in all material respects with the applicable requirements
of the Securities Act of 1933, as amended (the “Securities Act”), and the rules and
regulations promulgated thereunder and the Exchange Act and the rules and regulations promulgated
thereunder, each as in effect on the date so filed. None of the Company SEC Reports contained,
when filed as finally amended, any untrue statement of a material fact or omitted to state a
material fact required to be stated or incorporated by reference therein or necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading.
(b) The audited consolidated financial statements of the Company (including any related notes
thereto) included in the Company SEC Reports have been prepared in accordance with generally
accepted accounting principles in all material respects applied on a consistent basis throughout
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 and its subsidiaries at the
respective dates thereof and the consolidated statements of operations, cash flows and changes in
stockholders’ equity for the periods indicated. The unaudited consolidated financial statements of
the Company (including any related notes thereto) for all interim periods included in the Company
SEC Reports on Form 10-Q and current reports on Form 8-K have been prepared in accordance with
generally accepted accounting principles in all material respects applied on a consistent basis
throughout 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 and its
subsidiaries as of the respective dates thereof and the consolidated statements of operations and
cash flows for the periods indicated (subject to normal period-end adjustments).
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(c) Since the enactment of the Xxxxxxxx-Xxxxx Act of 2002, as amended (the
“Xxxxxxxx-Xxxxx Act”), the Company has been and is in compliance in all material respects
with the applicable provisions of the Xxxxxxxx-Xxxxx Act. There are no outstanding loans or other
extensions of credit made by the Company or any of its subsidiaries to any executive officer (as
defined in Rule 3b-7 under the Exchange Act) or director of the Company. The Company has not,
since the enactment of the Xxxxxxxx-Xxxxx Act, taken any action prohibited by Section 402 of the
Xxxxxxxx-Xxxxx Act.
(d) The Company has established and maintains disclosure controls and procedures (as defined
in Rule 13a-15 under the Exchange Act). Such disclosure controls and procedures are designed to
ensure that material information relating to the Company, including its consolidated subsidiaries,
is made known to the individuals responsible for the preparation of the Company’s filings with the
SEC and other public disclosure documents. The Company’s management has completed an assessment of
the effectiveness of the Company’s system of internal controls over financial reporting in
compliance with the requirements of Section 404 of the Xxxxxxxx-Xxxxx Act for the fiscal year ended
December 31, 2010, and such assessment concluded that such controls were effective and the
Company’s independent registered accountant has issued an attestation report concluding that the
Company maintained effective internal control over financial reporting as of December 31, 2010.
(e) The Company has disclosed, based on its most recent evaluation prior to the date hereof,
to the Company’s auditors and the audit committee of the Board (A) any significant deficiencies and
material weaknesses in the design or operation of internal controls over financial reporting which
are reasonably likely to adversely affect in any material respect the Company’s ability to record,
process, summarize and report financial information and (B) any fraud, whether or not material,
that involves management or other employees who have a significant role in the Company’s internal
controls over financial reporting, each of which, in the case of both clauses (A) and (B), is set
forth in Section 3.7(e) of the Company Disclosure Schedule.
(f) To the knowledge of the Company, the Company has not identified any material weaknesses in
the design or operation of internal controls over financial reporting. To the knowledge of the
Company, there is no reason to believe that its auditors and its Chief Executive Officer and Chief
Financial Officer will not be able to give the certification and attestations required pursuant to
the rules and regulations adopted pursuant to Section 404 of the Xxxxxxxx-Xxxxx Act when next due.
SECTION 3.8. Absence of Certain Changes or Events. Since December 31, 2010, the business of the Company and its subsidiaries has been
conducted in the ordinary course consistent with past practices and there has not been any change,
event, occurrence, development or state of circumstances or facts that has had or would reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect.
SECTION 3.9. No Undisclosed Material Liabilities. There are no liabilities or obligations of the Company or any of its subsidiaries of any
kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and
there is no existing condition, situation or set of circumstances that would reasonably be expected
to result in such a liability, other than:
13
(a) liabilities or obligations disclosed and provided for in the consolidated balance sheet of
the Company dated December 31, 2010 or in the notes thereto;
(b) liabilities or obligations incurred in the ordinary course of business consistent with
past practices since December 31, 2010;
(c) liabilities or obligations to pay legal, investment banking and other professional
advisory fees incurred in connection with the Merger;
(d) liabilities or obligations incurred directly as a result of this Agreement; and
(e) liabilities or obligations that would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect.
SECTION 3.10. Absence of Litigation. There are no suits, claims, actions, proceedings, arbitrations, mediations or investigations
pending or, to the knowledge of the Company, threatened against the Company or any of its
subsidiaries, or any present or former officer, director or employee of the Company or any of its
subsidiaries other than any such suit, claim, action, proceeding, arbitration, mediation or
investigation that would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its subsidiaries nor any of their
respective properties (for which the Company or any of its subsidiaries is liable) is or are
subject to any order, writ, judgment, injunction, decree or award except for those that would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. There
are no SEC inquiries or investigations, other governmental inquiries or investigations or internal
investigations pending or, to the knowledge of the Company, threatened, in each case regarding any
accounting practices of the Company or any of its subsidiaries or any malfeasance by any executive
officer of the Company or any of its subsidiaries.
SECTION 3.11. Employee Benefit Plans.
(a) Section 3.11(a) of the Company Disclosure Schedule contains a true and complete list of
each material “employee benefit plan” (within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), and each other
material benefit plan, program, policy, agreement or arrangement contributed to, sponsored or
maintained by the Company or any of its subsidiaries as of the date hereof (other than any plan,
program, policy, agreement or arrangement required to be provided under applicable law) for the
benefit of any current, former or retired employee, officer, consultant, independent contractor or
director of the Company or any of its subsidiaries (collectively, the “Company Employees”
and such plans, programs, policies, agreements and arrangements, collectively, “Company
Plans”).
(b) With respect to each Company Plan, the Company (i) has made available to Parent a current,
accurate and complete copy thereof (or, if a plan is not written, a written summary of the material
terms thereof) and, to the extent applicable, (x) any summary plan description and (y) the most
recently filed Form 5500, attached schedules, and audited financial statements, if any, and (ii)
will as soon as possible, but in no event more than fifteen calendar days after the date hereof,
make available to Parent a current, accurate and complete copy of, to the extent applicable, (x)
any related trust agreement or other funding instrument and (y) the most recent determination or
opinion letter, if any, received from the IRS.
14
(c) Except as failure to do so would not, individually or in the aggregate, be reasonably
expected to result in a Material Adverse Effect, each Company Plan has been established and
administered in compliance with its terms and in compliance with the applicable provisions of
ERISA, the Code, and other applicable laws, rules, and regulations.
(d) Neither the Company nor any other corporation or other trade or business that is treated
as part of a single employer with the Company under Section 414(b) or (c) of the Code contributes
or is required to contribute to, or has any liability with respect to, any employee benefit plan
that is subject to Title IV of ERISA.
(e) No Company Plan provides post employment or post retirement health or medical or life
insurance benefits for any employee or former employee, except as required to avoid excise tax
under Section 4980B of the Code.
(f) Except as would not, individually or in the aggregate, be reasonably expected to result in
a Material Adverse Effect, with respect to each Company Plan, no actions, suits or claims (other
than routine claims for benefits) are pending or, to the knowledge of the Company, threatened.
(g) Each Company Plan that is intended to be qualified under Section 401(a) of the Code has a
favorable determination or opinion letter from the Internal Revenue Service (the “IRS”)
and, to the knowledge of the Company, no circumstances exist that would reasonably be expected to
materially adversely affect such qualification.
(h) The execution, delivery of and performance by the Company of its obligations under the
transactions contemplated by this Agreement will not (either alone or upon occurrence of any
additional or subsequent events) (i) constitute an event under any Company Plan or any trust or
loan related to any of those plans or agreements that will result in any payment, acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any Company Employee, or (ii) result in the triggering or imposition of
any restrictions or limitations on the right of the Company or any of its subsidiaries to amend or
terminate any Company Plan.
(i) No condition exists that would prevent the Company from amending or terminating any
Company Plan covering a current Company Employee whose primary place of employment is in the United
States or former Company Employee whose primary place of employment was in the United States (each
such plan a “U.S. Company Plan”) without liability, other than the obligation for benefits
accrued prior to the termination of such plan.
(j) All contributions and premium payments required to have been paid with respect to each
U.S. Company Plan have been paid or, to the extent (if any) not paid, reflected as a liability in
accordance with the Company’s ordinary accounting practices.
(k) To the knowledge of the Company, there has been no amendment to, written interpretation of
or announcement (whether or not written) by the Company relating to, or change in employee
participation or coverage under, any of the U.S. Company Plans which would increase materially the
expense of maintaining such Company Plan above the level of the expense incurred in respect thereof
for the most recent fiscal year ended prior to the date hereof.
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(l) No person has been treated as an independent contractor of the Company or any of its
subsidiaries for tax purposes, or for purposes of exclusion from any Company Plan, who should have
been treated as an employee for such purposes, except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 3.12. Labor and Employment Matters. Neither the Company nor any of its subsidiaries is a party to any collective bargaining
agreement or other labor union agreement applicable to Company Employees, nor to the knowledge of
the Company as of the date of this Agreement are there any formal activities or proceedings of any
labor union to organize any such employees. As of the date of this Agreement, there are no unfair
labor practice complaints pending against the Company or any of its subsidiaries before the
National Labor Relations Board or any other labor relations tribunal or authority. As of the date
of this Agreement, there are no strikes, work stoppages, slowdowns, lockouts, material arbitrations
or material grievances, or other material labor disputes pending or, to the knowledge of the
Company, threatened in writing against or involving the Company or any of its subsidiaries.
SECTION 3.13. Insurance. Except as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, all insurance policies of the Company and its subsidiaries (a) are in full
force and effect and provide insurance in such amounts and against such risks as is sufficient to
comply with applicable law and (b) neither the Company nor any of its subsidiaries is in breach or
default, and neither the Company nor any of its subsidiaries has taken any action or failed to take
any action which, with notice or the lapse of time, would constitute such a breach or default, or
permit termination or modification of, any of such insurance policies.
SECTION 3.14. Properties. Except as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, and subject to Permitted Liens, the Company or one of its subsidiaries,
(i) has good title to all the real properties and assets reflected in the latest audited balance
sheet included in the Company SEC Reports as being owned by the Company or one of its subsidiaries
or acquired after the date thereof (except properties sold or otherwise disposed of since the date
thereof in the ordinary course of business), free and clear of all Liens, and (ii) has a valid
leasehold interest in all leasehold estates reflected in the latest audited financial statements
included in the Company SEC Reports or acquired after the date thereof (except for leases that have
expired by their terms since the date thereof or been assigned, terminated or otherwise disposed of
in the ordinary course of business consistent with past practice), and each material lease is valid
and binding on the Company and each of its subsidiaries party thereto and, to the knowledge of the
Company, each other party thereto, and there is no material default under any such lease by the
Company or any of its subsidiaries and no event has occurred that with the lapse of time or the
giving of notice or both would constitute a material default thereunder by the Company or any of
its subsidiaries or, to the knowledge of the Company, any other party thereto.
SECTION 3.15. Tax Matters.
(a) Except as would not, individually or in the aggregate, have a Material Adverse Effect, (i)
all Tax Returns required to be filed by, or with respect to any activities of, the Company and its
subsidiaries prior to the date hereof have been timely filed (except those under valid extension)
and as of the time of filing, the Tax Returns were true and complete in all material respects, (ii)
as of the date hereof, all Taxes of the Company and its subsidiaries have been paid or adequately
provided for in accordance with GAAP on the most recent financial statements included in the
Company SEC Reports filed prior to the date hereof, (iii) neither the Company nor any of its
16
subsidiaries has received written notice of any action, suit, proceeding, investigation, claim
or audit against, or with respect to, any Taxes that have not been paid or otherwise settled, (iv)
there are no liens for Taxes (other than Taxes not yet due and payable, that may thereafter be paid
without interest or penalty, that have been adequately provided for in accordance with generally
accepted accounting principles or for amounts being contested in good faith) upon any of the assets
of the Company or any of its subsidiaries, and (v) neither the Company nor any of its subsidiaries
(A) has been a member of an affiliated group filing a consolidated federal income Tax Return (other
than a group the common parent of which was the Company), (B) has any liability for the Taxes of
any person (other than the Company, or any subsidiary of the Company) under Treasury regulation
section 1.1502-6 (or any similar provision of state, local or foreign law) or (C) has entered into
any agreement or arrangement with any taxing authority with regard to the tax liability of the
Company or any subsidiary affecting any tax period for which the applicable statute of limitations
has not expired.
(b) For purposes of this Agreement, “Taxes” shall mean any taxes of any kind,
including but not limited to those on or measured by or referred to as income, gross receipts,
capital, sales, use, ad valorem, franchise, profits, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, value added, property, windfall profits taxes or
customs duties, together with any interest and any penalties, additions to tax or additional
amounts imposed by any governmental authority, domestic or foreign. For purposes of this
Agreement, “Tax Return” shall mean any return, report or statement required to be filed
with any governmental authority with respect to Taxes, including any schedule or attachment thereto
or amendment thereof.
SECTION 3.16. Information Statement. None of the information supplied or to be supplied by the Company for inclusion or
incorporation by reference in the information statement to be sent to stockholders of the Company
related to the Merger and this Agreement (together with any amendments or supplements thereto and
any other required materials, the “Information Statement”) will, at the date it is first
filed with the SEC and mailed to the stockholders of the Company, 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 the light of the circumstances under which they are made,
not misleading. The Information Statement will at all times comply as to form in all material
respects with the requirements of the Exchange Act and the rules and regulations promulgated
thereunder. Notwithstanding the foregoing, the Company makes no representation or warranty with
respect to any information supplied by or on behalf of Parent or Merger Sub in writing specifically
for use in the Information Statement.
SECTION 3.17. Opinion of Financial Advisor. Xxxxxxx, Xxxxx & Co. (the “Financial Advisor”) has delivered to the Board its
written opinion (or oral opinion to be confirmed in writing), dated as of the date hereof, that, as
of such date and based upon and subject to the limitations and assumptions set forth therein, the
Merger Consideration is fair, from a financial point of view, to the holders of Class A Common
Stock and the holders of Class B Common Stock.
SECTION 3.18. Brokers. No broker, finder or investment banker (other than the Financial Advisor) is entitled to
any brokerage, finder’s or other fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by and on behalf of the Company or any of its
subsidiaries. True, complete and correct copies of the Company’s engagement and other
agreements with the Financial Advisor have been previously delivered to Parent.
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SECTION 3.19. Takeover Statutes and Rights Agreement. (a) The Company has taken all action necessary to exempt the Merger, this Agreement, the
Voting Agreement and the transactions contemplated hereby and thereby from Section 203 of Delaware
Law, and, accordingly, neither such Section nor any other antitakeover or similar statute or
regulation applies or purports to apply to any such transactions. Assuming the accuracy of the
representations and warranties of Parent and Merger Sub set forth in Section 4.9, no “fair price”,
“moratorium”, “control share acquisition” or other similar antitakeover statute or regulation
enacted under state or federal laws in the United States applicable to the Company is applicable to
this Agreement, the Voting Agreement, the Merger or the other transactions contemplated hereby or
thereby.
(b) Neither the Company nor any of its subsidiaries has adopted a stockholder rights plan or
other similar arrangement relating to accumulations of beneficial ownership or capital stock of the
Company or a change in control of the Company.
SECTION 3.20. Intellectual Property.
(a) Section 3.20(a) of the Company Disclosure Schedule contains a true and complete list of
all registrations and applications for registration of any Intellectual Property owned by the
Company or any of its subsidiaries (“Registered Intellectual Property”).
(b) Except as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect: (i) the Company and its subsidiaries own or have the valid and
enforceable right to use all Intellectual Property that is used or held for use in, or necessary
for, the conduct of their businesses as currently conducted; (ii) the Company and its subsidiaries
solely and exclusively own all right, title and interest in and to all material Company Owned IP
free and clear of any Liens (except for Permitted Liens and other than non-exclusive licenses
granted by the Company or its subsidiaries in the ordinary course of business consistent with past
practice); (iii) the operations of the Company and its subsidiaries do not infringe, misappropriate
or otherwise violate the Intellectual Property of any third party and, to the knowledge of the
Company, none of the Company Owned IP or Intellectual Property exclusively licensed to the Company
or any of its subsidiaries has been challenged, misappropriated, infringed or otherwise violated by
any third party; (iv) the Company and its subsidiaries have taken all reasonable actions necessary
to protect and maintain all material Company Owned IP, including payment of applicable maintenance
fees and filing of applicable statements of use with respect to any and all Registered Intellectual
Property and, to the knowledge of the Company, all such material Company Owned IP is valid and
enforceable; (v) no Trademarks included in the Company Owned IP material to the business or
operation of the
Company or any of its subsidiaries has been the subject of an opposition or cancellation
proceeding; (vi) no Trade Secrets material to the operation of the business of the Company and its
subsidiaries have been disclosed other than to employees, representatives and agents of the Company
or any of its subsidiaries all of whom are bound by written confidentiality agreements; (vii)
neither the Company nor any of its subsidiaries is a party to any claim, suit or other action, and
to the knowledge of the Company, no claim, suit or other action is threatened against the Company
or any of its subsidiaries that (A) challenges the validity, enforceability, ownership, or right to
use, sell or license any material Company Owned IP or (B) alleges that any services provided,
processes used or products manufactured, used, imported, offered for sale or sold by the Company or
any of its subsidiaries infringes, misappropriates or otherwise violates any Intellectual Property
rights of any third party and (viii) the consummation of the transactions contemplated by this
Agreement will not alter, encumber, impair or extinguish any material Company Owned IP or
Intellectual Property licensed to the
18
Company or any of its subsidiaries or impair the right of
Parent to develop, use, sell, license or dispose of, or to bring any action for the infringement of
any material Company Owned IP.
(c) For purposes of this Agreement, (i) “Intellectual Property” means (A) trademarks,
service marks, brand names, certification marks, trade dress, domain names and other indications of
origin, the goodwill associated with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing, including any extension, modification
or renewal of any such registration or application (“Trademarks”); (B) inventions and
discoveries, whether patentable or not, in any jurisdiction; patents, applications for patents
(including, without limitation, divisions, continuations, continuations in part and renewal
applications), and any renewals, extensions or reissues thereof, in any jurisdiction; (C) trade
secrets and confidential information and rights in any jurisdiction to limit the use or disclosure
thereof by any person (“Trade Secrets”); (D) writings and other works of authorship,
including designs and drawings, whether copyrightable or not, in any jurisdiction, and any and all
copyright rights, whether registered or not, and registrations or applications for registration of
copyrights in any jurisdiction, and any renewals or extensions thereof; (E) moral rights, database
rights, design rights, industrial property rights, publicity rights and privacy rights; and (F) any
other intellectual property or proprietary rights and (ii) “Company Owned IP” means all
Intellectual Property owned or purported to be owned by the Company or its subsidiaries, including
any and all Registered Intellectual Property.
SECTION 3.21. Environmental Matters.
(a) Except as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect: (i) the Company and each of its subsidiaries are and have been in
compliance with all applicable Environmental Laws (as defined below), and possess and comply with
all applicable Environmental Permits (as defined below) required under such laws to operate its
properties and business operations; (ii) there are no Materials of Environmental Concern (as
defined below) at, in, under, from or within any property now or in the past owned, leased or
operated by the Company or any of its subsidiaries (or any of their respective predecessors), under
circumstances that violate, or are reasonably likely to result in liability of the Company or any
of its subsidiaries under, any applicable Environmental Law; (iii) neither the Company nor any of
its subsidiaries has any liability for, or has received, any request for information pursuant to
Section 104(e) of the Comprehensive Environmental Response, Compensation and Liability Act or any
similar state statute concerning, any release or threatened release of Materials of Environmental
Concern at any location;
and (iv) neither the Company nor any of its subsidiaries has received any claim, notice,
demand, request for information, citation, summons or complaint, or is or has been subject to any
suit, claim, action, investigation, review or proceeding, relating to noncompliance with
Environmental Laws or any other liabilities or obligations arising from Materials of Environmental
Concern or related to Environmental Laws, and to the knowledge of the Company no such matter has
been threatened.
(b) For purposes of this Agreement, the following terms shall have the meanings assigned
below:
“Environmental Laws” shall mean all foreign, federal, state, or local laws
(including without limitation common law), statutes, regulations, treaties, judicial
decisions, judgments, orders, ordinances, codes, or decrees related to (a) human health and
safety as such relates to the indoor or outdoor environment or (b) the indoor or outdoor
environment, including air, soil,
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sediments, surface water or groundwater, in each of the
foregoing cases, whether now or hereafter in effect.
“Environmental Permits” shall mean all permits, licenses, registrations, franchises,
certificates, approvals, and other authorizations relating to or required under applicable
Environmental Laws.
“Materials of Environmental Concern” shall mean any pollutant, contaminant or any
hazardous, acutely hazardous, or toxic substance or waste, including, without limitation,
chlorinated solvents, petroleum, its derivatives, by-products and other hydrocarbons,
polychlorinated biphenyls, radioactive material, lead, asbestos-containing materials and any
other substances or wastes defined or regulated under any Environmental Laws, including the
federal Comprehensive Environmental Response, Compensation and Liability Act or the federal
Resource Conservation and Recovery Act.
SECTION 3.22. Contracts.
(a) Except for this Agreement or as set forth on Section 3.22(a) of the Company Disclosure
Schedule, none of the Company or any of its subsidiaries is a party to or bound by:
(i) any Contract that would be required to be filed by the Company as a “material
contract” pursuant to Item 601(b)(10) of Regulation S-K under the Securities Act (other than
Contracts filed as exhibits to, or incorporated by reference in, Company SEC Reports);
(ii) any Contract containing covenants binding upon the Company or any of its
subsidiaries that materially restrict the ability of the Company or any of its subsidiaries
(or which, following the consummation of the Merger, could reasonably be expected to
materially restrict the ability of Parent, the Surviving Corporation or their respective
subsidiaries) to compete in any business or with any person or in any geographic area (other
than any customary restrictions in a lease for retail space) that is material to the Company
and its subsidiaries, taken as a whole, as of the date hereof, except for any such Contract
that may be canceled without penalty by the Company or any of its subsidiaries upon notice
of 60 days or less (so long as the such covenants do not survive such cancelation);
(iii) any joint venture, partnership or similar agreement (excluding information
technology Contracts) that is material to the Company and its subsidiaries, taken as a
whole;
(iv) any Contract that would prevent, materially delay or materially impede the
Company’s ability to consummate the Merger or the other transactions contemplated by this
Agreement;
(v) any Contract (other than any Company Plan or any purchase order issued in the
ordinary course of business covering footwear, apparel and accessories, and related
materials) for the purchase or sale of materials, supplies, goods, services, equipment or
other assets which by its terms provides for aggregate payments by or to the Company and its
subsidiaries of $10,000,000 or more over the remaining term thereof;
(vi) any Contract that is material to the Company and its subsidiaries, taken as a
whole, relating to the acquisition or disposition of any business (in each case, whether by
20
merger, sale of stock, sale of assets or otherwise) under which the Company or any of its
subsidiaries has current obligations as of the date of this Agreement;
(vii) any Contract relating to indebtedness for borrowed money or the deferred purchase
price of property (excluding trade payables and receivables in the ordinary course of
business), in either case, whether incurred, assumed, guaranteed or secured by any asset,
with an aggregate outstanding principal amount exceeding $10,000,000;
(viii) any lease of real or personal property (other than any lease for retail space)
that is material to the Company and its subsidiaries, taken as a whole;
(ix) any Contract that is material to the Company and its subsidiaries, taken as a
whole, that grants any exclusive license or supply or distribution agreement or other
exclusive rights or grants any “most favored nation” or similar rights (other than any
customary rights in a lease for retail space);
(x) any agreement with any Xxxxxx Family Group member, any director or officer of the
Company or any of its subsidiaries or with any “associate” or any member of the “immediate
family” (as such terms are respectively defined in Rules 12b-2 and 16a-1 of the Exchange
Act) of any such director or officer;
(xi) any Contract (excluding licenses for commercial computer software that are
generally available on nondiscriminatory pricing terms) to which the Company or any of its
subsidiaries (i) obtains the right to use, or a covenant not to be sued under, any
Intellectual Property or (ii) grants the right to use, or a covenant not to be sued under,
any Intellectual Property, in each case, that is material to the Company and its
subsidiaries, taken as a whole; or
(xii) any other Contract not made in the ordinary course of business that is material
to the Company and its subsidiaries, taken as a whole.
Each such Contract described in clauses (i) through (xii) is referred to herein as a “Material
Contract”.
(b) Each of the Material Contracts is valid and binding on the Company and each of its
subsidiaries party thereto and, to the knowledge of the Company, each other party thereto and is in
full force and effect, except for such failures to be valid and binding or to be in full force and
effect that would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. There is no default under any Material Contract by the Company or any of its
subsidiaries and no event has occurred that with the lapse of time or the giving of notice or both
would constitute a default thereunder by the Company or any of its subsidiaries or, to the
knowledge of the Company, any other party thereto, in each case except as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect. True and complete
copies of each Material Contract have been provided to Parent.
SECTION 3.23. Affiliate Transactions. There are no transactions, agreements, arrangements or understandings between (i) the
Company or any of its subsidiaries, on the one hand, and (ii) any affiliate of the Company (other
than any of its subsidiaries), on the other hand, of the
21
type that would be required to be
disclosed under Item 404 of Regulation S-K under the Securities Act which have not been so
disclosed.
SECTION 3.24. No Other Representations or Warranties. Except for the representations and warranties contained in this Article III, each of Parent
and Merger Sub acknowledges that neither the Company nor any other person on behalf of the Company
makes any other express or implied representation or warranty with respect to the Company or with
respect to any other information provided to Parent or Merger Sub in connection with the
transactions contemplated by this Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF
PARENT AND MERGER SUB
PARENT AND MERGER SUB
Parent and Merger Sub hereby, jointly and severally, represent and warrant to the Company
that, except as set forth on the Disclosure Schedule delivered by Parent and Merger Sub to the
Company prior to the execution of this Agreement (the “Parent Disclosure Schedule”) (it
being understood that any information set forth in one section or subsection of the Parent
Disclosure Schedule shall be deemed to apply to each other section or subsection of this Agreement
to the extent that it is reasonably apparent that such information is relevant to such other
section or subsection) and except as disclosed in any Parent SEC Report filed on or after December
31, 2010 and prior to the date of this Agreement (but subject to Section 9.13):
SECTION 4.1. Organization; Certificate of Incorporation and By-Laws.
(a) Each of Parent and Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated and has the requisite
corporate power and authority to own, operate or lease its properties and to carry on its business
as it is now being conducted, except where the failure to be so organized, existing or in good
standing or to have such power or authority would not, individually or in the aggregate,
prevent, materially delay or materially impede the consummation of the transactions
contemplated by this Agreement. Parent or one of Parent’s wholly-owned subsidiaries owns
beneficially and of record all of the outstanding capital stock of Merger Sub free and clear of all
security interests, liens, claims, pledges, agreements, limitations in voting rights, charges or
other encumbrances of any nature whatsoever.
(b) Parent has heretofore furnished or otherwise made available to the Company a complete and
correct copy of the certificate of incorporation and the by-laws of each of Parent and Merger Sub
as in effect as of the date hereof. Such organizational documents of Parent and Merger Sub are in
full force and effect and no other organizational documents are applicable to or binding upon
Parent and Merger Sub. Neither Parent nor Merger Sub is in violation of any provisions of its
organizational documents in any material respect.
SECTION 4.2. Authority. Each of Parent and Merger Sub has all necessary corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement by each of Parent
and Merger Sub and the consummation by each of Parent and Merger Sub of the transactions
contemplated hereby have been duly and validly authorized by all necessary action by the Boards of
Directors of Parent and Merger Sub and, promptly after the execution hereof, will be duly and
validly
22
authorized by written consent of the sole stockholder of Merger Sub, and no other corporate
proceedings on the part of Parent or Merger Sub are necessary to authorize this Agreement, to
perform their respective obligations hereunder, or to consummate the transactions contemplated
hereby (other than the filing with the Secretary of State of the State of Delaware of the
Certificate of Merger as required by the DGCL). This Agreement has been duly and validly executed
and delivered by Parent and Merger Sub and, assuming due authorization, execution and delivery
hereof by the Company, constitutes a legal, valid and binding obligation of each of Parent and
Merger Sub enforceable against each of Parent and Merger Sub in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and any implied covenant of
good faith and fair dealing.
SECTION 4.3. No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this Agreement by Parent and Merger Sub do not
and will not (i) contravene, conflict with or result in any violation or breach of the respective
certificates of incorporation or by-laws of Parent or Merger Sub, (ii) assuming that all consents,
approvals and authorizations contemplated by clauses (i) through (v) of subsection (b) below have
been obtained, and all filings described in such clauses have been made, conflict with or violate
any applicable law, rule, regulation, order, judgment or decree applicable to Parent or Merger Sub
or by which either of them or any of their respective properties are bound or (iii) require any
consent or other action by any person under, result in any breach or violation of or constitute a
default (or an event which with notice or lapse of time or both would become a default) or result
in the loss or change of a benefit or right under, or give rise to any right of termination,
cancellation, amendment or acceleration of, any Contracts to which Parent or Merger Sub is a party
or by which Parent or Merger Sub or its or any of their respective properties are bound, except, in
the case of
clauses (ii) and (iii), for any such conflict, violation, breach, default, acceleration, loss,
right or other occurrence which would not reasonably be expected to prevent, materially delay or
materially impede the consummation of the transactions contemplated hereby.
(b) The execution, delivery and performance of this Agreement by each of Parent and Merger Sub
and the consummation of the transactions contemplated hereby by each of Parent and Merger Sub do
not and will not require any consent, approval, authorization or permit of, action by, filing with
or notification to, any Governmental Entity, except for (i) the applicable requirements, if any, of
the Exchange Act and the rules and regulations promulgated thereunder, the HSR Act and state
securities, takeover and “blue sky” laws, (ii) the filing with the Secretary of State of the State
of Delaware of the Certificate of Merger as required by the DGCL, (iii) the applicable requirements
of Antitrust Laws of jurisdictions other than the United States and (iv) any such consent,
approval, authorization, permit, action, filing or notification the failure of which to make or
obtain would not prevent, materially delay or materially impede the consummation of the
transactions contemplated hereby.
SECTION 4.4. Absence of Litigation. There are no suits, claims, actions, proceedings, arbitrations, mediations or
investigations pending or, to the knowledge of Parent, threatened against Parent or any of its
subsidiaries, other than any such suit, claim, action, proceeding or investigation that would not,
or would not reasonably be expected to, prevent, materially delay or materially impede the
consummation of the transactions contemplated hereby. As of the date hereof,
23
neither Parent nor
any of its subsidiaries nor any of their respective properties is or are subject to any order,
writ, judgment, injunction, decree or award that would, or would reasonably be expected to,
prevent, materially delay or materially impede the consummation of the transactions contemplated
hereby.
SECTION 4.5. Information Statement. None of the information supplied or to be supplied by, or on behalf of, Parent or Merger
Sub for inclusion or incorporation by reference in the Information Statement will, at the date it
is first filed with the SEC and mailed to the stockholders of the Company, 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 the light of the circumstances under which
they are made, not misleading. Notwithstanding the foregoing, Parent and Merger Sub make no
representation or warranty with respect to any information supplied by or on behalf of the Company
or any of its representatives which is contained or incorporated by reference in the Information
Statement.
SECTION 4.6. Brokers. No broker, finder or investment banker (other than Xxxxxxxxx & Co., LLC, whose fees shall
be paid by Parent) is entitled to any brokerage, finder’s or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements made by and on behalf
of Parent or Merger Sub.
SECTION 4.7. Financing. Parent has or, at the Effective Time, will have sufficient funds to pay the aggregate
Merger Consideration and all amounts payable pursuant to Article II of this Agreement.
SECTION 4.8. Capitalization of Merger Sub; Operations of Merger Sub. All of the issued and outstanding share capital of Merger Sub is, and immediately prior to
the Effective Time will be, owned, directly or indirectly, by Parent. Merger Sub has been formed
solely for the purpose of engaging in the transactions contemplated hereby and prior to the
Effective Time will have engaged in no other business activities and will have incurred no
liabilities or obligations other than in connection herewith or as contemplated herein.
SECTION 4.9. Ownership of Shares. Except pursuant to the Voting Agreement, neither Parent nor any of Parent’s “Affiliates” or
“Associates” directly or indirectly “owns,” beneficially or otherwise, any Shares, as those terms
are defined in Section 203 of the DGCL. Other than as contemplated by this Agreement and the
Voting Agreement, neither Parent nor any of its subsidiaries is, nor has been within the last three
years, an “interested stockholder” of the Company, as such term is defined in Section 203 of the
DGCL.
SECTION 4.10. Vote/Approval Required. No vote or consent of the holders of any class or series of capital stock of Parent is
necessary to approve this Agreement or the Merger or the transactions contemplated hereby. The
vote or consent of the sole stockholder of Merger Sub (which shall have occurred prior to the
Effective Time) is the only vote or consent of the holders of any class or series of capital stock
of Merger Sub necessary to approve this Agreement or the Merger or the transactions contemplated
hereby.
SECTION 4.11. No Other Representations or Warranties. Except for the representations and warranties contained in this Article IV, the Company
acknowledges that none of Parent, Merger Sub or any other person on behalf of Parent or Merger Sub
makes any other express or implied representation or warranty with respect to Parent or Merger Sub
or with respect to any
24
other information provided to the Company in connection with the
transactions contemplated by this Agreement.
ARTICLE V.
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1. Conduct of Business of the Company Pending the Merger. The Company covenants and agrees that, during the period from the date hereof until the
Effective Time, except as contemplated by this Agreement or as required by law, or unless Parent
shall otherwise agree in writing, the business of the Company and its subsidiaries shall be
conducted in its ordinary course of business consistent with past practice and the Company shall
use its commercially reasonable efforts to preserve substantially intact its business organization,
to preserve its present relationships with material customers and suppliers and other persons with
which it has significant business relations and to maintain all material Registered Intellectual
Property,
including payment of applicable maintenance fees and filing of applicable statements of use,
except for such failures to maintain or file as are reasonably chosen in the ordinary course of
business. Between the date of this Agreement and the Effective Time, except as otherwise
contemplated by this Agreement, as set forth in Section 5.1 of the Company Disclosure Schedule or
as required by applicable law, neither the Company nor any of its subsidiaries shall without the
prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned, or
delayed):
(a) amend or otherwise change its Certificate of Incorporation or By-Laws or any
similar governing instruments;
(b) issue, deliver, sell, pledge, dispose of or encumber any shares of capital stock,
ownership interests or voting securities, or any options, warrants, convertible or
exchangeable securities or other rights of any kind to acquire or receive any shares of
capital stock, any other ownership interests or any voting securities (including but not
limited to stock appreciation rights, phantom stock or similar instruments), of the Company
or any of its subsidiaries (except for the issuance of Shares (x) upon the exercise of
Options or in connection with other equity-based awards outstanding as of the date hereof,
in each case, in accordance with their terms or (y) to the extent required under the Company
ESPP as in effect on the date of this Agreement, subject to any amendments contemplated by
Section 2.2(d) and in accordance with Section 2.2(d));
(c) declare, set aside, make or pay any dividend or other distribution, payable in
cash, stock, property or otherwise, with respect to any of its capital stock (except for any
dividend or distribution in the ordinary course consistent with past practice by a direct or
indirect wholly owned subsidiary of the Company);
(d) reclassify, combine, split, subdivide, redeem, purchase or otherwise acquire any
Company Security or Company Subsidiary Security (other than the acquisition of Shares
tendered by employees or former employees in connection with a cashless exercise of Options
or in order to pay Taxes in connection with the exercise of Options or the lapse of
restrictions in respect of Restricted Stock pursuant to the terms of a Company Plan);
(e) (i) acquire (whether by merger, consolidation or acquisition of stock or assets or
otherwise) any corporation, partnership or other business organization or division thereof
25
or any assets, securities, properties, interests or business, other than purchases of
inventory and supplies in the ordinary course of business consistent with past practice;
(ii) sell or otherwise dispose of (whether by merger, consolidation or acquisition of stock
or assets or otherwise) any corporation, partnership or other business organization or
division thereof or any assets (including any Intellectual Property), other than sales or
dispositions of inventory and other assets in the ordinary course of business consistent
with past practice or pursuant to existing Contracts; (iii) enter into or renew or amend in
any material respect any Contract that is or would be a Material Contract (except as set
forth in Section 5.1(e) of the Company Disclosure Schedule); (iv) terminate any Material
Contract or waive, release or assign any material right, claim or benefit of the Company or
any of its subsidiaries (except as set forth on Section 5.1(e) of the Company Disclosure
Schedule); or (v) authorize any material new capital expenditures which are, in the
aggregate, in excess of the Company’s budget provided to Parent, other than in connection
with the repair or replacement of facilities destroyed or damaged due to casualty or
accident (whether or not covered by insurance);
(f) incur or modify in any material respect the terms of any Indebtedness, or assume,
guarantee or endorse, or otherwise as an accommodation become responsible for, the
obligations of any person, or make any loans, advances or capital contributions to, or
investments in, any other person (other than a subsidiary of the Company), in each case,
other than (x) in the ordinary course of business consistent with past practice or (y) any
letter of credit entered into in the ordinary course of business in an amount and on terms
consistent with past practice;
(g) except as contemplated by Section 6.5 or except to the extent required under any
Company Plan or as required by applicable law, (i) increase the compensation or fringe
benefits of any of its directors, officers or employees (except in the ordinary course of
business consistent with past practices), (ii) grant any severance or termination pay unless
provided for under any Company Plan as in effect on the date hereof, (iii) make any change
in the key management structure of the Company or any of its subsidiaries, including,
without limitation, the hiring of additional executive officers or the termination of
existing executive officers, (iv) enter into any employment, consulting or severance
agreement or arrangement with any of its present or former directors, officers or other
employees (other than with respect to newly hired employees in the ordinary course of
business consistent with past practices) pursuant to which the total annual compensation and
the aggregate severance benefits provided for in such agreement or arrangement exceed
$150,000, or (v) establish, adopt, enter into or amend in any material respect or terminate
any Company Plan except as reasonably determined by the Company to be required to comply
with applicable law, including the Code;
(h) make any material change in any accounting principles, except as may be appropriate
to conform to changes in statutory or regulatory accounting rules or generally accepted
accounting principles or regulatory requirements with respect thereto;
(i) other than in the ordinary course of business consistent with past practice or as
required by applicable law, (i) change any material Tax election or any material method of
accounting, (ii) enter into any closing agreement relating to any material Tax or (iii)
surrender any right to claim a material Tax refund;
26
(j) settle or compromise (i) any proceeding or dispute that relates to the transactions
contemplated hereby or (ii) any material litigation, other than, in the case of this clause
(ii) only, (A) settlements or compromises of litigation involving an amount in controversy
that is less than $1,000,000 for any individual matter or $2,500,000 for all such matters
(and that does not limit future conduct of the Company or any subsidiary) and (B) the
settlement of claims or litigation specifically disclosed, reflected or reserved against in
the most recent financial statements (or the notes thereto) of the Company included in the
Company SEC Reports for an amount not materially in excess of the amount so disclosed,
reflected or reserved; or
(k) agree to take any of the actions described in Sections 5.1(a) through Section
5.1(j).
SECTION 5.2. Conduct of Business of Parent and Merger Sub Pending the Merger.
Each of Parent and Merger Sub agrees that, between the date of this Agreement and the
Effective Time, it shall not (i), directly or indirectly, take any action to cause its
representations and warranties set forth in Article IV to be untrue such that the condition set
forth in Section 7.3(a) would not be satisfied or (ii) acquire (by merger, consolidation,
acquisition of stock or assets or otherwise) any corporation, partnership or other business
organization or division thereof or any equity interest therein if such acquisition would, or would
reasonably be expected to, lead to any material delay in obtaining or materially increase the risk
of not obtaining any approval under any Antitrust Law necessary for the consummation of the
transactions contemplated by this Agreement.
SECTION 5.3. No Control of Other Party’s Business. Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to
control or direct the Company’s or its subsidiaries’ operations prior to the Effective Time, and
nothing contained in this Agreement shall give the Company, directly or indirectly, the right to
control or direct Parent’s or its subsidiaries’ operations prior to the Effective Time. Prior to
the Effective Time, each of the Company and Parent shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision over its and its subsidiaries’
respective operations.
ARTICLE VI.
ADDITIONAL AGREEMENTS
SECTION 6.1. Information Statement; Merger Consent. (a) The Company, acting through the Board and in accordance with the DGCL and the By-Laws,
shall take all action necessary to seek and obtain, on July 26, 2011 (by no later than 11:59 p.m.,
Boston time, on such date), the Stockholder Approval, by irrevocable written consent of the Xxxxxx
Family Group in the form attached as Exhibit A to the Voting Agreement (the “Merger
Consent”). The Company shall comply with the DGCL, the By-Laws and the Certificate of
Incorporation and the Exchange Act (including Regulation 14C and Schedule 14C promulgated
thereunder) in connection with the Stockholder Approval, including (i) delivering the Information
Statement to the Company’s stockholders as required pursuant to the Exchange Act and (ii) giving
prompt notice of the taking of the actions described in the Merger Consent in accordance with
Section 228 of the DGCL to all holders of Shares not executing the Merger Consent and providing a
description of the appraisal rights of holders of Shares available under Section 262 of the DGCL
and any other disclosures with respect to appraisal rights required by Delaware law.
27
(b) As soon as reasonably practicable following the date of this Agreement, the Company shall
prepare and file with the SEC the Information Statement. Parent and Merger Sub will cooperate with
the Company in the preparation of the Information Statement. The Company shall promptly furnish
the preliminary Information Statement and the definitive Information Statement, and any amendments
or supplements thereto, to Parent and give Parent and its legal counsel a reasonable opportunity to
review and comment on such preliminary Information Statement, or amendment or supplement thereto,
prior to filing with the SEC, and the Company shall consider in good faith all comments of Parent
in connection therewith. Without limiting the generality of the foregoing, each of Parent and
Merger Sub will furnish to the Company the information relating to it required by the Exchange Act
and the rules and regulations promulgated thereunder to be set forth in the Information Statement.
The Company shall use its reasonable best efforts to respond as soon as
reasonably practicable to any SEC comments with respect to the Information Statement. The
Company will use reasonable best efforts to cause the definitive Information Statement to be mailed
to the stockholders of the Company as promptly as practicable after the Information Statement has
been cleared by the SEC or after 10 calendar days have passed since the date of filing of the
preliminary Information Statement with the SEC without notice from the SEC of its intent to review
the Information Statement; provided, however, that the Company shall have no
obligation to mail the definitive Information Statement until after the date the Stockholder
Approval is obtained. Each of Parent, Merger Sub and the Company agree to correct any information
provided by it for use in the Information Statement which shall have become false or misleading.
The Company shall as soon as reasonably practicable notify Parent and Merger Sub of the receipt of
any comments from the SEC with respect to the Information Statement and any request by the SEC for
any amendment or supplement to the Information Statement or for additional information and shall
provide Parent with copies of all correspondence between the Company and its representatives, on
the one hand, and the SEC, on the other hand. Parent shall be given a reasonable opportunity to
participate in the response to any SEC comments and to provide comments on any response (to which
reasonable and good faith consideration shall be given), including by participating in any
discussions or meetings with the SEC.
SECTION 6.2. Resignation of Directors. At the Closing, the Company shall use its reasonable best efforts to deliver to Parent
evidence reasonably satisfactory to Parent of the resignation of all directors of the Company and,
as specified by Parent reasonably in advance of the Closing, all directors of each subsidiary of
the Company, in each case, effective at the Effective Time.
SECTION 6.3. Access to Information; Confidentiality.
(a) From the date hereof to the Effective Time or the earlier termination of this Agreement,
upon reasonable prior written notice, the Company shall, and shall use its reasonable best efforts
to cause its subsidiaries, officers, directors and employees to, afford the officers, employees,
auditors and other authorized representatives of Parent reasonable access, consistent with
applicable law, during normal business hours to its officers, employees, properties, offices,
plants and other facilities (which shall not include any invasive testing or sampling) and to all
books and records, and shall furnish Parent with all financial, operating and other data and
information as Parent, through its officers, employees or authorized representatives, may from time
to time reasonably request in writing. Notwithstanding the foregoing, any such investigation or
consultation shall be conducted in such a manner as not to interfere unreasonably with the business
or operations of the Company or its subsidiaries or otherwise result in any significant
interference with the prompt and timely discharge by such employees of their normal duties.
Neither the Company nor any of its subsidiaries shall be required to provide access to or to
disclose information where such access or disclosure would
28
reasonably be expected to violate or
prejudice the rights of its clients, jeopardize the attorney-client privilege of the Company or its
subsidiaries or contravene any applicable law, rule, regulation, order, judgment, decree or binding
agreement entered into prior to the date of this Agreement.
(b) Each of Parent and Merger Sub will hold and treat and will cause its partners, members,
directors, officers, employees, auditors, agents, advisors, controlling persons, financing sources
and other authorized representatives to hold and treat in confidence all documents and
information concerning the Company and its subsidiaries furnished to Parent or Merger Sub in
connection with the transactions contemplated by this Agreement.
SECTION 6.4. Acquisition Proposals.
(a) Subject to Section 6.4(b), the Company shall, and shall cause its subsidiaries and the
officers, directors, employees, investment bankers, representatives and agents of the Company and
its subsidiaries to, from the date hereof until the Effective Time or, if earlier, the termination
of this Agreement in accordance with Section 8.1, not (i) solicit, initiate or knowingly facilitate
or encourage (including by way of furnishing non-public information or providing access to its
properties, books, records or personnel) any inquiries regarding, or the making of any proposal or
offer that constitutes, or could reasonably be expected to result in, an Acquisition Proposal, (ii)
participate in any discussions or negotiations regarding an Acquisition Proposal (other than with
Parent and its representatives) or (iii) grant any waiver or release under any standstill or
similar agreement with respect to any class of equity securities of the Company or any of its
subsidiaries.
(b) Notwithstanding anything to the contrary contained in Section 6.4(a), if, at any time
following the date hereof and prior to 11:59 p.m., Boston time, on July 25, 2011, the Company
receives a bona fide Acquisition Proposal from any person (that does not arise out of a breach of
Section 6.4(a) of this Agreement or Section 5.02 of the Voting Agreement) that the
Board determines in good faith (i) after consultation with a financial advisor of nationally
recognized reputation, that such Acquisition Proposal constitutes or could reasonably be expected
to lead to a Superior Proposal and (ii) after consultation with outside counsel, that the failure
to take the actions set forth in clauses (x) and (y) below with respect to such Acquisition
Proposal would be inconsistent with its fiduciary duties under applicable law, the Company may, in
response to such Acquisition Proposal and until 11:59 p.m., Boston time, on July 25, 2011 (after
which time the Company and its representatives shall cease immediately all actions set forth in
clauses (x) and (y) below), (x) furnish information (including non-public information) with respect
to the Company and its subsidiaries to the person who has made such Acquisition Proposal, pursuant
to a confidentiality agreement (with terms and conditions that are not materially less favorable to
the Company than the Confidentiality Agreement between the Company and Parent dated January 14,
2011) (a copy of which shall be provided to Parent) and (y) participate in discussions and
negotiations regarding such Acquisition Proposal. The Company shall as promptly as practicable (and
in any event within 36 hours after receipt), notify Parent both orally and in writing of the
receipt of any Acquisition Proposal, any inquiries relating to an Acquisition Proposal or any
request for information from, or any negotiations sought to be initiated or continued with, either
the Company or its representatives concerning an Acquisition Proposal. The Company’s written notice
shall include a written summary of the material terms of such Acquisition Proposal, inquiry or
request, including the identity of the person or group of persons making the Acquisition Proposal,
inquiry or request. The Company shall as promptly as practicable (and in any event within 24 hours
after taking such action) advise Parent of any decision to take any of the actions referred to in
the foregoing clauses (x) and (y) with respect to any Acquisition Proposal. The Company shall keep
Parent reasonably informed on a reasonably prompt
29
basis of the status and material terms and
conditions (including any change to the financial terms or any other material term thereof) and
developments of any such Acquisition Proposal, inquiry or request and the status of any discussions
or negotiations with any person making such Acquisition Proposal, inquiry or request. For purposes
of this Agreement, “Acquisition Proposal” means any proposal or offer from any person or
“group” (within the meaning
of Section 13(d)(3) of the Exchange Act) (other than Parent and its affiliates) relating to
any direct or indirect acquisition or purchase of 20% or more of the consolidated assets of the
Company and its subsidiaries or 20% or more of any class of equity or voting securities of the
Company then outstanding, any tender offer or exchange offer that if consummated would result in
any person (other than any member of the Xxxxxx Family Group, except in the case of any tender
offer made by or on behalf of any member of the Xxxxxx Family Group, either individually or
together with one or more persons) beneficially owning 20% or more of any class of equity or voting
securities of the Company then outstanding, and any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the Company or one or
more of its subsidiaries whose assets together constitute 20% or more of the consolidated assets of
the Company, other than the transactions contemplated by this Agreement. For purposes of this
Agreement, a “Superior Proposal” means any bona fide unsolicited written Acquisition
Proposal (with all percentages in the definition of Acquisition Proposal increased to 50%) that is
on terms that the Board determines in its good faith judgment, after consultation with a financial
advisor of nationally recognized reputation and after taking into account all legal, financial and
regulatory aspects (including certainty of closing), to be more favorable to the Company’s
stockholders than the transactions contemplated hereby.
(c) Except as set forth in this Section 6.4, neither the Board nor any committee thereof shall
(i) withdraw or modify, or propose publicly to withdraw or modify in a manner adverse to Parent,
the approval or recommendation by the Board of the Merger or this Agreement or the other
transactions contemplated hereby; (ii) approve or recommend, or propose publicly to approve or
recommend, any Acquisition Proposal (any of the actions referred to in the foregoing clauses (i)
and (ii), an “Adverse Recommendation Change”); provided, however, that the
Board may (but subject to Section 6.4(e)), at any time prior to obtaining the Stockholder Approval,
effect an Adverse Recommendation Change (whether or not in response to an Acquisition Proposal) if
the Board determines, in good faith, after consultation with a financial advisor of nationally
recognized reputation and outside counsel, that the failure to do so would be inconsistent with its
fiduciary duties under applicable law; (iii) allow the Company or any of its subsidiaries to enter
into any letter of intent, acquisition agreement or any similar agreement or understanding (other
than a confidentiality agreement having the terms set forth in Section 6.4(b)) (A) constituting or
related to, or that is intended to or could reasonably be expected to result in, any Acquisition
Proposal or (B) requiring it to abandon, terminate or fail to consummate the Merger or any other
transaction contemplated by this Agreement; or (iv) effect any transaction contemplated by any
Acquisition Proposal; provided, however, that the Company shall not be prohibited
from terminating this Agreement in accordance with its terms. No Adverse Recommendation Change
shall change the approval of the Board for purposes of causing any state takeover statute or other
state law to be inapplicable to the transactions contemplated by this Agreement.
(d) Notwithstanding anything to the contrary in this Section 6.4, but subject to Section
6.4(e), if the Company has received a Superior Proposal after the date hereof that has not been
withdrawn or abandoned, the Board may, at any time prior to 11:59 p.m., Boston time, on
July 25, 2011, terminate this Agreement in order to cause the Company to concurrently accept such
Superior Proposal; provided, that the Board has concluded, in good faith, after
consultation with a financial advisor of nationally recognized reputation and outside counsel, that
in light of such
30
Superior Proposal, the failure of the Board or such committee to terminate this
Agreement would be inconsistent with its fiduciary duties; provided, further, that
the Company shall not terminate this Agreement pursuant to this Section 6.4(d) (and any purported
termination pursuant to this Section
6.4(d) shall be void and of no force or effect), unless prior to or concurrently with such
termination, the Company pays the Company Termination Fee pursuant to Section 8.2(b).
(e) Neither the Board nor the Company shall effect an Adverse Recommendation Change pursuant
to Section 6.4(c) or terminate this Agreement pursuant to Section 6.4(d) unless (i) the Company
shall have provided Parent with written notice at least five business days before taking that
action setting forth the Company’s intention to take such action and containing (A), if such action
is intended to be taken in response to an Acquisition Proposal, the material terms of such
Acquisition Proposal, including a copy of the most current version of the proposed definitive
agreement to be entered with, and the identity of, the person or group of persons making the
Acquisition Proposal or (B), if such action is intended to be taken in circumstances not involving
or relating to an Acquisition Proposal, a reasonably detailed description of the underlying facts
giving rise to, and the reasons for taking, such action, and (ii) Parent does not provide to the
Company, within five business days after its receipt of that written notification, a written
proposal that (A), in the case of any action intended to be taken in response to an Acquisition
Proposal, is, when taken in the aggregate, equal to, or more favorable than, such Acquisition
Proposal to the stockholders of the Company or (B), in the case of any action intended to be taken
in circumstances not involving or relating to an Acquisition Proposal, obviates the need for taking
such action. It is understood that in the case of any action intended to be taken in response to
an Acquisition Proposal, any amendment to the financial terms or other material terms of the
Acquisition Proposal shall require a new written notification from the Company pursuant to the
immediately preceding sentence, except that the Company’s advance written notice obligation shall
be reduced to three business days (rather than the five business days otherwise contemplated by the
immediately preceding sentence). The Company agrees that during any applicable five- or
three-business-day period, as the case may be, referred to in this Section 6.4(e), the Company and
its representatives shall negotiate in good faith with Parent and its representatives regarding any
revisions proposed by Parent to the terms of the transactions contemplated by this Agreement.
(f) Nothing contained in this Section 6.4, shall prohibit the Company from complying with
Rules 14a-9, 14d-9 or 14e-2 promulgated under the Exchange Act (or any similar communication to
stockholders in connection with the making or amendment of a tender offer or exchange offer) or
from making any disclosure to the Company’s stockholders if, in the good faith judgment of the
Board, after consultation with outside counsel, the failure to do so would be inconsistent with its
fiduciary duties or is otherwise required under applicable law; provided that any such
action taken or disclosure made that relates to an Acquisition Proposal shall be deemed to be an
Adverse Recommendation Change unless the Board reaffirms the Board’s recommendation of this
Agreement, the Merger and the other transactions contemplated hereby in such statement or
disclosure or in connection with such action (except that a mere “stop, look and listen” disclosure
in compliance with Rule 14d-9(f) of the Exchange Act shall not constitute an Adverse Recommendation
Change).
(g) The Company shall, and shall cause its representatives to, immediately cease and cause to
be terminated any existing discussions or negotiations with any persons conducted heretofore with
respect to any Acquisition Proposal and shall, in accordance with the Company’s rights and subject
to the Company’s obligations under applicable confidentiality agreements, use its reasonable best
efforts to cause any such person (or its agents, advisors or representatives) in
31
possession of
confidential information of the Company that was furnished by or on behalf of the Company in
connection with a potential sale of the Company to return or destroy all such
information (including any such information incorporated into any analysis prepared by any
such persons or any of their advisors).
SECTION 6.5. Employment and Employee Benefits Matters.
(a) Without limiting any additional rights that any Company Employee may have under any
Company Plan or under applicable law, Parent shall cause the Surviving Corporation and each of its
subsidiaries, for a period commencing at the Effective Time and ending on December 31, 2012, to
provide severance and other separation-related payments and benefits not less favorable, in any
case, than those provided for under the severance- or separation-related provisions of the Company
Plans as in effect on the date hereof for any Company Employee employed by the Company or any of
its subsidiaries on the date hereof whose employment terminates during that period in circumstances
entitling such Company Employee to payments or benefits under such severance- or separation-related
provisions as in effect on the date hereof (other than any changes to such severance-
or severance-related provisions to the extent required by applicable law). In respect of the annual
cash bonus payable to the Company Employees for service rendered in fiscal year 2011, Parent shall,
or shall cause the Surviving Corporation to, continue to honor the terms and conditions of and
obligations (existing as of the date of this Agreement) under the Company’s year 2011 annual cash
bonus program and the award or participation agreements thereunder (the “2011 Bonus
Program”), which 2011 Bonus Program shall be administered in a manner consistent with the
Company’s historic annual bonus programs and any individual agreements with Company Employees.
(b) Without limiting any additional rights that any Company Employee may have under any
Company Plan or under applicable law, Parent shall cause the Surviving Corporation and
each of its subsidiaries, for the period commencing at the Effective Time and ending on December
31, 2012, to maintain for any Company Employee, (i) subject to paragraph (a) above, compensation
levels (such term to include salary, bonus opportunities and commissions) that in the aggregate are
no less favorable to the Company Employee than the overall compensation levels maintained for and
provided to such Company Employee immediately prior to the Effective Time, (ii) without limiting
the generality of clause (i) above, base salary or a wage rate that is no less favorable to the
Company Employee than the base salary or wage rate paid to such Company Employee immediately prior
to the Effective Time and (iii) benefits (excluding any severance or equity-based compensation or
awards) that in the aggregate are no less favorable to the Company Employees in the aggregate than
the overall benefits (and the terms thereof) (excluding any severance or equity-based compensation
or awards) maintained for and provided to such Company Employees immediately prior to the Effective
Time (including, for the avoidance of doubt, the benefits provided under any Company Defined
Contribution Plan that Parent directs the Company to terminate pursuant to Section 6.5(e) as such
benefits are in effect immediately prior to such Company Defined Contribution Plan’s termination);
provided, however, subject to the foregoing, that nothing herein shall be construed
(x) as a guarantee of continued employment of any Company Employee, (y) to prohibit the Surviving
Corporation from terminating the employment of any Company Employee, or (z) to prevent the
amendment or termination of any particular Company Plan or interfere with the Surviving
Corporation’s right or obligation to make such changes as are necessary to conform with applicable
law.
32
(c) As of and after the Effective Time, Parent will, or will cause the Surviving Corporation
to, give each Company Employee full credit for purposes of eligibility and vesting under any
employee compensation and incentive plans (other than any equity-based compensation plan), benefit
(including vacation) plans, programs, policies and arrangements maintained for the benefit of
Company Employees as of and after the Effective Time by Parent, its subsidiaries or the Surviving
Corporation (each, a “Parent Plan”) and full credit for purposes of benefit accruals under
any Parent Plan that provides for paid vacation or severance, if any, for the Company Employee’s
service with the Company, its subsidiaries and their predecessor entities to the same extent
recognized by the Company and the applicable Company Plan or Plans immediately prior to the
Effective Time; provided, that, with respect to Parent’s 401(k), retirement savings plans
and executive deferred savings plan, service credit shall be given for eligibility purposes but not
vesting purposes relating to employer contributions. With respect to each Parent Plan that is a
“welfare benefit plan” (as defined in Section 3(1) of ERISA), Parent or its subsidiaries shall (i)
cause to be waived any pre-existing condition or eligibility limitations and (ii) give effect, in
determining any deductible and maximum out-of-pocket limitations, to claims incurred and amounts
paid by, and amounts reimbursed to, Company Employees under similar plans maintained by the Company
and its subsidiaries immediately prior to the Effective Time.
(d) From and after the Effective Time, Parent will honor, and will cause its subsidiaries to
honor, in accordance with its terms as in effect as of the date hereof or as amended or entered
into as permitted under Section 5.1(g) (and the Company Disclosure Schedule thereto) (i) each
existing employment, change in control, severance and termination plan, policy, or agreement of or
between the Company or any of its subsidiaries and any Company Employee and (ii) all obligations
pursuant to deferral plans, vested and accrued benefits under any employee benefit plan, program or
arrangement of the Company or its subsidiaries and similar employment compensation and benefit
arrangements and agreements, in each case to the extent legally binding on the Company or any of
its subsidiaries.
(e) Upon the written direction of Parent prior to the Effective Time, (i) the Company shall
amend or cause to be amended any and all U.S. tax-qualified defined contribution plan(s) that it or
its subsidiaries or any of them maintains (each, a “Company Defined Contribution Plan”) to
provide that account balances of Company Employees who participate in a Company Defined
Contribution Plan be fully and immediately vested and nonforfeitable as of the Effective Time and
(ii) the Company shall terminate or shall cause the termination of the Company Defined Contribution
Plans effective immediately prior to the Effective Time. Parent shall cause its tax-qualified
defined contribution plan (“Parent Defined Contribution Plan”) to accept eligible rollover
distributions (as defined in Section 402(c)(4) of the Code) by Company Employees with respect to
account balances distributed to them on or as of the Effective Time by a Company Defined
Contribution Plan, including, to the extent permitted under a Company Defined Contribution Plan,
outstanding loan balances of all loans with a term of 120 months or less. Subject to and without
limiting the generality of Section 6.5(c), each Company Employee shall be eligible effective
immediately following the Closing to participate in the salaried or hourly, as the case may be,
Parent Defined Contribution Plan to the extent permitted by and in accordance with the terms
thereof, and Parent shall use its reasonable best efforts to complete any documents or actions
necessary or appropriate to effectuate such participation as promptly as practicable following the
Closing Date.
(f) Nothing in this Section 6.5 shall be treated as an amendment of any Company Plan (or an
undertaking to amend any such plan) and, without limiting the generality of Section 9.6,
33
nothing in this Section 6.5 shall confer any rights or benefits on any person other than the
signatories to this Agreement.
SECTION 6.6. Directors’ and Officers’ Indemnification and Insurance.
(a) Without limiting any additional rights that any Company Employee may have under any
employment agreement or Company Plan, from the Effective Time through the sixth anniversary of the
date on which the Effective Time occurs, Parent shall cause the Surviving Corporation to indemnify
and hold harmless each present (as of the Effective Time) and former officer, director or employee
of the Company and its subsidiaries (the “Indemnified Parties”), against all claims,
losses, liabilities, damages, judgments, inquiries, fines and reasonable fees, costs and expenses,
including attorneys’ fees and disbursements (collectively, “Costs”), incurred in connection
with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative
or investigative, arising out of or pertaining to (i) the fact that the Indemnified Party is or was
an officer, director, employee, fiduciary or agent of the Company or any of its subsidiaries or
(ii) matters existing or occurring at or prior to the Effective Time (including this Agreement and
the transactions and actions contemplated hereby), whether asserted or claimed prior to, at or
after the Effective Time, to the fullest extent permitted under applicable law. In the event of
any such claim, action, suit, proceeding or investigation, (x) each Indemnified Party will be
entitled to advancement of expenses incurred in the defense of any claim, action, suit, proceeding
or investigation from the Surviving Corporation within ten business days of receipt by the
Surviving Corporation from the Indemnified Party of a request therefor; provided that any
person to whom expenses are advanced provides an undertaking, if and only to the extent required by
the DGCL, to repay such advances if it is ultimately adjudicated that such person is not entitled
to indemnification, (y) neither Parent nor Surviving Corporation shall settle, compromise or
consent to the entry of any judgment in any proceeding or threatened action, suit, proceeding,
investigation or claim (and in which indemnification could be sought by such Indemnified Party
hereunder), unless such settlement, compromise or consent includes an unconditional release of such
Indemnified Party from all liability arising out of such claim, action, suit, proceeding or
investigation. Parent and the Surviving Corporation shall be entitled to elect to control the
defense of any such action or proceeding, and counsel selected by the Indemnified Party shall, to
the extent consistent with their professional responsibilities, cooperate with Parent and counsel
designated by Parent; provided, however, that if there is a conflict between Parent
and/or the Surviving Corporation, on the one hand, and the Indemnified Party, on the other hand, in
respect of such action or proceeding, Parent shall not be entitled to elect to control the defense
of such action or proceeding (it being understood that, in such case, the Indemnified Party shall
not be entitled to into any settlement with respect to the such action or proceeding without the
prior written consent of the Parent).
(b) The certificate of incorporation and by-laws of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification, advancement of expenses and
exculpation of former or present directors and officers than are presently set forth in the
Company’s Certificate of Incorporation and By-Laws, which provisions shall not be amended, repealed
or otherwise modified for a period of six years from the Effective Time in any manner that would
adversely affect the rights thereunder of any such individuals.
(c) Parent shall, or shall cause the Surviving Corporation to, either (i) cause to be obtained
at the Effective Time “tail” insurance policies, at no expense to the beneficiaries, with a
claims period of six years from the Effective Time, from an insurance carrier with the same or
better credit rating as the Company’s current insurance carrier with respect to directors’ and
officers’ liability insurance in an amount and scope and on terms at least as favorable to the
Indemnified Parties as the Company’s current policies with respect to matters existing or occurring
at or prior to the Effective Time or (ii) maintain at no expense to the beneficiaries, in effect
for six years from the Effective Time the current policies of the directors’ and officers’
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liability insurance maintained by the Company (provided that Parent or the Surviving
Corporation may substitute therefor policies of at least the same coverage containing terms and
conditions which are not less advantageous to any beneficiary thereof than those of such policy in
effect on the date of the Agreement) with respect to matters existing or occurring at or prior to
the Effective Time; provided, that, in satisfying its obligation under this Section 6.6(c),
Parent, or the Surviving Corporation, as applicable, shall not be obligated to pay aggregate
premiums in excess of 300% of the amount per annum the Company paid in its last full fiscal year,
which amount is set forth in Section 6.6(c) of the Company Disclosure Schedule. Parent shall cause
the Surviving Corporation to honor and perform under all indemnification agreements entered into by
the Company or any of its subsidiaries.
(d) Notwithstanding anything herein to the contrary, if any claim, action, suit, proceeding or
investigation (whether arising before, at or after the Effective Time) is made against any
Indemnified Party on or prior to the sixth anniversary of the Effective Time, the provisions of
this Section 6.6 shall continue in effect until the final disposition of such claim, action, suit,
proceeding or investigation.
(e) This covenant is intended to be for the benefit of, and shall be enforceable by, each of
the Indemnified Parties and their respective heirs and legal representatives. The indemnification
provided for herein shall not be deemed exclusive of any other rights to which an Indemnified Party
is entitled, whether pursuant to law, contract or otherwise.
(f) In the event that the Surviving Corporation or Parent or any of their respective
successors or assigns (i) consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers or
conveys all or a majority of its properties and assets to any person, then, and in each such case,
proper provision shall be made so that the successors and assigns of the Surviving Corporation or
Parent, as the case may be, shall succeed to the obligations set forth in Section 6.5 and this
Section 6.6. In addition, the Surviving Corporation shall not distribute, sell, transfer or
otherwise dispose of any of its assets in a manner that would reasonably be expected to render the
Surviving Corporation unable to satisfy its obligations under this Section 6.6 unless the successor
or assign assumes such obligations.
SECTION 6.7. Further Action; HSR Act and Antitrust Laws.
(a) Subject to the terms and conditions of this Agreement, each party will use its reasonable
best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to consummate the Merger and
the other transactions contemplated by this Agreement.
(b) In furtherance and not in limitation of the other provisions of this Section 6.7, promptly
following execution and delivery of this Agreement, Parent, Merger Sub and the Company
shall (and, to the extent reasonably necessary, cause their respective affiliates to) (i)
prepare and, as promptly as practicable and in any event within ten (10) business days of the date
hereof (unless Parent and the Company agree otherwise in writing), file, or cause to be prepared
and filed, with the appropriate Antitrust Authorities, the requisite notifications and reports with
respect to the
35
transactions contemplated by this Agreement pursuant to the HSR Act, (ii) use their
respective reasonable best efforts to supply all information requested by Antitrust Authorities in
connection with the HSR Act, the Xxxxxxx Act, as amended, the Xxxxxxx Act, as amended, the Federal
Trade Commission Act, as amended, and any other federal, state or foreign law, regulation or decree
designed to prohibit, restrict or regulate actions for the purpose or effect of monopolization or
restraint of trade (collectively, “Antitrust Laws”), and (iii) use their respective
reasonable best efforts to comply with, and cooperate with each other in responding to, any
information or document requests from an Antitrust Authority. Each of Parent, Merger Sub and the
Company will use its reasonable best efforts to obtain early termination of the applicable waiting
period under the HSR Act. Parent and the Company shall each pay fifty percent (50%) of all filing
fees payable to Antitrust Authorities (or foreign equivalents) in connection with the transactions
contemplated by this Agreement.
(c) In furtherance and not in limitation of the other provisions of this Section 6.7, the
parties shall use their respective reasonable best efforts and shall cooperate with one another in
connection with the exercise of such efforts to obtain as promptly as practicable all approvals,
orders, permits or other consents of any applicable Governmental Entities necessary for the
consummation of the transactions contemplated by this Agreement. Each of the parties shall use
their respective reasonable best efforts to furnish to the other parties and, upon request, to any
Governmental Entities such information and assistance as may be reasonably requested in connection
with the foregoing. In connection with the foregoing, each party will (i) promptly notify the other
party in writing of any communication received by that party or its affiliates from any
Governmental Entity, and subject to applicable Law, provide the other party with a copy of any such
written communication (or written summary of any oral communication), (ii) provide the other party
and its counsel with a reasonable opportunity to review in advance, and will consider in good faith
the comments of the other party in connection with, any proposed written communication, filing or
other submission to any Governmental Entity in connection with the foregoing, provided that
confidential or competitively sensitive information or material shall be provided solely to the
other party’s outside legal counsel on an outside legal counsel basis, and unless permission is
obtained in advance from the party producing the materials and information, will not be disclosed
by such outside counsel to employees, officers or directors of such other party, and (iii) not
participate in any substantive meeting or discussion with any Governmental Entity in respect of any
filing, investigation or inquiry concerning the transactions contemplated by this Agreement unless
it consults with the other party in advance and, to the extent permitted by such Governmental
Entity, will give the other party the opportunity to attend and participate thereat.
(d) Notwithstanding anything to the contrary contained in this Section 6.7, the parties hereto
understand and agree that the reasonable best efforts of any party hereto shall not be deemed to
include (and the Company, without Parent’s prior written consent, shall not take any of the actions
referred to in clauses (i) and (iii) below) (i) entering into any settlement, undertaking, consent
decree, stipulation or agreement with any Governmental Entity in connection with the transactions
contemplated hereby, (ii) litigating, challenging or taking any other action with respect to any
action or proceeding by any Governmental Entity or (iii) divesting or otherwise holding separate
(including by establishing a trust or otherwise), or taking any other action (or otherwise agreeing
to do any of
the foregoing) with respect to any of its or the Surviving Corporation’s subsidiaries or any
of their respective affiliates’ businesses, assets or properties.
SECTION 6.8. Financing Cooperation.
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(a) The Company shall cooperate with, and cause its subsidiaries and its and their respective
representatives to cooperate with, Parent and its financing sources in connection with the
arrangement of financing related to the transactions contemplated by this Agreement. Such
cooperation shall include, to the extent both reasonably requested by Parent and reasonably
required in connection with such financing, (i) furnishing Parent and its financing sources with
financial and other pertinent information regarding the Company and its subsidiaries as may be
reasonably requested by Parent, (ii) providing direct contact between prospective financing sources
and the officers the Company, (iii) providing assistance in extinguishing existing indebtedness of
the Company and its subsidiaries and releasing liens securing such indebtedness, in each case to
take effect at the Effective Time, (iv) cooperation with respect to matters relating to pledges of
collateral to take effect at the Effective Time in connection with such financing, (v) assisting
Parent in obtaining legal opinions to be delivered in connection with such financing and (vi)
assisting Parent in securing the cooperation of the independent accountants of the Company and its
subsidiaries; provided, in each case, that (a) such requested cooperation does not
unreasonably interfere with or disrupt the ongoing operations of the Company and its subsidiaries,
(b) neither the Company nor any of its subsidiaries shall be required to take any action that would
subject them to any liability or to pay any commitment or other similar fee in connection with such
financing prior to the Effective Time unless reimbursed or indemnified by Parent to the reasonable
satisfaction of the Company and (c) neither the Company nor any of its subsidiaries shall be
required to enter into any credit agreement, security agreement or other agreement in connection
with the arrangement of financing related to the transactions contemplated by this Agreement or
take any action that would encumber any of its assets prior to the Effective Time.
(b) Parent shall, promptly upon request by the Company, reimburse the Company and its
subsidiaries for all reasonable out-of-pocket expenses and costs (including reasonable attorneys’
fees) incurred in connection with the Company’s or its subsidiaries’ obligations under this Section
6.8 or any other provision in this Agreement that obligates them to provide cooperation in
connection with the arrangement of financing related to the transactions contemplated by this
Agreement.
(c) Each of Parent and Merger Sub acknowledges and agrees that neither obtaining financing
related to the transactions contemplated by this Agreement, nor completing any issuance of
securities contemplated by such financing, is a condition to the Closing, and reaffirms its
obligation to consummate the transactions contemplated by this Agreement irrespective and
independently of the availability of such financing, or the completion of any such issuance.
SECTION 6.9. Public Announcements. The Company and Parent will consult with each other before issuing any press release or
making any public statement with respect to this Agreement or the transactions contemplated hereby,
except as may be required by applicable law or any listing agreement with, or any rules of, a
national securities exchange, in which case the issuing party will use its reasonable
best efforts to consult with the other party before it issues any such press release or makes
any such public statement; provided, however, that the foregoing shall not apply
with respect to any matter addressed in Section 6.4.
SECTION 6.10. Notices of Certain Events. Each party shall promptly notify the others of:
37
(a) any notice or other communication from any person alleging that the consent of such person
is or may be required in connection with the transactions contemplated by this Agreement; and
(b) any notice or other communication from any Governmental Entity in connection with the
transactions contemplated by this Agreement;
provided, however, that the delivery of any notice pursuant to this Section 6.10
shall not limit or otherwise affect the remedies available hereunder to the party receiving that
notice.
SECTION 6.11. Approval by Sole Stockholder of Merger Sub. Promptly after the execution hereof, Parent shall cause the sole stockholder of Merger Sub to
approve and adopt this Agreement, in accordance with the DGCL, by written consent.
ARTICLE VII.
CONDITIONS OF MERGER
SECTION 7.1. Conditions to Obligation of Each Party to Effect the Merger. The respective obligations of each party to effect the Merger shall be subject to the
satisfaction or (to the extent permitted by applicable law) waiver at or prior to the Effective
Time of the following conditions:
(a) Stockholder Approval. The Stockholder Approval shall have been obtained.
(b) Information Statement. The Information Statement shall have been mailed to the
Company’s stockholders and 20 days shall have elapsed since the date the Company sent or gave the
Information Statement to its stockholders in accordance with clause (b) of Rule 14c-2 promulgated
under the Exchange Act.
(c) No Injunctions or Restraints. No applicable law shall prohibit, restrain or
enjoin the consummation of the Merger; provided, however, that prior to invoking
this condition each party agrees to comply with Section 6.7.
(d) HSR Act. The waiting period (and any extension thereof) applicable to the Merger
under the HSR Act shall have been terminated or shall have expired.
(e) Required Governmental Consents. All actions by or in respect of, or filings with,
any Governmental Entity, required to permit the consummation of the Merger, including those
filings or approvals set forth on Section 7.1(e) of the Company Disclosure Schedule shall have
been taken, made or obtained.
SECTION 7.2. Conditions to Obligations of Parent and Merger Sub. The obligations of Parent and Merger Sub to effect the Merger shall be further subject to
the satisfaction or (to the extent permitted by applicable law) waiver at or prior to the Effective
Time of the following conditions:
(a) Representations and Warranties. (i) The representations and warranties of the
Company set forth in Sections 3.3(a), 3.4, 3.17 and 3.19 shall be true and correct in all respects
as of the Effective Time (or, if the Closing has been delayed due to the application of the
provisos in
38
Section 1.2, as of the Condition Date) as though made on and as of such time (unless
any such representation or warranty is made only as of a specific date, in which event such
representation and warranty shall be true and correct only as of such specified date) and (ii) the
other representations and warranties of the Company set forth in this Agreement, interpreted
without giving effect to any “material,” “materially,” “in all material respects” or similar
qualifications contained therein or with respect thereto, shall be true as of the Effective Time
(or, if the Closing has been delayed due to the application of the provisos in Section 1.2, as of
the Condition Date) as though made on and as of such time (unless any such representation or
warranty is made only as of a specific date, in which event such representation and warranty shall
be true and correct only as of such specified date) except where the failure of any such
representations and warranties to be so true and correct has not had, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(b) Performance of Obligations of the Company. The Company shall have performed in
all material respects the obligations, and complied in all material respects with the agreements
and covenants, required to be performed by or complied with by it under this Agreement at or prior
to the Effective Time.
(c) Closing Certificate. Parent shall have received a certificate of the Chief
Executive Officer or the Chief Financial Officer of the Company, certifying on behalf of the
Company that the conditions set forth in Sections 7.2(a) and (b) have been satisfied.
(d) No Governmental Conditions. No Governmental Entity shall have imposed a condition
to the consummation of the Merger and the other transactions contemplated hereby that includes the
taking of any action of the type described in clause (i) or (iii) of Section 6.7(d) that is not
required to be effected pursuant to the terms of this Agreement.
(e) No Proceedings. There shall not have been instituted and continuing or pending
any action or proceeding by any Governmental Entity, (i) seeking to make the Merger illegal or
otherwise to prohibit or restrain the consummation of the Merger or (ii) seeking to compel Parent,
the Company or any of their respective Subsidiaries to take any action of the type described in
clause (i) or (iii) of Section 6.7(d) that is not required to be effected pursuant to the terms of
this Agreement.
SECTION 7.3. Conditions to Obligations of the Company. The obligation of the Company to effect the Merger shall be further subject to the
satisfaction or (to the extent permitted by applicable law) waiver at or prior to the Effective
Time of the following conditions:
(a) Representations and Warranties. (i) The representations and warranties of Parent
and Merger Sub set forth in Sections 4.2 and 4.7 shall be true and correct in all respects as of
the Effective Time as though made on and as of such time (unless any such representation or
warranty is made only as of a specific date, in which event such representation and warranty shall
be true and correct only as of such specified date) and (ii) the other representations and
warranties of Parent and Merger Sub set forth in this Agreement, interpreted without giving effect
to any “material,” “materially,” “in all material respects” or similar qualifications contained
therein or with respect thereto, shall be true as of the Effective Time as though made on and as of
such time (unless any such representation or warranty is made only as of a specific date, in which
event such representation and warranty shall be true and correct only as of such specified
date) except where the failure of any such representations and warranties to be so true
and correct, has not had, and would not reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the
39
ability of Parent or Merger Sub duly to perform their
respective obligations under this Agreement or to consummate the transactions contemplated by this
Agreement on a timely basis.
(b) Performance of Obligations of Parent and Merger Sub. Each of Parent and Merger
Sub shall have performed in all material respects the obligations, and complied in all material
respects with the agreements and covenants, required to be performed by or complied with by it
under this Agreement at or prior to the Effective Time.
(c) Closing Certificate. The Company shall have received certificates of an executive
officer of each of Parent and Merger Sub, certifying on behalf of Parent and Merger Sub,
respectively, that the conditions set forth in Sections 7.3(a) and (b) have been satisfied.
ARTICLE VIII.
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. Termination. This Agreement may be terminated and the Merger contemplated hereby may be abandoned at any
time prior to the Effective Time, notwithstanding adoption thereof by the stockholders of the
Company:
(a) by mutual written consent of Parent and the Company;
(b) by Parent or the Company if any court of competent jurisdiction or other Governmental
Entity located or having jurisdiction within the United States shall have issued a final order,
decree or ruling or taken any other final action restraining, enjoining or otherwise prohibiting
the Merger and such order, decree, ruling or other action is or shall have become final and
nonappealable; provided, however, that the right to terminate this Agreement
pursuant to this Section 8.1(b) shall not be available to the party seeking to terminate if such
party (or, in the case of Parent, Merger Sub) has failed to take such actions with respect thereto
as are required to comply with Section 6.7;
(c) by either Parent or the Company if the Merger shall not have been consummated on or before
11:59 p.m., Boston time, on December 12, 2011 (the “Termination Date”); provided,
however, that the right to terminate this Agreement pursuant to this Section 8.1(c) shall
not be available to the party seeking to terminate if any action of such party (or, in the case of
Parent, Merger Sub) or the failure of such party (or, in the case of Parent, Merger Sub) to perform
any of its obligations under this Agreement required to be performed at or prior to the Effective
Time has been the cause of, or resulted in, the failure of the Effective Time to occur on or before
the Termination Date and such action or failure to perform constitutes a breach of this Agreement;
(d) by the Company (i) if there shall have been a breach of any representation, warranty,
covenant or agreement on the part of Parent or Merger Sub contained in this Agreement such that the
condition set forth in Sections 7.3(a) or 7.3(b) would not be satisfied and, in either such case,
such breach shall not have been cured prior to the earlier of (I) 20 business days following notice
of such breach to Parent and (II) the Termination Date; provided, that the Company shall
not have the right to terminate this Agreement pursuant to this Section 8.1(d)(i) if the Company
is then in material breach of any of its covenants or agreements contained in this Agreement or
(ii) prior to 11:59 p.m., Boston time, on July 25, 2011, in accordance with, and subject to the
terms and conditions of, Section 6.4(d);
40
(e) by Parent (i) if there shall have been a breach of any representation, warranty, covenant
or agreement on the part of the Company contained in this Agreement such that the condition set
forth in Sections 7.2(a) or 7.2(b) would not be satisfied and, in either such case, such breach
shall not have been cured prior to the earlier of (A) 20 business days following notice of such
breach to the Company and (B) the Termination Date; provided that Parent shall not have the
right to terminate this Agreement pursuant to this Section 8.1(e)(i) if Parent or Merger Sub is
then in material breach of any of its covenants or agreements contained in this Agreement, (ii) if
the Board shall have made an Adverse Recommendation Change or (iii) if the Company shall have
intentionally and materially breached its obligations under Section 6.4; provided,
however, that notwithstanding any provision in this Agreement to the contrary, after the
Condition Date, in no event may Parent terminate this Agreement under clause (i) of this Section
8.1(e) (x) as a result of the condition set forth in Section 7.2(a) not being satisfied or (y) to
the extent not permitted by the penultimate sentence of Section 1.2; or
(f) by Parent if the Stockholder Approval shall not have been obtained by 11:59 p.m., Boston
time, on July 26, 2011.
The party desiring to terminate this Agreement pursuant to this Section 8.1 (other than pursuant to
Section 8.1(a)) shall give written notice of such termination to the other party.
SECTION 8.2. Effect of Termination.
(a) In the event of the termination of this Agreement pursuant to Section 8.1, this Agreement
shall forthwith become void and there shall be no liability or obligation on the part of any party
hereto, except with respect to Sections 6.3(b), this Section 8.2, Section 8.3 and Article IX, which
shall survive such termination; provided, however, that nothing herein shall
relieve any party from liability for any willful and material breach hereof.
(b) In the event that this Agreement is terminated by the Company pursuant to Section
8.1(d)(ii) or by Parent pursuant to Section 8.1(e)(ii), Section 8.1(e)(iii) or Section 8.1(f) then
the Company shall pay $87,244,000 (the “Company Termination Fee”) to Parent, at or prior to
the time of termination in the case of a termination pursuant to Section 8.1(d)(ii) or as promptly
as reasonably practicable (and in any event within two business days after termination) in the case
of a termination pursuant to Section 8.1(e)(ii), Section 8.1(e)(iii) or Section 8.1(f), payable by
wire transfer of same day funds.
(c) In the event that this Agreement is terminated by the Company or Parent pursuant to
Section 8.1(c) or by Parent pursuant to Section 8.1(e)(i), but only if (a) after the date hereof
and prior to such termination an Acquisition Proposal shall have been made to the Company or shall
have been made directly to the holders of any class of Company Common Stock generally or shall have
otherwise become publicly known or any person shall have publicly announced an intention (whether
or not conditional and whether or not withdrawn) to make an Acquisition Proposal and (b) within 12
months following the date of such termination, (i) the Company merges with or into, or is acquired,
directly or indirectly, by merger or otherwise by, a third party, (ii) a third party, directly or
indirectly, acquires more than 50% of the total assets of the Company and its subsidiaries, taken
as a whole, (iii) a third party, directly or indirectly, acquires more than 50% of the outstanding
shares of the Company Common Stock or (iv) the Company or any of its subsidiaries shall have
entered into any contract or agreement providing for any of the actions described in any of the
immediately preceding clauses (i) through (iii), then, in each case, the Company shall pay the
41
Company Termination Fee to Parent as promptly as reasonably practicable (and in any event within
two business days after the event giving rise to the payment of the Company Termination Fee
pursuant to this Section 8.2(c)), payable by wire transfer of same day funds.
(d) Each of the Company, Parent and Merger Sub acknowledge that the agreements contained in
this Section 8.2 are an integral part of the transactions contemplated by this Agreement, and that,
without these agreements, neither the Company nor Parent would have entered into this Agreement.
In the event that the Company shall fail to pay the Company Termination Fee when due, the Company
shall reimburse Parent for all reasonable costs and expenses actually incurred by Parent (including
reasonable fees and expenses of counsel) in connection with the collection of such fee and the
enforcement of this Section 8.2.
SECTION 8.3. Expenses. Except as otherwise specifically provided herein, each party shall bear its own expenses in
connection with this Agreement and the transactions contemplated hereby. Expenses incurred in
connection with the filing, printing and mailing of the Information Statement shall be shared
equally by Parent and the Company.
SECTION 8.4. Amendment. This Agreement may be amended by the parties hereto by action taken by or on behalf of
their respective Boards of Directors at any time prior to the Effective Time, whether before or
after adoption of this Agreement by the stockholders of the Company; provided,
however, that, after adoption of this Agreement by the stockholders of the Company, no
amendment may be made which under applicable law requires the further approval of the stockholders
of the Company without such further approval. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 8.5. Waiver. At any time prior to the Effective Time, any party hereto may (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 and (iii) subject to the proviso to the first sentence of Section 8.4 and to the
requirements of applicable law, waive compliance with any of the agreements or conditions contained
herein. Any such extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby. The failure of any party to assert any rights
or remedies shall not constitute a waiver of such rights or remedies.
ARTICLE IX.
GENERAL PROVISIONS
SECTION 9.1. Non-Survival of Representations, Warranties, Covenants and Agreements. None of the representations, warranties, covenants and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement, including any rights arising out of any breach
of such representations, warranties, covenants and agreements, shall survive the Effective Time,
except for (i) those covenants and agreements contained herein that by their terms apply or are to
be performed in whole or in part after the Effective Time and (ii) this Article IX.
SECTION 9.2. Notices. All notices, requests, claims, demands and other communications hereunder shall be in
writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery
in person, by facsimile or by registered or certified mail
42
(postage prepaid, return receipt
requested) to the respective parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
(a) | if to Parent or Merger Sub: | ||
V.F. Corporation 000 Xxxxxxxxx Xxxxxx Xxxx. Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 Attention: General Counsel Facsimile: (000) 000-0000 |
|||
with an additional copy (which shall not constitute notice) to: | |||
Xxxxx Xxxx & Xxxxxxxx LLP 000 Xxxxxxxxx Xxxxxx Xxx Xxxx, XX 00000 Attention: Xxxxxx X. Xxxxx, Xx. Xxxx X. Xxxxxxxx Facsimile: (000) 000-0000 |
|||
(b) | if to the Company: | ||
The Timberland Company 000 Xxxxxx Xxxxx Xxxxxxxx, XX 00000 Attention: General Counsel Facsimile: (000) 000-0000 |
|||
with an additional copy (which shall not constitute notice) to: | |||
Ropes & Xxxx LLP Prudential Tower 000 Xxxxxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000-0000 Attention: Xxxx X. Xxxxxxxxx Facsimile: (000) 000-0000 |
SECTION 9.3. Certain Definitions. For purposes of this Agreement, the term:
(a) “affiliate” of a person means a person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control with, the first
mentioned person;
(b) “Antitrust Authorities” means the Antitrust Division of the United States
Department of Justice, the United States Federal Trade Commission and any other Governmental Entity
of any other jurisdiction (whether United States, foreign or multinational) responsible for
antitrust or competition approvals, consents or clearances;
(c) “applicable law” means, with respect to any person, any federal, state or local
law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule,
43
regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted,
adopted, promulgated or applied by a Governmental Entity that is binding upon or applicable to such
person, as amended unless expressly specified otherwise;
(d) “beneficial owner” with respect to any Shares means a person who shall be deemed
to be the beneficial owner of such Shares (i) which such person or any of its affiliates or
associates (as such term is defined in Rule 12b-2 under the Exchange Act) beneficially owns,
directly or indirectly, (ii) which such person or any of its affiliates or associates (as such term
is defined in Rule 12b-2 of the Exchange Act) has, directly or indirectly, (A) the right to acquire
(whether such right is exercisable immediately or subject only to the passage of time), pursuant to
any agreement, arrangement or understanding or upon the exercise of consideration rights, exchange
rights, warrants, options or otherwise, or (B) the right to vote pursuant to any agreement,
arrangement or understanding or (iii) which are beneficially owned, directly or indirectly, by any
other persons with whom such person or any of its affiliates or associates has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any
Shares (and the term “beneficially owned” shall have a corresponding meaning);
(e) “business day” means any day (ending at 11:59 p.m. Boston time) on which the
principal offices of the SEC in Washington, D.C. are open to accept filings or, in the case of
determining a date when any payment is due, any day other than Saturday or Sunday on which banks
are not required or authorized by applicable law to close in Boston, Massachusetts;
(f) “Company Stock Plans “ means the 1997 Incentive Plan, 2001 Non-Employee Directors
Stock Plan, and 2007 Incentive Plan;
(g) “control” (including the terms “controlled”, “controlled by” and
“under common control with”) means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management policies of a person,
whether through the ownership of stock, as trustee or executor, by contract or credit arrangement
or otherwise;
(h) “generally accepted accounting principles” means the generally accepted accounting
principles set forth in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession in the United States, in each case,
as applicable, as of the time of the relevant financial statements referred to herein;
(i) “industries in which the Company and its subsidiaries operate” means each of the
footwear, apparel and accessories manufacturing, wholesale and retail industries;
(j) “knowledge” (i) with respect to the Company means the actual knowledge, after
reasonable inquiry, of any of the persons set forth in Section 9.3(j) of the Company Disclosure
Schedule and (ii) with respect to Parent or Merger Sub means the actual knowledge, after reasonable
inquiry, of any of the persons set forth in Section 9.3(j) of the Parent Disclosure Schedule;
(k) “Lien” means, with respect to any property or asset, any mortgage, lien, pledge,
charge, security interest, or other encumbrance. For purposes of this Agreement, a person shall be
deemed to own subject to a Lien any property or asset that it has acquired or holds subject to
44
the
interest of a vendor or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such property or asset;
(l) “Parent SEC Reports” means any forms, reports, statements, certifications and
other documents (including all exhibits, amendments and supplements thereto) required to be filed
by Parent with the SEC since December 31, 2010;
(m) “Permitted Liens” means (A) mechanics’, carriers’, workmen’s, repairmen’s,
warehousemen’s or other like liens arising or incurred in the ordinary course of business relating
to obligations that are not delinquent or that are being contested in good faith by the Company or
any of its subsidiaries, (B) liens for Taxes, assessments and other governmental charges that are
not yet due and payable, that may thereafter be paid without interest or penalty, that have been
adequately provided for in accordance with generally accepted accounting principles or for
amounts being contested in good faith, (C) such imperfections or irregularities of title,
Liens and other restrictions or encumbrances as do not materially and adversely affect the use of
the properties or assets subject thereto or affected thereby for their respective current uses or
otherwise materially impair business operations at such properties, (D) mortgages, or deeds of
trust, security interests or other encumbrances on title related to indebtedness reflected on the
consolidated financial statements of the Company, (E) zoning, building and other similar codes and
regulations, (F) restrictions under leases, subleases, licenses or occupancy agreements and liens
or other encumbrances that have been placed by any developer, landlord or other similar third party
on any real property in which the Company or any of its subsidiaries has a leasehold interest and
subordination or similar agreements relating thereto and (G) any conditions that may be shown by a
current, accurate survey or physical inspection of any real property and any matters of record that
would not, individually or in the aggregate, reasonably be expected to materially impair the
continued use and operation of the property to which they relate in the business of the Company and
its subsidiaries as presently conducted;
(n) “person” means an individual, corporation, partnership, limited liability company,
association, trust, unincorporated organization, other entity or group (as defined in Section
13(d)(3) of the Exchange Act);
(o) “Stockholder Approval” means the affirmative vote or written consent of the
holders of at least a majority in combined voting power of the then outstanding Shares for the
approval and adoption of this Agreement;
(p) “subsidiary” or “subsidiaries” of the Company, the Surviving Corporation,
Parent or any other person means any corporation, partnership, joint venture or other legal entity
of which the Company, the Surviving Corporation, Parent or such other person, as the case may be
(either alone or through or together with any other subsidiary), owns, directly or indirectly, 50%
or more of the stock or other equity interests the holder of which is generally entitled to vote
for the election of the board of directors or other governing body of such corporation or other
legal entity; and
(q) “Xxxxxx Family Group” means any (i) lineal descendant or ancestor or sibling (by
birth or adoption) of Xxxxxx X. Xxxxxx or Xxxxxxx X. Xxxxxx, (ii) any spouse or former spouse of
any of the foregoing, (iii) any legal representative or estate of any of the foregoing, (iv) any
trust maintained for the benefit of the foregoing and (v) any corporation, private charitable
foundation or other organization controlled by the foregoing.
45
SECTION 9.4. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being
enforced by any applicable law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner adverse to any
party. 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 in an acceptable manner to the
end that the transactions contemplated hereby are fulfilled to the fullest extent possible.
SECTION 9.5. Entire Agreement; Assignment. This Agreement (including the Exhibits hereto), the Company Disclosure Schedule, the Parent
Disclosure Schedule and the Confidentiality Agreement constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior agreements and
undertakings, both written and oral, among the parties, or any of them, with respect to the subject
matter hereof. This Agreement shall not be assigned by operation of law or otherwise without the
prior written consent of each of the other parties, except that Parent and Merger Sub may assign
all or any of its rights and obligations hereunder to any direct or indirect wholly-owned
subsidiary of Parent; provided, however, that no such assignment shall relieve the
assigning party of its obligations hereunder.
SECTION 9.6. Parties in Interest. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the
parties and their respective successors and permitted assigns, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement, other than with respect to
the provisions of Section 6.6 which shall inure to the benefit of the persons or entities
benefiting therefrom who are intended to be third-party beneficiaries thereof.
SECTION 9.7. Governing Law. This Agreement, the rights of the parties and all actions arising in whole or in part under
or in connection herewith, shall be governed by, and construed in accordance with, the domestic
substantive laws of the State of Delaware (without giving effect to any choice or conflict of law
provision or rule that would cause the application of the laws of any other jurisdiction).
SECTION 9.8. Headings. The descriptive headings contained in this Agreement are included for convenience of
reference only and shall not affect in any way the meaning or interpretation of this Agreement.
SECTION 9.9. Counterparts. This Agreement may be executed and delivered (including by facsimile transmission) in one
or more counterparts, and by the different parties hereto in separate counterparts, each of which
when executed shall be deemed to be an original but all of which taken together shall constitute
one and the same agreement.
SECTION 9.10. Specific Performance; Jurisdiction; Waiver of Jury Trial. 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 the Court of Chancery of the State of Delaware or, if under
applicable law exclusive jurisdiction over such matter is vested in the federal courts, any court
of the United States located in the State of Delaware, this being in addition to any other remedy
to which such party is entitled at law or in equity. In addition, each of the parties hereto (i)
consents to submit itself to the personal jurisdiction of the Court of Chancery of the State of
46
Delaware or any court of
the United States located in the State of Delaware in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (ii) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any
such court, (iii) agrees that it will not bring any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other than the Court of Chancery of the
State of Delaware or, if under applicable law exclusive jurisdiction over such matter is vested in
the federal courts, any court of the United States located in the State of Delaware and (iv)
consents to service being made through the notice procedures set forth in Section 9.2. Each of the
Company, Parent and Merger Sub hereby agrees that service of any process, summons, notice or
document by U.S. registered mail to the respective addresses set forth in Section 9.2 shall be
effective service of process for any suit or proceeding in connection with this Agreement or the
transactions contemplated hereby. Each of the parties hereto hereby waives to the fullest extent
permitted by applicable law any right it may have to a trial by jury with respect to any litigation
directly or indirectly arising out of, under or in connection with this Agreement or the Merger.
SECTION 9.11. Parent Guarantee. Parent agrees to take all action necessary to cause Merger Sub or the Surviving
Corporation, as applicable, to perform all of its respective agreements, covenants and obligations
under this Agreement. Parent unconditionally guarantees to the Company the full and complete
performance by Merger Sub or the Surviving Corporation, as applicable, of its respective
obligations under this Agreement and shall be liable for any breach of any representation,
warranty, covenant or obligation of Merger Sub or the Surviving Corporation, as applicable, under
this Agreement. This is a guarantee of payment and performance and not collectibility. Parent
hereby waives diligence, presentment, demand of performance, filing of any claim, any right to
require any proceeding first against Merger Sub or the Surviving Corporation, as applicable,
protest, notice and all demands whatsoever in connection with the performance of its obligations
set forth in this Section 9.11.
SECTION 9.12. Interpretation. When reference is made in this Agreement to an Article or Section, such reference shall be
to an Article or Section of this Agreement unless otherwise indicated. Whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation.” The words “hereof,” “herein,” “hereby” and “hereunder”
and words of similar import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement. The word “or” will be inclusive and not
exclusive unless the context requires otherwise. Unless the context requires otherwise, any
agreements, documents, instruments or applicable laws defined or referred to in this Agreement will
be deemed to mean or refer to such agreements, documents, instruments or applicable laws as from
time to time amended, modified or supplemented, including (i) in the case of agreements, documents
or instruments, by waiver or consent and (ii) in the case of applicable laws, by succession of
comparable successor statutes. All references in this Agreement to any applicable law will be
deemed to refer also to any rules and regulations promulgated under that law. This Agreement shall
be construed without regard to any presumption or rule requiring construction or interpretation
against the party drafting or causing any instrument to be drafted.
SECTION 9.13. SEC Document References. The parties hereto agree that any information contained in any part of any Company SEC
Report or Parent SEC Report shall only be deemed to be an exception to (or a disclosure for
purposes of) the applicable party’s representations
47
and warranties if the relevance of that
information as an exception to (or a disclosure for purposes of) such representations and
warranties would be reasonably apparent to a person who has read that information concurrently with
such representations and warranties; provided that in no event shall any information
contained in any part of any Company SEC Document or Parent SEC Document entitled “Risk Factors” or
containing a description or explanation of “Forward-Looking Statements” be deemed to be an
exception to (or a disclosure for purposes of) any representations and warranties of any party
contained in this Agreement.
[Remainder of Page Left Blank Intentionally]
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be
executed as of the date first written above by their respective officers thereunto duly authorized.
V.F. CORPORATION |
||||
By: | /s/ Xxxxxxxx X. Xxxxxxxxx | |||
Name: | Xxxxxxxx X. Xxxxxxxxx | |||
Title: | Vice President — Mergers and Acquisitions | |||
VF ENTERPRISES, INC. |
||||
By: | /s/ Xxxxx X. Xxxxxxx | |||
Name: | Xxxxx X. Xxxxxxx | |||
Title: | President and Secretary | |||
THE TIMBERLAND COMPANY |
||||
By: | /s/ Xxxxxxx X. Xxxxxx | |||
Name: | Xxxxxxx X. Xxxxxx | |||
Title: | Chief Executive Officer | |||
[Merger Agreement Signature Page]