Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
dated as of
August 31, 1999
among
AFC CABLE SYSTEMS, INC.
TYCO INTERNATIONAL (NV) INC.
and
TYCO ACQUISITION CORP. XXII
and Guaranteed by
TYCO INTERNATIONAL LTD.
TABLE OF CONTENTS
-----------------
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.....................................................1
ARTICLE 2
THE MERGER
SECTION 2.01. The Merger......................................................6
SECTION 2.02. Conversion of Shares............................................6
SECTION 2.03. Surrender and Exchange..........................................7
SECTION 2.04. Stock Options...................................................8
SECTION 2.05. Adjustments.....................................................8
SECTION 2.06. Fractional Shares...............................................9
SECTION 2.07. Withholding Rights..............................................9
SECTION 2.08. Lost Certificates...............................................9
ARTICLE 3
THE SURVIVING CORPORATION
SECTION 3.01. Certificate of Incorporation.....................................9
SECTION 3.02. Bylaws..........................................................10
SECTION 3.03. Directors and Officers..........................................10
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. Corporate Existence and Power...................................10
SECTION 4.02. Corporate Authorization.........................................10
SECTION 4.03. Governmental Authorization......................................11
SECTION 4.04. Non-Contravention...............................................11
SECTION 4.05. Capitalization..................................................12
SECTION 4.06. Subsidiaries....................................................12
SECTION 4.07. SEC Filings.....................................................13
SECTION 4.08. Financial Statements............................................13
SECTION 4.09. Registration Statement; Proxy Statement/Prospectus..............14
SECTION 4.10. Absence of Certain Changes......................................14
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SECTION 4.11. No Undisclosed Material Liabilities.............................16
SECTION 4.12. Compliance with Laws and Court Orders...........................16
SECTION 4.13. Litigation......................................................17
SECTION 4.14. Finders' Fees...................................................17
SECTION 4.15. Opinion of Financial Advisor....................................17
SECTION 4.16. Taxes...........................................................17
SECTION 4.17. Employee Benefit Plans..........................................18
SECTION 4.18. Environmental Matters...........................................20
SECTION 4.19. Antitakeover Statutes...........................................21
SECTION 4.20. Assets..........................................................21
SECTION 4.21. Intellectual Property...........................................21
SECTION 4.22. Non-Competition Agreements......................................22
SECTION 4.23. Transactions with Affiliates....................................22
SECTION 4.24. Tax Treatment...................................................22
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT
SECTION 5.01. Corporate Existence and Power...................................22
SECTION 5.02. Corporate Authorization.........................................22
SECTION 5.03. Governmental Authorization......................................23
SECTION 5.04. Non-Contravention...............................................23
SECTION 5.05. Capitalization..................................................24
SECTION 5.06. Subsidiaries....................................................24
SECTION 5.07. SEC Filings.....................................................25
SECTION 5.08. Financial Statements............................................26
SECTION 5.09. Registration Statement; Proxy Statement/Prospectus..............26
SECTION 5.10. Absence of Certain Changes......................................26
SECTION 5.11. No Undisclosed Material Liabilities.............................27
SECTION 5.12. Compliance with Laws and Court Orders...........................27
SECTION 5.13. Litigation......................................................27
SECTION 5.14. Finders' Fees...................................................27
SECTION 5.15. Tax Treatment...................................................28
SECTION 5.16. Ownership of Merger Subsidiary; No Prior Activities.............28
ARTICLE 6
COVENANTS OF THE COMPANY
SECTION 6.01. Conduct of the Company..........................................28
SECTION 6.02. Stockholders Meeting; Board Recommendation......................29
SECTION 6.03. No Solicitation.................................................30
SECTION 6.04. Access to Information...........................................31
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ARTICLE 7
COVENANTS OF PARENT
SECTION 7.01. Conduct of Tyco.................................................31
SECTION 7.02. [Intentionally omitted].........................................32
SECTION 7.03. Obligations of Merger Subsidiary................................32
SECTION 7.04. Director and Officer Liability..................................32
SECTION 7.05. Tyco Common Shares; Stock Exchange Listing......................33
ARTICLE 8
COVENANTS OF PARENT AND THE COMPANY
SECTION 8.01. Reasonable Efforts..............................................33
SECTION 8.02. Certain Filings.................................................34
SECTION 8.03. Public Announcements............................................35
SECTION 8.04. Further Assurances..............................................35
SECTION 8.05. Notices of Certain Events.......................................36
SECTION 8.06. Tax-Free Reorganization.........................................36
SECTION 8.07. Affiliates......................................................36
SECTION 8.08. Substantially Equivalent Benefits...............................36
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.01. Conditions to Obligations of Each Party.........................37
SECTION 9.02. Conditions to the Obligations of Parent and Merger Subsidiay....38
SECTION 9.03. Conditions to the Obligations of the Company....................39
ARTICLE 10
TERMINATION
SECTION 10.01. Termination....................................................39
SECTION 10.02. Effect of Termination..........................................41
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. Notices........................................................42
SECTION 11.02. Survival of Representations and Warranties.....................43
SECTION 11.03. Amendments; No Waivers.........................................43
SECTION 11.04. Expenses.......................................................43
SECTION 11.05. Successors and Assigns.........................................45
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SECTION 11.06. Governing Law..................................................45
SECTION 11.07. Jurisdiction...................................................45
SECTION 11.08. Counterparts; Effectiveness....................................45
SECTION 11.09. Entire Agreement...............................................45
SECTION 11.10. Captions.......................................................46
SECTION 11.11. Severability...................................................46
SECTION 11.12. Specific Performance...........................................46
GUARANTEE
EXHIBIT A.......................................................Voting Agreement
iv
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of August 31, 1999 among AFC
Cable Systems, Inc., a Delaware corporation (the "COMPANY"), Tyco International
(NV) Inc., a Nevada corporation ("PARENT"), and a direct wholly-owned subsidiary
of Tyco International Ltd., a Bermuda company ("TYCO"), and Tyco Acquisition
Corp. XXII, a Delaware corporation and a direct wholly-owned subsidiary of
Parent ("MERGER SUBSIDIARY").
WHEREAS, the respective Boards of Directors of Tyco, Parent, Merger
Subsidiary and the Company have approved, and deem it advisable and in the best
interests of their respective stockholders to consummate, the acquisition of the
Company by Parent on the terms and conditions set forth herein;
WHEREAS, for United States federal income tax purposes, it is intended
that the Merger (as defined below) contemplated by this Agreement qualify as a
"reorganization" within the meaning of Section 368 of the Code, and the rules
and regulations promulgated thereunder;
WHEREAS, concurrently with the execution and delivery of this
Agreement, and as a condition to the Company's willingness to enter into this
Agreement, Tyco has agreed fully and unconditionally to guarantee the
representations, warranties, covenants, agreements and other obligations of
Parent and Merger Subsidiary in this Agreement; and
WHEREAS, as a condition and inducement to Parent entering into this
Agreement and incurring the obligations set forth herein, concurrently with the
execution and delivery of this Agreement, Parent is entering into a Voting
Agreement with Xxxxx X. Xxxxxxx, a stockholder of the Company ("SELLING
STOCKHOLDER"), in the form of Exhibit A hereto (the "VOTING AGREEMENT") pursuant
to which, among other things, the Selling Stockholder has agreed to vote the
shares of Company Common Stock owned by such Selling Stockholder in favor of
this Agreement and the Merger provided for herein;
NOW, THEREFORE, in consideration of the promises and the respective
representations, warranties, covenants, and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS. (a) The following terms, as used herein, have
the following meanings:
1
"ACQUISITION PROPOSAL" means any offer or proposal for, or any
indication of interest in, a merger, consolidation, share exchange, business
combination, reorganization, recapitalization, liquidation, dissolution or other
similar transaction involving the Company or any of its Subsidiaries or any
proposal or offer to acquire, directly or indirectly, any equity interest in,
any voting securities of, or a substantial portion of the assets of, the Company
or any of its Subsidiaries, other than the transactions contemplated by this
Agreement.
"AFFILIATE" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person. The terms "controlling," "controlled by" and "under common control
with" mean the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a person, whether through the
ownership of voting shares, by contract or otherwise.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY BALANCE SHEET" means the consolidated balance sheet of the
Company as of December 31, 1998 and the footnotes thereto set forth in the
Company 10-K.
"COMPANY BALANCE SHEET DATE" means July 3, 1999.
"COMPANY COMMON STOCK" means the common stock, $0.01 par value, of the
Company.
"COMPANY 10-K" means the Company's annual report on Form 10-K for the
fiscal year ended December 31, 1998.
"DELAWARE LAW" means the General Corporation Law of the State of
Delaware.
"ENVIRONMENTAL LAWS" means any federal, state, local or foreign law
(including, without limitation, common law), treaty, judicial decision,
regulation, rule, judgment, order, decree, injunction, permit or governmental
restriction or requirement or any agreement with any governmental authority or
other third party, relating to human health and safety, the environment or to
pollutants, contaminants, wastes or chemicals or any toxic, radioactive,
ignitable, corrosive, reactive or otherwise hazardous substances, wastes or
materials.
"ENVIRONMENTAL PERMITS" means all permits, licenses, franchises,
certificates, approvals and other similar authorizations of governmental
authorities relating to or required by Environmental Laws and affecting, or
relating in any way to, the business of the Company or any Subsidiary as
currently conducted.
"GOVERNMENTAL AUTHORITY" means any governmental or regulatory body,
agency, official or authority, domestic or foreign.
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"GUARANTEE" means the unconditional guarantee of the obligations of
Parent and Merger Subsidiary under this Agreement by Tyco.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976.
"INTELLECTUAL PROPERTY RIGHT" means any trademark, service xxxx, trade
name, mask work, invention, patent, trade secret, copyright, know-how (including
any registrations or applications for registration of any of the foregoing) or
any other similar type of proprietary intellectual property right.
"LIEN" means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim of
any kind in respect of such property or asset. 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 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.
"MATERIAL ADVERSE EFFECT" means, with respect to any Person, a material
adverse effect on the condition (financial or otherwise), business, assets or
results of operations of such Person and its Subsidiaries, taken as a whole.
"1933 ACT" means the Securities Act of 1933.
"1934 ACT" means the Securities Exchange Act of 1934.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"PROXY STATEMENT/PROSPECTUS" means the proxy statement/prospectus
included in the Registration Statement relating to the Company Stockholders
Meeting, together with any amendments or supplements thereto.
"REGISTRATION STATEMENT" means the Registration Statement on Form S-4
registering under the 1933 Act the Tyco Common Shares issuable in connection
with the Merger.
"SEC" means the United States Securities and Exchange Commission.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at any time directly or indirectly owned by such Person.
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"SUPERIOR PROPOSAL" means any bona fide, unsolicited written
Acquisition Proposal for at least a majority of the outstanding shares of
Company Common Stock on terms that the Board of Directors of the Company
determines in good faith by a majority vote, on the basis of the written advice
of a financial advisor of nationally recognized reputation and taking into
account all the terms and conditions of the Acquisition Proposal, is more
favorable to all the Company's stockholders than the transactions contemplated
hereby (after giving effect to any revised proposal made by or on behalf of
Parent prior to the end of the 2-day period referred to in Section 6.02(b)).
"TYCO AVERAGE SHARE PRICE" means the average of the Daily Share Prices
for the five consecutive trading days ending on the fourth trading day prior to
the date of the Company Stockholders Meeting. "DAILY SHARE PRICE" for any
trading day means the volume weighted average of the per share selling prices on
the New York Stock Exchange of Tyco Common Shares (as reported in the New York
Stock Exchange Composite Transactions Tape) for that day.
"TYCO BALANCE SHEET" means the consolidated balance sheet of Tyco as of
September 30, 1998 and the footnotes therein set forth in the Tyco 10-K.
"TYCO BALANCE SHEET DATE" means September 30, 1998.
"TYCO COMMON SHARES" means the common shares, US$0.20 par value, of
Tyco.
"TYCO 10-K" means Tyco's annual report on Form 10-K for the fiscal year
ended September 30, 1998.
"TAX" means any Unites States federal, state, local, non-United States
or provincial income, gross receipts, property, sales, use, license, excise,
franchise, withholding, employment, payroll, alternative or add-on minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental
fee or other like assessment or charge imposed by any Governmental Authority,
together with any interest or penalty imposed thereon.
"TAX RETURN" means a report, return or other information (including any
attached schedules or any amendments to such report, return or other
information) required to be supplied to or filed with a Governmental Authority
with respect to any Tax, including an information return, claim for refund,
amended return or estimated Tax.
Any reference in this Agreement to a statute shall be to such statute,
as amended from time to time, and to the rules and regulations promulgated
thereunder.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
4
Term Section
---- -------
Affected Employees..............................................8.08
Antitrust Law...................................................8.01
Certificates....................................................2.03
Closing.........................................................2.01
Closing Date....................................................2.01
Company Disclosure Schedule................................Article 4
Company Employee Plans..........................................4.17
Company Intellectual Property Right.............................4.21
Company Recommendation..........................................6.02
Company SEC Documents...........................................4.07
Company Stockholder Approval....................................4.02
Company Stockholders Meeting....................................4.09
Company Stock Options...........................................2.04
Confidentiality Agreements......................................6.03
DOJ.............................................................8.01
Effective Time..................................................2.01
ERISA...........................................................4.17
ERISA Affiliate.................................................4.17
Exchange Agent..................................................2.03
Exchange Ratio..................................................2.02
FTC.............................................................8.01
GAAP............................................................4.08
T&B Agreement...................................................4.04
Indemnified Person..............................................7.04
IRS.............................................................4.16
ISO.............................................................2.04
Merger..........................................................2.01
Merger Consideration............................................2.02
Representatives.................................................6.03
Significant Subsidiary..........................................4.06
SRP.............................................................8.08
Superior Proposal...............................................6.02
Surviving Corporation...........................................2.01
Tyco SEC Documents..............................................5.07
Reorganization..................................................4.24
5
ARTICLE 2
THE MERGER
SECTION 2.01. THE MERGER. (a) At the Effective Time, Merger Subsidiary
shall be merged (the "MERGER") with and into the Company in accordance with
Delaware Law, whereupon the separate existence of Merger Subsidiary shall cease,
and the Company shall be the surviving corporation (the "SURVIVING
CORPORATION").
(b) Upon the terms and subject to the conditions of this Agreement, the
closing of the Merger (the "CLOSING") shall take place at 10:00 a.m. on a date
(the "CLOSING DATE") which shall be no later than the second business day after
satisfaction or, to the extent permitted hereunder, waiver of the conditions set
forth in Article 9, at the offices of Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other time or place as the
parties may agree in writing.
(c) Upon the Closing, the Company and Merger Subsidiary shall file a
certificate of merger with the Delaware Secretary of State and make all other
filings or recordings required by Delaware Law in connection with the Merger.
The Merger shall become effective at such time as the certificate of merger is
duly filed with the Delaware Secretary of State, or at such later time as may be
specified in the certificate of merger (the "EFFECTIVE TIME").
(d) From and after the Effective Time, the Surviving Corporation shall
possess all the rights, powers, privileges and franchises and be subject to all
of the obligations, liabilities, restrictions and disabilities of the Company
and Merger Subsidiary, all as provided under Delaware Law.
SECTION 2.02. CONVERSION OF SHARES. At the Effective Time, (a) except
as otherwise provided in Section 2.02(b), each share of Company Common Stock
outstanding immediately prior to the Effective Time shall be converted into the
right to receive a fraction of a validly issued, fully paid and nonassessable
Tyco Common Share, such fraction to be in the ratio (the "EXCHANGE RATIO") of
$45.00 divided by the Tyco Average Share Price (together with the cash in lieu
of fractional Tyco Common Shares as specified below, the "MERGER
CONSIDERATION");
(b) each share of Company Common Stock held by the Company as treasury
stock or owned by Tyco or any of its Subsidiaries immediately prior to the
Effective Time shall be canceled, and no payment shall be made with respect
thereto; and
(c) each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and become one
share of common stock of the Surviving Corporation with the same rights, powers
and privileges as the shares so converted and shall constitute the only
outstanding shares of capital stock of the Surviving Corporation.
6
SECTION 2.03. SURRENDER AND EXCHANGE. (a) Prior to the Effective Time,
Parent shall appoint an agent (the "EXCHANGE AGENT") for the purpose of
exchanging certificates representing shares of Company Common Stock (the
"CERTIFICATES") for the Merger Consideration. Parent will make available to the
Exchange Agent, as needed, the Merger Consideration to be paid in respect of the
shares of Company Common Stock. Promptly after the Effective Time (but in any
event within five business days after the Effective Time), Parent will send, or
will cause the Exchange Agent to send, to each holder of shares of Company
Common Stock at the Effective Time a letter of transmittal and instructions
(which shall specify that the delivery shall be effected, and risk of loss and
title shall pass, only upon proper delivery of the Certificates to the Exchange
Agent) for use in such exchange.
(b) Each holder of shares of Company Common Stock that have been
converted into the right to receive the Merger Consideration will be entitled to
receive, upon surrender to the Exchange Agent of a Certificate, together with a
properly completed letter of transmittal, the Merger Consideration in respect of
the Company Common Stock represented by such Certificate together with any
dividends or other distributions with a record date after the Effective Time
previously paid or payable with respect to the Tyco Common Shares issued as part
of the Merger Consideration, less the amount of any withholding taxes which may
be required thereon and without any interest. Until so surrendered, each
Certificate will be deemed from and after the Effective Time, for all corporate
purposes other than the payment of dividends and subject to Section 2.03(e) and
Section 2.03(f), to evidence the ownership of the number of full shares of Tyco
Common Shares into which such Certificates shall have the right to be converted.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the Person in whose name the Certificate is registered, it
shall be a condition to such payment that the Certificate so surrendered shall
be properly endorsed or otherwise be in proper form for transfer and that the
Person requesting such payment shall pay to the Exchange Agent any transfer or
other taxes required as a result of such payment to a Person other than the
registered holder of such Certificate or establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not payable.
(d) After the Effective Time, there shall be no further registration of
transfers of shares of Company Common Stock. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be canceled
and exchanged for the Merger Consideration provided for, and in accordance with
the procedures set forth, in this Article.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.03(a) that remains unclaimed by the holders
of shares of Company Common Stock one year after the Effective Time shall be
returned to Parent, upon demand, and any such holder who has not exchanged
shares of Company Common Stock for the Merger Consideration in accordance with
this Section prior to that time shall thereafter look only to
7
Parent for payment of the Merger Consideration, and any dividends and
distributions with respect thereto, in respect of such shares of Company Common
Stock. Notwithstanding the foregoing, Parent shall not be liable to any holder
of shares of Company Common Stock for any amounts paid to a public official
pursuant to applicable abandoned property, escheat or similar laws. Any portion
of the Merger Consideration, and any dividends and distributions with respect
thereto, remaining unclaimed by holders of shares of Company Common Stock two
years after the Effective Time (or such earlier date, immediately prior to such
times when the amounts would otherwise escheat to or become property of any
governmental authority) shall become, to the extent permitted by applicable law,
the property of Parent free and clear of any claims or interest of any Person
previously entitled thereto.
(f) No dividends or other distributions with respect to securities of
Tyco constituting part of the Merger Consideration, and no cash payment in lieu
of fractional shares as provided in Section 2.06, shall be paid to the holder of
any unsurrendered Certificates until such Certificates are surrendered as
provided in this Section. Following such surrender, there shall be paid, without
interest, to the Person in whose name the securities of Tyco have been
registered, at the time of such surrender, the amount of any cash payable in
lieu of fractional shares to which such Person is entitled pursuant to Section
2.06 and the amount of all dividends or other distributions with a record date
after the Effective Time previously paid or payable on the date of such
surrender with respect to such securities, less the amount of any withholding
taxes which may be required thereon.
SECTION 2.04. STOCK OPTIONS. At the Effective Time, by virtue of the
Merger and without any further action on the part of the holders thereof, each
outstanding option to purchase shares of Company Common Stock (collectively, the
"COMPANY STOCK OPTIONS"), whether or not then vested or exercisable, shall
constitute the right to receive an amount in cash equal to the positive
difference, if any, between (i) the product of the Exchange Ratio and the Tyco
Average Share Price, multiplied by the number of shares of Company Common Stock
subject to such Company Stock Option, whether or not then vested or exercisable,
immediately prior to the Effective Time and (ii) the aggregate exercise price
for the Company Common Stock subject to such Company Stock Option immediately
prior to the Effective Time. Any Company Stock Option, the per share exercise
price of which as of the Effective Time equals or exceeds the product of the
Exchange Ratio and the Tyco Average Share Price shall be cancelled and be of no
further force and effect as of the Effective Time.
(b) Prior to the Effective Time, the Company shall (i) obtain any
consents from holders of Company Stock Options and (ii) make any amendments to
the terms of such stock option or compensation plans or arrangements that are
necessary to give effect to the transactions contemplated by this Section 2.04.
SECTION 2.05. ADJUSTMENTS. If, during the period between the date of
this Agreement and the Effective Time, any change in the outstanding shares of
capital stock of Company or
8
Tyco shall occur, including by reason of any reclassification,
recapitalization, stock split or combination, exchange or readjustment of
shares, or any stock dividend thereon with a record date during such period,
the Exchange Ratio shall be appropriately adjusted.
SECTION 2.06. FRACTIONAL SHARES. No fractional Tyco Common Shares shall
be issued in the Merger. All fractional Tyco Common Shares that a holder of
shares of Company Common Stock would otherwise be entitled to receive as a
result of the Merger shall be aggregated and if a fractional share results from
such aggregation, such holder shall be entitled to receive, in lieu thereof, an
amount in cash determined by multiplying the fraction of a Tyco Common Share to
which such holder would otherwise have been entitled by the Tyco Average Share
Price.
SECTION 2.07. WITHHOLDING RIGHTS. Each of the Surviving Corporation and
Parent shall be entitled to deduct and withhold from the consideration otherwise
payable to any Person pursuant to this Article such amounts as it is required to
deduct and withhold with respect to the making of such payment under any
provision of federal, state, local or foreign tax law. If the Surviving
Corporation or Parent, as the case may be, so withholds amounts, such amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the shares of Company Common Stock in respect of which the Surviving
Corporation or Parent, as the case may be, made such deduction and withholding.
SECTION 2.08. LOST CERTIFICATES. If any Certificate shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation or the Exchange Agent, the posting by such
Person of a bond, in such reasonable amount as the Surviving Corporation or the
Exchange Agent may direct, as indemnity against any claim that may be made
against it or them with respect to such Certificate, the Exchange Agent will
issue, in exchange for such lost, stolen or destroyed Certificate, the Merger
Consideration to be paid in respect of the shares of Company Common Stock
represented by such Certificate, as contemplated by this Article.
ARTICLE 3
THE SURVIVING CORPORATION
SECTION 3.01. CERTIFICATE OF INCORPORATION. The certificate of
incorporation of the Company in effect at the Effective Time shall be the
certificate of incorporation of the Surviving Corporation until amended in
accordance with applicable law, PROVIDED that, at the Effective Time, Article 1
of such certificate of incorporation shall be amended to read as follows: "The
name of the corporation is AFC Cable Systems, Inc." and [other modifications].
9
SECTION 3.02. BYLAWS. The bylaws of the Company in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 3.03. DIRECTORS AND OFFICERS. From and after the Effective
Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, (i) the directors of Merger Subsidiary 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.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent that, except as
set forth in the written disclosure schedule delivered on or prior to the date
hereof by the Company to Parent that is arranged in paragraphs corresponding to
the numbered and lettered paragraphs contained in this Article 4 (the "COMPANY
DISCLOSURE SCHEDULE"):
SECTION 4.01. CORPORATE EXISTENCE AND POWER. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all corporate powers and all governmental
licenses, authorizations, permits, consents and approvals required to carry on
its business as now conducted, except for those licenses, authorizations,
permits, consents and approvals the absence of which would not have,
individually or in the aggregate, a Material Adverse Effect on the Company. The
Company is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where such qualification is necessary, except for
those jurisdictions where failure to be so qualified would not have,
individually or in the aggregate, a Material Adverse Effect on the Company. The
Company has heretofore made available to Parent true and complete copies of the
certificate of incorporation and bylaws of the Company as currently in effect.
SECTION 4.02. CORPORATE AUTHORIZATION. (a) The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby are within the Company's corporate
powers and, except for the required approval of the Company's stockholders in
connection with the consummation of the Merger, have been duly authorized by all
necessary corporate action on the part of the Company. The affirmative vote of
the holders of a majority of the outstanding shares of Company Common Stock
approving the adoption of this Agreement and the transactions contemplated
hereby (the "COMPANY STOCKHOLDER APPROVAL") is the only vote of the holders of
any of the Company's capital stock necessary in connection with the consummation
of the Merger. This Agreement constitutes a valid and binding agreement of the
Company.
10
(b) At a meeting duly called and held, the Company's Board of Directors
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 and adopted this Agreement and the
transactions contemplated hereby and (iii) unanimously resolved (subject to
Section 6.02(b)) to recommend approval and adoption of this Agreement and the
transactions contemplated hereby by its stockholders.
SECTION 4.03. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the transactions contemplated hereby require no action by or in respect of,
or filing with, any Governmental Authority, other than (i) the filing of a
certificate of merger with respect to the Merger with the Delaware Secretary of
State and appropriate documents with the relevant authorities of other states in
which Company is qualified to do business, (ii) compliance with any applicable
requirements of the HSR Act, (iii) compliance with any applicable requirements
of the 1933 Act, the 1934 Act, and any applicable state securities laws, (iv)
compliance with the Environmental Law of any state relating to the transfer of
ownership or control of property located in that state and (v) any actions or
filings the absence of which would not be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company or
materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement.
SECTION 4.04. NON-CONTRAVENTION. (a) The execution, delivery and
performance by the Company of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (i) contravene, conflict
with, or result in any violation or breach of any provision of the certificate
of incorporation or bylaws of the Company or any of its Subsidiaries, (ii)
assuming compliance with the matters referred to in Section 4.03, contravene,
conflict with or result in a violation or breach of any provision of any law,
rule, regulation, judgment, injunction, order, or decree applicable to the
Company or any of its Subsidiaries, (iii) require any consent or other action by
any Person under, constitute a default under, or cause or permit the
termination, cancellation, acceleration or other change of any right or
obligation or the loss of any benefit to which the Company or any of its
Subsidiaries is entitled under any provision of any Material Agreement binding
upon the Company or any of its Subsidiaries or any material license, franchise,
permit, certificate, approval or other similar authorization affecting, or
relating in any way to, the assets or business of the Company and its
Subsidiaries, PROVIDED that, for purposes of this subsection 4.04(iii),
"MATERIAL AGREEMENT" shall mean any agreement identified in the Company 10-K or
in any of the Company's quarterly reports on Form 10-Q or any agreement entered
into since the date of the Company's latest quarterly report on Form 10-Q that
would be required to be so identified in the Company's annual report on Form
10-K for the year ended December 31, 1999 or (iv) result in the creation or
imposition of any Lien on any material asset of the Company or any of its
Subsidiaries.
11
(b) Without limiting in any way the representations set forth in
Section 4.04(a), none of the negotiation, execution, delivery and performance of
and by the Company of this Agreement, or the discussions with or disclosure of
nonpublic information to Parent and its affiliates concerning the transactions
contemplated hereby, violates or constitutes a breach, or has violated or
constituted a breach, by the Company of its obligations under the Agreement and
Plan of Merger, dated January 27, 1999, among the Company, Xxxxxx & Xxxxx
Corporation, and TB Acquisition Corp., as amended through the date hereof (the
"T&B AGREEMENT"), including, without limitation, Section 6.03 thereof. The T&B
Agreement has been terminated in accordance with the provisions of Section
10.01(d)(i) thereof.
SECTION 4.05. CAPITALIZATION. (a) The authorized capital stock of the
Company consists of 50,000,000 shares of Company Common Stock and 1,000,000
shares of Preferred Stock, par value $0.01 per share (the "COMPANY PREFERRED
STOCK"). As of August 24, 1999, there were outstanding 12,842,132 shares of
Company Common Stock, 1,056,004 shares of Company Common Stock were reserved for
issuance pursuant to the Company Stock Options and 359,587 shares of Company
Common Stock are reserved for future grants of Company Common Stock or options
to purchase Company Common Stock under the Company's various benefit plans.
There are no outstanding shares of Company Preferred Stock. All outstanding
shares of capital stock of the Company have been duly authorized and validly
issued and are fully paid and nonassessable.
(b) Except as set forth in this Section 4.05 and except for changes
since August 24, 1999 resulting from the issuance of Company Common Stock as
permitted under Section 6.01(c), there are no outstanding (i) shares of capital
stock or 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, or other 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. There are no outstanding obligations of the
Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any of the securities referred to in clauses (i), (ii) or (iii) above.
SECTION 4.06. SUBSIDIARIES. (a) Each Subsidiary of the Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, has all corporate powers and all
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted, except for those licenses,
authorizations, permits, consents and approvals the absence of which would not
have, individually or in the aggregate, a Material Adverse Effect on the
Company. Each such Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be
so qualified would not have, individually or in the aggregate, a Material
Adverse Effect on the Company. Except as set forth in Schedule 4.06(a), all
"SIGNIFICANT SUBSIDIARIES"
12
(as such term is defined under Rule 1-02 of Regulation S-X under the 0000 Xxx)
of the Company and their respective jurisdictions of incorporation are
identified in the Company 10-K or in a quarterly report of the Company on Form
10-Q filed with respect to any quarter of the 1999 fiscal year.
(b) All of the outstanding capital stock of, or other voting
securities or ownership interests in, each Subsidiary of the Company, is owned
by the Company, directly or indirectly, free and clear of any Lien and free of
any other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other voting securities
or ownership interests). There are no outstanding (i) securities of the Company
or any of its Subsidiaries convertible into or exchangeable for shares of
capital stock 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 or other voting securities or
ownership interests in, or any securities convertible into or exchangeable for
any capital stock or other voting securities or ownership interests in, any
Subsidiary of the Company. There are no outstanding obligations of the Company
or any of its Subsidiaries to repurchase, redeem or otherwise acquire any of the
securities referred to in clauses (i) or (ii) above.
SECTION 4.07. SEC FILINGS. (a) The Company has filed with the SEC all
reports, schedules, forms, statements and other documents required to be filed
since December 31, 1996 (collectively, the "COMPANY SEC DOCUMENTS").
(b) As of its filing date, each Company SEC Document complied as to
form in all material respects with the applicable requirements of the 1933 Act
and the 1934 Act, as the case may be.
(c) As of its filing date, each Company SEC Document filed pursuant to
the 1934 Act did not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
(d) Each Company SEC Document that is a registration statement, as
amended or supplemented, if applicable, filed pursuant to the 1933 Act, as of
the date such registration statement or amendment became effective, did not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
SECTION 4.08. FINANCIAL STATEMENTS. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company included in the Company SEC Documents fairly present, in conformity with
generally accepted accounting principles in the United States ("GAAP") applied
on a consistent basis (except as may be
13
indicated in the notes thereto), the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the periods then ended
(subject to normal year-end adjustments in the case of any unaudited interim
financial statements).
SECTION 4.09. REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. (a)
The information to be supplied by the Company for inclusion or incorporation by
reference in the Registration Statement will not at the time the Registration
Statement (including any amendments or supplements thereto) is declared
effective by the SEC contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(b) The information to be supplied by the Company for inclusion or
incorporation by reference in the Proxy Statement/Prospectus to be sent to the
stockholders of the Company in connection with the meeting of the stockholders
of the Company to consider the Merger (the "COMPANY STOCKHOLDERS MEETING"), will
not, on the date the Proxy Statement/Prospectus (or any amendment thereof or
supplement thereto) is first mailed to stockholders, at the time of the Company
Stockholders Meeting, or at the Effective Time, contain any statement which, at
such time and in light of the circumstances under which it shall be made, is
false or misleading with respect to any material fact, or shall omit to state
any material fact necessary in order to make the statements made therein not
false or misleading, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Company Stockholders Meeting which has become false or
misleading.
(c) Notwithstanding the foregoing, the Company makes no representation
or warranty with respect to any information supplied by Tyco, Parent or Merger
Subsidiary which is contained in or furnished in connection with the preparation
of the Registration Statement or the Proxy Statement/Prospectus.
SECTION 4.10. ABSENCE OF CERTAIN CHANGES. Since the Company Balance
Sheet Date, the business of the Company and its Subsidiaries has been conducted
in the ordinary course consistent with past practice and there has not been:
(a) any event, occurrence, development or state of
circumstances or facts that has had or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on
the Company;
(b) any declaration, setting aside or payment of any dividend
or other distribution with respect to any shares of capital stock of
the Company, or any repurchase, redemption or other acquisition by the
Company or any of its Subsidiaries
14
of any outstanding shares of capital stock or other securities of, or
other ownership interests in, the Company or any of its Subsidiaries;
(c) any amendment of any material term of any outstanding
security of the Company or any of its Subsidiaries;
(d) any incurrence, assumption or guarantee by the Company or
any of its Subsidiaries of any indebtedness for borrowed money other
than in the ordinary course of business and in amounts and on terms
consistent with past practices;
(e) any creation or other incurrence by the Company or any of
its Subsidiaries of any Lien on any asset other than in the ordinary
course of business consistent with past practices;
(f) any making of any loan, advance or capital contributions
to or investment in any Person other than loans, advances or capital
contributions to or investments in its wholly-owned Subsidiaries in the
ordinary course of business consistent with past practices;
(g) any damage, destruction or other casualty loss (whether or
not covered by insurance) affecting the business or assets of the
Company or any of its Subsidiaries that has had or could reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company;
(h) any transaction or commitment made, or any contract or
agreement entered into, by the Company or any of its Subsidiaries
relating to its assets or business (including the acquisition or
disposition of any assets) or any relinquishment by the Company or any
of its Subsidiaries of any contract or other right, in either case,
material to the Company and its Subsidiaries, taken as a whole, other
than transactions and commitments in the ordinary course of business
consistent with past practices and those contemplated by this
Agreement;
(i) any material change in the accounting methods, principles
or practices by the Company or any of its Subsidiaries, except for any
such change required by reason of a concurrent change in GAAP or
Regulation S-X under the 1934 Act;
(j) except as set forth in Schedule 4.10(j), any (i) grant of
any severance or termination pay to any director, officer or employee
of the Company or any of its Subsidiaries, (ii) increase in benefits
payable under any existing severance or termination pay policies or
employment agreements, (iii) entering into any employment, deferred
compensation or other similar agreement (or any amendment to any such
existing agreement) with any director, officer or employee of the
Company or
15
any of its Subsidiaries, (iv) establishment, adoption or amendment
(except as required by applicable law) of any collective bargaining,
bonus, profit-sharing, thrift, pension, retirement, deferred
compensation, compensation, stock option, restricted stock or other
benefit plan or arrangement covering any director, officer or employee
of the Company or any of its Subsidiaries or (v) increase in
compensation, bonus or other benefits payable to any director, officer
or employee of the Company or any of its Subsidiaries, other than in
the ordinary course of business consistent with past practice; or
(xi) any material labor dispute, other than routine individual
grievances, or any activity or proceeding by a labor union or
representative thereof to organize any employees of the Company or any
of its Subsidiaries, which employees were not subject to a collective
bargaining agreement at the Company Balance Sheet Date, or any
lockouts, strikes, slowdowns, work stoppages or threats thereof by or
with respect to such employees.
SECTION 4.11. NO UNDISCLOSED MATERIAL LIABILITIES. (a) 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, other than:
(i) liabilities or obligations disclosed and provided for in
the Company Balance Sheet or in the notes thereto or in the Company SEC
Documents filed prior to the date hereof;
(ii) liabilities or obligations that would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company; and
(iii) liabilities or obligations incurred in connection with
this Agreement or disclosed in the Company Disclosure Schedule.
(b) Schedule 4.11(b) sets forth every obligation of the Company or any
of its Subsidiaries, whether accrued, contingent, absolute, determined,
determinable or otherwise, for payment of additional purchase price or any other
additional or contingent consideration in connection with any acquisition by the
Company or any of its Subsidiaries.
SECTION 4.12. COMPLIANCE WITH LAWS AND COURT ORDERS. The Company and
each of its Subsidiaries is and at all times since December 31, 1996 has been in
compliance with, and to the knowledge of the Company is not under investigation
with respect to and has not been threatened to be charged with or given notice
of any violation of, any applicable law, rule, regulation, judgment, injunction,
order or decree, except for matters that have not had and could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on the Company.
16
SECTION 4.13. LITIGATION. Except as set forth in the Company SEC
Documents filed prior to the date hereof, there is no action, suit,
investigation or proceeding pending against, or, to the knowledge of the
Company, threatened against or affecting, the Company, any of its Subsidiaries,
any present or former officer, director or employee of the Company or any of its
Subsidiaries or any Person for whom the Company or any Subsidiary may be liable
or any of their respective properties before any court or arbitrator or any
governmental body, agency or official, domestic or foreign, that, could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company or that, as of the date hereof, in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the Merger or
any of the other transactions contemplated hereby.
SECTION 4.14. FINDERS' FEES. Except for NationsBanc Xxxxxxxxxx
Securities and The Xxxxxxxx-Xxxxxxxx Company, a copy of whose engagement
agreements have been provided to Parent and whose fees will be paid by the
Company, there is no investment banker, broker, finder or other intermediary
that has been retained by or is authorized to act on behalf of the Company or
any of its Subsidiaries who might be entitled to any fee or commission from the
Company or any of its Affiliates in connection with the transactions
contemplated by this Agreement.
SECTION 4.15. OPINION OF FINANCIAL ADVISOR. The Company has received
the opinion of The Xxxxxxxx-Xxxxxxxx Company, financial advisor to the Company,
to the effect that, as of the date of this Agreement, the Merger Consideration
is fair to the Company's stockholders from a financial point of view and such
opinion has not been withdrawn.
SECTION 4.16. TAXES. Except as set forth in the Company Balance Sheet
(including the notes thereto) or except as would not, individually or in the
aggregate, have a Material Adverse Effect on the Company:
(a) all Tax Returns required to be filed with any taxing
authority by, or with respect to, the Company and its Subsidiaries have
been timely filed in accordance with all applicable laws;
(b) other than Taxes which are being contested in good faith
and for which adequate reserves are reflected on the Company Balance
Sheet, the Company and its Subsidiaries have timely paid all Taxes
(which for purposes of this Section 4.16 shall include interest,
penalties and additions to Tax with respect thereto), whether or not
shown as due and payable on the Company Returns that have been so
filed, and, as of the time of filing, the Company Returns correctly
reflected the facts regarding the income, business, assets, operations,
activities and the status of the Company and its Subsidiaries;
17
(c) the Company and its Subsidiaries have made provision for
all Taxes payable by the Company and its Subsidiaries for which no
Company Return has yet been filed;
(d) the charges, accruals and reserves for taxes with respect
to the Company and its Subsidiaries reflected on the Company Balance
Sheet are adequate under GAAP to cover the Tax liabilities accruing
through the date thereof;
(e) there is no action, suit, proceeding, audit or claim now
proposed or pending against or with respect to the Company or any of
its Subsidiaries in respect of any Tax where there is a reasonable
possibility of an adverse determination;
(f) except as set forth in Schedule 4.16, neither the Company
nor any of its Subsidiaries has been a member of an affiliated,
consolidated, combined or unitary group other than one of which the
Company was the common parent;
(g) the Company and its Subsidiaries have complied with all
applicable laws, rules and regulations relating to the payment and
withholding of Taxes; and
(h) except as set forth in Schedule 4.16, neither the Company
nor any of its Subsidiaries is obligated by any contract, agreement or
other arrangement (i) to indemnify any other Person with respect to
Taxes, (ii) to make any Tax payment to or for the account of any other
Person, (iii) to afford any other Person the benefit of any net
operating loss, net capital loss, investment Tax credit, foreign Tax
credit, charitable deduction or other credit or tax attribute that
could reduce Taxes of the Company or any of its Subsidiaries, or (iv)
to permit the transfer or assignment of income, revenues, receipts or
gains to the Company or any of its Subsidiaries from any other Person.
SECTION 4.17. EMPLOYEE BENEFIT PLANS. (a) Schedule 4.17(a) identifies
each material "EMPLOYEE BENEFIT PLAN," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974 ("ERISA"), each employment,
severance or similar contract, plan, arrangement or policy applicable to any
director, former director, employee or former employee of the Company or any of
its Affiliates and each material plan or arrangement (written or oral) providing
for compensation, bonuses, profit-sharing, stock purchase, stock option or other
stock related rights or other forms of incentive or deferred compensation,
vacation benefits, insurance coverage (including any self-insured arrangements),
health or medical benefits, disability benefits, workers' compensation,
supplemental unemployment benefits, severance benefits and post-employment or
retirement benefits (including compensation, pension, health, medical or life
insurance benefits) which is maintained, administered or contributed to by the
Company or any of its Affiliates and covers any employee, director or former
employee, director of the Company or any of its Affiliates, or under which the
Company or any of its Affiliates has any liability. Such plans are referred to
collectively herein as the "COMPANY EMPLOYEE PLANS". To the extent applicable,
the Company
18
has made available to Parent accurate and complete copies of all
Company Employee Plans, including any plan documents, summary plan descriptions,
trust agreements, most recent IRS determination letters and most recent Forms
5500 with all schedules and attachments.
(b) Each Company Employee Plan has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and all
statutes, order, rules and regulations (including but not limited to ERISA and
the Code) which are applicable to such Plan, except where failure to so comply
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company.
(c) Neither the Company nor any ERISA Affiliate has maintained,
contributed to or been required to contribute to any employee benefit plan
subject to Title IV of ERISA during the six year period prior to the Closing.
For purposes of this Agreement the term "ERISA AFFILIATE" shall mean any entity
which, together with the Company, would be treated as a single employer under
Section 414 of the Code. All contributions required to be made with respect to
any Company Employee Plan has been made on or before their due dates or adequate
accruals therefor will have been provided for and properly reflected on the
books of the Company. The benefits accrued by each participant under the AFC
Cable Systems, Inc. Selective Retirement Plan (and any other non-qualified
deferred compensation plan of the Company or its Subsidiaries) as of the date
hereof and as of the Closing are fully funded with cash set aside in a rabbi
trust designated for the payment of such benefits.
(d) Each Company Employee Plan which is intended to be qualified under
Section 401(a) of the Code has been determined to be so qualified by the IRS and
to the knowledge of the Company each such Employee Plan is so qualified and has
been so qualified during the period from its adoption to date, and each trust
forming a part thereof is exempt from tax pursuant to Section 501(a) of the
Code.
(e) Except as set forth in Schedule 4.17(e) or as required by law, the
execution and performance of this Agreement will not (i) constitute a stated
triggering event under any Company Employee Plan that would result in any
payment (including severance or otherwise) becoming due to any director,
employee or former director or employee of the Company or any of its
Subsidiaries or (ii) accelerate the time of payment or vesting, or increase the
amount of compensation due any director or employee or former director or
employee of the Company or any of its Subsidiaries. Without limiting the
generality of the foregoing, except as set forth in Schedule 4.17(e), no amount
required to be paid or payable to or with respect to any director or officer or
other employee of the Company or any of its Subsidiaries or Affiliates under any
Company Employee Plan in connection with the transactions contemplated hereby
(either solely as a result thereof or as a result of such transactions in
conjunction with any other event) will be an "excess parachute payment" within
the meaning of Section 280G of the Code.
19
(f) Except as set forth in Schedule 4.17(f), and to the extent required
under Section 601 of ERISA, no Company Employee Plan provides post-retirement
health and medical, life or other insurance benefits for retired employees of
the Company or any of its Subsidiaries.
(g) There has been no amendment to, written interpretation or
announcement (whether or not written) by the Company or any of its Affiliates
relating to, or change in employee participation or coverage under, any Company
Employee Plan which would increase materially the expense of maintaining such
Company Employee Plan above the level of the expense incurred in respect thereof
for the 12 months ended on the Company Balance Sheet Date.
(h) Schedule 4.17(h) identifies each collective bargaining agreement to
which the Company or any of its Subsidiaries is a party and copies of each such
agreement have been furnished to or made available to Parent. Except as set
forth on Schedule 4.17(h), or except as would not be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect on Company,
(i) there is no labor strike, slowdown or work stoppage or lockout against
Company or any of its Subsidiaries and (ii) there is no unfair labor practice
charge or complaint against or pending before the National Labor Relations
Board. As of the date of this Agreement, there is no representation claim or
petition pending before the National Labor Relations Board and, to the knowledge
of Company, no question concerning representation exists with respect to the
employees of Company or any of its Subsidiaries.
SECTION 4.18. ENVIRONMENTAL MATTERS. (a) Except as set forth in the
Company SEC Documents prior to the date hereof:
(i) no notice, notification, demand, request for information,
citation, summons or order has been received, no complaint has been
filed, no penalty has been assessed, and no investigation, action,
claim, suit, proceeding or review is pending or, to the knowledge of
the Company, is threatened by any governmental entity or other Person
relating to or arising out of any Environmental Law;
(ii) the Company is in compliance in all material respects
with all Environmental Laws and all Environmental Permits; and
(iii) there are no liabilities of or relating to the Company
or any of its Subsidiaries of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise arising
under or relating to any Environmental Law.
(b) There has been no environmental investigation, study, audit, test,
review or other analysis conducted of which the Company has knowledge in
relation to the current or prior business either of the Company or any of its
Subsidiaries or any property or facility now or
20
previously owned or leased by the Company or any of its Subsidiaries that has
not been delivered to Parent.
(c) Except as set forth in Schedule 4.18(c), neither the Company nor
any of its Subsidiaries owns, leases or operates or has owned, leased or
operated any real property, or conducts or has conducted any operations, in New
Jersey or Connecticut.
SECTION 4.19. ANTITAKEOVER STATUTES. The Board of Directors of the
Company has approved this Agreement and the transactions contemplated hereby and
neither Section 203 of Delaware Law nor any other antitakeover or similar
statute or regulation applies or purports to apply to the transactions
contemplated hereby.
SECTION 4.20. ASSETS. The assets, properties, rights and contracts,
including (as applicable), title or leaseholds thereto, of the Company and its
Subsidiaries, taken as a whole, are sufficient to permit the Company and its
Subsidiaries to conduct their business as currently being conducted with only
such exceptions as are not reasonably likely to have a Material Adverse Effect
on the Company. All material real property owned by the Company and its
Subsidiaries is owned free and clear of all Liens, except (A) those reflected or
reserved against in the latest balance sheet (or notes thereto) of the Company
included in the Company SEC Documents filed prior to the date hereof, (B) taxes
and general and special assessments not in default and payable without penalty
or interest, and (C) Liens that do not materially adversely interfere with any
present use, or materially impair the value, of such property.
SECTION 4.21. INTELLECTUAL PROPERTY. (a) The Company, directly or
indirectly, owns, or is licensed or otherwise possesses legally enforceable
rights to use, all Intellectual Property Rights that are material to the
business of the Company and its Subsidiaries, taken as a whole, as currently
conducted or as proposed to be conducted (the "COMPANY INTELLECTUAL PROPERTY
RIGHTS"), except where the failure to do so would not have a Material Adverse
Effect on the Company.
(b) Except as disclosed on Schedule 4.21(b), no claims have been
asserted to the Company or any Subsidiary in writing or, to the knowledge of the
Company, are threatened by any person nor are there any valid grounds, to the
knowledge of the Company, for any bona fide claims (i) against the use by the
Company or any of its Subsidiaries of the Company Intellectual Property Rights,
or (ii) challenging the ownership by the Company or any of its Subsidiaries, or
the validity or effectiveness of any of the Company Intellectual Property
Rights, except for such claims that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company.
(c) Neither the Company nor any of its Subsidiaries has any outstanding
claim or suit for, and the Company has no knowledge of, any continuing
infringement by any other Person of any Company Intellectual Property Rights. No
Company Intellectual Property Right is
21
subject to any outstanding judgment, injunction, order, decree or agreement
restricting the use thereof by the Company or any of its Subsidiaries or
restricting the licensing thereof by the Company or any of its Subsidiaries to
any Person.
SECTION 4.22. NON-COMPETITION AGREEMENTS. Neither the Company nor any
of its Subsidiaries is a party to or bound by any non-competition agreement or
any other agreement or obligation which limits or will limit in any material
respect the location or lines of business conducted by the Company or any of its
Subsidiaries (or after the Merger, Parent, any of its Subsidiaries or any of
their respective Affiliates).
SECTION 4.23. TRANSACTIONS WITH AFFILIATES. Except to the extent
disclosed in the Company SEC Documents filed prior to the date hereof, since the
Company Balance Sheet Date there have been no transactions, agreements,
arrangements or understandings between Company or its Subsidiaries, on the one
hand, and Company's Affiliates (other than its wholly-owned Subsidiaries) or
other Persons, on the other hand, that would be required to be disclosed under
Item 404 of Regulation S-K under the 1933 Act.
SECTION 4.24. TAX TREATMENT. Neither the Company nor any of its
Affiliates has taken or agreed to take any action or is aware of any fact or
circumstance that would prevent the Merger from qualifying as a reorganization
within the meaning of Section 368(a) of the Code (a "REORGANIZATION").
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent represents and warrants to the Company that:
SECTION 5.01. CORPORATE EXISTENCE AND POWER. Each of Tyco, Parent and
Merger Subsidiary is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
corporate powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted,
except for those licenses, authorizations, permits, consents and approvals the
absence of which would not have, individually or in the aggregate, a Material
Adverse Effect on Tyco. Parent has heretofore made available to the Company true
and complete copies of the charter and bye-laws of Tyco, Parent and Merger
Subsidiary as currently in effect.
SECTION 5.02. CORPORATE AUTHORIZATION. (a) The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, the execution,
delivery and performance by Tyco of the Guarantee and the consummation by Tyco,
Parent and Merger Subsidiary of the transactions contemplated hereby and
thereby, as applicable, are within the respective corporate powers of Tyco,
Parent and Merger Subsidiary and have been duly authorized by all
22
necessary corporate action. This Agreement constitutes a valid and binding
agreement of each of Parent and Merger Subsidiary, and the Guarantee
constitutes a valid and binding agreement of Tyco.
(b) At a meeting duly called and held, or by written consent in lieu of
meeting, Parent's Board of Directors has (i) unanimously determined that this
Agreement and the transactions contemplated hereby are fair to and in the best
interests of the sole stockholder of Parent and (ii) unanimously approved and
adopted this Agreement and the transactions contemplated hereby. At a meeting
duly called and held, Tyco's Board of Directors has (i) determined that the
Guarantee and the transactions contemplated thereby are fair to and in the best
interests of Tyco's shareholders and (ii) approved and adopted the Guarantee and
the transactions contemplated thereby.
SECTION 5.03. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, the execution,
delivery and performance by Tyco of the Guarantee and the consummation by Tyco,
Parent and Merger Subsidiary of the transactions contemplated hereby and
thereby, as applicable, require no action by or in respect of, or filing with,
any Governmental Authority, other than (i) the filing of a certificate of merger
with respect to the Merger with the Delaware Secretary of State, (ii) compliance
with any applicable requirements of the HSR Act (iii) compliance with any
applicable requirements of the 1933 Act, the 1934 Act and any applicable state
securities laws, (iv) compliance with the Environmental Law of any state
relating to the transfer of ownership or control of property located in that
state and (v) any actions or filings the absence of which would not be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on Tyco or Parent or materially impair the ability of Parent and
Merger Subsidiary to consummate the transactions contemplated by this Agreement
or the ability of Tyco to fulfill its obligations under the Guarantee.
SECTION 5.04. NON-CONTRAVENTION. The execution, delivery and
performance by Parent and Merger Subsidiary of this Agreement, the execution,
delivery and performance by Tyco of the Guarantee and the consummation by Tyco,
Parent and Merger Subsidiary of the transactions contemplated hereby and
thereby, as applicable, do not and will not (i) contravene, conflict with, or
result in any violation or breach of any provision of the memorandum of
association or bye-laws of Tyco or the certificate of incorporation or bylaws of
Parent or Merger Subsidiary, (ii) assuming compliance with the matters referred
to in Section 5.03, contravene, conflict with or result in a violation or breach
of any provision of any law, rule, regulation, judgment, injunction, order or
decree applicable to Tyco or any of its Subsidiaries, (iii) require any consent
or other action by any Person under, constitute a default under, or cause or
permit the termination, cancellation, acceleration or other change of any right
or obligation or the loss of any benefit to which Tyco or any of its
Subsidiaries is entitled under any provision of any material agreement or
instrument binding upon Tyco or any of its Subsidiaries or any material license,
franchise, permit, certificate, approval or other similar
23
authorization affecting, or relating in any way to, the assets or business of
Tyco and its Subsidiaries, PROVIDED that, for purposes of this subsection
5.04(iii), "MATERIAL AGREEMENT" shall mean any agreement identified in Tyco's
10-K or in any of Tyco's quarterly reports on Form 10-Q or any agreement entered
into since the date of Tyco's latest quarterly report on Form 10-Q that would be
required to be so identified in Tyco's annual report on Form 10-K for the year
ended September 30, 1999 or (iv) result in the creation or imposition of any
Lien on any material asset of Tyco or any of its Subsidiaries.
SECTION 5.05. CAPITALIZATION. (a) The authorized capital stock of Tyco
consists of 2,500,000,000 Tyco Common Shares and 125,000,000 Preference Shares,
$1.00 par value per share ("TYCO PREFERRED SHARES"). As of August 12, 1999, (i)
843,921,601 Tyco Common Shares were issued and outstanding, all of which are
validly issued, fully paid and non-assessable, (ii) no Tyco Preferred Shares
were outstanding and (iii) no more than 10,000,000 Tyco Common Shares and no
Tyco Preferred Shares were held by subsidiaries of Tyco. As of August 12, 1999,
approximately 63,629,641 Tyco Common Shares were reserved for issuance upon
exercise of stock options issued under Tyco's stock option plans.
(b) Except as set forth in this Section 5.05, except for changes since
August 12, 1999 resulting from the exercise of stock options or the grant of
stock based compensation to directors or employees or from the issuance of stock
in connection with a merger or other acquisition or business combination
determined by Tyco's Board of Directors to be in the best interests of Tyco and
its shareholders, including, without limitation, the acquisition of Raychem
Corporation and General Surgical Innovations, Inc., and except for the
previously declared two-for-one stock split to be effected in the form of a
stock dividend, there are no outstanding (i) shares of capital stock or voting
securities of Tyco, (ii) securities of Tyco convertible into or exchangeable for
shares of capital stock or voting securities of Tyco or (iii) options or other
rights to acquire from Tyco or other obligation of Tyco to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of Tyco. There are no outstanding obligations
of Tyco or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any of the securities referred to in clauses (i), (ii) or (iii) above.
(c) The Tyco Common Shares to be issued as part of the Merger
Consideration have been duly authorized and, when issued and delivered in
accordance with the terms of this Agreement, will have been validly issued and
will be fully paid and nonassessable and the issuance thereof is not subject to
any preemptive or other similar right.
SECTION 5.06. SUBSIDIARIES. (a) Each Subsidiary of Tyco is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, has all corporate powers and all
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted, except for those licenses,
authorizations, permits, consents and approvals the absence of which would not
have,
24
individually or in the aggregate, a Material Adverse Effect on Tyco. Each
Subsidiary of Tyco is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction where such qualification is necessary,
except for those jurisdictions where failure to be so qualified would not have,
individually or in the aggregate, a Material Adverse Effect on Tyco. Except as
set forth in Schedule 5.06(a), all Significant Subsidiaries of Tyco and their
respective jurisdictions of incorporation are identified in the Tyco 10-K or in
a quarterly report of Tyco filed with respect to any quarter of the 1998 fiscal
year.
(b) Except with respect to any Subsidiary of Tyco which is not a
Significant Subsidiary of Tyco, all of the outstanding capital stock of, or
other voting securities or ownership interests in, each Subsidiary of Tyco, is
owned by Tyco, directly or indirectly, free and clear of any Lien and free of
any other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other voting securities
or ownership interests). Except with respect to any Subsidiary of Tyco which is
not a Significant Subsidiary, there are no outstanding (i) securities of Tyco or
any of its Subsidiaries convertible into or exchangeable for shares of capital
stock or other voting securities or ownership interests in any of its
Subsidiaries or (ii) options or other rights to acquire from Tyco or any of its
Subsidiaries, or other obligation of Tyco or any of its Subsidiaries to issue,
any capital stock or other voting securities or ownership interests in, or any
securities convertible into or exchangeable for any capital stock or other
voting securities or ownership interests in, any Subsidiary of Tyco. Except with
respect to any Subsidiary of Tyco which is not a Significant Subsidiary, there
are no outstanding obligations of Tyco or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any of the securities referred to in clauses (i) or
(ii) above.
SECTION 5.07. SEC FILINGS. (a) Tyco has filed with the SEC all reports,
schedules, forms, statements and other documents required to be filed since
December 31, 1996 (collectively, the "TYCO SEC DOCUMENTS").
(b) As of its filing date, each Tyco SEC Document complied as to form
in all material respects with the applicable requirements of the 1933 Act and
1934 Act, as the case may be.
(c) As of its filing date, each Tyco SEC Document filed pursuant to the
1934 Act did not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
(d) Each Tyco SEC Document that is a registration statement, as amended
or supplemented, if applicable, filed pursuant to the 1933 Act, as of the date
such registration statement or amendment became effective, did not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading.
25
SECTION 5.08. FINANCIAL STATEMENTS. The audited consolidated financial
statements and unaudited consolidated interim financial statements of Tyco
included in the Tyco SEC Documents fairly present, in conformity with GAAP
applied on a consistent basis (except as may be indicated in the notes thereto),
the consolidated financial position of Tyco and its consolidated Subsidiaries as
of the dates thereof and their consolidated results of operations and cash flows
for the periods then ended (subject to normal year-end adjustments in the case
of any unaudited interim financial statements).
SECTION 5.09. REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS.
(a) The information to be supplied by Tyco or Parent for inclusion or
incorporation by reference in the Registration Statement will not, at the time
the Registration Statement (including any amendments or supplements thereto) is
declared effective by the SEC, contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
included therein, in light of the circumstances under which they were made, not
misleading. The Registration Statement (including any amendments thereto), when
filed, will comply as to form in all material respects with the requirements of
the 1933 Act.
(b) The information to be supplied by Tyco or Parent for inclusion or
incorporation in the Proxy Statement/Prospectus will not, on the date the Proxy
Statement/Prospectus is first mailed to stockholders, at the time of the Company
Stockholders Meeting and at the Effective Time, contain any statement which, at
such time and in light of the circumstances under which it shall be made, is
false or misleading with respect to any material fact, or will omit to state any
material fact necessary in order to make the statements therein not false or
misleading; or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Company Stockholders Meeting which has become false or
misleading.
(c) Notwithstanding the foregoing, Parent and Merger Subsidiary make no
representation or warranty with respect to any information supplied by the
Company which is contained in, or furnished in connection with the preparation
of, the Registration Statement or the Proxy Statement/Prospectus.
SECTION 5.10. ABSENCE OF CERTAIN CHANGES. Except as set forth in
Schedule 5.10, since the Tyco Balance Sheet Date, the business of Tyco and its
Subsidiaries has been conducted in the ordinary course consistent with past
practice and there has not been:
(a) any event, occurrence, development or state of
circumstances or facts that has had or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on
Tyco; or
26
(b) any declaration, setting aside or payment of any dividend
or other distribution with respect to any shares of capital stock of
Tyco other than Tyco's regular quarterly cash dividends, or any
repurchase, redemption or other acquisition by Tyco or any of its
Subsidiaries of any outstanding shares of capital stock or other
securities of, or other ownership interests in, Tyco or any of its
Subsidiaries (other than direct or indirect wholly-owned Subsidiaries
of Tyco).
SECTION 5.11. NO UNDISCLOSED MATERIAL LIABILITIES. There are no
liabilities or obligations of Tyco or any of its Subsidiaries of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, other than:
(a) liabilities or obligations disclosed and provided for in
the Tyco Balance Sheet or in the notes thereto or in the Tyco SEC
Documents filed prior to the date hereof;
(b) liabilities or obligations that would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect on Tyco; and
(c) liabilities or obligations incurred in connection with
this Agreement.
SECTION 5.12. COMPLIANCE WITH LAWS AND COURT ORDERS. Tyco and each of
its Subsidiaries is and at all times since December 31, 1996 has been in
compliance with, and to the knowledge of Parent is not under investigation with
respect to and has not been threatened to be charged with or given notice of any
violation of, any applicable law, rule, regulation, judgment, injunction, order
or decree, except for matters that have not had and could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Tyco.
SECTION 5.13. LITIGATION. Except as set forth in the Tyco SEC Documents
filed prior to the date hereof, there is no action, suit, investigation or
proceeding pending against, or, to the knowledge of Parent, threatened against
or affecting, Tyco, any of its Subsidiaries, any present or former officer,
director or employee of Tyco or any of its Subsidiaries or any other Person for
whom Tyco or any Subsidiary may be liable or any of their respective properties
before any court or arbitrator or any governmental body, agency or official,
United States or non-United States, that, could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Tyco or that, as
of the date hereof, in any manner challenges or seeks to prevent, enjoin, alter
or materially delay the Merger or any of the other transactions contemplated
hereby.
SECTION 5.14. FINDERS' FEES. There is no investment banker, broker,
finder or other intermediary that has been retained by or is authorized to act
on behalf of Parent or Tyco who
27
might be entitled to any fee or commission from Parent, Tyco or any of their
respective Affiliates in connection with the transactions contemplated by this
Agreement.
SECTION 5.15. TAX TREATMENT. Neither Tyco nor any of its Affiliates
has taken or agreed to take any action or is aware of any fact or circumstance
that would prevent the Merger from qualifying as a Reorganization.
SECTION 5.16. OWNERSHIP OF MERGER SUBSIDIARY; NO PRIOR ACTIVITIES.
(a) Merger Subsidiary was formed solely for the purpose of engaging
in the transactions contemplated by this Agreement.
(b) Except for obligations or liabilities incurred by Merger Subsidiary
in connection with its incorporation or organization and the transactions
contemplated by this Agreement and except for this Agreement and any other
agreements or arrangements contemplated by this Agreement, Merger Subsidiary has
not incurred, directly or indirectly, through any subsidiary or affiliate, any
obligations or liabilities or engaged in any business activities of any type or
kind whatsoever or entered into any agreements or arrangements with any person.
ARTICLE 6
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 6.01. CONDUCT OF THE COMPANY. Except as otherwise contemplated
by this Agreement, from the date hereof until the Effective Time, the Company
and its Subsidiaries shall conduct their business in all material respects in
the ordinary course consistent with past practice and shall use their reasonable
efforts to preserve intact their business organizations and relationships with
third parties and to keep available the services of their present officers and
employees. Without limiting the generality of the foregoing, from the date
hereof until the Effective Time, without the prior written consent of Parent:
(a) the Company will not adopt or propose any change to its
certificate of incorporation or bylaws;
(b) the Company will not, and will not permit any of its
Subsidiaries to, merge or consolidate with any other person or acquire
a material amount of stock or assets of any other Person;
(c) the Company will not, and will not permit any of its
Subsidiaries to, issue, sell, transfer, pledge, dispose of or encumber
any additional shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights
28
of any kind to acquire, any shares of capital stock of any class or
series of Company or its Subsidiaries other than issuances of Company
Common Stock (i) upon the exercise of Company Stock Options
outstanding as of August 24, 1999 (ii) as required pursuant to
purchase price adjustments under the acquisition agreements set forth
in Schedule 6.01(c) or (iii) in connection with the Company's 1998
Bonus Plan;
(d) the Company will not, and will not permit any of its
Subsidiaries to, sell, lease, license or otherwise dispose of any
Significant Subsidiary or any material amount of assets, securities or
property except (i) pursuant to existing contracts or commitments and
(ii) in the ordinary course consistent with past practice;
(e) the Company will not, and will not permit any of its
Subsidiaries to take any action that would make any representation and
warranty of the Company hereunder inaccurate in any respect at, or as
of any time prior to, the Effective Time;
(f) the Company will not, and will not permit any of its
Subsidiaries to make any tax election inconsistent with past practice
or settle or compromise any federal, state, local or foreign tax
liability; and
(g) the Company will not, and will not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.
SECTION 6.02. STOCKHOLDERS MEETING; BOARD RECOMMENDATION. (a) The
Company shall cause the Company Stockholders Meeting to be duly called and held
as soon as reasonably practicable for the purpose of obtaining the Company
Stockholder Approval. In connection with such meeting, the Company will (i) use
its reasonable efforts to obtain the Company Stockholder Approval and (ii)
otherwise comply with all legal requirements applicable to such meeting.
(b) Except as provided in the next sentence, the Board of Directors of
the Company shall recommend approval and adoption of this Agreement and the
Merger by the Company's stockholders (the "COMPANY RECOMMENDATION"). The Board
of Directors of the Company shall be permitted to withdraw, or modify in a
manner adverse to Parent, the Company Recommendation, but only if and to the
extent that (i) the Company has complied with the terms of Section 6.03,
including, without limitation, the requirement in Section 6.03(b) that it notify
Parent promptly after its receipt of any Acquisition Proposal, (ii) a Superior
Proposal is pending at the time the Board of Directors determines to take any
such action, (iii) the Board of Directors determines in good faith by a majority
vote, on the basis of advice of outside counsel to the Company that it must take
such action to comply with its fiduciary duties under applicable law and (iv)
the Company shall have delivered to Parent at least two business days prior
written notice advising Parent that it intends to take such action. Nothing
contained in
29
this Agreement shall prevent the Board of Directors of the Company
from complying with Rule 14e-2 under the 1934 Act with respect to any
Acquisition Proposal.
SECTION 6.03. NO SOLICITATION. (a) From the date hereof until the
termination hereof, the Company will not, and will cause its Subsidiaries and
the officers, directors, employees, investment bankers, attorneys, accountants,
consultants and other agents or advisors ("REPRESENTATIVES") of the Company and
its Subsidiaries not to, directly or indirectly, (i) take any action to solicit,
initiate, facilitate or encourage the submission of any Acquisition Proposal,
(ii) engage in any discussions or negotiations with, or disclose any nonpublic
information relating to the Company or any of its Subsidiaries or afford access
to the properties, books or records of the Company or any of its Subsidiaries
to, any Person who may be considering making, or has made, an Acquisition
Proposal or (iii) grant any waiver or release under any standstill or similar
agreement with respect to any class of equity securities of the Company,
PROVIDED that the Company may negotiate or otherwise engage in substantive
discussions with, and furnish nonpublic information to, any Person who delivers
an Acquisition Proposal if (w) the Company has complied with the terms of this
Section 6.03, including, without limitation, the requirement in Section 6.03(b)
that it notify Parent promptly after its receipt of any Acquisition Proposal,
(x) the Board of Directors of the Company determines in good faith by a majority
vote, on the basis of advice from outside legal counsel to the Company that it
must take such action to comply with its fiduciary duties under applicable law,
(y) such Person executes a confidentiality agreement with terms no less
favorable to the Company than those contained in the confidentiality agreement
dated June 30, 1998 between the Company and Tyco (the "CONFIDENTIALITY
AGREEMENT") and (z) the Company shall have delivered to Parent a prior written
notice advising Parent that it intends to take such action.
(b) The Company will notify Parent promptly (but in no
event later than 24 hours) after receipt by the Company (or any of its advisors)
of any Acquisition Proposal, any indication that a Person is considering making
an Acquisition Proposal or of any request for nonpublic information relating to
the Company or any of its Subsidiaries or for access to the properties, books or
records of the Company or any of its Subsidiaries by any Person that informs the
Board of Directors of the Company that is considering making, or has made, an
Acquisition Proposal. The Company shall provide such notice orally and in
writing and shall identify the material terms and conditions of, any such
Acquisition Proposal, indication or request. The Company shall keep Parent fully
informed, on a current basis, of the status and material terms of any such
Acquisition Proposal, indication or request. The Company shall, and shall cause
its Subsidiaries and the Representatives of the Company and its Subsidiaries to,
cease immediately and cause to be terminated all activities, discussions or
negotiations, if any, with any Persons conducted prior to the date hereof with
respect to any Acquisition Proposal.
(c) The Company shall immediately cease and cause to be
terminated any existing discussions or negotiations with any Persons (other than
Parent and Merger
30
Subsidiary) conducted heretofore with respect to any of the
foregoing. The Company agrees not to release any third party from the
confidentiality provisions of any agreement to which the Company is a party.
(d) The Company shall ensure that the officers and
directors of the Company and the Company's Significant Subsidiaries and any
investment banker or other advisor or representative retained by the Company
are aware of the restrictions described in this Section 6.03.
SECTION 6.04. ACCESS TO INFORMATION. From the date hereof until the
Effective Time and subject to applicable law and the Confidentiality Agreement,
the Company shall (i) give to Parent, its counsel, financial advisors, auditors
and other authorized representatives reasonable access to the offices,
properties, books and records of such party, (ii) furnish to Parent, its
counsel, financial advisors, auditors and other authorized representatives such
financial and operating data and other information as such Persons may
reasonably request and (iii) instruct its employees, counsel, financial
advisors, auditors and other authorized representatives to cooperate with Parent
in its investigation. Any investigation pursuant to this Section shall be
conducted in such manner as not to interfere unreasonably with the conduct of
the business of the Company. Unless otherwise required by law, each of Parent
and Merger Subsidiary will hold, and will cause its respective officers,
employees, counsel, financial advisors, auditors and other authorized
representatives to hold, any nonpublic information obtained in any such
investigation in confidence in accordance with the Confidentiality Agreement. No
information or knowledge obtained in any investigation pursuant to this Section
shall affect or be deemed to modify any representation or warranty made by the
Company hereunder.
ARTICLE 7
COVENANTS OF PARENT
Parent agrees that:
SECTION 7.01. CONDUCT OF TYCO. Except as otherwise contemplated by this
Agreement, from the date hereof until the Effective Time, Parent shall take all
action necessary so that Tyco and its Subsidiaries shall conduct their business
in all material respects in the ordinary course consistent with past practice
and shall use their reasonable efforts to preserve intact their business
organizations and relationships with third parties and to keep available the
services of their present officers and employees. Without limiting the
generality of the foregoing, from the date hereof until the Effective Time,
Parent shall take all action necessary so that Tyco will not, and will not
permit any of its Subsidiaries to, take any action that would make any
representation and warranty of Parent hereunder inaccurate in any respect at, or
as of any time prior to, the Effective Time.
31
SECTION 7.02. [Intentionally omitted]
SECTION 7.03. OBLIGATIONS OF MERGER SUBSIDIARY. Parent will take all
action necessary to cause Merger Subsidiary to perform its obligations under
this Agreement and to consummate the Merger on the terms and conditions set
forth in this Agreement.
SECTION 7.04. DIRECTOR AND OFFICER LIABILITY. Parent shall cause the
Surviving Corporation, and the Surviving Corporation hereby agrees, to do the
following:
(a) For six years after the Effective Time, Parent and the Surviving
Corporation shall indemnify and hold harmless the present and former officers
and directors of the Company (each an "INDEMNIFIED PERSON") against all costs or
expenses, including attorneys' fees, judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or
investigative, (i) arising out of or pertaining to the transactions contemplated
by this Agreement or (ii) in respect of acts or omissions occurring at or prior
to the Effective Time, in each case to the fullest extent permitted by Delaware
Law or any other applicable laws or to the fullest extent provided under the
Company's certificate of incorporation and bylaws or any applicable contract or
agreement as in effect on the date hereof, PROVIDED that such indemnification
shall be subject to any limitation imposed from time to time under applicable
law. In the event of any such claim, action, suit, proceeding or investigation,
whether arising before or after the Effective Time, (i) after the Effective
Time, Parent or the Surviving Corporation shall pay the reasonable fees and
expenses of one counsel selected by the Indemnified Persons which counsel should
be reasonably satisfactory to Parent or the Surviving Corporation, as the case
may be, promptly after statements therefor are received, (ii) Parent and the
Surviving Corporation will cooperate in the defense of any such matter and (iii)
in the event that any claim or claims for indemnification are asserted or made
within such six-year period, all rights to indemnification in respect of any
such claim or claims shall continue until the disposition of any and all such
claims, PROVIDED, that neither Parent nor the Surviving Corporation shall be
liable for any settlement effected without its prior written consent (which
consent shall not be unreasonably withheld).
(b) For six years after the Effective Time, Parent and the Surviving
Corporation shall provide officers' and directors' liability insurance in
respect of acts or omissions occurring prior to the Effective Time covering each
such Indemnified Person currently covered by the Company's officers' and
directors' liability insurance policy on terms with respect to coverage and
amount no less favorable than those of such policy in effect on the date hereof,
PROVIDED that, in satisfying its obligation under this Section 7.04(b), the
Surviving Corporation shall not be obligated to pay annual premiums in excess of
200% of the amount per annum the Company paid for the fiscal year ending
December 31, 1998; and PROVIDED FURTHER, that if the premium for such coverage
exceeds such amount, Parent or the Surviving Corporation shall purchase a
32
policy with the greatest coverage available for such 200% of the amount per
annum spent by the Company for its fiscal year ending December 31, 1998.
(c) If Parent, the Surviving Corporation or any of its 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 substantially all of its properties
and assets to any Person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of Parent or
the Surviving Corporation, as the case may be, shall assume the obligations set
forth in this Section 7.04.
(d) The rights of each Indemnified Person under this Section 7.04 shall
be in addition to any rights such Person may have under the certificate of
incorporation or bylaws of the Company or any of its Subsidiaries, or under
Delaware Law or any other applicable laws. These rights shall survive
consummation of the Merger and are intended to benefit, and shall be enforceable
by, each Indemnified Person and shall be binding on all successors and assigns
of Parent and the Surviving Corporation.
SECTION 7.05. TYCO COMMON SHARES; STOCK EXCHANGE LISTING.
(a) Prior to the Effective Time, Parent shall obtain from Tyco, and
shall take all action necessary so that Tyco shall transfer to Parent, the Tyco
Common Shares to be delivered by Parent to the holders of Company Common Stock
in the Merger.
(b) Parent shall cause Tyco to use its reasonable efforts to cause the
shares of Tyco Common Shares to be issued in connection with the Merger to be
listed on the New York Stock Exchange, subject to official notice of issuance.
ARTICLE 8
COVENANTS OF PARENT AND THE COMPANY
The parties hereto agree that:
SECTION 8.01. REASONABLE EFFORTS. (a) Subject to the terms and
conditions of this Agreement, Company and Parent will use their reasonable
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 transactions contemplated by this Agreement. In
furtherance and not in limitation of the foregoing, Company agrees, and Parent
agrees to cause Tyco, to make an appropriate filing of a Notification and Report
Form pursuant to the HSR Act with respect to the transactions contemplated
hereby as promptly as practicable and in any event within 20 business days of
the date hereof and to supply as promptly as
33
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act.
(b) In connection with the efforts referenced in Section 8.01(a) to
obtain all requisite approvals and authorizations for the transactions
contemplated by this Agreement under the HSR Act or any other Antitrust Law,
each of Parent and Company shall use its reasonable efforts to (i) cooperate in
all respects with each other in connection with any filing or submission and in
connection with any investigation or other inquiry, including any proceeding
initiated by a private party, (ii) keep the other party informed in all material
respects of any material communication received by such party from, or given by
such party to, the Federal Trade Commission (the "FTC"), the Antitrust Division
of the Department of Justice (the "DOJ") or any other governmental authority and
of any material communication received or given in connection with any
proceeding by a private party, in each case regarding any of the transactions
contemplated hereby and (iii) permit the other party to review any material
communication given by it to, and consult with each other in advance of any
meeting or conference with, the FTC, the DOJ or any such other Governmental
Authority or, in connection with any proceeding by a private party, with any
other Person. For purposes of this Agreement, "ANTITRUST LAW" means the Xxxxxxx
Act, as amended, the Xxxxxxx Act, as amended, the HSR Act, the Federal Trade
Commission Act, as amended, and all other federal, state and foreign, if any,
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines and other laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade or lessening of competition through merger or acquisition.
SECTION 8.02. CERTAIN FILINGS. (a) As promptly as practicable after the
execution of this Agreement, the Company shall, and Parent shall cause Tyco to,
jointly prepare and file with the SEC preliminary proxy materials which shall
constitute the Proxy Statement/Prospectus and, if the parties so agree at the
time, the Registration Statement of Tyco with respect to the Tyco Common Shares
to be issued in connection with the Merger. As promptly as practicable after
comments are received from the SEC thereon and after the furnishing by the
Company and Tyco of all information required to be contained therein, the
Company shall, and Parent shall cause Tyco to, file with the SEC the Proxy
Statement/Prospectus and Registration Statement on Form S-4 (or on such other
form as shall be appropriate), or an amendment thereto if the Registration
Statement has previously been filed, relating to the adoption of this Agreement
and approval of the transactions contemplated hereby by the stockholders of the
Company, and shall use all reasonable efforts to cause the Registration
Statement to become effective, and the Company shall mail the Proxy
Statement/Prospectus to its stockholders, as soon thereafter as practicable.
(b) No amendment or supplement to the Proxy Statement/Prospectus will
be made by the Company, Tyco or Parent without the approval of the other party,
which will not be unreasonably withheld or delayed. Each party will advise the
other party, promptly after it
34
receives notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, the issuance of any
stop order, the suspension of the qualification of the Tyco Common Shares
issuable in connection with the Merger for offering or sale in any jurisdiction,
or any request by the SEC for amendment of the Proxy Statement/Prospectus or
comments thereon and responses thereto or requests by the SEC for additional
information. If at any time prior to the Effective Time, the Company, Tyco or
Parent discovers any information relating to either party, or any of their
respective Affiliates, officers or directors, that should be set forth in an
amendment or supplement to the Proxy Statement/Prospectus, so that such document
would not include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party that
discovers such information shall promptly notify the other parties hereto and an
appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and, to the extent required by law or regulation,
disseminated to the stockholders of the Company.
(c) The Company and Parent shall cooperate with one another (i) in
determining whether any other action by or in respect of, or filing with, any
Governmental Authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any material contracts, in
connection with the consummation of the transactions contemplated by this
Agreement, (ii) in taking such actions or making any such filings, furnishing
information required in connection therewith and seeking timely to obtain any
such actions, consents, approvals or waivers and (iii) in setting a mutually
acceptable date for the Company Stockholders Meeting. In connection with the
foregoing, each party shall permit the other party to review any communication
given by it to, and consult with each other in advance of any meeting or
conference with, any Governmental Authority or, in connection with any
proceeding by a private party, with any other Person, and to the extent
permitted by the applicable Governmental Authority or other Person, give the
other party the opportunity to attend and participate in such meetings and
conferences, in each case in connection with the transactions contemplated
hereby.
SECTION 8.03. PUBLIC ANNOUNCEMENTS. Parent and the Company will, and
Parent shall ensure that Tyco 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 and, except as may be required by
applicable law or any listing agreement with any national securities exchange,
will not issue any such press release or make any such public statement prior to
such consultation.
SECTION 8.04. FURTHER ASSURANCES. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or Merger
Subsidiary, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Company or Merger Subsidiary, any other
actions and things to vest, perfect or confirm of record or otherwise in
35
the Surviving Corporation any and all right, title and interest in, to and under
any of the rights, properties or assets of the Company acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger.
SECTION 8.05. NOTICES OF CERTAIN EVENTS. Each of the Company and
Parent shall promptly notify the other of:
(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;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or
involving or otherwise affecting the Company, Tyco or any of their
respective Subsidiaries, as the case may be, that, if pending on the
date of this Agreement, would have been required to have been disclosed
pursuant to Article 4 or Article 5, as the case may be, or that relate
to the consummation of the transactions contemplated by this Agreement.
SECTION 8.06. TAX-FREE REORGANIZATION. Prior to and after the Effective
Time, each party shall use its reasonable efforts to cause the Merger to qualify
as a Reorganization, and will not take any action reasonably likely to cause the
Merger not so to qualify.
(b) Each party shall use its best efforts to obtain the opinions
referred to in Section 9.01(f).
SECTION 8.07. AFFILIATES. Promptly following the date of this
Agreement, the Company shall deliver to Parent a letter identifying all known
Persons who may be deemed affiliates of the Company under Rule 145 of the 1933
Act. The Company shall use its reasonable efforts to obtain from each Person who
may be so deemed as soon as practicable and, in any event, prior to the Company
Stockholders Meeting, a written agreement restricting the sales of securities by
such affiliates in accordance with the restrictions on affiliates under Rule
145, in substantially the form of EXHIBIT B.
SECTION 8.08. SUBSTANTIALLY EQUIVALENT BENEFITS. (a) With respect to
the Company Employee Plans in effect immediately prior to the Effective Time,
Parent shall for a period of no less than one year following the Effective Time
continue to provide or cause to be provided such plans, programs, agreements or
arrangements on behalf of the employees of the Company or its Subsidiaries (the
"AFFECTED EMPLOYEES") so as to provide, in the aggregate, employee
36
benefits which are at least substantially equivalent to the benefits provided to
such individuals under the Company Employee Plans immediately prior to the
Effective Time; PROVIDED, that Affected Employees who are not covered by any
binding severance arrangements of the Company (including, without limitation,
the Company's Change in Control Severance Benefit Plan for Key Employees) shall
be covered under the severance policy of Tyco in the manner and the extent
applicable to similarly situated employees of Tyco, PROVIDED FURTHER that such
Affected Employees shall be entitled to credit for past service at the Company
under the severance policy of Tyco.
(b) To the fullest extent permitted by law, Parent shall take all
actions necessary to cause the Surviving Corporation to maintain in effect, for
a period of at least two years following the Effective Time, the AFC Cable
Systems, Inc. Selective Retirement Plan, as in effect as of the date hereof (the
"SRP"), and to provide to the employees of the Company who actively participate
in the SRP as of the date hereof an annual Benefit contribution during the
period that the SRP remains in effect determined on a basis substantially
similar to the benefit contributions made with respect to such employees for
plan years ending prior to the Effective Time; PROVIDED that the maximum
aggregate annual contribution that shall be required to be made to the SRP for
any plan year ending after the Effective Time shall not exceed $325,000. Parent
and the Company agree that the consummation of the Merger shall not be treated
as a sale of the Company for purposes of the SRP and shall not result in the
accelerated payment of any benefits or deferrals under the SRP, and Parent and
the Company shall cause to be taken all actions reasonably necessary and
appropriate to assure this result and to prevent any actions to the contrary.
(c) It is expressly agreed that the provisions of this Section 8.08 are
not intended to be for the benefit of or otherwise be enforceable by any third
party, including, without limitation, any former employee, any Retained Employee
or any collective bargaining unit or employee organization.
(d) Subject to compliance with this Section 8.08, nothing herein shall
prevent Parent or the Surviving Corporation from amending or modifying any
employee benefit plan, program or arrangement in any respect or terminating or
modifying the terms and conditions of employment of any particular Affected
Employee or any other person.
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.01. CONDITIONS TO OBLIGATIONS OF EACH PARTY. The obligations
of the Company, Parent and Merger Subsidiary to consummate the Merger are
subject to the satisfaction of the following conditions:
37
(a) the Company Stockholder Approval shall have been obtained;
(b) any applicable waiting period under the HSR Act relating
to the Merger shall have expired or been terminated;
(c) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation
of the Merger;
(d) the Registration Statement shall have been declared
effective, and no stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such
purpose shall be pending before or threatened by the SEC;
(e) the Tyco Common Shares to be issued in the Merger shall
have been approved for listing on the New York Stock Exchange, subject
to official notice of issuance; and
(f) The Company shall have received an opinion, dated the
Closing Date, of Ropes & Xxxx in form and substance reasonably
satisfactory to the Company, and Parent shall have received an opinion,
dated the Closing Date, of PricewaterhouseCoopers LLP in form and
substance reasonably satisfactory to Parent, to the effect that (i) the
Merger will be treated for federal income tax purposes as a
reorganization qualifying under the provisions of Section 368(a) of the
Code, and (ii) the transfer of Company Common Stock by Company
stockholders pursuant to the Merger, other than by Company stockholders
who are or will be "5% transferee shareholders" within the meaning of
Treasury Regulation Section 1.367(a)-3(c)(5)(ii), will not be treated
as a transfer to an entity that is not considered to be a corporation
pursuant to Section 367(a)(1) of the Code and the Treasury Regulations
thereunder. In rendering such opinion, Ropes & Xxxx and
PricewaterhouseCoopers LLP shall be entitled to rely on customary
representations and covenants of officers of Tyco, Parent and the
Company in form and substance reasonably satisfactory to them and other
reasonable assumptions set forth therein.
SECTION 9.02. CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER
SUBSIDIARY. The obligations of Parent and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following further conditions:
(a) the Company shall have performed in all material respects
all of its obligations hereunder required to be performed by it at or
prior to the Effective Time, the representations and warranties of the
Company contained in this Agreement shall be true in all material
respects at and as of the Effective Time as if made at and as of such
time and Parent shall have received a certificate signed by an
executive officer of the Company to the foregoing effect;
38
(b) there shall not be pending any action or proceeding (or
any investigation or other inquiry that might result in such action or
proceeding) or any statute, rule, regulation, injunction, order or
decree proposed, enacted, enforced, promulgated, issued or deemed
applicable to the Merger, by any government or governmental authority
or agency, domestic or foreign, or by any other Person, domestic or
foreign, before any court or Governmental Authority, (i) challenging or
seeking to make illegal, to delay materially or otherwise directly or
indirectly to restrain or prohibit the consummation of the Merger,
seeking to obtain material damages or otherwise directly or indirectly
relating to the transactions contemplated by the Merger or (ii) seeking
to restrain or prohibit Tyco's ownership or operation (or that of its
respective Subsidiaries or Affiliates) of all or any material portion
of the business or assets of the Company and its Subsidiaries, taken as
a whole, or of the electrical and electronic component businesses of
Tyco and its Subsidiaries, taken as a whole, or to compel Tyco or any
of its Subsidiaries or Affiliates to dispose of or hold separate all or
any material portion of the business or assets of the Company and its
Subsidiaries, taken as a whole, or of the electrical and electronic
component businesses of Tyco and its Subsidiaries, taken as a whole.
SECTION 9.03. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The
obligations of the Company to consummate the Merger are subject to the
satisfaction of the condition that each of Parent and Merger Subsidiary shall
have performed in all material respects all of its obligations hereunder
required to be performed by it at or prior to the Effective Time, the
representations and warranties of Parent contained in this Agreement shall be
true in all material respects at and as of the Effective Time as if made at and
as of such time and the Company shall have received a certificate signed by an
executive officer of Parent to the foregoing effect.
ARTICLE 10
TERMINATION
SECTION 10.01. TERMINATION. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (whether before
or after the Company Stockholder Approval shall have been obtained):
(a) by mutual written agreement of the Company and Parent;
(b) by either the Company or Parent, if:
(i) the Merger has not been consummated on or before
December 31, 1999, PROVIDED that the right to terminate this
Agreement pursuant to this Section 10.01(b)(i) shall not be
available to any party whose breach of any
39
provision of this Agreement results in the failure of the
Merger to be consummated by such time;
(ii) there shall be any law or regulation that makes
consummation of the Merger illegal or otherwise prohibited or
any judgment, injunction, order or decree of any court or
governmental body having competent jurisdiction enjoining
Company or Parent from consummating the Merger is entered and
such judgment, injunction, judgment or order shall have become
final and nonappealable;
(iii) at the Company Stockholders Meeting (including
any adjournment or postponement thereof), the Company
Stockholder Approval shall not have been obtained; or
(c) by Parent, if
(i) (A) the Board of Directors of the Company shall
have failed to recommend or shall have withdrawn, or modified
in a manner adverse to Parent, the Company Recommendation or
shall have recommended a Superior Proposal, or the Company
shall have entered into a definitive agreement with respect to
an Acquisition Proposal (or shall have resolved to do any of
the foregoing) or (B) the Company shall have breached any of
its obligations under Sections 6.02 or 6.03;
(ii) any Person or "group" (as defined in Section
13(d)(3) of the 1934 Act), other than Parent or any of its
Affiliates, shall have acquired beneficial ownership of more
than 50% of the shares of Company Common Stock, through the
acquisition of stock, the formation of a group or otherwise,
or shall have been granted any option, right or warrant,
conditional or otherwise, to acquire beneficial ownership of
such shares;
(iii) any person or group shall have made a tender or
exchange offer for at least 50% of the outstanding shares of
Company Common Stock;
(iv) the Company shall have breached any of its
covenants or any representation or warranty made by it in this
Agreement and shall have failed to cure such breach within 30
days after receipt of notice thereof and such breach, if not
cured, would result in the failure of the condition set forth
in Section 9.02(a); or
(v) (x) the Tyco Average Share Price is less than
[90% of the closing price of Tyco Common Shares on the date of
this Agreement], (y) on or before
40
the second trading day prior to the date of the Company
Stockholders Meeting, the Company has not agreed by notice
to Parent in writing to an Exchange Ratio equal to [$45.00
divided by 90% of the closing price of Tyco Common Shares on
the date of this Agreement]; PROVIDED that, in the event of
such notice, the Exchange Ratio shall thereafter, for all
purposes of this Agreement, be deemed to be such ratio, and
(z) the Company Stockholders Meeting shall not have
theretofore been held.
(d) by the Company, if
(i) (A) the Board of Directors of the Company shall
have authorized the Company, subject to complying with the
terms of this Agreement, to enter into a definitive agreement
with respect to a Superior Proposal and the Company shall have
notified Parent in writing that it intends to enter into such
an agreement, attaching a summary of the material terms
thereof, (B) Parent shall not have made, within two business
days of receipt of the Company's written notification of its
intention to enter into a definitive agreement with respect to
a Superior Proposal, an offer that the Board of Directors of
the Company determines, in good faith after consultation with
its financial advisors, is at least as favorable, from a
financial point of view, to the stockholders of the Company as
the Superior Proposal and (C) the Company prior to such
termination pursuant to this clause (d)(i) shall have paid to
Parent in immediately available funds the fees required to be
paid pursuant to Section 11.04(b); or
(ii) Parent shall have breached any of its covenants
or any representation or warranty made by it in this Agreement
and shall have failed to cure such breach within 30 days after
receipt of notice thereof and such breach, if not cured, would
result in the failure of the condition set forth in Section
9.03(a).
The Company agrees (x) that it will not enter into a definitive
agreement referred to in clause (i) above until at least 2 business days after
it has provided the notice to Parent required thereby and (y) to notify Parent
promptly if its intention to enter into a written agreement referred to in its
notification shall change at any time after giving such notification;
The party desiring to terminate this Agreement pursuant to this Section 10.01
(other than pursuant to Section 10.01(a)) shall give notice of such termination
to the other party.
SECTION 10.02. EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 10.01, this Agreement shall become void and of no effect
without liability of any party (or any stockholder, director, officer, employee,
agent, consultant or representative of such party) to the other party hereto,
PROVIDED that, if such termination shall result from the willful (i) failure of
either party to fulfill a condition to the performance of the obligations of the
other
41
party, (ii) failure of either party to perform a covenant hereof or (iii)
breach by either party hereto of any representation or warranty or agreement
contained herein, such party shall be fully liable for any and all liabilities
and damages incurred or suffered by the other party as a result of such failure
or breach. The provisions of Sections 11.04, 11.06 and 11.07 shall survive any
termination hereof pursuant to Section 10.01.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,
if to Parent or Merger Subsidiary, to:
Tyco International (NV) Inc./Tyco Acquisition Corp. XXII
Xxx Xxxx Xxxx
Xxxxxx, Xxx Xxxxxxxxx 00000
Attention: Executive Vice President and Chief Corporate
Counsel
Fax: (000) 000-0000
Confirm: (000) 000-0000
with a copy to:
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
Confirm: (000) 000-0000
if to the Company, to:
AFC Cable Systems, Inc.
00 Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Chairman and Chief Executive Officer
Fax: (000) 000-0000
Confirm: (000) 000-0000
with a copy to:
42
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxxxx X. Xxxxx, Xx.
Fax: (000) 000-0000
Confirm: (000) 000-0000
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5 p.m., and such day is a
business day, in the place of receipt. Otherwise, any such notice, request or
communication shall be deemed not to have been received until the next
succeeding business day in the place of receipt.
SECTION 11.02. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Effective Time or the
termination of this Agreement.
SECTION 11.03. AMENDMENTS; NO WAIVERS. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, but only if,
such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this Agreement or, in the case of a waiver, by each
party against whom the waiver is to be effective, PROVIDED that, after the
adoption of this Agreement by the stockholders of the Company and without their
further approval, no such amendment or waiver shall reduce the amount or change
the kind of consideration to be received in exchange for any shares of capital
stock of the Company.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11.04. EXPENSES. (a) Except as otherwise provided in this
Section, all costs and expenses incurred in connection with this Agreement shall
be paid by the party incurring such cost or expense.
(b) If:
(i) (A) Parent or the Company shall terminate this
Agreement pursuant to Section 10.01(b)(iii), (B) after the
date hereof and on or prior to the Company Stockholders
Meeting an Acquisition Proposal (other than the Acquisition
Proposal of Hedge Your Bets, Inc. on the terms set forth in
the T&B
43
Agreement) shall have been publicly proposed or disclosed
and (C) concurrently with or within 12 months after the
termination of this Agreement pursuant to Section
10.01(b)(iii), the Company or any of its Subsidiaries shall
have consummated or entered into a definitive agreement with
respect to any transaction that, if such transaction had
been proposed prior to the termination of this Agreement,
would have constituted an Acquisition Proposal;
(ii) Parent shall terminate this Agreement
pursuant to clause (i) or (ii) of Section 10.01(c); or
(iii) the Company shall terminate this Agreement
pursuant to Section 10.01(d)(i);
then, in any such case, the Company shall pay to Tyco an amount equal to $16
million by wire transfer of immediately available funds and such funds shall be
paid by the Company (X) in the case of clause (i) above, concurrently with the
earlier of the Company or any of its Subsidiaries consummating or entering into
a definitive agreement with respect to the type of transaction referred to in
clause (i) above, (Y) in the case of clause (ii) above, promptly, and in any
event within two days, following the termination of this Agreement and (Z) in
the case of clause (iii) above, prior to such termination.
(c) If Parent shall terminate this Agreement pursuant to Section
10.01(c)(iv), the Company shall pay to Parent and Tyco in reimbursement of their
respective documented out-of-pocket costs and expenses an aggregate amount not
to exceed $2 million by wire transfer in immediately available funds promptly,
and in any event within two business days, following the termination of this
Agreement.
(d) If the Company shall terminate this Agreement pursuant to Section
10.01(d)(ii) then Parent shall pay to the Company in reimbursement of its
documented out-of-pocket costs and expenses an amount not to exceed $2 million
by wire transfer in immediately available funds promptly, and in any event
within two business days, following the termination of this Agreement.
(e) If Parent shall terminate this Agreement pursuant to Section
10.01(c)(v) then Parent shall reimburse the Company for its $16 million
termination fee in connection with the termination of the T&B Agreement and
shall pay to the Company in reimbursement of its documented out-of-pocket costs
and expenses an amount not to exceed $2 million by wire transfer in immediately
available funds promptly, and in any event within two business days, following
the termination of this Agreement.
(f) If the Company or Parent fails promptly to pay any amount due to
the other party or its Affiliates pursuant to this Section 11.04, it shall also
pay any costs and expenses incurred
44
by the other party in connection with a legal action to enforce this Agreement
that results in a judgment in favor of the other party for such amount.
SECTION 11.05. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, PROVIDED that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto, except that Parent or Merger
Subsidiary may transfer or assign, in whole or from time to time in part, to one
or more of their Affiliates, the right to enter into the transactions
contemplated by this Agreement, but any such transfer or assignment will not
relieve Parent or Merger Subsidiary of its obligations hereunder.
SECTION 11.06. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
SECTION 11.07. JURISDICTION. Any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby shall
be brought in a federal or state court located in the State of Delaware, and
each of the parties hereby consents to the jurisdiction of such courts (and
of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law,
any objection that it may now or hereafter have to the laying of the venue of
any such suit, action or proceeding in any such court or that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party in the same manner as provided
in Section 11.01 shall be deemed effective service of process on such party,
notwithstanding any provision of law or regulation to the contrary.
SECTION 11.08. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Except as provided in Section 7.04, no provision of this Agreement is intended
to confer any rights, benefits, remedies, obligations or liabilities hereunder
upon any Person other than the parties hereto and their respective successors
and assigns.
SECTION 11.09. ENTIRE AGREEMENT. This Agreement, the Guarantee, the
Confidentiality Agreement and the Voting Agreement constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
45
SECTION 11.10. CAPTIONS. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 11.11. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties 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 so that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.
SECTION 11.12. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof in
any federal court located in the State of Delaware or any Delaware state court,
in addition to any other remedy to which they are entitled at law or in equity.
46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
AFC CABLE SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Name:
Title:
TYCO INTERNATIONAL (NV) INC.
By: /s/ Xxxx Xxxxxx
--------------------------------
Name:
Title:
TYCO ACQUISITION CORP. XXII
By: /s/ Xxxx Xxxxxx
-------------------------------
Name:
Title:
47
GUARANTEE
Tyco guarantees each and every representation, warranty, covenant,
agreement and other obligation of Parent and Merger Subsidiary, and/or any of
their respective permitted assigns (and where any such representation or
warranty is made to the knowledge of Parent or Merger Subsidiary, such guarantee
shall be deemed made to the knowledge of Tyco), and the full and timely
performance of their respective obligations under the provisions of the
Agreement and Plan of Merger, dated as of August 31, 1999, among AFC Cable
Systems, Inc., Tyco International (NV) Inc., and Tyco Acquisition Corp. XXII.
This is a guarantee of payment and performance, and not of collection, and Tyco
acknowledges and agrees that this guarantee is unconditional, and no release or
extinguishment of Parent's and Merger Subsidiary's obligations or liabilities
(other than in accordance with the terms of the Agreement), whether by decree in
any bankruptcy proceeding or otherwise, shall affect the continuing validity and
enforceability of this guarantee, as well as any provision requiring or
contemplating performance by Tyco.
The provisions of Article 11 of the Agreement are incorporated herein,
MUTATIS MUTANDIS, except that notices and other communications hereunder to Tyco
shall be delivered to Tyco International Ltd., The Xxxxxxx Building, 00 Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx XX 00, Xxxxxxx, Xxxx: Secretary, Telecopy No. (441)
295-9647, Confirm No. (000) 000-0000 (with a copy as provided with respect to
Parent in Section 11.01).
We understand that the Company is relying on this guarantee in entering
into the Agreement and may enforce this guarantee as if Tyco were a party
thereto.
TYCO INTERNATIONAL LTD.
By: /s/ Xxxx Xxxxxx
---------------------------
Name:
Title:
48
