AGREEMENT AND PLAN OF MERGER
BY AND AMONG
CCPC ACQUISITION CORP.,
and
GENERAL HOUSEWARES CORP.
August 2, 1999
TABLE OF CONTENTS
PAGE
RECITALS
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING..............................1
1.1 The Merger....................................1
1.2 Effective Time................................2
1.3 Closing.......................................2
1.4 Right to Revise Structure of Merger...........2
ARTICLE II
SURVIVING CORPORATION............................................3
2.1 Certificate of Incorporation..................3
2.2 By-Laws.......................................3
2.3 Directors.....................................3
2.4 Officers......................................3
ARTICLE III
MERGER CONSIDERATION; CONVERSION OR CANCELLATION
OF SHARES IN THE MERGER....................................3
3.1 Share Consideration for the
Merger; Conversion or Cancella-
tion of Shares in the Merger...............3
3.2 Stockholders' Meeting.........................4
3.3 Dissenting Shares.............................5
3.4 Payment for Shares in the Merger..............6
3.5 Transfer of Shares After the
Effective Time................................7
3.6 Stock Options.................................8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................9
4.1 Corporate Organization and
Qualification................................9
4.2 Capitalization...............................9
4.3 Authority Relative to This
Agreement...................................11
4.4 Consents and Approvals; No
Violation...................................12
4.5 SEC Reports; Financial
Statements..................................13
4.6 Absence of Certain Changes or
Events......................................14
4.7 Litigation; Compliance......................14
4.8 Proxy Statement; Offer
Documents...................................15
4.9 Taxes.......................................15
4.10 Employee Benefit Plans; Labor
Matters.....................................16
4.11 Environmental Laws and
Regulations.................................18
4.12 Intellectual Property.......................19
4.13 Year 2000 Compliance........................20
4.14 Contracts...................................20
4.15 Insurance...................................20
4.16 Brokers and Finders.........................21
4.17 Opinion of Financial Advisors...............21
4.18 Customers and Distributors..................21
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND
NEWCO.............................................21
5.1 Corporate Organization and
Qualification..............................21
5.2 Authority Relative to This
Agreement..................................22
5.3 Consents and Approvals; No
Violation..................................22
5.4 Parent Financial Condition.................23
5.5 Proxy Statement............................23
5.6 Financing..................................24
5.7 Interim Operations of Newco................24
5.8 Brokers and Finders........................24
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS.............................24
6.1 Conduct of Business of the
Company....................................24
6.2 Acquisition Proposals......................29
6.3 Reasonable Efforts.........................30
6.4 Access to Information......................31
6.5 Publicity..................................32
6.6 Indemnification of Directors and
Officers...................................32
6.7 Employees..................................33
6.8 Certain Financing Matters..................33
6.9 Notification of Certain Matters............34
6.10 Rights Agreement...........................34
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER........................34
7.1 Condition to Each Party's Obliga-
tions to Effect the Merger..................34
7.2 Conditions to the Company's Obligations
to Effect the Merger........................35
7.3 Conditions to the Parent's and Newco's
Obligations to Effect the Merger............35
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER..................................36
8.1 Termination by Mutual Consent...............36
8.2 Termination by Either Parent
or the Company..............................36
8.3 Termination by Parent.......................37
8.4 Termination by the Company..................37
8.5 Effect of Termination.......................38
8.6 Extension; Waiver...........................39
ARTICLE IX
MISCELLANEOUS AND GENERAL.......................................40
9.1 Payment of Expenses.........................40
9.2 Survival of Representations
and Warranties; Survival of
Confidentiality.............................40
9.3 Modification or Amendment...................40
9.4 Waiver of Conditions........................40
9.5 Counterparts; Facsimile.....................40
9.6 Governing Law...............................41
9.7 Notices.....................................41
9.8 Entire Agreement; Assignment................42
9.9 Parties in Interest.........................42
9.10 Certain Definitions.........................43
9.11 Obligation of Parent........................43
9.12 Validity....................................43
9.13 Captions....................................44
9.14 Interpretation..............................44
9.15 Severability................................44
9.16 Specific Performance........................44
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of August
2, 1999, by and among CCPC Acquisition Corp, a Delaware corporation
("Parent"), and General Housewares Corp., a Delaware corporation (the
"Company").
RECITALS
WHEREAS, the Board of Directors of the Company, including all of
the disinterested directors of the Company, has, subject to the conditions
of this Agreement, unanimously declared and determined that the Merger (as
defined below) is advisable, fair to and in the best interests of the
stockholders of the Company and approved and adopted this Agreement and the
transactions contemplated hereby; and
WHEREAS, promptly following the execution of this Agreement by
Parent and the Company, Parent will form a wholly-owned subsidiary
corporation under the laws of the State of Delaware ("Newco") which will
become a party to this Agreement;
WHEREAS, Parent, Newco (upon its execution hereof) and the
Company desire to make certain representations, warranties, covenants and
agreements in connection with the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein,
Parent, Newco (upon its execution hereof) and the Company hereby agree as
follows:
ARTICLE I
THE MERGER; EFFECTIVE TIME; CLOSING
1.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.2), the Company
and Newco shall consummate a merger (the "Merger") in which (a) Newco shall
be merged with and into the Company and the separate corporate existence of
Newco shall thereupon cease, (b) the Company shall be the successor or
surviving corporation in the Merger and shall continue to be governed by
the laws of the State of Delaware, and (c) the separate corporate existence
of the Company with all its rights, privileges, immunities, powers,
franchises, debts, liabilities and duties shall continue unaffected by the
Merger. The corporation surviving the Merger is sometimes hereinafter
referred to as the "Surviving Corporation." The Merger shall have the
effects set forth in the General Corporation Law of the State of Delaware
(the "DGCL").
1.2 Effective Time. Parent, Newco and the Company will cause an
appropriate Certificate of Merger (the "Certificate of Merger") to be
executed and filed on the date of the Closing (as defined in Section 1.3)
(or on such other date as Parent and the Company may agree) with the
Secretary of State of the State of Delaware as provided in the DGCL. The
Merger shall become effective on the date and time on which the Certificate
of Merger has been duly filed with Secretary of State of the State of
Delaware or such time as is agreed upon by the parties and specified in the
Certificate of Merger, and such time is hereinafter referred to as the
"Effective Time."
1.3 Closing. The closing of the Merger (the "Closing") shall take
place (a) at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m. on the second business day
following the date on which the last of the conditions set forth in Article
VII hereof shall be fulfilled or waived in accordance with this Agreement
or (b) at such other place, time and date as Parent and the Company may
agree.
1.4 Right to Revise Structure of Merger. At Parent's election,
the Merger may alternatively be structured so that the Company is merged
with and into another direct or indirect wholly-owned subsidiary of Parent,
or another direct or indirect wholly-owned subsidiary of Parent is merged
with and into the Company; provided, however, that no such change shall (i)
alter or change the amount or kind of the consideration to be issued to the
Company's stockholders in the Merger as set forth in Article III hereof or
the treatment of the holders of the Options, (ii) materially impede or
delay consummation of the Merger, (iii) release Parent from any of its
obligations hereunder or (iv) adversely affect the rights of the Company
and its shareholders hereunder. In the event of such an election, the
Company agrees to execute such appropriate documentation as may be
reasonably requested by Parent to reflect such election.
ARTICLE II
SURVIVING CORPORATION
2.1 Certificate of Incorporation. The Certificate of
Incorporation of the Company, as in effect immediately prior to the
Effective Time, shall upon the Effective Time be amended and restated in
full to read as set forth in Exhibit A, and as so amended and restated
shall be the Certificate of Incorporation of the Surviving Corporation.
2.2 By-Laws. The By-Laws of Newco, as in effect immediately prior
to the Effective Time, shall be the By-Laws of the Surviving Corporation.
2.3 Directors. The directors of Newco at the Effective Time
shall, from and after the Effective Time, be the initial directors of the
Surviving Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and By-Laws.
2.4 Officers. The officers of the Company at the Effective Time
shall, from and after the Effective Time, be the initial officers of the
Surviving Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and By-Laws.
ARTICLE III
MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF
SHARES IN THE MERGER
3.1 Share Consideration for the Merger; Conversion or Cancellation
of Shares in the Merger. At the Effective Time, by virtue of the Merger
and without any action on the part of Parent, Newco, the Company, the
Surviving Corporation or the holders of any capital stock thereof:
(a) Each share of common stock, par value $0.331/3 per share
of the Company ("Shares") issued and outstanding immediately prior to the
Effective Time (other than Shares owned by Parent, Newco or any direct or
indirect wholly owned subsidiary of Parent (collectively, "Parent
Companies") or any of the Company's direct or indirect wholly owned
subsidiaries or held in the treasury of the Company and other than any
Dissenting Shares (as hereinafter defined in Section 3.3)) shall, by virtue
of the Merger and without any action on the part of Newco, the Company or
the holder thereof, be cancelled and extinguished and converted into the
right to receive, pursuant to Section 3.4, $28.75 in cash (the "Merger
Consideration"), payable to the holder thereof, without interest thereon,
less any required withholding of taxes, upon the surrender of the
certificate formerly representing such Share.
(b) At the Effective Time, each Share issued and outstanding
and owned by any of the Parent Companies or any of the Company's direct or
indirect wholly owned subsidiaries or held in the treasury of the Company
immediately prior to the Effective Time shall cease to be outstanding, be
cancelled and retired without payment of any consideration therefor and
cease to exist.
(c) At the Effective Time, each share of capital stock of
Newco issued and outstanding immediately prior to the Effective Time shall
be converted into one validly issued, fully paid and nonassessable
identical share of capital stock of the Surviving Corporation.
3.2 Stockholders' Meeting. The Company, acting through the Board
of Directors, shall:
(i) duly call, give notice of, convene and hold a
special meeting of its stockholders (the "Stockholders Meeting"), to
be held as soon as practicable after the date hereof, for the purpose
of considering and taking action upon this Agreement;
(ii) include in the Proxy Statement (as hereinafter
defined in Section 4.8) (x) the opinion of the Company Financial
Advisor referred to in Section 4.17 and (y) the recommendation of the
Board of Directors that stockholders of the Company vote in favor of
the approval and adoption of this Agreement unless, in the opinion of
the Board of Directors after consultation with its counsel, the
inclusion of such recommendation would be inconsistent with its
fiduciary duties to the Company's stockholders under applicable law;
and
(iii) obtain and furnish the information required to
be included by it in the Proxy Statement and, after consultation with
Parent and Newco, file the Proxy Statement confidentially with the
SEC, respond promptly to any comments made by the SEC with respect to
the Proxy Statement and any preliminary version thereof, provided,
however, that all such filings and responses shall be subject to
Parent's prior consent, not to be unreasonably withheld and cause the
Proxy Statement to be mailed to its stockholders at the earliest
practicable time following the date hereof.
At such meeting, Parent, Newco and their affiliates will vote all
Shares owned by them in favor of approval and adoption of this Agreement
and the transactions contemplated hereby.
Subject to its right to terminate this Agreement in accordance with
its terms, the Company shall be required to take the actions specified in
Sections 3.2(i) and (iii), and satisfy all its other obligations under this
Agreement, whether or not the Board of Directors of the Company withdraws
or makes an adverse change in its recommendation that stockholders of the
Company vote in favor of the approval and adoption of this Agreement after
the date hereof.
3.3 Dissenting Shares.
(a) Notwithstanding anything in this Agreement to the contrary,
Shares that are issued and outstanding immediately prior to the Effective
Time and which are held by stockholders who have not voted in favor of or
consented to the Merger and who shall have delivered a written demand for
appraisal of such Shares in the time and manner provided in Section 262 of
the DGCL and shall not have failed to perfect or shall not have effectively
withdrawn or lost their rights to appraisal and payment under the DGCL (the
"Dissenting Shares") shall not be converted into the right to receive the
Merger Consideration, but shall be entitled to receive the consideration as
shall be determined pursuant to Section 262 of the DGCL; provided, however,
that if such holder shall have failed to perfect or shall have effectively
withdrawn or lost his, her or its right to appraisal and payment under the
DGCL, such holder's Shares shall thereupon be deemed to have been
converted, at the Effective Time, into the right to receive the Merger
Consideration, without any interest thereon, less any required withholding
taxes.
(b) The Company shall give Parent (i) prompt notice and copies of
any demands for appraisal pursuant to Section 262 of the DGCL received by
the Company, withdrawals of such demands, and any other instruments served
or sent pursuant to the DGCL and received by the Company and (ii) the
opportunity to direct all negotiations and proceedings with respect to
demands for appraisal under the DGCL. The Company shall not, except with
the prior written consent of Parent, make any payment with respect to any
such demands for appraisal or offer to settle or settle any such demands.
3.4 Payment for Shares in the Merger. The manner of making
payment for Shares in the Merger shall be as follows:
(a) At the Effective Time, Parent shall make available to
First Chicago Trust Company of New York (the "Exchange Agent"), or such
other exchange agent selected by Parent and reasonably acceptable to the
Company for the benefit of the holders of Shares, the funds necessary to
make the payments contemplated by Section 3.1 (the "Exchange Fund"). Such
funds may be invested by the Exchange Agent as directed by Parent, provided
that such investments shall be in obligations of or guaranteed by the
United States of America, in commercial paper obligations rated A-1 or P-1
or better by Xxxxx'x Investors Service, Inc. or Standard & Poor's Rating
Services, respectively, or in deposit accounts, certificates of deposit,
bank repurchase or reverse repurchase agreements or banker's acceptances
of, or Eurodollar time deposits purchased from, commercial banks with
capital exceeding $500 million. Any net profit resulting from, or interest
or income produced by, such investments will be payable to the Surviving
Corporation or Parent, as Parent directs. The Exchange Agent shall,
pursuant to irrevocable instructions, deliver the Merger Consideration out
of the Exchange Fund. The Exchange Fund shall not be used for any other
purpose.
(b) As soon as reasonably practicable after the Effective
Time, the Exchange Agent shall mail to each holder of record (other than
holders of certificates for Shares referred to in Section 3.1(c)) of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares (the "Certificates") (i) a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent) and (ii) instructions for use in
effecting the surrender of the Certificates for payment therefor. Upon
surrender of Certificates for cancellation to the Exchange Agent, together
with such letter of transmittal duly executed and any other required
documents, the holder of such Certificates shall be entitled to receive for
each of the Shares represented by such Certificates the Merger
Consideration, without any interest thereon, less any required withholding
of taxes, and the Certificates so surrendered shall forthwith be cancelled.
Until so surrendered, such Certificates shall upon and following the
Effective Time represent solely the right to receive the Merger
Consideration with respect to each of the Shares represented thereby. If
payment is to be made to a person other than the person in whose name a
Certificate so surrendered is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed and
otherwise in proper form for transfer and that the person requesting such
payment shall pay to the Exchange Agent any transfer or other taxes
required by reason of the payment to a person other than the registered
holder of the Certificate surrendered, or shall establish to the
satisfaction of the Exchange Agent that such tax has been paid or is not
applicable. Until surrendered in accordance with the provisions of this
Section 3.4(b), each Certificate (other than Certificates representing
Shares held in the Company's treasury or by Newco, or by Parent or any
other direct or indirect wholly-owned subsidiary of the Company or Parent)
shall upon and following the Effective Time represent for all purposes only
the right to receive, for each Share represented thereby, the Merger
Consideration.
(c) Any portion of the Exchange Fund made available to the
Exchange Agent which remains unclaimed by the former stockholders of the
Company for one year after the Effective Time shall be delivered to the
Surviving Corporation, upon demand of the Surviving Corporation, and any
former stockholders of the Company shall thereafter look only to the
Surviving Corporation for payment of their claim for the Merger
Consideration for the Shares. If any Certificates shall not have been
surrendered immediately prior to the date on which any Merger Consideration
in respect of such certificate would escheat to or become the property of
any governmental entity, any such Merger Consideration shall, to the extent
permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person
previously entitled thereto. Notwithstanding the foregoing, none of the
Surviving Corporation, Parent or the Exchange Agent shall be liable to any
holder of a Certificate for Merger Consideration delivered to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
3.5 Transfer of Shares After the Effective Time. No transfers of
Shares shall be made on the stock transfer books of the Company after the
close of business on the day of the Effective Time. From and after the
Effective Time, the holders of Certificates evidencing ownership of Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares except as otherwise provided for herein
or by applicable law. All cash paid upon the surrender for exchange of the
Certificates in accordance with the terms of this Article shall be deemed
to have been in full satisfaction of all rights pertaining to the Shares
theretofore represented by such Certificates.
3.6 Stock Options.
(a) Immediately prior to the Effective Time, each option
("Option") which has been granted under the 1993 or 1997 Key Employees
Incentive Plans or any predecessor plans thereto (together, the "Option
Plans") and is outstanding at the Effective Time, whether or not then
exercisable, shall be (or, if not previously vested and exercisable, shall
become) vested and exercisable and such Options immediately thereafter
shall be canceled by the Company, and each holder of a canceled Option
shall be entitled to receive at the Effective Time or as soon as
practicable thereafter from the Company in consideration for the
cancellation of such Option an amount in cash equal to the product of (i)
the number of Shares previously subject to such Option and (ii) the excess,
if any, of the Merger Consideration over the exercise price per share of
Shares previously subject to such Option, less any applicable withholding
taxes.
(b) The Company shall (i) take all actions necessary and
appropriate so that all stock or other equity based plans maintained with
respect to the Shares, including, without limitation, the plans listed in
Section 4.10(a) hereof ("Option Plans"), shall terminate as of the
Effective Time and that any other Company Plan (as hereinafter defined in
Section 4.10) (including the Company Employee Stock Purchase Plan)
providing for the issuance, transfer or grant of any capital stock of the
Company or any interest in respect of any capital stock of the Company
shall be amended to provide that no further issuances, transfer or grants
shall be permitted as of the Effective Time, and (ii) provide that,
following the Effective Time, no holder of an Option or any participant in
any Option Plan shall have any right thereunder to acquire any capital
stock of the Company, Parent or the Surviving Corporation. Prior to the
Effective Time, the Company shall use reasonable best efforts to (x) obtain
all necessary consents from, and provide (in a form acceptable to Parent)
any required notices to, holders of Options and (y) amend the terms of the
applicable Option Plan and the Company Employee Stock Purchase Plan, in
each case as is necessary to give effect to the provision of this paragraph
(b).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Newco
that:
4.1 Corporate Organization and Qualification. Each of the Company
and its subsidiaries (as hereinafter defined in Section 9.10) is a
corporation duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation and is qualified and
in good standing as a foreign corporation in each jurisdiction where the
properties owned, leased or operated or the business conducted by it
require such qualification, except where failure to so qualify or be in
good standing would not have a Material Adverse Effect (as hereinafter
defined in Section 9.10). Each of the Company and its subsidiaries has all
requisite power and authority (corporate or otherwise) to own, lease and
operate its properties and to carry on its business as it is now being
conducted except where failure to have such power and authority would not
have a Material Adverse Effect. The Company has heretofore made available
to Parent complete and correct copies of its Restated Certificate of
Incorporation and By-Laws.
4.2 Capitalization.
(a) The authorized capital stock of the Company consists of (i)
10,000,000 Shares of which, as of June 30, 1999, 4,030,412 Shares were
issued and outstanding and 277,760 Shares were held in the treasury of the
Company and (ii) 1,000,000 shares of preferred stock, par value $1.00 per
share, none of which is issued or outstanding and 40,000 shares of which
are designated as Series A Junior Participating Preferred Stock. All of
the outstanding shares of capital stock of the Company have been duly
authorized, validly issued and are fully paid and nonassessable and were
not issued in violation of, and are not entitled to, preemptive rights. As
of June 30, 1999, 198,439 Shares were reserved for issuance upon exercise
of outstanding options pursuant to the Option Plans (with an average
exercise price of $11.87 for all such options), all of which Shares are
issuable at an exercise price less than the Merger Consideration. No
Shares have been issued (including from treasury) since June 30, 1999
except for any issued pursuant to the options described above or up to
5,000 Shares in the aggregate issued under the Employee Stock Purchase
Plan. Except as set forth above, no shares of capital stock or other
equity securities of the Company are issued, reserved for issuance or
outstanding. None of the subsidiaries of the Company owns any of the
capital stock of the Company. Except as set forth on Schedule 4.2, as of
the date hereof all outstanding shares of capital stock of the Company's
subsidiaries are owned of record and beneficially by the Company or a
direct or indirect wholly owned subsidiary of the Company, free and clear
of all liens, charges, encumbrances, claims and options of any nature.
Except as set forth above and on Schedule 4.2 and except for the Rights,
there are not as of the date hereof any outstanding or authorized options,
warrants, calls, rights (including preemptive rights), commitments,
understandings, or any other agreements of any character which the Company
or any of its subsidiaries is a party to, or may be bound by, requiring it
to issue, transfer, sell, purchase, redeem, make any payment in respect of
or acquire any shares of capital stock or any securities or rights
convertible into, exchangeable for, or evidencing the right to subscribe
for, any shares of capital stock of the Company or any of its subsidiaries.
(b) As of June 30, 1999, the outstanding aggregate indebtedness of
the Company and its subsidiaries for borrowed money did not exceed $25
million. There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of the Company having the right to vote
(or convertible into, or exchangeable for, securities having the right to
vote) on any matters on which stockholders of the Company may vote.
(c) Except as set forth on Schedule 4.2(c), there are no voting
trusts or other agreements to which the Company or any of its subsidiaries
is a party with respect to the voting of the capital stock of the Company
or any of its subsidiaries.
(d) Schedule 4.2(d) sets forth, as of the date hereof, to the
knowledge of the Company: each person or group (within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (i) who has beneficial ownership (within the meaning of
Rule 13d-3 under the Exchange Act) of more than 5% of the outstanding
Company Common Stock; and the number of Shares that such person or group
has asserted are beneficially owned by it, or (ii) who has made any filing
under the HSR Act with respect to the Company or the Shares since January
1, 1998.
4.3 Authority Relative to This Agreement.
(a) The Company has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement and the consummation by
the Company of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of the Company and no other
corporate proceedings on the part of the Company are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby (other
than, with respect to the Merger, the approval and adoption of this
Agreement by the stockholders of the Company, including Newco, in
accordance with Section 251 of the DGCL). This Agreement has been duly and
validly executed and delivered by the Company and, assuming this Agreement
constitutes the valid and binding agreement of Parent and Newco,
constitutes the valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except that the
enforcement hereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity (regardless of whether enforceability is considered in a proceeding
in equity or at law).
(b) The Board of Directors of the Company, at a meeting duly
called and held, has by unanimous vote of the entire Board of Directors (i)
declared and determined that this Agreement and the transactions
contemplated hereby, including the Merger, are advisable, fair to and in
the best interests of the stockholders of the Company and has taken all
corporate action required to be taken by the Board of Directors for the
consummation of the Merger and the other transactions contemplated herein,
including but not limited to all actions required to render the provisions
of Section 203 of the DGCL restricting business combinations with
"interested stockholders" inapplicable to such transactions, (ii) approved
this Agreement and the Merger and the other transactions contemplated
hereby and (iii) recommended that the stockholders of the Company approve
and adopt this Agreement and the Merger.
(c) The Company has amended the Rights Agreement, dated as of
November 10, 1998, by and between the Company and First Chicago Trust
Company of New York, as amended by the Amendment dated as of June 24, 1999
(the "Rights Agreement"), to ensure that (i) neither a "Distribution Date"
nor a "Stock Acquisition Date" will occur (and no such event has occurred
prior to the date hereof); (ii) none of Parent, Newco or any of their
"Affiliates" or "Associates" will be deemed to be an "Acquiring Person" (as
defined in the Rights Agreement); (iii) no provisions of Section 11 or
Section 13 of the Rights Agreement will be triggered, by reason of the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby and (iv) the Rights will expire
immediately prior to the Effective Time.
(d) The affirmative vote of a majority of the voting power of
the outstanding Shares in favor of the approval and adoption of this
Agreement (the "Company Stockholder Approval") is the only vote of the
holders of any class or series of the Company's or its subsidiaries'
securities necessary to approve this Agreement, the Merger and the other
transactions contemplated hereby.
4.4 Consents and Approvals; No Violation. Neither the execution
and delivery of this Agreement nor the performance by the Company (and its
subsidiaries) of its obligations herein nor the consummation by the Company
of the transactions contemplated hereby will (a) conflict with or result in
any breach of any provision of the respective Certificate of Incorporation
or By-Laws of the Company or any of its subsidiaries; (b) require any
consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority or any other
person or entity, except (i) in connection with the applicable requirements
of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), (ii) pursuant to the applicable requirements of the
Exchange Act, (iii) the filing of the Certificate of Merger pursuant to the
DGCL and appropriate documents with the relevant authorities of other
states in which the Company or any of its subsidiaries is authorized to do
business, (iv) required filings with and notifications to the New York
Stock Exchange (the "NYSE") or, (v) as may be required by any applicable
state securities or "blue sky" laws or state takeover laws; (c) except as
set forth in Schedule 4.4(c), result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, modification, cancellation or
acceleration or lien or other charge or encumbrance) under, or give rise to
any purchase or put right or other imposition of any obligation or loss of
any benefit under, any of the terms, conditions or provisions of any note,
permit, concession, franchise, license, agreement or other instrument or
obligation to which the Company or any of its subsidiaries or any of their
assets may be bound (any of the foregoing, a "Contract"), or (d) assuming
the consents, approvals, authorizations or permits and filings or
notifications referred to in this Section 4.4 are duly and timely obtained
or made and, with respect to the Merger, the approval of this Agreement by
the Company's stockholders has been obtained, violate any order, writ,
injunction, decree, law, statute, rule or regulation applicable to the
Company or any of its subsidiaries or to any of their respective assets,
except in the case of clauses (b), (c) and (d), as would not, individually
or in the aggregate, have a Material Adverse Effect.
4.5 SEC Reports; Financial Statements.
(a) Except as set forth in Schedule 4.5(a), the Company has
filed all forms, reports and documents required to be filed by it with the
SEC since January 1, 1998 pursuant to the federal securities laws and the
SEC rules and regulations thereunder, all of which, including in each case
all exhibits and schedules thereto and documents incorporated by reference
therein (collectively, the "Company SEC Reports") as of their respective
dates, complied in all material respects with all applicable requirements
of the Securities Act of 1933, as amended (the "Securities Act") and the
Exchange Act. None of the Company SEC Reports, including, without
limitation, any financial statements or schedules included therein, as of
their respective dates, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
Company's subsidiaries has been required to file any reports, schedules,
forms, statements or other documents with the SEC.
(b) The consolidated balance sheets and the related
consolidated statements of operations, comprehensive income (loss),
stockholders' equity and cash flows (including the related notes thereto)
of the Company included in the Company SEC Reports, as of their respective
dates, complied in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a basis consistent with prior
periods (except as otherwise noted therein), and present fairly, in all
material respects, the consolidated financial position of the Company and
its consolidated subsidiaries as of their respective dates, and the
consolidated results of their operations and their cash flows for the
periods presented therein (subject, in the case of the unaudited interim
financial statements, to normal year-end adjustments which would not,
individually or in the aggregate, have a Material Adverse Effect).
(c) Except as set forth in the Company's financial statements
included in the Company SEC Reports filed since January 1, 1999 and prior
to the date hereof (the "Current SEC Reports"), and except as incurred in
the ordinary course of business since the date of such financial statements
or disclosed on Schedule 4.5(c), neither the Company nor any of its
subsidiaries has any liabilities or obligations that would be required to
be set forth on a balance sheet prepared in accordance with GAAP other than
those which, individually or in the aggregate, would not have a Material
Adverse Effect.
4.6 Absence of Certain Changes or Events. Except as specifically
disclosed in the Current SEC Reports, as set forth with reasonable
specificity in the schedules to this Agreement or as specifically
contemplated by this Agreement, since March 31, 1999, (i) the Company has
conducted its business in all material respects only in the ordinary course
consistent with past practice, (ii) there has not been any condition, event
or occurrence which, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect and (iii) no
actions have been taken, which if taken after the date hereof, would
constitute a material breach of the provisions of Section 6.1.
4.7 Litigation; Compliance.
(a) Except as set forth on Schedule 4.7, the Current SEC
Reports accurately disclose in all material respects all actions, claims,
suits, proceedings and governmental investigations pending or, to the
knowledge of the Company, threatened, which (i) are required to be
disclosed therein by the Exchange Act or (ii) individually or in the
aggregate are reasonably likely to have a Material Adverse Effect. No
judgment, decree, injunction, rule or order of any governmental entity or
arbitrator is outstanding against the Company that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
(b) The conduct of the business of each of the Company and
its subsidiaries complies, and during the past three years has complied,
with all laws, statutes, rules, regulations, orders, writs, injunctions,
and decrees applicable thereto, except for failures so to comply, if any,
that, individually or in the aggregate, would not have a Material Adverse
Effect.
(c) Except for any of the following that would not,
individually or in the aggregate, have a Material Adverse Effect: (i) each
of the Company and its subsidiaries is in possession of all franchises,
grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders from governmental
entities (collectively, the "Company Permits"), that are necessary to own,
lease and operate the properties of the Company and its subsidiaries and to
carry on their business as owned, leased, operated or carried on as of the
date of this Agreement; (ii) the Company Permits are in full force and
effect; and (iii) there is no action, proceeding or investigation pending
or, to the knowledge of the Company, threatened regarding suspension or
cancellation of any of the Company Permits.
4.8 Proxy Statement; Offer Documents. Any proxy or similar
materials distributed to the Company's stockholders in connection with the
Merger, including any amendments or supplements thereto and any information
incorporated by reference therein (the "Proxy Statement") will comply in
all material respects with applicable federal securities laws, and the
Proxy Statement will not, at the time that it or any amendment or
supplement thereto is mailed to the Company's stockholders, at the time of
the Stockholders Meeting or at the Effective Time, contain any untrue
statement of 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 or
necessary to correct any statement in any earlier communication with
respect to the solicitation of proxies for the Stockholders Meeting which
has become false or misleading except that no representation is made by the
Company with respect to information supplied by Newco or Parent in writing
for inclusion in the Proxy Statement.
4.9 Taxes. Except as set forth on Schedule 4.9, the Company and
its subsidiaries have filed when due or will cause to be filed when due,
all Federal, state, local and foreign Tax Returns, declarations,
statements, reports, schedules, forms and information returns and any
amendments thereto that any of them is required to file ("Tax Returns")
other than those Tax Returns the failure of which to file would not have a
Material Adverse Effect and have paid all taxes shown on those returns.
All such Tax Returns are, or will be at the time of filing, true, complete
and correct in all respects except as would not have a Material Adverse
Effect. The Company and its subsidiaries have paid (or have had paid on
their behalf), or where payment is not yet due, have established (or have
established on their behalf and for their sole benefit and recourse), or
will establish or cause to be established on or before the Effective Time,
an adequate accrual for the payment of, all material Taxes (as hereinafter
defined in Section 9.10) (other than deferred Taxes reflecting differences
between the book and tax bases in assets and liabilities) with respect to
any period (or portion thereof) ending prior to or as of the Effective
Time. Except as set forth in Schedule 4.9, no audits or other
administrative proceedings or court proceedings are presently pending with
regard to any Taxes or Tax Return of the Company or its subsidiaries as to
which any taxing authority has asserted in writing any claim, other than
claims, which, individually or in the aggregate, would not have a Material
Adverse Effect. Except as set forth on Schedule 4.9, neither the Company
nor its subsidiaries have received any written notice of deficiency or
assessment from any taxing authority with respect to Taxes, which have not
been fully paid or finally settled. Neither the Company nor any of its
subsidiaries has any liability for any Taxes of any person under Treasury
Regulation section 1.1502-6 (or any comparable state, local or foreign
law), as a transferee or successor, by contract or otherwise, except as
would not result in a Material Adverse Effect. Except as disclosed in the
Schedules hereto, neither the Company nor its subsidiaries is required to
make any payments to directors, officers or employees, including as a
result of the transactions contemplated by this Agreement, which would be
subject to Section 162(m) of the Code.
4.10 Employee Benefit Plans; Labor Matters.
(a) Schedule 4.10(a) contains a true and complete list of
each "employee benefit plan" (within the meaning of section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
including, without limitation, multiemployer plans within the meaning of
ERISA section 3(37)), stock purchase, stock option, severance, employment,
change-in-control, fringe benefit, collective bargaining, bonus, incentive,
deferred compensation and all other employee benefit plans, agreements,
programs or policies, whether or not subject to ERISA (including any
funding mechanism therefor now in effect or required in the future as a
result of the transactions contemplated by this Agreement or otherwise),
oral or written under which any employee or former employee of the Company
or its subsidiaries has any present or future right to material benefits or
under which the Company or its subsidiaries has any material present or
future liability. All such plans, agreements, programs, policies and
arrangements shall be collectively referred to as the "Company Plans".
With respect to the Company Plans, except as set forth in Schedule 4.10(b)
or the Current SEC Reports: (i) each Company Plan intended to be qualified
under Section 401(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), has received a favorable determination letter from the Internal
Revenue Service (the "IRS") that it is so qualified and nothing has
occurred since the date of such letter that is reasonably likely to affect
the qualified status of such Company Plan; (ii) each Company Plan has been
operated in all material respects in accordance with its terms and the
requirements of applicable law; (iii) neither the Company nor any of its
subsidiaries has incurred any direct or indirect liability under, arising
out of or by operation of Title IV of ERISA, in connection with the
termination of, or withdrawal from, any Company Plan or other retirement
plan or arrangement and no fact or event exists that is reasonably likely
to give rise to any liability, except as would not, individually or in the
aggregate, have a Material Adverse Effect. Except as set forth in Schedule
4.10(b) or the Current SEC Reports, the aggregate accumulated benefit
obligations of each Company Plan subject to Title IV of ERISA (as of the
date of the most recent actuarial valuation prepared for such Company Plan)
do not exceed the fair market value of the assets of such Company Plan (as
of the date of such valuation).
(b) With respect to each Company Plan, the Company has made
or will make available to Parent a current, accurate and complete copy (or,
to the extent no such copy exists, an accurate description) thereof and, to
the extent applicable: (i) the most recent determination letter, if
applicable; (ii) any summary plan description by the Company or its
subsidiaries to their employees concerning the extent of the benefits
provided under a Company Plan; and (iii) for the most recent year, if
applicable, (A) the Form 5500 and attached schedules and (B) actuarial
valuation reports.
(c) With respect to any Company Plan, except as would not
have a Material Adverse Effect, (i) no actions, suits or claims (other than
routine claims for benefits in the ordinary course) are pending or, to the
knowledge of the Company, threatened and (ii) no written or, to the
knowledge of the Company, oral communication has been received by the
Company from any governmental entity in respect of any Company Plan subject
to Title IV of ERISA concerning the funded status of any such plan or any
transfer of assets and liabilities from any such plan in connection with
the transactions contemplated herein.
(d) Except as set forth in Schedule 4.10(d), no Company Plan
exists that provides for the payments to any present or former employee of
the Company or its subsidiaries of any amount of money or other property or
accelerates or provides any other rights or benefits to any present or
former employee of the Company or its subsidiaries, as a result of the
transactions contemplated by this Agreement, whether or not such payment
would constitute a parachute payment within the meaning of Code section
280G.
(e) Neither the Company nor any of its subsidiaries is a
party to any collective bargaining or other labor union contracts or is the
subject of any proceeding asserting that it or any subsidiary has committed
an unfair labor practice. There is no pending or, to the knowledge of the
Company, threatened labor dispute, strike or work stoppage against the
Company or any of its subsidiaries which would interfere with the
respective business activities of the Company or its subsidiaries. There
is no action, suit, complaint, charge, arbitration, inquiry, proceeding,
grievance or investigation by or before any court, government agency,
administrative agency or commission brought by or on behalf of any
employee, prospective employee, former employee, retiree or other
representative of the Company's employees pending or, to the knowledge of
the Company, threatened against the Company or any of its subsidiaries
other than any which would not, individually or in the aggregate, have a
Material Adverse Effect. Neither the Company nor any of its subsidiaries
is a party to or otherwise bound by, any consent, decree, or citation by
any government entity relating to employees or employment practices.
(f) Except as set forth on Schedule 4.10(f), neither the Company
nor any of its subsidiaries sponsor, maintain or contribute to any Company
Plan that provides post-retirement medical or life insurance benefits to
any present or former employee of the Company or its subsidiaries.
4.11 Environmental Laws and Regulations. Except as publicly
disclosed by the Company in the Current SEC Reports or as set forth in
Schedule 4.11, (i) the Company and each of its subsidiaries is, and has
been for the past three years, in material compliance with all applicable
federal, state, local and foreign statutes, laws, regulations, orders,
judgments and decrees relating to pollution or protection of human health
or the environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata) (collectively,
"Environmental Laws"), except for non-compliance that in the aggregate
would not have a Material Adverse Effect and (ii) neither the Company nor
any of its subsidiaries has received written notice of, or, to the
knowledge of the Company, is the subject of, any action, cause of action,
claim, investigation, demand or notice by any person or entity alleging
liability or investigatory or remedial obligations under or non-compliance
with any Environmental Law (an "Environmental Claim") which, in the
aggregate, is reasonably likely to have a Material Adverse Effect.
Materials or substances that are regulated or that could result in
liability under Environmental Laws, including without limitation asbestos,
polychlorinated biphenyls and petroleum and petroleum products, have not
been generated, transported, treated, stored, disposed of, arranged to be
disposed of, or released by the Company or any of its subsidiaries at, on,
from or under any of the properties or facilities currently owned, leased
or otherwise used by the Company or its subsidiaries in violation of, or in
a manner or to a location that is reasonably likely to give rise to
liability under, Environmental Laws that would, in the aggregate, have a
Material Adverse Effect.
4.12 Intellectual Property.
(a) Schedule 4.12(a) sets forth (i) all Intellectual Property
material to the business of the Company and its subsidiaries as currently
conducted that is owned, held or used by the Company or its subsidiaries
("Company IP") and issued by or registered or filed with, or which has been
submitted to, any governmental entity and (ii) each and every material
license, sublicense, consent-to-use agreement and other agreement
concerning Company IP to which the Company and/or any of its subsidiaries
is a party ("IP Licenses").
(b) Except as disclosed on Schedule 4.12(b) or as would not,
individually or in the aggregate, have a Material Adverse Effect: (i) the
patents and trademark and copyright registrations owned by the Company or
its subsidiaries are, to the knowledge of the Company, valid, enforceable,
unexpired and not abandoned, the Company and/or its subsidiaries owns or
has the right to use all the Company IP, free of encumbrances, and, to the
knowledge of the Company, such Intellectual Property does not infringe upon
or otherwise impair the Intellectual Property of, and is not being
infringed upon or impaired by, any third party; (ii) no judgment, decree,
injunction, rule or order has been rendered or, to the knowledge of the
Company, is threatened by any governmental entity which would limit, cancel
or question the validity of (or the Company's or any subsidiary's right to
own or use) any Company IP; (iii) no action, suit or proceeding is pending,
or to the knowledge of the Company, threatened that seeks to limit, cancel
or question the validity of (or the Company's or any subsidiary's right to
own or use) any Company IP; (iv) the Company has made all filings and
executed all agreements reasonably necessary to maintain its interests in
the Company IP; (v) no party to an IP License is in breach or default
thereunder; and (vi) the transactions contemplated by this Agreement do not
impair or limit the rights of the Company or any of its subsidiaries under
any IP License, or cause any payment to be due or accelerated thereunder.
For the purposes of this Section 4.12, "Intellectual Property"
shall means all U.S., state and foreign intellectual property, including
without limitation all (i) inventions, discoveries, processes, designs and
related improvements and know-how, whether or not patented or patentable;
(ii) copyrights and works of authorship in any media, including computer
programs, software, databases, Internet site content and related items,
advertising and promotional materials (including graphics, and text),
designs, proprietary or copyrightable elements of pictorial, graphic or
sculptural works, and all other authors' rights; (iii) trademarks, service
marks, trade names, brand names, corporate names, domain names, logos,
trade dress and all elements thereof, the goodwill of any business
symbolized thereby, and all common-law rights relating thereto; (iv) trade
secrets and other proprietary information; (v) all registrations,
applications, recordings, and licenses or other agreements related to the
foregoing; and (vi) all rights to obtain renewals, extensions,
continuations, continuations-in-part, reissues, divisions or similar legal
protections related to the foregoing.
4.13 Year 2000 Compliance. To the knowledge of the Company,
except as would not, individually or in the aggregate, have a Material
Adverse Effect, all computer hardware, software, databases, systems and
other computer equipment owned, held, and/or used by the Company or any of
its subsidiaries, can be used prior to, during and after the calendar year
2000 A.D., and will operate during each such time period, either on a
stand-alone basis, or by interacting or interoperating with third-party
software, without error relating to the processing, calculating, comparing,
sequencing or other use of date data.
4.14 Contracts. Except as set forth on Schedule 4.14, neither the
Company nor any of its subsidiaries is, or has received any notice or has
any knowledge that any other party is, or would with the passage of time or
the giving of notice or both be, in default in any respect under any
Contract to which it or any of its subsidiaries is a party or by which it
or any such subsidiary is bound, except for those defaults which would not,
individually or in the aggregate, have a Material Adverse Effect. Except
as set forth in Schedule 4.14 or as disclosed in the Current SEC Reports,
neither the Company nor any of its subsidiaries is subject to or bound by
(i) any Contract required to be disclosed pursuant to Items 404 or 601 of
Regulation S-K of the SEC, including any Contracts entered into since the
respective dates of the Current SEC Reports, or (ii) any exclusive dealing
arrangement or other Contract containing covenants which limit the ability
of the Company or any subsidiary to compete in any significant line of
business as presently conducted by it or which materially restrict the
geographic area in which, or method by which, the Company or any subsidiary
may carry on its business as presently conducted by it.
4.15 Insurance. The Company and its subsidiaries are insured with
reputable insurers against such risks and in such amounts as the management
of the Company reasonably has determined to be appropriate or as required
by law. All of the insurance policies, binders, or bonds maintained by the
Company or its subsidiaries are in full force and effect; the Company and
its subsidiaries are not in default thereunder; and all claims thereunder
have been filed in due and timely fashion, in each instance except for
cases which would not, individually or in the aggregate, have a Material
Adverse Effect.
4.16 Brokers and Finders. Except for the fees and expenses
payable to Xxxxxxxxxxx Xxxxxxx & Co., Inc., which fees and expenses are
reflected in its agreement with the Company, true and complete copies of
which have been furnished to Parent, the Company has not employed any
investment banker, broker, finder, consultant or intermediary in connection
with the transactions contemplated by this Agreement which would be
entitled to any investment banking, brokerage, finder's or similar fee or
commission in connection with this Agreement or the transactions
contemplated hereby.
4.17 Opinion of Financial Advisors. The Company has received the
opinion of Xxxxxxxxxxx Xxxxxxx & Co., Inc., dated as of the date hereof, to
the effect that, as of such date, the cash consideration to be received by
the stockholders of the Company in the Merger is fair to such stockholders
from a financial point of view, a copy of which opinion has been provided
to Parent.
4.18 Customers and Distributors. Schedule 4.18 sets forth a list
of the ten largest customers and distributors of the Company and its
subsidiaries (based on 1998 annual revenues for those businesses currently
operated by the Company). Since April 1, 1999 and prior to the date
hereof, except as would not, individually or in the aggregate, have a
Material Adverse Effect, none of such customers or distributors has
terminated or materially reduced its purchases or orders of the Company's
and its subsidiaries' products, nor has any such customer or distributor
specifically indicated that it intends to do so.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT
AND NEWCO
Each of Parent and Newco (upon its execution hereof) represent and
warrant jointly and severally to the Company that:
5.1 Corporate Organization and Qualification. Parent is and Newco
upon its execution hereof will be, a corporation duly organized, validly
existing and in good standing under the laws of its respective jurisdiction
of incorporation.
5.2 Authority Relative to This Agreement. Parent has, and upon
its execution hereof, Newco will have, the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement and the consummation by
Parent of the transactions contemplated hereby have been, and upon its
execution hereof, by Newco of the transactions contemplated hereby will
have been, duly and validly authorized by the respective Boards of
Directors of Parent and Newco and immediately following the execution of
this Agreement by Newco it will be adopted by Parent as sole stockholder of
Newco, and no other corporate proceedings on the part of Parent are, or
upon execution hereof by Newco will on the part of Newco be, necessary to
authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by
Parent, and upon its execution hereof, will have been duly and validly
executed and delivered by Newco and, assuming this Agreement constitutes
the valid and binding agreement of the Company, constitutes valid and
binding agreement of Parent, and upon its execution hereof, will constitute
valid and binding agreement of Newco, enforceable against each of them in
accordance with its terms, except that the enforcement hereof may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
5.3 Consents and Approvals; No Violation. Neither the execution
and delivery of this Agreement by Parent or Newco nor the performance by
Parent and Newco of their obligations herein or the consummation by Parent
and Newco of the transactions contemplated hereby will (a) conflict with or
result in any breach of any provision of the Certificate of Incorporation
or the By-Laws, respectively, of Parent or Newco; (b) require any consent,
approval, authorization or permit of, or filing with or notification to,
any governmental or regulatory authority or any other person or entity,
except (i) in connection with the applicable requirements of the HSR Act,
(ii) pursuant to the applicable requirements of the Exchange Act, (iii) the
filing of the Certificate of Merger pursuant to the DGCL and appropriate
documents with the relevant authorities of other states in which Parent is
authorized to do business, (iv) required filings with and notifications to
the NYSE, and (v) as may be required by any applicable state securities or
"blue sky" laws or state takeover laws, (v) such filings, consents,
approvals, orders, registrations, declarations and filings as may be
required under the laws of any foreign country in which Parent or any of
its subsidiaries conducts any business or owns any assets, (vi) such
filings and consents as may be required under any environmental, health or
safety law or regulation pertaining to any notification, disclosure or
required approval triggered by the Merger or the transactions contemplated
by this Agreement or (vii) where the failure to obtain such consent,
approval, authorization or permit, or to make such filing or notification,
would not in the aggregate have a Material Adverse Effect or adversely
affect the consummation of the transactions contemplated hereby; (c) except
as set forth in Schedule 5.3(c), result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, modification, cancellation or
acceleration or lien or other charge or encumbrance) under any Contract; or
(d) assuming the consents, approvals, authorizations or permits and filings
or notifications referred to in this Section 5.3 are duly and timely
obtained or made, violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Parent or any of its subsidiaries or to
any of their respective assets, except in the case of clauses (b), (c) and
(d), as would not, individually or in the aggregate, have a Material
Adverse Effect.
5.4 Parent Financial Condition. The only material asset of Parent
is its ownership of approximately 89.5% of the outstanding common stock of
CCPC Holding Company, Inc., a Delaware corporation (formerly known as
Corning Consumer Products Company) ("CCPC"). The consolidated balance
sheets and the related consolidated statements of operations, stockholders
equity and cash flows (including the related notes thereto) of CCPC
included in the reports and documents filed by CCPC with the SEC since
January 1, 1999 and prior to the date hereof, as of their respective dates,
complied in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto,
were prepared in accordance with generally accepted accounting principles
applied on a basis consistent with prior periods (except as otherwise noted
therein), and present fairly, in all material respects, the consolidated
financial position of CCPC and its consolidated subsidiaries as of their
respective dates, and the consolidated results of their operations and
their cash flows for the periods presented therein (subject, in the case of
the unaudited interim financial statements, to normal year-end
adjustments).
5.5 Proxy Statement. None of the information supplied by Parent
or Newco in writing for inclusion in the Proxy Statement will, at the
respective times that the Proxy Statement or any amendments or supplements
thereto are filed with the SEC and are first published or sent or given to
holders of Shares, and in the case of the Proxy Statement, at the time that
it or any amendment or supplement thereto is mailed to the Company's
stockholders, at the time of the Stockholders' Meeting or at the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are
made, not misleading.
5.6 Financing. Xxxxxx, Inc. has, and as of closing date, Parent
will have, sufficient funds available to purchase all of the Shares
outstanding on a fully diluted basis and to pay all fees and expenses
related to the transactions contemplated by this Agreement.
5.7 Interim Operations of Newco. Newco will be formed solely for
the purpose of engaging in the transactions contemplated hereby and will
not engage in any business activities or conduct any operations other than
in connection with the transactions contemplated hereby.
5.8 Brokers and Finders. Except for Xxxxxxx, Sachs & Co. (the
fees and expenses of which will be paid by Parent), Parent has not employed
any investment banker, broker, finder, consultant or intermediary in
connection with the transactions contemplated by this Agreement which would
be entitled to any investment banking, brokerage, finder's or similar fee
or commission in connection with this Agreement or the transactions
contemplated hereby.
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS
6.1 Conduct of Business of the Company.
(a) The Company agrees that during the period from the date
of this Agreement to the Effective Time (unless the other party shall
otherwise agree in writing and except as otherwise contemplated by this
Agreement), the Company will, and will cause each of its subsidiaries to,
conduct its operations according to its ordinary and usual course of
business consistent with past practice and, to the extent consistent
therewith, with no less diligence and effort than would be applied in the
absence of this Agreement, seek to preserve intact its current business
organizations, keep available the service of its current officers and
employees and preserve its relationships with distributors, customers,
suppliers and others having business dealings with it to the end that
goodwill and ongoing businesses shall not be impaired in any material
respect prior to, at, or following the Effective Time. Without limiting
the generality of the foregoing, and except as otherwise expressly
permitted in this Agreement or as set forth in Schedule 6.1(a), prior to
the Effective Time, neither the Company nor any of its subsidiaries will,
without the prior written consent of Parent:
(i) except for shares to be issued or delivered under
outstanding option agreements and restricted stock awards pursuant to
the Option Plans, or pursuant to the Company's Employee Stock Purchase
Plan, issue, deliver, sell, dispose of, pledge or otherwise encumber,
or authorize or propose the issuance, sale, disposition or pledge or
other encumbrance of or redeem, purchase or otherwise acquire, (A) any
additional shares of capital stock of any class (including the Shares)
or other ownership or equity investment, or any securities or rights
convertible into, exchangeable for, or evidencing the right to
subscribe for any shares of capital stock, or other ownership or
equity investment or any rights, warrants, options, calls, commitments
or any other agreements of any character to purchase or acquire any
shares of capital stock or other ownership or equity investment or any
securities or rights convertible into, exchangeable for, or evidencing
the right to subscribe for, any shares of capital stock or other
ownership or equity investment, or (B) any other securities in respect
of, in lieu of, or in substitution for, Shares outstanding on the date
hereof;
(ii) split, combine, subdivide or reclassify any
Shares or declare, set aside for payment or pay any dividend, or make
any other actual, constructive or deemed distribution in respect of
any Shares or otherwise make any payments to stockholders in their
capacity as such, other than the declaration and payment of regular
annual cash dividends in accordance with past dividend policy not in
excess of $0.32 per share per year pro rated to reflect the earliest
anticipated Effective Time and except for dividends by a wholly owned
subsidiary of the Company;
(iii) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any of its subsidiaries not
constituting an inactive subsidiary (other than the Merger);
(iv) adopt any amendments to its Certificate of
Incorporation or By-Laws or alter through merger, liquidation,
reorganization, restructuring or in any other fashion the corporate
structure or ownership of any subsidiary not constituting an inactive
subsidiary of the Company;
(v) make any material acquisition, by means of
merger, consolidation or otherwise, or material disposition, of assets
or securities;
(vi) other than in the ordinary course of business
consistent with past practice, incur any indebtedness for borrowed
money or guarantee or otherwise become liable in respect of any such
indebtedness (provided that any indebtedness incurred after the date
hereof shall be prepayable at any time at the option of the Company
without premium or penalty) or make any loans, advances or capital
contributions to, or investments in, any other person, other than to
the Company or any wholly owned subsidiary of the Company;
(vii) except as may be required as a result of a
change in law or in generally accepted accounting principles, change
any of the accounting practices or principles used by it;
(viii) except as required by law or the applicable
taxing authority, make or change in any material respect any material
Tax election, make or change in any material respect any method of
accounting with respect to Taxes, file any amended Tax Return, or
settle or compromise any proceeding with respect to any material Tax
liability;
(ix) pay, discharge or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge or
satisfaction (A) in the ordinary course of business and consistent
with past practice of liabilities reflected or reserved against in the
financial statements of the Company or incurred in the ordinary course
of business and consistent with past practice and (B) to the extent
required to be paid, discharged or satisfied pursuant to the terms of
any contract in existence on the date hereof;
(x) settle or offer to settle any claims, complaints
or lawsuits including (w) Xxxxxx Xxxxxxxxx v. Xxxx X. Xxxxxx, et al.,
filed June, 1999, in The Court of Chancery of the State of Delaware in
and for New Castle County, C.A. No. 17192NC, (x) The Xxxxx Family
Limited Partnership of California v. General Housewares Corp., et al.,
filed June, 1999, in The Court of Chancery of the State of Delaware in
and for Xxx Xxxxxx Xxxxxx, X.X. Xx. 00000XX and (y) Great Neck
Capital Appreciation Investment Partnership v. Xxxx X. Xxxxxx, et al.,
filed June, 1999, in The Court of the Chancery of the State of
Delaware in and for New Castle County, C.A. No. 17196NC, and (z)
Xxxxxx Xxxxx, et. al. v. Xxxx Xxxxxx, et. al, filed July 2, 1999, in
County Vigo, State of Indiana, C.A. No. 84D01-9907-CP-1104, and any
and all suits relating to the same underlying claims, other than
settlements of claims, complaints or proceedings not specified above
in the ordinary course of business and consistent with past practice
or not otherwise material to the Company and its subsidiaries taken as
a whole;
(xi) authorize any single or related group of capital
expenditures in excess of $200,000 (or $850,000 in the case of capital
expenditures relating to Oxo tooling) or capital expenditures which
are, in the aggregate, in excess of $1,200,000 for the Company and its
subsidiaries taken as a whole;
(xii) amend or modify in any material respect or
terminate any material existing IP License, execute any new material
IP License, sell, license or otherwise dispose of, in whole or in
part, any Company IP, and/or subject any Company IP to any material
Encumbrance;
(xiii) grant any material increases in the
compensation of any of its directors, officers or key employees, which
increases, for each such individual, shall not exceed ten percent
(10%) of each such individual's annual rate of compensation;
(xiv) pay or agree to pay any pension, retirement
allowance or other employee benefit not required by any of the
existing benefit, severance, termination, pension or employment plans,
agreements or arrangements as in effect on the date hereof to any
employee director or officer, whether past or present;
(xv) engage in any material transaction with, or enter
into any agreement, arrangement, or understanding with, directly or
indirectly, any of the Company's affiliates, other than the Company or
its wholly-owned subsidiaries, including, without limitation, any
transactions, agreements, arrangements, or understandings with any
affiliate or other person covered under Item 404 of Regulation S-K
under the Securities Act that would be required to be disclosed under
such Item 404;
(xvi) enter into any new or materially amend any
existing employment or severance or termination agreement with any
employee, director or officer;
(xvii) except as may be required to comply with
applicable law, become obligated under any new pension plan, welfare
plan, multiemployer plan, employee benefit plan, severance plan,
benefit arrangement, or similar plan or arrangement, which was not in
existence on the date hereof, or amend any such plan or arrangement in
existence on the date hereof if such amendment would have the effect
of enhancing any benefits thereunder;
(xviii) take or agree to take in writing or otherwise,
any action which would make any of the representations or warranties
of the Company contained in this Agreement untrue and incorrect in any
respect that would cause the condition in Section 7.2(a) not to be
satisfied;
(xix) authorize, recommend, propose or announce an
intention to do any of the foregoing, or enter into any contract,
agreement, commitment or arrangement to do any of the foregoing.
6.2 Acquisition Proposals.
(a) The Company shall not, and it shall cause its
subsidiaries, and their respective directors, officers, employees,
financial and other advisors, agents, representatives, affiliates and
others working on its behalf or at its direction (collectively, "Company
Representatives") not to, initiate, solicit, encourage or facilitate
offers, inquiries or proposals with respect to, or furnish any information
relating to or participate in any negotiations or discussions concerning,
any merger, reorganization, share exchange, consolidation, business
combination, recapitalization, liquidation, dissolution or similar
transaction involving the Company or any of its subsidiaries, or any
purchase or sale of more than 25% of the assets (including stock of
subsidiaries) of the Company and its subsidiaries, taken as a whole, or any
purchase or sale of, or tender or exchange offer for, more than 25% of the
equity securities of the Company or any of its subsidiaries (an
"Acquisition Proposal"), other than the transactions to be effected
pursuant to this Agreement.
(b) Notwithstanding Section 6.2(a), the Board of Directors of
the Company may, directly or indirectly through Company Representatives:
(x) furnish information concerning the Company and its subsidiaries to any
person with respect to an unsolicited Acquisition Proposal pursuant to an
appropriate confidentiality agreement with terms not substantially less
favorable in the aggregate to the Company than those contained in the
Confidentiality Agreement (as hereinafter defined in Section 6.4) and (y)
negotiate and participate in discussions and negotiations with such person
concerning an Acquisition Proposal, if in either case (x) or (y), such
person has submitted a Superior Proposal (as defined below) to the Company.
In addition, nothing herein shall restrict the Company Board of Directors
from, to the extent required, complying with its disclosure obligations
under Federal securities laws, including Rule 14d-9 and Rule 14e-2
promulgated under the Exchange Act with regard to an Acquisition Proposal,
subject to any rights of Parent to terminate this Agreement and receive
payment of any fee due under Article VIII as a result thereof. Neither the
Company nor any subsidiary of the Company will waive any provision of any
confidentiality or standstill or similar agreement to which it is a party
without the prior written consent of Parent; provided that if specifically
requested by an entity or group, the Company may waive the provisions of
any "standstill" agreements between the Company and any entity or group to
the extent necessary to permit such entity or group to submit an
Acquisition Proposal that the Board of Directors believes, in its good
faith judgment based on information contained in such specific request, is
reasonably likely to result in a Superior Proposal.
(c) The Company shall notify Parent promptly (and in any
event within one business day) of any inquiries, proposals or offers
received by, information requested from, or discussions or negotiations
sought to be initiated or continued with, it or any Company Representative
with respect to an Acquisition Proposal, indicating in each such notice the
name of such person and the material terms, conditions and other aspects of
any such inquiries, proposals, offers, requests, discussions or
negotiations, including a copy of any written Acquisition Proposal, and
shall promptly (and in any event within one business day) inform Parent of
any material developments with respect thereto. The Company agrees
immediately to cease and to cause to be terminated any activities,
discussions or negotiations conducted on or prior to the date of this
Agreement with any parties other than Parent with respect to any of the
foregoing.
(d) For purposes of this Agreement, a "Superior Proposal"
means a bona fide written Acquisition Proposal made by a third party after
the date hereof for which all necessary financing is committed in full or
reasonably likely to be obtained and which, if accepted, is reasonably
likely to be consummated and taking into account all legal, financial and
regulatory aspects of the proposal and the person making such proposal,
including the relative expected consummation date, is financially superior
to the holders of Company Common Stock than the Merger.
6.3 Reasonable Efforts.
(a) Subject to the terms and conditions herein provided, each of
the parties hereto shall use all reasonable efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement, including
using its reasonable efforts to obtain all necessary or appropriate
waivers, consents and approvals, to effect all necessary registrations,
filings and submissions (including, but not limited to, (i) filings under
the HSR Act and any other submissions requested by the Federal Trade
Commission or Department of Justice and (ii) such filings, consents,
approvals, orders, registrations and declarations as may be required under
the laws of any foreign country in which the Company or any of its
subsidiaries conducts any business or owns any assets) and to lift any
injunction or other legal bar to the Merger (and, in such case, to proceed
with the Merger as expeditiously as possible, subject to the other terms
and conditions hereof).
(b) Each of the parties hereto will keep the other party
apprised of the status of matters relating to the completion of the
transactions contemplated hereby. Subject to applicable laws relating to
the exchange of information, each of the Company and Parent shall have the
right to review in advance, and will consult with the other with respect
to, all information relating to the other party and each of their
respective subsidiaries, which appears in any waivers, consents, approvals,
orders, registrations, filings, submissions or declarations made with or
written materials submitted to any third party or government entity in
connection with the transactions contemplated by this Agreement. In
exercising the foregoing right, each of the parties hereto agrees to act
reasonably and as promptly as practicable.
(c) Notwithstanding the foregoing, the Company shall not be
obligated to use its reasonable efforts or take any action pursuant to this
Section 6.3 if in the opinion of the Board of Directors after consultation
with its counsel such actions would be inconsistent with its fiduciary
duties to the Company's stockholders under applicable law.
6.4 Access to Information. Upon reasonable notice, the Company
shall (and shall cause each of its subsidiaries to) afford to officers,
employees, counsel, accountants and other authorized representatives of
Parent ("Representatives"), in order to evaluate the transactions
contemplated by this Agreement, reasonable access, during normal business
hours and upon reasonable notice throughout the period prior to the
Effective Time, to its personnel, properties, books and records and, during
such period, shall (and shall cause each of its subsidiaries to) furnish
promptly to such Representatives all information concerning its business,
properties and personnel as may reasonably be requested, including, without
limitation, a copy of each report, schedule, registration statement and
other document filed by it or its subsidiaries pursuant to the requirements
of federal or state securities laws. Between the date of this Agreement
and the Effective Time, the Company shall provide Parent at the end of each
month with monthly financial statements in the form and at the time any
such statements are customarily provided for internal reporting purposes,
it being understood that such financial statements are for informational
purposes only and no representation is made with respect thereto. Parent
agrees that it will not, and will cause its Representatives not to, use any
information obtained pursuant to this Section 6.4 for any purpose unrelated
to the consummation of the transactions contemplated by this Agreement.
The Confidentiality Agreement, dated June 15, 1999 (the "Confidentiality
Agreement"), by and between the Company and Parent shall apply with respect
to information furnished by the Company, its subsidiaries and the Company's
officers, employees, counsel, accountants and other authorized
representatives hereunder. No investigation pursuant to this Section 6.4
or otherwise shall affect any representations or warranties of the parties
herein or the conditions to the obligations of the parties hereto.
6.5 Publicity. The parties will consult with each other and will
mutually agree upon any press releases or public announcements pertaining
to the Merger or the other transactions contemplated hereby and shall not
issue any such press releases or make any such public announcements prior
to such consultation and agreement, except as may be required by applicable
law or by obligations pursuant to any listing agreement with any national
securities exchange, in which case the party proposing to issue such press
release or make such public announcement shall use its reasonable efforts
to consult in good faith with and obtain the approval of the other party
before issuing any such press releases or making any such public
announcements.
6.6 Indemnification of Directors and Officers.
(a) The Certificate of Incorporation and By-Laws of the
Surviving Corporation shall contain the provisions with respect to
indemnification set forth in the Restated Certificate of Incorporation and
By-Laws of the Company on the date of this Agreement, which provisions
thereafter shall not be amended, repealed or otherwise modified in any
manner that would adversely affect the rights thereunder of individuals who
at any time prior to the Effective Time were directors or officers of the
Company in respect of actions or omissions occurring at or prior to the
Effective Time (including, without limitation, the transactions
contemplated by this Agreement), unless such modification is required by
law.
(b) Parent shall cause to be maintained in effect for the
Indemnified Parties (as defined below) for not less than six years the
current policies of directors' and officers' liability insurance and
fiduciary liability insurance maintained by the Company and the Company's
subsidiaries with respect to matters occurring at or prior to the Effective
Time (including, without limitation, the transactions contemplated by this
Agreement); provided, that Parent may substitute therefor policies of
substantially the same coverage containing terms and conditions which are
no less advantageous, in any material respect, to the Company's present or
former directors, officers, employees, agents or other individuals
otherwise covered by such insurance policies prior to the Effective Time
(the "Indemnified Parties") and provided, further, that in no event shall
Parent be required to expend in any one year an amount in excess of 150% of
the annual premiums currently paid by the Company for such insurance as set
forth on Schedule 6.6(b), although it shall be obligated to obtain a policy
with the greatest coverage available for a cost not exceeding such amount.
(c) This Section 6.6 is intended to benefit the Indemnified
Parties and shall be binding on all successors and assigns of Parent,
Newco, the Company and the Surviving Corporation. Parent hereby guarantees
the performance by the Surviving Corporation of the indemnification and
other obligations pursuant to this Section 6.6 and the Certificate of
Incorporation and By-laws of the Surviving Corporation.
6.7 Employees.
(a) For a period commencing at the Effective Time and ending
on December 31, 2000, Parent shall, or shall cause the Surviving
Corporation to, provide employee benefit plans, programs, arrangements and
policies (other than those related to equity securities of the Company) for
the benefit of employees of the Company and its subsidiaries that in the
aggregate are no less favorable to such employees than the Company Plans.
All service credited to each employee by the Company through the Effective
Time shall be recognized by Parent for all purposes, including for purposes
of eligibility, vesting and benefit accruals under any employee benefit
plan provided by Parent for the benefit of the employees.
(b) Individual Agreements. Parent shall cause the Surviving
Corporation to honor and assume the employment agreements, executive
termination agreements and individual benefit arrangements listed on
Schedule 6.7(b), all as in effect at the Effective Time.
6.8 Certain Financing Matters. The Company agrees to provide, and
will cause its subsidiaries and its and their respective officers,
employees and advisors to provide, all necessary cooperation reasonably
requested in connection with the arrangement of any financing to be
consummated contemporaneous with or at or after the Merger, including
without limitation any financing to be provided to the Company or any of
its subsidiaries by the Parent; provided, that the Company will not be
required to incur any out-of-pocket expenses or make any binding
commitments with respect thereto until after the consummation of the
Merger.
6.9 Notification of Certain Matters. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the
Company, of (a) the occurrence or non-occurrence of any event which causes
any representation or warranty of the Company or Parent and Newco, as the
case may be, contained in this Agreement to be untrue or inaccurate in any
material respect at or prior to the Effective Time and (b) any failure or
inability of the Company or Parent, as the case may be, to comply with or
satisfy in all material respects any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 6.9 shall not limit or
otherwise affect the remedies available hereunder to the party receiving
such notice.
6.10 Rights Agreement. The Company shall not amend, modify or
waive any provision of the Rights Agreement, and shall not take any action
to redeem the Rights or render the Rights inapplicable to any transaction
other than the transactions to be effected pursuant to this Agreement,
which is reasonably likely to reduce the likelihood of or delay the
consummation of the Merger, or result in any increase in the costs or
decrease in the benefits to Parent of the Merger, or affect the
capitalization of Parent or any of its affiliates after the Merger.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.1 Conditions to Each Party's Obligations to Effect the Merger.
The respective obligations of each party to effect the Merger are subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Stockholder Approval. This Agreement shall have been
duly adopted by the stockholders of the Company in accordance with
applicable law.
(b) Injunction. There shall not be in effect any law,
statute, rule, regulation, executive order, decree, ruling or injunction or
other order of a court or governmental or regulatory agency of competent
jurisdiction prohibiting or making illegal the transactions contemplated
herein.
(c) The applicable waiting period under the HSR Act shall
have expired or been terminated.
7.2 Conditions to the Company's Obligations to Effect the Merger.
The obligations of the Company to effect the Merger are subject to the
satisfaction at or prior to the Effective Time of the following additional
conditions:
(a) The representations and warranties of Parent and Newco
contained in this Agreement shall be true and correct (in all material
respects, in the case of representations and warranties not already
qualified as to materiality by their terms) at and as of the Effective Time
as though made on and as of such date (except (i) for changes specifically
permitted by this Agreement and (ii) that those representations and
warranties which address matters only as of a particular date shall remain
true and correct as of such date), and the Company shall have received a
certificate of the President or a Vice President of Parent to the foregoing
effect.
(b) Parent and Newco shall have performed and complied with
in all material respects their obligations under this Agreement to be
performed or complied with on or prior to the Effective Time, and the
Company shall have received a certificate of the President or a Vice
President of Parent to the foregoing effect.
7.3 Conditions to the Parent's and Newco's Obligations to Effect
the Merger. The obligations of Parent and Newco to effect the Merger are
subject to the satisfaction at or prior to the Effective Time of the
following additional conditions:
(a) The representations and warranties of the Company
contained in this Agreement shall be true and correct (in all material
respects, in the case of representations and warranties not already
qualified as to materiality by their terms) at and as of the Effective Time
as though made on and as of such date (except (i) for changes specifically
permitted by this Agreement and (ii) that those representations and
warranties which address matters only as of a particular date shall remain
true and correct as of such date), and the Parent shall have received a
certificate of the Chief Executive Officer of the Company to the foregoing
effect.
(b) The Company shall have performed and complied with in all
material respects its obligations under this Agreement to be performed or
complied with on or prior to the Effective Time, and Parent shall have
received a certificate of the Chief Executive Officer of the Company to the
foregoing effect.
(c) Governmental Filings and Consents. All governmental
consents, orders and approvals legally required for the consummation of the
Merger and the transactions contemplated hereby shall have been obtained
and be in effect at the Effective Time (including, but not limited to, such
approvals and consents as may be required under the laws of any foreign
country in which the Company or any of its subsidiaries conducts any
business or owns any assets), except where the failure to obtain any such
consent would not reasonably be expected to have a Material Adverse Effect
on the Company or a material adverse effect on the financial condition,
business, results of operations, assets or liabilities of Parent and its
subsidiaries, taken as a whole.
(d) There shall not be any action or proceeding brought or
threatened by any governmental entity seeking any executive order, decree,
ruling or injunction or other order of a court of governmental or
regulatory entity of competent jurisdiction which would have the effect of
prohibiting or making illegal any of the transactions contemplated herein.
(e) Rights Agreement. No Distribution Date or Stock
Acquisition Date (each as defined in the Rights Agreement) shall have
occurred.
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
8.1 Termination by Mutual Consent. This Agreement may be
terminated and the Merger may be abandoned at any time prior to the
Effective Time, by the mutual written consent of Parent and the Company.
8.2 Termination by Either Parent or the Company. This Agreement
may be terminated and the Merger may be abandoned by Parent or the Company
if (i) any court of competent jurisdiction in the United States or some
other governmental body or regulatory authority shall have issued an order,
decree or ruling or taken any other action permanently restraining,
enjoining or otherwise prohibiting the Merger and such order, decree,
ruling or other action shall have become final and nonappealable or (ii)
the Company Stockholder Approval shall not have been received at the
Stockholders Meeting duly called and held, or (iii) the Effective Time
shall not have occurred on or before November 30, 1999 (the "Termination
Date"), provided, however, that the right to terminate this Agreement
under this Section 8.2(iii) shall not be available to any party whose
failure to fulfill any obligations under this Agreement has been the
primary cause of the failure of the Effective Time to occur on or before
the Termination Date until ten business days after such failure has been
cured.
8.3 Termination by Parent. This Agreement may be terminated by
Parent prior to the Effective Time, if (i) the Company shall have failed to
perform in any material respect any of its material obligations under this
Agreement to be performed at or prior to such date of termination, which
failure to perform is not cured, or is incapable of being cured, within 30
days after the receipt by the Company of written notice of such failure,
(ii) any representation or warranty of the Company contained in this
Agreement shall not be true and correct (except for changes permitted by
this Agreement and those representations which address matters only as of a
particular date shall remain true and correct as of such date), except, in
any case, such failures to be true and correct as would not, individually
or in the aggregate, result in a failure of the condition set forth in
Section 7.3(a); provided, that such failure to be true and correct is not
cured, or is incapable of being cured, within 30 days after the receipt by
the Company of written notice of such failure, or (iii) the Board of
Directors of the Company withdraws or materially modifies or changes its
recommendation of this Agreement or the Merger in a manner adverse to
Parent or Newco or fails to reconfirm such recommendation if so requested
by Parent, within 10 business days following such request, or approves or
recommends another Acquisition Proposal.
8.4 Termination by the Company. This Agreement may be terminated
by the Company and the Merger may be abandoned at any time prior to the
Effective Time if (i) Newco or Parent shall have failed to perform in any
material respect any of their material obligations under this Agreement to
be performed at or prior to such date of termination, which failure to
perform is not cured, or is incapable of being cured, within 30 days after
the receipt by Parent of written notice of such failure, (ii) any
representation or warranty of the Company contained in this Agreement shall
not be true and correct (except for changes permitted by this Agreement and
those representations which address matters only as of a particular date
shall remain true and correct as of such date), except, in any case, such
failures to be true and correct would not, individually or in the
aggregate, result in a failure of the condition set forth in Section
7.2(a); provided, that such failure to be true and correct is not cured,
or is incapable of being cured, within 30 days after the receipt by Parent
of written notice of such failure or (iii) prior to the Company Stockholder
Approval, upon five business days' prior irrevocable written notice to
Parent, in order to accept an unsolicited Superior Proposal for which all
necessary financing is committed; provided, however, that (A) such notice
shall include a copy of any proposed or definitive documentation relating
to such Superior Proposal (including all financing documentation), and
shall otherwise specify all material terms, conditions and other
information with respect thereto, and (B) prior to any such termination,
the Company shall, if requested by Parent in connection with any revised
proposal Parent might make, negotiate in good faith for such five business
day period with Parent, and such third party proposal remains a Superior
Proposal after taking into account any revised proposal by Parent during
such five business day period; and provided, further, that it shall be a
condition to termination pursuant to this Section 8.4 (iii) that the
Company shall have made the payment of the fee to Parent required by
Section 8.5(b).
8.5 Effect of Termination.
(a) In the event of the termination and abandonment of this
Agreement pursuant to Article VIII, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party
hereto or its affiliates, directors, officers or stockholders, other than
the provisions of this Section 8.5 and the provisions of Section 9.1 and
the last two sentences of Section 6.4. Nothing contained in this Section
8.5 shall relieve any party from liability for any breach of this
Agreement.
(b) If:
(i) this Agreement is terminated by the Company
pursuant to Section 8.4(iii) hereof or by Parent pursuant to Section
8.3(iii) hereof, or
(ii) (A) this Agreement is terminated pursuant to
Sections 8.2(ii) or 8.3(i) and (B) a Third Party made a proposal
publicly or to the Company or expressed any interest publicly or to
the Company with respect to any Third Party Acquisition and (C) within
twelve months after any such termination, either (1) the Company
enters into an agreement with respect to any Third Party Acquisition,
which is later consummated or (2) any Third Party Acquisition occurs;
then the Company shall pay to Parent, within one business day following the
consummation of such Third Party Acquisition, or no later than concurrently
with any termination contemplated by Section 8.4(iii) above or within one
business day after a termination contemplated by Section 8.3(iii), a fee,
in cash and in immediately available funds, of $4.25 million (the
"Termination Fee"); provided, however, that the Company in no event shall
be obligated to pay more than one Termination Fee with respect to all such
agreements and occurrences and such termination.
"Third Party" means any person other than Parent, Newco or any
affiliate thereof.
"Third Party Acquisition" means any transaction contemplated by the
definition of "Acquisition Proposal" which, together with any related
transactions, would result in (i) the acquisition by any person of
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange
Act) of more than 50% of the Company Common Stock, (ii) the holders of
Shares immediately prior to such transaction(s) acquiring or holding
securities in respect of such Shares with less than 50% of the voting power
of the capital stock of the ultimate parent entity immediately following
consummation of such transaction(s), or (iii) the sale or other disposition
of more than 50% of the assets (including stock of subsidiaries) of the
Company and its subsidiaries, taken as a whole.
The Company acknowledges that the provisions contained in this Section
8.5(b) are an integral part of the transactions contemplated by this
Agreement, and that, without these provisions, Parent and Newco would not
enter into this Agreement.
8.6 Extension; Waiver. At any time prior the Effective Time, each
of Parent, Newco and the Company may (i) extend the time for the
performance of any of the obligations or other acts of the other party,
(ii) waive any inaccuracies in the representations and warranties of the
other party contained herein or in any document, certificate or writing
delivered pursuant hereto or (iii) waive compliance by the other party with
any of the agreements or conditions contained herein. Any agreement on the
part of either party hereto to any such extension or waiver shall be valid
only if set forth in any instrument in writing signed on behalf of such
party. The failure or delay of either party hereto to assert any of its
rights hereunder shall not constitute a waiver of such rights.
ARTICLE IX
MISCELLANEOUS AND GENERAL
9.1 Payment of Expenses. Whether or not the Merger shall be
consummated, each party hereto shall pay its own expenses incident to
preparing for, entering into and carrying out this Agreement and the
consummation of the transactions contemplated hereby, provided that the
Surviving Corporation shall pay, with funds of the Company and not with
funds provided by any of Parent Companies, any and all property or transfer
taxes imposed on the Surviving Corporation or any Gains Taxes.
9.2 Survival of Representations and Warranties; Survival of
Confidentiality. The representations and warranties made herein shall not
survive beyond the Effective Time. This Section 9.2 shall not limit any
covenant or agreement of the parties hereto which by its terms contemplates
performance after the Effective Time. The Confidentiality Agreement shall
survive any termination of this Agreement, and the provisions of such
Confidentiality Agreement shall apply to all information and material
delivered by any party hereunder.
9.3 Modification or Amendment. Subject to the applicable
provisions of the DGCL, at any time prior to the Effective Time, the
parties hereto may modify or amend this Agreement, by written agreement
executed and delivered by duly authorized officers of the respective
parties; provided, however, that after approval of this Agreement by the
stockholders of the Company, no amendment shall be made which by law
requires prior approval of the stockholders of the Company unless such
approval has been obtained.
9.4 Waiver of Conditions. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party
and may be waived by such party in whole or in part to the extent permitted
by applicable law.
9.5 Counterparts; Facsimile. For the convenience of the parties
hereto, this Agreement may be executed in any number of counterparts, each
such counterpart being deemed to be an original instrument, and all such
counterparts shall together constitute the same agreement. This Agreement
may be executed by facsimile signatures of the parties hereto.
9.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
giving effect to the principles of conflicts of law thereof.
9.7 Notices. Any notice, request, instruction or other document
to be given hereunder by any party to the other parties shall be in writing
and delivered personally or sent by registered or certified mail, postage
prepaid, or by facsimile transmission (with a confirming copy sent by
overnight courier), as follows:
(a) If to the Company, to
Xxxxxxx X. Xxxxx, Esq.
General Housewares Corp.
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
with a copy to:
Xxxxx X. Xxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx
& Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
(b) If to Parent or Newco, to
Xxxxxxx X. Xxxxxxx
CCPC Acquisition Corp.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopies
with a copy to:
Xxxxxxx X. Xxxxx, Xx.
Xxxxxx, Inc.
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxx 00000-0000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopies)
and a copy to:
Xxxxx X. Xxxxxx, Esq.
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (telecopier)
or to such other persons or addresses as may be designated in writing by
the party to receive such notice.
9.8 Entire Agreement; Assignment. This Agreement and the
Confidentiality Agreement constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all other prior
agreements and understandings, both written and oral, among the parties or
any of them with respect to the subject matter hereof. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties, except
that Newco may assign, in its sole discretion, any or all of its rights,
interests and obligations hereunder to Parent or to any affiliate of
Parent; provided, however, that no such assignment shall relieve Parent
from any of its obligations hereunder. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
9.9 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their respective
successors and assigns. Nothing in this Agreement, express or implied,
other than the right to receive the consideration payable in the Merger
pursuant to Article III hereof is intended to or shall confer upon any
other person any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement; provided, however, that the
provisions of Section 6.6 shall inure to the benefit of and be enforceable
by the Indemnified Parties.
9.10 Certain Definitions. As used herein:
(a) "Material Adverse Effect" shall mean (x) with respect to
the Company, any adverse change in the financial condition, business,
results of operations, assets or liabilities of the Company or any of its
subsidiaries, which is material to the Company and its subsidiaries, taken
as a whole, or excluding any changes or effects resulting from general
changes in economic conditions and (y) with respect to the Company or
Parent, any change, circumstance or event that would prevent, or materially
hinder or delay the consummation of the transactions contemplated by this
Agreement by such party and its subsidiaries. Whenever a statement herein
is qualified by, or includes a reference to, whether any facts, events or
circumstances have a Material Adverse Effect, all such facts, events or
circumstances so referenced shall be considered both individually and in
the aggregate, whether or not so expressly indicated in such statement.
(b) "subsidiary" shall mean, when used with reference to any
entity, any corporation a majority of the outstanding voting securities of
which are owned directly or indirectly by such former entity.
(c) "Taxes" shall mean all Federal, state, local and foreign
taxes, customs, duties or similar fees and other assessments of a similar
nature, (whether imposed directly or through withholding), including any
interest, additions to tax, or penalties applicable thereto.
9.11 Obligation of Parent. Whenever this Agreement requires Newco
to take any action, such requirement shall be deemed to include an
undertaking on the part of Parent to cause Newco to take such action and a
guarantee of the performance thereof.
9.12 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provisions of this Agreement, each of which shall remain in
full force and effect.
9.13 Captions. The Article, Section and paragraph captions herein
are for convenience of reference only, do not constitute part of this
Agreement and shall not be deemed to limit or otherwise affect any of the
provisions hereof.
9.14 Interpretation. When a reference is made in this Agreement
to Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Whenever the words "include", "includes" or
"including" are used in this Agreement they shall be deemed to be followed
by the words "without limitation". As used in this Agreement, the term
"business day" shall mean any day other than a Saturday, a Sunday, or a day
on which banking institutions in New York, New York are authorized or
obligated by law or executive order to close. As used in this Agreement,
the term "affiliate(s)" shall have the meaning set forth in Rule 12b-2 of
the Exchange Act. As used in this Agreement, the term "person" means an
individual, corporation, partnership, limited liability company,
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act).
9.15 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect 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
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order
that the transactions contemplated hereby may be consummated as originally
contemplated to the fullest extent possible.
9.16 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties
shall be entitled to the remedy of specific performance of the terms hereof
without the posting of any bond or security, in addition to any other
remedy at law or equity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective duly authorized officers as of the date
first above written.
GENERAL HOUSEWARES CORP.
By:/s/ Xxxx Xxxxxx
---------------------------------
Name: Xxxx Xxxxxx
Title: President and CEO
CCPC ACQUISITION CORP.
By:/s/ Xxxxxxx X.Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
Xxxxxx, Inc., a New Jersey corporation, hereby guarantees the obligations
of Parent and Newco under Article III of the attached Agreement and Plan of
Merger, dated as of August 2, 1999, between CCPC Acquisition Corp. and
General Housewares Corp. (as such terms are defined therein).
Dated as of August 2, 1999
XXXXXX, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
Title: Senior Vice President
