Exhibit 2.1
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
MOLEX INCORPORATED,
MLX ACQUISITION CORP.
and
WOODHEAD INDUSTRIES, INC.
June 30, 2006
TABLE OF CONTENTS
PAGE
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ARTICLE I THE OFFER............................................................1
1.1 The Offer......................................................1
1.2 Company Action.................................................3
1.3 Directors......................................................4
1.4 Top-Up Option..................................................5
ARTICLE II THE MERGER; EFFECTIVE TIME; CLOSING.................................6
2.1 The Merger......................................................
2.2 Effective Time.................................................6
2.3 Closing........................................................6
ARTICLE III SURVIVING CORPORATION..............................................7
3.1 Certificate of Incorporation...................................7
3.2 Bylaws.........................................................7
3.3 Directors......................................................7
3.4 Officers.......................................................7
3.5 Subsequent Actions.............................................7
ARTICLE IV MERGER CONSIDERATION; CONVERSION OR CANCELLATION
OF SHARES IN THE MERGER.............................................8
4.1 Share Consideration for the Merger; Conversion or Cancellation
of Shares in the Merger........................................8
4.2 Stockholders' Meeting; Proxy Statement.........................8
4.3 Merger Without Stockholders' Meeting...........................9
4.4 Payment for Shares in the Merger...............................9
4.5 Transfer of Shares After the Effective Time...................10
4.6 Dissenting Shares.............................................10
4.7 Stock Options.................................................11
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................12
5.1 Corporate Organization and Qualification......................12
5.2 Subsidiaries..................................................12
5.3 Capitalization................................................12
5.4 Authority Relative to This Agreement..........................13
5.5 Consents and Approvals; No Violation..........................13
5.6 SEC Reports; Financial Statements.............................14
5.7 Absence of Certain Changes or Events..........................15
5.8 Litigation....................................................16
5.9 Offer Documents; Schedule 14D-9; Proxy Statement..............16
5.10 Taxes.........................................................16
5.11 Employee Benefit Plans........................................17
5.12 Compliance with Law; Environmental Laws and Regulations.......19
5.13 Intangible Property...........................................20
5.14 Labor Matters.................................................21
5.15 Properties....................................................21
5.16 Insurance.....................................................22
5.17 Material Contracts............................................22
5.18 Customers and Suppliers.......................................23
5.19 Affiliate Transactions........................................23
5.20 Brokers and Finders...........................................23
5.21 Opinion of Financial Advisor..................................23
5.22 Expiration of Rights Agreement................................24
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.............24
6.1 Corporate Organization and Qualification......................24
6.2 Authority Relative to This Agreement..........................24
6.3 Consents and Approvals; No Violation..........................24
6.4 Proxy Statement; Schedule 14D-9 ..............................25
6.5 Financing.....................................................25
6.6 Interim Operations of Purchaser...............................25
6.7 Share Ownership...............................................25
6.8 Brokers and Finders...........................................25
ARTICLE VII ADDITIONAL COVENANTS AND AGREEMENTS...............................26
7.1 Conduct of Business of the Company............................26
7.2 No Solicitation...............................................28
7.3 Commercially Reasonable Efforts; Cooperation..................32
7.4 Access to Information.........................................33
7.5 Publicity.....................................................34
7.6 Indemnification of Directors and Officers.....................34
7.7 Employees.....................................................35
7.8 Notification of Certain Matters...............................36
7.9 Takeover Laws.................................................36
7.10 Litigation Matters............................................36
ARTICLE VIII CONDITIONS TO CONSUMMATION OF THE MERGER.........................36
8.1 Conditions to Each Party's Obligations to Effect the Merger...36
ARTICLE IX TERMINATION; AMENDMENT; WAIVER.....................................36
9.1 Termination by Mutual Consent.................................37
9.2 Termination by Either Parent or the Company...................37
9.3 Termination by Parent.........................................37
9.4 Termination by the Company....................................38
9.5 Effect of Termination
9.6 Extension; Waiver.............................................39
ARTICLE X MISCELLANEOUS AND GENERAL...........................................39
10.1 Payment of Fees and Expenses..................................39
10.2 Non-Survival of Representations and Warranties;
Survival of Confidentiality...................................40
10.3 Modification or Amendment.....................................40
10.4 Waiver of Conditions..........................................40
10.5 Counterparts..................................................40
10.6 Governing Law.................................................41
10.7 Jurisdiction..................................................41
10.8 Notices.......................................................41
10.9 Entire Agreement; Assignment..................................42
10.10 Parties in Interest...........................................42
10.11 Certain Definitions...........................................42
10.12 Schedules.....................................................46
10.13 Obligation of Parent..........................................46
10.14 Specific Performance..........................................46
10.15 Validity......................................................46
10.16 Captions......................................................46
ANNEX A Conditions to the Offer...........................................A-1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of June 30,
2006, by and among Molex Incorporated, a Delaware corporation ("Parent"), MLX
Acquisition Corp. Acquisition Corp., a Delaware corporation and a direct wholly
owned subsidiary of Parent ("Purchaser"), and Woodhead Industries, Inc., a
Delaware corporation (the "Company").
RECITALS
WHEREAS, the Board of Directors (the "Board") of the Company has,
subject to the conditions of this Agreement, determined that each of the Offer
and the Merger (each as defined below) is in the best interests of the
stockholders of the Company and approved and adopted this Agreement and the
Transactions contemplated hereby in accordance with the Delaware General
Corporation Law, as amended (the "DGCL") and such approval by the Board of the
Offer and the Merger constituted the approvals required by Section 203(a)(1) of
the DGCL and Articles Eleventh and Fourteenth of the Company's certificate of
incorporation; and
WHEREAS, in furtherance thereof, it is proposed that Purchaser shall
make a tender offer (the "Offer") to acquire all of the issued and outstanding
shares of common stock, par value $1.00 per share, of the Company (the
"Shares"), at a price of $19.25 per Share (such amount, or any greater amount
per share paid pursuant to the Offer, being hereinafter referred to as the "Per
Share Amount"), net to the seller in cash, in accordance with the terms and
subject to the conditions of this Agreement; and
WHEREAS, the Board has unanimously approved the making of the Offer and
resolved to recommend that holders of Shares tender their Shares pursuant to the
Offer; and
WHEREAS, as a condition and inducement to Parent and Purchaser entering
into this Agreement and incurring the obligations set forth herein, the Company,
is granting to Purchaser a Top-Up Option (as hereinafter defined) to purchase
Shares in certain circumstances upon the terms and subject to the conditions set
forth herein; and
WHEREAS, Parent, Purchaser and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger; and
WHEREAS, the definitions of certain capitalized terms used herein are
set forth in Section 10.11 hereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, Parent,
Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
1.1 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Article IX and none of the events or conditions set forth in
Annex A hereto shall have occurred and be existing, Purchaser shall commence
(within the meaning of Rule 14d-2(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) the Offer as promptly as reasonably practicable
(and in any event within five Business Days) after the date hereof. The
obligation of Purchaser to commence the Offer shall be subject only to the
conditions set forth in Annex A hereto, and the obligation of Purchaser to
accept for payment, purchase and pay for Shares tendered pursuant to the Offer
shall be subject to the satisfaction of each of the conditions set forth in
Annex A hereto and to the further condition that a number of Shares representing
not less than a majority of the Shares then outstanding on a fully diluted basis
shall have been validly tendered and not withdrawn prior to the expiration date
of the Offer (the "Minimum Condition" and together with the other conditions set
forth in Annex A, collectively, the "Offer Conditions"). For purposes of this
Agreement, "fully diluted basis" means issued and outstanding Shares and Shares
subject to issuance assuming the exercise of all options, warrants, rights and
convertible securities outstanding at the time of acceptance for payment of the
Shares in the Offer. Purchaser expressly reserves the right to waive any Offer
Condition, to increase the Per Share Amount and to make any other changes in the
terms and conditions of the Offer; provided, that unless previously approved by
the Company in writing, no change in the Offer may be made which (i) decreases
the Per Share Amount payable in the Offer, (ii) changes the form of
consideration to be paid in the Offer, (iii) reduces the maximum number of
Shares sought to be purchased in the Offer or the Minimum Condition, (iv)
imposes conditions to the Offer in addition to those set forth in Annex A hereto
or which modifies the conditions set forth in Annex A (other than to waive any
such condition to the extent permitted by the Merger Agreement), or (v) amends
any other term of the Offer in a manner adverse to the holders of the Shares.
Subject to the terms of the Offer and this Agreement and to the prior
satisfaction or waiver by Parent or Purchaser of each of the Offer Conditions as
of any expiration date of the Offer, Purchaser shall, and Parent shall cause
Purchaser to, pay for all Shares validly tendered and not properly withdrawn
pursuant to the Offer that Purchaser becomes obligated to purchase pursuant to
the Offer as soon as practicable after the expiration of the Offer. The Offer
shall initially be open for a period of twenty (20) consecutive Business Days
and shall initially be scheduled to expire at 12:00 midnight, Eastern time,
immediately following the twentieth Business Day of such period (the "Initial
Expiration Time"). Notwithstanding the foregoing, (i) Purchaser may, in its sole
discretion and without the consent of the Company, (x) extend the Offer for one
or more periods if, at the Initial Expiration Time or subsequent expiration time
related to an extension of the Offer, any of the Offer Conditions shall not have
been satisfied or waived; provided that no such extension or extensions shall
occur after the Termination Date; (y) extend the Offer for any period required
by any rule, regulation, interpretation or provision of the SEC or the staff
thereof applicable to the Offer, and/or (z) extend the Offer for an aggregate
period of not more than 10 Business Days beyond the latest expiration date that
would otherwise be permitted (but not after the Termination Date) under clause
(x) or (y) of this sentence if there shall not have been tendered and not
withdrawn pursuant to the Offer at least 90% of the outstanding Shares or if
there has been a commencement of a war or other international or national
calamity (including terrorist activity) directly involving the United States and
(ii) if, as of the Initial Expiration Time or subsequent expiration time related
to an extension of the Offer, any of the events set forth in clauses (a), (b) or
(d) of Annex A shall have occurred and be continuing (and the condition in Annex
A with respect to the applicable clause shall not have been waived by Purchaser)
then, subject to the right of Parent and Purchaser to terminate this Agreement
in accordance with its terms, Purchaser shall be required to extend the Offer
unless such conditions could not reasonably be expected to be waived or
satisfied by the Termination Date. In addition, Purchaser may (and, if the
Company so requests, Purchaser shall, and Parent shall cause Purchaser to)
provide a "subsequent offering period" in accordance with Rule 14d-11 under the
Exchange Act, and, if applicable and to the extent permitted under such Rule
14d-11, extend such subsequent offering period.
(b) As soon as reasonably practicable on the date of commencement of
the Offer, Purchaser shall file with the SEC, pursuant to Regulation M-A under
the Exchange Act ("Regulation M-A") a Tender Offer Statement on Schedule TO
(together with all amendments and supplements thereto, the "Schedule TO") with
respect to the Offer. The Schedule TO will comply in all material respects with
the applicable provisions of federal securities laws and will include the
summary term sheet required under Regulation M-A and, as exhibits, the offer to
purchase (the "Offer to Purchase") and the related letter of transmittal (such
Schedule TO and such documents included therein pursuant to which the Offer will
be made, together with any supplements or amendments thereto, the "Offer
Documents"). Parent, Purchaser and the Company each agree to promptly correct
any information provided by them for use in the Offer Documents if and to the
extent that it shall have become false or misleading in any material respect and
to correct any material omissions, and Purchaser further agrees to take all
steps necessary to cause the Offer Documents as so corrected to be filed with
the SEC and to be disseminated to holders of Shares, in each case as and to the
extent required by applicable federal securities laws. The Company and its
counsel shall be given an opportunity to review and comment upon the Offer
Documents and any amendments thereto prior to the filing thereof with the SEC,
and Parent and Purchaser shall give consideration to all the additions,
deletions or changes suggested thereto by the Company and its counsel. Parent
and Purchaser agree to provide to the Company and its counsel any comments or
other communications which Parent, Purchaser or their counsel may receive from
the SEC with respect to the Offer Documents promptly after the receipt thereof,
and any responses thereto. The Company and its counsel shall be given a
reasonable opportunity to review any such written responses, and Parent and
Purchaser shall give consideration to all additions, deletions or changes
suggested thereto by the Company and its counsel.
1.2 Company Action.
(a) The Company hereby approves of and consents to the Offer and
represents that the Board of Directors, at a meeting duly called and held, has,
subject to the terms and conditions set forth herein, unanimously (i) determined
that this Agreement and the transactions contemplated hereby, including the
Offer, the Merger (as defined in Section 2.1) and the Top-Up Option (as defined
in Section 1.4) (collectively, the "Transactions") are fair to, and in the best
interests of, the holders of Shares; (ii) approved, adopted and declared
advisable this Agreement and the Transactions (such approval and adoption having
been made in accordance with the DGCL) and that such approval constitutes
approval of this Agreement and the Transactions for purposes of (A) Section 203
of the DGCL, (B) Article Eleventh, paragraph (d)(i) of the Company's certificate
of incorporation, and (C) Article Fourteenth, paragraph (b)(i) of the Company's
certificate of incorporation; and (iii) resolved to recommend that the
stockholders of the Company accept the Offer, tender their Shares thereunder to
Purchaser and approve and adopt this Agreement and the Merger. The Company
hereby consents to the inclusion in the Offer Documents of the recommendation
and approval of the Board described in the immediately preceding sentence, and
the Company shall not withdraw or modify such recommendation in any manner
adverse to Purchaser or Parent except as permitted by Section 7.2(c). The
Company has been advised by its directors and executive officers that they
intend to tender all Shares beneficially owned by them to Purchaser pursuant to
the Offer.
(b) The Company hereby agrees to file with the SEC as soon as
reasonably practicable on the date of commencement of the Offer a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments or supplements thereto, the "Schedule 14D-9") containing, except as
permitted by Section 7.2(c), the recommendation described in Section
1.2(a)(iii). The Schedule 14D-9 will comply in all material respects with the
applicable provisions of federal securities laws. Each of the Company, Parent
and Purchaser agrees to promptly correct any information provided by them for
use in the Schedule 14D-9 if and to the extent that such information shall have
become false or misleading in any material respect and to correct any material
omissions, and the Company further agrees to take all steps necessary to cause
the Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to
the holders of Shares, in each case as and to the extent required by applicable
federal securities laws. Parent, Purchaser and their counsel shall be given an
opportunity to review and comment upon the Schedule 14D-9 and any amendments
thereto prior to the filing thereof with the SEC, and the Company shall give
consideration to all the additions, deletions or changes suggested thereto by
Parent, Purchaser or their counsel. The Company shall provide to Parent,
Purchaser and their counsel any comments or other communications which the
Company may receive from the SEC with respect to the Schedule 14D-9 promptly
after receipt thereof, and any responses thereto. Parent, Purchaser and their
counsel shall be given a reasonable opportunity to review any such responses,
and the Company shall give consideration to all additions, deletions or changes
suggested thereto by Parent, Purchaser or their counsel.
(c) In connection with the Offer, the Company will promptly furnish or
cause the transfer agent for the Shares to furnish Parent and Purchaser with
mailing labels, security position listings and any available listing or computer
files containing the names and addresses of the record holders of the Shares as
of a recent date, and shall promptly furnish Purchaser with such additional
information and assistance (including, without limitation, updated lists of
stockholders, mailing labels and lists of securities positions) as Purchaser or
its agents may reasonably request in communicating the Offer to the record and
beneficial holders of Shares. Subject to the requirements of applicable Law, and
except for such steps as are necessary to disseminate the Offer Documents and
any other documents necessary to consummate the Offer or the Merger and any
other Transactions contemplated by this Agreement, Parent, Purchaser and their
affiliates, associates, agents and advisors shall hold in confidence the
information contained in any such labels, listings and files, shall use such
information only in connection with the Transactions, and, if this Agreement
shall be terminated, will deliver to the Company all copies of, and any extracts
from or summaries of, such information then in their possession.
1.3 Directors.
(a) Promptly upon the purchase of and payment for any Shares by Parent
or Purchaser pursuant to the Offer (provided that the Minimum Condition is
satisfied), Parent shall be entitled to designate such number of directors,
rounded to the nearest whole number, on the Board as is equal to the product of
the total number of directors on the Board (giving effect to the directors
designated by Parent pursuant to this sentence) multiplied by the percentage
that the number of Shares so accepted for payment bears to the total number of
Shares then outstanding; provided, however, that Parent shall be entitled to
designate at least a majority of the directors on the Company Board (as long as
Parent and its Affiliates beneficially own a majority of the Common Shares of
the Company). In furtherance of Parent's rights under this Section 1.3, the
Company shall, upon Parent or Purchaser's request, use all reasonable efforts
promptly either to increase the size of the Board or to secure the resignations
of such number of its incumbent directors, or both, as is necessary to enable
Parent's designees to be so elected to the Board, and shall take all actions
available to the Company to cause Parent's designees to be so elected. At such
time, the Company shall also upon Parent's request cause Persons designated by
Parent (provided that any designees to the Audit Committee comply with the Audit
Committee Requirements (as defined below)) to have appropriate (and not less
than a majority so long as Parent and its Affiliates beneficially own a majority
of the Shares) representation on (i) each committee of the Board, (ii) each
board of directors (or similar body) of each Subsidiary and (iii) each committee
(or similar body) of each such board. The Company shall promptly take all
actions required pursuant to Section 14(f) of the Exchange Act and Rule 14f-1
promulgated thereunder in order to fulfill its obligations under this Section
1.3, including mailing to stockholders (as part of the Schedule 14D-9 or
otherwise) the information required by such Section 14(f) and Rule 14f-1 as is
necessary to enable Parent's designees to be elected to the Board (provided that
Purchaser shall have provided to the Company on a timely basis all information
required to be included with respect to Purchaser's designees). The provisions
of this Section 1.3 are in addition to and shall not limit any rights which
Purchaser, Parent or any of their affiliates may have as a holder or beneficial
owner of Shares as a matter of law with respect to the election of directors or
otherwise.
(b) In the event that Parent's designees are elected to the Board,
until the Effective Time (as defined below), the Board shall have at least three
directors who are directors on the date of this Agreement and who are not
officers of the Company (the "Original Directors") and at least three Original
Directors shall serve on the Audit Committee of the Board such that such Audit
Committee complies with all requirements of the SEC and the Nasdaq Stock Market
applicable thereto (collectively, the "Audit Committee Requirements"); provided
that, in such event, if the number of Original Directors is reduced below three
for any reason whatsoever, any remaining Original Directors (or Original
Director, if there be only one remaining) shall be entitled to designate Persons
who satisfy the Audit Committee Requirements to fill such vacancies who shall be
deemed to be Original Directors for purposes of this Agreement or, if no
Original Director then remains, the other directors shall designate three
Persons (who shall not be officers or affiliates of the Company) to fill such
vacancies who shall not be stockholders, affiliates or associates of Parent or
Purchaser, and such Persons shall be deemed to be Original Directors for
purposes of this Agreement. Notwithstanding anything in this Agreement to the
contrary, if Parent's designees are elected to the Board before the Effective
Time, the affirmative vote of a majority of the Original Directors shall be
required for the Company to (a) amend or terminate this Agreement or agree or
consent to any amendment or termination of this Agreement, (b) exercise or waive
any of the Company's rights, benefits or remedies hereunder, or (c) take any
other action by the Board under or in connection with this Agreement.
1.4 Top-Up Option.
(a) The Company hereby grants to Purchaser an irrevocable option, for
so long as this Agreement has not been terminated pursuant to the provisions
hereof (the "Top-Up Option") to purchase that number of Shares (the "Top-Up
Option Shares") equal to the lowest number of Shares that, when added to the
number of Shares owned by Parent and Purchaser at the time of such exercise,
shall constitute one Share more than 90% of the then outstanding Shares
(determined on a fully diluted basis and assuming the issuance of the Top-Up
Option Shares), at a price per share equal to the Per Share Amount.
(b) The Top-Up Option shall become exercisable upon Purchaser's
acceptance for payment and payment for Shares pursuant to the Offer (the
"Purchase Date") if Parent and Purchaser do not then own 90% of the then
outstanding Shares (determined on a fully diluted basis). The Top-Up Option
shall be exercisable in whole and not in part and may be exercised only once and
only during the ten Business Day period after the Purchase Date; provided,
however, that notwithstanding anything in this Agreement to the contrary the
Top-Up Option shall not be exercisable and shall terminate on the Purchase Date
if (i) the issuance of the Top-Up Option Shares would require stockholder
approval under the rules of the Nasdaq Stock Market, or (ii) the number of
Top-Up Option Shares would exceed the number of authorized but unissued shares
of Common Stock; and, provided, further, that the Top-Up Option shall terminate
upon the first to occur of (x) the Effective Time; (y) the termination of this
Agreement in accordance with its terms, and (z) 5:00 p.m. Central Time on the
date that is ten Business Days after the Purchase Date.
(c) In the event Purchaser wishes to exercise the Top-Up Option,
Purchaser shall so notify the Company in writing, and shall set forth in such
notice (i) the number of shares of Common Stock that will be owned by Parent and
Purchaser immediately preceding the purchase of the Top-Up Option Shares and
(ii) the place and time for the closing of the purchase of the Top-Up Option
Shares, which shall not be more than five (5) Business Days after delivery of
such notice (the "Top-Up Closing"). The Company shall, as soon as practicable
following receipt of such notice, notify Parent and Purchaser in writing of the
number of shares of Common Stock then outstanding and the number of Top-Up
Option Shares. At the Top-Up Closing, Purchaser shall pay the Company the
aggregate price required to be paid for the Top-Up Option Shares by wire
transfer of same day funds to a bank account designated by the Company and the
Company shall cause to be issued to Purchaser a certificate representing the
Top-Up Option Shares.
(d) Parent and Purchaser understand that the Company Common Stock which
Purchaser may acquire upon exercise of the Top-Up Option will not be registered
under the Securities Act and will be issued in reliance upon an exemption
thereunder for transactions not involving a public offering. Purchaser agrees
that the Top-Up Option and the Top-Up Option Shares to be acquired upon exercise
of the Top-Up Option are being and will be acquired by Purchaser for the purpose
of investment and not with a view to or for resale in connection with any
distribution thereof within the meaning of the Securities Act.
(e) Certificates evidencing Top-Up Option Shares delivered hereunder
may, at the Company's election, contain the following legend: "The Shares
represented by this certificate have not been registered under the Securities
Act of 1933 and may not be sold, pledged or otherwise transferred except in
accordance with the registration requirements of the Securities Act of 1933 or
any exemption therefrom."
ARTICLE II
THE MERGER; EFFECTIVE TIME; CLOSING
2.1 The Merger. Upon the terms and subject to the satisfaction or, if
permissible, waiver of the conditions set forth in Article VIII hereof, and in
accordance with the applicable provisions of this Agreement and the DGCL, at the
Effective Time (as defined in Section 2.2), the Company and Purchaser shall
consummate a merger (the "Merger") pursuant to which (a) Purchaser shall be
merged with and into the Company and the separate corporate existence of
Purchaser shall thereupon cease, (b) the Company shall be the successor or
surviving corporation (the "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 and franchises shall continue unaffected by the Merger. The
Merger shall have the effects set forth in Section 259 of the DGCL.
2.2 Effective Time. As promptly as practicable after the satisfaction
or, if permissible, waiver of the conditions set forth in Article VIII, Parent,
Purchaser and the Company will cause an appropriate certificate of merger, or,
if permitted, a certificate of ownership and merger (the "Certificate of
Merger") to be executed and filed on the date of the Closing (as defined in
Section 2.3) (or on such other date as Parent and the Company may agree) with
the Secretary of State of Delaware in such form as is required by, and executed
in accordance with, the relevant provisions of the DGCL. The Merger shall become
effective on the date and at the time on which the Certificate of Merger has
been duly filed with the Secretary of State of the State of Delaware, or at such
later date and time as is agreed upon by Parent, Purchaser and the Company and
specified in the Certificate of Merger, and such date and time is hereinafter
referred to as the "Effective Time."
2.3 Closing. Prior to the filing of the Certificate of Merger, a
closing (the "Closing") shall take place (a) at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, 000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx, or at such
other place as Parent and the Company may agree, on a date no later than the
second Business Day following the date on which the last of the conditions set
forth in Article VIII hereof shall be fulfilled or waived in accordance with
this Agreement or at such other time as Parent and the Company may agree. The
date on which the Effective Time occurs is sometimes referred to herein as the
"Closing Date."
ARTICLE III
SURVIVING CORPORATION
3.1 Certificate of Incorporation. The certificate of incorporation of
Purchaser, as in effect immediately prior to the Effective Time, shall be the
certificate of incorporation of the Surviving Corporation, until thereafter
amended as provided by Law and such certificate of incorporation; provided,
however, that, at the Effective Time, Article I of the certificate of
incorporation of the Surviving Corporation shall be amended to read as follows:
"The name of the corporation is Woodhead Industries, Inc."
3.2 Bylaws. The bylaws of Purchaser, as in effect immediately prior to
the Effective Time, shall be the bylaws of the Surviving Corporation until
thereafter amended as provided by Law and such bylaws.
3.3 Directors. The directors of Purchaser 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 bylaws.
3.4 Officers. The Persons designated in writing by Parent prior to 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
bylaws.
3.5 Subsequent Actions. If at any time after the Effective Time the
Surviving Corporation shall determine, in its sole discretion, or shall be
advised, that any deeds, bills of sale, assignments, assurances or any other
actions or things are necessary or desirable to vest, perfect or confirm of
record or otherwise in the Surviving Corporation its right, title or interest
in, to or under any of the rights, properties or assets of either of the Company
or Purchaser acquired or to be acquired by the Surviving Corporation as a result
of, or in connection with, the Merger or otherwise to carry out this Agreement,
then the officers and directors of the Surviving Corporation shall be authorized
to execute and deliver, in the name and on behalf of either the Company or
Purchaser, all such deeds, bills of sale, instruments of conveyance, assignments
and assurances and to take and do, in the name and on behalf of each of such
corporations or otherwise, all such other actions and things as may be necessary
or desirable to vest, perfect or confirm any and all right, title or interest
in, to and under such rights, properties or assets in the Surviving Corporation
or otherwise to carry out this Agreement.
ARTICLE IV
MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF
SHARES IN THE MERGER
4.1 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 the holders of any Shares or other capital stock of
the Company or the holders of any capital stock of Purchaser:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than Shares to be canceled pursuant to Section 4.1(b) and
any Dissenting Shares (as hereinafter defined), shall, by virtue of the Merger
and without any action on the part of Purchaser, the Company or the holder
thereof, be cancelled and extinguished and converted into the right to receive,
pursuant to Section 4.4, the Per Share Amount in cash (the "Merger
Consideration"), payable to the holder thereof, without interest thereon, less
any required withholding of Taxes, upon the surrender, in the manner provided in
Section 4.4, of the certificate that formerly evidenced such Share.
(b) At the Effective Time, each Share issued and outstanding and owned
by any of the Purchaser, Parent or any of Parent's direct or indirect
wholly-owned subsidiaries (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
(if applicable), be cancelled and retired without payment of any consideration
therefor and cease to exist.
(c) At the Effective Time, each share of common stock of Purchaser
issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued, fully paid and
nonassessable share of common stock of the Surviving Corporation.
4.2 Stockholders' Meeting; Proxy Statement.
(a) The Company, acting through the Board of Directors, shall, if
required by applicable Law to consummate the Merger, in accordance with
applicable Law and the Company's certificate of incorporation and bylaws: (i)
duly call, give notice of, convene and hold a special meeting of its
stockholders (the "Stockholders Meeting"), to be held as soon as reasonably
practicable after Purchaser shall have purchased Shares pursuant to the Offer,
for the purpose of considering and taking action upon this Agreement and the
Merger contemplated hereby; (ii) except to the extent permitted by Section
7.2(c), include in the Proxy Statement (as defined below), and not subsequently
withdraw or modify in any manner adverse to Purchaser or Parent, the
recommendation of the Board that stockholders of the Company vote in favor of
the approval and adoption of this Agreement and the Merger; and (iii) use all
reasonable efforts consistent with their fiduciary duties to solicit from
stockholders of the Company proxies in favor of the Merger and take all other
reasonable action necessary or, in the reasonable opinion of Parent, advisable
to secure any vote of stockholders required by the DGCL to effect the Merger. At
such Stockholders Meeting, Parent, Purchaser and their affiliates will vote all
Shares owned by them in favor of approval and adoption of this Agreement and the
Merger.
(b) If approval of the Company's stockholders is required by applicable
Law to consummate the Merger following consummation of the Offer (and the Top-Up
Option shall not have been exercised), the Company shall as promptly as
practicable file the Proxy Statement with the SEC under the Exchange Act, and
shall use all reasonable efforts to have the Proxy Statement cleared by the SEC.
Parent, Purchaser and the Company shall cooperate with each other in the
preparation of the Proxy Statement, and the Company shall promptly notify Parent
of the receipt of any comments of the SEC with respect to the Proxy Statement
and of any requests by the SEC for any amendment or supplement thereto or for
additional information and shall provide to Parent promptly copies of all
correspondence between the Company or any representative of the Company and the
SEC. The Company shall give Parent and its counsel the opportunity to review and
comment upon the Proxy Statement, including all amendments and supplements
thereto, prior to its being filed with the SEC and shall give Parent and its
counsel the opportunity to review and comment upon all responses to requests for
additional information and replies to comments prior to their being filed with,
or sent to, the SEC. The Company shall give consideration to all additions,
deletions or changes suggested thereto by Parent, Purchaser or their counsel.
Each of the Company, Parent and Purchaser agrees to use all reasonable efforts,
after consultation with the other parties hereto, to respond promptly to all
such comments of and requests by the SEC and to cause the Proxy Statement and
all required amendments and supplements thereto to be mailed to the holders of
Shares entitled to vote at the Stockholders Meeting at the earliest practicable
time.
(c) If at any time prior to the Stockholders Meeting any event or
circumstance relating to the Company or any Subsidiary, or their respective
officers or directors, should be discovered by the Company that is required to
be set forth in an amendment or a supplement to the Proxy Statement in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, the Company shall promptly inform Parent and file such
amendment or supplement with the SEC.
4.3 Merger Without Stockholders' Meeting. Notwithstanding Section 4.2,
if the Parent Companies shall acquire or otherwise own, in the aggregate,
Shares entitled to at least 90% of the votes entitled to be cast on the Merger
(including any Shares acquired pursuant to Section 1.4), the parties hereto
agree, subject to satisfaction or (to the extent permitted hereunder) waiver of
all conditions to the Merger, to take all necessary and appropriate action to
cause the Merger to be effective as soon as practicable after the acceptance
for payment and purchase of and payment for Shares pursuant to the Offer
without the Stockholders Meeting, in accordance with Section 253 of the DGCL.
4.4 Payment for Shares in the Merger. The manner of making payment for
Shares in the Merger shall be as follows:
(a) Prior to the Effective Time, Parent shall designate a bank or trust
company reasonably acceptable to the Company to act as agent (the "Paying
Agent") for the holders of Shares to receive the funds to which holders of
Shares shall become entitled pursuant to Section 4.1(a). Prior to the Effective
Time, Parent shall deliver to the Paying Agent for the benefit of the holders of
Shares, the funds necessary to make the payments contemplated by Section 4.1(a)
(the "Exchange Fund"). The Paying 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. The Exchange Fund shall
be invested by the Paying Agent as directed by Parent or the Surviving
Corporation, in its sole discretion, pending payment thereof by the Paying Agent
to the holders of the Shares; provided that such investments shall be limited to
direct obligations of the United States of America, obligations for which the
full faith and credit of the United States of America is pledged to provide for
the payment of principal and interest, commercial paper rated of the highest
quality by Xxxxx'x Investors Services, Inc. or Standard & Poor's Corporation, or
certificates of deposit issued by a commercial bank having at least $1 billion
in assets. Earnings from such investments shall be the sole and exclusive
property of Parent and the Surviving Corporation, and no part of such earnings
shall accrue to the benefit of holders of Shares.
(b) As soon as reasonably practicable after the Effective Time, the
Paying Agent shall mail to each holder of record (other than holders of
certificates for Shares referred to in Section 4.1(b)) 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 Paying Agent) and (ii) instructions for use in effecting the surrender of
the Certificates for payment therefor. Upon surrender of Certificates for
cancellation to the Paying Agent, together with such letter of transmittal duly
completed and validly executed in accordance with the instructions thereto, and
any other required documents, the holder of such Certificates shall be entitled
to receive for each of the Shares formerly 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. If payment is to be made to a Person other than the Person in whose
name a Certificate so surrendered is registered on the stock transfer books of
the Company, 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 Paying 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 Paying Agent that such Tax has been paid or is not
applicable. In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and, if required by Parent, the
posting by such Person of a bond in customary amount and upon such terms as may
be required by Parent as indemnity against any claim that may be made against it
or the Surviving Corporation with respect to such Certificate, the Paying Agent
will pay the Merger Consideration in respect of such lost, stolen or destroyed
Certificate. Until surrendered in accordance with the provisions of this Section
4.4(b), each Certificate (other than Certificates formerly representing Shares
referred to in Section 4.1(b)) shall represent for all purposes only the right
to receive, for each Share formerly represented thereby, the Merger
Consideration, without interest thereon, less any required withholding of taxes.
(c) At any time following the date that is nine months after the
Effective Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it any funds which had been made available to the
Paying Agent and not disbursed to holders of Shares (including, without
limitation, all interest and other income received by the Paying Agent in
respect of all funds made available to it), and, thereafter, such holders shall
be entitled to look to the Surviving Corporation (subject to abandoned
property, escheat and other similar laws) only as general creditors thereof
with respect to any Merger Consideration that may be payable upon due surrender
of the Certificates held by them. Notwithstanding the foregoing, none of
Parent, the Surviving Corporation or the Paying Agent shall be liable to any
holder of a Share for any Merger Consideration delivered in respect of such
Share to a public official pursuant to any abandoned property, escheat or other
similar law.
4.5 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 prior to the date of the Effective Time. If, after the
Effective Time, Certificates formerly representing Shares are presented to the
Surviving Corporation or the Paying Agent, they shall be cancelled and
exchanged for the Merger Consideration as provided in this Article IV, subject
to applicable Law in the case of Dissenting Shares.
4.6 Dissenting Shares.
(a) Notwithstanding anything in this Agreement to the contrary, Shares
outstanding immediately prior to the Effective Time and held by a holder who
has not voted in favor of the adoption of this Agreement or consented thereto
in writing and who has demanded appraisal for such Shares in compliance with
Section 262 of the DGCL ("Dissenting Shares") shall not be converted into a
right to receive the Merger Consideration as provided in Section 4.1(a) unless
such holder fails to perfect or withdraws or otherwise loses his, her or its
right to appraisal and payment under the DGCL. A holder of Dissenting Shares
shall be entitled to receive payment of the appraised value of such shares held
by him or her in accordance with Section 262 of the DGCL, unless, after the
Effective Time, such holder fails to perfect or withdraws or loses his, her or
its right to appraisal, in which case such Shares shall be treated as if they
had been converted as of the Effective Time into, and represent only the right
to receive, the Merger Consideration, without interest or dividends thereon,
upon surrender of the certificate or certificates that formerly evidenced such
Shares.
(b) The Company shall give Parent (i) prompt notice of any demands for
appraisal of any Shares, attempted withdrawals of such demands and any other
instruments served pursuant to the DGCL and received by the Company relating to
rights of appraisal and (ii) the opportunity to participate in the conduct of
all negotiations and proceedings with respect to demands for appraisal under
the DGCL. Except with the prior written consent of Parent, the Company shall
not make any payment with respect to any demands for appraisal or settle or
offer to settle any such demands for appraisal.
4.7 Stock Options.
(a) Effective as of the Effective Time, the Company shall (i)
terminate the Company's 1990, 1993, 1996, 1999 and 2001 Stock Awards Plans or
any predecessor plans thereto, each as amended through the date of this
Agreement (collectively, the "Option Plans"), and (ii) cancel, at the Effective
Time, each outstanding option to purchase shares of Company Common Stock
granted under the Option Plans or otherwise (each, an "Option") that is
outstanding and unexercised as of such date. Each holder of an Option that is
outstanding and unexercised at the Effective Time pursuant to the terms of the
applicable Option Plan shall be entitled to receive from the Surviving
Corporation immediately after the Effective Time, in exchange for the
cancellation of such Option, an amount in cash equal to the excess, if any, of
(x) the Per Share Amount over (y) the per share exercise price of such Option,
multiplied by the number of Shares subject to such Option as of the Effective
Time. The Company shall use reasonable best efforts to obtain from each holder
of an Option that is outstanding and unexercised at the Effective Time a
written consent to the cancellation of the Option immediately prior to the
Effective Time in exchange for the receipt of the consideration set forth in
the prior sentence, all such written consents to be delivered to the Company
(and a copy provided to Parent) prior to the Initial Expiration Time. The
Company shall confirm that unexercised options after the Effective Time will
only be exercisable for the Merger Consideration. Any such payments shall be
subject to all applicable Tax withholding requirements.
(b) Purchaser shall be entitled to deduct and withhold from the
amounts otherwise payable pursuant to Section 4.7(a) to any holder of Options
such amounts as the Company is required to deduct and withhold with respect to
the making of such payment under the Code or any provision of state, local or
foreign tax Law. To the extent that amounts are so deducted and withheld by
Purchaser, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Options in respect of which
such deduction and withholding was made by Purchaser.
(c) Prior to the Effective Time, the Company shall take all necessary
action (i) (in accordance with that certain SEC no-action letter, dated January
12, 1999, to Skadden, Arps, Slate, Xxxxxxx & Xxxx) to provide that the
treatment of Options pursuant to Section 4.7(a) will qualify for exemption
under Rule 16b-3(d) or (e), as applicable, under the Exchange Act, and (ii) to
effect the treatment of the Option Plans and Options set forth in this Section
4.7, including obtaining any and all necessary consents.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser as set
forth below. Each exception set forth in a disclosure schedule is identified by
reference to, or has been grouped under a heading referring to, a specific
individual section or subsection of this Agreement and relates only to such
section or subsection; provided, however, that the inclusion of any item
referenced in one section or subsection shall be deemed to refer to any other
section or subsection, whether or not an explicit cross-reference appears, to
the extent that the applicability of such item to the other section is readily
apparent.
5.1 Corporate Organization and Qualification. Each of the Company and
its Subsidiaries (as defined in Section 10.11) (a) is duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
organization, (b) (i) has all requisite corporate power and authority and (ii)
any necessary governmental authority and approvals, to own, operate or lease
the properties that it purports to own, operate or lease and to carry on its
business as it is now being conducted, and (c) is qualified or licensed as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the properties owned, leased or operated, or the business
conducted, by it require such qualification or licensing, except in the case of
subsections (a) (insofar as it relates to Subsidiaries), (b) and (c) hereof,
for any such failures that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect (as defined in Section
10.11). The Company has heretofore made available to Parent complete and
correct copies of its certificate of incorporation and bylaws (or comparable
organizational documents) of the Company and each Subsidiary. Neither the
Company nor any of the Subsidiaries is in default in the performance,
observance or fulfillment of any provision or its certificate of incorporation
or bylaws (or comparable organizational documents), except in the case of the
Subsidiaries, for any such failures that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
5.2 Subsidiaries. Schedule 5.2 sets forth a true and complete list of
all the Subsidiaries, together with the name, jurisdiction of incorporation,
authorized and outstanding capital stock, and the percentage of each
Subsidiary's outstanding capital stock owned by Company or another Subsidiary
of each of the Company's Subsidiaries. Except as set forth on Schedule 5.2, the
Company does not own, directly or indirectly, any capital stock or other equity
securities of any corporation or have any direct or indirect equity or
ownership interest in any other Person.
5.3 Capitalization. The authorized capital stock of the Company
consists entirely of 30,000,000 shares of common stock, par value $1.00 per
share, and 10,000,000 shares of preferred stock, par value $0.01 per share, of
which 30,000 shares have been designated as Series A Junior Participating
Preferred Stock. As of the close of business on June 29, 2006, (i) 12,498,973
Shares were issued and outstanding, (ii) no shares of preferred stock of the
Company were issued and outstanding, (iii) no Shares were issued and held in
the treasury of the Company, and (iv) 1,957,636 Shares were reserved for
issuance pursuant to the Plans, of which 1,401,347 Shares were subject to
outstanding Options. There are no bonds, debentures, notes or other
Indebtedness having general voting rights (or convertible into securities
having such rights) of the Company or any Subsidiary issued and outstanding
("Voting Debt"). All of the outstanding shares of capital stock of the Company
and each of the Subsidiaries have been duly authorized and validly issued and
are fully paid and nonassessable. Except as set forth on Schedule 5.3, all
outstanding shares of capital stock of, or comparable equity interests in, the
Company's Subsidiaries are owned by the Company or a direct or indirect wholly
owned Subsidiary of the Company, free and clear of all Liens of any nature.
Schedule 5.3 sets forth a listing of all outstanding vested and unvested
Options as of the date hereof (indicating which Options will vest upon
consummation of the Merger) and the exercise prices thereof. Except as set
forth on Schedule 5.3, there are not any outstanding or authorized
subscriptions, options, warrants, puts, calls, rights (including preemptive
rights), commitments, "phantom" stock rights, stock appreciation rights,
stock-based performance units, Contracts, arrangements or any other agreements
of any character to which the Company or any of its Subsidiaries is a party, or
by which any of them may be bound, relating to, or obligating the Company or
any Subsidiary with respect to, the issuance, transfer, sale, purchase, grant,
redemption, voting, acquisition or disposition of 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, or comparable
equity or voting interests in, or other securities of the Company or any of its
Subsidiaries, or that give any Person the right to receive any economic benefit
or right similar to or derived from the economic benefits and rights accruing
to holders of the Shares. Except as set forth on Schedule 5.3, there are no
voting trusts or other agreements or understandings to which Company or any
Subsidiary is a party with respect to the voting, issuance or transfer of the
capital stock of Company or any of the Subsidiaries.
5.4 Authority Relative to This Agreement.
(a) The Company has the requisite corporate power and authority to
execute and deliver this Agreement, to carry out its obligations hereunder and
to consummate the Transactions. The execution and delivery of this Agreement by
the Company, the performance by Company of its obligations hereunder, and the
consummation by the Company of the Transactions have been duly and validly
authorized by the Board and no other corporate actions or proceedings on the
part of the Company are necessary to authorize this Agreement, the performance
by Company of its obligations hereunder, or to consummate the Transactions
(other than, with respect to the Merger, the approval and adoption of this
Agreement by the stockholders of the Company in accordance with Section 251 of
the DGCL, if necessary).
(b) This Agreement has been duly and validly executed and delivered by
the Company and, assuming due authorization, execution and delivery by Parent
and Purchaser, 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).
(c) The Board has duly and validly approved and taken all corporate
action required to be taken by the Board for the consummation of the
Transactions, including the Offer, the Merger, the Top-Up Option, and the
acquisition of Shares pursuant to the Transactions, including but not limited
to all actions required to (i) render the provisions of Section 203 of the DGCL
regarding business combinations with "interested stockholders" inapplicable to
such Transactions and (ii) render the provisions of Articles Eleventh and
Fourteenth of the Company's certificate of incorporation inapplicable to such
Transactions. If the Offer is consummated and Purchaser acquires more than 50%
but less than 90% of the outstanding Shares, the only stockholder vote required
for approval of this Agreement and consummation of the Merger is the
affirmative vote of the holders of a majority of the outstanding Shares.
5.5 Consents and Approvals; No Violation. The execution and delivery
of this Agreement by the Company do not, and the performance of this Agreement,
and the consummation of the Transactions contemplated hereby will not:
(a) conflict with or result in any breach of any provision of the
respective certificate of incorporation, bylaws or the comparable
organizational documents 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 Entity, except (i) in
connection with the applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act") and any requirements of
any foreign or supranational antitrust Laws, including the German Act Against
Restraints of Competition, (ii) pursuant to the applicable requirements of the
Exchange Act or the rules thereunder or the Nasdaq Stock Market, (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) as may be required
by any applicable state securities or "blue sky" laws or state takeover laws,
(v) consents or approvals of any Governmental Entity set forth in Schedule
5.5(b) or (vi) where the failure to obtain such consent, approval,
authorization or permit, or to make such filing or notification, would not
individually or in the aggregate have a Material Adverse Effect;
(c) except as set forth in Schedule 5.5(c), result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both)
a default under, or give to others any rights of termination, amendment or
cancellation of, or accelerate the performance required by, or result in the
creation of a Lien or encumbrance on any of the property or assets of the
Company or any Subsidiary pursuant to, any note, bond, mortgage, indenture,
agreement, Contract, instrument, Permit, license, franchise or other instrument
or obligation to which the Company or any of its Subsidiaries is a party or by
which it or its property may be bound, except for such violations, breaches and
defaults (or rights of termination, amendment, cancellation or acceleration or
lien or other charge or encumbrance) as to which requisite waivers or consents
have been obtained or which, individually or in the aggregate, would not have a
Material Adverse Effect; or
(d) assuming the consents, approvals, authorizations or permits and
filings or notifications referred to in this Section 5.5 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, if necessary,
conflict with or violate any Law, Permit or Order of any Governmental Entity
applicable to Company or any Subsidiary or by which any of its property is
bound, except for violations which would not individually or in the aggregate
have a Material Adverse Effect.
5.6 SEC Reports; Financial Statements.
(a) The Company has timely filed all forms, reports, schedules, proxy
statements, registration statements and other documents (including all exhibits
thereto) required to be filed by it with the SEC since October 1, 2003 pursuant
to the federal securities laws and the SEC rules and regulations thereunder,
together with all certifications required pursuant to the Xxxxxxxx-Xxxxx Act of
2002 (the "Xxxxxxxx-Xxxxx Act"), (as they have been amended since the time of
their filing, and including the exhibits thereto, collectively, the "Company
SEC Reports"). The Company SEC Reports (including, without limitation, any
financial statements or schedules included or incorporated by reference
therein) at the time they became effective, in the case of registration
statements, or when filed, in the case of any other Company SEC Report,
complied in all material respects with the applicable requirements of the
Securities Act and the Exchange Act, as the case may be, and the rules and
regulations of the SEC under all of the foregoing. None of the Company SEC
Reports, including, without limitation, any financial statements or schedules
included or incorporated by reference 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 Subsidiaries is required to file any reports, forms
or other documents with the SEC.
(b) The consolidated financial statements (including the related notes
thereto) of the Company included in the Company SEC Reports (the "Financial
Statements"), 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 in the United States ("GAAP") applied on a
consistent basis throughout the periods involved (except as indicated in the
notes thereto and except in the case of unaudited interim statements, as
permitted by Form 10-Q under the Exchange Act), 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 operations, changes in stockholders' equity and changes in cash
flows of the Company and its consolidated Subsidiaries for the periods
presented therein (subject, in the case of the unaudited interim financial
statements, to normal year-end adjustments).
(c) Neither the Company nor any Subsidiary has any Liabilities or
obligations that are of a nature (whether known, unknown, accrued, absolute,
contingent or otherwise and whether due or to become due) that would be
required to be reflected or reserved against on a consolidated balance sheet of
the Company and it Subsidiaries prepared in accordance with GAAP, or in the
notes thereto, other than any Liabilities to the extent (i) reserved against,
reflected or disclosed on the most recent consolidated balance sheet of Company
and its Subsidiaries contained in the Available Company SEC Documents,
including the notes to financial statements contained therein, (ii) incurred in
the ordinary course of business consistent with past practice since the date of
the most recent financial statements included in the Available Company SEC
Documents, or (iii) that, individually or in the aggregate, have not had and
would not reasonably be expected to have a Material Adverse Effect.
(d) The Company is in compliance in all material respects with the
applicable provisions of the Xxxxxxxx-Xxxxx Act and the applicable listing and
governance rules and regulations of the Nasdaq National Market.
(e) There are no outstanding or unresolved comments in comment letters
received from the SEC staff with respect to any of the Company SEC Reports.
(f) The Company maintains a system of internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act)
sufficient to provide reasonable assurance (i) that the Company maintains
records that in reasonable detail accurately and fairly reflect their
respective transactions and dispositions of assets, (ii) that transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP, (iii) that receipts and expenditures are executed only in
accordance with authorizations of management and the Board and (iv) regarding
prevention or timely detection of the unauthorized acquisition, use or
disposition of the Company's assets that could have a material effect on the
Company's consolidated financial statements. Except as disclosed in the
Available Company SEC Documents, the Company has not identified as of the date
hereof any material weaknesses in the design or operation of the Company's
internal control over financial reporting.
(g) To the Knowledge of the Company and except as previously disclosed
to Parent, there are no SEC inquiries or investigations, other governmental
inquiries or investigations or internal investigations pending or threatened in
each case regarding any accounting practices of the Company or any malfeasance
by any director or executive officer of the Company.
5.7 Absence of Certain Changes or Events. Except as expressly provided
in this Agreement or as set forth in Schedule 5.7 or in the Available Company
SEC Documents, since October 2, 2005: (a) the business of the Company and the
Subsidiaries has been conducted in the ordinary course consistent with past
practice, (b) there has not been any event, condition, change or development,
or worsening of any existing event, condition, change or development that,
individually or in the aggregate, has had or would reasonably be expected to
have a Material Adverse Effect, (c) there has not been any damage, destruction
or loss (whether or not covered by insurance) with respect to any of the assets
of the Company or any of its Subsidiaries, except for damage, destruction or
loss as would not, individually or in the aggregate, have a Material Adverse
Effect, (d) neither the Company nor any of its Subsidiaries has revalued any
material assets of the Company or any Subsidiary resulting in an impairment
charge and (e) except as Parent has consented in writing, neither the Company
nor any of its Subsidiaries has taken any action which requires the consent of
Parent under Section 7.1(i), (iv) (but only with respect to the Company), (v)
(but only with respect to the Company), (vi)(A) and (B), (vii), (x) and (xii)
or which would have required the consent of Parent under any of the foregoing
subsections of Section 7.1 if such action was taken after the date hereof.
5.8 Litigation. Except as set forth on Schedule 5.8, there is no
Litigation pending or, to the Knowledge of the Company, threatened against the
Company, any Subsidiary, any officer, director or employee of the Company or
any Subsidiary in such capacity, which would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Except as set
forth on Schedule 5.8, neither the Company nor any Subsidiary nor any of their
respective businesses or assets is a party or subject to any Order that would,
individually or in the aggregate, (i) reasonably be expected to have a Material
Adverse Effect or (ii) prevent or materially delay the Company from performing
its obligations under this Agreement in any material respect.
5.9 Offer Documents; Schedule 14D-9; Proxy Statement. None of the
information supplied by the Company for inclusion in the Offer Documents or
provided by the Company in the Schedule 14D-9 will, at the respective times
that the Offer Documents and the Schedule 14D-9 or any amendments or
supplements thereto are filed with the SEC and are first published or sent or
given to holders of Shares, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Any proxy statement, information statement or
similar materials distributed to the Company's stockholders in connection with
the Merger, including any amendments or supplements thereto (the "Proxy
Statement") and the Schedule 14D-9 shall comply in all material respects with
applicable federal securities laws and the DGCL, except that no representation
is made by the Company with respect to information supplied by Purchaser or
Parent for inclusion in the Proxy Statement. The Proxy Statement will not, at
the date the Proxy Statement (or any amendment or supplement thereto) is first
mailed to stockholders of the Company, at the time of any amendment or
supplement thereof, at the time of the Stockholders' Meeting and 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
were made, not misleading.
5.10 Taxes. Except as disclosed in Schedule 5.10 or as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect:
(a) all Tax Returns required to be filed by the Company and its
Subsidiaries for all Taxable Periods ending prior to the date hereof have been
duly and timely (within any applicable extension periods) filed with the
appropriate Governmental Entities in all jurisdictions in which such Tax
Returns are required to be filed, all such Tax Returns are true, correct and
complete, all Taxes shown to be due and payable on such Returns have been paid
and the Company and its Subsidiaries have set up reserves for the payment of
all Taxes not yet due and payable, or any penalties related to all Tax Returns,
that adequately cover all Taxable Periods ending prior to the date hereof;
(b) the Company and each Subsidiary have duly withheld and paid all
Taxes that they are required to withhold and pay in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder or
other third party;
(c) none of the Company or any Subsidiary has received from the
Internal Revenue Service ("IRS") or any other applicable Tax authorities or
Governmental Entities any written notice of underpayment or assessment of Taxes
or other deficiency that has not been paid or any objection to any Tax Return
filed by the Company or any Subsidiary.
(d) neither the Company nor any of its Subsidiaries has (i) executed a
waiver or consent extending any statute of limitations for the assessment or
collection of any Taxes which remains outstanding or (ii) applied for a ruling
relative to Taxes that remains pending with the Governmental Entity with which
it was filed;
(e) there are no examinations or other administrative or court
proceedings relating to Taxes or Tax Returns in progress or pending or proposed
in writing with respect to the Company or any of its Subsidiaries;
(f) none of the Company and its Subsidiaries is a party to any written
agreement providing for the allocation or sharing of Taxes;
(g) since January 1, 2000, none of the Company and its Subsidiaries
has been a member of an (i) affiliated group (within the meaning of ss.1504 of
the Internal Revenue Code of 1986, as amended (the "Code")) or (ii) affiliated,
combined, consolidated, unitary, or similar group for state, local or foreign
Tax purposes, other than the group of which the Company is the common parent;
(h) neither the Company nor any of its Subsidiaries has any liability
for the Taxes of any other Person (other than the Company or any of its
Subsidiaries) under the provisions of Treasury Regulation ss.1.1502-6 (or any
similar provision of and state, local or foreign Law) as a transferee or
successor, whether by contract or otherwise;
(i) there are no Liens for Taxes upon the assets of the Company or its
Subsidiaries which are not provided for in the Available Company SEC Reports,
except Liens for Taxes not yet due and payable and Liens for Taxes that are
being contested in good faith; (j) since June 30, 2004, none of the Company or
any Subsidiary has been a "distributing corporation" or a "controlled
corporation" in a spin-off described in Section 355 of the Code; and
(k) neither the Company nor any Subsidiary has entered into any
"listed transaction" as defined in Treasury Regulation ss.1.6011-4(b)(1).
5.11 Employee Benefit Plans.
(a) To the extent the Company or any Subsidiary or any ERISA
Affiliate, as defined below is or has been a party to, sponsors or has
sponsored, maintains or has maintained, contributes or has contributed to, or
has or had an obligation to contribute to, and has any Liability with respect
to any (i) executive compensation or employment agreement with any current or
former director, officer or employee, (ii) severance program or policy, plan or
arrangement relating to its current or former directors, officers or employees
which contains change in control provisions, or (iii) any "employee benefit
plan" as defined in Section 3(3) of ERISA, collective bargaining agreement,
consulting agreement, or bonus, pension, profit sharing, deferred compensation,
fringe benefit, perquisite, retiree medical or life insurance, retirement,
supplemental retirement, incentive compensation, stock ownership, stock
purchase, stock option, restricted stock, phantom stock, vacation, disability,
death benefit, hospitalization, medical, or other similar plan, fund,
agreement, policy, or arrangement for the benefit of any employee or former
employee of the Company or any Subsidiary, such agreement, program, policy,
plan, arrangement, fund or understanding shall be deemed an "Employee Benefit
Plan." Schedule 5.11(a) lists all Employee Benefit Plans. For purposes of this
Agreement, "ERISA Affiliate" means any entity (whether or not incorporated)
which is or was, together with the Company, treated as a single employer under
Section 414(b), (c), or (m) of the Code.
(b) True, complete and correct copies of the following have been
delivered or made available to Parent: (i) each Employee Benefit Plan, and a
written summary of any material Employee Benefit Plan not in writing, (ii) all
collective bargaining agreements, (iii) the most recent determination letter
received from the IRS, to the extent required by applicable Law, (iv) all
Summary Plan Descriptions and all Summaries of Material Modifications, (v) the
most recent annual report on IRS Form 5500 or 5500C for each Employee Benefit
Plan including all applicable schedules thereto, to the extent required by
applicable Law, (vi) the most recently prepared actuarial report, (vii) all
related trust agreements, annuity contracts, insurance contracts or other
funding arrangements which implement any Employee Benefit Plan, and (viii) in
the case of restricted stock, phantom stock, stock options or stock
appreciation rights issued under any Employee Benefit Plan that is an equity
plan, a list of holders, dates of grant, number of shares, exercise price per
share and dates exercisable.
(c) Except as disclosed on Schedule 5.11(c) or as expressly provided
in this Agreement, neither the Company nor any Subsidiary, or any of their
officers or directors, has taken any action directly or indirectly which
obligates the Company or any Subsidiary to, from the date of this Agreement,
institute, modify or change any Employee Benefit Plan, any actuarial or other
assumption used to calculate funding obligations with respect to any of the
Employee Benefit Plans, the manner in which contributions to any of the
Employee Benefit Plans are made, or the basis on which such contributions are
determined.
(d) Except as set forth on Schedule 5.11(d), each Employee Benefit
Plan has been administered in accordance with its terms, and all Employee
Benefit Plans have been operated, and are in compliance with the applicable
provisions of ERISA, the Code and all other applicable Laws except for
instances of noncompliance that, individually or in the aggregate, are not
material. Each Employee Benefit Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified and has received a favorable
determination letter, or if a prototype an opinion letter, from the IRS that it
is so qualified. To the Company's Knowledge, no fact or event has occurred
since the date of any such determination letter which could affect adversely
the qualified status of any such Employee Benefit Plan. Except as set forth on
Schedule 5.11(d), to the Company's Knowledge, all material required reports and
descriptions of the Employee Benefit Plans have been timely filed and
distributed.
(e) With respect to each Employee Benefit Plan (i) no non-exempt
prohibited transactions as defined in Section 406 of ERISA or Section 4975 of
the Code have occurred, and (ii) neither the Company nor any Subsidiary has any
material Liability for failure to comply with ERISA or the Code for any action
or failure to act in connection with the administration or investment of the
assets of any Employee Benefit Plan. There is not pending or, to the Knowledge
of the Company, threatened any Litigation, claim, or governmental investigation
or audit relating to any Employee Benefit Plan or the assets thereof that
individually or in the aggregate would reasonably be expected to be material.
(f) All contributions required to be made by the Company, or any
entity while an ERISA Affiliate, under applicable Law or the terms of any
Employee Benefit Plan or collective bargaining agreement have been timely made
or have been accrued and reflected on the most recent consolidated balance
sheet included in the Available Company SEC Documents. Subject only to normal
retrospective adjustments in the ordinary course, all insurance premiums,
including premiums to the Pension Benefit Guaranty Corporation, have been paid
in full with regard to each Employee Benefit Plan. Except as disclosed on
Schedule 5.11(f), none of the Employee Benefit Plans has unfunded benefit
liabilities, as defined in Section 4001(a)(16) of ERISA. No accumulated funding
deficiency within the meaning of Section 302 of ERISA or Section 412 of the
Code has been incurred with respect to any Employee Benefit Plan, whether or
not waived. Neither the Company nor any Subsidiary has any material Liability
(i) for any Lien imposed under Section 302(f) of ERISA or Section 401(a)(29) or
412(n) of the Code, (ii) for any interest payments required under Section
302(e) of ERISA or Section 412(m) of the Code, (iii) for any excise tax or
penalty imposed by Section 4971, 4975 or 4976 of the Code or Section 502 of
ERISA, (iv) for any minimum funding contributions under Section 302(c)(11) of
ERISA or Section 412(c)(11) of the Code, or (v) to provide security pursuant to
Section 307 of ERISA or Section 401(a)(29) of the Code.
(g) Except as set forth in Schedule 5.11(g), no current or former
director, officer, or employee of the Company or any Subsidiary will be
entitled to any payment (including severance, unemployment compensation, golden
parachute, or otherwise), additional benefits or any acceleration of the time
of payment or vesting of any benefits under any Employee Benefit Plan as a
result of the Transactions (either alone or in conjunction with any other event
such as a termination of employment) that constitutes an "excess parachute
payment" within the meaning of ss.280G of the Code or that will be
nondeductible under ss.162(m) of the Code.
(h) Except as disclosed in Schedule 5.11(h), no Employee Benefit Plan
provides any retiree welfare or post-employment health, medical, dental,
disability, or life insurance, other than benefits required pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or
benefits, the full cost of which are borne by the employee.
(i) Except as disclosed in Schedule 5.11(i), neither the Company, nor
any of its Subsidiaries or any entities while ERISA Affiliates, has, within the
preceding six years established, maintained, contributed to or has any material
Liability with respect to, any Employee Benefit Plan that has been during such
period, a multiemployer plan within the meaning of ERISA Section 3(37) or
4001(a)(3) or Code Section 414(f), or that has been during such period, a
"multiple employer welfare plan" or a "multiple employer welfare arrangement"
within the meaning of ERISA ss.514(b)(6) or 3(40). Except as disclosed in
Schedule 5.11(j), none of the Company nor any Subsidiary nor any ERISA
Affiliate has incurred any withdrawal liability under ss.4201 of ERISA nor does
the Company, Subsidiary or any ERISA Affiliate reasonably expect to withdraw in
a "complete withdrawal" or "partial withdrawal" within the meaning of Sections
4203 and 4205 of ERISA.
(j) Each Employee Benefit Plan that is a nonqualified deferred
compensation plan subject to Section 409A of the Code has been operated and
administered in good faith compliance with, under published guidance, under
Code Section 409A from the period beginning January 1, 2005 through the date
hereof. The Company is not a party to, or otherwise obligated under, any
Employee Benefit Plan, that provides for the gross-up of the Tax imposed by
Section 409A(a)(1)(B) of the Code.
5.12 Compliance with Law; Environmental Laws and Regulations.
(a) The Company and each Subsidiary (including its business and
assets) is (and, to the Company's Knowledge, has at all times since January 1,
2003 been) in compliance with all applicable Laws, Permits and Orders, and has
not received any notice of any violation or alleged violation of any Laws,
Permits or Orders, except for such instances of noncompliance that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect. All reports, filings and returns
(other than reports, filings and returns which are the subject of Sections 5.10
and 5.11) required to be filed by or on behalf of the Company or any Subsidiary
with any Governmental Entity have been filed, except for such instances of
noncompliance that, individually or in the aggregate, have not had and would
not reasonably be expected to have a Material Adverse Effect.
(b) The Company and each Subsidiary has all licenses, Permits,
approvals, certifications, consents and listings of all Governmental Entities
and all certification organizations required, and all exemptions from
requirements to obtain or apply for any of the foregoing, for the conduct of
its business (as currently conducted) and the operation of its facilities,
except where the failure to have such licenses, permits, approvals,
certifications, consents, listings and exemptions would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect. All
such material licenses, Permits, approvals, certifications, consents and
listings are in full force and effect, except where the failure to be in full
force or effect has not had and would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Company and each
Subsidiary (including its respective business and assets) is in compliance with
all such licenses, permits, approvals, certifications, consents and listings,
except for such instances of noncompliance that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
(c) Except as set forth in the Available Company SEC Documents, except
as disclosed on Schedule 5.12(c) and except for such instances of noncompliance
or any Environmental Claim, or any potential liability under any Environmental
Law or Environmental Permit that, individually or in the aggregate, have not
had and would not reasonably be expected to have a Material Adverse Effect, (i)
each of the Company and Subsidiaries is (and, to the Company's Knowledge, has
at all times since January 1, 2003 been) in compliance with all applicable
Environmental Laws; (ii) the Company and each Subsidiary have all Permits,
licenses and other authorizations required under any Environmental Law
("Environmental Permits"); (iii) the Company and each Subsidiary is (and, to
the Company's Knowledge, has at all times since January 1, 2003 been) in
compliance with its Environmental Permits; (iv) none of the Company or the
Subsidiaries has received any written communication since October 1, 2003 from
any Governmental Entity or other Person that alleges that the Company or any
Subsidiary has violated or is liable under any Environmental Law or
Environmental Permit; (v) there are no Environmental Claims (A) pending or, to
the Knowledge of the Company, threatened against the Company or any Subsidiary
or (B) to the Knowledge of the Company, pending or threatened against any
Person whose Liability for any such Environmental Claim the Company or any
Subsidiary has retained or assumed, either contractually or by operation of
Law; (vi) to the Knowledge of the Company, there have been no Releases of any
Hazardous Substances that would reasonably be expected to result in any
Environmental Claim against the Company or any Subsidiary or any Liability of
the Company or any Subsidiary under any Environmental Law or Environmental
Permit; and (vii) the reports of environmental assessments, audits and similar
investigations previously made available to Parent are all such material
reports in the possession of the Company conducted since January 1, 2003 on any
property currently or formerly owned or operated by the Company or any
Subsidiary.
5.13 Intangible Property. The Company or a Subsidiary is the owner of,
or a licensee under a valid license for, all Trade Rights used by the business
of the Company and its Subsidiaries as currently conducted, including, without
limitation, trade names, unregistered trademarks and service marks, brand
names, patents and copyrights, except for such Trade Rights as would not
individually or in the aggregate have a Material Adverse Effect. Except as
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, neither the Company nor any Subsidiary is infringing
or has infringed any Trade Rights of another and, to the Company's Knowledge,
no Person or entity is infringing or has infringed any of the Company Trade
Rights. Except as set forth in Schedule 5.13 and except as would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect, there is no pending or, to the Company's Knowledge, threatened claim,
suit, Litigation, arbitration or other adversarial proceeding involving the
Company Trade Rights alleging that the activities or the conduct of the
Company's or any of the Subsidiaries' businesses infringes upon or otherwise
violates the Trade Rights of any third party or challenging the Company's or
any of the Subsidiary's ownership, use, validity, enforceability or
registrability of any Trade Rights.
5.14 Labor Matters. Except as set forth on Schedule 5.14, and except
as would not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect, (i) there is no unfair labor practice charge or
complaint or Litigation pending or, to the Company's Knowledge, threatened in
writing against the Company or any Subsidiary; (ii) there is no labor dispute,
slowdown, strike, lockout, work stoppage or other collective labor action
actually pending or, to the Company's Knowledge, threatened in writing, against
or affecting the Company or any Subsidiary; (iii) there has been no "mass
layoff" or "plant closing" covered by the Worker Adjustment and Retraining
Notification (WARN) Act or any applicable state or local law concerning mass
layoffs and/or plant closures within the last year with respect to which the
Company or a Subsidiary, as applicable, has not given the notice required by,
or otherwise complied with, the WARN Act or similar state or local law; (iv) no
labor grievance, nor any arbitration proceeding arising out of or under
collective bargaining agreements to which the Company or any Subsidiary is a
party, is pending or, to the Company's Knowledge, threatened in writing; and
(v) there are no administrative charges or court complaints or Litigation
against the Company or any Subsidiary concerning alleged employment
discrimination or other employment-related matters pending or, to the Company's
Knowledge, threatened in writing before the U.S. Equal Employment Opportunity
Commission or any other Governmental Entity. The Company has no Knowledge of
any actual activity or proceeding of any labor organization (or representative
thereof) to organize any unorganized employees of the Company or any Subsidiary
or of any such activity or proceeding which has been threatened in writing.
Except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, the Company and the Subsidiaries are in
compliance with all applicable collective bargaining agreements and all
applicable Laws relating to employment and employment practices, occupational
health and safety, pay equity, wages, hours and terms and conditions of
employment.
5.15 Properties.
(a) Except as set forth on Schedule 5.15(a), each of the Company and
its Subsidiaries has good, valid and marketable title to, or in the case of
leased properties and assets, valid leasehold interests in, all the assets and
properties that it owns or uses and that are reflected on the Company's most
recent consolidated balance sheet (or in the footnotes related thereto)
included in the Available Company SEC Documents (the "Company Balance Sheet"),
or that were thereafter acquired (except for assets and properties sold,
consumed or otherwise disposed of in the ordinary course of business since such
date) except where the failure to have such title or valid leaseholds would not
reasonably be expected to have a Material Adverse Effect, and such assets and
properties are owned free and clear of all Liens, except for (a) Liens
reflected in the consolidated balance sheet of the Company included in the
Available Company SEC Documents, (b) Liens consisting of zoning or planning
restrictions, easements, permits and other restrictions or limitations on the
use of real property or irregularities in title thereto, which do not
materially impair the value of such properties or the use of such properties by
the Company or any of its Subsidiaries in the operation of their respective
businesses, (c) Liens for current Taxes, assessments or governmental charges or
levies on property not yet delinquent and Liens for Taxes that are being
contested in good faith by appropriate proceedings and for which an adequate
reserve has been provided on the appropriate financial statements, (d) inchoate
mechanics' and materialmen's Liens for construction in progress, (e) workmen's,
repairmen's, warehousemen's and carrier's Liens arising in the ordinary course
of business and (f) Liens which have not and would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect.
(b) There is no default under any lease of real property to which the
Company or any of the Subsidiaries is a party or, to the Company's Knowledge,
by any other party thereto, and no event has occurred that, with the lapse of
time or the giving of notice or both, would constitute a default by the Company
or any Subsidiary thereunder, except for such defaults as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
5.16 Insurance. Except as set forth on Schedule 5.16, all material
insurance policies of the Company are in full force and effect, all premiums
due and payable thereon have been paid, and no notice of cancellation has been
received by the Company or any Subsidiary with respect to any such policy.
Except as set forth on Schedule 5.16, true and complete copies of each such
policy have previously been made available to Parent. To the Company's
Knowledge, the insurance coverage provided by such policies is customary for
the industry in which the Company and the Subsidiaries operate. Each of the
Company and the Subsidiaries has complied with the provisions of each such
policy under which it is an insured party, except for instances of
noncompliance that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect. There are no pending or, to the
Knowledge of the Company, threatened claims under any insurance policy that
individually or in the aggregate have had or would reasonably be expected to
have a Material Adverse Effect.
5.17 Material Contracts.
(a) All material Contracts to which the Company or any Subsidiary is a
party or any of their respective properties or assets is subject that are
required to be filed as an exhibit to any Available Company SEC Document have
been filed as an exhibit to such Available Company SEC Document (such filed
Contracts, the "Filed Contracts").
(b) The Company has made available to Parent in the data room prepared
for the Transaction true and complete copies of all Contracts, other than the
Filed Contracts, to which the Company or any of its Subsidiaries is a party and
which fall within any of the following categories (together with the Filed
Contracts and the Contracts, if any, filed as an exhibit to a SEC Report or
entered into subsequent to the date hereof which fall within any of the
following categories, being referred to herein as the "Material Contracts"):
(i) material Contracts not entered into in the ordinary course of business;
(ii) joint venture, partnership and like agreements involving a sharing of
profits, losses, costs or liabilities; (iii) leases of real property providing
for an aggregate annual rental in excess of $100,000; (iv) Contracts relating
to any outstanding commitment for capital expenditures in excess of $300,000 or
which provided for payments to or from the Company or any Subsidiary in excess
of $300,000 in the aggregate over the life of such Contract; (v) indentures,
mortgages, promissory notes, loan agreements, guarantees, letter of credit or
other agreements, instruments or Indebtedness of the Company or any of its
Subsidiaries or commitments for the borrowing or the lending by the Company or
any of its Subsidiaries of amounts in excess of $300,000; (vi) any
non-competition agreement or any other agreement or obligation that purports to
limit in any material respect the manner in which, or the localities in which,
the Business of the Company or the Subsidiaries may be conducted; (vii)
Contracts with the Company's top ten customers (by dollar volume) for the
fiscal year ended October 1, 2005 and for the six months ended March 31, 2006
and Contracts with the Company's top ten suppliers (by dollar volume) for the
fiscal year ended October 1, 2005 and for the six months ended March 31, 2006;
(viii) any Contract that would prohibit or materially delay the consummation of
any of the Transactions contemplated by this Agreement; (ix) any Contract with
any Affiliate; (x) any Contract with any investment bank or other financial
advisor, including in connection with the Offer and the Merger; (xi) any
settlement agreement (other than any settlement agreement with any Tax
authorities in amounts less than $250,000) entered into since January 1, 2004
with any Governmental Entity; (xii) any collective bargaining agreement; and
(xiii) any agreement for the sale of significant assets out of the ordinary
course of business since January 1, 2004.
(c) All the Material Contracts are valid and in full force and effect,
except to the extent they have previously expired or terminated in accordance
with their terms and except for any invalidity or failure to be in full force
and effect that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. None of the Company or any
Subsidiary is in violation of or default (with or without notice or lapse of
time or both) under, or has waived or failed to enforce any rights or benefits
under, any Material Contract, except for violations, defaults, waivers or
failures to enforce rights or benefits that individually or in the aggregate
would not reasonably be expected to have a Material Adverse Effect. To the
Knowledge of the Company, no other party to any Material Contract is in breach
thereof or default thereunder, except for breaches or defaults that
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
5.18 Customers and Suppliers. Schedule 5.18 sets forth a true,
complete and correct list of (a) the top ten customers of the Company and the
consolidated Subsidiaries for the fiscal year ended October 1, 2005 and for the
six months ended March 31, 2006 (determined on the basis of the total dollar
amount of sales) and (b) the top ten suppliers from whom the Company and the
consolidated Subsidiaries for the fiscal year ended October 1, 2005 and for the
six months ended March 31, 2006 (determined on the basis of the total dollar
amount of purchases). Except as set forth on Schedule 5.18, since October 1,
2005, to the Company's knowledge, there has been no material adverse change in
the business relationship of the Company or any of its Subsidiaries with any
customer or supplier named on Schedule 5.18.
5.19 Affiliate Transactions. Except as set forth in the Available
Company SEC Documents, since October 2, 2005 there have been no transactions,
agreements, arrangements or understandings between the Company or any
Subsidiary, on the one hand, and their respective directors, officers or
Affiliates, on the other hand, that would be required to be disclosed under
Item 404 of Regulation S-K. To the Knowledge of the Company, except as set
forth on Schedule 5.19 or in the Available Company SEC Documents, no director
or officer of the Company or any Subsidiary owns, directly or indirectly, any
material interest in, or is an officer, director, employee or consultant of,
any Person which is a competitor, lessor, lessee, customer or supplier of the
Company; and except as set forth on Schedule 5.19 or in the Available Company
SEC Documents, no officer or director of the Company or any Subsidiary (i)
owns, directly or indirectly, in whole or in party, any material Trade Rights,
the use of which is necessary for the business of the Company or any Subsidiary
or (ii) owes any money to the Company or any Subsidiary (except for
reimbursement of advances in the ordinary course of business, consistent with
past practice).
5.20 Brokers and Finders. Except for the fees and expenses payable to
BMO Capital Markets, which fees and expenses are reflected in its agreement
with the Company (a complete and correct copy of which has heretofore been
furnished to Parent), the Company has not employed any investment banker,
broker, finder, consultant or intermediary in connection with the Transactions
which would be entitled to any investment banking, brokerage, finder's or
similar fee or commission in connection with this Agreement or the
Transactions.
5.21 Opinion of Financial Advisor. The Company has received the
opinion of BMO Capital Markets, 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 pursuant to the Offer and the Merger is fair to
such stockholders from a financial point of view. The Company has been
authorized by BMO Capital Markets to permit inclusion of such opinion in the
Offer Documents and the Proxy Statement.
5.22 Expiration of Rights Agreement. All of the Rights issued pursuant
to the Rights Agreement, dated as of April 24, 1996, by and between the Company
and Xxxxxx Trust and Savings Bank, as Rights Agent (the "Rights Agreement")
expired in accordance with their terms on May 29, 2006 and accordingly are not
applicable in any respect to, or affected by, the execution, delivery or
performance of this Agreement and the consummation of the Transactions. No
successor to such Rights Agreement has been adopted by the Company.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT
AND PURCHASER
Each of Parent and Purchaser represent and warrant jointly and
severally to the Company that:
6.1 Corporate Organization and Qualification. Each of Parent and
Purchaser is duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation, has all requisite
corporate power and authority to own and operate its properties and assets and
to carry on its business as presently conducted, and is qualified to do
business and in good standing in each jurisdiction where the properties owned,
leased or operated, or the business conducted, by it require such
qualification, except in each such case for such failures that would not,
individually or in the aggregate, have a Parent Material Adverse Effect. The
term "Parent Material Adverse Effect", as used in this Agreement, means any
effect that would prevent, materially delay or materially impair the ability of
Parent or Purchaser to consummate the Offer, the Merger and the other
Transactions that this Agreement requires it to consummate.
6.2 Authority Relative to This Agreement. Each of Parent and Purchaser
has the requisite corporate power and authority to execute and deliver this
Agreement and to consummate the Transactions. This Agreement and the
consummation by Parent and Purchaser of the Transactions have been duly and
validly authorized by the respective boards of directors of Parent and
Purchaser and by Parent as sole stockholder of Purchaser, and no other
corporate proceedings on the part of Parent and Purchaser are necessary to
authorize this Agreement or to consummate the Transactions. This Agreement has
been duly and validly executed and delivered by each of Parent and Purchaser
and, assuming this Agreement constitutes the valid and binding agreement of the
Company, constitutes the valid and binding agreement of Parent and Purchaser,
enforceable against Parent and Purchaser 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).
6.3 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Parent or Purchaser nor the consummation by
Parent or Purchaser of the Transactions contemplated hereby will:
(a) conflict with or result in any breach of any provision of the
certificate of incorporation or bylaws, respectively of Parent or Purchaser;
(b) require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority,
except (i) in connection with the applicable requirements of the HSR Act and
any requirements of any foreign or supranational antitrust Laws, including the
German Act Against Restraints of Competition, (ii) pursuant to the applicable
requirements of the Exchange Act or the rules thereunder or the Nasdaq Stock
Market, (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) as
may be required by any applicable state securities or "blue sky" laws or state
takeover and environmental laws, or (v) where the failure to obtain such
consent, approval, authorization or permit, or to make such filing or
notification, would not have a Parent Material Adverse Effect;
(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, cancellation or acceleration or lien or other charge or
encumbrance) under any of the terms, conditions or provisions of any note,
license, agreement or other instrument or obligation to which Parent or any of
its Subsidiaries or any of their assets may be bound, except for such
violations, breaches and defaults (or rights of termination, cancellation or
acceleration or lien or other charge or encumbrance) as to which requisite
waivers or consents have been obtained or which would not have a Parent
Material Adverse Effect; or
(d) assuming the consents, approvals, authorizations or permits and
filings or notifications referred to in this Section 6.3 are duly and timely
obtained or made, violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Parent or Purchaser or any of their respective
subsidiaries or to any of their respective assets, except for violations which
would not have a Parent Material Adverse Effect.
6.4 Proxy Statement; Schedule 14D-9. None of the information supplied
by Parent or Purchaser in writing for inclusion in the Proxy Statement or the
Schedule 14D-9 will, at the respective times that the Proxy Statement and the
Schedule 14D-9 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. Notwithstanding the
foregoing, Parent and Purchaser make no representation or warranty with respect
to any information supplied by the Company or any of its representatives for
inclusion in any of such documents.
6.5 Financing. Parent has sufficient funds available to purchase and
pay for all of the Shares outstanding on a fully diluted basis in the Offer, to
pay the Merger Consideration in the Merger and to pay all fees and expenses
related to the Transactions.
6.6 Interim Operations of Purchaser. Purchaser has not engaged in any
business activities or conducted any operations other than in connection with
the Transactions contemplated hereby.
6.7 Share Ownership. None of Parent, Purchaser or any of their
respective subsidiaries beneficially owns any Shares.
6.8 Brokers and Finders. Except for the fees and expenses payable to
Xxxxxxx Xxxxx & Company, L.L.C., which fees and expenses are reflected in its
agreement with Parent, Parent has not employed any investment banker, broker,
finder, consultant or intermediary in connection with the Transactions which
would be entitled to any investment banking, brokerage, finder's or similar fee
or commission in connection with this Agreement or the Transactions.
ARTICLE VII
ADDITIONAL COVENANTS AND AGREEMENTS
7.1 Conduct of Business of the Company. The Company agrees that during
the period from the date of this Agreement to the Effective Time (unless Parent
shall have provided its prior written consent and except as otherwise expressly
required or permitted by this Agreement or as set forth on Schedule 7.1), the
business and operations of the Company and its Subsidiaries shall be conducted
in the usual and ordinary course of business consistent with past practices,
and the Company shall use all commercially reasonable efforts, with no less
diligence and effort than would be applied in the absence of this Agreement, to
(a) preserve intact its current business organizations, material insurance
policies and Trade Rights and goodwill; (b) preserve its present relationships
with customers, suppliers, officers, employees, lessors, licensees,
wholesalers, and other Persons with which it has significant business
relations; and (c) comply in all material respects with all Laws applicable to
it or any of its properties, assets or business. Without limiting the
generality of the foregoing, and except as expressly required by applicable
Law, as otherwise permitted by this Agreement or as set forth in Schedule
7.1(a), between the date of this Agreement and the Effective Time, neither the
Company nor any of its Subsidiaries will, without the prior written consent of
Parent, directly or indirectly, do, or commit to do, any of the following:
(i) issue, deliver, sell, dispose of, grant, pledge or otherwise
encumber, or authorize or propose the issuance, delivery, sale,
disposition, grant, pledge or other encumbrance of (a) any shares of
capital stock of any class or any other ownership interest of the Company
or any Subsidiary (including the Shares), any Voting Debt or other voting
securities, or any securities or rights convertible into, exchangeable
for, or evidencing the right to subscribe for any shares of capital stock
or any other ownership interest of the Company or any Subsidiary, any
Voting Debt or other voting securities, or any rights, warrants, options,
calls, commitments or any other agreements of any character to purchase or
acquire any shares of capital stock or any other ownership interest of the
Company or any Subsidiary or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for, any shares of
capital stock or any other ownership interest (including, without
limitation, any stock appreciation rights, phantom stock, phantom stock
rights, or stock-based performance units) of the Company or any Subsidiary
(except for the issuance of a maximum of 1,444,757 Shares issuable
pursuant to options outstanding on the date of this Agreement under the
Option Plans), or (b) any other securities of the Company or any
Subsidiary in respect of, in lieu of, or in substitution for, Shares
outstanding on the date hereof;
(ii) reclassify, split (including a reverse split),
recapitalize, subdivide or redeem, purchase or otherwise acquire (except
to the extent required by the Company's stock-based Employee Benefit
Plans), or propose to reclassify, split, recapitalize, subdivide, redeem,
purchase or otherwise acquire, any outstanding Shares or other of its
securities;
(iii) declare, set aside for payment or pay any dividend or
other distribution (whether payable in cash, stock, property or
otherwise), or make any other actual, constructive or deemed distribution
in respect of any Shares or capital stock or otherwise make any payments
to stockholders in their capacity as such, other than the declaration and
payment of regular quarterly cash dividends in amounts and at times
consistent with past practice and except for dividends by a wholly owned
subsidiary of the Company;
(iv) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any of its Subsidiaries (other than
the Merger);
(v) adopt any amendments to its certificate of incorporation or
bylaws (or comparable organizational documents) or alter through merger,
liquidation, reorganization, restructuring or in any other fashion the
corporate structure or ownership of any Subsidiary;
(vi) (A) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets or any other business
combination) any corporation, partnership, other Person or any division
thereof, any real property or any material amount of assets; (B) incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise become responsible for, the obligations
of any Person, or make any loans or advances or capital contributions,
except in the ordinary course of business and consistent with past
practice; (C) enter into, amend or modify or terminate any derivative,
swap or hedging arrangement or Contract; (D) enter into any Contract other
than in the ordinary course of business and consistent with past practice;
(E) authorize, or make any commitment with respect to, any single capital
expenditure which is in excess of $100,000 or capital expenditures which
are, in the aggregate, in excess of $200,000 for the Company and the
Subsidiaries taken as a whole; or (F) enter into or amend or modify any
Contract with respect to any matter set forth in this Section 7.1(vi),
except, with respect to matters described in clauses (B) or (D) of this
Section 7.1(vi) in the ordinary course of business and consistent with
past practice;
(vii) sell, lease or dispose of any assets or securities which
are material to the Company and its Subsidiaries, or enter into any
commitment to do any of the foregoing or enter into any material
commitment or transaction, in each case outside the ordinary course of
business consistent with past practice other than transactions between a
wholly owned Subsidiary of the Company and the Company or another wholly
owned Subsidiary of the Company;
(viii) hire or terminate any employee except in the ordinary
course of business consistent with past practice or increase the salary,
bonus or other compensation payable or to become payable or the benefits
(including fringe benefits or perquisites) provided to its current or
former directors, officers, other employees or consultants, except for
increases in the ordinary course of business and consistent with past
practice in salaries or wages of employees of the Company or any
Subsidiary who are not directors or officers of the Company, as provided
in any existing agreements with current or former directors, officers,
other employees or consultants of the Company or its Subsidiaries or as
required by any collective bargaining agreement or applicable Law; grant
or increase any bonus, incentive compensation, retention payments,
severance change-in-control or termination pay to, or enter into, amend or
modify any employment, consulting, change-in-control or severance
agreement with, any current or former director, officer, other employee or
consultant of the Company or of any Subsidiary, except as provided in any
existing agreements with current or former directors, officers, other
employees or consultants of the Company or its Subsidiaries or as required
by any collective bargaining agreement or applicable Law; or establish,
adopt, enter into, amend or modify (including any amendment or
modification that increases or accelerates payment or requires any
funding), except as required by Law, any collective bargaining or other
Contract with a labor union, bonus, profit-sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, change-in-control, severance or
other plan, program, agreement, trust, fund, policy or arrangement for the
benefit of any current or former director, officer, other employee or
consultant;
(ix) make any material Tax election, enter into any settlement
or compromise of any material Tax liability, file any amended Tax Return
with respect to any material Tax, change any annual Tax accounting period,
enter into any closing agreement relating to any material Tax or surrender
any right to claim a material Tax refund;
(x) except as may be required as a result of a change in Law or
in generally accepted accounting principles or audit practices, change any
of the financial or tax accounting methods, practices or principles used
by it;
(xi) enter into, amend or modify any Contract with any officer
or director of the Company or any stockholder of the Company holding five
percent or more of the Company's outstanding Shares;
(xii) release any Person from, or waive any provision of, any
standstill agreement to which it is a party (unless, and only to the
limited extent and only for the limited purposes specified, expressly
permitted by Section 7.2 of this Agreement) or any confidentiality
agreement between it and another Person;
(xiii) take any action that is intended or is reasonably likely
to result in (a) any of its representations or warranties set forth in
this Agreement being or becoming untrue in any respect at any time prior
to the Effective Time in any manner that would be reasonably likely to
cause the conditions set forth in Annex A hereto or Article VIII of this
Agreement to not be satisfied, or (b) a violation of any provision of this
Agreement; or
(xiv) authorize, recommend, take, or propose to take, or agree
to take in writing or otherwise, or enter into any Contract, agreement,
commitment or arrangement to do any of the actions described in this
Section 7.1.
7.2 No Solicitation.
(a) From the date of this Agreement until the Effective Time, the
Company shall not, and shall not permit any of its Subsidiaries to, and shall
use commercially reasonable best efforts to cause its and its Subsidiaries'
officers, directors, employees, consultants, representatives and other agents,
including, but not limited to, investment bankers, attorneys and accountants
(collectively, the "Representatives"), not to, directly or indirectly, (i)
solicit, initiate, or knowingly encourage (including by way of furnishing
information or assistance), or knowingly induce, or take any action to
facilitate the making of, any inquiry, offer or proposal that constitutes, or
may reasonably be expected to lead to, the making of any Acquisition Proposal,
or (ii) other than informing Persons of the existence of this Section 7.2,
participate in any discussions or negotiations regarding any Acquisition
Proposal or, in connection with any Acquisition Proposal, furnish or provide
access to any Person (other than Parent and Purchaser and their
Representatives) to properties, books and records or any nonpublic information
or data with respect to the Company or any of its Subsidiaries, or (iii)
approve or recommend, or propose to approve or recommend any Acquisition
Proposal, or (iv) enter into any understanding, letter of intent, agreement in
principle, merger agreement, acquisition agreement, option agreement or other
similar agreement or document contemplating or otherwise relating to any
Acquisition Proposal (except for any confidentiality agreement required by
Section 7.2(b)), or approve or resolve to approve, or recommend or resolve to
recommend, any Acquisition Proposal, or (v) take any action to make any "fair
price," "moratorium," "control share acquisition," "business combination" or
other similar anti-takeover statute or regulation (including, without
limitation, Section 203 of the DGCL) or any restrictive provision of any
applicable anti-takeover provision in the Company's certificate of
incorporation (including, without limitation, Article Eleventh and Article
Fourteenth thereof) or bylaws inapplicable to any transactions contemplated by
an Acquisition Proposal. Any violation of any of the foregoing restrictions set
forth in this Section 7.2(a) by any of the Representatives, whether or not such
Representative is so authorized and whether or not such Representative is
purporting to act on behalf of the Company or any Subsidiary or otherwise,
shall be deemed to be a breach of this Section 7.2(a) by the Company.
(b) Notwithstanding the foregoing, until the consummation of the Offer
the Board shall be permitted to engage in discussions and negotiations with, or
provide nonpublic information or data to, any Person in response to a bona fide
written Acquisition Proposal by such Person made after the date of this
Agreement and prior to the consummation of the Offer if and only if, prior to
taking any of the actions set forth above: (A) none of the Company, any of its
Affiliates or any of the Representatives shall have violated any of the
provisions of this Section 7.2, (B) the Board determines in good faith, after
consultation with its outside legal counsel and a nationally recognized
financial advisor (which may be the Company's Financial Advisor), (x) that such
Person is reasonably capable of consummating such Acquisition Proposal taking
into account the legal, financial, regulatory and other aspects of such
Acquisition Proposal and (y) that such Acquisition Proposal constitutes or
would reasonably be expected to constitute or result in a Superior Proposal
from the Person that made the applicable Acquisition Proposal, (C) the Board
determines in good faith, after consultation with its outside legal counsel and
a nationally recognized financial advisor (which may be the Company's Financial
Advisor), that the failure to participate in such discussions or negotiations
or to furnish such information would result in a reasonable likelihood of a
breach of the fiduciary duties of the Board to the Company's stockholders under
applicable Law, (D) as promptly as practicable (and in no event later than 24
hours) following any determination by the Board referred to in clauses (B) or
(C) above the Company gives Parent written notice of such determination and at
least 24 hours prior to participating in discussions or negotiations with, or
furnishing or disclosing any nonpublic information to, such Person, the Company
gives Parent written notice of the Company's intention to participate in
discussions or negotiations with, or furnish or disclose nonpublic information
to, such Person, (E) in each such case, the Board has received from the Person
being furnished or disclosed any nonpublic information, an executed
confidentiality agreement (the subject matter of which shall be limited to the
protection of nonpublic information and standstill provisions) on terms no less
favorable to the Company than those contained in the Confidentiality Agreement,
which confidentiality agreement shall in no event provide such Person with any
exclusive right to negotiate with the Company or have the effect of prohibiting
the Company from satisfying its obligations under this Agreement and (F)
simultaneously with or prior to furnishing or disclosing any nonpublic
information to such Person, the Company furnishes such information to Parent
(to the extent such information has not been previously delivered or made
available by the Company to Parent).
(c)
(i) The Board shall not withdraw, modify or change, in a manner
adverse to Parent or Purchaser, the Board's recommendation of this
Agreement, the Offer or the Merger ("Change in Recommendation") unless,
prior to the consummation of the Offer, and if and only if (A) none of the
Company, any of its Affiliates or any of the Representatives have violated
any of the provisions of this Section 7.2, (B) the Company has provided
Parent with written notice that the Board intends to take such action,
such notice to specify in reasonable detail the reason(s) for such
proposed action, such notice to be delivered not less than three full
Business Days prior to the time the action is to be taken; (C) during the
three Business Day period following the delivery of the notice referred to
in clause (B) above, Parent shall have the right to propose adjustments to
the terms and conditions of this Agreement and the Company and its
advisors shall negotiate in good faith with Parent to make adjustments to
the terms and conditions of this Agreement, (D) following any such
negotiations and adjustments pursuant to clause (C) above, the Board of
Directors determines in good faith, after consultation with its outside
legal counsel and a nationally recognized financial advisor (which may be
the Company's Financial Advisor),, that failure to make such Change in
Recommendation would be inconsistent with the fiduciary duties of the
Board to the stockholders of the Company under applicable Law and (E) if
the Change in Recommendation is being made primarily as a result of an
Acquisition Proposal, such Acquisition Proposal is a Superior Proposal and
the Company shall have complied with the provisions of this Section 7.2
with respect to such Acquisition Proposal. Any Change in Recommendation in
accordance with all of the provisions of this Section 7.2(c)(i) shall not
be deemed a breach of Section 7.2(a) hereof. The Board shall not, in
connection with any such Change in Recommendation, take any action to
change the approval of the Board of this Agreement or the Transactions
contemplated hereby, including for purposes of any state takeover statute
or other state law (including, without limitation, Section 203 of the
DGCL) and the Company's certificate of incorporation (including, without
limitation, Article Eleventh and Article Fourteenth thereof) and bylaws.
(ii) The Board shall not recommend, approve, enter into or
accept a Superior Proposal unless prior to the consummation of the Offer,
the Company has not violated any of the provisions of this Section 7.2,
and the Board determines in good faith, after consultation with its
outside legal counsel and a nationally recognized financial advisor (which
may be the Company's Financial Advisor), that such proposal is a Superior
Proposal and that the failure to terminate this Agreement to accept such
Superior Proposal or to recommend such Superior Proposal to the
stockholders of the Company would result in a reasonable likelihood of a
breach of the fiduciary duties of the Board to the Company's stockholders
under applicable Law; provided, however, that the Company shall not have
the right to take any such action or to terminate this Agreement pursuant
to Section 9.4(c) hereof and any purported termination pursuant to Section
9.4(c) hereof shall be void and of no force or effect, unless prior to any
such action or termination: (A) the Company has provided Parent with
written notice that it intends to terminate this Agreement pursuant to
Section 9.4(c) hereof and take such action with respect to a Superior
Proposal, such notice to specify in reasonable detail the material terms
and conditions of the Superior Proposal then determined to be more
favorable and the parties thereto and be delivered not less than three
full Business Days prior to the time the action is to be taken; and (B)
during the three Business Day period following the delivery of the notice
referred to in clause (A) above, Parent shall have the right to propose
adjustments in the terms and conditions of this Agreement and the Company
and its advisors shall negotiate in good faith with Parent regarding such
adjustments in the terms and conditions of this Agreement, and (C)
following any such negotiations and adjustments pursuant to clause (B)
above, the Board of Directors determines in good faith, after consultation
with its outside legal counsel and a nationally recognized financial
advisor (which may be the Company's Financial Advisor), that such proposal
is a Superior Proposal and that the failure to terminate this Agreement to
accept such Superior Proposal or to recommend such Superior Proposal to
the stockholders of the Company would result in a reasonable likelihood of
a breach of the fiduciary duties of the Board to the Company's
stockholders under applicable Law. The Company agrees that any material
amendment to any Acquisition Proposal will be deemed to be a new
Acquisition Proposal for purposes of this Section 7.2(c)(ii). Any Board
action taken in accordance with all of the provisions of this Section
7.2(c)(ii) shall not be deemed a breach of Section 7.2(a) hereof.
(d) The Company shall, and shall cause its Subsidiaries and each of
their respective Representatives to immediately cease and cause to be
terminated any and all discussions, negotiations or communications with any
other Persons with respect to any existing or potential Acquisition Proposal.
The Company will promptly (and in any event within four Business Days of the
date hereof) request each Person that has heretofore executed a confidentiality
agreement on or after October 1, 2005 in connection with its consideration of
an Acquisition Proposal with the Company to return or destroy all confidential
information furnished prior to the execution of this Agreement to or for the
benefit of such Person by or on behalf of the Company or any of its
Subsidiaries and to destroy all summaries, analyses or extracts of or based
upon such information in the possession of such Person or any of its
representatives. The Company agrees not to release any Person from, waive any
provisions of, or fail to use commercially reasonable best efforts to enforce
any confidentiality agreement or standstill agreement to which the Company or
any of the Subsidiaries is a party, except that, if requested to do so by a
Person who is a party to a confidentiality or standstill agreement with the
Company that forbids such Person from submitting an Acquisition Proposal to the
Company, the Company may provide a conditional waiver of such provision of the
confidentiality or standstill agreement between the Company and such Person
solely to the extent necessary and for the limited purpose of permitting such
Person to submit a Superior Proposal directed and disclosed only to the Board
and its Representatives if and only if (i) none of the Company, any of its
Affiliates or any of the Representatives have violated any of the provisions of
this Section 7.2, (ii) such Person has submitted a written certification to the
Company that such Person will if such provision is waived promptly submit a
Superior Proposal with no financing or due diligence conditions or
contingencies, and a copy of such certification has been delivered to Parent,
(iii) the Board determines in good faith, after consultation with its outside
legal counsel and a nationally recognized financial advisor (which may be the
Company's Financial Advisor), that the taking of such action is reasonably
likely to result in a Superior Proposal and that the failure to take such
action would result in a reasonably likelihood of a breach of the fiduciary
duties of the Board to the Company's stockholders under applicable Law, (iv)
the Board has notified Parent of such request and the identity of such Person
within 24 hours of receipt and has notified Parent of its intention to take
such action with respect to such Person not less than 24 hours in advance of
the taking of such action, and (v) no other provision of such confidentiality
or standstill agreement is amended, waived, or modified in any respect. In the
event that a conditional waiver satisfying the requirements in the foregoing
sentence is granted and such Person does not promptly (and in any event within
four Business Days) thereafter submit an Acquisition Proposal that is a
Superior Proposal (determined in good faith by the Board after consultation
with its outside legal counsel and financial advisor) with no financing or due
diligence conditions or contingencies, any such conditional waiver shall be
void and of no effect.
(e) The Company shall promptly (and in any event within 24 hours)
notify Parent orally and confirm in writing if any proposals are received by,
any information is requested from, or any negotiations or discussions are
sought to be initiated or continued with, the Company or its Representatives,
in each case in connection with any Acquisition Proposal or potential
Acquisition Proposal, indicating in connection with such notice, the name of
such Person(s) and the material terms and conditions of such proposal or offer.
The Company shall thereafter keep Parent informed, on a current basis, as to
the material terms and conditions of any such proposal or offer and the status
of any such discussions or negotiations.
(f) Nothing contained in this Section 7.2 shall prohibit the Company
or its Board from taking and disclosing to the Company's stockholders its
position with respect to any tender or exchange offer by a third party pursuant
to Rules 14d-9 and 14e-2 promulgated under the Exchange Act; provided, however,
that any such disclosure relating to an Acquisition Proposal shall be deemed to
be a Change in Recommendation (in which case Parent shall have the right to
terminate this Agreement as set forth in Section 9.3(c) and be paid the
Termination Fee and Reimbursable Expenses) unless the Company Board reaffirms
the Company's recommendation of the Offer in such disclosure and provided
further, that compliance with such rules shall not in any way limit or modify
the effect that any action taken pursuant to such rules has under any other
provision of this Agreement.
(g) "Acquisition Proposal" means any bona fide proposal made by any
Person (other than Parent, Purchaser or any affiliate thereof) relating to (i)
any direct or indirect acquisition or purchase of at least a 15% portion of the
assets of the Company and its Subsidiaries, taken as a whole, immediately prior
to such transaction (ii) any purchase or sale of, or tender or exchange offer
for, capital stock of the Company (or its Subsidiaries) that if consummated
would result in any Person, together with all affiliates thereof, beneficially
owning at least 15% of any class of any capital stock (including the Shares) or
voting power of the Company,, or (iii) any merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving the Company (or any one or more Subsidiaries of the Company,
individually or taken together, whose business constitutes 15% or more of the
net revenues, net income or total assets of the Company and its Subsidiaries,
taken as a whole, immediately prior to such transaction.
(h) "Superior Proposal" means a bona fide written Acquisition Proposal
made by any Person to acquire at least a majority of the issued and outstanding
Shares pursuant to a tender offer or a merger that is reasonably capable of
being consummated and would, if consummated, result in a transaction more
favorable (taking into account the nature of the currency and all legal,
financial, regulatory, timing and similar aspects of, and conditions to, the
proposal and the Person making the proposal, and after giving effect to any
adjustments to the terms and provisions of this Agreement committed to in
writing by Parent in response to such Acquisition Proposal, including taking
into account the nature of the currency and all legal, financial, regulatory,
timing and similar aspects of, and conditions to, the adjustments) to the
Company's stockholders (in their capacities as stockholders), from a financial
point of view, than the Transactions contemplated by this Agreement.
7.3 Commercially Reasonable Efforts; Cooperation. Upon the terms and
subject to the conditions hereof, each of the parties hereto shall use its
commercially reasonable efforts to obtain in a timely manner all necessary
waivers, consents and approvals of Governmental Entities and other Persons and
to effect all necessary registrations and filings, and to use its commercially
reasonable efforts to take, or cause to be taken, all other reasonable actions
and to do, or cause to be done, all other things reasonably necessary, proper
or advisable to consummate and make effective as promptly as practicable the
Transactions contemplated by this Agreement, including, without limitation, (a)
cooperating in responding to inquiries from, and making presentations to,
stockholders, suppliers, customers and Governmental Entities, (b) defending
against and responding to any Litigation challenging or relating to this
Agreement or the Transactions contemplated hereby, including seeking to have
any stay or temporary restraining order entered, by any court or other
Governmental Entity vacated or reversed, (c) cooperating in the preparation and
filing of the Offer Documents and any Proxy Statement, (d) promptly making all
regulatory filings and applications, including without limitation any required
filings under the HSR Act and any other submissions requested by the Federal
Trade Commission or Department of Justice, and any amendments thereto as are
necessary for the consummation of the Transactions contemplated by this
Agreement, (e) effecting all 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 (f) the taking of all acts reasonably necessary to
cause the conditions precedent set forth in Annex A and Article VIII to be
satisfied. In case, at any time after the Effective Time, any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement shall use all
commercially reasonable efforts to take all such action. Notwithstanding
anything herein to the contrary, in connection with any filing or submission or
other action required to be made or taken by any party to effect the Offer, the
Merger and all other Transactions contemplated hereby, the Company shall not,
without the prior written consent of Parent, commit to any divestiture
transaction, and Parent shall not be required to divest or hold separate or
otherwise take or commence to take any action that, in the reasonable
discretion of Parent, limits its freedom of action with respect to, or its
ability to retain, the Company or any of the Company's Affiliates or Parent or
any of Parent's subsidiaries or any material portion of assets or businesses of
the Company, its Subsidiaries, Parent or any of the Parent's subsidiaries.
7.4 Access to Information. Upon reasonable notice, the Company shall
(and shall cause each of its Subsidiaries to) afford to officers, employees,
counsel, accountants, consultants and other authorized representatives of
Parent ("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 employees, assets, properties, contracts, books and records so that they
may have the opportunity to make such investigations as they shall reasonably
request in connection with the Transactions contemplated by this Agreement;
provided, however, that such investigation shall not affect the representations
and warranties made by the Company in this Agreement. During such period, the
Company shall (and shall cause each of its Subsidiaries and Representatives
to), to the extent permitted by Law, furnish promptly to such Parent
Representatives all information concerning its finances, operations, business,
properties and personnel as may reasonably be requested, and respond to such
inquires as Parent and Purchaser shall from time to time reasonably request,
and use commercially reasonable efforts to make available during normal
business hours to Parent, Purchaser and the Parent Representatives the
appropriate individuals (including management, personnel, employees, attorneys,
accountants and other professionals) for reasonable inquiries regarding the
Company's and the Subsidiaries' businesses, properties and personnel. Without
limiting the generality of the foregoing, the Company shall (a) promptly
furnish to Parent and Purchaser (i) a copy of each form, report, schedule,
statement, registration statement and other document filed by it or any
Subsidiary during such period pursuant to the requirements of federal or state
securities Laws or the DGCL, and (ii) on a monthly basis an unaudited monthly
consolidated balance sheet of the Company and its Subsidiaries for the month
then ended and related consolidated statements of earnings, cash flows and
stockholders' equity (which the Company will use commercially reasonable
efforts to furnish no later than fifteen Business Days after the end of each
month); and (b) keep Parent apprised on a current and timely basis of the
status of, and any significant issues relating to, the Company's consolidated
financial statements. Notwithstanding the foregoing, nothing herein shall
require the Company or any of its Subsidiaries to disclose any information that
would cause a violation of Law or any confidentiality agreement in effect as of
the date of this Agreement (in which case the parties will make appropriate
substitute disclosure arrangements, if such arrangements can be made by the
parties using their reasonable best efforts and, if material to the Company,
without such violation). The Confidentiality Agreement, dated February 24, 2006
(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.
7.5 Publicity. The parties will consult with each other and will
mutually agree upon any press releases or public announcements pertaining to
the Transactions 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 or trading market, 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 the other party
before issuing any such press releases or making any such public announcements.
7.6 Indemnification of Directors and Officers.
(a) Parent shall cause the Surviving Corporation to, (i) indemnify,
defend and hold harmless any person who is now, has been at any time prior to
the date hereof, or becomes prior to the Effective Time, a director or officer
of the Company or any of its present or former Subsidiaries (the "Indemnified
Party") to the same extent such persons are indemnified as of the date of this
Agreement by the Company pursuant to the Company's certificate of incorporation
and the Company's by-laws against all losses, claims, damages, liabilities,
costs and expenses (including attorneys' fees and expenses), judgments, fines,
losses, and amounts paid in settlement in connection with any actual or
threatened action, suit, claim, proceeding or investigation (each, a "Claim")
to the extent that any such Claim is based on, or arises out of, the fact that
such person is or was a director or officer of the Company or any of its
Subsidiaries or is or was serving at the request of the Company or any of its
Subsidiaries as a director or officer of another corporation, partnership,
joint venture, trust or other enterprise, in each case to the extent that any
such Claim pertains to any matter or fact arising, existing or occurring prior
to or at the Effective Time (including to the extent that any such Claim is
based on, or arises out of this Agreement or any of the transactions
contemplated hereby), regardless of whether such Claim is asserted or claimed
prior to, at or after the Effective Time, other than in each case for Claims
judicially determined to involve a willful breach of this Agreement, and (ii)
advance to such Indemnified Party its fees and expenses (including attorneys'
fees) periodically and promptly upon request to the fullest extent permitted
under the certificate of incorporation and bylaws of the Company as of the date
hereof, subject to the provision by such Indemnified Party of an undertaking to
reimburse the amounts so advanced in the event of a determination by a court of
competent jurisdiction that such Indemnified Party is not entitled thereto.
Parent and the Company agree that all rights to indemnification and all
limitations of liability existing in favor of any Indemnified Party as provided
in the Company's certificate of incorporation and by-laws and indemnification
agreements as in effect as of the date hereof shall survive the Merger and
shall continue in full force and effect for a period of six years from the
Effective Time unless otherwise required by Law. In addition, until six years
from the Effective Time, unless otherwise required by applicable Law, the
certificate of incorporation and bylaws of the Surviving Corporation shall
contain provisions no less favorable with respect to indemnification of the
Indemnified Parties for actions or omissions occurring at or prior to the
Effective Time than those set forth in the certificate of incorporation and
bylaws of the Company on the date of this Agreement. Notwithstanding the
six-year period specified in the foregoing sentences, in the event any Claim or
Claims are asserted or made within such six-year period, all rights to
indemnification in respect of such Claim or Claims shall continue until the
disposition thereof.
(b) Parent shall cause the Surviving Corporation to maintain in effect
for a period of six years from the Effective Time the current directors' and
officers' liability insurance policy maintained by the Company (provided that
Parent may substitute therefor a policy or policies providing at least the same
coverage containing terms and conditions which are in the aggregate not less
advantageous to the Insured Parties than such current policy) covering the
Persons serving as officers and directors of the Company on the date of this
Agreement (collectively, the "Insured Parties") with respect to acts or
omissions occurring prior to the Effective Time which were committed by such
officers and directors in their capacity as such (including, without
limitation, the Transactions contemplated by this Agreement); provided,
however, that (i) in no event shall Parent be required to expend on an annual
basis more than 200% of the current amount expended by the Company (the
"Insurance Amount") to maintain or procure such insurance coverage; and (ii) if
Parent is unable to maintain or obtain the insurance otherwise called for by
this Section 7.6(b) Parent shall use all reasonable efforts to obtain as much
comparable insurance as is available for the Insurance Amount. The Company
represents to Parent that the last annual premium paid for such insurance prior
to the date hereof was $270,500. Notwithstanding the foregoing, the obligations
under this Section 7.6(b) shall be satisfied if the Company, prior to the
Effective Time and only with the prior written consent of Parent, or the
Surviving Corporation after the Effective Time purchases a "tail" policy under
the Company's existing directors' and officers' insurance policy that (i) has
an effective term of six years from the Effective Time, (ii) covers the Insured
Parties for actions and omissions occurring on or prior to the Effective Time
which were committed by such officers and directors in their capacity as such
(including, without limitation, the Transactions contemplated by this
Agreement);and (iii) contains terms and conditions (including without
limitation coverage amounts) that are at least as favorable in the aggregate as
the terms and conditions of the Company's directors' and officers' insurance
policy in effect on the date hereof. The Company shall cooperate with Parent
and its insurance broker in connection with the provision of information
relating to the analysis of, and application for, insurance responsive to the
requirements of this Section.
(c) The provisions of this Section 7.6 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives and shall not be deemed exclusive of any other rights
to which an Indemnified Party is entitled, whether pursuant to law, contract or
otherwise. Parent hereby guarantees the payment and performance by the
Surviving Corporation of the indemnification and other obligations pursuant to
this Section 7.6 and the certificate of incorporation and by-laws of the
Surviving Corporation.
(d) In the event that Parent, the Surviving Corporation or any of
their successors or assigns (i) consolidates with or merges into any other
Person and shall not be the continuing or surviving Person of such
consolidation or merger or (ii) transfers or conveys a majority of its
properties and assets to any Person, then, and in each such case, to the extent
necessary, proper provision shall be made so that the successors and assigns of
Parent or the Surviving Corporation or their respective successors or assigns,
as the case may be, assume the obligations set forth in this Section 7.6.
7.7 Employees.
(a) Except as set forth on Schedule 7.7(a) and as provided in Section
7.7(b) below, for a period of one year following the Effective Time, Parent
agrees to provide employees of the Surviving Corporation and its subsidiaries
with employee benefits (other than options and equity incentives) that are in
the aggregate substantially similar to those employee benefits that are
provided to similarly situated employees of the Company and its Subsidiaries as
of the date of this Agreement. Employees of the Company or any Subsidiary shall
receive credit for purposes of eligibility to participate and vesting (but not
for benefit accruals, determination of levels of benefits or any other
purposes) under any employee benefit plan, program or arrangement established
or maintained by the Surviving Corporation or any of its subsidiaries for
service accrued or deemed accrued prior to the Effective Time with the Company
or any Subsidiary to the same extent such service was taken into account for
such purposes under comparable Employee Benefit Plans prior to the Effective
Time; provided, however, that such crediting of service shall not operate to
duplicate any benefit or the funding of any such benefit. Notwithstanding the
foregoing, nothing in this Section 7.7 nor any other provision of this
Agreement shall interfere with the right of the Parent or the Surviving
Corporation and their subsidiaries to terminate the employment of any of their
respective employees after the Effective Time to the extent permitted by
applicable Law or to terminate or amend any employee benefit plan, including
without limitation any Employee Benefit Plan to the extent permitted pursuant
to the term of such plan or applicable Law.
(b) The Surviving Corporation hereby agrees to assume the Company's
binding obligations under any collective bargaining agreements or other labor
agreements, employment agreements, employment termination agreements and
individual benefit arrangements, all as in effect at the Effective Time, and to
provide employees covered by such agreements and arrangements with compensation
and benefits as set forth in such agreements and arrangements..
7.8 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 whose occurrence or
non-occurrence, as the case may be, could reasonably be expected to cause any
representation and warranty contained in this Agreement to be untrue or
inaccurate in any material respect or any condition set forth in Annex A or
Article VIII to not be satisfied at any time from the date hereof to the
Effective Time and (b) any failure of the Company, Purchaser 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 7.8
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice or the representations or warranties of the parties
or the conditions to the obligations of the parties hereto. The Company shall
give prompt notice to Parent of any notice or other communication from any
Person alleging that the consent of such Person is or may be required in
connection with the Transactions contemplated by this Agreement.
7.9 Takeover Laws. If any state takeover statute or other similar Law
becomes or is deemed to become applicable to the Offer, the Merger, the Top-Up
Option, this Agreement or any of the Transactions contemplated hereby, the
Company shall use its reasonable best efforts to render such Law inapplicable
to all of the foregoing.
7.10 Litigation Matters. Each of the parties hereto agrees to
cooperate and use all reasonable efforts to vigorously contest and resist any
Litigation, and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and that restricts, prevents or prohibits
consummation of any of the Transactions, including, without limitation, by
vigorously pursuing all available avenues of administrative and judicial
appeal. The Company agrees that it shall not settle or offer to settle any
Litigation commenced prior to or after the date hereof against the Company or
any of its directors by any stockholder of the Company relating to this
Agreement, including the Offer, the Merger and any other transaction
contemplated hereby, without the prior written consent of Parent (which consent
shall not unreasonably be withheld).
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
8.1 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. If required for the Merger pursuant to
applicable Law, this Agreement and the Merger shall have been duly approved by
the stockholders of the Company in accordance with applicable Law and the
certificate of incorporation of the Company;
(b) Injunctions, Illegality. No Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Law or Order (whether temporary, preliminary or permanent) which is then in
effect and has the effect of making the acquisition of Shares by Parent or
Purchaser (or any Affiliate of either of them) or consummation of the Merger
illegal or otherwise restricting, preventing or prohibiting consummation of the
Transactions; and
(c) Governmental Filings and Consents. All material 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, and any waiting period (and any extension
thereof) applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated.
(d) The Offer. Purchaser shall have purchased Shares pursuant to the
Offer.
ARTICLE IX
TERMINATION; AMENDMENT; WAIVER
9.1 Termination by Mutual Consent. Subject to Section 1.3(b), this
Agreement may be terminated, and the Offer and the Merger may be abandoned, at
any time prior to the Effective Time, by the mutual written consent of Parent
and the Company, notwithstanding any requisite approval and adoption of this
Agreement and the Transactions by the stockholders of the Company.
9.2 Termination by Either Parent or the Company. This Agreement may be
terminated, and the Offer and the Merger may be abandoned, by Parent or the
Company at any time prior to the Effective Time, notwithstanding any requisite
approval and adoption of this Agreement and the Transactions by the
stockholders of the Company, if:
(a) any court or other Governmental Entity of competent jurisdiction
shall have issued, enacted, entered, promulgated or enforced a Law or Order or
taken any other action permanently restraining, enjoining or otherwise
prohibiting the Offer or the Merger and such Law or Order or other action shall
have become final and nonappealable; or
(b) if (i) the Offer expires or is terminated or withdrawn pursuant to
its terms without any Shares being purchased thereunder, or (ii) Purchaser
shall not have accepted for payment all Shares tendered pursuant to the Offer
on or prior to the Termination Date; provided, that the right to terminate this
Agreement pursuant to this Section 9.2(b) shall not be available to any party
whose material breach of its obligations under this Agreement results in such
failure to purchase. The "Termination Date" is October 31, 2006, provided that
if (A) prior to such date there is issued a Request for Additional Information
and Materials under the HSR Act or that a similar request or investigation is
made in connection with the review by any governmental or regulatory authority
of the Offer and the Merger under any comparable law of non-United States
jurisdictions, and (B) as of such date all of the conditions to the Offer set
forth in Annex A shall then be satisfied except that the waiting period under
the HSR Act has not expired or been terminated, then the Termination Date shall
be December 31, 2006.
9.3 Termination by Parent. This Agreement may be terminated, and the
Transactions may be abandoned, by Parent, if:
(a) due to an occurrence or circumstance that would result in a
failure to satisfy any condition set forth in Annex A hereto, Purchaser shall
have failed to commence the Offer within five Business Days following the date
of this Agreement, unless such failure shall have been caused by or resulted
from the failure of Parent or Purchaser to perform, in any material respect,
any of their material covenants or agreements contained in this Agreement, or
the material breach by Parent or Purchaser of any of their material
representations or warranties contained in this Agreement; or
(b) prior to the purchase of Shares pursuant to the Offer by
Purchaser, the Company shall have breached any representation, warranty,
covenant or other agreement contained in this Agreement which (A) would give
rise to the failure of a condition set forth in paragraph (e) or (f) of Annex A
hereto and (B) is incapable of being cured or is not cured within 30 days after
notice in writing to the Company by Parent; or
(c) prior to the purchase of Shares pursuant to the Offer by
Purchaser, (i) the Company shall have materially breached its obligations under
this Agreement by failing to file the Schedule 14D-9 as provided in Section 1.2
hereof; provided, that Parent may not terminate this Agreement pursuant to this
Section 9.3(c) if Parent or Purchaser is at such time in material breach of its
obligations under this Agreement; (ii) the Company shall have failed to include
in the Schedule 14D-9 or the Proxy Statement the Board's approval or
recommendation of this Agreement, the Offer or the Merger, (iii) the Board or
any committee thereof shall have withdrawn or materially modified or changed
(including by amendment of the Schedule 14D-9) its recommendation of this
Agreement, the Offer or the Merger in a manner adverse to Parent or Purchaser;
(iv) the Board or any committee thereof shall have recommended or approved any
Acquisition Proposal; (v) the Board or any committee thereof shall have
approved any transaction (other than the Transactions) to render inapplicable
to such transaction any restrictive provision of any "fair price,"
"moratorium," "control share acquisition," "business combination" or other
similar anti-takeover Law (including, without limitation, Section 203 of the
DGCL) or any restrictive provision of any applicable anti-takeover provision in
the Company's certificate of incorporation (including, without limitation,
Article Eleventh and Article Fourteenth thereof) or bylaws, (vi) any Person
other than Parent or Purchaser shall have become the beneficial owner of more
than 25% of the outstanding Shares; or (vii) the Company shall have entered
into any agreement with respect to any Superior Proposal in accordance with
Section 7.2 of the Agreement.
9.4 Termination by the Company. This Agreement may be terminated by
the Company, and the Offer and the Merger may be abandoned, at any time prior
to the time that Purchaser has purchased Shares pursuant to the Offer if:
(a) Purchaser shall have materially breached its obligations under
this Agreement by failing to commence the Offer as provided in Section 1.1
hereof; provided, that the Company may not terminate this Agreement pursuant to
this Section 9.4(a) if the Company is at such time in material breach of its
obligations under this Agreement;
(b) there shall have occurred, on the part of Parent or Purchaser, a
material breach of any representation, warranty, covenant or agreement
contained in this Agreement which is incapable of being cured or is not cured
within 30 days after notice in writing of such breach is given by the Company
to the party committing the breach, except in any case, for such failures which
are not reasonably likely to affect adversely Parent's or Purchaser's ability
to complete the Offer or the Merger; or
(c) in connection with entering into a definitive agreement with
respect to a Superior Proposal in accordance with Section 7.2, provided that
(i) the Company and its Representatives shall have complied in all respects
with Section 7.2 in connection therewith, and (ii) the Company has prior
thereto paid in full the Termination Fee and Reimbursable Expenses due to
Parent and Purchaser under Section 10.1.
9.5 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Article IX, 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 9.5 and the provisions of Sections 10.1 and
10.2, the last sentence of Section 1.2(c) and the last sentence of Section 7.4.
Nothing contained in this Section 9.5 shall relieve any party from liability
for any breach of this Agreement, provided, however, that Parent and Purchaser
shall not be able to obtain and damages, consequential, punitive or otherwise,
as a result of such breach if Parent has received the Termination Fee and
Reimbursable Expenses pursuant to Section 10.1.
9.6 Extension; Waiver. At any time prior to the Effective Time, each
of Parent, Purchaser and the Company may (i) extend the time for the
performance of any of the obligations or other acts of the other parties, (ii)
waive any inaccuracies in the representations and warranties of the other
parties contained herein or in any document, certificate or writing delivered
pursuant hereto or (iii) waive compliance by the other parties with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in any
instrument in writing signed on behalf of such party. The failure of a party
hereto to assert any of its rights hereunder shall not constitute a waiver of
such rights, and the failure to take any action to terminate this Agreement
pursuant to Article IX, if such termination is permitted pursuant thereto,
shall not give rise to an inference that a party entitled to so terminate this
Agreement has waived its right to do so.
ARTICLE X
MISCELLANEOUS AND GENERAL
10.1 Payment of Fees and Expenses.
(a) Except as set forth in Section 10.1(b), whether or not the Merger
is consummated, all costs and expenses incurred in connection with this
Agreement and the Transactions contemplated by this Agreement shall be paid by
the party incurring such expenses.
(b) In the event that:
(i) this Agreement is terminated pursuant to Section 9.3(c)(i)
through (v), inclusive, Section 9.3(c)(vii) or Section 9.4(c); or
(ii) (A) this Agreement is terminated pursuant to Section
9.2(b), Section 9.3(a) (other than a termination due to an occurrence or
circumstance that results in a failure of paragraph (a), (b) or (d) of
Annex A), Section 9.3(b) or Section 9.3(c)(vi) and (B) prior thereto any
Person shall have commenced, publicly proposed or communicated to the
Company an Acquisition Proposal or any Person has publicly proposed or
communicated to the Company an intention (whether or not conditional) to
make an Acquisition Proposal and (C) and concurrently with such
termination, or within twelve months thereafter, the Company enters into a
merger agreement, acquisition agreement or similar agreement with respect
to an Acquisition Proposal or an Acquisition Proposal is consummated,
then, in any such event, the Company shall pay Parent a fee of $7.0 million
(the "Termination Fee"), which amount plus an amount equal to Purchaser's
actual, documented, out-of-pocket fees and expenses (including, without
limitation, reasonable legal, investment banking, accounting, banking and
consulting fees and expenses) incurred by Parent and Purchaser in connection
with the due diligence investigation, the Offer, the Merger, this Agreement and
the consummation of the Transactions contemplated hereby not to exceed $2.5
million (the "Reimbursable Expenses"), shall be payable by wire transfer of
immediately available funds to an account designated by Purchaser. The
Termination Fee and Parent's good faith estimate of its Reimbursable Expenses
shall be paid and a written acknowledgment by the Company of its obligation to
reimburse Parent for its actual expenses in excess of such estimated expenses
payment shall be delivered (x) at or prior to the time of, and as a
pre-condition to the effectiveness of, termination in the case of a termination
pursuant to Section 9.4(c), (y) as promptly as practicable (and in any event,
within two Business Days) in the case of a termination pursuant to Section
9.3(c) and (z) upon the earliest to occur of the execution of a definitive
agreement and the consummation of a transaction in accordance with a
termination described in Section 10.1(b)(ii). The Termination Fee shall be
payable by wire transfer of immediately available funds to an account
designated by Purchaser.
(c) The Company shall not withhold any amounts on any payment under
this Section 10.1 unless such withholding is required by Law. The parties
acknowledge that the agreements contained in Section 10.1 are an integral part
of the Transactions contemplated by this Agreement, and that, without these
agreements, Parent and Purchaser would not have entered into this Agreement.
Accordingly, if the Company fails to pay promptly any amounts due pursuant to
Section 10.1, and, in order to obtain such payment, Parent commences Litigation
which results in a judgment against the Company for the fee or expense
reimbursement set forth in Section 10.1, the Company shall pay to Parent its
costs and expenses (including reasonable attorneys' fees and expenses) in
connection with such Litigation, together with interest on the amount due from
each date for payment until the date of the payment at a rate equal to the
"prime rate" (as announced by JPMorgan Chase & Co. or any successor thereto) in
effect on the date on which such payment was required to be made plus 3%.
10.2 Non-Survival of Representations and Warranties; Survival of
Confidentiality. The representations and warranties made herein shall not
survive beyond the Effective Time. This Section 10.2 shall not limit any
covenant or agreement of the parties hereto which covenants and agreements
shall survive in accordance with their respective terms. 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.
10.3 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 (i)
after the purchase of the Shares pursuant to the Offer, any amendment shall be
in compliance with the terms of Section 1.3(b) hereof and (ii) after approval
of this Agreement by the stockholders of the Company, no amendment shall be
made which changes the consideration payable in the Merger or which is
otherwise required under any applicable law to be approved by such stockholders
without the approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of all the parties.
10.4 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.
10.5 Counterparts. For the convenience of the parties hereto, this
Agreement may be executed manually or by facsimile 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.
10.6 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.
10.7 Jurisdiction. Each of the parties hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the Court
of Chancery of the State of Delaware, and any appellate court thereof, for any
litigation arising out of or relating to this Agreement or the agreements
delivered in connection herewith or the Transactions contemplated hereby or
thereby, to the extent the Court of Chancery has jurisdiction over the claims
alleged in such litigation, or, if the Court of Chancery does not have
jurisdiction over the claims alleged in such litigation, the courts of the
State of Delaware and of the United States of America located in the State of
Delaware, and each of the parties hereby irrevocably and unconditionally (i)
agrees not to commence any such litigation except in such courts, (ii) waives
any objection to the laying of venue of any such litigation in such Delaware
courts and (iii) agrees not to plead or claim in any Delaware court that such
litigation brought therein has been brought in an inconvenient forum. Process
in any suit, action or proceeding may be served on any party anywhere in the
world, whether within or without the State of Delaware. Without limiting the
generality of the foregoing, each party hereto agrees that service of process
upon such party at the address referred to in Section 10.8, together with
written notice of such service to such party, shall be deemed effective service
of process upon such party. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner permitted by
Law.
10.8 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be delivered by hand or
sent by facsimile transmission (with a confirming copy sent by overnight
delivery service) or by registered or certified mail (postage prepaid, return
receipt requested) or express mail or reputable overnight courier service to
the respective parties and shall be deemed given when so delivered by hand or
facsimile transmission, or if mailed, three (3) Business Days after mailing
(one Business Day in the case of overnight mail or overnight courier service)
as follows:
(a) If to the Company, to
Woodhead Industries, Inc.
Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (facsimile)
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (facsimile)
Attention: Xxxxxxx X. Xxxxxx, Esq.
(b) If to Parent or Purchaser, to
Molex Incorporated
0000 Xxxxxxxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (facsimile)
Attention: Xxxxxx X. Xxx, Vice President of New
Ventures and Acquisitions
with a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx LLP
7800 Sears Tower
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
(000) 000-0000 (telephone)
(000) 000-0000 (facsimile)
Attention: Xxxxxxx X. Xxxx, Esq.
or to such other Persons or addresses as may be designated in writing by the
party to receive such notice.
10.9 Entire Agreement; Assignment. This Agreement and the
Confidentiality Agreement (a) 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, and (b) shall not be
assigned by operation of law or otherwise, except that Parent and Purchaser may
assign all or any of their rights and obligations hereunder to any affiliate of
Parent, provided that no such assignment shall relieve the assigning party of
its obligations hereunder if such assignee does not perform such obligations.
10.10 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 IV 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 7.6 shall
inure to the benefit of and be enforceable by the Insured Parties, including
the Indemnified Parties.
10.11 Certain Definitions. As used herein:
(a) "Affiliate" of a Person shall mean a Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first mentioned Person;
(b) "Available Company SEC Documents" shall mean all reports,
schedules, forms, statements and other documents filed by Company with the SEC
and publicly available prior to the date of this Agreement.
(c) "Business Day" means any day, other than a Saturday, Sunday, or a
federal holiday in the United States of America.
(d) "Contract" shall mean all oral and written contracts, purchase
orders, sales orders, licenses, leases and other agreements, commitments,
arrangements and understandings.
(e) "Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, Orders, decrees, suits, Litigation, demands,
demand letters, directives, threats, claims, Liens, investigations, proceedings
or notices of noncompliance or violation by any Governmental Entity or other
Person alleging liability arising out of, based on or related to (x) the
presence, Release or threatened Release of, or exposure to, any Hazardous
Substances at any location, whether or not, owned, operated, leased or managed
by the Company or any Subsidiary, or (y) any other circumstances forming the
basis of any violation or alleged violation of any Environmental Law or
Environmental Permit.
(f) "Environmental Law" shall mean any federal, state, municipal,
local, foreign or other statutes, Laws, ordinances, rules or regulations,
Orders, decrees, common law principles, judgments or binding agreements issued,
promulgated or entered into by or with any Governmental Entity relating to
regulation of pollution or the protection of human health or the environment
(including ambient air, surface water, groundwater, soils, subsurface strata
and natural resources) including, without limitation, Laws concerning Hazardous
Substances, including Laws and regulations relating to the presence of,
exposure to, Release of or threatened Release of Hazardous Substances or
otherwise relating to the generation, manufacture, processing, distribution,
use, treatment, storage, recycling, transport, handling of, or the arrangement
for such activities with respect to, Hazardous Substances, including without
limitation the following federal statutes and their state counterparts, as each
may be amended from time to time, and any regulations promulgated thereunder:
the Atomic Energy Act, the Clean Air Act, the Clean Water Act, the
Comprehensive Environmental Response, Compensation, and Liability Act, the
Federal Insecticide, Fungicide, and Rodenticide Act, the Hazardous Materials
Transportation Act, the Occupational Safety and Health Act (including only
provisions relating to exposure to Hazardous Substances), the Resource
Conservation and Recovery Act and the Safe Drinking Water Act.
(g) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and all regulatory guidance thereunder.
(h) "Governmental Entity" shall mean any court, arbitrator,
department, commission, board, bureau, agency, authority, instrumentality or
other governmental or regulatory body, whether federal, state, municipal,
county, local, foreign or other.
(i) "Hazardous Substance" shall mean any hazardous or toxic substance
which is regulated by (or would require remediation under) Environmental Laws,
and includes, without limitation, (x) any and all materials or substances which
are defined as hazardous waste, extremely hazardous waste or a hazardous
substance pursuant to state, federal or local governmental Law; (y) asbestos
and asbestos containing materials; (z) polychlorinated biphenyls; (aa)
petroleum products, including without limitation, crude oil, constituents of
petroleum products, and substances derived from petroleum; (bb) urea
formaldehyde and related substances; (cc) radon and other radioactive
substances; (dd) substances which are toxic, ignitable, reactive; (ee)
biohazardous materials, including without limitation infectious substances and
regulated medical waste as defined in 49 CFR Sec. 173.134(a) and (ff) toxic
mold.
(j) "Indebtedness" of any Person at any date shall include (i) all
indebtedness (including interest payments or prepayments required prior to
satisfaction) of such Person for borrowed money or for the deferred purchase
price of property or services (other than current liabilities for trade
payables incurred and payable in the ordinary course of business consistent
with past practice), including earn-out or similar contingent purchase amounts,
(ii) any other indebtedness of such Person which is evidenced by a note,
mortgage, bond, debenture or similar instrument, (iii) all obligations of such
Person under capitalized leases (other than the current portion thereof to the
extent reflected in current liabilities), (iv) all obligations of such Person
for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction, (v) all obligations of the type
referred to in clauses (i) through (v) of any Persons for the payment of which
such Person is responsible or liable, directly or indirectly, as obligor,
guarantor or otherwise, including guarantees of such obligations and (vi) all
obligations of the type referred to in clauses (i) through (v) of other Persons
secured by any Liens on any property or asset of such Person (whether or not
such obligation is assumed by such Person).
(k) "Knowledge" means with respect to the Company regarding any matter
in question, the actual knowledge of Xxxxxxxx Xxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxx
X. Xxxxxx, Xxxxxx X. Xxxxxxxxxx, Xxxxxxx X. Xxxx, Xxxxxxx Xxxxxxx, Ed
Nabrotsky, Xxxxxxxx Xxxxxx and Xxxx Xxxxx.
(l) "Laws" shall mean any applicable foreign, federal, state or local
statute, law, ordinance, rule or regulation.
(m) "Liability" means any direct or indirect indebtedness, guaranty,
endorsement, claim, loss, damage, deficiency, cost, expense, obligation or
responsibility, fixed or unfixed, known or unknown, asserted or unasserted,
absolute or contingent, liquidated or unliquidated, secured or unsecured.
(n) "Lien" means any security interest, pledge, mortgage, lien
(statutory or otherwise), charge, hypothecation, option to purchase or lease or
otherwise acquire any interest, conditional sales agreement, claim, charge,
assessment, levy, license, condition, reservation, restriction, exception,
covenant, easement, right of way, title defect or objection, adverse claim of
ownership or use, transfer restriction, voting agreement, proxy or other
limitation on voting rights, possibilities of reversion, rights of refusal or
other encumbrance of any kind whatsoever, other than those arising by reason of
restrictions on transfers under federal, state and foreign securities laws.
(o) "Litigation" means any complaint, action, suit, proceeding,
arbitration or other alternate dispute resolution procedure, demand,
investigation or inquiry, whether civil, criminal or administrative.
(p) "Material Adverse Effect" shall mean any fact, event, change,
effect, condition, factor or circumstance that individually or in the aggregate
with all other facts, changes, events, effects, conditions, factors and
circumstances (i) is or is reasonably likely to be materially adverse to the
business, results of operations, financial condition, assets or Liabilities of
Company and Subsidiaries taken as a whole or (ii) prevents in any material
respect the Company's ability to perform its obligations under this Agreement
or consummate the Offer, the Merger or the other Transactions contemplated
hereby; provided, however, that the following shall not be taken into account
in determining whether there has occurred (or whether there is reasonably
likely to be) a Material Adverse Effect: (A) changes in the economy, financial
markets (including the securities markets), political or regulatory conditions
generally, including, without limitation, as a result of terrorist activities
not directly affecting the Company, engagement or escalation in hostilities
involving the United States, or declaration of a national emergency or war by
the United States; (B) changes generally applicable to the industries and
markets in which the Company and its subsidiaries or the Parent and its
subsidiaries, as the case may be, are involved (except for any changes which
disproportionately affect the business, results of operations, properties,
condition, assets or Liabilities of Company and its Subsidiaries, taken as a
whole, as compared to other industry participants); (C) changes in any laws
applicable to the Company and its subsidiaries or the Parent and its
subsidiaries, as the case may be, after the date hereof (except in each such
case for any changes which disproportionately affect the business, results of
operations, properties, condition, assets or Liabilities of Company and its
Subsidiaries, taken as a whole, as compared to other industry participants);
(D) changes in GAAP after the date hereof (except in each such case for any
changes which disproportionately affect the business, results of operations,
properties, condition, assets or Liabilities of Company and its Subsidiaries,
taken as a whole, as compared to other industry participants); or (E) the
announcement of this Agreement or the announcement or consummation of the Offer
or the Merger.
(q) "Orders" shall mean any order, writ, injunction, judgment, plan or
decree.
(r) "Permit" shall mean any permit, license, variance, exemption,
authorization, certificate, franchise, order or approval of any Governmental
Entity.
(s) "Person" shall mean an individual, corporation, partnership,
limited liability company, association, trust, unincorporated organization,
group (within the meaning of Section 13(d)(3) of the Exchange Act), or other
entity or organization.
(t) "Release" means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into or through the environment (including ambient air, surface
water, groundwater, land surface or subsurface strata) or within any building,
structure, facility or fixture.
(u) "Subsidiary" shall mean any corporation, partnership, joint
venture or other organization or entity, whether incorporated or
unincorporated, of which (i) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of
the board of directors or others performing similar functions with respect to
such corporation or other organization is directly or indirectly owned or
controlled by Company or by any one or more of its Subsidiaries, or by Company
and one or more of its Subsidiaries or (ii) Company or any of its Subsidiaries
is a general partner or managing member or otherwise has the ability to elect a
majority of the directors, trustees or managing members thereof.
(v) "subsidiary" when used with reference to any Person, any entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other Persons performing similar
functions are at any time directly or indirectly owned by such Person.
(w) "Taxes" means all federal, state, local and foreign taxes
(including income or profits taxes, alternative or add-on minimum taxes,
profits or excess profits taxes, premium taxes, occupation taxes, equalization
taxes, excise taxes, sales taxes, use taxes, gross receipts taxes, franchise
taxes, ad valorem taxes, severance taxes, capital levy taxes, prohibited
transaction taxes, transfer taxes, value added taxes, employment and
payroll-related taxes (including employee withholding or employer payroll tax,
FICA or FUTA), real or personal property taxes, business license taxes,
occupation taxes, stamp taxes or duties, withholding or back up withholding
taxes, import duties and other governmental charges and assessments), of any
kind whatsoever, including interest, additions to tax and penalties with
respect thereto, it being agreed that the foregoing shall include any
transferee or secondary liability for a Tax and any liability assumed by
agreement or arising as a result of being or ceasing to be a member of any
affiliated group or being included or required to be included in any Tax
Return.
(x) "Taxable Period" means any taxable year or any other period that
is treated as a taxable year (or other period, or portion thereof, in the case
of a Tax imposed with respect to such other period, e.g., a quarter) with
respect to which any Tax may be imposed under any applicable Law.
(y) "Tax Returns" shall mean any return, declaration, report,
statement, estimate, claim for refund, or information return or statement
relating to, or required to be filed in connection with, any Taxes, including
any schedule, form, attachment or amendment.
(z) "Trade Rights" shall mean rights in the following: (i) all
trademarks, all trademark rights, including, without limitation, license rights
in trademarks or service marks owned by others, business identifiers, trade
dress, service marks, trade names and brand names; (ii) all copyrights and all
other rights associated therewith and the underlying works of authorship; (iii)
all patents and all proprietary rights associated therewith; (iv) all contracts
or agreements granting any right, title, license or privilege under any or all
of the intellectual property rights of any third party; (v) all inventions,
mask works and mask work registrations, know how, discoveries, improvements,
designs, computer source codes, programs and other software (including all
machine readable code, printed listings of code, documentation and related
property and information), trade secrets, websites, domain names, shop and
royalty rights, employee covenants and agreements respecting intellectual
property and non competition and all other types of intellectual property; and
(vi) all registrations of any of the foregoing, all applications therefor, all
goodwill associated with any of the foregoing and all claims for infringement
or breach thereof.
10.12 Schedules. The schedules shall be construed with and as an
integral part of this Agreement to the same extent as if the same has been set
forth verbatim herein. Any matter disclosed shall not be deemed to be an
admission or representation as to the materiality of the item so disclosed.
10.13 Obligation of Parent. Whenever this Agreement requires Purchaser
to take any action, such requirement shall be deemed to include an undertaking
on the part of Parent to cause Purchaser to take such action and a guarantee of
the payment and performance thereof.
10.14 Specific Performance. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to
specific performance of the terms and provisions hereof, in addition to any
other remedy to which they are entitled at law or in equity.
10.15 Validity. 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 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 be consummated as originally contemplated to the
fullest extent possible.
10.16 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 in any way the meaning or
interpretation of the provisions hereof.
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.
WOODHEAD INDUSTRIES, INC.
By: /s/ Xxxxxxxx Xxxxxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Chairman, President and CEO
MOLEX INCORPORATED
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Vice Chairman and CEO
MLX ACQUISITION CORP.
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: President
ANNEX A
CONDITIONS TO THE OFFER(1)
Notwithstanding any other provisions of the Offer, Purchaser shall not
be required to accept for payment or pay for, any Shares, and may extend,
terminate or amend the Offer and may postpone the acceptance for payment of any
Shares tendered if (i) immediately prior to the expiration of the Offer the
Minimum Condition shall not have been satisfied, (ii) any applicable waiting
period under the HSR Act, the German Act Against Restraints of Competition or
any material applicable foreign statue or regulation shall not have expired or
been terminated prior to the expiration of the Offer or (iii) at any time on or
after the date of this Agreement and prior to the acceptance for payment of
Shares, any of the following conditions shall exist:
(a) any Governmental Entity of competent jurisdiction shall have
issued an Order or ruling or taken any other action permanently restraining,
enjoining or otherwise prohibiting or materially delaying or preventing any
Transaction and such order, decree, injunction, ruling or other action shall
have become final and non-appealable;
(b) there shall be pending any Litigation by any Governmental Entity
with appropriate jurisdiction, or there shall have been any Law or
interpretation enacted, promulgated, amended or issued applicable to, in either
case (i) Parent, the Company or any subsidiary or Affiliate of Parent or the
Company or (ii) any Transaction, by any Governmental Entity with appropriate
jurisdiction, other than the routine application of the waiting period
provisions of the HSR Act to the Offer or the Merger, that is reasonably likely
to result, directly or indirectly, in any Person (A) challenging or seeking to
make illegal or otherwise restrain or prohibit or make materially more costly
the making of the Offer, the acceptance for payment of any Shares by Parent,
Purchaser or any other affiliate of Parent, or the purchase of Shares, or the
consummation of any other Transaction; (B) seeking to prohibit or limit
materially the ownership or operation by the Company, Parent or any of their
subsidiaries of all or any of the business or assets of the Company, Parent or
any of their subsidiaries that is material to either Parent and its
subsidiaries or the Company and the Subsidiaries, in either case, taken as a
whole, or to compel the Company, Parent or any of their subsidiaries, as a
result of the Transactions, to dispose of or to hold separate all or any
portion of the business or assets of the Company, Parent or any of their
subsidiaries that is material to either Parent and its subsidiaries or the
Company and the Subsidiaries, in each case, taken as a whole; (C) seeking to
impose any limitation on the ability of Parent, Purchaser or any other
affiliate of Parent to exercise effectively full rights of ownership of any
Shares, including, without limitation, the right to vote any Shares acquired by
Purchaser pursuant to the Offer or otherwise on all matters properly presented
to the Company's stockholders, including, without limitation, the approval and
adoption of this Agreement and the Transactions; (D) seeking to require
divestiture by Parent, Purchaser or any other affiliate of Parent of any
Shares;
(c) since the date of the Merger Agreement, any Material Adverse
Effect, or any occurrence, circumstance or event that is reasonably likely to
result in a Material Adverse Effect, shall have occurred;
(d) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock Exchange or
Nasdaq National Market for a period in excess of 24 hours (excluding
suspensions or limitations resulting solely from physical damage or
interference with such exchanges not related to market conditions), (ii) a
declaration of a banking moratorium or any suspension of payments in respect of
banks in the United States (whether or not mandatory), (iii) any
_________________
(1) The capitalized terms used herein shall have the meanings set forth in the
Agreement and Plan of Merger to which this Annex A is attached.
limitation (whether or not mandatory) by any United States Governmental Entity
on the extension of credit generally by banks or other financial institutions
or (iv) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof;
(e) (A) the representations and warranties of the Company set forth in
Section 5.3 shall not be true and correct in all material respects or (B) the
other representations and warranties of the Company set forth in the Agreement
shall not be true and correct, in each of clauses (A) and (B) (i) as of the
date referred to in any representation or warranty which addresses matters only
as of a particular date, or (ii) as to all other representations and
warranties, as of the date of the Agreement and as of such time on or after the
date of this Agreement including the scheduled expiration of the Offer, unless
in the case of clause (B) the inaccuracies without giving effect to any
materiality or Material Adverse Effect qualifications or materiality exceptions
contained therein under such representations and warranties, taking all the
inaccuracies under all such representations and warranties together in their
entirety, do not constitute and could not reasonably be expected to result in a
Material Adverse Effect;
(f) the Company (i) shall have failed to perform any obligation or to
comply with any agreement or covenant to be performed or complied with by it
under Section 7.1 or 7.2 of the Agreement or (ii) the Company shall have failed
to perform, in any material respect, any other obligation or to comply, in any
material respect, with any other agreement or covenant of the Company to be
performed or complied with by it under the Agreement;
(g) the Board or any committee thereof shall have (i) withdrawn, or
modified or changed in a manner adverse to the Transactions, to Parent or to
Purchaser (including by amendment of the Schedule 14D-9), its recommendation of
the Agreement, the Offer, or the Merger, (ii) recommended any Acquisition
Proposal, (iii) taken a neutral position or made no recommendation with respect
to any Acquisition Proposal after a reasonable amount of time (and in no event
more than ten Business Days following receipt thereof) has elapsed for the
Board or any committee thereof to review and make a recommendation with respect
thereto, (iv) authorized the Company to enter into any agreement with respect
to any Superior Proposal in accordance with Section 7.2(c) of the Agreement; or
(v) resolved to do any of the foregoing;
(h) Purchaser shall have failed to receive a certificate executed by
the Company's Chief Executive Officer or Chief Financial Officer on behalf of
the Company, dated as of the scheduled expiration of the Offer, to the effect
that the conditions set forth in paragraphs (c), (e), (f), and (g) of this
Annex A have not occurred; or
(i) the Agreement shall have been terminated in accordance with its
terms.
The foregoing conditions are for the sole benefit of Parent and
Purchaser and may, except for the Minimum Condition, be waived by Parent or
Purchaser, in whole or in part, at any time and from time to time in the sole
discretion of Parent or Purchaser. The failure by Parent or Purchaser at any
time to exercise any of the foregoing rights shall not be deemed a waiver of any
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time-to-time.
