AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER Dated as of November 14, 2005 Among JOHNSON & JOHNSON, SHELBY MERGER SUB, INC. And GUIDANT CORPORATION
Exhibit
2.1
EXECUTION
COPY
============================================================================================================
AMENDED
AND RESTATED
Dated
as
of November 14, 2005
Among
XXXXXXX
& XXXXXXX,
XXXXXX
MERGER SUB, INC.
And
GUIDANT
CORPORATION
============================================================================================================
TABLE
OF CONTENTS
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Page
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ARTICLE
I
The
Merger
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SECTION
1.01.
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The
Merger
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1
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SECTION
1.02.
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Closing
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2
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SECTION
1.03.
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Effective
Time
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2
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SECTION
1.04.
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Effects
of the Merger
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2
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SECTION
1.05.
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Articles
of Incorporation and By-laws
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2
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SECTION
1.06.
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Directors
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2
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SECTION
1.07.
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Officers
|
2
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ARTICLE
II
Effect
of the Merger on the Capital Stock of the Constituent Corporations;
Exchange of Certificates
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SECTION
2.01.
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Effect
on Capital Stock
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3
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SECTION
2.02.
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Exchange
of Certificates
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4
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ARTICLE
III
Representations
and Warranties
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SECTION
3.01.
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Representations
and Warranties of the Company
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7
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SECTION
3.02.
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Representations
and Warranties of Parent and Sub
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27
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ARTICLE
IV
Covenants
Relating to Conduct of Business; No Solicitation
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SECTION
4.01.
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Conduct
of Business
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32
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SECTION
4.02.
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No
Solicitation
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37
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ARTICLE
V
Additional
Agreements
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SECTION
5.01.
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Preparation
of the Form S-4 and the Proxy Statement;
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(i)
Shareholders’ Meeting |
40
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SECTION
5.02.
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Access
to Information; Confidentiality.
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41
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SECTION
5.03.
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Reasonable
Best Efforts
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42
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SECTION
5.04.
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Company
Stock Options; ESPP
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43
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SECTION
5.05.
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Indemnification,
Exculpation and Insurance
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45
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SECTION
5.06.
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Fees
and Expenses
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46
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SECTION
5.07.
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Public
Announcements
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47
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SECTION
5.08.
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Affiliates
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48
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SECTION
5.09.
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Stock
Exchange Listing
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48
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SECTION
5.10.
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Shareholder
Litigation
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48
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SECTION
5.11.
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Employee
Matters
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48
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SECTION
5.12.
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Company
Notes
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50
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SECTION
5.13.
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Rights
Agreement
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50
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ARTICLE
VI
Conditions
Precedent
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SECTION
6.01.
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Conditions
to Each Party’s Obligation to Effect the Merger
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50
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SECTION
6.02.
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Conditions
to Obligations of Parent and Sub
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51
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SECTION
6.03.
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Conditions
to Obligation of the Company
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52
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SECTION
6.04.
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Frustration
of Closing Conditions
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52
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ARTICLE
VII
Termination,
Amendment and Waiver
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SECTION
7.01.
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Termination
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53
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SECTION
7.02.
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Effect
of Termination
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54
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SECTION
7.03.
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Amendment
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54
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SECTION
7.04.
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Extension;
Waiver
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54
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SECTION
7.05.
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Procedure
for Termination or Amendment
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54
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ARTICLE
VIII
General
Provisions
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SECTION
8.01.
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Nonsurvival
of Representations and Warranties
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54
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SECTION
8.02.
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Notices
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55
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SECTION
8.03.
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Definitions
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56
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SECTION
8.04.
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Interpretation
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57
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SECTION
8.05.
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Consents
and Approvals
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57
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SECTION
8.06.
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Counterparts
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58
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SECTION
8.07.
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Entire
Agreement; No Third-Party Beneficiaries
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58
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(ii)
SECTION
8.08.
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GOVERNING
LAW
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58
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SECTION
8.09.
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Assignment
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58
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SECTION
8.10.
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Specific
Enforcement; Consent to Jurisdiction
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58
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SECTION
8.11.
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Waiver
of Jury Trial
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58
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SECTION
8.12.
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Severability
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59
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Annex
I
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Index
of Defined Terms
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Exhibit
A
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Restated
Articles of Incorporation of the Surviving Corporation
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Exhibit
B
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Affiliate
Letter
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(iii)
AMENDED
AND RESTATED AGREEMENT AND PLAN OF MERGER (this “Agreement”) dated as of
November 14, 2005, among XXXXXXX & XXXXXXX, a New Jersey corporation
(“Parent”), SHELBY MERGER SUB, INC., an Indiana corporation and a wholly owned
Subsidiary of Parent (“Sub”), and GUIDANT CORPORATION, an Indiana corporation
(the “Company”).
WHEREAS
Parent, Sub and the Company entered into an Agreement and Plan of Merger dated
as of December 15, 2004 (the “Original Merger Agreement”), and they now desire
to amend and restate the Original Merger Agreement (it being understood that
all
references to “the date hereof” or “the date of this Agreement” refer to
December 15, 2004);
WHEREAS
the Board of Directors of each of the Company and Sub has adopted, and the
Board
of Directors of Parent has approved, this Agreement and the merger of Sub with
and into the Company (the “Merger”), upon the terms and subject to the
conditions set forth in this Agreement, whereby each issued and outstanding
share of common stock, without par value, of the Company (“Company Common
Stock”), other than shares of Company Common Stock directly owned by Parent, Sub
or the Company, will be converted into the right to receive (a) a number of
validly issued, fully paid and nonassessable shares of common stock, par value
$1.00 per share, of Parent (“Parent Common Stock”) and (b) $33.25 in cash,
without interest;
WHEREAS
simultaneously with the execution and delivery of this Agreement, Parent and
the
Company are entering into a Settlement Agreement for the purpose of permanently
settling and resolving any and all claims, disputes, issues or matters that
exist between them relating to the matters contemplated by the Original Merger
Agreement or raised by the litigation filed by the Company with respect to
the
Original Merger Agreement, and agreeing to dismiss such litigation with
prejudice; and
WHEREAS
Parent, Sub and the Company desire to make certain representations, warranties,
covenants and agreements in connection with the Merger and also to prescribe
various conditions to the Merger.
NOW,
THEREFORE, in consideration of the representations, warranties, covenants and
agreements contained in this Agreement, and subject to the conditions set forth
herein, the parties hereto agree as follows:
ARTICLE
I
The
Merger
SECTION
1.01. The
Merger.
Upon the
terms and subject to the conditions set forth in this Agreement, and in
accordance with the Business Corporation Law of the State of Indiana (the
“IBCL”), Sub shall be merged with and into the Company at the Effective Time.
Following the Effective Time, the separate corporate existence of Sub shall
cease and the Company shall continue as the surviving corporation in the Merger
(the “Surviving
Corporation”)
and shall succeed to and assume all the rights and obligations of Sub in
accordance with the IBCL.
SECTION
1.02. Closing.
The
closing of the Merger (the “Closing”) will take place at 10:00 a.m. on a
date to be specified by the parties, which shall be no later than the second
business day after satisfaction or (to the extent permitted by applicable Law)
waiver of the conditions set forth in Article VI (other than those
conditions that by their terms are to be satisfied at the Closing, but subject
to the satisfaction or (to the extent permitted by applicable Law) waiver of
those conditions), at the offices of Cravath, Swaine & Xxxxx LLP,
Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, unless
another time, date or place is agreed to in writing by Parent and the Company;
provided,
however,
that if
all the conditions set forth in Article VI shall no longer be satisfied or
(to the extent permitted by applicable Law) waived on such second business
day,
then the Closing shall take place on the first business day on which all such
conditions shall again have been satisfied or (to the extent permitted by
applicable Law) waived unless another time is agreed to in writing by Parent
and
the Company. The date on which the Closing occurs is referred to in this
Agreement as the “Closing Date”.
SECTION
1.03. Effective
Time.
Subject
to the provisions of this Agreement, as soon as practicable on the Closing
Date,
the parties shall file with the Secretary of State of the State of Indiana
articles of merger (the “Articles of Merger”) executed and acknowledged by the
parties in accordance with the relevant provisions of the IBCL and, as soon
as
practicable on or after the Closing Date, shall make all other filings or
recordings required under the IBCL. The Merger shall become effective upon
the
filing of the Articles of Merger with the Secretary of State of the State of
Indiana, or at such later time as Parent and the Company shall agree and shall
specify in the Articles of Merger (the time the Merger becomes effective being
the “Effective Time”).
SECTION
1.04. Effects
of the Merger.
The
Merger shall have the effects set forth in Section 23-1-40-6 of the
IBCL.
SECTION
1.05. Articles
of Incorporation and By-laws.
(a) The Articles of Incorporation of the Company (the “Company
Articles”) shall be amended at the Effective Time to be in the form of
Exhibit A and, as so amended, such Company Articles shall be the Restated
Articles of Incorporation of the Surviving Corporation until thereafter changed
or amended as provided therein or by applicable Law.
(b)
The
By-laws of Sub, as in effect immediately prior to the Effective Time, shall
be
the By-laws of the Surviving Corporation until thereafter changed or amended
as
provided therein or by applicable Law.
SECTION
1.06. Directors.
The
directors of Sub immediately prior to the Effective Time shall be the directors
of the Surviving Corporation until the earlier of their resignation or removal
or until their respective successors are duly elected and qualified, as the
case
may be.
SECTION
1.07. Officers.
The
officers of the Company immediately prior to the Effective Time shall be the
officers of the Surviving Corporation until the earlier of their
2
resignation
or removal or until their respective successors are duly elected and qualified,
as the case may be.
ARTICLE
II
Effect
of the Merger on the Capital Stock of the
Constituent
Corporations; Exchange of Certificates
SECTION
2.01. Effect
on Capital Stock.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
the holder of any shares of Company Common Stock or any shares of capital stock
of Parent or Sub:
(a)
Capital
Stock of Sub.
Each
issued and outstanding share of capital stock of Sub shall be converted into
and
become one validly issued, fully paid and nonassessable share of common stock,
without par value, of the Surviving Corporation.
(b)
Cancelation
of Treasury Stock and Parent-Owned Stock.
Each
share of Company Common Stock that is directly owned by the Company, Parent
or
Sub immediately prior to the Effective Time shall automatically be canceled
and
shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(c)
Conversion
of Company Common Stock.
Subject
to Section 2.02(e), each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than shares to be
canceled in accordance with Section 2.01(b)) shall be converted into the
right to receive (i) 0.493 (the “Exchange Ratio”) validly issued, fully
paid and nonassessable shares of Parent Common Stock (the “Stock Portion”) and
(ii) $33.25 in cash, without interest (the “Cash Portion” and, together
with the Stock Portion, the “Merger Consideration”). At the Effective Time, all
such shares of Company Common Stock shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and each holder of a
certificate which immediately prior to the Effective Time represented any such
shares of Company Common Stock (each, a “Certificate”) shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration, any dividends or other distributions payable pursuant to
Section 2.02(c) and cash in lieu of any fractional shares payable pursuant
to Section 2.02(e), in each case to be issued or paid in consideration
therefor upon surrender of such Certificate in accordance with
Section 2.02(b), without interest. Notwithstanding the foregoing, if
between the date of this Agreement and the Effective Time, (A) the
outstanding shares of Parent Common Stock shall have been changed into a
different number of shares or a different class, by reason of the occurrence
or
record date of any stock dividend, subdivision, reclassification,
recapitalization, split, combination, exchange of shares or similar transaction,
(B) Parent declares or pays cash dividends in any fiscal quarter in excess
of 200% of the amount of regularly quarterly dividends paid by the Parent
immediately prior to the date hereof or (C) Parent engages in any spin-off
or split-off, then in any such case the Exchange Ratio shall be appropriately
adjusted to reflect such action. The right of any holder of a Certificate to
receive the Merger Consideration, any dividends or other distributions payable
pursuant to Section 2.02(c) and cash in lieu of any fractional shares
payable pursuant to Section 2.02(e) shall be
3
subject
to and reduced by the amount of any withholding that is required under
applicable tax Law.
SECTION
2.02. Exchange
of Certificates.
(a) Exchange
Agent.
Prior to
the Effective Time, Parent shall appoint EquiServe Trust Company or another
bank
or trust company that is reasonably satisfactory to the Company to act as
exchange agent (the “Exchange Agent”) for the payment of the Merger
Consideration. At the Effective Time, Parent shall deposit, or cause the
Surviving Corporation to deposit, with the Exchange Agent, for the benefit
of
the holders of Certificates, certificates representing shares of Parent Common
Stock and cash in an amount sufficient to pay the aggregate Merger Consideration
required to be paid pursuant to Section 2.01(c). In addition, Parent shall
deposit with the Exchange Agent,
as
necessary from time to time after the Effective Time, any dividends or other
distributions payable pursuant to Section 2.02(c) and cash in lieu of any
fractional shares payable pursuant to Section 2.02(e). All shares of Parent
Common Stock, cash, dividends and distributions deposited with the Exchange
Agent pursuant to this Section 2.02(a) shall hereinafter be referred to as
the “Exchange Fund”.
(b)
Exchange
Procedures.
As soon
as reasonably practicable after the Effective Time, Parent shall cause the
Exchange Agent to mail to each holder of record of a Certificate whose shares
of
Company Common Stock were converted into the right to receive the Merger
Consideration, any dividends or other distributions payable pursuant to
Section 2.02(c) and cash in lieu of any fractional shares payable pursuant
to Section 2.02(e) (i) a form of letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Exchange Agent and which shall be in customary form and contain customary
provisions) and (ii) instructions for use in effecting the surrender of the
Certificates in exchange for the Merger Consideration, any dividends or other
distributions payable pursuant to Section 2.02(c) and cash in lieu of any
fractional shares payable pursuant to Section 2.02(e). Each holder of
record of one or more Certificates shall, upon surrender to the Exchange Agent
of such Certificate or Certificates, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Exchange Agent, be entitled to receive in exchange therefor (i) the amount
of cash to which such holder is entitled pursuant to Section 2.01(c),
(ii) a certificate or certificates representing that number of whole shares
of Parent Common Stock (after taking into account all Certificates surrendered
by such holder) to which such holder is entitled pursuant to
Section 2.01(c) (which shall be in uncertificated book entry form unless a
physical certificate is requested), (iii) any dividends or distributions
payable pursuant to Section 2.02(c) and (iv) cash in lieu of any
fractional shares payable pursuant to Section 2.02(e), and the Certificates
so surrendered shall forthwith be canceled. In the event of a transfer of
ownership of Company Common Stock which is not registered in the transfer
records of the Company, payment of the Merger Consideration in accordance with
this Section 2.02(b) may be made to a person other than the person in whose
name the Certificate so surrendered is registered if such Certificate shall
be
properly endorsed or otherwise be in proper form for transfer and the person
requesting such payment shall pay any transfer or other taxes required by reason
of the payment of the Merger Consideration, any dividends or other distributions
payable pursuant to Section 2.02(c) and cash in lieu of any fractional
shares payable pursuant to Section 2.02(e) to a person other than the
registered holder of such Certificate or establish to the reasonable
satisfaction of Parent that such taxes have been paid or are not applicable.
Until surrendered as contemplated by this Section 2.02(b), each Certificate
shall be deemed at any time after the Effective Time to
4
represent
only the right to receive upon such surrender the Merger Consideration, any
dividends or other distributions payable pursuant to Section 2.02(c) and
cash in lieu of any fractional shares payable pursuant to Section 2.02(e).
No interest shall be paid or will accrue on any payment to holders of
Certificates pursuant to the provisions of this Article II.
(c)
Distributions
with Respect to Unexchanged Shares.
No
dividends or other distributions with respect to Parent Common Stock with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of Parent Common Stock
that
the holder thereof has the right to receive upon the surrender thereof, and
no
cash payment in lieu of fractional shares of Parent Common Stock shall be paid
to any such holder pursuant to Section 2.02(e), in each case until the
holder of such Certificate shall have surrendered such Certificate in accordance
with this Article II. Following the surrender of any Certificate, there
shall be paid to the record holder of the certificate representing whole shares
of Parent Common Stock issued in exchange therefor, without interest,
(i) at the time of such surrender, the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid
with
respect to such whole shares of Parent Common Stock and the amount of any cash
payable in lieu of a fractional share of Parent Common Stock to which such
holder is entitled pursuant to Section 2.02(e) and (ii) at the
appropriate payment date, the amount of dividends or other distributions with
a
record date after the Effective Time but prior to such surrender and a payment
date subsequent to such surrender payable with respect to such whole shares
of
Parent Common Stock.
(d)
No
Further Ownership Rights in Company Common Stock.
The
Merger Consideration, any dividends or other distributions payable pursuant
to
Section 2.02(c) and cash in lieu of any fractional shares payable pursuant
to Section 2.02(e) paid upon the surrender of Certificates in accordance
with the terms of this Article II shall be deemed to have been paid in full
satisfaction of all rights pertaining to the shares of Company Common Stock
formerly represented by such Certificates. At the close of business on the
day
on which the Effective Time occurs, the share transfer books of the Company
shall be closed, and there shall be no further registration of transfers on
the
share transfer books of the Surviving Corporation of the shares of Company
Common Stock that were outstanding immediately prior to the Effective Time.
If,
after the Effective Time, any Certificate is presented to the Surviving
Corporation for transfer, it shall be canceled against delivery of the Merger
Consideration, any dividends or other distributions payable pursuant to
Section 2.02(c) and cash in lieu of any fractional shares payable pursuant
to Section 2.02(e) to the holder thereof as provided in this
Article II.
(e)
No
Fractional Shares.
(i) No certificates or scrip representing fractional shares of Parent
Common Stock shall be issued upon the surrender for exchange of Certificates,
no
dividends or other distributions of Parent shall relate to such fractional
share
interests and such fractional share interests will not entitle the owner thereof
to vote or to any rights of a shareholder of Parent.
(ii)
In lieu of such fractional share interests, Parent shall pay to each holder
of a
Certificate an amount in cash equal to the product obtained by multiplying
(A) the fractional share interest to which such holder (after taking into
account all shares of Company Common Stock formerly represented by all
Certificates surrendered by such holder) would otherwise be entitled by
(B) the per share closing price of Parent Common Stock on the Closing Date
(the
5
“Closing
Price”), as such price is reported on the New York Stock Exchange, Inc. (the
“NYSE”) Composite Transaction Tape (as reported by Bloomberg Financial Markets
or such other source as the parties shall agree in writing).
(f)
Termination
of the Exchange Fund.
Any
portion of the Exchange Fund which remains undistributed to the holders of
the
Certificates for six months after the Effective Time shall be delivered to
Parent, upon demand, and any holders of the Certificates who have not
theretofore complied with this Article II shall thereafter look only to
Parent for, and Parent shall remain liable for, payment of their claim for
the
Merger Consideration, any dividends or other distributions payable pursuant
to
Section 2.02(c) and cash in lieu of any fractional shares payable pursuant
to Section 2.02(e) in accordance with this Article II.
(g)
No
Liability.
None of
Parent, Sub, the Company, the Surviving Corporation or the Exchange Agent shall
be liable to any person in respect of any shares of Parent Common Stock, cash,
dividends or other distributions from the Exchange Fund properly delivered
to a
public official pursuant to any applicable abandoned property, escheat or
similar Law. If any Certificate shall not have been surrendered prior to four
years after the Effective Time (or immediately prior to such earlier date on
which any Merger Consideration (and any dividends or other distributions payable
with respect thereto pursuant to Section 2.02(c) and cash in lieu of any
fractional shares payable with respect thereto pursuant to Section 2.02(e))
would otherwise escheat to or become the property of any Governmental Entity),
any such Merger Consideration (and any dividends or other distributions payable
with respect thereto pursuant to Section 2.02(c) and cash in lieu of any
fractional shares payable with respect thereto pursuant to Section 2.02(e))
shall, to the extent permitted by applicable Law, become the property of Parent,
free and clear of all claims or interest of any person previously entitled
thereto.
(h)
Investment
of Exchange Fund.
The
Exchange Agent shall invest the cash included in the Exchange Fund as directed
by Parent. Any interest and other income resulting from such investments shall
be paid to and be income of Parent. If for any reason (including losses) the
cash in the Exchange Fund shall be insufficient to fully satisfy all of the
payment obligations to be made in cash by the Exchange Agent hereunder, Parent
shall promptly deposit cash into the Exchange Fund in an amount which is equal
to the deficiency in the amount of cash required to fully satisfy such cash
payment obligations.
(i)
Lost
Certificates.
If any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by such person
of a
bond in such reasonable amount as Parent may direct as indemnity against any
claim that may be made against it with respect to such Certificate, the Exchange
Agent shall deliver in exchange for such lost, stolen or destroyed Certificate
the Merger Consideration, any dividends or other distributions payable pursuant
to Section 2.02(c) and cash in lieu of any fractional shares payable
pursuant to Section 2.02(e), in each case pursuant to this Article
II.
(j)
Withholding
Rights.
Parent,
the Surviving Corporation or the Exchange Agent shall be entitled to deduct
and
withhold from the consideration otherwise payable pursuant to this Agreement
to
any holder of Certificates such amounts as Parent, the Surviving Corporation
or
the Exchange Agent is required to deduct and withhold with respect to the making
of such
6
payment
under the Internal Revenue Code of 1986, as amended (the “Code”), or any
provision of state, local or foreign tax Law. To the extent that amounts are
so
withheld and paid over to the appropriate taxing authority by Parent, the
Surviving Corporation or the Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder
of
Certificates in respect of which such deduction and withholding was made by
Parent, the Surviving Corporation or the Exchange Agent.
ARTICLE
III
Representations
and Warranties
SECTION
3.01. Representations
and Warranties of the Company.
Except
as disclosed in the Company SEC Documents filed by the Company and publicly
available prior to November 14, 2005 (“Filed Company SEC Documents”), and except
as set forth in (i) the disclosure schedule delivered by the Company to Parent
prior to the execution of the Original Merger Agreement and (ii) the supplement
thereto delivered by the Company to Parent prior to the execution of this
Agreement (collectively, the “Company Disclosure Schedule”) (with specific
reference to the particular Section or subsection of this Agreement to which
the
information set forth in such disclosure schedule relates; provided,
however,
that
any information set forth in one section of the Company Disclosure Schedule
shall be deemed to apply to each other Section or subsection thereof to which
its relevance is readily apparent on its face), the Company represents and
warrants to Parent and Sub as follows:
(a)
Organization,
Standing and Corporate Power.
Each of
the Company and its Subsidiaries has been duly organized, and is validly
existing and in good standing (with respect to jurisdictions that recognize
that
concept) under the Laws of the jurisdiction of its incorporation or formation,
as the case may be, and has all requisite power and authority and possesses
all
governmental licenses, permits, authorizations and approvals necessary to enable
it to use its corporate or other name and to own, lease or otherwise hold and
operate its properties and other assets and to carry on its business as
currently conducted, except where the failure to have such governmental
licenses, permits, authorizations or approvals individually or in the aggregate
has not had and would not reasonably be expected to have a Material Adverse
Effect. Each of the Company and its Subsidiaries is duly qualified or licensed
to do business and is in good standing (with respect to jurisdictions that
recognize that concept) in each jurisdiction in which the nature of its business
or the ownership, leasing or operation of its properties makes such
qualification, licensing or good standing necessary, other than in such
jurisdictions where the failure to be so qualified, licensed or in good standing
individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect. The Company has made available
to
Parent, prior to the date of this Agreement, complete and accurate copies of
the
Company Articles and the Company’s By-laws (the “Company By-laws”), and the
comparable organizational documents of each Significant Subsidiary (as such
term
is defined in Rule 12b-2 under the Exchange Act), in each case as amended
to the date hereof.
(b)
Subsidiaries.
Section 3.01(b) of the Company Disclosure Schedule lists, as of the date
hereof, (i) each Significant Subsidiary of the Company (including its state
of
7
incorporation
or formation) and (ii) each other Subsidiary of the Company. All of the
outstanding capital stock of, or other equity interests in, each Significant
Subsidiary of the Company, is directly or indirectly owned by the Company.
All
the issued and outstanding shares of capital stock of, or other equity interests
in, each such Subsidiary owned by the Company have been validly issued and
are
fully paid and nonassessable and are owned directly or indirectly by the Company
free and clear of all pledges, liens, charges, encumbrances or security
interests of any kind or nature whatsoever (other than liens, charges and
encumbrances for current taxes not yet due and payable) (collectively, “Liens”),
and free of any restriction on the right to vote, sell or otherwise dispose
of
such capital stock or other equity interests. Except with respect to securities
of non-Affiliates that, to the Knowledge of the Company, do not constitute
a 20%
or greater interest in such non-Affiliates (or a 5% or greater interest in
such
non-Affiliates if the Company’s investment therein is greater than $20,000,000),
and except for the capital stock of, or voting securities or equity interests
in, its Subsidiaries, the Company does not own, directly or indirectly, as
of
the date hereof, any capital stock of, or other voting securities or equity
interests in, any corporation, partnership, joint venture, association or other
entity.
(c)
Capital
Structure.
The
authorized capital stock of the Company consists of 1,000,000,000 shares of
Company Common Stock and 50,000,000 shares of preferred stock, without par
value (“Company Preferred Stock”). 1,500,000 shares of Company Preferred Stock
have been designated as Series A Participating Preferred Stock, without par
value (the “Company Series A Preferred Stock”). At the close of business on
October 31, 2005, (i) 332,448,023 shares of Company Common Stock were issued
and
outstanding (which number includes (A) 708,755 shares of Company
Common Stock held by the Company in its treasury, (B) 1,382,196 shares of
Company Common Stock held by the trust established under The Guidant Employee
Savings and Stock Ownership Plan and (C) 1,084,669 shares of Company
Common Stock subject to vesting and restrictions on transfer (“Company
Restricted Stock”)), (ii) 28,029,833 shares of Company Common Stock
were reserved and available for issuance pursuant to the Company’s 1994 Stock
Plan, as amended, 1996 Nonemployee Director Stock Plan, as amended, 1998 Stock
Plan, as amended, and 2001 Employee Stock Purchase Plan (the “ESPP”) (such
plans, collectively, the “Company Stock Plans”), of which 26,067,053 shares
of Company Common Stock were subject to outstanding Company Stock Options or
agreements to issue Company Stock Options, and (iii) no shares of Company
Preferred Stock (including Company Series A Preferred Stock) were issued or
outstanding or were held by the Company as treasury shares. Except as set forth
above in this Section 3.01(c), at the close of business on October 31,
2005, no shares of capital stock or other voting securities or equity interests
of the Company were issued, reserved for issuance or outstanding. At the close
of business on October 31, 2005, there were no outstanding stock appreciation
rights, “phantom” stock rights, restricted stock units, performance units,
rights to receive shares of Company Common Stock on a deferred basis or other
rights (other than Company Stock Options) that are linked to the value of
Company Common Stock (collectively, “Company Stock-Based Awards”). All
outstanding options to purchase shares of Company Common Stock exclusive of
rights under the ESPP (collectively, “Company Stock Options”) and shares of
Company Restricted Stock are evidenced by stock option agreements, restricted
stock purchase
8
agreements
or other award agreements. All outstanding shares of capital stock of the
Company are, and all shares which may be issued pursuant to the Company Stock
Options or Company Stock-Based Awards will be, when issued in accordance with
the terms thereof, duly authorized, validly issued, fully paid and nonassessable
and not subject to preemptive rights. There are no bonds, debentures, notes
or
other indebtedness of the Company having the right to vote (or convertible
into,
or exchangeable for, securities having the right to vote) on any matters on
which shareholders of the Company may vote. Except as set forth above in this
Section 3.01(c) and for issuances of shares of Company Common Stock
pursuant to the Company Stock Options set forth above in this
Section 3.01(c) and subject to Section 4.01(a), (x) there are not
issued, reserved for issuance or outstanding (A) any shares of capital
stock or other voting securities or equity interests of the Company,
(B) any securities of the Company convertible into or exchangeable or
exercisable for shares of capital stock or other voting securities or equity
interests of the Company, (C) any warrants, calls, options or other rights
to acquire from the Company or any of its Subsidiaries, and no obligation of
the
Company or any of its Subsidiaries to issue, any capital stock, voting
securities, equity interests or securities convertible into or exchangeable
or
exercisable for capital stock or voting securities of the Company or
(D) any Company Stock-Based Awards and (y) there are not any
outstanding obligations of the Company or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any such securities or to issue, deliver or sell,
or
cause to be issued, delivered or sold, any such securities. Neither the
Company nor any of its Subsidiaries is a party to any voting Contract with
respect to the voting of any such securities. Except as set forth above in
this
Section 3.01(c) and subject to Section 4.01(a), there are no
outstanding (1) securities of the Company or any of its Subsidiaries
convertible into or exchangeable or exercisable for shares of capital stock
or
voting securities or equity interests of any Subsidiary of the Company,
(2) warrants, calls, options or other rights to acquire from the Company or
any of its Subsidiaries, and no obligation of the Company or any of its
Subsidiaries to issue, any capital stock, voting securities, equity interests
or
securities convertible into or exchangeable or exercisable for capital stock
or
voting securities of any Subsidiary of the Company or (3) obligations of
the Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any such outstanding securities or to issue, deliver or sell, or cause
to be issued, delivered or sold, any such securities.
(d)
Authority;
Noncontravention.
The
Company has all requisite corporate power and authority to execute and deliver
this Agreement and, subject to receipt of the Shareholder Approval, to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by the Company and the consummation by the Company
of
the transactions contemplated by this Agreement have been duly authorized by
all
necessary corporate action on the part of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the transactions contemplated by this Agreement, subject,
in
the case of the consummation of the Merger, to the obtaining of the Shareholder
Approval. This Agreement has been duly executed and delivered by the Company
and, assuming the due authorization, execution and delivery by each of the
other
parties hereto, constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, subject
to bankruptcy, insolvency,
9
fraudulent
transfer, moratorium, reorganization or similar Laws affecting the rights of
creditors generally and the availability of equitable remedies (regardless
of
whether such enforceability is considered in a proceeding in equity or at law).
The Board of Directors of the Company, at a meeting duly called and held, duly
and unanimously adopted by all directors present, resolutions (i) adopting
this Agreement, the Merger and the other transactions contemplated by this
Agreement, (ii) declaring that it is in the best interests of the Company
and the shareholders of the Company that the Company enter into this Agreement
and consummate the Merger and the other transactions contemplated by this
Agreement on the terms and subject to the conditions set forth in this
Agreement, (iii) directing that the Company use its reasonable best efforts
to submit the approval of this Agreement to a vote at a meeting of the
shareholders of the Company as promptly as practicable, and
(iv) recommending that the shareholders of the Company approve this
Agreement, which resolutions, as of November 14, 2005, have not been
subsequently rescinded, modified or withdrawn in any way. The execution and
delivery of this Agreement by the Company do not, and the consummation by the
Company of the Merger and the other transactions contemplated by this Agreement
and compliance by the Company with the provisions of this Agreement will not,
conflict with, or result in any violation or breach of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of,
or
result in, termination, cancelation or acceleration of any obligation or to
the
loss of a benefit under, or result in the creation of any Lien in or upon any
of
the properties or other assets of the Company or any of its Subsidiaries under,
(x) the Company Articles or the Company By-laws or the comparable
organizational documents of any of its Subsidiaries, (y) any loan or credit
agreement, bond, debenture, note, mortgage, indenture, lease, supply agreement,
license agreement, development agreement or other contract, agreement,
obligation, commitment or instrument that is intended by the Company, Parent
or
any of their respective Subsidiaries, as applicable, to be legally binding,
(each, including all amendments thereto, a “Contract”), to which the Company or
any of its Subsidiaries is a party or any of their respective properties or
other assets is subject or (z) subject to the obtaining of the Shareholder
Approval and the governmental filings and other matters referred to in the
following sentence, any (A) statute, law, ordinance, rule or regulation
(each, a “Law”) applicable to the Company or any of its Subsidiaries or their
respective properties or other assets or (B) order, writ, injunction,
decree, judgment or stipulation (each, an “Order”) applicable to the Company or
any of its Subsidiaries or their respective properties or other assets, other
than, in the case of clauses (y) and (z), any such conflicts, violations,
breaches, defaults, rights of termination, cancelation or acceleration, losses
or Liens that individually or in the aggregate have not had and would not
reasonably be expected to (x) have a Material Adverse Effect,
(y)
impair in any material respect the ability of the Company to perform its
obligations under this Agreement or (z) prevent or materially impede, interfere
with, hinder or delay the consummation of the transactions contemplated by
this
Agreement.
No
consent, approval, order or authorization of, action by or in respect of, or
registration, declaration or filing with, any Federal, state, local or foreign
government, any court, administrative, regulatory or other governmental agency,
commission or authority or any organized securities exchange (each, a
“Governmental Entity”) is required by or with respect to the Company or any of
its Subsidiaries in connection with the execution and delivery of this Agreement
by the Company or the consummation of the Merger or the
10
other
transactions contemplated by this Agreement, except for (1) (A) the filing
of a premerger notification and report form by the Company under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the rules
and regulations thereunder (the “HSR Act”) and the termination of the waiting
period required thereunder, (B) all required notifications and filings by the
Company under Article 4 of Council Regulation 139/2004 of the European
Community, as amended (the “EC Merger Regulation”), and the receipt of a
decision under Article 6(1)(b), 8(1) or 8(2) thereunder declaring the Merger
compatible with the EC Common Market and (C) the receipt, termination or
expiration, as applicable, of approvals or waiting periods required under any
other applicable competition, merger control, antitrust or similar Law,
(2) the filing with the Securities and Exchange Commission (the “SEC”) of
(X) a proxy statement relating to the adoption by the shareholders of the
Company of this Agreement (as amended or supplemented from time to time, the
“Proxy Statement”) and (Y) such reports under the Securities Exchange Act
of 1934, as amended (including the rules and regulations promulgated thereunder,
the “Exchange Act”), as may be required in connection with this Agreement and
the transactions contemplated by this Agreement, (3) the filing of the
Articles of Merger with the Secretary of State of the State of Indiana and
appropriate documents with the relevant authorities of other states in which
the
Company or any of its Subsidiaries is qualified to do business, (4) any
filings with and approvals of the NYSE and (5) such other consents,
approvals, orders, authorizations, actions, registrations, declarations and
filings the failure of which to be obtained or made individually or in the
aggregate has not had and would not reasonably be expected to (x) have a
Material Adverse Effect,
(y)
impair in any material respect the ability of the Company to perform its
obligations under this Agreement or (z) prevent or materially impede, interfere
with, hinder or delay the consummation of the transactions contemplated by
this
Agreement.
(e)
Company
SEC Documents. (i) The
Company has filed all reports, schedules, forms, statements and other documents
(including exhibits and other information incorporated therein) with the SEC
required to be filed by the Company since January 1, 2003 (such documents,
together with any documents filed during such period by the Company with the
SEC
on a voluntary basis on Current Reports on Form 8-K, the “Company SEC
Documents”). As of their respective filing dates, the Company SEC Documents
complied in all material respects with, to the extent in effect at the time
of
filing, the requirements of the Securities Act of 1933, as amended (including
the rules and regulations promulgated thereunder, the “Securities Act”), the
Exchange Act and the Xxxxxxxx-Xxxxx Act of 2002 (including the rules and
regulations promulgated thereunder, “SOX”) applicable to such Company SEC
Documents, and none of the Company SEC Documents contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except to the extent
that information contained in any Company SEC Document has been revised,
amended, supplemented or superseded by a later-filed Company SEC Document,
none
of the Company SEC Documents contains any untrue statement of a material fact
or
omits to state any material fact required to be stated therein or necessary
in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, which individually or in the aggregate
would
11
require
an amendment, supplement or corrective filing to such Company SEC Documents.
Each of the financial statements (including the related notes) of the Company
included in the Company SEC Documents complied at the time it was filed as
to
form in all material respects with the applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto in effect
at
the time of filing, had been prepared in accordance with generally accepted
accounting principles in the United States (“GAAP”) (except, in the case of
unaudited statements, as permitted by the rules and regulations of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly presented in all material respects
the consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case
of
unaudited statements, to normal year-end audit adjustments). Neither the Company
nor any of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which individually or
in
the aggregate have had or would reasonably be expected to have a Material
Adverse Effect. None of the Subsidiaries of the Company are, or have at any
time
since January 1, 2003 been, subject to the reporting requirements of
Section 13(a) or 15(d) of the Exchange Act.
(ii)
Each
of
the principal executive officer of the Company and the principal financial
officer of the Company (or each former principal executive officer of the
Company and each former principal financial officer of the Company, as
applicable) has made all certifications required by Rule 13a-14 or 15d-14 under
the Exchange Act and Sections 302 and 906 of SOX with respect to the Company
SEC
Documents, and the statements contained in such certifications are true and
accurate. For purposes of this Agreement, “principal executive officer” and
“principal financial officer” shall have the meanings given to such terms in
SOX. Neither the Company nor any of its Subsidiaries has outstanding, or has
arranged any outstanding, “extensions of credit” to directors or executive
officers within the meaning of Section 402 of SOX.
(iii)
The
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in accordance with
management’s general or specific authorizations; (B) access to assets is
permitted only in accordance with management’s general or specific
authorization; and (C) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken
with respect to any differences.
(iv)
The
Company’s “disclosure controls and procedures” (as defined in
Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are reasonably designed
to ensure that all information (both financial and non-financial) required
to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC, and that all such
information is accumulated and communicated to the Company’s management as
appropriate to allow timely decisions regarding required disclosure and to
make
the certifications of the chief executive officer and chief financial officer
of
the Company required under the Exchange Act with respect to such
reports.
12
(f)
Information
Supplied.
None of
the information supplied or to be supplied by or on behalf of the Company
specifically for inclusion or incorporation by reference in (i) the
Form S-4 to be filed with the SEC by Parent in connection with the issuance
of shares of Parent Common Stock in the Merger will, at the time the
Form S-4 is filed with the SEC and at the time it becomes effective under
the Securities Act, contain any untrue statement of a material fact or omit
to
state any material fact required to be stated therein or necessary to make
the
statements therein, in light of the circumstances under which they are made,
not
misleading or (ii) the Proxy Statement will, at the date it is first mailed
to the shareholders of the Company and at the time of the Shareholders’ Meeting,
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, except that no representation or warranty is made by the Company
with respect to statements made or incorporated by reference therein based
on
information supplied by or on behalf of Parent or Sub specifically for inclusion
or incorporation by reference in the Form S-4 or the Proxy Statement. The
Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act.
(g)
Absence
of Certain Changes or Events.
Except
for liabilities incurred in connection with this Agreement or as expressly
permitted pursuant to Section 4.01(a)(i) through (xvi), since the date of
the most recent financial statements included in the Filed Company SEC
Documents, the Company and its Subsidiaries have conducted their respective
businesses only in the ordinary course consistent with past practice, and there
has not been any Material Adverse Change, and from such date until the date
hereof there has not been (i) any declaration, setting aside or payment of
any dividend or other distribution (whether in cash, stock or property) with
respect to any capital stock of the Company or any of its Subsidiaries, other
than (x) cash dividends payable by the Company in respect of shares of
Company Common Stock consistent with past practice and not exceeding $0.10
per
share of Company Common Stock per fiscal quarter or (y) dividends or
distributions by a direct or indirect wholly owned Subsidiary of the Company
to
its shareholders, (ii) any purchase, redemption or other acquisition by the
Company or any of its Subsidiaries of any shares of capital stock or any other
securities of the Company or any of its Subsidiaries or any options, warrants,
calls or rights to acquire such shares or other securities, other than in
connection with net share withholding in connection with the vesting of Company
Restricted Stock, (iii) any split, combination or reclassification of any
capital stock of the Company or any of its Subsidiaries or any issuance or
the
authorization of any issuance of any other securities in respect of, in lieu
of
or in substitution for shares of their respective capital stock,
(iv) (A) any granting by the Company or any of its Subsidiaries to any
current or former (1) director of the Company or any of its Subsidiaries or
(2) employee of the Company or any of its Subsidiaries who is treated as a
Tier I Employee (a “Tier I Employee”) or Tier II Employee (a
“Tier II Employee”) for purposes of the Company’s Change in Control
Severance Pay Plan for Select Employees (all individuals described in the
foregoing clauses (1) and (2) of this clause (A), collectively, the
“Key Personnel”) of any increase in compensation, bonus or fringe or other
benefits, except for normal increases in cash compensation (including cash
bonuses) in the ordinary course of business consistent with past practice or
as
was required under any Company Benefit Agreement
13
or
Company Benefit Plan, (B) any granting by the Company or any of its
Subsidiaries to any Key Personnel of (1) any increase in severance or
termination pay or (2) any right to receive any severance or termination
pay except for severance or termination pay received in the ordinary course
of
business consistent with past practice or as was required under any Company
Benefit Agreement or Company Benefit Plan, (C) any entry by the Company or
any of its Subsidiaries into, or any amendments of, (1) any employment,
deferred compensation, consulting, severance, change of control, termination
or
indemnification Contract with any Key Personnel or (2) any Contract with
any Key Personnel the benefits of which are contingent, or the terms of which
are materially altered, upon the occurrence of a transaction involving the
Company of a nature contemplated by this Agreement (all such Contracts under
this clause (C), collectively, “Company
Benefit Agreements”), (D) the removal or modification of any restrictions
in any Company Benefit Agreement or Company Benefit Plan or awards made
thereunder, except as required to comply with applicable Law or any Company
Benefit Agreement or Company Benefit Plan in effect as of the date hereof or
(E) the adoption, amendment or termination of any Company Benefit Plan,
other than, in the cases of clauses (A), (B), (C) and (D), such increases,
amendments, new agreements, removals, modifications or terminations with respect
to Tier II Employees that (1) do not provide for any increase in
compensation or benefits for any individual Tier II Employee that is
material in relation to such Tier II Employee’s compensation or benefits
prior to such increase and (2) in the aggregate do not result in any
material increase in compensation, benefits or other similar expenses of the
Company and its Subsidiaries, (v) any damage, destruction or loss, whether
or not covered by insurance, that individually or in the aggregate has had
or
would reasonably be expected to have a Material Adverse Effect, (vi) any
change in accounting methods, principles or practices by the Company materially
affecting its assets, liabilities or businesses, except insofar as may have
been
required by a change in GAAP or (vii) any material tax election or any
settlement or compromise of any material income tax liability.
(h)
Litigation.
Except
with respect to taxes, which are the subject of Section 3.01(n), there is
no suit, action or proceeding pending or, to the Knowledge of the Company,
threatened against or affecting the Company or any of its Subsidiaries or any
of
their respective assets that individually or in the aggregate has had or would
reasonably be expected to have a Material Adverse Effect, nor is there any
demand, letter or Order of any Governmental Entity or arbitrator outstanding
against, or, to the Knowledge of the Company, investigation by any Governmental
Entity involving, the Company or any of its Subsidiaries or any of their
respective assets that individually or in the aggregate has had or would
reasonably be expected to have a Material Adverse Effect.
(i)
Contracts.
(1) As of the date hereof, neither the Company nor any of its
Subsidiaries is a party to, and none of their respective properties or other
assets is subject to, any Contract that is a “material contract” (as such term
is defined in Item 601(b)(10) of Regulation S-K of the SEC) (a
“Material Contract”). None of the Company, any of its Subsidiaries or, to the
Knowledge of the Company, any other party thereto is in violation of or in
default under (nor does there exist any condition which upon the passage of
time
or the giving of notice or both would cause such a violation of or default
by
the Company
14
or
any of
its Subsidiaries or, to the Knowledge of the Company, any other party thereto
under) any Contract to which it is a party or by which it or any of its
properties or other assets is bound, except for violations or defaults that
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of
its
Subsidiaries has entered into any Contract that is currently in effect that
is
required to be disclosed pursuant to Item 404 of Regulation S-K of the
SEC.
(2) Section 3.01(i)(2)
of the Company Disclosure Schedule contains a complete and accurate list, as
of
the date hereof, of (A) each material Contract restricting or purporting to
restrict any of the Company’s Affiliates’ ability to compete (other than each
such Contract that only restricts the Company’s Subsidiaries’ ability to
compete) in any line of business, geographic area or customer segment,
(B) each material Contract restricting the Company’s or any of its
Subsidiaries’ ability to compete in any line of business, geographic area or
customer segment and (C) each material Contract relating to distribution,
sale, supply, licensing, co-promotion or manufacturing of any products or
services of the Company or any of its Subsidiaries or any products licensed
by
the Company or any of its Subsidiaries.
(j)
Compliance
with Laws; Environmental Matters.
(i) Except with respect to Environmental Laws, the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), taxes and regulatory
compliance, which are the subjects of Sections 3.01(j)(ii), 3.01(l),
3.01(n) and 3.01(u), respectively, each of the Company and its Subsidiaries
is
in compliance with all Laws and Orders (collectively, “Legal Provisions”)
applicable to it, its properties or other assets or its business or operations,
except for failures to be in compliance that individually or in the aggregate
have not had and would not reasonably be expected to have a Material Adverse
Effect. Each of the Company and its Subsidiaries has in effect all approvals,
authorizations, certificates, filings, franchises, licenses, notices and permits
of or with all Governmental Entities (collectively, “Permits”), including all
Permits under the Federal Food, Drug and Cosmetic Act of 1938, as amended
(including the rules and regulations promulgated thereunder, the “FDCA”),
necessary for it to own, lease or operate its properties and other assets and
to
carry on its business and operations as currently conducted, except where the
failure to have such Permits individually or in the aggregate has not had and
would not reasonably be expected to have a Material Adverse Effect. Since
January 1, 2000, there has occurred no default under, or violation of, any
such
Permit, except for any such default or violation that individually or in the
aggregate has not had and would not reasonably be expected to have a Material
Adverse Effect. The consummation of the Merger, in and of itself, would not
cause the revocation or cancelation of any such Permit that individually or
in
the aggregate would reasonably be expected to have a Material Adverse Effect.
(ii)
Except
for those matters that individually or in the aggregate have not had and would
not reasonably be expected to have a Material Adverse Effect: (A) during
the period of ownership or operation by the Company or any of its Subsidiaries
of any of its currently or formerly owned, leased or operated properties, there
have been no Releases of Hazardous Materials in, on, under or affecting any
properties which would subject the
15
Company
or any of its Subsidiaries to any liability under any Environmental Law or
require any expenditure by the Company or any of its Subsidiaries for
remediation to meet applicable standards thereunder; (B) prior to and
after, as applicable, the period of ownership or operation by the Company or
any
of its Subsidiaries of any of its currently or formerly owned, leased or
operated properties, to the Knowledge of the Company, there were no Releases
of
Hazardous Materials in, on, under or affecting any properties which would
subject the Company or any of its Subsidiaries to any liability under any
Environmental Law or require any expenditure by the Company or any of its
Subsidiaries for remediation to meet applicable standards thereunder;
(C) neither the Company nor any of its Subsidiaries is subject to any
indemnity obligation or other Contract with any person relating to obligations
or liabilities under Environmental Laws; and (D) to the Knowledge of the
Company, there are no facts, circumstances or conditions that would reasonably
be expected to form the basis for any investigation, suit, claim, action,
proceeding or liability against or affecting the Company or any of its
Subsidiaries relating to or arising under Environmental Laws. The term
“Environmental Laws” means all applicable Federal, state, local and foreign Laws
(including the common law), Orders, notices, Permits or binding Contracts
issued, promulgated or entered into by any Governmental Entity, relating in
any
way to the environment, preservation or reclamation of natural resources or
the
presence, management, Release of, or exposure to, Hazardous Materials, or to
human health and safety. The term “Hazardous Materials” means (1) petroleum
products and by-products, asbestos and asbestos-containing materials, urea
formaldehyde foam insulation, medical or infectious wastes, polychlorinated
biphenyls, radon gas, radioactive substances, chlorofluorocarbons and all other
ozone-depleting substances and (2) any other chemical, material, substance,
waste, pollutant or contaminant that is prohibited, limited or regulated by
or
pursuant to any Environmental Law. The term “Release” means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping, disposing or migrating into or through the environment or
any
natural or man-made structure.
(k)
Labor
Relations.
From the
date of the most recent financial statements included in the Filed Company
SEC
Documents through the date hereof, there has not been any adoption, material
amendment or termination by the Company or any of its Subsidiaries of any
collective bargaining or other labor union Contract to which the Company or
any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound. There are no collective bargaining or other labor union
Contracts to which the Company or any of its Subsidiaries is a party or by
which
the Company or any of its Subsidiaries is bound. As of the date of this
Agreement, none of the employees of the Company or any of its Subsidiaries
are
represented by any union with respect to their employment by the Company or
such
Subsidiary. Since January 1, 2003, neither the Company nor any of its
Subsidiaries has experienced any material labor disputes, union organization
attempts or work stoppages, slowdowns or lockouts due to labor
disagreements.
(l)
ERISA
Compliance.
(i) Section 3.01(l)(i) of the Company Disclosure Schedule contains a
complete and accurate list, as of the date hereof, of each employment, bonus,
pension, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock appreciation, restricted stock,
stock
16
option,
“phantom” stock, performance, retirement, thrift, savings, stock bonus, paid
time off, perquisite, fringe benefit, vacation, severance, disability, death
benefit, hospitalization, medical, welfare benefit or other plan, program,
policy or Contract maintained, contributed to or required to be maintained
or
contributed to by the Company or any of its Subsidiaries or any other person
or
entity that, together with the Company, is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code (each, a “Commonly Controlled
Entity”) (exclusive of any such plan, program, policy or Contract mandated by
and maintained solely pursuant to applicable law), in each case providing
benefits to any current or former director, officer or employee of the Company
or any of its Subsidiaries (collectively, but exclusive of individual option
and
restricted award agreements issued under the Company Stock Plans, the “Company
Benefit Plans”) and each Company Benefit Agreement (exclusive of local offer
letters mandated under applicable non-U.S. law that do not impose any severance
obligations other than any mandatory statutory severance). Each Company Benefit
Plan that is an “employee pension benefit plan” (as defined in Section 3(2)
of ERISA) is sometimes referred to herein as a “Company Pension Plan” and each
Company Benefit Plan that is an “employee welfare benefit plan” (as defined in
Section 3(1) of ERISA) is sometimes referred to herein as a “Company
Welfare Plan”.
(ii)
The
Company has provided to Parent complete and accurate copies of (A) each
Company Benefit Plan or, at the Company’s option, in the case of Company Benefit
Plans maintained primarily for the benefit of individuals regularly employed
outside the United States, a summary thereof (or, in either case, with respect
to any unwritten Company Benefit Plans, descriptions thereof) and Company
Benefit Agreements (exclusive of local offer letters mandated under applicable
non-U.S. law that do not impose any severance obligations other than any
mandatory statutory severance), (B) the two most recent annual reports on
Form 5500 required to be filed with the Internal Revenue Service (the
“IRS”) with respect to each Company Benefit Plan (if any such report was
required), (C) the most recent summary plan description for each Company
Benefit Plan for which such summary plan description is required and
(D) each trust Contract and insurance or group annuity Contract relating to
any Company Benefit Plan.
(iii)
Each
Company Benefit Plan has been administered in all material respects in
accordance with its terms. The Company, its Subsidiaries and all the Company
Benefit Plans are all in compliance in all material respects with the applicable
provisions of ERISA, the Code and all other applicable Laws, including Laws
of
foreign jurisdictions, and the terms of all collective bargaining
Contracts.
(iv)
All
Company Pension Plans intended to be tax-qualified have received favorable
determination letters from the IRS with respect to “TRA” (as defined in
Section 1 of IRS Rev. Proc. 93-39), and have timely filed with the IRS
determination letter applications (or have received such a determination letter)
with respect to “GUST” (as defined in Section 1 of IRS
Notice 2001-42), to the effect that such Company Pension Plans are
qualified and exempt from Federal income taxes under Sections 401(a) and
501(a), respectively, of the Code, no such determination letter has been revoked
(nor, to the Knowledge of the Company, has revocation been threatened) and
to
the Knowledge
17
of
the
Company, no event has occurred since the date of the most recent determination
letter or application therefor relating to any such Company Pension Plan that
would reasonably be expected to adversely affect the qualification of such
Company Pension Plan or materially increase the costs relating thereto or
require security under Section 307 of ERISA. The Company has provided to
Parent a complete and accurate copy of the most recent determination letter
received prior to the date hereof with respect to each Company Pension Plan,
as
well as a complete and accurate copy of each pending application for a
determination letter, if any. The Company has also provided to Parent a complete
and accurate list of all amendments to any Company Pension Plan as to which
a
favorable determination letter has not yet been received.
(v)
Neither
the Company nor any Commonly Controlled Entity has, during the six-year period
ending on the date hereof, maintained, contributed to or been required to
contribute to any Company Pension Plan that is subject to Title IV of ERISA
or Section 412 of the Code, or any “multiemployer plan” as defined in
Section 3(37) or 4001(a)(3) of ERISA. Except as has not had and would not
reasonably be expected to have a Material Adverse Effect, neither the Company
nor any Commonly Controlled Entity has any unsatisfied liability under
Title IV of ERISA. To the Knowledge of the Company, no condition exists
that presents a material risk to the Company or any Commonly Controlled Entity
of incurring a material liability under Title IV of ERISA. The Pension Benefit
Guaranty Corporation has not instituted proceedings under Section 4042 of
ERISA to terminate any Company Benefit Plan and, to the Knowledge of the
Company, no condition exists that presents a material risk that such proceedings
will be instituted.
(vi)
Except
as
has not had and would not reasonably be expected to have a Material Adverse
Effect, (A) all reports, returns and similar documents with respect to all
Company Benefit Plans required to be filed with any Governmental Entity or
distributed to any Company Benefit Plan participant have been duly and timely
filed or distributed, (B) none of the Company or any of its Subsidiaries
has received notice of, and to the Knowledge of the Company, there are no
investigations by any Governmental Entity with respect to, termination
proceedings or other claims (except claims for benefits payable in the normal
operation of the Company Benefit Plans), suits or proceedings against or
involving any Company Benefit Plan or asserting any rights or claims to benefits
under any Company Benefit Plan that could reasonably be expected to give rise
to
any material liability and (C) to the Knowledge of the Company, there are
not any facts that could give rise to any liability in the event of any such
investigation, claim, suit or proceeding.
(vii)
Except
as
has not had and would not reasonably be expected to have a Material Adverse
Effect, (A) all contributions, premiums and benefit payments under or in
connection with the Company Benefit Plans that are required to have been made
as
of the date hereof in accordance with the terms of the Company Benefit Plans
have been timely made or have been reflected on the most recent consolidated
balance sheet filed or incorporated by reference into the Filed Company SEC
Documents and (B) no Company Pension Plan has an “accumulated funding
deficiency” (as such term is defined in Section 302 of ERISA or
Section 412 of the Code), whether or not waived.
18
(viii)
With
respect to each Company Benefit Plan, except as has not had and would not
reasonably be expected to have a Material Adverse Effect, (A) there has not
occurred any prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) in which the Company or any of its
Subsidiaries or any of their respective employees, or, to the Knowledge of
the
Company, any trustee, administrator or other fiduciary of such Company Benefit
Plan, or any agent of the foregoing, has engaged that could reasonably be
expected to subject the Company or any of its Subsidiaries or any of their
respective employees, or any such trustee, administrator or other fiduciary,
to
the tax or penalty on prohibited transactions imposed by Section 4975 of
the Code or the sanctions imposed under Title I of ERISA and
(B) neither the Company, any of its Subsidiaries or any of their respective
employees nor, to the Knowledge of the Company, any trustee, administrator
or
other fiduciary of any Company Benefit Plan nor any agent of any of the
foregoing, has engaged in any transaction or acted in a manner, or failed to
act
in a manner, that could reasonably be expected to subject the Company or any
of
its Subsidiaries or any of their respective employees or, to the Knowledge
of
the Company, any such trustee, administrator or other fiduciary, to any
liability for breach of fiduciary duty under ERISA or any other applicable
Law.
(ix)
Each
Company Welfare Plan may be amended or terminated (including with respect to
benefits provided to retirees and other former employees) without material
liability to the Company or any of its Subsidiaries at any time after the
Effective Time. Each of the Company and its Subsidiaries complies in all
material respects with the applicable requirements of Section 4980B(f) of
the Code, Sections 601-609 of ERISA or any similar state or local Law with
respect to each Company Benefit Plan that is a group health plan, as such term
is defined in Section 5000(b)(1) of the Code or such state Law. Neither the
Company nor any of its Subsidiaries has any material obligations for health
or
life insurance benefits following termination of employment under any Company
Benefit Plan (other than for continuation coverage required under
Section 4980(B)(f) of the Code).
(x)
None
of
the execution and delivery of this Agreement, the obtaining of the Shareholder
Approval or the consummation of the Merger or any other transaction contemplated
by this Agreement (alone or in conjunction with any other event, including
as a
result of any termination of employment on or following the Effective Time)
will
(A) entitle any current or former director, officer, employee or consultant
of the Company or any of its Subsidiaries to severance or termination pay,
(B) accelerate the time of payment or vesting, or trigger any payment or
funding (through a grantor trust or otherwise) of, compensation or benefits
under, increase the amount payable or trigger any other material obligation
pursuant to, any Company Benefit Plan or Company Benefit Agreement or
(C) result in any breach or violation of, or a default under, any Company
Benefit Plan or Company Benefit Agreement.
(xi)
Neither
the Company nor any of its Subsidiaries has any material liability or
obligations, including under or on account of a Company Benefit Plan, arising
out of the hiring of persons to provide services to the Company or any of its
Subsidiaries and treating such persons as consultants or independent contractors
and not as employees of the Company or any of its Subsidiaries. No current
or
former independent contractor that
19
provides
or provided personal services to the Company or its Subsidiaries (other than
a
current or former director) is entitled to any material fringe or other benefits
(other than cash consulting fees) pursuant to any plan, program, policy or
Contract to which the Company or any of its Subsidiaries is a party or which
is
maintained, sponsored or contributed to by the Company or any of its
Subsidiaries.
(xii)
No
material deduction by the Company or any of its Subsidiaries in respect of
any
“applicable employee remuneration” (within the meaning of Section 162(m) of
the Code) has been disallowed or is subject to disallowance by reason of
Section 162(m) of the Code. For each of the Key Personnel, the Company has
previously provided to Parent (A) accurate Form W-2 information for
the 1999, 2000, 2001, 2002 and 2003 calendar years, (B) annual base salary
as of the date hereof, actual bonus earned for the 2003 calendar year and target
annual bonus for the 2004 calendar year and (C) a list, as of the date
hereof, of all outstanding Company Stock Options, Company Restricted Stock
and
Company Stock-Based Awards granted under the Company Stock Plans or otherwise
(other than rights under the ESPP), together with (as applicable) the number
of
shares of Company Common Stock subject thereto, and the grant dates, expiration
dates, exercise or base prices and vesting schedules thereof, (D) estimated
current annual cost of welfare benefits and (E) estimated cost of the
pension benefit enhancement under Section 8 of the Company’s Change in
Control Severance Plan for Select Employees.
(m)
No
Parachute Gross Up.
Except
as provided in accordance with the Company’s Change in Control Severance Pay
Plan for Select Employees, no current or former employee or director of the
Company or any of its Subsidiaries is entitled to receive any additional payment
from the Company or any of its Subsidiaries or the Surviving Corporation by
reason of the excise tax required by Section 4999(a) of the Code being
imposed on such person by reason of the transactions contemplated by this
Agreement.
(n)
Taxes. Except
as has not had and would not reasonably be expected to have a Material Adverse
Effect:
(i)
All
tax
returns required by applicable Law to have been filed with any taxing authority
by, or on behalf of, the Company or any of its Subsidiaries have been filed
in a
timely manner (taking into account any valid extension) in accordance with
all
applicable Laws, and all such tax returns are true and complete in all material
respects.
(ii)
The
Company and each of its Subsidiaries has paid (or has had paid on its behalf)
all taxes due and owing, and the Company’s most recent financial statements
included in the Filed Company SEC Documents reflect an adequate accrual for
all
taxes payable by Company and its Subsidiaries for all taxable periods and
portions thereof accrued through the date of such financial
statements.
(iii)
There
are
no Liens or encumbrances for taxes on any of the assets of the Company or any
of
its Subsidiaries other than for taxes not yet due and payable.
20
(iv)
The
Company and its Subsidiaries have complied with all applicable Laws relating
to
the payment and withholding of taxes.
(v)
No
written notification has been received by the Company or any of its Subsidiaries
that any federal, state, local or foreign audit, examination or similar
proceeding is pending, proposed or asserted with regard to any taxes or tax
returns of the Company or its Subsidiaries.
(vi)
There
is
no currently effective Contract extending, or having the effect of extending,
the period of assessment or collection of any federal, state and, to the
Knowledge of the Company, foreign taxes with respect to the Company or any
of
its Subsidiaries nor has any request been made for any such
extension.
(vii)
No
written notice of a claim of pending investigation has been received from any
state, local or other jurisdiction with which the Company or any of its
Subsidiaries currently does not file tax returns, alleging that the Company
or
any of its Subsidiaries has a duty to file tax returns and pay taxes or is
otherwise subject to the taxing authority of such jurisdiction.
(viii)
Neither
the Company nor any of its Subsidiaries joins or has joined, for any taxable
period during the eight years prior to the date of this Agreement, in the filing
of any affiliated, aggregate, consolidated, combined or unitary federal, state,
local and, to the Knowledge of the Company, foreign tax return other than
consolidated tax returns for the consolidated group of which the Company is
the
common parent.
(ix)
Neither
the Company nor any of its Subsidiaries is a party to or bound by any tax
sharing agreement or tax indemnity agreement, arrangement or practice (including
any advance pricing agreement, closing agreement or other agreement relating
to
taxes with any taxing authority).
(x)
Neither
the Company nor any of its Subsidiaries has constituted either a “distributing
corporation” or a “controlled corporation” in a distribution of stock qualifying
for tax-free treatment under Section 355 of the Code in the two years prior
to the date of this Agreement.
(xi)
Neither
the Company nor any of its Subsidiaries will be required to include in a taxable
period ending after the Effective Time taxable income attributable to income
that accrued in a prior taxable period (or portion of a taxable period) but
was
not recognized for tax purposes in any prior taxable period as a result of
(A) an open transaction disposition made on or before the Effective Time,
(B) a prepaid amount received on or prior to the Effective Time,
(C) the installment method of accounting, (D) the long-term contract
method of accounting, (E) the cash method of accounting or Section 481
of the Code or (F) any comparable provisions of state or local tax Law,
domestic or foreign, or for any other reason, other than any amounts that are
specifically reflected in a reserve for taxes on the most recent financial
statements of the Company included in the Filed Company SEC
Documents.
21
(xii)
Neither
the Company nor any of its Subsidiaries has entered into a “listed transaction”
within the meaning of Treasury Regulation § 1.6011-4(b)(2).
(xiii)
As
used
in this Agreement (A) “tax” means (i) any
tax, duty, governmental fee or other like assessment or charge of any kind
whatsoever (including withholding on amounts paid to or by any person
and
liabilities with respect to unclaimed funds),
together with any related interest, penalty, addition to tax or additional
amount, and any liability for any of the foregoing as transferee, (ii) in
the case of the Company or any of its Subsidiaries, liability for the payment
of
any amount of the type described in clause (i) as a result of being or
having been before the Effective Time a member of an affiliated, consolidated,
combined or unitary group, or a party to any Contract as a result of which
liability of the Company or any of its Subsidiaries is determined or taken
into
account with reference to the activities of any other person and
(iii) in the case of the Company or any of its Subsidiaries, liability of
the Company or any of its Subsidiaries for the payment of any amount as a result
of being party to any tax sharing Contract or with respect to the payment of
any
amount imposed on any person of the type described in (i) or (ii) as a result
of
any existing Contract (including an indemnification Contract); (B) “taxing
authority” means any Federal, state, local or foreign government, any
subdivision, agency, commission or authority thereof, or any quasi-governmental
body exercising tax regulatory authority; and (C) “tax return” means any
report, return, document, declaration or other information or filing required
to
be filed with respect to taxes (whether or not a payment is required to be
made
with respect to such filing), including information returns, any documents
with
respect to or accompanying payments of estimated taxes, or with respect to
or
accompanying requests for the extension of time in which to file any such
report, return, document, declaration or other information.
(o)
Title
to Properties. Each
of the Company and its Subsidiaries has valid title to, or valid leasehold
or
sublease interests or other comparable contract rights in or relating to all
of
its real properties and other tangible assets necessary for the conduct of
its
business as currently conducted, except as have been disposed of in the ordinary
course of business and except for defects in title, easements, restrictive
covenants and similar encumbrances that individually or in the aggregate have
not had and would not reasonably be expected to have a Material Adverse Effect.
Each of the Company and its Subsidiaries has complied with the terms of all
leases or subleases to which it is a party and under which it is in occupancy,
and all leases to which the Company is a party and under which it is in
occupancy are in full force and effect, except for such failure to comply or
be
in full force and effect that individually or in the aggregate has not had
and
would not reasonably be expected to have a Material Adverse Effect. Neither
the
Company nor any of its Subsidiaries has received any written notice of any
event
or occurrence that has resulted or could result (with or without the giving
of
notice, the lapse of time or both) in a default with respect to any lease or
sublease to which it is a party, which defaults individually or in the aggregate
have had or would reasonably be expected to have a Material Adverse
Effect.
(p)
Intellectual
Property.
(i) Section 3.01(p)(i) of the Company Disclosure Schedule sets
forth, as of the date hereof, a complete and accurate list (in all material
respects) of all patents and applications therefor, registered trademarks and
applications
22
therefor,
domain name registrations and copyright registrations (if any) that, in each
case, are owned by or licensed to the Company or any of its Subsidiaries and
are
material to the conduct of the business of the Company and its Subsidiaries,
taken as a whole, as currently conducted. Such intellectual property rights
required to be listed in Section 3.01(p)(i) of the Company Disclosure
Schedule, together with any tradename rights, trade secret or know how rights,
service xxxx rights, trademark rights, patent rights, intellectual property
rights in computer programs or software or other type of intellectual property
rights, in each case, that are owned or licensed by the Company or any of its
Subsidiaries and are material to the conduct of the business of the Company
and
its Subsidiaries, taken as a whole, as currently conducted, are collectively
referred to herein as “Intellectual Property Rights”. All Intellectual Property
Rights are either (x) owned by the Company or a Subsidiary of the Company
free and clear of all Liens or (y) licensed to the Company or a Subsidiary
of the Company free and clear (to the Knowledge of the Company) of all Liens,
except where the failure to so own or license such Intellectual Property Rights
individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect. There are no claims pending or,
to
the Knowledge of the Company, threatened with regard to the ownership or, to
the
Knowledge of the Company, licensing by the Company or any of its Subsidiaries
of
any Intellectual Property Rights which individually or in the aggregate has
had
or would reasonably be expected to have a Material Adverse Effect. Each of
the
Company and its Subsidiaries owns, is validly licensed or otherwise has the
right to use all Intellectual Property Rights, except where the failure to
own,
have a valid license or otherwise have rights to use individually or in the
aggregate has not had and would not reasonably be expected to have a Material
Adverse Effect. The execution and delivery of this Agreement by the Company
do
not, and the consummation by the Company of the Merger and the other
transactions contemplated by this Agreement and compliance by the Company with
the provisions of this Agreement will not, conflict with, or result in any
violation or breach of, or default (with or without notice or lapse of time,
or
both) under, or give rise to a right of, or result in, termination, cancelation
or acceleration of any obligation or to the loss of a benefit under, or result
in the creation of any Lien in or upon, any Intellectual Property Right, in
each
case that individually or in the aggregate has had or would reasonably be
expected to have a Material Adverse Effect. Section 3.01(p)(i) of the
Company Disclosure Schedule sets forth, as of the date hereof, all Contracts
under which the Company or any of its Subsidiaries is obligated to make payments
to third parties for use of any Intellectual Property Rights with respect to
the
commercialization of any products that are, as of the date hereof, being sold,
manufactured by or under development by the Company or any of its Subsidiaries
and for which such payments are in excess of $2,000,000 per year for any single
product. The aggregate amount of all such payments that the Company and its
Subsidiaries are obligated to make under any Contract of the type described
in
the immediately preceding sentence that are not required to be disclosed
pursuant to such sentence does not exceed $10,000,000 per year.
(ii)
There
are
no pending or, to the Knowledge of the Company, threatened claims that the
Company or any of its Subsidiaries has infringed or is infringing (including
with respect to the manufacture, use or sale by the Company or any of its
Subsidiaries of any products or to the operations of the Company and its
Subsidiaries)
23
any
intellectual property rights of any person which individually or in the
aggregate has had or would reasonably be expected to have a Material Adverse
Effect. To the Knowledge of the Company, as of the date of this Agreement,
there
are no facts, circumstances or conditions that would reasonably be expected
to
form the basis for any claim by a person to exclude or prevent the Company
or
any of its Subsidiaries from freely using its Intellectual Property Rights
and
that individually or in the aggregate would reasonably be expected to have
a
Material Adverse Effect.
(iii)
All
patents required to be listed in Section 3.01(p)(i) of the Company
Disclosure Schedule that are owned by the Company or any of its Subsidiaries
have been duly registered and/or filed with or issued by each appropriate
Governmental Entity, all necessary affidavits of continuing use have been timely
filed, and all necessary maintenance fees have been timely paid to continue
all
such rights in effect, other than failures to be duly registered, filed, issued
or paid which individually or in the aggregate have not had and would not
reasonably be expected to have a Material Adverse Effect. None of the patents
required to be listed in Section 3.01(p)(i) of the Company Disclosure
Schedule that are owned by the Company or any of its Subsidiaries has expired
or
been declared invalid, in whole or in part, by any Governmental Entity, other
than such expirations or declarations of invalidity which individually or in
the
aggregate have not had and would not reasonably be expected to have a Material
Adverse Effect. There are no ongoing interferences, oppositions, reissues,
reexaminations or other proceedings challenging any of the patents or patent
applications required to be listed in Section 3.01(p)(i) of the Company
Disclosure Schedule and owned by the Company or any of its Subsidiaries (or,
to
the Company’s Knowledge, challenging any such patents or patent applications
licensed to the Company or any of its Subsidiaries), including ex parte and
post-grant proceedings, in the United States Patent and Trademark Office or
in
any foreign patent office or similar administrative agency, other than such
interferences, oppositions, reissues, reexaminations or proceedings that
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect.
(iv)
Except
as
has not had and would not reasonably be expected to have a Material Adverse
Effect, the Company and its Subsidiaries have used commercially reasonable
efforts to maintain their material trade secrets in confidence.
(q)
Voting
Requirements.
The
affirmative vote of holders of a majority of the outstanding shares of Company
Common Stock at the Shareholders’ Meeting or any adjournment or postponement
thereof to approve this Agreement (the “Shareholder Approval”) is the only vote
of the holders of any class or series of capital stock of the Company necessary
to approve this Agreement and the transactions contemplated by this Agreement
(it being understood that the approval of the Original Merger Agreement by
the
shareholders of the Company on April 27, 2005, shall not constitute the
“Shareholder Approval” with regard to this Agreement).
(r)
State
Takeover Laws; Company Articles Provisions.
The
Board of Directors of the Company has unanimously adopted, by all directors
present, this Agreement, the terms of this Agreement and the consummation of
the
Merger and the other transactions contemplated by this Agreement, and such
adoption represents all the
24
actions
necessary to render inapplicable to this Agreement, the Merger and the other
transactions contemplated by this Agreement, the restrictions (i) on “business
combinations” (as defined in Section 23-1-43-5 of the IBCL) set forth in
Section 23-1-43-18 of the IBCL and (ii) on the actions or transactions
set forth in Paragraph 6 of the Company Articles (“Paragraph 6”), in each
case to the extent, if any, such restrictions would otherwise be applicable
to
this Agreement, the Merger and the other transactions contemplated by this
Agreement. For purposes of Paragraph 6, the approval of the Board of Directors
of the Company referred to in the immediately preceding sentence constitutes
the
approval of the Merger and the other transactions contemplated by this Agreement
by the “Continuing Directors” (as defined in Paragraph 6) pursuant to
clause (c) of Paragraph 6. No other similar provision of the Company
Articles or the Company By-laws or, to the Knowledge of the Company, other
state
takeover Law or similar Law applies or purports to apply to this Agreement,
the
Merger or the other transactions contemplated by this Agreement.
(s)
Brokers
and Other Advisors.
No
broker, investment banker, financial advisor or other person (other than
X.X. Xxxxxx Securities Inc. and Xxxxxx Xxxxxxx & Co. Incorporated), the
fees and expenses of which will be paid by the Company, is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company has delivered
to
Parent complete and accurate copies of all Contracts under which any such fees
or expenses are payable and all indemnification and other Contracts related
to
the engagement of the persons to whom such fees are payable.
(t)
Opinion
of Financial Advisors.
The
Company has received the opinions of each of X.X. Xxxxxx Securities Inc.
and Xxxxxx Xxxxxxx & Co. Incorporated, in each case dated as of November 14,
2005, to the effect that, as of such date, the Merger Consideration is fair,
from a financial point of view, to the holders of shares of Company Common
Stock, a signed copy of which opinion has been, or will promptly be, delivered
to Parent.
(u)
Regulatory
Compliance. (i) As
to each product subject to the FDCA or similar Legal Provisions in any foreign
jurisdiction that are developed, manufactured, tested, distributed and/or
marketed by the Company or any of its Subsidiaries (a “Medical Device”), each
such Medical Device is being developed, manufactured, tested, distributed and/or
marketed in compliance with all applicable requirements under the FDCA and
similar Legal Provisions, including those relating to investigational use,
premarket clearance or marketing approval to market a Medical Device, good
manufacturing practices, labeling, advertising, record keeping, filing of
reports and security, and in compliance with the Advanced Medical Technology
Association Code of Ethics on Interactions with Healthcare Professionals and
the
American Medical Association’s guidelines on gifts to physicians, except for
failures in compliance that individually or in the aggregate have not had and
would not reasonably be expected to have a Material Adverse Effect. Neither
the
Company nor any of its Subsidiaries has received any notice or other
communication from the Federal Food and Drug Administration (the “FDA”) or any
other Governmental Entity (A) contesting the premarket clearance or
approval of, the
25
uses
of or the labeling and promotion of any products of the Company or any of its
Subsidiaries or (B) otherwise alleging any violation applicable to any
Medical Device of any Legal Provision, in the case of (A) and (B), that
individually or in the aggregate have had or would reasonably be expected to
have a Material Adverse Effect.
(ii)
No
Medical Device is under consideration by senior management of the Company or
any
of its Subsidiaries for, or has been recalled, withdrawn, suspended, seized
or
discontinued (other than for commercial or other business reasons) by, the
Company or any of its Subsidiaries in the United States or outside the United
States (whether voluntarily or otherwise), in each case since January 1,
2002. No proceedings in the United States or outside of the United States of
which the Company has Knowledge (whether completed or pending) seeking the
recall, withdrawal, suspension, seizure or discontinuance of any Medical Device
are pending against the Company or any of its Subsidiaries or any licensee
of
any Medical Device which individually or in the aggregate have had or would
reasonably be expected to have a Material Adverse Effect.
(iii)
As
to
each Medical Device of the Company or any of its Subsidiaries for which a
premarket approval application, premarket notification, investigational device
exemption or similar state or foreign regulatory application has been approved,
the Company and its Subsidiaries are in compliance with 21 U.S.C. §§ 360
and 360e or 21 C.F.R. Parts 812 or 814, respectively, and all similar Legal
Provisions and all terms and conditions of such licenses or applications, except
for any such failure or failures to be in compliance which individually or
in
the aggregate have not had and would not reasonably be expected to have a
Material Adverse Effect. In addition, the Company and its Subsidiaries are
in
substantial compliance with all applicable registration and listing requirements
set forth in 21 U.S.C. § 360 and 21 C.F.R. Part 807 and all similar
Legal Provisions, except for any such failures to be in compliance which
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect.
(iv)
No
article of any Medical Device manufactured and/or distributed by the Company
or
any of its Subsidiaries is (A) adulterated within the meaning of 21 U.S.C.
§ 351 (or similar Legal Provisions), (B) misbranded within the meaning
of 21 U.S.C. § 352 (or similar Legal Provisions) or (C) a product
that is in violation of 21 U.S.C. § 360 or § 360e (or similar Legal
Provisions), except for failures to be in compliance with the foregoing that
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect.
(v)
Neither
the Company nor any of its Subsidiaries, nor, to the Knowledge of the Company,
any officer, employee or agent of the Company or any of its Subsidiaries, has
made an untrue statement of a material fact or fraudulent statement to the
FDA
or any other Governmental Entity, failed to disclose a material fact required
to
be disclosed to the FDA or any other Governmental Entity, or committed an act,
made a statement, or failed to make a statement that, at the time such
disclosure was made, could reasonably be expected to provide a basis for the
FDA
or any other Governmental Entity to invoke its policy respecting “Fraud, Untrue
Statements of Material Facts, Bribery, and Illegal Gratuities”, set forth in 56
Fed. Reg. 46191 (September 10, 1991) or any similar policy.
26
Neither
the Company nor any of its Subsidiaries, nor, to the Knowledge of the Company,
any officer, employee or agent of the Company or any of its Subsidiaries, has
been convicted of any crime or engaged in any conduct for which debarment is
mandated by 21 U.S.C. § 335a(a) or any similar Legal Provision or
authorized by 21 U.S.C. § 335a(b) or any similar Legal Provision.
Neither the Company nor any of its Subsidiaries, nor, to the Knowledge of the
Company, any officer, employee or agent of the Company or any of its
Subsidiaries, has been convicted of any crime or engaged in any conduct for
which such person or entity could be excluded from participating in the federal
health care programs under Section 1128 of the Social Security Act of 1935,
as amended (the “Social Security Act”) or any similar Legal
Provision.
(vi)
Since
January 1, 2002, neither the Company nor any of its Subsidiaries has
received any written notice that the FDA or any other Governmental Entity has
(a) commenced, or threatened to initiate, any action to withdraw its
approval or request the recall of any Medical Device, (b) commenced, or
threatened to initiate, any action to enjoin production of any Medical Device
or
(c) commenced, or threatened to initiate, any action to enjoin the
production of any medical device produced at any facility where any Medical
Device is manufactured, tested or packaged, except for any such action that
individually or in the aggregate has not had and would not reasonably be
expected to have a Material Adverse Effect.
(vii)
To
the
Knowledge of the Company, there are no facts, circumstances or conditions
that would reasonably be expected to form the basis for any investigation,
suit,
claim, action or proceeding against or affecting the Company or any of its
Subsidiaries relating to or arising under (a) the FDCA or (b) the
Social Security Act or regulations of the Office of the Inspector General of
the
Department of Health and Human Services, in each case individually or in the
aggregate that has had or would reasonably be expected to have a Material
Adverse Effect.
(v)
Rights
Agreement.
The
Company has taken all actions necessary to cause the Rights Agreement dated
as
of December 15, 2004, between the Company and EquiServe Trust Company, as
rights agent (the “Rights Agreement”), to (i) render the Rights Agreement
inapplicable to this Agreement, the Merger and the other transactions
contemplated by this Agreement, (ii) ensure that (x) none of Parent,
Sub or any other Subsidiary of Parent is an Acquiring Person (as defined in
the
Rights Agreement) pursuant to the Rights Agreement, (y) a Distribution Date
or a Stock Acquisition Date (as such terms are defined in the Rights Agreement)
does not occur and (z) the rights (the “Company Rights”) to purchase Company
Series A Preferred Stock issued under the Rights Agreement do not become
exercisable, in the case of clauses (x), (y) and (z), solely by reason of
the execution of this Agreement or the consummation of the Merger or the other
transactions contemplated by this Agreement and (iii) provide that the
Expiration Date (as defined in the Rights Agreement) shall occur immediately
prior to the Effective Time.
SECTION
3.02. Representations
and Warranties of Parent and Sub.
Except
as disclosed in the Parent SEC Documents filed by Parent and publicly available
prior to the date of
27
this
Agreement (“Filed Parent SEC Documents”), Parent and Sub represent and warrant
to the Company as follows:
(a)
Organization,
Standing and Corporate Power.
Each of
Parent and Sub is a corporation duly organized, validly existing and in good
standing under the Laws of the jurisdiction in which it is incorporated and
has
all requisite corporate power and authority and possesses all governmental
licenses, permits, authorizations and approvals necessary to enable it to use
its corporate or other name and to own, lease or otherwise hold and operate
its
properties and other assets and to carry on its business as now being conducted,
except whether the failure to have such governmental licenses, permits,
authorizations and approvals individually or in the aggregate has not had and
would not reasonably be expected to have a Parent Material Adverse Effect.
Each
of Parent and Sub is duly qualified or licensed to do business and is in good
standing (with respect to jurisdictions that recognize that concept) in each
jurisdiction in which the nature of its business or the ownership, leasing
or
operation of its properties makes such qualification, licensing or good standing
necessary, other than in such jurisdictions where the failure to be so
qualified, licensed or in good standing individually or in the aggregate has
not
had and would not reasonably be expected to have a Parent Material Adverse
Effect. Parent has made available to the Company complete and accurate copies
of
its Restated Certificate of Incorporation and By-laws, the Articles of
Incorporation of Sub (the “Sub Articles”) and the By-laws of Sub, in each case
as amended to the date hereof.
(b)
Authority;
Noncontravention.
Each of
Parent and Sub has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by Parent and Sub and
the consummation by Parent and Sub of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of Parent and Sub and no other corporate proceedings on the part of Parent
or Sub are necessary to authorize this Agreement or to consummate the
transactions contemplated by this Agreement. This Agreement and the transactions
contemplated by this Agreement do not require approval of the holders of any
shares of capital stock of Parent. This Agreement has been duly executed and
delivered by each of Parent and Sub and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of Parent and Sub, as applicable, enforceable against Parent and
Sub,
as applicable, in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, moratorium, reorganization or similar Laws affecting the
rights of creditors generally and the availability of equitable remedies
(regardless of whether such enforceability is considered in a proceeding at
equity or at law). The execution and delivery of this Agreement by Parent and
Sub do not, and the consummation by Parent and Sub of the Merger and the other
transactions contemplated by this Agreement and compliance by Parent and Sub
with the provisions of this Agreement will not, conflict with, or result in
any
violation or breach of, or default (with or without notice or lapse of time,
or
both) under, or give rise to a right of, or result in, termination, cancelation
or acceleration of any obligation or to the loss of a benefit under, or result
in the creation of any Lien in or upon any of the properties or other assets
of
Parent or Sub under (x) the Restated Certificate of Incorporation or
By-laws of Parent, the Sub Articles or the By-laws of Sub, (y) any Contract
to
which Parent or Sub is a party
28
or
any of
their respective properties or other assets is subject or (z) subject to
the governmental filings and other matters referred to in the following
sentence, any Legal Provision applicable to Parent or Sub or their respective
properties or other assets, other than, in the case of clauses (y) and (z),
any such conflicts, violations, breaches, defaults, rights of termination,
cancelation or acceleration, losses or Liens that individually or in the
aggregate have not had and would not reasonably be expected to (1) have a Parent
Material Adverse Effect,
(2)
impair in any material respect the ability of Parent or Sub to perform its
respective obligations under this Agreement or (3) prevent or materially impede,
interfere with, hinder or delay the consummation of the transactions
contemplated by this Agreement.
No
consent, approval, order or authorization of, action by or in respect of, or
registration, declaration or filing with, any Governmental Entity is required
by
or with respect to Parent or Sub in connection with the execution and delivery
of this Agreement by Parent and Sub or the consummation by Parent and Sub of
the
Merger or the other transactions contemplated by this Agreement, except for
(1)
(A) the filing of a premerger notification and report form by Parent under
the HSR Act and the termination of the waiting period required thereunder,
(B)
all required notifications and filings by Parent under Article 4 of the EC
Merger Regulation and the receipt of a decision under Article 6(1)(b), 8(1)
or
8(2) thereunder declaring the Merger compatible with the EC Common Market and
(C) the receipt, termination or expiration, as applicable, of approvals or
waiting periods required under any other applicable competition, merger control,
antitrust or similar Law, (2) the filing with the SEC of (X) the
Form S-4 and (Y) such reports under the Exchange Act as may be
required in connection with this Agreement and the transactions contemplated
by
this Agreement, (3) the filing of the Articles of Merger with the Secretary
of State of the State of Indiana, (4) any filings with and approvals of the
NYSE
and (5) such other consents, approvals, orders, authorizations, actions,
registrations, declarations and filings the failure of which to be obtained
or
made individually or in the aggregate has not had and would not reasonably
be
expected to (x) have a Parent Material Adverse Effect,
(y)
impair in any material respect the ability of Parent or Sub to perform its
respective obligations under this Agreement or (z) prevent or materially impede,
interfere with, hinder or delay the consummation of the transactions
contemplated by this Agreement.
(c)
Parent
SEC Documents.
Parent
has filed all reports, schedules, forms, statements and other documents
(including exhibits and other information incorporated therein) with the SEC
required to be filed by Parent since January 1, 2003 (such documents, together
with any documents filed during such period by Parent with the SEC on a
voluntary basis on Current Reports on Form 8-K, the “Parent SEC
Documents”). As of their respective filing dates, the Parent SEC Documents
complied in all material respects with, to the extent in effect at the time
of
filing, the requirements of the Securities Act, the Exchange Act and SOX
applicable to such Parent SEC Documents, and none of the Parent SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary
29
in
order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. Except to the extent that information contained
in
any Parent SEC Document has been revised, amended, supplemented or superseded
by
a later-filed Parent SEC Document, none of the Parent SEC Documents contains
any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary in order to make the statements therein,
in
light of the circumstances under which they were made, not misleading, which
individually or in the aggregate would require an amendment, supplement or
corrective filing to such Parent SEC Documents. Each of the financial statements
(including the related notes) of Parent included in the Parent SEC Documents
complied at the time it was filed as to form in all material respects with
the
applicable accounting requirements and the published rules and regulations
of
the SEC with respect thereto in effect at the time of filing, had been prepared
in accordance with GAAP (except, in the case of unaudited statements, as
permitted by the rules and regulations of the SEC) applied on a consistent
basis
during the periods involved (except as may be indicated in the notes thereto)
and fairly presented in all material respects the consolidated financial
position of Parent and its consolidated Subsidiaries as of the dates thereof
and
the consolidated results of their operations and cash flows for the periods
then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments). Neither Parent nor any of its Subsidiaries has any liabilities
or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
which individually or in the aggregate have had or would reasonably be expected
to have a Parent Material Adverse Effect.
(d)
Information
Supplied.
None of
the information supplied or to be supplied by or on behalf of Parent or Sub
specifically for inclusion or incorporation by reference in (i) the
Form S-4 will, at the time the Form S-4 is filed with the SEC and at
the time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to
be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, or (ii) the Proxy
Statement will, at the date it is first mailed to the shareholders of the
Company and at the time of the Shareholders’ Meeting, 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, except that no
representation or warranty is made by Parent or Sub with respect to statements
made or incorporated by reference therein based on information supplied by
or on
behalf of the Company specifically for inclusion or incorporation by reference
in the Form S-4 or the Proxy Statement. The Form S-4 will comply as to
form in all material respects with the requirements of the Securities Act and
the rules and regulations thereunder.
(e)
Interim
Operations of Sub.
Sub was
formed solely for the purpose of engaging in the transactions contemplated
by
this Agreement, has engaged in no other business activities and has conducted
its operations only as contemplated hereby.
(f)
Capital
Resources.
As of
the Closing, Parent will have funds that are sufficient to effect the Closing
on
the terms contemplated hereby.
(g)
Brokers.
No
broker, investment banker, financial advisor or other person, other than
Xxxxxxx,
Xxxxx & Co.,
the
fees and expenses of which will be paid by Parent, is entitled to any broker’s,
finder’s, financial advisor’s or other similar fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Parent or Sub.
30
(h)
Capital
Structure.
The
authorized capital stock of Parent consists of 4,320,000,000 shares of
Parent Common Stock and 2,000,000 shares of preferred stock, without par value,
of Parent (“Parent Preferred Stock”). At the close of business on November 11,
2005, (i) 3,119,842,548 shares of Parent Common Stock were issued and
outstanding, (ii) 145,627,833 shares of Parent Common Stock were held by
Parent in its treasury, (iii) no shares of Parent Preferred Stock had been
designated or issued, (iv) 252,675,833 shares of Parent Common Stock were
subject to outstanding options to purchase shares of Parent Common Stock granted
under Parent’s stock incentive plans and (v) 6,890,509
shares
of Parent Common Stock were reserved for issuance upon conversion of the 3%
Zero
Coupon Convertible Subordinated Debentures of Alza Corporation, a Delaware
corporation and wholly-owned subsidiary of Parent (“Alza”), and the 5.25% Zero
Coupon Convertible Subordinated Debentures of Alza. Except as set forth above
in
this Section 3.02(h), at the close of business on November 11, 2005, there
were not issued, reserved for issuance or outstanding (A) any shares of capital
stock or other voting securities of Parent, (B) any securities of Parent
convertible into or exchangeable or exercisable for shares of capital stock
or
voting securities of Parent or (C) any warrants, calls, options or other
rights to acquire from Parent, or any obligation of Parent to issue, any shares
of capital stock, voting securities or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of Parent.
Except as set forth above in this Section 3.02(h), at the close of business
on November 11, 2005, no bonds, debentures, notes or other indebtedness of
Parent having the right to vote (or convertible into, or exchangeable for,
securities having the right to vote) on any matters on which the shareholders
of
Parent may vote are issued or outstanding. The authorized capital stock of
Sub consists of 1,000 shares of common stock, without par value, of which
1,000 shares are issued and outstanding, all of which shares are
beneficially owned by Parent.
(i)
Absence
of Changes.
Except
for liabilities incurred in connection with this Agreement, since the date
of
the most recent financial statements included in the Filed Parent SEC Documents,
there has not been any Parent Material Adverse Change.
(j)
Litigation.
There
is no suit, action or proceeding pending or, to the Knowledge of Parent,
threatened against or affecting Parent or any of its Subsidiaries or any of
their respective assets that individually or in the aggregate has had or would
reasonably be expected to have a Parent Material Adverse Effect, nor is there
any Order of any Governmental Entity or arbitrator outstanding against, or,
to
the Knowledge of Parent, investigation by any Governmental Entity involving,
Parent or any of its Subsidiaries or any of their respective assets that
individually or in the aggregate has had or would reasonably be expected to
have
a Parent Material Adverse Effect.
(k)
Intellectual
Property Rights.
Each of
Parent and its Subsidiaries owns or has the right to use all intellectual
property rights which are material to the conduct of the business of Parent
and
its Subsidiaries, taken as a whole, in each case (i) with respect to such
intellectual property rights that are owned by Parent or any of its
Subsidiaries, free and clear of all Liens and (ii) with respect to such
intellectual property rights that are licensed by Parent or any of its
Subsidiaries, to the Knowledge of Parent, free and clear of all Liens, except
where the failure to so own or have such right to use such
intellectual
31
property
rights individually or in the aggregate has not had and would not reasonably
be
expected to have a Parent Material Adverse Effect. Neither the manufacture,
marketing, license, sale or use by Parent or any of its Subsidiaries of any
product violates any license or agreement between Parent or any of its
Subsidiaries and any other person and there is no pending or, to the Knowledge
of Parent, threatened claim or litigation contesting the validity, ownership
or
right to use, sell, license or dispose of any such intellectual property rights
relating to any product or asserting that the proposed use, sale, license or
disposition thereof, or the manufacture, use or sale of any product by Parent
or
any of its Subsidiaries, conflicts with the rights of any other person, in
each
case which, individually or in the aggregate, has had or would reasonably be
expected to have a Parent Material Adverse Effect.
(l)
Regulatory
Compliance.
To the
Knowledge of Parent, the testing, manufacture, storage, distribution, use,
promotion and sale of products of Parent or any of its Subsidiaries by Parent,
such Subsidiary and their respective contractors have been performed and is
performed in compliance with all applicable requirements under the FDCA and
similar Legal Provisions, including those relating to investigational use,
premarket clearance, good manufacturing practices, labeling, advertising, record
keeping, filing of reports and security, except for such instances of
noncompliance or possible noncompliance that individually or in the aggregate
have not had and would not reasonably be expected to have a Parent Material
Adverse Effect. Neither Parent nor any of its Subsidiaries has received any
adverse written notice within the past two years that the FDA or any other
similar foreign Governmental Entity has commenced, or threatened to initiate,
any action to withdraw its approval or request the recall of any product of
Parent or any of its Subsidiaries, or commenced, or overtly threatened to
initiate, any action to enjoin production of any such product, except where
such
action has not had and would not reasonably be expected to have a Parent
Material Adverse Effect.
ARTICLE
IV
Covenants
Relating to Conduct of Business; No Solicitation
SECTION
4.01. Conduct
of Business.
(a) Conduct
of Business by the Company.
During
the period from the date of this Agreement to the Effective Time, except as
set
forth in Section 4.01(a) of the Company Disclosure Schedule or as consented
to in writing in advance by Parent or as otherwise permitted or required by
this
Agreement, the Company shall, and shall cause each of its Subsidiaries to,
carry
on its business in the ordinary course consistent with past practice prior
to
the Closing and, to the extent consistent therewith, use all commercially
reasonable efforts to preserve intact its current business organizations, keep
available the services of its current officers, employees and consultants and
preserve its relationships with customers, suppliers, licensors, licensees,
distributors and others having business dealings with it. In addition to and
without limiting the generality of the foregoing, during the period from the
date of this Agreement to the Effective Time, except as otherwise set forth
in
Section 4.01(a) of the Company Disclosure Schedule or as otherwise
permitted or required pursuant to this Agreement, the Company shall not, and
shall not permit any of its Subsidiaries to, without Parent’s prior written
consent:
32
(i)
(x) declare,
set aside or pay any dividends on, or make any other distributions (whether
in
cash, stock or property) in respect of, any of its capital stock, other than
(1) cash dividends payable by the Company in respect of shares of Company
Common Stock consistent with past practice and not exceeding $0.10 per share
of
Company Common Stock per fiscal quarter, (2) dividends and distributions in
connection with the Rights Agreement and (3) dividends or distributions by
a direct or indirect wholly owned Subsidiary of the Company to its shareholders,
(y) split, combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu of or
in
substitution for shares of its capital stock or (z) purchase, redeem or
otherwise acquire any shares of its capital stock or any other securities
thereof or any rights, warrants or options to acquire any such shares or other
securities, except for purchases, redemptions or other acquisitions of
capital stock or other securities (1) required by the terms of the Company
Stock Plans or the ESPP or (2) required by the terms of any plans,
arrangements or Contracts existing on the date hereof between the Company or
any
of its Subsidiaries and any director or employee of the Company or any of its
Subsidiaries (to the extent complete and accurate copies of which have been
heretofore delivered to Parent);
(ii)
issue,
deliver, sell, grant, pledge or otherwise encumber or subject to any Lien any
shares of its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options to acquire, any such
shares, voting securities or convertible securities, or any “phantom” stock,
“phantom” stock rights, stock appreciation rights or stock based performance
units, including pursuant to Contracts as in effect on the date hereof (other
than (x) the issuance of shares of Company Common Stock upon the exercise of
Company Stock Options or in connection with Company Stock Based Awards, in
each
case in accordance with their terms on the date hereof, and (y) the issuance
of
Company Rights and shares of the Company’s capital stock pursuant to the Company
Rights or the Rights Agreement);
(iii)
amend
(x) the Company Articles or the Company By-laws or other comparable charter
or organizational documents of any of the Company’s Subsidiaries or (y) the
Indenture dated as of January 18, 1996 between the Company and Citibank, N.A.,
with respect to the 6.15% Senior Unsecured Notes due February 15, 2006 of the
Company (the “Company Notes”), in each case except as may be required by
applicable Law or the rules and regulations of the SEC or the NYSE;
(iv)
directly
or indirectly acquire (x) by merging or consolidating with, by purchasing a
substantial portion of the assets of, by making an investment in or capital
contribution to, or by any other manner, any person or division, business or
equity interest of any person or (y) any asset or assets, except for
(1) capital expenditures, which shall be subject to the limitations of
clause (vii) below, (2) purchases of components, raw materials or supplies
in the ordinary course of business consistent with past practice and
(3) acquisitions of material intellectual property rights in respect of
cross-licenses permitted in connection with the discharge, settlement or
satisfaction of claims and litigation under clause (viii)
below;
33
(v)
(x) sell,
lease, license, mortgage, sell and leaseback or otherwise encumber or subject
to
any Lien or otherwise dispose of any of its material properties or other
material assets or any interests therein (including securitizations), except
for
(1) sales of inventory and used equipment in the ordinary course of business
consistent with past practice and (2) licenses of Intellectual Property Rights
permitted in connection with the discharge, settlement or satisfaction of claims
and litigation under clause (viii) below, or (y) enter into, modify or
amend any lease of material property, except for modifications or amendments
that are not materially adverse to the Company and its Subsidiaries, taken
as a
whole;
(vi)
(x) incur
any indebtedness for borrowed money or guarantee any such indebtedness of
another person, issue or sell any debt securities or calls, options, warrants
or
other rights to acquire any debt securities of the Company or any of its
Subsidiaries, guarantee any debt securities of another person, enter into any
“keep well” or other Contract to maintain any financial statement condition of
another person or enter into any arrangement having the economic effect of
any
of the foregoing (other than short-term borrowings in the ordinary course of
business consistent with past practice under the Company’s commercial paper
program, in an aggregate amount not to exceed $800,000,000 at any time
outstanding) or (y) make any loans or advances to any other person, other
than to employees in respect of travel expenses in the ordinary course of
business consistent with past practice, which would result in the aggregate
principal amount of all of the outstanding foregoing loans and advances of
the
Company and its Subsidiaries exceeding $25,000,000;
(vii)
make
any
new capital expenditure or expenditures exceeding the amounts set forth in
Section 4.01(a)(vii) of the Company Disclosure Schedule;
(viii)
except
as
required by Law or any judgment by a court of competent jurisdiction,
(v) pay, discharge, settle or satisfy any material claims, liabilities,
obligations or litigation (absolute, accrued, asserted or unasserted, contingent
or otherwise), other than the payment, discharge, settlement or satisfaction
in
the ordinary course of business consistent with past practice or in accordance
with their terms, of liabilities disclosed, reflected or reserved against in
the
most recent audited financial statements (or the notes thereto) of the Company
included in the Filed Company SEC Documents (for amounts not in excess of such
reserves) or incurred since the date of such financial statements in the
ordinary course of business consistent with past practice, (w) cancel any
material indebtedness, (x) waive or assign any claims or rights of material
value, (y) waive any benefits of, or agree to modify in any respect, or,
subject to the terms hereof, knowingly fail to enforce, or consent to any matter
with respect to which consent is required under, any standstill or similar
Contract to which the Company or any of its Subsidiaries is a party or
(z) waive any material benefits of, or agree to modify in any material
respect, or, subject to the terms hereof, knowingly fail to enforce in any
material respect, or consent to any matter with respect to which consent is
required under, any material confidentiality or similar Contract to which the
Company or any of its Subsidiaries is a party;
34
(ix)
enter
into (1) any material Contract that would be of a type referred to in
Section 3.01(i)(2)(A) or (2) any other material Contract that would be
of a type referred to in Section 3.01(i)(2)(B) or (C) and, in the case of
this clause (2), that (A) would reasonably be expected to impair in
any material respect the ability of the Company and its Subsidiaries to conduct
their business as currently conducted or (B) would reasonably be expected
to have a material adverse effect on the reasonably expected benefits of the
Merger to Parent;
(x)
enter
into, modify, amend or terminate any Contract or waive, release or assign any
material rights or claims thereunder, which if so entered into, modified,
amended, terminated, waived, released or assigned would reasonably be expected
to (A) have a Material Adverse Effect, (B) impair in any material
respect the ability of the Company to perform its obligations under this
Agreement or (C) prevent or materially impede, interfere with, hinder or
delay the consummation of the transactions contemplated by this
Agreement;
(xi)
enter
into any material Contract to the extent consummation of the transactions
contemplated by this Agreement or compliance by the Company with the provisions
of this Agreement could reasonably be expected to conflict with, or result
in a
violation or breach of, or default (with or without notice or lapse of time,
or
both) under, or give rise to a right of, or result in, termination, cancelation
or acceleration of any obligation or to the loss of a benefit under, or result
in the creation of any Lien in or upon any of the properties or other assets
of
the Company or any of its Subsidiaries under, or require Parent to license
or
transfer any of its Intellectual Property Rights or other material assets under,
or give rise to any increased, additional, accelerated, or guaranteed right
or
entitlements of any third party under, or result in any material alteration
of,
any provision of such Contract;
(xii)
except
as
required to ensure that any Company Benefit Plan or Company Benefit Agreement
is
not then out of compliance with applicable Law or to comply with any Company
Benefit Plan, Company Benefit Agreement or other Contract entered into prior
to
the date hereof (to the extent complete and accurate copies of which have been
heretofore delivered to Parent), (A) adopt, enter into, terminate or amend
(I) any collective bargaining Contract or Company Benefit Plan or
(II) any Company Benefit Agreement or other Contract, plan or policy
involving the Company or any of its Subsidiaries and Key Personnel,
(B) increase in any manner the compensation, bonus or fringe or other
benefits of, or pay any discretionary bonus of any kind or amount whatsoever
to,
any current or former director, officer, employee or consultant, except in
the
ordinary course of business consistent with past practice to employees of the
Company or its Subsidiaries other than Key Personnel, (C) grant or pay any
severance or termination pay, except for severance or termination pay granted
or
paid in the ordinary course of business consistent with past practice, to,
or
increase in any material manner the severance or termination pay of, any current
or former director, officer, employee or consultant of the Company or any of
its
Subsidiaries other than Key Personnel, (D) remove any existing restrictions
in any Company Benefit Agreements, Company Benefit Plans or awards made
thereunder, (E) take any action to fund or in any other way secure the
payment of compensation or benefits under any Company Benefit Plan
or
35
Company
Benefit Agreement, (F) take any action to accelerate the vesting or payment
of any compensation or benefit under any Company Benefit Plan or Company Benefit
Agreement or awards made thereunder or (G) materially change any actuarial
or other assumption used to calculate funding obligations with respect to any
Company Pension Plan or change the manner in which contributions to any Company
Pension Plan are made or the basis on which such contributions are
determined;
(xiii)
except
as
required by GAAP, revalue any material assets of the Company or any of its
Subsidiaries or make any change in accounting methods, principles or practices;
or
(xiv)
authorize
any of, or commit, resolve, propose or agree to take any of, the foregoing
actions.
(b)
Other
Actions.
The
Company, Parent and Sub shall not, and shall not permit any of their respective
Subsidiaries to, take any action that could reasonably be expected to result
in
any of the conditions to the Merger set forth in Article VI not being
satisfied.
(c)
Advice
of Changes; Filings.
The
Company and Parent shall promptly advise the other party orally and in writing
if (i) any representation or warranty made by it (and, in the case of
Parent, made by Sub) contained in this Agreement becomes untrue or inaccurate
in
a manner that would result in the failure of the condition set forth in
Section 6.02(a) or Section 6.03(a) or (ii) it (and, in the case
of Parent, Sub) fails to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it (and,
in
the case of Parent, Sub) under this Agreement; provided,
however,
that no
such notification shall affect the representations, warranties, covenants or
agreements of the parties (or remedies with respect thereto) or the conditions
to the obligations of the parties under this Agreement. The Company and Parent
shall, to the extent permitted by Law, promptly provide the other with copies
of
all filings made by such party with any Governmental Entity in connection with
this Agreement and the transactions contemplated by this Agreement, other than
the portions of such filings that include confidential or proprietary
information not directly related to the transactions contemplated by this
Agreement.
(d)
Certain
Tax Matters. (i) During
the period from the date of this Agreement to the Effective Time, the Company
shall, and shall cause each of its Subsidiaries to (A) timely file all material
tax returns (taking into account any applicable extensions) required to be
filed
by or on behalf of each such entity (“Post-Signing Returns”); (B) timely pay all
material taxes due and payable; (C) accrue a reserve in the books and records
and financial statements of any such entity in accordance with past practice
for
all taxes payable but not yet due; (D) promptly notify Parent of any material
suit, claim, action, investigation, audit or similar proceeding (collectively,
“Actions”) pending against or with respect to the Company or any of its
Subsidiaries in respect of any amount of tax and not settle or compromise any
tax liability in excess of $10 million for individual claims, or $50 million
in
the aggregate, without Parent’s prior written consent, which shall not be
unreasonably withheld; (E) not make any material tax election, other than with
Parent’s prior written consent or other than in the ordinary course of business
consistent with past practice; and (F) cause all existing tax sharing
agreements, tax indemnity agreements and similar agreements, arrangements or
practices to which the Company or any of its Subsidiaries is
36
or
may be
a party or by which the Company or any of its Subsidiaries is or may otherwise
be bound to be terminated as of the Closing Date so that after such date neither
the Company nor any of its Subsidiaries shall have any further rights or
liabilities thereunder. Any tax returns described in this Section 4.01(d)
shall be complete and correct in all material respects and shall be prepared
on
a basis consistent with the past practice of the Company and in a manner that
does not distort taxable income, including by deferring income or accelerating
deductions. The Company shall notify Parent upon the filing of any such material
tax return and shall make such tax returns available to Parent.
(ii)
Notwithstanding
any other provision of this Agreement, the Company shall not permit any of
its
Subsidiaries incorporated outside the United States (a “Non-U.S. Subsidiary”) to
make a cash distribution to the Company or any of the Company’s Subsidiaries
incorporated in the United States in excess of amounts described in
Section 965(b)(2)(B) of the Code (an “Excess Distribution”) except to the
extent the Company has provided Parent with substantiation, in a form reasonably
satisfactory to Parent, that the deduction described in Section 965(a) of
the Code will apply to the entire amount of the Excess Distribution. For
purposes of this Section, a written opinion of a nationally recognized law
firm
to
the
effect that the deduction described in Section 965(a) of the Code should
apply to the entire amount of the Excess Distribution shall be a form of
substantiation deemed reasonably satisfactory to Parent. Furthermore,
notwithstanding any other provision of this Agreement, the Company shall not
permit any of its Non-U.S. Subsidiaries to increase its indebtedness to any
related person as described in Section 965(b)(3) of the Code without the
prior written consent of Parent, such consent not to be unreasonably withheld.
For purposes of the preceding sentence, indebtedness of a Non-U.S. Subsidiary
to
a related person shall include indebtedness of a Non-U.S. Subsidiary guaranteed
by a related person.
SECTION
4.02. No
Solicitation.
(a) The Company shall not, nor shall it authorize or permit any of its
Subsidiaries or any of their respective directors, officers or employees or
any
investment banker, financial advisor, attorney, accountant or other advisor,
agent or representative (collectively, “Representatives”) retained by it or any
of its Subsidiaries to, directly or indirectly through another person,
(i) solicit, initiate or knowingly encourage, or take any other action
designed to, or which could reasonably be expected to, facilitate, any Takeover
Proposal or (ii) enter into, continue or otherwise participate in any
discussions or negotiations regarding, or furnish to any person any information,
or otherwise cooperate in any way with, any Takeover Proposal. Without limiting
the foregoing, it is agreed that any violation of the restrictions set forth
in
the preceding sentence by any Representative of the Company or any of its
Subsidiaries shall be a breach of this Section 4.02(a) by the Company. The
Company shall, and shall cause its Subsidiaries to, immediately cease and cause
to be terminated all existing discussions or negotiations with any person
conducted heretofore with respect to any Takeover Proposal and request the
prompt return or destruction of all confidential information previously
furnished. Notwithstanding the foregoing, at any time prior to obtaining the
Shareholder Approval, in response to a bona fide written Takeover Proposal
that
the Board of Directors of the Company reasonably determines (after consultation
with outside counsel and a financial advisor of nationally recognized
reputation) constitutes or is reasonably likely to lead to a Superior Proposal,
and which Takeover Proposal was not solicited after the date hereof and was
made
after the date hereof and did not otherwise result from a breach of this
Section 4.02(a), the Company may, subject to compliance with
Section 4.02(c), (x) furnish information with
37
respect
to the Company and its Subsidiaries to the person making such Takeover Proposal
(and its Representatives) pursuant to a customary confidentiality agreement
not
less restrictive to such person than the confidentiality provisions of the
Confidentiality Agreement, provided
that all
such information has previously been provided to Parent or is provided to Parent
prior to or substantially concurrent with the time it is provided to such
person, and (y) participate in discussions or negotiations with the person
making such Takeover Proposal (and its Representatives) regarding such Takeover
Proposal.
The
term
“Takeover Proposal” means any inquiry, proposal or offer from any person
relating to, or that could reasonably be expected to lead to, any direct or
indirect acquisition or purchase, in one transaction or a series of
transactions, of assets (including equity securities of any Subsidiary of the
Company) or businesses that constitute 15% or more of the revenues, net income
or assets of the Company and its Subsidiaries, taken as a whole, or 15% or
more
of any class of equity securities of the Company, any tender offer or exchange
offer that if consummated would result in any person beneficially owning 15%
or
more of any class of equity securities of the Company, or any merger,
consolidation, business combination, recapitalization, liquidation, dissolution,
joint venture, binding share exchange or similar transaction involving the
Company or any of its Subsidiaries pursuant to which any person or the
shareholders of any person would own 15% or more of any class of equity
securities of the Company or of any resulting parent company of the Company,
in
each case other than the transactions contemplated by this
Agreement.
The
term
“Superior Proposal” means any bona fide offer made by a third party that if
consummated would result in such person (or its shareholders) owning, directly
or indirectly, more than 80% of the shares of Company Common Stock then
outstanding (or of the shares of the surviving entity in a merger or the direct
or indirect parent of the surviving entity in a merger) or all or substantially
all the assets of the Company, which the Board of Directors of the Company
reasonably determines (after consultation with a financial advisor of nationally
recognized reputation) to be (i) more favorable to the shareholders of the
Company from a financial point of view than the Merger (taking into account
all
the terms and conditions of such proposal and this Agreement (including any
changes to the financial terms of this Agreement proposed by Parent in response
to such offer or otherwise)) and (ii) reasonably capable of being
completed, taking into account all financial, legal, regulatory and other
aspects of such proposal.
(b)
Neither
the Board of Directors of the Company nor any committee thereof shall
(i) (A) withdraw (or modify in a manner adverse to Parent), or
publicly propose to withdraw (or modify in a manner adverse to Parent), the
adoption or recommendation by such Board of Directors or any such committee
thereof of this Agreement, the Merger or the other transactions contemplated
by
this Agreement or (B) adopt or recommend, or propose publicly to adopt or
recommend, any Takeover Proposal (any action described in this clause (i)
being referred to as a “Company Adverse Recommendation Change”) or
(ii) adopt or recommend, or publicly propose to adopt or recommend, or
allow the Company or any of its Subsidiaries to execute or enter into, any
letter of intent, memorandum of understanding, agreement in principle, merger
agreement, acquisition agreement, option agreement, joint venture agreement,
partnership agreement or other similar Contract constituting or related to,
or
that is intended to or could reasonably be expected to lead to, any Takeover
Proposal (other than a confidentiality agreement referred to in
Section 4.02(a)) (an “Acquisition Agreement”). Notwithstanding the
38
foregoing,
at any time prior to obtaining the Shareholder Approval and subject to
Section 4.02(c), the Board of Directors of the Company may (x) make a
Company Adverse Recommendation Change if the Board of Directors of the Company
determines in good faith (after consultation with outside counsel and a
financial advisor of nationally recognized reputation) that (A) a Parent
Material Adverse Effect has occurred and (B) as a result thereof such
action is consistent with their fiduciary duties under applicable Laws or
(y) in response to a Takeover Proposal that the Board reasonably determines
(after consultation with outside counsel and a financial advisor of nationally
recognized reputation) constitutes a Superior Proposal and that was unsolicited
and made after the date hereof and that did not otherwise result from a breach
of this Section 4.02, (1) make a Company Adverse Recommendation Change
or (2) cause the Company to terminate this Agreement and concurrently with
or after such termination enter into an Acquisition Agreement; provided,
however,
that
the Company shall not be entitled to exercise its right to make a Company
Adverse Recommendation Change or terminate this Agreement pursuant to
clause (y) until after the fifth business day following Parent’s receipt of
written notice (a “Notice of Superior Proposal”) from the Company advising
Parent that the Board of Directors of the Company intends to take such action
and specifying the reasons therefor, including the terms and conditions of
any
Superior Proposal that is the basis of the proposed action by the Board of
Directors (it being understood and agreed that any amendment to the financial
terms or any other material term of such Superior Proposal shall require a
new
Notice of Superior Proposal and a new five business day period). In determining
whether to make a Company Adverse Recommendation Change or to cause the Company
to so terminate this Agreement, the Board of Directors of the Company shall
take
into account any changes to the financial terms of this Agreement proposed
by
Parent in response to a Notice of Superior Proposal or otherwise.
(c)
In
addition to the obligations of the Company set forth in paragraphs (a) and
(b) of this Section 4.02, the Company shall promptly advise Parent orally
and in writing (i) of any Takeover Proposal, the material terms and
conditions of any such Takeover Proposal (including any changes thereto) and
the
identity of the person making any such Takeover Proposal and (ii) if the
Board of Directors of the Company is considering, or has decided to consider,
whether any change, effect, event, occurrence, state of facts or development
constitutes a Parent Material Adverse Effect. The Company shall (x) keep
Parent fully informed in all material respects of the status and details
(including any change to the terms thereof) of any Takeover Proposal,
(y) provide to Parent as soon as practicable after receipt or delivery
thereof copies of all correspondence and other written material sent or provided
to the Company or any of its Subsidiaries from any person that describes any
of
the terms or conditions of any Takeover Proposal and (z) keep Parent fully
informed in all material respects of the status and details of any determination
by the Company’s Board of Directors with respect to a potential Parent Material
Adverse Effect.
(d)
Nothing
contained in this Section 4.02 shall prohibit the Company from
(x) taking and disclosing to its shareholders a position contemplated by
Rule 14e-2(a) under the Exchange Act or making a statement required under
Rule 14a-9 under the Exchange Act or (y) making any disclosure to the
shareholders of the Company that is required by applicable Law; provided,
however,
that in
no event shall the Company or its Board of Directors or any committee thereof
take, or agree or resolve to take, any action prohibited by Section 4.02(b)
(it being understood that any accurate disclosure of factual information to
the
shareholders of the
39
Company
that is required to be made to such shareholders under applicable federal
securities Laws shall not be considered a modification prohibited by
clause (i)(A) of Section 4.02(b)).
ARTICLE
V
Additional
Agreements
SECTION
5.01. Preparation
of the Form S-4 and the Proxy Statement; Shareholders’ Meeting.
(a) As promptly as practicable following November 14, 2005, the
Company and Parent shall prepare and Parent shall file with the SEC a
post-effective amendment to the Registration Statement on Form S-4 of Parent
(Registration No. 333-122856), originally filed with the SEC on February 16,
2005, in connection with the issuance of shares of Parent Common Stock in the
Merger (as may be further amended or supplemented from time to time, the “Form
S-4”), in which the Proxy Statement will be included as a prospectus. Each of
the Company and Parent shall use its reasonable best efforts to have the
Form S-4 declared effective under the Securities Act as promptly as
practicable after such filing. The Company shall use its reasonable best efforts
to cause the Proxy Statement to be mailed to the shareholders of the Company
as
promptly as practicable after the Form S-4 is declared effective under the
Securities Act. Parent shall also take any action (other than qualifying to
do
business in any jurisdiction in which it is not now so qualified or filing
a
general consent to service of process) required to be taken under any applicable
state securities Laws in connection with the issuance of shares of Parent Common
Stock in the Merger, and each of Parent and the Company shall furnish all
information as may be reasonably requested by the other in connection with
any
such action and the preparation, filing and distribution of the Form S-4 and
the
Proxy Statement. No filing of, or amendment or supplement to, the Form S-4
will be made by Parent, and no filing of, or amendment or supplement to, the
Proxy Statement will made by the Company, in each case without providing the
other party a reasonable opportunity to review and comment thereon. If at any
time prior to the Effective Time any information relating to the Company or
Parent, or any of their respective Affiliates, directors or officers, should
be
discovered by the Company or Parent which should be set forth in an amendment
or
supplement to either the Form S-4 or the Proxy Statement, so that either
such document would not include any misstatement of a material fact or omit
to
state any material fact necessary to make the statements therein, in light
of
the circumstances under which they are made, not misleading, the party which
discovers such information shall promptly notify the other parties hereto and
an
appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and, to the extent required by Law, disseminated
to
the shareholders of the Company. The parties shall notify each other promptly
of
the time when the Form S-4 has become effective, of the issuance of any stop
order or suspension of the qualification of the Parent Common Stock issuable
in
connection with the Merger for offering or sale in any jurisdiction, or of
the
receipt of any comments from the SEC or the staff of the SEC and of any request
by the SEC or the staff of the SEC for amendments or supplements to the Proxy
Statement or the Form S-4 or for additional information and shall supply each
other with copies of (i) all correspondence between it or any of its
Representatives, on the one hand, and the SEC or the staff of the SEC, on the
other hand, with respect to the Proxy Statement, the Form S-4 or the Merger
and
(ii) all orders of the SEC relating to the Form S-4.
40
(b)
The
Company shall use its reasonable best efforts to, as promptly as practicable,
establish a record date for, duly call, give notice of, convene and hold a
meeting of its shareholders (the “Shareholders’ Meeting”) solely for the purpose
of obtaining the Shareholder Approval. Subject to Section 4.02, the Company
shall, through its Board of Directors, recommend to its shareholders approval
of
this Agreement and shall include such recommendation in the Proxy Statement.
Without limiting the generality of the foregoing, but subject to the terms
of
this Agreement, the Company’s obligations pursuant to the first sentence of this
Section 5.01(b) shall not be affected by the commencement, public
proposal, public disclosure or communication to the Company of any Takeover
Proposal.
SECTION
5.02. Access
to Information; Confidentiality.
(a)
To
the
extent permitted by applicable Law, the Company shall afford to Parent, and
to
Parent’s officers, employees, accountants, counsel, financial advisors and other
Representatives, reasonable access (including for the purpose of coordinating
integration activities and transition planning with the employees of the Company
and its Subsidiaries) during normal business hours and upon reasonable prior
notice to the Company during the period prior to the Effective Time or the
termination of this Agreement to all its and its Subsidiaries’ properties,
books, Contracts, commitments, personnel and records, but only to the extent
that such access does not unreasonably interfere with the business or operations
of the Company and its Subsidiaries, and, during such period, the Company shall
furnish promptly to Parent (a) a copy of each report, schedule,
registration statement and other document filed by it during such period
pursuant to the requirements of Federal or state securities Laws and
(b) all other information concerning its and its Subsidiaries’ business,
properties and personnel as Parent may reasonably request; provided,
however,
that
the Company shall not be required to (or to cause any of its Subsidiaries to)
so
confer, afford such access or furnish such copies or other information to the
extent that doing so would result in the loss of attorney-client privilege
(provided that the Company shall use its reasonable best efforts to allow for
such access or disclosure in a manner that does not result in a loss of
attorney-client privilege). Except for disclosures expressly permitted by the
terms of the Confidentiality Agreement dated as of August 4, 2004, between
Parent and the Company (as it may be amended from time to time, the
“Confidentiality Agreement”), Parent shall hold, and shall cause its officers,
employees, accountants, counsel, financial advisors and other Representatives
to
hold, all information received from the Company, directly or indirectly, in
confidence in accordance with the Confidentiality Agreement. The Confidentiality
Agreement shall survive any termination of this Agreement. Notwithstanding
the
terms of the Confidentiality Agreement, Parent and the Company agree that until
the earlier of the consummation of this Agreement or the six month anniversary
of the date of the termination of this Agreement, as applicable, each party
and
its respective Subsidiaries shall not, without the other party’s prior written
consent, directly or indirectly solicit for employment (other than through
advertising in newspapers or periodicals of general circulation or recruiters’
searches, in each case not specifically directed at the other party’s employees)
any person currently employed by the other party or any of its Subsidiar-ies
with whom it has contact or who is identified to such party in connection with
the transactions contemplated by this Agreement. No investigation pursuant
to
this Section 5.02 or information provided or received by any party hereto
pursuant to this Agreement will affect any of the representations or warranties
of the parties hereto contained in this Agreement or the conditions hereunder
to
the obligations of the parties hereto.
41
(b)
To
the
extent permitted by applicable Law, Parent shall afford to the Company and
its
Representatives reasonable access to Parent’s personnel and records (i) on
a basis consistent with the Company’s access to such personnel and records prior
to the date hereof in connection with the Company’s due diligence review of
Parent and its Subsidiaries in connection with the transactions contemplated
hereby and (ii) to the extent reasonably necessary for the Company to
determine whether the conditions set forth in Section 6.03 are
satisfied.
SECTION
5.03. Reasonable
Best Efforts.
Upon the
terms and subject to the conditions set forth in this Agreement, each of the
parties agrees to use its reasonable best efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary to consummate and make
effective, in the most expeditious manner practicable, the Merger and the other
transactions contemplated by this Agreement, including using reasonable best
efforts to accomplish the following: (i) the taking of all acts necessary
to cause the conditions to Closing to be satisfied as promptly as practicable,
(ii) the obtaining of all necessary actions or nonactions, waivers,
consents and approvals from Governmental Entities and the making of all
necessary registrations and filings (including filings with Governmental
Entities) and the taking of all steps as may be necessary to obtain an approval
or waiver from, or to avoid an action or proceeding by, any Governmental Entity,
(iii) the avoidance of each and every impediment under any antitrust, merger
control, competition or trade regulation Law that may be asserted by any
Governmental Entity with respect to the Merger so as to enable the Closing
to
occur as soon as reasonably possible and (iv) the obtaining of all
necessary consents, approvals or waivers from third parties, including any
such
consents, approvals or waivers required in connection with any Divestiture.
In
connection with and without limiting the foregoing, the Company and Parent
shall
(A) duly file with the U.S. Federal Trade Commission and the Antitrust
Division of the Department of Justice the notification and report form (the
“HSR
Filing”) required under the HSR Act and (B) duly make all notifications and
other filings required (i) under the EC Merger Regulation (together with
the HSR Filings, the “Antitrust Filings”) or (ii) under any other
applicable competition, merger control, antitrust or similar Law that the
Company and Parent deem advisable or appropriate, in each case with respect
to
the transactions contemplated by this Agreement and as promptly as practicable.
The Antitrust Filings shall be in substantial compliance with the requirements
of the HSR Act, the EC Merger Regulation or other Laws, as applicable. Each
party shall cooperate with the other party to the extent necessary to assist
the
other party in the preparation of its Antitrust Filings and, if requested,
to
promptly amend or furnish additional information thereunder. Each party shall
use its reasonable best efforts to furnish to each other all information
required for any filing, form, declaration, notification, registration and
notice, other than confidential or proprietary information not directly related
to the transactions contemplated by this Agreement, and to keep the other party
reasonably informed with respect to the status of each clearance, approval
or
waiver sought from a Governmental Entity in connection with the transactions
contemplated by this Agreement and the material communications between such
party and such Governmental Entity. Each party shall consult with the other
party, and consider in good faith the views of the other party, prior to
entering into any agreement with any Antitrust Authority. Neither party shall,
nor shall it permit any of its Subsidiaries to, acquire or agree to acquire
any
business, person or division thereof, or otherwise acquire or agree to acquire
any assets if the entering into of a definitive agreement relating to or the
consummation of such acquisition, could reasonably be expected to materially
increase the risk of not obtaining the applicable clearance, approval or waiver
from an Antitrust Authority
42
with
respect to the transactions contemplated by this Agreement. The Company and
its
Board of Directors shall (1) use reasonable best efforts to ensure that no
state takeover Law or similar Law is or becomes applicable to this Agreement,
the Merger or any of the other transactions contemplated by this Agreement
and
(2) if any state takeover Law or similar Law becomes applicable to this
Agreement, the Merger or any of the other transactions contemplated by this
Agreement, use reasonable best efforts to ensure that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly
as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such Law on this Agreement, the Merger and the other
transactions contemplated by this Agreement. Notwithstanding the foregoing
or
any other provision of this Agreement: (a) with respect to the assets of
the cardiac rhythm management businesses of Parent, the Company and their
respective Affiliates, Parent and its Affiliates shall only be required to
agree
to Divestitures of such assets that individually or in the aggregate would
not
reasonably be expected to have greater than a de
minimis
adverse
effect on the combined cardiac rhythm management business of Parent, the Company
and their respective Affiliates, taken as a whole; (b) with respect to the
assets of the coronary vascular intervention business of Parent and its
Affiliates, Parent and its Affiliates shall only be required to agree to
Divestitures of such assets that individually or in the aggregate would not
reasonably be expected to have greater than a de
minimis
adverse
effect on the drug eluting stent business of Parent and its Affiliates, taken
as
a whole; (c) with respect to the assets of the vascular intervention
business of the Company and its Affiliates, Parent and its Affiliates shall
only
be required to agree to Divestitures of such assets that individually or in
the
aggregate would not reasonably be expected to have a material adverse effect
on
the combined vascular intervention business of Parent, the Company and their
respective Affiliates, taken as a whole; (d) none of Parent and its
Affiliates shall be required to agree to any Divestiture of any of their assets
except as provided in clauses (a) and (b) above and (e) if, but only
if, directed by Parent, the Company shall agree to any Divestiture of any of
its
assets or the assets of any of its Affiliates if such Divestiture is conditioned
on the consummation of the Merger. For purposes of this Agreement, a
“Divestiture” of any asset shall mean (i) any sale, transfer, license,
separate holding, divestiture or other disposition, or any prohibition of,
or
any limitation on, the acquisition, ownership, operation, effective control
or
exercise of full rights of ownership, of such asset or (ii) the termination
or amendment of any existing relationships and contractual rights. It is agreed
and understood that, for purposes of this Agreement, a Divestiture of a business
unit, product line or development program may include (x) the transfer of
any and all assets primarily relating to that business unit or to the research,
development, manufacture, marketing or sale of that product line or development
program and (y) licensing or otherwise making available assets that are
related, but not primarily, to that business unit, product line or development
program; provided that Parent, the Company or their Affiliates will be entitled
to a license back or otherwise having made available transferred assets to
the
extent that such assets otherwise relate to other retained businesses, product
lines or development programs of Parent, the Company or any of their respective
Affiliates. It is understood and agreed by the parties that, for purposes of
this Agreement, the effect of any Divestiture required to be made pursuant
to
this Section 5.03 shall not, directly or indirectly, be deemed to result in
a breach of the representations and warranties set forth herein.
SECTION
5.04. Company
Stock Options; ESPP.
(a) As soon as practicable following the date of this Agreement, the
Board of Directors of the Company (or, if appropriate,
43
any
committee thereof administering the Company Stock Plans) shall adopt such
resolutions or take such other actions as may be required to effect the
following:
(i) each
Company Stock Option outstanding immediately prior to the Effective Time shall
be amended and converted into an option to acquire, on the same terms and
conditions as were applicable under such Company Stock Option, the number of
shares of Parent Common Stock (rounded down to the nearest whole share) equal
to
the sum of (x) the product of (A) the number of shares of Company Common Stock
subject to such Company Stock Option and (B) the Exchange Ratio and (y) the
product of (A) the number of shares of Company Common Stock subject to such
Company Stock Option and (B) the Cash Portion Option Exchange Multiple, at
an
exercise price per share of Parent Common Stock (rounded up to the nearest
whole
cent) equal to the quotient obtained by dividing (1) the aggregate exercise
price for the shares of Company Common Stock subject to such Company Stock
Option by (2) the aggregate number of shares of Parent Common Stock to be
subject to such Company Stock Option after giving effect to the adjustments
in
this clause (i) (each, as so adjusted, an “Adjusted Option”);
and
(ii) make
such other changes to the Company Stock Plans as Parent and the Company may
agree are appropriate to give effect to the Merger.
(b)
As
soon
as practicable following the date of this Agreement, the Board of Directors
of
the Company (or, if appropriate, any committee of the Board of Directors of
the
Company administering the ESPP), shall adopt such resolutions or take such
other
actions as may be required to provide that with respect to the ESPP
(i) participants may not increase their payroll deductions or purchase
elections from those in effect on the date of this Agreement, (ii) each
participant’s outstanding right to purchase shares of Company Common Stock under
the ESPP shall terminate on the day immediately prior to the day on which the
Effective Time occurs, provided that all amounts allocated to each participant’s
account under the ESPP as of such date shall thereupon be used to purchase
from
the Company whole shares of Company Common Stock at the applicable price
determined under the terms of the ESPP for the then outstanding offering periods
using such date as the final purchase date for each such offering period, and
(iii) the ESPP shall terminate immediately following such purchases of
Company Common Stock.
(c)
The
Company shall ensure that following the Effective Time, no holder of a Company
Stock Option (or former holder of a Company Stock Option) or any participant
in
any Company Stock Plan, Company Benefit Plan or Company Benefit Agreement shall
have any right thereunder to acquire any capital stock of the Company or the
Surviving Corporation or any other equity interest therein (including “phantom”
stock or stock appreciation rights).
(d)
The
adjustments provided in Section 5.04(a) with respect to any Company Stock
Option to which Section 421(a) of the Code applies shall be and are
intended to be effected in a manner which is consistent with Section 424(a)
of the Code. As soon as practicable following the Effective Time, Parent shall
deliver to the holders of Adjusted Options appropriate notices setting forth
such holders’ rights pursuant to the respective Company Stock Plans and the
Contracts evidencing the grants of such Adjusted Options, which shall provide,
among other things, that such Adjusted Options and Contracts have been assumed
by Parent and shall
44
continue
in effect on the same terms and conditions (subject to the adjustments required
by this Section 5.04 after giving effect to the Merger).
(e)
Except
as
otherwise contemplated by this Section 5.04 and except to the extent
required under the respective terms of the Adjusted Options, all restrictions
or
limitations on transfer and vesting with respect to Adjusted Options, to the
extent that such restrictions or limitations shall not have already lapsed,
and
all other terms thereof, shall remain in full force and effect with respect
to
such Adjusted Options after giving effect to the Merger and the assumption
by
Parent as set forth above.
(f)
As
soon
as practicable following the Effective Time, Parent shall prepare and file
with
the SEC a registration statement on Form S-8 (or another appropriate form)
registering shares of Parent Common Stock subject to issuance upon the exercise
of the Adjusted Options. The Company shall cooperate with, and assist Parent
in
the preparation of, such registration statement. Parent shall keep such
registration statement effective (and to maintain the current status of the
prospectus required thereby) for so long as any Adjusted Options remain
outstanding.
(g)
For
purposes of this Agreement, “Cash Portion Option Exchange Multiple” means the
quotient obtained by dividing (x) the Cash Portion by (y) the Average Parent
Stock Price.
(h)
For
purposes of this Agreement, “Average Parent Stock Price” means the average of
the volume weighted averages of the trading prices of Parent Common Stock,
as
such price is reported on the NYSE Composite Transaction Tape (as reported
by
Bloomberg Financial Markets or such other source as the parties shall agree
in
writing), for the 15 trading days ending on the third trading day immediately
preceding the Effective Time.
(i)
Prior
to
the Effective Time, each of Parent and the Company shall use reasonable best
efforts to cause any dispositions of Company Common Stock (including derivative
securities with respect to Company Common Stock) or acquisitions of Parent
Common Stock (including derivative securities with respect to Parent Common
Stock) resulting from the transactions contemplated by this Agreement by each
individual who is subject to the reporting requirements of Section 16(a) of
the Exchange Act with respect to the Company to be exempt under Rule 16b-3
promulgated under the Exchange Act, such efforts to include all steps required
be taken in accordance with the No-Action Letter dated January 12, 1999,
issued by the SEC to Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP.
SECTION
5.05. Indemnification,
Exculpation and Insurance.
(a) Parent shall cause the Surviving Corporation to assume the
obligations with respect to all rights to indemnification and exculpation from
liabilities, including advancement of expenses, for acts or omissions occurring
at or prior to the Effective Time now existing in favor of the current or former
directors or officers of the Company as provided in the Company Articles, the
Company By-laws or any indemnification Contract between such directors or
officers and the Company (in each case, as in effect on the date hereof),
without further action, as of the Effective Time and such obligations shall
survive the Merger and shall continue in full force and effect in accordance
with their terms.
45
(b)
In
the
event that the Surviving Corporation or any of its successors or assigns
(i) consolidates with or merges into any other person and is not the
continuing or surviving corporation or entity of such consolidation or merger
or
(ii) transfers or conveys all or substantially all of its properties and
other assets to any person, then, and in each such case, Parent shall cause
proper provision to be made so that the successors and assigns of the Surviving
Corporation shall expressly assume the obligations set forth in this
Section 5.05. In the event (A) the Surviving Corporation transfers any
material portion of its assets, in a single transaction or in a series of
transactions or (B) Parent takes any action to materially impair the financial
ability of the Surviving Corporation to satisfy the obligations referred to
in
Section 5.05(a), Parent will either guarantee such obligations or take such
other action to insure that the ability of the Surviving Corporation, legal
and
financial, to satisfy such obligations will not be diminished in any material
respect.
(c)
For
six
years after the Effective Time, Parent shall maintain (directly or indirectly
through the Company’s existing insurance programs) in effect the Company’s
current directors’ and officers’ liability insurance in respect of acts or
omissions occurring at or prior to the Effective Time, covering each person
currently covered by the Company’s directors’ and officers’ liability insurance
policy (a complete and accurate copy of which has been heretofore delivered
to
Parent), on terms with respect to such coverage and amounts no less favorable
than those of such policy in effect on the date hereof; provided,
however,
that
Parent may (i) substitute therefor policies of Parent containing terms with
respect to coverage (including as coverage relates to deductibles and
exclusions) and amounts no less favorable to such directors and officers or
(ii) request that the Company obtain such extended reporting period
coverage under its existing insurance programs (to be effective as of the
Effective Time); provided
further,
however,
that in
satisfying its obligation under this Section 5.05(c), neither the Company
nor Parent shall be obligated to pay more than in the aggregate the amount
set
forth in Section 5.05(c) of the Company Disclosure Schedule to obtain such
coverage. It is understood and agreed that in the event such coverage cannot
be
obtained for such amount or less in the aggregate, Parent shall only be
obligated to provide such coverage as may be obtained for such aggregate
amount.
(d)
The
provisions of this Section 5.05 (i) are intended to be for the benefit
of, and will be enforceable by, each indemnified party, his or her heirs and
his
or her representatives and (ii) are in addition to, and not in substitution
for, any other rights to indemnification or contribution that any such person
may have by Contract or otherwise.
SECTION
5.06. Fees
and Expenses.
(a) Except as provided in paragraphs (b), (c) and (d) of this
Section 5.06, all fees and expenses incurred in connection with this
Agreement, the Merger and the other transactions contemplated by this Agreement
shall be paid by the party incurring such fees or expenses, whether or not
the
Merger is consummated, except
that expenses incurred in connection with the printing and mailing of the
Form S-4 and the Proxy Statement shall be shared equally by Parent and the
Company.
(b)
In
the
event that (i) this Agreement is terminated by Parent pursuant to
Section 7.01(e) (other than as a result of a Company Adverse Recommendation
Change following the occurrence of a Parent Material Adverse Effect),
(ii) this Agreement is terminated by the Company pursuant to
Section 7.01(f) or (iii) (A) prior to the obtaining of the
Shareholder
46
Approval,
a Takeover Proposal shall have been made to the Company or shall have been
made
directly to the shareholders of the Company generally or shall have otherwise
become publicly known or any person shall have publicly announced an intention
(whether or not conditional) to make a Takeover Proposal, (B) thereafter
this Agreement is terminated by either Parent or the Company pursuant to
Section 7.01(b)(i) (but only if a vote to obtain the Shareholder Approval
or the Shareholders’ Meeting has not been held) or Section 7.01(b)(iii) and
(C) within 12 months after such termination, the Company enters into a
definitive Contract to consummate, or consummates, the transactions contemplated
by any Takeover Proposal, then the Company shall pay Parent a fee equal to
$625,000,000 (the “Parent Termination Fee”) by wire transfer of same-day funds
on the first business day following (x) in the case of a payment required
by clause (i) or (ii) above, the date of termination of this Agreement and
(y) in the case of a payment required by clause (iii) above, the date
of the first to occur of the events referred to in clause (iii)(C). For
purposes of clause (iii)(C) of the immediately preceding sentence only, the
term “Takeover Proposal” shall have the meaning assigned to such term in
Section 4.02(a) except that all references to “15%” therein shall be deemed
to be references to “35%”.
(c)
In
the
event that (i) this Agreement is terminated pursuant to
Section 7.01(b)(i), 7.01(b)(ii) or 7.01(c)(ii) and (ii) at the time of
any such termination all of the conditions set forth in Article VI have
been satisfied or waived except for any of the conditions set forth in
Section 6.01(b), 6.01(c), 6.01(d), 6.02(c) or 6.02(d) (in the case of
Sections 6.01(d), 6.02(c) and 6.02(d), only
to
the extent that the conditions set forth therein have not been satisfied due
to
a suit, action or proceeding by any national Governmental Entity or the
imposition of a Restraint, in either case relating to competition, merger
control, antitrust or similar Laws),
then
Parent shall pay to the Company a fee equal to $300,000,000 (the “Company
Termination Fee”) by wire transfer of same-day funds on the first business day
following the date of termination of this Agreement.
(d)
The
Company and Parent acknowledge and agree that the agreements contained in
Sections 5.06(b) and 5.06(c) are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, the Company
and Parent would not enter into this Agreement; accordingly, (i) if the
Company fails promptly to pay the amount due pursuant to Section 5.06(b),
and, in order to obtain such payment, Parent commences a suit that results
in a
judgment against the Company for the Parent Termination Fee, the Company shall
pay to Parent its costs and expenses (including attorneys’ fees and expenses) in
connection with such suit, together with interest on the amount of the Parent
Termination Fee from the date such payment was required to be made until the
date of payment at the prime rate of Citibank, N.A., in effect on the date
such
payment was required to be made; and (ii) if Parent fails promptly to pay
the amount due pursuant to Section 5.06(c), and, in order to obtain such
payment, the Company commences a suit that results in a judgment against Parent
for the Company Termination Fee, Parent shall pay to the Company its costs
and
expenses (including attorneys’ fees and expenses) in connection with such suit,
together with interest on the amount of the Company Termination Fee from the
date such payment was required to be made until the date of payment at the
prime
rate of Citibank, N.A., in effect on the date such payment was required to
be
made.
SECTION
5.07. Public
Announcements.
Except
with respect to any Company Adverse Recommendation Change made in accordance
with the terms of this Agreement, Parent and the Company shall consult with
each
other before issuing, and give each other the
47
opportunity
to review and comment upon, any press release or other public statements with
respect to the transactions contemplated by this Agreement, including the
Merger, and shall not issue any such press release or make any such public
statement prior to such consultation, except as such party may reasonably
conclude may be required by applicable Law, court process or by obligations
pursuant to any listing agreement with any national securities exchange or
national securities quotation system. The parties agree that the initial press
release to be issued with respect to the transactions contemplated by this
Agreement shall be in the form heretofore agreed to by the parties.
SECTION
5.08. Affiliates. As
soon as practicable after November 14, 2005, the Company shall deliver to Parent
a letter identifying all persons who at the time this Agreement is submitted
for
adoption by the shareholders of the Company may be deemed to be “affiliates” of
the Company for purposes of Rule 145 under the Securities Act. The Company
shall use its reasonable best efforts to cause each such person to deliver
to
Parent at least 30 days prior to the Closing Date a written agreement
substantially in the form attached as Exhibit B hereto.
SECTION
5.09. Stock
Exchange Listing.
To the
extent Parent does not issue or intend to issue treasury shares in the Merger
or
to holders of Adjusted Options that are already listed, Parent shall use its
reasonable best efforts to cause the shares of Parent Common Stock to be issued
in the Merger and to holders of Adjusted Options to be promptly approved for
listing on the NYSE, subject to official notice of issuance, prior to the
Closing Date.
SECTION
5.10. Shareholder
Litigation.
The
Company shall give Parent the opportunity to participate in the defense or
settlement of any shareholder litigation against the Company and/or its
directors relating to the transactions contemplated by this Agreement, and
no
such settlement shall be agreed to without Parent’s prior written
consent.
SECTION
5.11. Employee
Matters.
(a) (i)For a period of twelve months following the Effective Time,
the employees of the Company and its Subsidiaries who remain in the employment
of the Surviving Corporation and its Subsidiaries (the “Continuing Employees”)
shall receive employee benefits that in the aggregate are substantially
comparable to the employee benefits provided to such employees immediately
prior
to the Effective Time; (ii) for the six-month period immediately following
the
expiration of the twelve-month period described in the preceding clause (i),
the
Continuing Employees shall receive employee benefits that in the aggregate
are
substantially comparable to either the employee benefits provided to such
employees immediately prior to the Effective Time or the employee benefits
provided to similarly situated employees of Parent and its Subsidiaries; and
(iii) for a period of not less than eighteen months following the Effective
Time, the Continuing Employees shall receive base salary or wage rates that
are
not less than those in effect for such Continuing Employees immediately prior
to
the Effective Time; provided
that
neither Parent nor the Surviving Corporation nor any of their Subsidiaries
shall
have any obligation to issue, or adopt any plans or arrangements providing
for
the issuance of, shares of capital stock, warrants, options, stock appreciation
rights or other rights in respect of any shares of capital stock of any entity
or any securities convertible or exchangeable into such shares pursuant to
any
such plans or arrangements; provided,
further,
that no
plans or arrangements of the Company or any of its Subsidiaries providing for
such issuance shall be taken into account in determining whether employee
benefits are substantially comparable in the aggregate.
48
(b)
Nothing
contained herein shall be construed as requiring, and the Company shall take
no
action that would have the effect of requiring, Parent or the Surviving
Corporation to continue any specific employee benefit plans or to continue
the
employment of any specific person.
(c)
Parent
shall cause the Surviving Corporation to recognize the service of each
Continuing Employee as if such service had been performed with Parent
(i) for purposes of vesting (but not benefit accrual) under Parent’s
defined benefit pension plan, (ii) for purposes of eligibility for vacation
under Parent’s vacation program, (iii) for purposes of eligibility and
participation under any health or welfare plan maintained by Parent (other
than
any post-employment health or post-employment welfare plan) , (iv) for purposes
of eligibility for the company matching contribution under Parent’s 401(k)
savings plan (it being understood that each Continuing Employee who was
participating in the Company’s 401(k) savings plan immediately prior to becoming
eligible to participate in Parent’s 401(k) savings plan shall be immediately
eligible for the company matching contribution under Parent’s 401(k) savings
plan) and (v) unless covered under another arrangement with or of the
Company, for benefit accrual purposes under Parent’s severance plan (in the case
of each of clauses (i), (ii), (iii), (iv) and (v), solely to the extent
that Parent makes such plan or program available to employees of the Surviving
Corporation, it being Parent’s current intention to do so), but not for purposes
of any other employee benefit plan of Parent.
(d)
With
respect to any welfare plan maintained by Parent in which Continuing Employees
are eligible to participate after the Effective Time, Parent shall, and shall
cause the Surviving Corporation to, (i) waive all limitations as to
preexisting conditions and exclusions with respect to participation and coverage
requirements applicable to such employees to the extent such conditions and
exclusions were satisfied or did not apply to such employees under the welfare
plans maintained by the Company prior to the Effective Time and
(ii) provide each Continuing Employee with credit for any co-payments and
deductibles paid prior to the Effective Time in satisfying any analogous
deductible or out-of-pocket requirements to the extent applicable under any
such
plan.
(e)
Subject
to the provisions of Section 5.11(a) through (d), Parent shall assume all
obligations under and honor in accordance with their terms, and shall cause
the
Surviving Corporation to honor in accordance with their terms, the Company
Benefit Plans and Company Benefit Agreements listed on Section 5.11(e) of the
Company Disclosure Schedule (as modified, if applicable, as agreed between
Parent and individual employees of the Company or its Subsidiaries). Parent
acknowledges and agrees that the Merger will constitute a “change in control”
within the meaning of the Company Benefit Plans and Company Benefit Agreements
which include a definition of such (or substantially similar) concept, except
to
the extent otherwise agreed between Parent and individual employees of the
Company and its Subsidiaries.
(f)
Notwithstanding
the foregoing provisions of Section 5.11, the provisions of Section 5.11(a),
(c)
and (d) shall apply only with respect to Continuing Employees who are covered
under Company Benefit Plans that are maintained primarily for the benefit of
employees employed in the United States (including Continuing Employees
regularly employed outside the United States to the extent they participate
in
such Company Benefit Plans). With respect to Continuing Employees not described
in the preceding sentence, Parent shall, and shall cause the
49
Surviving
Corporation and its Subsidiaries to, comply with all applicable laws, directives
and regulations relating to employees and employee benefits matters applicable
to such employees.
SECTION
5.12. Company
Notes.
Each of
the Company, Parent and Sub shall take each action required to be taken by
such
party pursuant to the Indenture dated as of January 18, 1996, between the
Company and Citibank, N.A., with respect to the Company Notes, as necessary
to
consummate the Merger and the other transactions contemplated by this Agreement
in compliance therewith.
SECTION
5.13. Rights
Agreement.
The
Board of Directors of the Company shall take all further actions (in addition
to
those referred to in Section 3.01(v)) requested by Parent in order to
render the Company Rights inapplicable to the Merger and the other transactions
contemplated by this Agreement. Except as provided above with respect to the
Merger and the other transactions contemplated by this Agreement, the Board
of
Directors of the Company shall not, without the prior written consent of Parent,
amend, take any action with respect to, or make any determination under, the
Rights Agreement (including a redemption of the Company Rights) to facilitate
a
Takeover Proposal.
ARTICLE
VI
Conditions
Precedent
SECTION
6.01. Conditions
to Each Party’s Obligation to Effect the Merger.
The
respective obligation of each party to effect the Merger is subject to the
satisfaction or (to the extent permitted by Law) waiver by Parent and the
Company on or prior to the Closing Date of the following
conditions:
(a)
Shareholder
Approval.
The
Shareholder Approval shall have been obtained.
(b)
NYSE
Listing.
The
shares of Parent Common Stock issuable to the shareholders of the Company and
to
holders of Adjusted Options as contemplated by this Agreement shall have been
approved for listing on the NYSE, subject to official notice of
issuance.
(c)
Antitrust.
(i) The waiting period (and any extension thereof) applicable to the
Merger under the HSR Act shall have been terminated or shall have expired and
(ii) the European Commission shall have issued a decision under
Article 6(1)(b), 8(1) or 8(2) of the EC Merger Regulation (or shall have
been deemed to have done so under Article 10(6) of the EC Merger
Regulation) declaring the Merger compatible with the EC Common Market (and/or,
as may be the case, any national competition authority in the EC to which all
or
part of the case may have been transferred shall have issued a decision with
similar effect or have been deemed to have done so).
(d)
No
Injunctions or Restraints.
No
temporary restraining order, preliminary or permanent injunction or other
judgment or order issued by any court or agency of
50
competent
jurisdiction or other Law, rule, legal restraint or prohibition (collectively,
“Restraints”) shall be in effect preventing the consummation of the
Merger.
(e)
Form
S-4.
The
Form S-4 shall have become effective under the Securities Act and shall not
be the subject of any stop order or proceedings seeking a stop
order.
SECTION
6.02. Conditions
to Obligations of Parent and Sub.
The
obligations of Parent and Sub to effect the Merger are further subject to the
satisfaction or (to the extent permitted by Law) waiver by Parent on or prior
to
the Closing Date of the following conditions:
(a)
Representations
and Warranties.
(i) The representations and warranties of the Company contained in
Sections 3.01(c), 3.01(d), 3.01(g)(iv) (but only with respect to current
and former directors and Tier I Employees), 3.01(i)(2)(A), 3.01(q), 3.01(r)
(but not with respect to the last sentence thereof) and 3.01(v) of this
Agreement that are qualified as to materiality or by reference to Material
Adverse Effect or Material Adverse Change shall be true and correct, and such
representations and warranties of the Company that are not so qualified shall
be
true and correct in all material respects, in each case as of the date of this
Agreement and as of the Closing Date as though made on the Closing Date, except
to the extent such representations and warranties expressly relate to an earlier
date, in which case as of such earlier date, (ii) the representations and
warranties of the Company contained in Sections 3.01(i)(2)(B) and (C) shall
be true and correct as of the date of this Agreement as though made on the
Closing Date, except to the extent that the facts or matters as to which such
representations and warranties are not so true and correct as of such date,
individually or in the aggregate, would not reasonably be expected to have
a
material adverse effect on the reasonably expected benefits of the Merger to
Parent and (iii) all other representations and warranties of the Company
contained in this Agreement shall be true and correct as of the date of this
Agreement and as of the Closing Date as though made on the Closing Date, except
to the extent such representations and warranties expressly relate to a
specified date, in which case as of such specified date, and except further,
in
the case of this clause (iii), to the extent that the facts or matters as
to which such representations and warranties are not so true and correct as
of
such dates (without giving effect to any qualifications or limitations as to
materiality or Material Adverse Effect or Material Adverse Change set forth
therein), individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect. Parent shall have
received a certificate signed on behalf of the Company by an executive officer
of the Company to such effect.
(b)
Performance
of Obligations of the Company.
The
Company shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing Date,
and
Parent shall have received a certificate signed on behalf of the Company by
the
chief executive officer and the chief financial officer of the Company to such
effect.
(c)
No
Litigation.
There
shall not be pending any suit, action or proceeding by any national Governmental
Entity (i) seeking to restrain or prohibit the consummation of the Merger
or any other transaction contemplated by this Agreement or seeking to obtain
from the Company, Parent, Sub or any other Affiliate of Parent any damages
that
are
51
material
in relation to the Company, (ii) seeking to impose limitations on the
ability of Parent or any Affiliate of Parent to hold, or exercise full rights
of
ownership of, any shares of capital stock of the Surviving Corporation,
including the right to vote such shares on all matters properly presented to
the
shareholders of the Surviving Corporation, (iii) seeking to prohibit Parent
or any of its Affiliates from effectively controlling in any material respect
the business or operations of the Company or any of its Affiliates,
(iv) seeking any Divestiture that is not required to be effected pursuant
to the terms of this Agreement or (v) that has had or would reasonably be
expected to have a Material Adverse Effect or Parent Material Adverse
Effect.
(d)
Restraints.
No
Restraint that would reasonably be expected to result, directly or indirectly,
in any of the effects referred to in clauses (i) through (v) of
paragraph (c) of this Section 6.02 shall be in effect.
SECTION
6.03. Conditions
to Obligation of the Company.
The
obligation of the Company to effect the Merger is further subject to the
satisfaction or (to the extent permitted by Law) waiver by the Company on or
prior to the Closing Date of the following conditions:
(a)
Representations
and Warranties.
(i) The
representations and warranties of Parent and Sub contained in
Section 3.02(b) of this Agreement that are qualified as to materiality or
by reference to Parent Material Adverse Effect or Parent Material Adverse Change
shall be true and correct, and such representations and warranties of Parent
that are not so qualified shall be true and correct in all material respects,
in
each case as of the date of this Agreement and as of the Closing Date as though
made on the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date, in which case as of such earlier
date and (ii) all other representations and warranties of Parent contained
in
this Agreement shall be true and correct as of the date of this Agreement and
as
of the Closing Date as though made on the Closing Date, except to the extent
such representations and warranties expressly relate to a specified date, in
which case as of such specified date, and except further, in the case of this
clause (ii), to the extent that the facts or matters as to which such
representations and warranties are not so true and correct as of such dates
(without giving effect to any qualifications or limitations as to materiality
or
Parent Material Adverse Effect or Parent Material Adverse Change set forth
therein), individually or in the aggregate, have not had and would not
reasonably be expected to have a Parent Material Adverse Effect. The Company
shall have received a certificate signed on behalf of Parent by an executive
officer of Parent to such effect.
(b)
Performance
of Obligations of Parent and Sub.
Parent
and Sub shall have performed in all material respects all obligations required
to be performed by them under this Agreement at or prior to the Closing Date,
and the Company shall have received a certificate signed on behalf of Parent
by
an executive officer of Parent to such effect.
SECTION
6.04. Frustration
of Closing Conditions.
None of
the Company, Parent or Sub may rely on the failure of any condition set forth
in
Section 6.01, 6.02 or 6.03, as the case may be, to be satisfied if such
failure was caused by such party’s failure to act in good faith or to use its
reasonable best efforts to consummate the Merger and the other transactions
contemplated by this Agreement, as required by and subject to
Section 5.03.
52
ARTICLE
VII
Termination,
Amendment and Waiver
SECTION
7.01. Termination.
This
Agreement may be terminated at any time prior to the Effective Time, whether
before or after receipt of the Shareholder Approval:
(a)
by
mutual
written consent of Parent, Sub and the Company;
(b)
by
either
Parent or the Company:
(i)
if
the
Merger shall not have been consummated on or before March 31, 2006; provided,
however,
that
the right to terminate this Agreement under this Section 7.01(b)(i) shall
not be available to any party whose wilful breach of a representation or
warranty in this Agreement or whose other action or failure to act has been
a
principal cause of or resulted in the failure of the Merger to be consummated
on
or before such date;
(ii)
if
any
Restraint having any of the effects set forth in Section 6.01(d) shall be
in effect and shall have become final and nonappealable; or
(iii)
if
the
Shareholder Approval shall not have been obtained at the Shareholders’ Meeting
duly convened therefor or at any adjournment or postponement
thereof;
(c)
by
Parent
(i) if the Company shall have breached or failed to perform any of its
representations, warranties, covenants or agreements set forth in this
Agreement, which breach or failure to perform (A) would give rise to the
failure of a condition set forth in Section 6.02(a) or 6.02(b) and
(B) is incapable of being cured by the Company within 30 calendar days
following receipt of written notice of such breach or failure to perform from
Parent or (ii) if any Restraint having the effects referred to in
clauses (i) through (v) of Section 6.02(c) shall be in
effect and shall have become final and nonappealable;
(d)
by
the
Company, if Parent shall have breached or failed to perform any of its
representations, warranties, covenants or agreements set forth in this
Agreement, which breach or failure to perform (A) would give rise to the
failure of a condition set forth in Section 6.03(a) or 6.03(b) and
(B) is incapable of being cured by Parent within 30 calendar days
following receipt of written notice of such breach or failure to perform from
the Company;
(e)
by
Parent, in the event that prior to the obtaining of the Shareholder Approval
(i)
a Company Adverse Recommendation Change shall have occurred or (ii) the Board
of
Directors of the Company fails publicly to reaffirm its adoption and
recommendation of this Agreement, the Merger or the other transactions
contemplated by this Agreement within ten business days of receipt of a written
request by Parent to provide such reaffirmation following a Takeover Proposal;
or
53
(f)
by
the
Company in accordance with the terms and subject to the conditions of
Section 4.02(b).
SECTION
7.02. Effect
of Termination.
In the
event of termination of this Agreement by either the Company or Parent as
provided in Section 7.01, this Agreement shall forthwith become void and
have no effect, without any liability or obligation on the part of Parent,
Sub
or the Company under this Agreement, other than the provisions of
Section 3.01(s) and 3.02(g), the second, third and fourth sentences of
Section 5.02(a), Section 5.06, this Section 7.02 and
Article VIII, which provisions shall survive such termination; provided,
however,
that no
such termination shall relieve any party hereto from any liability or damages
resulting from the wilful and material breach by a party of any of its
representations, warranties, covenants or agreements set forth in this
Agreement.
SECTION
7.03. Amendment.
This
Agreement may be amended by the parties hereto at any time before or after
receipt of the Shareholder Approval; provided,
however,
that
after such approval has been obtained, there shall be made no amendment that
by
applicable Law requires further approval by the shareholders of the Company
without such approval having been obtained. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
SECTION
7.04. Extension;
Waiver.
At any
time prior to the Effective Time, the parties may (a) extend the time for
the performance of any of the obligations or other acts of the other parties,
(b) to the extent permitted by applicable Law, waive any inaccuracies in
the representations and warranties contained herein or in any document delivered
pursuant hereto or (c) subject to the proviso to the first sentence of
Section 7.03 and to the extent permitted by applicable Law, waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party.
The failure of any party to this Agreement to assert any of its rights under
this Agreement or otherwise shall not constitute a waiver of such rights
nor
shall
any single or partial exercise by any party to this Agreement of any of its
rights under this Agreement preclude any other or further exercise of such
rights or any other rights under this Agreement.
SECTION
7.05. Procedure
for Termination or Amendment.
A
termination of this Agreement pursuant to Section 7.01 or an amendment of
this Agreement pursuant to Section 7.03 shall, in order to be effective,
require, in the case of Parent or the Company, action by its Board of Directors
or, with respect to any amendment of this Agreement pursuant to
Section 7.03, the duly authorized committee of its Board of Directors to
the extent permitted by applicable Law.
ARTICLE
VIII
General
Provisions
SECTION
8.01. Nonsurvival
of Representations and Warranties.
None of
the representations and warranties in this Agreement or in any instrument
delivered pursuant to this
54
Agreement
shall survive the Effective Time. This Section 8.01 shall not limit any
covenant or agreement of the parties which by its terms contemplates performance
after the Effective Time.
SECTION
8.02. Notices.
Except
for notices that are specifically required by the terms of this Agreement to
be
delivered orally, all notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally, telecopied (which is confirmed) or sent by overnight
courier (providing proof of delivery) to the parties at the following addresses
(or at such other address for a party as shall be specified by like
notice):
if
to
Parent or Sub, to:
Xxxxxxx
& Xxxxxxx
Xxx
Xxxxxxx & Xxxxxxx Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Telecopy
No.: (000) 000-0000
Attention:
Office of General Counsel
with
a
copy to:
Cravath,
Swaine & Xxxxx LLP
Worldwide
Plaza
000
Xxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Telecopy
No.: (000) 000-0000
Attention:
Xxxxxx X. Xxxxxxxx, III, Esq.
if
to the
Company, to:
Guidant
Corporation
000
Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx,
XX 00000
Telecopy
No.: (000) 000-0000
Attention:
General Counsel
55
with
a
copy to:
Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP
000
Xxxx
Xxxxxx Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Telecopy
No.: (000) 000-0000
Attention:
Xxxxxxx X. Xxxxxxx, Xx., Esq.
SECTION
8.03. Definitions.
For
purposes of this Agreement:
(a)
an
“Affiliate” of any person means another person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such first person;
(b)
“Knowledge”
of any person that is not an individual means, with respect to any matter in
question, the actual knowledge of such person’s executive officers after making
due inquiry of the current Tier I Employees and Tier II Employees
having primary responsibility for such matter;
(c)
“Material
Adverse Change” or “Material Adverse Effect” means any change, effect, event,
occurrence, state of facts or development which individually or in the aggregate
would reasonably be expected to result in any change or effect, that is
materially adverse to the business, financial condition or results of operations
of the Company and its Subsidiaries, taken as a whole; provided,
that
none of the following shall be deemed, either alone or in combination, to
constitute, and none of the following shall be taken into account in determining
whether there has been or will be, a Material Adverse Change or Material Adverse
Effect: (A) any change, effect, event, occurrence, state of facts or
development (1) in the financial or securities markets or the economy in
general, (2) in the industries in which the Company or any of its
Subsidiaries operates in general, to the extent that such change, effect, event,
occurrence, state of facts or development does not disproportionately impact
the
Company or any of its Subsidiaries, or (3) resulting from any Divestiture
required to be effected pursuant to the terms of this Agreement or (B) any
failure, in and of itself, by the Company to meet any internal or published
projections, forecasts or revenue or earnings predictions (it being understood
that the facts or occurrences giving rise or contributing to such failure may
be
deemed to constitute, or be taken into account in determining whether there
has
been or would reasonably be expected to be, a Material Adverse Effect or a
Material Adverse Change);
(d)
“Parent
Material Adverse Change” or “Parent Material Adverse Effect” means any change,
effect, event, occurrence, state of facts or development which individually
or
in the aggregate would reasonably be expected to result in any change or effect,
that is materially adverse to the business, financial condition or results
of
operations of Parent and its Subsidiaries, taken as a whole; provided,
that
none of the following shall be deemed, either alone or in combination, to
constitute, and none of the following shall be taken into account in determining
whether there has been or will be, a
56
Parent
Material Adverse Change or Parent Material Adverse Effect: (A) any change,
effect, event, occurrence, state of facts or development (1) in the
financial or securities markets or the economy in general, (2) in the
industries in which Parent or any of its Subsidiaries operates in general,
to
the extent that such change, effect, event, occurrence, state of facts or
development does not disproportionately impact Parent or any of its Subsidiaries
or (3) resulting from any Divestiture required to be effected pursuant to
the terms of this Agreement or (B) any failure, in and of itself, by Parent
to meet any internal or published projections, forecasts or revenue or earnings
predictions (it being understood that the facts or occurrences giving rise
or
contributing to such failure may be deemed to constitute, or be taken into
account in determining whether there has been or would reasonably be expected
to
be, a Parent Material Adverse Effect or a Parent Material Adverse
Change);
(e)
“person”
means an individual, corporation, partnership, limited liability company, joint
venture, association, trust, unincorporated organization or other entity;
and
(f)
a
“Subsidiary” of any person means another person, an amount of the voting
securities, other voting rights or voting partnership interests of which is
sufficient to elect at least a majority of its board of directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first
person.
SECTION
8.04. Interpretation.
When a
reference is made in this Agreement to an Article, a Section, Exhibit or
Schedule, such reference shall be to an Article of, a Section of, or an Exhibit
or Schedule to, this Agreement unless otherwise indicated. The table of contents
and headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Whenever the words “include”, “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation”. The words “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and
not to any particular provision of this Agreement. References to “this
Agreement” shall include the Company Disclosure Schedule. All terms defined in
this Agreement shall have the defined meanings when used in any certificate
or
other document made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well
as to the feminine and neuter genders of such term. Any Contract, instrument
or
Law defined or referred to herein or in any Contract or instrument that is
referred to herein means such Contract, instrument or Law as from time to time
amended, modified or supplemented, including (in the case of Contracts or
instruments) by waiver or consent and (in the case of Laws) by succession of
comparable successor Laws and references to all attachments thereto and
instruments incorporated therein. References to a person are also to its
permitted successors and assigns.
SECTION
8.05. Consents
and Approvals.
For any
matter under this Agreement requiring the consent or approval of any party
to be
valid and binding on the parties hereto, such consent or approval must be in
writing.
57
SECTION
8.06. Counterparts.
This
Agreement may be executed in one or more counterparts (including by facsimile),
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other parties.
SECTION
8.07. Entire
Agreement; No Third-Party Beneficiaries.
This
Agreement (including the Exhibits and Schedules) and the Confidentiality
Agreement and any agreements entered into contemporaneously herewith
(a) constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter of this Agreement and the Confidentiality Agreement and
(b) except for the provisions of Article II and Section 5.05, are
not intended to and do not confer upon any person other than the parties any
legal or equitable rights or remedies.
SECTION
8.08.GOVERNING
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF
THE STATE OF INDIANA, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER
APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
SECTION
8.09. Assignment.
Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned, in whole or in part, by operation of law or otherwise by any of
the
parties without the prior written consent of the other parties, and any
assignment without such consent shall be null and void, except that Sub, upon
prior written notice to the Company, may assign, in its sole discretion, any
of
or all its rights, interests and obligations under this Agreement to Parent
or
to any direct or indirect wholly owned Subsidiary of Parent, but no such
assignment shall relieve Parent or Sub of any of its obligations hereunder.
Subject to the preceding sentence, this Agreement will be binding upon, inure
to
the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
SECTION
8.10. Specific
Enforcement; Consent to Jurisdiction.
The
parties agree that irreparable damage would occur and that the parties would
not
have any adequate remedy at law in the event that any of the provisions of
this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in the United
States District Court for the Southern District of New York, this being in
addition to any other remedy to which they are entitled at law or in equity.
In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of the United States District Court for the Southern
District of New York in the event any dispute arises out of this Agreement
or
the transactions contemplated by this Agreement, (b) agrees that it will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (c) agrees that it will not bring
any action relating to this Agreement or the transactions contemplated by this
Agreement in any court other than the United States District Court for the
Southern District of New York.
SECTION
8.11. Waiver
of Jury Trial.
Each
party hereto hereby waives, to the fullest extent permitted by applicable Law,
any right it may have to a trial by jury in respect of any suit, action or
other
proceeding arising out of this Agreement or the transactions
58
contemplated
hereby. Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
party would not, in the event of any action, suit or proceeding, seek to enforce
the foregoing waiver and (b) acknowledges that it and the other parties hereto
have been induced to enter into this Agreement, by, among other things, the
mutual waiver and certifications in this Section 8.11.
SECTION
8.12. Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect.
Upon such determination that any term or other provision is invalid, illegal
or
incapable of being enforced, the parties hereto shall negotiate in good faith
to
modify this Agreement so as to effect the original intent of the parties as
closely as possible to the fullest extent permitted by applicable Law in an
acceptable manner to the end that the transactions contemplated by this
Agreement are fulfilled to the extent possible.
59
IN
WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement to
be
signed by their respective officers hereunto duly authorized, all as of the
date
first written above.
XXXXXXX
& XXXXXXX,
|
|
by
|
|
/s/
XXXXXX X. XXXXXXXX
|
|
Name: Xxxxxx
X. Xxxxxxxx
|
|
Title: Vice
Chairman and Chief Financial
Officer
|
SHELBY
MERGER SUB, INC.,
|
|
by
|
|
/s/
XXXXX X. XXXXXX
|
|
Name: Xxxxx
X. Xxxxxx
|
|
Title: President
|
GUIDANT
CORPORATION,
|
|
by
|
|
/s/
XXXXXX X. XXXXXXX
|
|
Name: Xxxxxx
X. Xxxxxxx
|
|
60
ANNEX I
TO
THE
AMENDED AND RESTATED MERGER AGREEMENT
Index
of Defined Terms
Term
Acquisition
Agreement
|
Section 4.02(b)
|
Actions
|
Section 4.01(d)
|
Adjusted
Option
|
Section
5.04(a)
|
Affiliate
|
Section 8.03(a)
|
Agreement
|
Preamble
|
Alza
|
Section
3.02(h)
|
Antitrust
Filings
|
Section
5.03
|
Articles
of Merger
|
Section 1.03
|
Average
Parent Stock Price
|
Section 5.04(h)
|
Cash
Portion
|
Section
2.01(c)
|
Cash
Portion Option Exchange Multiple
|
Section
5.04(g)
|
Certificate
|
Section 2.01(c)
|
Closing
|
Section 1.02
|
Closing
Date
|
Section 1.02
|
Closing
Price
|
Section
2.02(e)
|
Code
|
2.02(j)
|
Commonly
Controlled Entity
|
Section 3.01(l)
|
Company
|
Preamble
|
Company
Adverse Recommendation Change
|
Section 4.02(b)
|
Company
Articles
|
Section
1.05
|
Company
Benefit Agreements
|
Section 3.01(g)
|
Company
Benefit Plans
|
Section 3.01(l)
|
Company
By-laws
|
Section 3.01(a)
|
Company
Common Stock
|
Recitals
|
Company
Disclosure Schedule
|
Section 3.01
|
Company
Notes
|
Section 4.01(a)
|
Company
Pension Plan
|
Section 3.01(l)
|
Company
Preferred Stock
|
Section
3.01(c)
|
Company
Restricted Stock
|
Section
3.01(c)
|
Company
Rights
|
Section
3.01(v)
|
Company
SEC Documents
|
Section 3.01(e)
|
Company
Series A Preferred Stock
|
Section
3.01(c)
|
Company
Stock-Based Awards
|
Section 3.01(c)
|
Company
Stock Options
|
Section 3.01(c)
|
Company
Stock Plans
|
Section 3.01(c)
|
Company
Termination Fee
|
Section 5.06(c)
|
Company
Welfare Plan
|
Section
3.01(l)
|
Confidentiality
Agreement
|
Section 5.02
|
Continuing
Employees
|
Section
5.11(a)
|
Contract
|
Section 3.01(d)
|
EC
Merger Regulation
|
Section
3.01(d)
|
Effective
Time
|
Section 1.03
|
Environmental Laws |
Section
3.01(j)
|
ERISA
|
Section 3.01(j)
|
ESPP
|
Section 3.01(c)
|
Excess
Distribution
|
Section 4.01(d)
|
Exchange
Act
|
Section 3.01(d)
|
Exchange
Agent
|
Section 2.02(a)
|
Exchange
Fund
|
Section 2.02(a)
|
Exchange
Ratio
|
Section
2.01(c)
|
FDA
|
Section 3.01(u)
|
FDCA
|
Section 3.01(j)
|
Filed
Company SEC Documents
|
Section 3.01
|
Filed
Parent SEC Documents
|
Section 3.02
|
Form
S-4
|
Section
5.01
|
GAAP
|
Section 3.01(e)
|
Governmental
Entity
|
Section 3.01(d)
|
Hazardous
Materials
|
Section 3.01(j)
|
HSR
Act
|
Section 3.01(d)
|
HSR
Filing
|
Section 5.03
|
IBCL
|
Section 1.01
|
Intellectual
Property Rights
|
Section 3.01(p)
|
IRS
|
Section 3.01(l)
|
Key
Personnel
|
Section 3.01(g)
|
Knowledge
|
Section 8.03(b)
|
Law
|
Section
3.01(d)
|
Legal
Provisions
|
Section 3.01(j)
|
Liens
|
Section 3.01(b)
|
Material
Adverse Change
|
Section 8.03(c)
|
Material
Adverse Effect
|
Section 8.03(c)
|
Medical
Device
|
Section 3.01(u)
|
Merger
|
Recitals
|
Merger
Consideration
|
Section 2.01(c)
|
New
Rights Plan
|
Section 5.13
|
Non-U.S.
Subsidiary
|
Section 4.01(d)
|
Notice
of Superior Proposal
|
Section 4.02(b)
|
NYSE
|
2.02(e)
|
Order
|
3.01(d)
|
Original
Merger Agreement
|
Preamble
|
Paragraph
6
|
3.01(r)
|
Parent
|
Preamble
|
Parent
Common Stock
|
Recitals
|
Parent
Disclosure Schedule
|
Section
3.02
|
Parent
Material Adverse Change
|
Section
8.03(d)
|
Parent
Material Adverse Effect
|
Section
8.03(d)
|
Parent
Preferred Stock
|
Section
3.02(h)
|
Parent
SEC Documents
|
Section
3.02(c)
|
Parent
Termination Fee
|
Section 5.06(b)
|
Permits
|
Section 3.01(j)
|
Person
|
Section 8.03(e)
|
Post-Signing
Returns
|
Section 4.01(d)
|
Primary
Company Executives
|
Section 3.01(m)
|
Proxy
Statement
|
Section 3.01(d)
|
Representatives
|
Section 4.02(a)
|
Release
|
Section 3.01(j)
|
Restraints
|
Section 6.01(d)
|
Rights
Agreement
|
Section
3.01(v)
|
SEC
|
Section 3.01(d)
|
Securities
Act
|
Section 3.01(e)
|
Shareholder
Approval
|
Section 3.01(q)
|
Shareholders’
Meeting
|
Section 5.01(b)
|
Significant
Subsidiary
|
Section 3.01(a)
|
Social
Security Act
|
Section
3.01(u)
|
SOX
|
Section
3.01(e)
|
Stock
Portion
|
Section
2.01(c)
|
Sub
|
Preamble
|
Sub
Articles
|
Section
3.02(a)
|
Subsidiary
|
Section 8.03(g)
|
Superior
Proposal
|
Section 4.02(a)
|
Surviving
Corporation
|
Section 1.01
|
Takeover
Proposal
|
Section 4.02(a)
|
tax
|
Section 3.01(n)
|
taxing
authority
|
Section 3.01(n)
|
tax
return
|
Section 3.01(n)
|
Tier
I Employee
|
Section
3.01(g)
|
Tier
II Employee
|
Section
3.01(g)
|
EXHIBIT
A
TO
THE
AMENDED AND RESTATED MERGER AGREEMENT
Restated
Articles of Incorporation
of
the
Surviving Corporation
FIRST:
The
name of the corporation (hereinafter called the “Corporation”) is Guidant
Corporation.
SECOND:
The
aggregate number of shares which the Corporation shall have authority to issue
is 1,000 shares of Common Stock, without par value.
THIRD:
The
street address of the Corporation’s initial registered office in Indiana is 000
Xxxx XxXxxxx Xxxxxx, Xxxxxxxxxxxx 00000 and the name of its initial
registered agent at that office is [Name of Agent].
FOURTH:
The
purpose of the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the Business Corporation Law of the State
of
Indiana.
FIFTH:
In
furtherance and not in limitation of the powers conferred upon it by law, the
Board of Directors of the Corporation is expressly authorized to adopt, amend
or
repeal the By-laws of the Corporation.
SIXTH:
To the
fullest extent permitted by the Business Corporation Law of the State of Indiana
as it now exists and as it may hereafter be amended, no director or officer
of
the Corporation shall be personally liable to the Corporation or any of its
shareholders for monetary damages for breach of fiduciary duty as a director
or
officer.
SEVENTH:
The
Corporation shall, to the fullest extent permitted by Section 23-1-37 of
the Business Corporation Law of the State of Indiana, as the same may be amended
and supplemented, indemnify any and all persons whom it shall have power to
indemnify under said Section from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said Section. Such
indemnification shall be mandatory and not discretionary. The indemnification
provided for herein shall not be deemed exclusive of any other rights to which
those indemnified may be entitled under any by-law, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in
his
or her official capacity and as to action in another capacity while holding
such
office, and shall continue as to a person who has ceased to be a director,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person. Any repeal or modification
of
this Article SEVENTH shall not adversely affect any right to indemnification
of
any persons existing at the time of such repeal or modification with respect
to
any matter occurring prior to such repeal or modification.
The
Corporation shall to the fullest extent permitted by the Business Corporation
Law of the State of Indiana advance all costs and expenses (including, without
limitation, attorneys’ fees and expenses) incurred by any director or officer
within 15 days of the presentation of same to the Corporation, with respect
to any one or more actions, suits or proceedings, whether civil, criminal,
administrative or investigative, so long as the Corporation receives from the
director or officer a written affirmation required by the Business Corporation
Law
of
the State of Indiana of his or her good faith belief that he or she has met
the
applicable standard of conduct established by the Business Corporation Law
of
the State of Indiana, together with an unsecured undertaking to repay such
expenses if it shall ultimately be determined that such director or officer
is
not entitled to be indemnified by the Corporation under the Business Corporation
Law of the State of Indiana. Such obligation to advance costs and expenses
shall
be mandatory, and not discretionary, and shall include, without limitation,
costs and expenses incurred in asserting affirmative defenses, counterclaims
and
cross claims. Such undertaking to repay may, if first requested in writing
by
the applicable director or officer, be on behalf of (rather than by) such
director or officer, provided that in such case the Corporation shall have
the
right to approve the party making such undertaking.
EIGHTH:
Unless
and except to the extent that the By-laws of the Corporation shall so require,
the election of directors of the Corporation need not be by written
ballot.
2
EXHIBIT
B
TO
THE
AMENDED AND RESTATED MERGER AGREEMENT
Form
of Affiliate Letter
Dear
Sirs:
The
undersigned, a holder of shares of common stock, without par value (“Company
Common Stock”), of Guidant Corporation, an Indiana corporation (the “Company”),
acknowledges that the undersigned may be deemed an “affiliate” of the Company
within the meaning of Rule 145 (“Rule 145”) promulgated under the
Securities Act of 1933, as amended (the “Securities Act”), by the Securities and
Exchange Commission (the “SEC”). Pursuant to the terms of the Amended and
Restated Agreement and Plan of Merger dated as of November 14, 2005 (the “Merger
Agreement”), among Xxxxxxx & Xxxxxxx, a New Jersey corporation
(“Parent”), Shelby Merger Sub, Inc., an Indiana corporation and a wholly owned
subsidiary of Parent (“Sub”), and the Company, Merger Sub will be merged with
and into the Company (the “Merger”), and in connection with the Merger, the
undersigned is entitled to receive 0.493 shares of the common stock of Parent
(“Parent Common Stock”) and $33.25 in cash for each share of Company Common
Stock, without interest.
If
in
fact the undersigned were an affiliate under the Securities Act, the
undersigned’s ability to sell, assign or transfer the shares of Parent Common
Stock received by the undersigned in exchange for any shares of Company Common
Stock in connection with the Merger may be restricted unless such transaction
is
registered under the Securities Act or an exemption from such registration
is
available. The undersigned understands that such exemptions are limited and
the
undersigned has obtained or will obtain advice of counsel as to the nature
and
conditions of such exemptions, including information with respect to the
applicability to the sale of such securities of Rules 144 and 145(d)
promulgated under the Securities Act. The undersigned understands that Parent
will not be required to maintain the effectiveness of any registration statement
under the Securities Act for the purposes of resale of Parent Common Stock
by
the undersigned.
The
undersigned hereby represents to and covenants with Parent that the undersigned
will not sell, assign or transfer any of the shares of Parent Common Stock
received by the undersigned in exchange for shares of Company Common Stock
in
connection with the Merger except (i) pursuant to an effective registration
statement under the Securities Act, (ii) in conformity with the volume and
other limitations of Rule 145 or (iii) in a transaction which, in the
opinion of counsel to the undersigned, such counsel to be reasonably
satisfactory to Parent and such opinion to be in form and substance reasonably
satisfactory to Parent, or as described in a “no-action” or interpretive letter
from the Staff of the SEC specifically issued with respect to a transaction
to
be engaged in by the undersigned, is not required to be registered under the
Securities Act.
In
the
event of a sale or other disposition by the undersigned of the shares of Parent
Common Stock pursuant to Rule 145, the undersigned will supply Parent with
evidence of compliance with such Rule, in the form of a letter in the form
of
Annex I
hereto
or
the opinion of counsel or no-action letter referred to above. The undersigned
understands that Parent may instruct its transfer agent to withhold the transfer
of any shares of Parent Common Stock disposed of by the undersigned, but that
(provided such transfer is not prohibited by any other provision of this letter
agreement) upon receipt of such evidence of compliance, Parent shall cause
the
transfer agent to effectuate the transfer of the shares of Parent Common Stock
sold as indicated in such letter.
Parent
covenants that it will take all such actions as may be reasonably available
to
it to permit the sale or other disposition of the shares of Parent Common Stock
by the undersigned under Rule 145 in accordance with the terms
thereof.
The
undersigned acknowledges and agrees that the legend set forth below will be
placed on certificates representing the shares of Parent Common Stock received
by the undersigned in connection with the Merger or held by a transferee
thereof, which legend will be removed by delivery of substitute certificates
(i) if the undersigned provides evidence of compliance with Rule 145
to Parent, in the form of a letter in the form of Annex I hereto, or
(ii) upon receipt of an opinion in form and substance reasonably
satisfactory to Parent from counsel reasonably satisfactory to Parent to the
effect that such legend is no longer required for purposes of the Securities
Act.
There
will be placed on the certificates for Parent Common Stock issued to the
undersigned in connection with the Merger, or any substitutions therefor, a
legend stating in substance:
“The
shares represented by this certificate were issued pursuant to a transaction
to
which Rule 145 promulgated under the Securities Act of 1933 applies. The
shares have not been acquired by the holder with a view to, or for resale in
connection with, any distribution thereof within the meaning of the Securities
Act of 1933. The shares may not be sold, pledged or otherwise transferred except
in accordance with Rule 145, pursuant to a Registration Statement under the
Securities Act of 1933 or in accordance with an exemption from the registration
requirements of the Securities Act of 1933.”
The
undersigned acknowledges that (i) the undersigned has carefully read this
letter and understands the requirements hereof and the limitations imposed
upon
the distribution, sale, transfer or other disposition of Parent Common Stock
and
(ii) the receipt by Parent of this letter is an inducement to Parent’s
obligations to consummate the Merger.
2
Execution
of this letter should not be considered an admission on the part of the
undersigned that the undersigned is an “affiliate” of the Company as described
in the first paragraph of this letter, or as a waiver of any rights the
undersigned may have to object to any claim that the undersigned is such an
affiliate on or after the date of this letter.
Very
truly yours,
Dated:
3
ANNEX
I
TO
EXHIBIT B
[Name]
[Date]
On
,
the undersigned sold the securities of Xxxxxxx & Xxxxxxx (“Parent”)
described below in the space provided for that purpose (the “Securities”). The
Securities were received by the undersigned in connection with the merger of
Shelby Merger Sub, Inc., an Indiana corporation, with and into Guidant
Corporation, an Indiana corporation.
Based
upon the most recent report or statement filed by Parent with the Securities
and
Exchange Commission, the Securities sold by the undersigned were within the
prescribed limitations set forth in paragraph (e) of Rule 144
promulgated under the Securities Act of 1933, as amended (the “Securities
Act”).
The
undersigned hereby represents that the Securities were sold in “brokers’
transactions” within the meaning of Section 4(4) of the Securities Act or
in transactions directly with a “market maker” as that term is defined in
Section 3(a)(38) of the Securities Exchange Act of 1934, as amended. The
undersigned further represents that the undersigned has not solicited or
arranged for the solicitation of orders to buy the Securities, and that the
undersigned has not made any payment in connection with the offer or sale of
the
Securities to any person other than to the broker who executed the order in
respect of such sale.
Very
truly yours,
Dated: