EXHIBIT 99(C)(1)
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AGREEMENT AND PLAN OF MERGER
by and among
THE ▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇ CORPORATION,
DKM ACQUISITION CORP.
and
OPTEK TECHNOLOGY, INC.
dated as of
May 12, 1999
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AGREEMENT AND PLAN OF MERGER
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AGREEMENT AND PLAN OF MERGER, dated as of May 12, 1999, by and among
THE ▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇ CORPORATION, a Delaware corporation ("Parent"), DKM
ACQUISITION CORP., a Delaware corporation and a wholly-owned Subsidiary of
Parent ("Purchaser"), and OPTEK TECHNOLOGY, INC., a Delaware corporation (the
"Company"). Certain capitalized terms used in this Agreement have the meanings
ascribed to them in Article VIII.
WHEREAS, the Board of Directors of each of Parent, Purchaser and the
Company have approved, and deem it fair to, advisable and in the best interests
of their respective stockholders to consummate, the acquisition of the Company
by Parent and Purchaser upon the terms and subject to the conditions set forth
herein;
WHEREAS, in furtherance thereof, it is proposed that Purchaser make a
cash tender offer to acquire all shares of the issued and outstanding common
stock, $.01 par value, of the Company (the "Shares") for $25.50 per share, net
to the seller in cash, upon the terms and subject to the conditions set forth
herein;
WHEREAS, also in furtherance of such acquisition, the Board of
Directors of each of Parent, Purchaser and the Company have approved this
Agreement and the Merger (as herein defined) following the Offer (as herein
defined) pursuant to which Purchaser shall merge with and into the Company and
outstanding Shares shall be converted into the right to receive the Offer Price
(as herein defined) in cash, without interest, all in accordance with the DGCL
(as herein defined) and upon the terms and subject to the conditions set forth
herein;
WHEREAS, the Board of Directors of the Company has determined that the
consideration to be paid for each Share in the Offer and the Merger is fair to
the holders of such Shares and has resolved to recommend that the holders of
such Shares tender their Shares pursuant to the Offer and approve and adopt this
Agreement and the Merger upon the terms and subject to the conditions set forth
herein;
WHEREAS, the Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger; and
WHEREAS, as a condition and inducement to Parent's and Purchaser's
entering into this Agreement and incurring the obligations set forth herein,
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concurrently with the execution and delivery of this Agreement, Parent is
entering into an Option Agreement (the "Company Option Agreement") with the
Company pursuant to which, among other things and subject to the terms and
conditions thereof, the Company has granted Parent an option to purchase up to
19.9% of the Shares issued and outstanding as of the date hereof;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth herein, the
parties hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer.
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(a) As promptly as practicable (but in no event later than
five business days after the public announcement of the execution hereof),
Purchaser shall commence (within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) a tender offer (the
"Offer") for all of the outstanding Shares at a price of $25.50 per Share, net
to the seller in cash (such price, or such higher price per Share as may be paid
in the Offer, being referred to herein as the "Offer Price"), subject to the
conditions set forth in Annex A hereto.
(b) The obligations of Purchaser to commence the Offer and to
accept for payment and to pay for any Shares validly tendered on or prior to the
expiration of the Offer and not withdrawn shall be subject only to the
conditions set forth in Annex A hereto. The Offer shall be made by means of an
offer to purchase (the "Offer to Purchase") containing the terms set forth in
this Agreement and the conditions set forth in Annex A hereto.
(c) Purchaser expressly reserves the right to modify the terms
of the Offer; provided, that, without the Company's prior written consent,
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Purchaser shall not decrease the Offer Price, change the form of consideration
to be paid in the Offer or decrease the number of Shares sought or amend any
other condition of the Offer in any manner adverse to the holders of the Shares
(other than with respect to insignificant changes or amendments and subject to
the penultimate sentence of this Section 1.1) or impose additional conditions
without the written consent of the Company; provided further, however, that, if
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on the initial scheduled expiration date
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of the Offer, which shall be 20 business days after the date that the Offer is
commenced, all conditions to the Offer shall not have been satisfied or waived,
Purchaser may, from time to time until such time as all such conditions are
satisfied or waived, in its sole discretion, extend the expiration date. In
addition, the Offer Price may be increased and the Offer may be extended to the
extent required by applicable Law in connection with such increase, in each case
without the consent of the Company. Purchaser shall, on the terms and subject to
the prior satisfaction or waiver of the conditions of the Offer, accept for
payment and pay for Shares validly tendered as promptly as practicable;
provided, however, that if, immediately prior to the initial expiration date of
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the Offer, the Shares validly tendered and not withdrawn pursuant to the Offer
equal less than 90% of the outstanding Shares, Purchaser may extend the Offer,
in one or more extensions, for a period not to exceed 20 business days,
notwithstanding that all conditions to the Offer are satisfied as of such
expiration date of the Offer.
Section 1.2 Company Actions.
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(a) The Company hereby approves of and consents to the Offer
and represents that the Board of Directors of the Company, at a meeting duly
called and held, has (i) unanimously determined that each of the Agreement, the
Company Option Agreement, the Offer and the Merger (as defined in Section 2.1)
are fair to and in the best interests of the stockholders of the Company, (ii)
unanimously approved this Agreement, the Company Option Agreement, the Offer,
the acquisition of Shares pursuant to the Offer and the Merger for purposes of
Section 203 of the DGCL (the "Section 203 Approval"), (iii) received the opinion
of ABN AMRO Incorporated, financial advisor to the Company, to the effect that
the Offer Price to be received by holders of Shares pursuant to the Offer and
the Merger Consideration (as defined herein) pursuant to the Merger is fair to
the stockholders of the Company from a financial point of view, (iv) approved
this Agreement and the Company Option Agreement and the transactions
contemplated hereby and thereby, including the Offer and the Merger
(collectively, the "Transactions") and (v) resolved to recommend that the
stockholders of the Company accept the Offer, tender their Shares thereunder to
Purchaser and approve and adopt this Agreement and the Merger. The Company has
been advised by each of its directors and by each executive officer who as of
the date hereof is actually aware (to the Knowledge of the Company) of the
Transactions that each such Person currently intends to tender pursuant to the
Offer all Shares owned by such Person.
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(b) In connection with the Offer, the Company will promptly
furnish or cause to be furnished to Purchaser mailing labels, security position
listings and any available listings or computer files containing the names and
addresses of all holders of record of the Shares as of a recent date, and shall
furnish Purchaser with such additional information (including, but not limited
to, updated lists of holders of the Shares and their addresses, mailing labels
and lists of security positions) and such assistance as Purchaser or its agents
may reasonably request in communicating the Offer to the record and beneficial
holders of the Shares. Subject to the requirements of applicable Law, and except
for such steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Merger, Purchaser and its affiliates and
associates shall hold in confidence the information contained in any such
labels, listings and files and all other information delivered pursuant to this
Section 1.2(b), will use such information only in connection with the Offer and
the Merger and, if this Agreement shall be terminated, will deliver to the
Company all copies, extracts or summaries of such information in their
possession or the possession of their agents.
Section 1.3 SEC Documents.
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(a) On the date the Offer is commenced, Parent and Purchaser
shall file with the United States Securities and Exchange Commission (the "SEC")
a Tender Offer Statement on Schedule 14D-1 in accordance with the Exchange Act
with respect to the Offer (together with all amendments and supplements thereto
and including the exhibits thereto, the "Schedule 14D-1"). The Schedule 14D-1
will include, as exhibits, the Offer to Purchase and a form of letter of
transmittal (collectively, together with any amendments and supplements thereto,
the "Offer Documents"). Concurrently with the filing of the Schedule 14D-1 by
Parent and Purchaser, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 in accordance with the
Exchange Act (together with all amendments and supplements thereto and including
the exhibits thereto, the "Schedule 14D-9"), which shall, except as otherwise
provided herein, contain the recommendation referred to in clause (v) of Section
1.2(a) hereof, and the Company shall also file therewith the information
required to be distributed to the stockholders of the Company pursuant to
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder as is
necessary to enable Parent's designees to be elected to the Company's Board of
Directors pursuant to Section 1.4 hereof
(b) Parent and Purchaser will take all steps necessary to
ensure that the Offer Documents, and the Company will take all steps necessary
to
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ensure that the Schedule 14D-9 and the information required to be distributed to
the stockholders of the Company pursuant to Section 14(f) of the Exchange Act
and Rule 14f-1 promulgated thereunder as is necessary to enable Parent's
designees to be elected to the Company's Board of Directors pursuant to Section
1.4 hereof, will comply in all material respects with the provisions of
applicable Federal and state securities Laws. Each of Parent and Purchaser will
take all steps necessary to cause the Offer Documents, and the Company will take
all steps necessary to cause the Schedule 14D-9 and the information required to
be distributed to the stockholders of the Company pursuant to Section 14(f) of
the Exchange Act and Rule 14f-1 promulgated thereunder as is necessary to enable
Parent's designees to be elected to the Company's Board of Directors pursuant to
Section 1.4 hereof, to be filed with the SEC and to be disseminated to holders
of the Shares, in each case as and to the extent required by applicable Federal
and state securities Laws and Parent or Purchaser will supply the Company any
information with respect to either of them and their nominees, officers,
directors and affiliates required by such Section 14(f) and Rule 14f-1. Each of
Parent and Purchaser, on the one hand, and the Company, on the other hand, will
promptly correct any information provided by it for use in the Offer Documents
and the Schedule 14D-9 if and to the extent that it shall have become false and
misleading in any material respect and Purchaser will take all steps necessary
to cause the Offer Documents, and the Company will take all steps necessary to
cause the Schedule 14D-9, as so corrected to be filed with the SEC and to be
disseminated to holders of the Shares, in each case as and to the extent
required by applicable Federal and state securities Laws. Parent and its counsel
shall be given a reasonable opportunity to review and comment upon the Schedule
14D-9 and all amendments and supplements thereto prior to their filing with the
SEC or dissemination to stockholders of the Company. The Company agrees to
provide Parent and its counsel with copies of any written comments that the
Company or its counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments and each of Parent
and Purchaser agrees to provide the Company and its counsel with copies of any
written comments that Parent, Purchaser or their counsel may receive from the
SEC or its staff with respect to the Offer Documents promptly after the receipt
of such comments.
Section 1.4 Directors.
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(a) Promptly after the purchase of and payment for any Shares
by Purchaser or any of its affiliates as a result of which Purchaser and its
affiliates own beneficially at least a majority of then outstanding Shares,
Parent shall be entitled to designate such number of directors, rounded up to
the next whole number,
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on the Company's Board of Directors as is equal to the product of the total
number of directors on such Board (giving effect to the increase in the size of
such Board pursuant to this Section 1.4) multiplied by the percentage that the
number of Shares beneficially owned by Purchaser (including Shares so accepted
for payment) bears to the total number of Shares then outstanding. In
furtherance thereof, the Company shall, upon request of Parent, use its best
efforts promptly either to increase the size of its Board of Directors or to
secure the resignations of such number of its incumbent directors, or both, as
is necessary to enable such designees of Parent to be so elected or appointed to
the Company's Board of Directors, and the Company shall take all actions
available to the Company to cause such designees of Parent to be so elected or
appointed. At such time, the Company shall, if requested by Parent, also take
all action necessary to cause Persons designated by Parent to constitute at
least the same percentage (rounded up to the next whole number) as is on the
Company's Board of Directors of (i) each committee of the Company's Board of
Directors, (ii) each board of directors (or similar body) of each Subsidiary of
the Company and (iii) each committee (or similar body) of each such board.
(b) Notwithstanding the provisions of this Section 1.4, the
parties hereto shall use their respective reasonable best efforts to ensure that
at least two of the members of the Board shall, at all times prior to the
Effective Time (as defined in Section 2.2 hereof) be, Continuing Directors. From
and after the time, if any, that Parent's designees constitute a majority of the
Company's Board of Directors, any amendment or modification of this Agreement,
any amendment to the Company's Certificate of Incorporation or By-Laws
inconsistent with this Agreement, any termination of this Agreement by the
Company, any extension of time for performance of any of the obligations of
Parent or Purchaser hereunder, any waiver of any condition to the Company's
obligations hereunder or any of the Company's rights hereunder or other action
by the Company hereunder may be effected only by the action of a majority of the
Continuing Directors of the Company, which action shall be deemed to constitute
the action of any committee specifically designated by the Board of Directors of
the Company to approve the actions contemplated hereby and the Transactions and
the full Board of Directors of the Company; provided, that, if there shall be no
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Continuing Directors, such actions may be effected by majority vote of the
entire Board of Directors of the Company; provided, further, that, if there be
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no such Continuing Directors, Purchaser shall not decrease the Offer Price or
change the form of consideration to be paid in the Merger. The provisions of
this Section 1.4 are in addition to and shall not limit any rights which
Purchaser, Parent or any of their affiliates may have as a holder or beneficial
owner of Shares as a matter of applicable Law with respect to the election of
directors or otherwise.
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ARTICLE II
THE MERGER
Section 2.1 The Merger. (a) Upon the terms and subject to the
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conditions of this Agreement, and in accordance with the DGCL, at the Effective
Time (as defined in Section 2.2 hereof), the Company and Purchaser shall
consummate a merger (the "Merger") pursuant to which (x) Purchaser shall be
merged with and into the Company and the separate corporate existence of
Purchaser shall thereupon cease and (y) the Company shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the "Surviving
Corporation") and shall continue to be governed by the Laws of the State of
Delaware.
(b) Pursuant to the Merger, at the Effective Time, (x) the
Certificate of Incorporation of Purchaser, as in effect immediately prior to the
Effective Time, shall be the certificate of incorporation of the Surviving
Corporation; provided, however, that Article FIRST of the Certificate of
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Incorporation shall be amended to read in its entirety as follows: "FIRST: The
name of the corporation is Optek Technology, Inc." and (y) the By-Laws of
Purchaser, as in effect immediately prior to the Effective Time, shall be the
by-laws of the Surviving Corporation, each until thereafter changed or amended
as provided therein and by the DGCL.
(c) The directors of Purchaser at the Effective Time shall be
the initial directors of the Surviving Corporation until their respective
successors are duly elected and qualified or until their earlier death,
resignation or removal in accordance with the Surviving Corporation's
certificate of incorporation and by-laws. The officers of the Company at the
Effective Time shall be the initial officers of the Surviving Corporation until
their respective successors are duly elected and qualified or until their
earlier death, resignation or removal in accordance with the Surviving
Corporation's certificate of incorporation and by-laws.
(d) The Merger shall have the effects specified in the
applicable provisions of the DGCL.
Section 2.2 Effective Time. Subject to the terms and conditions of
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this Agreement, Parent, Purchaser and the Company will cause a certificate of
merger or, if applicable, a certificate of ownership and merger (as applicable,
the "Certificate of Merger"), to be executed and filed on the date of the
Closing (as defined in Section 2.3) (or on such other date as Parent and the
Company may agree)
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with the Secretary of State of Delaware (the "Secretary of State") as provided
in the DGCL. The Merger shall become effective on the date on which the
Certificate of Merger has been duly filed with the Secretary of State or such
time as is agreed upon by the parties and specified in the Certificate of
Merger, and such time is hereinafter referred to as the "Effective Time".
Section 2.3 Closing. The closing of the Merger (the "Closing") shall
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take place at 10:00 a.m., local time, on a date to be specified by the parties,
which shall be no later than the second business day after satisfaction or
waiver of all of the conditions set forth in Article VI hereof (the "Closing
Date"), at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, unless another date or place is agreed to in
writing by the parties hereto.
Section 2.4 Conversion of Capital Stock. As of the Effective Time,
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by virtue of the Merger and without any action on the part of the holders of any
Shares or any shares of capital stock of Purchaser:
(a) Purchaser Capital Stock. Each issued and outstanding
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share of common stock, par value $.01 per share, of Purchaser shall be converted
into and become one fully paid and nonassessable share of common stock, par
value $.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Purchaser-Owned Stock.
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All Shares that are owned by the Company or any Subsidiary of the Company and
any Shares owned by Parent, Purchaser or any Subsidiary of Parent or Purchaser
shall be cancelled and retired and shall cease to exist and no consideration
shall be delivered in exchange therefor.
(c) Exchange of Shares. Each issued and outstanding Share
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(other than Shares to be cancelled in accordance with Section 2.4(b) and
Dissenting Shares (as herein defined)) shall be converted into the right to
receive the Offer Price in cash, without interest (the "Merger Consideration").
All such Shares, when so converted, shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each holder
of a certificate representing any such Shares shall cease to have any rights
with respect thereto, except the right to receive the Merger Consideration
therefor upon the surrender of such certificate in accordance with Section 2.5,
without interest.
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Section 2.5 Exchange of Certificates.
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(a) Paying Agent. Prior to the Effective Time, Parent shall
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designate a bank, trust company or other Person, reasonably acceptable to the
Company, to act as agent for the holders of the Shares in connection with the
Merger (the "Paying Agent") to receive the funds to which holders of the Shares
shall become entitled pursuant to Section 2.4(c). Parent shall, from time to
time, make available to the Paying Agent funds in amounts and at times necessary
for the payment of the Merger Consideration as provided herein. All interest
earned on such funds shall be paid to Parent.
(b) Exchange Procedures. As soon as reasonably practicable
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after the Effective Time, Parent shall cause the Paying Agent to mail to each
holder of record of a certificate or certificates which immediately prior to the
Effective Time represented outstanding Shares (the "Certificates") whose Shares
were con converted into the right to receive the Merger Consideration pursuant
to Section 2.4, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates to the Paying Agent and shall be in such
form not inconsistent with this Agreement as Parent may specify) and (ii)
instructions for use in surrendering the Certificates in exchange for payment of
the Merger Consideration. Upon surrender of a Certificate for cancellation to
the Paying Agent, together with such letter of transmittal, duly executed, and
such other documents as may reasonably be required by the Paying Agent, Parent
shall cause the Paying Agent to pay to the holder of such Certificate the Merger
Consideration, and the Certificate so surrendered shall forthwith be cancelled.
In the event of a surrender of a Certificate representing Shares which are not
registered in the transfer records of the Company under the name of the Person
surrendering such Certificate, payment 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 payment to a Person other than the registered holder
of such Certificate or establish to the satisfaction of the Paying Agent that
such tax has been paid or is not applicable. Until surrendered as contemplated
by this Section 2.5, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
Merger Consideration which the holder thereof has the right to receive in
respect of such Certificate pursuant to the provisions of this Article II. No
interest shall be paid or will accrue on the Merger Consideration payable to
holders of Certificates pursuant to the provisions of this Article II.
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(c) Transfer Books; No Further Ownership Rights in Shares.
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At the Effective Time, the stock transfer books of the Company shall be closed
and thereafter there shall be no further registration of transfers of the Shares
on the records of the Company. From and after the Effective Time, the holders of
Certificates evidencing ownership of the Shares outstanding immediately prior
to the Effective Time shall cease to have any rights with respect to such
Shares, except as otherwise provided for herein or by applicable Law. If, after
the Effective Time, Certificates are presented to the Surviving Corporation for
any reason, they shall be cancelled and exchanged as provided in this Article
II.
(d) Termination of Fund; No Liability. At any time
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following six months after the Effective Time, the Surviving Corporation shall
be entitled to require the Paying Agent to deliver to it any funds (including
any interest received with respect thereto) which had been made available to the
Paying Agent and which have not been disbursed to holders of Certificates, and
thereafter such holders shall be entitled to look to the Surviving Corporation
(subject to abandoned property, escheat or other similar Laws) only as general
creditors thereof with respect to the Merger Consideration payable upon due
surrender of their Certificates, without any interest thereon. Notwithstanding
the foregoing, none of Parent, the Surviving Corporation or the Paying Agent
shall be liable to any holder of a Certificate for Merger Consideration
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar Law.
(e) Lost Certificates. If any Certificate shall have been
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lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such Certificate,
the Paying Agent shall pay in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration pursuant to this Agreement.
Section 2.6 Withholding Taxes. Parent and Purchaser shall be
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entitled to deduct and withhold, or cause the Paying Agent to deduct and
withhold, from the Offer Price or the Merger Consideration payable to a holder
of Shares pursuant to the Offer or the Merger any withholding and stock transfer
Taxes and such amounts as are required under the Code, or any applicable
provision of state, local or foreign Tax law. To the extent that amounts are so
withheld by Parent or Purchaser, such withheld amounts shall be treated for all
purposes of this Agreement
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as having been paid to the holder of the Shares in respect of which such
deduction and withholding was made by Parent or Purchaser.
Section 2.7. Stock Options. (a) At or immediately prior to the
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Effective Time, each then outstanding option to purchase any shares of capital
stock of the Company (in each case, an "Option"), whether or not then vested or
exercisable, shall be cancelled by the Company. In consideration of such
cancellation of Options with an exercise price of less than the Offer Price, the
Company (or, at Parent's option, the Purchaser) shall pay to such holders of
Options an amount in respect thereof equal to the product of (A) the excess, if
any, of the Offer Price over the exercise price of each such Option and (B) the
number of Shares previously subject to the Option immediately prior to its
cancellation (such payment to be net of withholding taxes and without interest).
(b) The Company shall take all actions necessary and
appropriate so that all stock option or other equity based plans maintained with
respect to the Shares, including, without limitation, the plans listed in
Section 3.3 hereof ("Option Plans"), shall terminate as of the Effective Time
and the provisions in any other Benefit Plan providing for the issuance,
transfer or grant of any capital stock of the Company or any interest in respect
of any capital stock of the Company shall be deleted as of the Effective Time,
and the Company shall use its best efforts to ensure that following the
Effective Time no holder of an Option or any participant in any Option Plan
shall have any right thereunder to acquire any capital stock of the Company,
Parent, Purchaser or the Surviving Corporation.
(c) Prior to the Effective Time, the Company shall (i)
obtain all necessary consents from, and provide (in a form acceptable to Parent)
any required notices to, holders of Options and (ii) amend the terms of the
applicable Option Plan, in each case as is necessary to give effect to the
provisions of paragraphs (a) and (b) of this Section 2.7.
Section 2.8. Appraisal Rights. Notwithstanding anything in
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this Agreement to the contrary, Shares (the "Dissenting Shares") that are issued
and outstanding immediately prior to the Effective Time and which are held by
stockholders who did not vote in favor of the Merger and who comply with all of
the relevant provisions of Section 262 of the DGCL (the "Dissenting
Stockholders") shall not be converted into or be exchangeable for the right to
receive the Merger Consideration, unless and until such holders shall have
failed to perfect or shall have effectively withdrawn or lost their rights to
appraisal under the DGCL. If any
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Dissenting Stockholder shall have failed to perfect or shall have effectively
withdrawn or lost such right, such holder's Shares shall thereupon be converted
into and become exchangeable for the right to receive, as of the Effective Time,
the Merger Consideration without any interest thereon. The Company shall give
Parent (i) prompt notice of any written demands for appraisal of any Shares,
attempted withdrawals of such demands and any other instruments served pursuant
to the DGCL and received by the Company relating to stockholders' rights of
appraisal, and (ii) the opportunity to direct all negotiations and proceedings
with respect to demands for appraisal under the DGCL. Neither the Company nor
the Surviving Corporation shall, except with the prior written consent of
Parent, voluntarily make any payment with respect to, or settle or offer to
settle, any such demand for payment. If any Dissenting Stockholder shall fail to
perfect or shall have effectively withdrawn or lost the right to dissent, the
Shares held by such Dissenting Stockholder shall thereupon be treated as though
such Shares had been converted into the right to receive the Merger
Consideration pursuant to Section 2.4(c).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser as
follows:
Section 3.1 Organization, Standing and Corporate Power. Each of
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the Company and each of its Subsidiaries is a corporation duly organized,
validly existing and in good standing under the Laws of the jurisdiction in
which it is organized and has the requisite corporate power and authority to
carry on its business as it is now being conducted. Each of the Company and its
Subsidiaries is duly qualified as a foreign corporation or licensed to do
business and is in good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes such qualification
or licensing necessary, other than in such jurisdictions where the failure to be
so qualified or licensed (individually or in the aggregate) would not have a
Material Adverse Effect on the Company. The Company has delivered to Parent
complete and correct copies of the Certificate of Incorporation of the Company
and By-Laws of the Company, in each case as amended to the date of this
Agreement, and has delivered the certificates of incorporation and by-laws or
other organizational documents of its Subsidiaries, in each case as amended as
of the date of this Agreement. The respective certificates of incorpo-
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ration and by-laws or other organizational documents of the Subsidiaries of the
Company do not contain any provision limiting or otherwise restricting the
ability of the Company to control such Subsidiaries. Except as set forth on
Schedule 3.1 of the Company Disclosure Schedule, the Company has delivered to
Parent true and complete copies of all minutes of its Board of Directors since
November 1, 1995.
Section 3.2 Subsidiaries. (a) Exhibit 21 to the Company's Annual
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Report on Form 10-K for the fiscal year ended October 30, 1998 and Schedule 3.2
of the disclosure schedule delivered by the Company to Parent at or prior to the
execution of this Agreement (the "Company Disclosure Schedule") together include
the names, jurisdictions of incorporation and capitalization of all of the
Subsidiaries of the Company. All the outstanding shares of capital stock of, or
other equity interests in, each Subsidiary of 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 Liens and free of any other restriction
(including any restriction on the right to vote, sell or otherwise dispose of
such capital stock or other ownership interests).
(b) The Company does not directly or indirectly
beneficially own any securities or other beneficial ownership interests in any
other entity (including through joint ventures or partnership arrangements)
other than (i) the Subsidiaries of the Company or (ii) as disclosed on Schedule
3.2 of the Company Disclosure Schedule.
Section 3.3 Capital Structure. The authorized capital stock of
-----------------
the Company consists of 25,000,000 Shares and 1,000,000 shares of preferred
stock, par value $.01 per share (the "Preferred Shares"). As of the date hereof,
(i) 7,642,773 Shares were issued and outstanding and no Preferred Shares were
issued and outstanding, (ii) 930,034 Shares were reserved for issuance upon
exercise of outstanding Options, with an average exercise price of $16.11 and
(iii) 76,268 Shares were issued and are held in the Company's treasury. Except
as set forth above or on Schedule 3.3 of the Company Disclosure Schedule, as of
the date of this Agreement: (i) no shares of capital stock or other voting
securities of the Company are issued, reserved for issuance or outstanding; (ii)
there are no stock appreciation rights, phantom stock units, restricted stock
grants, contingent stock grants or Benefit Plans which grant awards of any of
the foregoing, and there are no other outstanding contractual rights to which
the Company is a party the value of which is based on the value of Shares; (iii)
all outstanding shares of capital stock of the Company are, and all Shares which
may be issued will be, when so issued, duly authorized, validly
13
issued, fully paid and nonassessable and not subject to preemptive rights; and
(iv) 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 stockholders of the Company
may vote. Except as set forth above, as of the date of this Agreement, there are
no outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which the Company or
any of its Subsidiaries is a party or by which any of them is bound obligating
the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other voting
securities of the Company or of any of its Subsidiaries or obligating the
Company or any of its Subsidiaries to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment, agreement, arrangement
or undertaking. There are no outstanding contractual obligations of the Company
or any of its Subsidiaries, to repurchase, redeem or otherwise acquire any
shares of capital stock of the Company or any of its Subsidiaries. Schedule 3.3
of the Company Disclosure Schedule accurately sets forth information regarding
the current exercise price, date of grant and number of outstanding Options for
each holder of Options pursuant to any Company Option Plan. Following the
Effective Time, no holder of Options will have any right to receive shares of
common stock of the Surviving Corporation upon exercise of Options.
Section 3.4 Authority; Noncontravention; Company Action. The
-------------------------------------------
Company has the requisite corporate power and authority to enter into this
Agreement and the Company Option Agreement and to consummate the transactions
contemplated by the Company Option Agreement and, subject to approval of this
Agreement by the holders of a majority of the outstanding Shares, to consummate
the Merger contemplated by this Agreement. The execution, delivery and
performance of this Agreement and the Company Option Agreement by the Company
and the consummation by the Company of the Transactions have been duly
authorized by all necessary corporate action on the part of the Company,
subject, in the case of the Merger, to approval of this Agreement by the holders
of a majority of the outstanding Shares. This Agreement and the Company Option
Agreement have been duly executed and delivered by the Company and, assuming
this Agreement constitutes the valid and binding obligation of Parent and
Purchaser, constitute the valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except that (i)
such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar Laws now or hereafter in effect relating to
creditors' rights generally and (ii) the remedy of specific performance and
injunctive relief may be subject to equitable defenses and to the discretion
14
of the court before which any proceeding therefor may be brought. Except as set
forth on Schedule 3.4 of the Company Disclosure Schedule, the execution,
delivery and performance of this Agreement and the Company Option Agreement do
not, and the consummation of the Transactions (including the changes in the
composition of the Board of Directors of the Company) and compliance with the
provisions of this Agreement will not, conflict with, or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or loss of a material benefit under, or result in the creation of any Lien upon
any of the properties or assets of the Company or any of its Subsidiaries under,
or result in the termination of, or require that any consent be obtained or any
notice be given with respect to, (i) the Certificate of Incorporation or By-laws
of the Company or the comparable charter or organizational documents of any of
its Subsidiaries, (ii) any loan or credit agreement note, bond, mortgage,
indenture, lease, contract or other agreement, instrument or Permit applicable
to the Company or any of its Subsidiaries or their respective properties or
assets or (iii) any Law applicable to the Company or any of its Subsidiaries or
their respective properties or assets, other than, in the case of clauses (ii)
or (iii), any such conflicts, violations, defaults, rights, Liens, losses of a
material benefit, consents or notices that, individually or in the aggregate,
would not have a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole. No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity or any other
Person, is required by the Company or any of its Subsidiaries in connection with
the execution and delivery of this Agreement by the Company or the consummation
by the Company of the Transactions, except for (i) the filings, permits,
authorizations, consents and approvals set forth in Section 3.4 of the Company
Disclosure Schedule, or as may be required under, and other applicable
requirements of, the Securities Act, the Exchange Act, the HSR Act, any
applicable state securities or "blue sky" Laws and the DGCL, and (ii) such other
consents, approvals, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made would not, individually or
in the aggregate, (x) impair, in any material respect, the ability of the
Company to perform its obligations under this Agreement, (y) prevent or
significantly delay the consummation of the Transactions or (z) have a Material
Adverse Effect on the Company and its Subsidiaries taken as a whole. The Board
of Directors of the Company has taken all appropriate action so that neither
Parent nor Purchaser will be an "interested stockholder" within the meaning of
Section 203 of the DGCL by virtue of Parent, Purchaser and the Company entering
into this Agreement or the Company Option Agreement or any other agreement
contemplated hereby or thereby and consummating the Transactions.
15
Section 3.5 SEC Documents; Financial Statements. The Company
-----------------------------------
has filed all SEC Documents required to be filed by it since November 1, 1995
(the "Company's SEC Documents"). As of their respective dates, (i) the Company's
SEC Documents complied in all material respects with the requirements of the
Securities Act, or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC Documents,
and (ii) none of the Company's SEC Documents contained at the time of their
filing 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. The financial statements of the Company included in the Company's
SEC Documents, as of the dates of such SEC Documents, were true and complete and
complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles ("GAAP") in the United States applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and
fairly presented 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). Except as
set forth on Schedule 3.5 of the Company Disclosure Schedule and except as set
forth in the Company's SEC Documents filed and publicly available prior to the
date of this Agreement, and except for liabilities and obligations incurred in
the ordinary course of business consistent with past practice since the date of
the most recent consolidated balance sheet included in the Company's SEC
Documents filed and publicly available prior to the date of this Agreement,
neither the Company nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise).
Section 3.6 Schedule 14D-9; Offer Documents; Proxy Statement.
------------------------------------------------
Neither the Schedule 14D-9, any other document required to be filed by the
Company with the SEC in connection with the Transactions, nor any information
supplied by the Company for inclusion in the Offer Documents shall, at the
respective times the Schedule 14D-9, any such other filings by the Company, the
Offer Documents or any amendments or supplements thereto are filed with the SEC
or are first published, sent or given to stockholders of the Company, as the
case may be, 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 made therein, in light of the circumstances under which they are
made, not misleading. The Proxy Statement will
16
not, on the date the Proxy Statement (including any amendment or supplement
thereto) is first mailed to stockholders of the Company, contain any untrue
statement of a material fact, or omit to state any material fact required to be
stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they are made, not misleading or shall,
at the time of the Special Meeting (as hereinafter defined) or at the Effective
Time, omit to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of proxies for the
Special Meeting which shall have become false or misleading in any material
respect. The Schedule 14D-9, any other document required to be filed by the
Company with the SEC in connection with the Transactions and the Proxy
Statement will, when filed by the Company with the SEC, comply as to form in all
material respects with the applicable provisions of the Exchange Act and the
rules and regulations thereunder. Notwithstanding the foregoing, the Company
makes no representation or warranty with respect to the statements made in any
of the foregoing documents based on and in conformity with information supplied
by or on behalf of Parent or Purchaser in writing specifically for inclusion
therein.
Section 3.7 Absence of Certain Changes or Events. Except as
------------------------------------
set forth in the Company's SEC Documents or on Schedule 3.7 of the Company
Disclosure Schedule, since October 30, 1998, the Company and its Subsidiaries
have conducted their respective businesses only in the ordinary course, and (i)
there has not been any Material Adverse Change in the Company and its
Subsidiaries, taken as a whole and (ii) neither the Company nor any of its
Subsidiaries has taken any of the actions prohibited by Section 5.1 or otherwise
acted in such a way as to impair, prevent or impede the consummation of the
Transactions.
Section 3.8 Litigation. Except as specifically set forth in
----------
the Company's SEC Documents or on Schedule 3.8 of the Company Disclosure
Schedule, there are (i) no suits, actions or proceedings pending or, to the
Knowledge of the Company, threatened against the Company or any of its
Subsidiaries that, individually or in the aggregate, could have a Material
Adverse Effect on the Company, (ii) no complaints, lawsuits, charges or other
proceedings pending or, to the Knowledge of the Company, threatened in any forum
by or on behalf of any present or former employee of the Company or any of its
Subsidiaries, any applicant for employment or classes of the foregoing alleging
breach of any express or implied contract of employment, any applicable Law
governing employment or the termination thereof or other discriminatory,
wrongful or tortious conduct in connection with the employment relationship
that, individually or in the aggregate, could have a Material
17
Adverse Effect on the Company, (iii) no judgments, decrees, injunctions or
orders of any Governmental Entity or arbitrator outstanding against the Company
that, individually or in the aggregate, could have a Material Adverse Effect on
the Company and (iv) no orders, writs, judgments, injunctions, decrees,
determinations or awards applicable to the Trademarks or the Other Intellectual
Property.
Section 3.9 Absence of Changes in Benefit Plans; SEC
----------------------------------------
Disclosure. Except as disclosed on Schedule 3.9 of the Company Disclosure
----------
Schedule, there has not been any adoption or amendment by the Company or any of
its Subsidiaries or any ERISA Affiliate (as defined in Section 3.10 hereof) of
any Benefit Plan (as defined in Section 3.10 hereof) since October 30, 1998.
Except as disclosed on Schedule 3.9 of the Company Disclosure Schedule, neither
the Company nor any of its Subsidiaries has any formal plan or commitment to
create any additional Benefit Plan or modify or change any existing Benefit Plan
that would affect any employee or terminated employee of the Company or a
Subsidiary of the Company. All employment, consulting, severance, termination,
change in control or indemnification agreements, arrangements or understandings
between the Company or any of its Subsidiaries and any current or former officer
or director of the Company or any of its Subsidiaries which are required to be
disclosed in the Company's SEC Documents have been disclosed therein.
Section 3.10 Employee Benefits; ERISA. (a) Schedule 3.10 of
------------------------
the Company Disclosure Schedule contains a true and complete list of each bonus,
deferred compensation, incentive compensation, stock purchase, stock option,
employment, severance or termination pay, health insurance, supplemental
unemployment benefits, profit-sharing, pension, or retirement plan, program,
agreement or arrangement, and each other employee benefit plan, program,
agreement or arrangement, other than a non-material fringe benefit plan,
sponsored, maintained or contributed to or required to be contributed to (at any
time during the past six years) by the Company or any of its Subsidiaries or by
any trade or business, whether or not incorporated (an "ERISA Affiliate"), that
is a member of a "controlled group" within the meaning of section 4001 of the
Employee Retirement Income Security Act of 1974, as amended, and the rules and
regulations promulgated thereunder ("ERISA") of which the Company or a
Subsidiary is a member or which is under "common control" within the meaning of
Section 4001 of ERISA, with the Company or a Subsidiary, for the benefit of any
employee or terminated employee of the Company, its Subsidiaries or any ERISA
Affiliate, whether formal or informal (the "Benefit Plans").
18
(b) With respect to each Benefit Plan, the Company has made
available a true and complete copy thereof (including all amendments thereto),
as well as true and complete copies of the two most recent annual reports, if
required under ERISA, with respect thereto; the two most recent actuarial
reports, if required under ERISA, with respect thereto; the two most recent
reports prepared with respect thereto in accordance with Statement of Financial
Accounting Standards No. 87, Employer's Accounting for Pensions; the most recent
Summary Plan Description, together with each Summary of Material Modifications,
if required under ERISA with respect thereto; if the Benefit Plan is funded
through a trust or any third party funding vehicle, the trust or other funding
agreement (including all amendments thereto) and the latest financial statements
thereof; and the most recent determination letter received from the Internal
Revenue Service with respect to each Benefit Plan that is intended to be
qualified under section 401 of the Code.
(c) No liability to the Pension Benefit Guaranty
Corporation ("PBGC") under Title IV of ERISA has been incurred by the Company,
its Subsidiaries or any ERISA Affiliate since the effective date of ERISA that
has not been satisfied in full, and no condition exists that presents a material
risk to the Company, its Subsidiaries or any ERISA Affiliate of incurring a
liability under such Title, other than liability for premiums due the PBGC
(which premiums have been paid when due). Each Benefit Plan has been operated
and administered in all material respects in accordance with its terms and
applicable Law, including but not limited to ERISA and the Code.
(d) The PBGC has not instituted proceedings to terminate
any Benefit Plan and no condition exists that presents a material risk that such
proceedings will be instituted.
(e) No Benefit Plan is subject to Section 302 of the Code
or Title IV of ERISA.
(f) Neither the Company, nor any Subsidiary of the Company,
nor any trust created thereunder, nor any trustee or administrator thereof has
engaged in a transaction in connection with which the Company or any Subsidiary
of the Company, any such trust, or any trustee or administrator thereof, or any
party dealing with any Benefit Plan or any such trust could be subject to either
a civil penalty assessed pursuant to section 409 or 502(i) of ERISA or a tax
imposed pursuant to section 4975 or 4976 of the Code.
19
(g) All employee Benefit Plans that are subject to the laws
of any jurisdiction outside the United States are in material compliance with
such applicable laws, including relevant tax laws, and the requirements of any
trust deed under which they are established.
(h) Each Benefit Plan which is intended to be "qualified"
within the meaning of section 401(a) of the Code is so qualified and the trusts
maintained thereunder are exempt from taxation under section 501(a) of the Code
and no event has occurred to cause the loss of such qualified or exempt status.
(i) No Benefit Plan provides health, death or medical
benefits (whether or not insured) with respect to current or former employees of
the Company or its Subsidiaries beyond their retirement or other termination of
service (other than (a) coverage mandated by applicable Law or (b) benefits the
full cost of which is borne by the current or former employee (or his
beneficiary).
(j) The consummation of the Transactions, alone, will not
(a) entitle any current or former employee or officer of the Company or any
Subsidiary to severance pay, unemployment compensation or any other payment, (b)
accelerate the time of payment or vesting, or increase the amount of
compensation due any such employee or officer, (c) result in any prohibited
transaction described in section 406 of ERISA or section 4975 of the Code for
which an exemption is not available, or (d) require the Company or any ERISA
Affiliate to fund or make any payments to any trust or other funding vehicle in
respect of any Benefit Plan.
(k) There are no pending, anticipated or, to the knowledge
of the Company, threatened claims by or on behalf of any Benefit Plan, by any
employee or beneficiary covered under any such Benefit Plan, or otherwise
involving any such Benefit Plan (other than routine claims for benefits).
Section 3.11 Taxes.
-----
(a) Each of the Company and each of its Subsidiaries has duly
and timely filed (or has had duly and timely filed on its behalf) all Tax
Returns required to be filed by it, and all such Tax Returns are true, complete
and correct. Each of the Company and each of its Subsidiaries has paid (or has
had paid on its behalf) all Taxes due and owing by them and the most recent
financial statements contained in the Company's SEC Documents reflect adequate
reserves in accordance with generally accepted accounting principles for all
Taxes payable by the Company or its
20
Subsidiaries for all taxable periods and portions thereof through the date of
such financial statements.
(b) Each of the Company and each of its Subsidiaries has
complied with all applicable Laws relating to the payment and withholding of
Taxes (including, without limitation, the withholding of Taxes pursuant to
Sections 1441 and 1442 of the Code or similar provisions under any applicable
foreign Laws) and have, within the time and in the manner prescribed by
applicable Laws, withheld from employee wages and paid over to the proper
Governmental Entity all amounts required to be so withheld and paid over under
all applicable Laws.
(c) Except as set forth on Schedule 3.11 of the Company
Disclosure Schedule, (i) no deficiencies for any Taxes have been threatened,
proposed, asserted or assessed (either in writing or orally) against the Company
or any of its Subsidiaries, (ii) no Governmental Entity is conducting or
proposing to conduct an audit with respect to Taxes or any Tax Returns of the
Company or any of its Subsidiaries, (iii) no extension or waiver of the statute
of limitations with respect to Taxes or any Tax Return has been granted by the
Company or any of its Subsidiaries, which remains in effect, (iv) neither the
Company nor any of its Subsidiaries is a party to any agreement or arrangement
to allocate, share or indemnify another party for Taxes, (v) there are no Liens
for Taxes upon the assets of the Company or any of its Subsidiaries, except for
Liens for Taxes not yet due, (vi) no jurisdiction where either the Company or
any of its Subsidiaries does not file a Tax Return has asserted or otherwise
made a claim that the Company or any of its Subsidiaries is required to file a
Tax Return for such jurisdiction, (vii) neither the Company nor any of its
Subsidiaries has agreed to make, or is required to make, any adjustment under
Section 481(a) of the Code (or comparable provision under state, local or
foreign Tax laws) by reason of a change in accounting method or otherwise and
the Company and each of its Subsidiaries do not have knowledge that the Internal
Revenue Service has proposed any such adjustment or change in accounting method,
(viii) neither the Company nor any of its Subsidiaries could have any liability
for Taxes under Section 1.1502-6 of the Treasury regulations promulgated under
the Code or any comparable state, local or foreign Tax laws or by contract or
otherwise, (ix) neither the Company nor any of its Subsidiaries has filed a
consent pursuant to Section 341(f) of the Code (or any predecessor provision) or
agreed to have Section 341(f)(2) of the Code apply to any disposition of a
subsection (f) asset (as such term is defined in Section 341(f)(4) of the Code)
owned by the Company or any of its Subsidiaries, (x) all Tax deficiencies which
have been claimed, proposed or asserted against the Company or any of its
Subsidiaries have been fully paid or finally settled, and no issue has been
21
raised in any examination by the Taxing Authority, which by application of
similar principles, could be expected to result in the proposal or assertion of
a Tax deficiency against the Company or any of its Subsidiaries for another year
not so examined, (xi) the Company has filed, as a common parent corporation of
an affiliated group (within the meaning of Section 1504(a) of the Code) a
consolidated return for Federal income tax purposes on behalf of such affiliated
group and (xii) no power of attorney has been granted by or with respect to the
Company or any of its Subsidiaries with respect to any matter relating to
Taxes.
(d) Schedule 3.11 of the Company Disclosure Schedule sets forth
the taxable years of the Company or any of its Subsidiaries as to which the
respective statutes of limitations with respect to Taxes have not expired and,
with respect to such taxable years, those years for which examinations have been
completed, those years for which examinations are presently being conducted,
those years for which examinations have not been initiated and those years for
which required Returns have not yet been filed.
Section 3.12 No Excess Nondeductible Payments.
--------------------------------
(a) Except as set forth on Schedule 3.12 of the Company
Disclosure Schedule, no amounts payable as a result of the Transactions under
the Benefit Plans or any other plans or arrangements will constitute a
"parachute payment" as such term is defined in Section 280G of the Code, without
regard to whether such payment is reasonable compensation for personal services
performed or to be performed in the future.
(b) Neither the Company nor any of its Subsidiaries is a party
to any contract, agreement or other arrangement which could result in the
payment of amounts that could be nondeductible by reason of Section 162(m) of
the Code.
Section 3.13 Compliance with Applicable Laws.
-------------------------------
Except as set forth on Schedule 3.13 of the Company Disclosure
Schedule:
(a) The Company and each of its Subsidiaries have complied and
are presently complying in all material respects with all applicable Laws, and
neither the Company nor any of its Subsidiaries has received notification of any
asserted present or past failure to so comply, except such non-compliance that
(i) has not and will not
22
prevent the Company from carrying on its business substantially as now
conducted, or (ii) would not be reasonably expected to (x) result in a Material
Adverse Effect on the Company or (y) materially impair the ability of the
parties hereto to consummate the Transactions.
(b) Each of the Company and its Subsidiaries has in effect, or
has timely filed applications for, all material Permits necessary for it to own,
lease or operate its properties and assets and to carry on its business
substantially as now conducted and there are no appeals nor any other actions
pending to revoke any such Permits, and there has occurred no material default
or violation under any such Permits.
(c) Each of the Company and its Subsidiaries is, and has been,
and each of the Company's former Subsidiaries, while a Subsidiary of the
Company, was in compliance in all material respects with all applicable
Environmental Laws, and there are no circumstances or conditions that would be
reasonably likely to prevent or interfere with compliance by the Company or its
Subsidiaries in the future with Environmental Laws (or Permits issued
thereunder).
(d) Neither the Company nor any Subsidiary of the Company has
received any written claim, demand, notice, complaint, court order,
administrative order or request for information from any Governmental Entity or
private party, alleging violation of, or asserting any noncompliance with or
liability under or potential liability under, any Environmental Laws, except for
matters which are no longer threatened or pending or for which the Company or
its Subsidiaries are not subject to further requirements pursuant to an
administrative or court order, judgment or settlement agreement.
(e) During the period of ownership or operation by the Company
and its Subsidiaries of any of their respective current or previously owned or
leased properties, there have been no Releases of Hazardous Material in, on,
under or affecting such properties and none of the Company or its Subsidiaries
have disposed of any Hazardous Material or any other substance either on said
owned or leased properties or at other properties, in a manner that has led, or
could reasonably be anticipated to lead, to a Release. Prior to the period of
ownership or operation by the Company and its Subsidiaries of any of their
respective current or previously owned or leased properties, to the knowledge of
the Company, no Hazardous Material was disposed of at such current or previously
owned or leased properties, and there were no Releases of Hazardous Material in,
on, under or affecting any such property.
23
(f) Neither the Company nor any of its Subsidiaries has entered
into any agreement that may require it to pay to, reimburse, guarantee, pledge,
defend, indemnify, or hold harmless any Person for or against any Environmental
Liabilities and Costs.
(g) Neither the Company nor any of its Subsidiaries has treated,
stored or disposed of "hazardous waste", as that term is defined in the Resource
Conservation and Recovery Act, 42 U.S.C. (S) 6901 et seq., analogous state Laws,
--------
or the regulations promulgated thereunder, such that the Company or any of its
Subsidiaries would be required to obtain a permit under said Laws for such
treatment, storage or disposal.
(h) The Company has provided to Parent true and correct copies
of all environmental studies and reports in its possession or in the possession
of its representatives, agents or consultants, prepared within the last five
years, relating to (i) the Company's and its Subsidiaries' compliance with
Environmental Laws; (ii) the environmental condition of the Company's and its
Subsidiaries' currently owned or leased properties, including, but not limited
to, the extent of any on-site contamination at any of such properties, results
of investigations at such properties, remedial action plans for such properties,
and asbestos surveys; and (iii) the environmental condition of any properties
formerly owned or operated by the Company or any of its Subsidiaries, or of any
other location at which the Company or any of its Subsidiaries is subject to an
environmental claim, including, but not limited to, the extent of any on-site
contamination at any such properties, results of investigations at such
properties and remedial action plans at such properties.
Section 3.14 Intellectual Property. The Company and its
---------------------
Subsidiaries own or are validly licensed, or otherwise possess legally
enforceable rights, to use the Trademarks and Other Intellectual Property and
the consummation of the Transactions will not alter or impair such ability in
any respect. Schedule 3.14(a) of the Company Disclosure Schedule sets forth a
complete and accurate list of all Trademarks and Other Intellectual Property
held by the Company. Schedule 3.14(b)of the Company Disclosure Schedule sets
forth a complete and accurate list of all license agreements relating to the
foregoing to which the Company or any of its Subsidiaries is a party. The
Company and its Subsidiaries are the sole and exclusive owners of the Trademarks
and Other Intellectual Property, free and clear of all Liens and free of all
licenses except those set forth on Schedule 3.14(b) of the Company Disclosure
Schedule. There are no oppositions, cancellations, invalidity proceedings,
interferences or re-examination proceedings presently pending with respect to
the
24
Trademarks and Other Intellectual Property. The conduct of the business of the
Company and its Subsidiaries and the Trademarks and Other Intellectual Property
do not infringe any rights of any Person, and, except as set forth on Schedule
3.14(c) of the Company Disclosure Schedule, neither the Company nor any of its
Subsidiaries has received any written notice from any other Person pertaining to
or challenging the right of the Company or any of its Subsidiaries to use any of
the Trademarks or Other Intellectual Property. To the Company's knowledge, no
third party is infringing upon any of the Trademarks or Other Intellectual
Property. Neither the Company nor any of its Subsidiaries has made any claim of
a violation or infringement by others of its rights to or in connection with the
Trademarks and Other Intellectual Property which is still pending. The Company
and its Subsidiaries take reasonable measures to protect the confidentiality of
their trade-secrets and other confidential information.
Section 3.15 Properties. Each of the Company and each of its
----------
Subsidiaries has sufficiently good and valid title to, or an adequate leasehold
interest in, its material properties and assets (including the Real Property) in
order to allow it to conduct, and continue to conduct, its business as currently
conducted in all material respects. Except as set forth on Schedule 3.15 of the
Company Disclosure Schedule, such material tangible properties and assets
(including the Real Property) are sufficiently free of Liens to allow the
Company and each of its Subsidiaries to conduct, and continue to conduct, its
business as currently conducted in all material respects and the consummation of
the Transactions will not alter or impair such ability in any material respect.
Except as set forth on Schedule 3.15 of the Company Disclosure Schedule, the
Company and/or its Subsidiaries have good, valid, marketable and fee simple
title to all the Fee Property, free and clear of all Liens.
Section 3.16 Contracts. (a) Except as set forth in the Company's
---------
SEC Documents or Schedule 3.16 of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries is a party to or bound by (i) any "material
contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the
SEC), (ii) any non-competition agreement or any other agreement or obligation
which purports to limit in any respect the manner in which, or the localities in
which, all or any material portion of the business of the Company and its
Subsidiaries, taken as a whole, may be conducted, (iii) any transaction,
agreement, arrangement or understanding with any Affiliate that would be
required to be disclosed under Item 404 of regulation S-K under the Securities
Act, (iv) any voting or other agreement governing how any Shares shall be
voted, (v) any material agreement with any stockholders of the Company, (vi) any
acquisition, merger, asset purchase or sale agreement or
25
(vii) any contract or other agreement which would prohibit or materially delay
the consummation of the Merger or any of the Transactions (all contracts of the
type described in clauses (i) - (vii) being referred to herein as "Company
Material Contracts"). Each Company Material Contract is valid and binding on
the Company (or, to the extent a Subsidiary of the Company is a party, such
Subsidiary) and is in full force and effect, and the Company and each Subsidiary
of the Company have, in all material respects, performed all obligations
required to be performed by them to date under each Company Material Contract,
except where such noncompliance, individually or in the aggregate, would not
have a Material Adverse Effect on the Company. Neither the Company nor any
Subsidiary of the Company knows of, or has received notice of, any violation or
default under (nor, to the knowledge of the Company, does there exist any
condition which with the passage of time or the giving of notice or both would
result in such a violation or default under) any Company Material Contract.
(b) Except as disclosed in the Company's SEC Documents or on
Schedule 3.16 of the Company Disclosure Schedule or as provided for in this
Agreement, neither the Company nor any of its Subsidiaries is a party to any
oral or written (i) employment or consulting agreements not terminable on thirty
(30) days' or less notice, (ii) union or collective bargaining agreement, (iii)
agreement with any executive officer or other key employee of the Company or any
of its Subsidiaries the benefits of which are contingent or vest, or the terms
of which are materially altered, upon the occurrence of a transaction involving
the Company or any of its Subsidiaries of the nature contemplated by this
Agreement and the Company Option Agreement, (iv) agreement with respect to any
executive officer or other key employee of the Company or any of its
Subsidiaries providing any term of employment or compensation guarantee or (v)
agreement or plan, including any stock option, stock appreciation right,
restricted stock or stock purchase plan, any of the benefits of which will be
increased, or the vesting of the benefits of which will be accelerated, by the
occurrence of any of the Transactions or the value of any of the benefits of
which will be calculated on the basis of any of the Transactions.
Section 3.17 Labor Relations. Except to the extent set forth in
---------------
the Company's SEC Documents or Schedule 3.17 of the Company Disclosure Schedule,
(i) the Company and each of its Subsidiaries is, and has at all times been, in
material compliance with all applicable Laws respecting employment and
employment practices, terms and conditions of employment, wages, hours of work
and occupational safety and health, and is not engaged in any unfair labor
practices as defined in the National Labor Relations Act or other applicable
Law, except where the failure to
26
comply would not be reasonably likely to cause a Material Adverse Effect on the
Company; (ii) there is no labor strike, slowdown, stoppage or lockout actually
pending, or, to the knowledge of the Company, threatened against or affecting
the Company or any of its Subsidiaries; and (iii) neither the Company nor any of
its Subsidiaries is a party to or bound by any collective bargaining or similar
agreement with any labor organization.
Section 3.18 Products Liability; Recalls. (a) Except as set
---------------------------
forth in Schedule 3.18 of the Company Disclosure Schedule, (i) there is no
notice, demand, claim, action, suit, inquiry, hearing, proceeding, notice of
violation or investigation of a civil, criminal or administrative nature
(collectively, "Notices") pending or threatened before any Governmental Entity
in which a Product is alleged to have a Defect or relating to or resulting from
any alleged failure to warn or from any alleged breach of express or implied
warranties or representations; (ii) no valid basis exists for any such demand,
claim, action, suit, inquiry, hearing, proceeding, notice of violation or
investigation; (iii) no demand, claim, action, suit, inquiry, hearing,
proceeding, notice of violation or investigation referred to in clause (i) or
(ii) of this Section 3.18 would, if adversely determined, have, individually or
in the aggregate, a Material Adverse Effect on the Company; (iv) there has not
been any Occurrence; (v) there has not been any recall, rework, retrofit or
post-sale warning (collectively, "Recalls") of any Product, or any investigation
or consideration of or decision made by any person or entity concerning whether
to undertake or not to undertake any Recalls and the Company has received no
Notices from any Governmental Entity or any other person with respect to the
foregoing; and (vi) there are no defects in design, manufacturing, materials, or
workmanship, including, without limitation, any failure to warn, or any breach
of express or implied warranties or representations, which involve any Product,
other than, with respect to clauses (ii), (v) and (vi), those which could not
have a Material Adverse Effect.
(b) Section 3.18 of the Company Disclosure Schedule sets forth
all Notices received by the Company or its Subsidiaries since November 1, 1995
and the amount of the reserves provided therefor.
Section 3.19 Applicability of State Takeover Statutes. The
----------------------------------------
Section 203 Approval is valid and in full force and effect. Section 203 of the
DGCL will not apply to the Company Option Agreement, the Offer, the acquisition
of Shares pursuant to the Offer or the Merger. No other state takeover statute
or similar statute or regulation applies or purports to apply to the Offer, the
Merger or the other Transactions.
27
Section 3.20 Voting Requirements. The affirmative vote of the
-------------------
holders of a majority of all the Shares entitled to vote approving this
Agreement is the only vote of the holders of any class or series of the
Company's capital stock necessary to approve this Agreement and the
Transactions.
Section 3.21 Brokers. No broker, investment banker, financial
-------
advisor or other Person, other than ABN AMRO 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 based upon arrangements made by or on behalf of the Company. The
Company has provided Parent true and correct copies of all agreements between
the Company and ABN AMRO Incorporated, including, without limitations, any fee
arrangements.
Section 3.22 Opinion of Financial Advisor. The Company has
----------------------------
received the opinion of ABN AMRO Incorporated, to the effect that, as of the
date of this Agreement, the consideration to be received in the Offer and the
Merger by the Company's stockholders is fair to the Company's stockholders from
a financial point of view, and a complete and correct signed copy of such
opinion has been, or promptly upon receipt thereof will be, delivered to Parent.
The Company has been authorized by ABN AMRO Incorporated to permit the inclusion
of such opinion in its entirety in the Offer Documents and the Schedule 14D-9
and the Proxy Statement, so long as such inclusion is in form and substance
reasonably satisfactory to ABN AMRO Incorporated.
Section 3.23 Year 2000.
---------
Except as set forth on Schedule 3.23 of the Company Disclosure
Schedule or the Company's SEC Documents:
(a) all of the Computer Programs, computer firmware, computer
hardware (whether general or special purpose) and other similar or related items
of automated, computerized and/or software system(s) that are used or relied on
by the Company or by any of its Subsidiaries in the conduct of their respective
businesses will not malfunction, will not cease to function, will not generate
incorrect data, and will not provide incorrect results when processing,
providing, and/or receiving (i) date-related data into and between the twentieth
and twenty-first centuries and (ii) date-related data in connection with any
valid date in the twentieth and twenty-first centuries;
28
(b) all of the products and services sold, licensed, rendered or
otherwise provided by the Company or by any of its Subsidiaries in the conduct
of their respective businesses will not malfunction, will not cease to function,
will not generate incorrect data and will not produce incorrect results when
processing, providing and/or receiving (i) date-related data into and between
the twentieth and twenty-first centuries and (ii) date-related data in
connection with any valid date in the twentieth and twenty-first centuries; and
neither the Company nor any of its Subsidiaries is or shall be subject to claims
or liabilities arising from their failure to do so; and
(c) neither the Company nor any of its Subsidiaries has made
other representations or warranties regarding the ability of any product or
service sold, licensed, rendered or otherwise provided by the Company or by any
of its Subsidiaries in the conduct of their respective businesses to operate
without malfunction, to operate without ceasing to function, to generate
correct data and to produce correct results when processing, providing and/or
receiving (i) date-related data into and between the twentieth and twenty-first
centuries and (ii) date-related data in connection with any valid date in the
twentieth and twenty-first centuries.
Section 3.24 Absence of Questionable Payments. Neither the
--------------------------------
Company nor any of its Subsidiaries nor any director, officer, agent, employee
or other person acting on behalf of the Company or any of its Subsidiaries, has
used any corporate or other funds for unlawful contributions, payments, gifts,
or entertainment, or made any unlawful expenditures relating to political
activity to government officials or others or established or maintained any
unlawful or unrecorded funds in violation of Section 30A of the Exchange Act.
Neither the Company nor any of its Subsidiaries nor any current director,
officer, agent, employee or other person acting on behalf of the Company or any
of its Subsidiaries, has accepted or received any unlawful contributions,
payments, gifts or expenditures. The Company and each of its Subsidiaries which
is required to file reports pursuant to Section 12 or 15(d) of the Exchange Act
is in compliance with the provisions of Section 13(b) of the Exchange Act.
Section 3.25 Full Disclosure. The Company has not failed to
---------------
disclose to Parent any facts material to the business, results of operations,
assets, liabilities, financial condition or prospects of the Company. No
representation or warranty by the Company in this Agreement and no statement
contained in any document (including, without limitation, financial statements
and the Company Disclosure Schedule), certificate, or other writing furnished or
to be furnished by the Company
29
to Parent or any of its Representatives pursuant to the provisions hereof or in
connection with the Transactions, contains or will contain any untrue statement
of material fact or omits or will omit to state any material fact necessary, in
light of the circumstances under which it was made, in order to make the
statements herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company as
follows:
Section 4.1 Organization, Standing and Corporate Power. Each
------------------------------------------
of Parent and Purchaser is a corporation duly organized, validly existing and in
good standing under the Laws of the jurisdiction in which each is incorporated
and has the requisite corporate power and authority to carry on its business as
now being conducted. Each of Parent and Purchaser is duly qualified or licensed
to do business and is in good standing in each jurisdiction in which the nature
of its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in such jurisdictions where
the failure to be so qualified or licensed (individually or in the aggregate)
would not have a Material Adverse Effect on Parent.
Section 4.2 Authority; Noncontravention. Parent and Purchaser
---------------------------
have the requisite corporate power and authority to enter into this Agreement
and to consummate the Transactions. The execution and delivery of this Agreement
and the Company Option Agreement by Parent and Purchaser and the consummation by
Parent and Purchaser of the Transactions have been duly authorized by all
necessary corporate action on the part of Parent and Purchaser, as applicable.
This Agreement and the Company Option Agreement have been duly executed and
delivered by Parent and Purchaser and, assuming this Agreement and the Company
Option Agreement constitute the valid and binding obligation of the Company,
constitute a valid and binding obligation of each such party, enforceable
against each such party in accordance with its terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar Laws now or hereafter in effect relating to creditors' rights
generally and (ii) the remedy of specific
30
performance and injunctive relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought.
The execution and delivery of this Agreement and the Company Option Agreement do
not, and the consummation of the Transactions will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under, or result
in the creation of any lien upon any of the properties or assets of Parent
under, (i) the certificate of incorporation or by-laws of Parent or Purchaser,
(ii) any Law applicable to Parent or Purchaser or their respective properties or
assets, other than, in the case of clause (ii), any such conflicts, violations,
defaults, rights or Liens that individually or in the aggregate would not (x)
impair in any material respect the ability of Parent and Purchaser to perform
their respective obligations under this Agreement or (y) prevent or impede the
consummation of any of the Transactions. No consent, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity or any other Person is required by Parent or Purchaser in connection with
the execution and delivery of this Agreement and the Company Option Agreement or
the consummation by Parent or Purchaser, as the case may be, of any of the
Transactions, except for (i) the filings, permits, authorizations, consents and
approvals set forth in Schedule 4.2 of the disclosure schedule delivered by
Parent to the Company at or prior to the execution of this Agreement (the
"Parent Disclosure Schedule"), or as may be required under, and other applicable
requirements of, the Securities Act, the Exchange Act, the HSR Act, any
applicable state securities or "blue sky" Laws and the DGCL, and (ii) such other
consents, approvals, orders, authorizations, registrations, declarations and
filings the failure of which to be obtained or made would not, individually or
in the aggregate, prevent the consummation of or materially impair the ability
of Parent or Purchaser to consummate the Transactions.
Section 4.3 Proxy Statement; Offer Documents. The Offer
--------------------------------
Documents and any other documents to be filed by Parent with the SEC or any
other Government Entity in connection with the Merger and the other Transactions
will (in the case of the Offer Documents and any such other documents filed with
the SEC under the Securities Act or the Exchange Act) comply as to form in all
material respects with applicable provisions of the Exchange Act and the
Securities Act, respectively, and the rules and regulations thereunder. None of
the Offer Documents, any other documents required to be filed by Parent or
Purchaser with the SEC in connection with the Transactions, nor any information
supplied by Parent or Purchaser for inclusion in the Schedule 14D-9 or in the
information required to be distributed to the stockholders of the Company
pursuant to Section 14(f) of the
31
Exchange Act and Rule 14f-1 promulgated thereunder as is necessary to enable
Parent's designees to be elected to the Company's Board of Directors pursuant to
Section 1.4 hereof shall, at the respective times the Offer Documents or any
amendments and supplements thereto, any such other filings by Parent or
Purchaser are filed with SEC or are first published, sent or given to
stockholders of the Company, as the case may be, or, in the case of the Proxy
Statement, on the date the Proxy Statement is first mailed to stockholders of
the Company, contain any untrue statement of a material fact, or omit to state
any material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which they
are made, not misleading or shall, at the time of the Special Meeting (as
defined in Section 5.3) or at the Effective Time, omit to state any material
fact necessary to correct any statement in any earlier communication with
respect to the solicitation of proxies for the Special Meeting which shall have
become false or misleading in any material respect. Notwithstanding the
foregoing, neither Parent nor Purchaser makes any representation or warranty
with respect to the statements made in any of the foregoing documents based on
and in conformity with information supplied by or on behalf of the Company in
writing specifically for inclusion therein.
Section 4.4 Operations of Purchaser. Purchaser is a wholly
-----------------------
owned Subsidiary of Parent and was formed solely for the purpose of engaging in
the Transactions and has not engaged in any business activities or conducted any
operations other than in connection with the Transactions.
Section 4.5 Brokers. No broker, investment banker, financial
-------
advisor or other Person, other than Bear, ▇▇▇▇▇▇▇ & Co. Inc., the fees and
expenses of which will be paid by Parent or Purchaser, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the Transactions based upon arrangements made by or on behalf of
Parent or Purchaser.
Section 4.6 Sufficient Funds. Either Parent or Purchaser has
----------------
available, or has made arrangements to obtain (through existing credit
arrangements or otherwise), sufficient funds to purchase all of the Shares
outstanding on a fully diluted basis at the Offer Price and to pay all fees and
expenses related to the Transactions.
32
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. After the date
---------------------------------
hereof and prior to the time the designees of Parent have been elected or
appointed to, and shall constitute a majority of, the Board of Directors of the
Company pursuant to Section 1.4 or the date, if any, on which this Agreement is
earlier terminated pursuant to Section 7.1, and except (i) as expressly
contemplated by this Agreement, (ii) as set forth on Schedule 5.1 of the Company
Disclosure Schedule or (iii) as agreed in writing by Parent:
(a) the Company shall and shall cause its Subsidiaries to
carry on their respective businesses in the ordinary course;
(b) the Company shall and shall cause its Subsidiaries to
use all reasonable best efforts consistent with good business judgment to
preserve intact their current business organizations, keep available the
services of their current officers and key employees and preserve their
relationships consistent with past practice with desirable customers, suppliers,
licensors, licensees, distributors and others having business dealings with them
to the end that their goodwill and ongoing businesses shall be unimpaired in all
material respects at the Effective Time;
(c) neither the Company nor any of its Subsidiaries shall,
directly or indirectly, amend its certificate of incorporation or by-laws or
similar organizational documents;
(d) Representatives of the Company and its Subsidiaries
shall confer at such times as Parent may reasonably request with one or more
Representatives of Parent to report material operational matters and the
general status of ongoing operations;
(e) neither the Company nor any of its Subsidiaries shall:
(i)(A) declare, set aside or pay any dividend or other distribution payable in
cash, stock or property with respect to the Company's capital stock or that of
its Subsidiaries, except that a wholly-owned Subsidiary of the Company may
declare and pay a dividend or make advances to its parent or the Company or (B)
redeem, purchase or otherwise acquire directly or indirectly any of the
Company's capital stock or that of its Subsidiaries; (ii) issue, sell, pledge,
dispose of or encumber any additional shares
33
of, or securities convertible into or exchangeable for, or options, warrants,
calls, commitments or rights of any kind to acquire, any shares of capital stock
of any class of the Company or its Subsidiaries, other than Shares issued upon
the exercise of Options outstanding on the date hereof in accordance with the
Option Plans as in effect on the date hereof; or (iii) split, combine or
reclassify the outstanding capital stock of the Company or of any of the
Subsidiaries of the Company;
(f) except as permitted by this Agreement, neither the
Company nor any of its Subsidiaries shall acquire or agree to acquire (A) by
merging or consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
joint venture, association or other business organization or division thereof
(including entities which are Subsidiaries of the Company or any of the
Company's Subsidiaries) or (B) any assets, including real estate, except
purchases in the ordinary course of business consistent with past practice;
(g) neither the Company nor any of its Subsidiaries shall
make any new capital expenditure or expenditures, other than the specific
capital expenditures disclosed and set forth on Schedule 5.1 of the Company
Disclosure Schedule;
(h) neither the Company nor any of its Subsidiaries shall,
except in the ordinary course of business and except as otherwise permitted by
this Agreement, amend or terminate any Company Material Contract where such
amendment or termination would have a Material Adverse Affect on the Company,
or waive, release or assign any material rights or claims;
(i) neither the Company nor any of its Subsidiaries shall
transfer, lease, license, sell, mortgage, pledge, dispose of or encumber any
property or assets other than in the ordinary course of business and consistent
with past practice;
(j) neither the Company nor any of its Subsidiaries shall:
(i) enter into any employment or severance agreement with or grant any severance
or termination pay to any officer, director or key employee of the Company or
any its Subsidiaries; or (ii) hire or agree to hire any new or additional key
employees or officers;
34
(k) neither the Company nor any of its Subsidiaries shall,
except as required to comply with applicable Law or expressly provided in this
Agreement, (A) adopt, enter into, terminate, amend or increase the amount or
accelerate the payment or vesting of any benefit or award or amount payable
under any Benefit Plan or other arrangement for the current or future benefit or
welfare of any director, officer or current or former employee, except to the
extent necessary to coordinate any such Benefit Plans with the terms of this
Agreement, (B) increase in any manner the compensation or fringe benefits of, or
pay any bonus to, any director, officer or employee, (C) pay any benefit not
provided for under any Benefit Plan, (D) grant any awards under any bonus,
incentive, performance or other compensation plan or arrangement or Benefit Plan
(including the grant of stock options, stock appreciation rights, stock based or
stock related awards, performance units or restricted stock, or the removal of
existing restrictions in any Benefit Plans or agreements or awards made
thereunder) or (E) take any action to fund or in any other way secure the
payment of compensation or benefits under any employee plan, agreement, contract
or arrangement or Benefit Plan;
(l) neither the Company nor any of its Subsidiaries shall:
(i) incur or assume any long-term debt, or except in the ordinary course of
business, incur or assume any short-term indebtedness in amounts not consistent
with past practice; (ii) incur or modify any material indebtedness or other
liability except as set forth on Schedule 5.1 of the Company Disclosure
Schedule; (iii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other Person, except in the ordinary course of business and consistent with
past practice; (iv) make any loans, advances or capital contributions to, or
investments in, any other Person (other than to wholly owned Subsidiaries of the
Company or customary loans or advances to employees in the ordinary course of
business and consistent with past practice); (v) settle any claims other than in
the ordinary course of business, in accordance with past practice and without
admission of liability; or (vi) enter into any material commitment or
transaction except in the ordinary course of business consistent with past
practice;
(m) neither the Company nor any of its Subsidiaries shall
change any of the accounting methods used by it unless required by GAAP;
(n) neither the Company nor any of its Subsidiaries shall
make or change any Tax election, amend any Tax Return, change an annual Tax
accounting period, adopt or change any method of Tax accounting, enter into any
closing agreement, settle or compromise any Tax claim or assessment, surrender
any
35
right to claim a Tax refund, consent to any extension or waiver of the
limitations period applicable to any Tax claim or assessment or take or omit to
take any other action relating to Taxes except in the ordinary course of
business consistent with past practice;
(o) neither the Company nor any of its Subsidiaries shall
pay, discharge or satisfy any claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction of any such claims, liabilities or
obligations, in the ordinary course of business and consistent with past
practice, of claims, liabilities or obligations reflected or reserved against
in, or contemplated by, the consolidated financial statements (or the notes
thereto) of the Company and its consolidated Subsidiaries; or, except in the
ordinary course of business consistent with past practice, waive the benefits
of, or agree to modify in any manner, any confidentiality, standstill or similar
agreement to which the Company or any of its Subsidiaries is a party;
(p) neither the Company nor any of its Subsidiaries shall
(by action or inaction) amend, renew, terminate or cause to be extended any
lease, agreement or arrangement relating to any of the Leased Properties or
enter into any lease, agreement or arrangement with respect to any real
property;
(q) neither the Company nor any of its Subsidiaries will
enter into an agreement, contract, commitment or arrangement to do any of the
foregoing, or to authorize, recommend, propose or announce an intention to do
any of the foregoing; and
(r) neither the Company nor any of its Subsidiaries shall
take any action that would result in (i) any of its representations and
warranties set forth in this Agreement that are qualified as to materiality
becoming untrue, (ii) any of such representations and warranties that are not so
qualified becoming untrue in any material respect or (iii) any of the conditions
to the Offer set forth in Annex A not being satisfied (subject to the Company's
right to take action specifically permitted by Section 5.5).
Section 5.2 Access; Confidentiality. The Company shall (and
-----------------------
shall cause each of its Subsidiaries to) afford to the Representatives of Parent
reasonable access on reasonable prior notice during normal business hours,
throughout the period prior to the earlier of the Effective Time or the
termination of this Agreement, to all of its properties, offices, employees,
contracts, commitments, books and
36
records (including but not limited to Tax Returns) and any report, schedule or
other document filed or received by it pursuant to the requirements of federal
or state securities laws and shall (and shall cause each of its Subsidiaries to)
furnish promptly to Parent such additional financial and operating data and
other information as to its and its Subsidiaries' respective businesses and
properties as Parent may from time to time reasonably request. Parent and
Purchaser will make all reasonable efforts to minimize any disruption to the
businesses of the Company and its Subsidiaries which may result from the
requests for data and information hereunder and pursuant to Section 5.1(d)
hereof. Except as otherwise agreed to by the other party, Parent and the Company
will be bound by the terms of a letter agreement (the "Confidentiality
Agreement"), dated as of November 6, 1998 and supplemented as of December 15,
1998, by and between Parent and the Company.
Section 5.3. Special Meeting, Proxy Statement.
--------------------------------
(a) If required by applicable Law in order to consummate
the Merger, the Company, acting through its Board of Directors, shall, in
accordance with applicable Law, its Certificate of Incorporation and By-laws:
(i) as promptly as practicable following the acceptance for
payment and purchase of Shares by Purchaser pursuant to the Offer duly
call, give notice of, convene and hold a special meeting of its
stockholders (the "Special Meeting") for the purposes of considering
and taking action upon the approval of the Merger and the approval and
adoption of this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement and (x)
obtain and furnish the information required to be included by the SEC
in the Proxy Statement (as hereinafter defined) and, after consultation
with Parent, respond promptly to any comments made by the SEC with
respect to the preliminary proxy or information statement and cause a
definitive proxy or information statement, including any amendment or
supplement thereto (the "Proxy Statement") to be mailed to its
stockholders at the earliest practicable date; provided that no
--------
amendment or supplement to the Proxy Statement will be made by the
Company without consultation with Parent and its counsel and (y) use
its reasonable best efforts to obtain the necessary approvals of the
Merger and this Agreement by its stockholders; and
37
(iii) unless this Agreement has been terminated in
accordance with Article VII, subject to its rights pursuant to Section
5.5, include in the Proxy Statement the recommendation of its Board of
Directors that stockholders of the Company vote in favor of the
approval of the Merger and the approval and adoption of this Agreement.
(b) Parent shall vote, or cause to be voted, all of the
Shares then owned by it, Purchaser or any of its other Subsidiaries in favor of
the approval and adoption of this Agreement.
(c) Notwithstanding anything else herein or in this Section
5.3, in the event that Parent, Purchaser and any other Subsidiaries of Parent
shall acquire in the aggregate a number of the outstanding shares of each class
of capital stock of the Company, pursuant to the Offer or otherwise, sufficient
to enable Purchaser or the Company to cause the Merger to become effective under
applicable Law without a meeting of stockholders of the Company, the parties
hereto shall, at the request of Parent and subject to Article VI, take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the consummation of such acquisition, without a meeting of
stockholders of the Company, in accordance with Section 253 of the DGCL.
Section 5.4 Reasonable Efforts; Notification. (a) Upon the
--------------------------------
terms and subject to the conditions set forth in this Agreement, including
without limitation Section 5.5 hereto, each of the parties agrees to use all
reasonable 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, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the Offer and the Merger, and the other
Transactions, including (i) the preparation and filing with the SEC of the Offer
Documents, the Schedule 14D-9, the information required to be distributed to the
stockholders of the Company pursuant to Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder as is necessary to enable Parent's designees
to be elected to the Company's Board or Directors pursuant to Section 1.4
hereof, the preliminary Proxy Statement and the Proxy Statement and all
necessary amendments or supplements thereto; (ii) the obtaining of all necessary
actions or nonactions, waivers, consents and approvals from any Governmental
Entity and the making of all necessary registrations and filings (including
filings with any Governmental Entity, if any) and the taking of all reasonable
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 obtaining of all
necessary consents, approvals
38
or waivers from third parties, (iv) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of any of the Transactions, including seeking to have any stay
or temporary restraining order entered by any court or other Governmental Entity
vacated or reversed, and (v) the execution and delivery of any additional
instruments necessary to consummate the Transactions and to fully carry out the
purposes of this Agreement.
(b) Each of the Company, Parent and Purchaser shall give
prompt notice to the other of (i) any of their representations or warranties
contained in this Agreement becoming untrue or inaccurate in any respect
(including receiving knowledge of any fact, event or circumstance which may
cause any representation qualified as to knowledge to be or become untrue or
inaccurate in any respect) or (ii) the failure by them to comply with or satisfy
in any material respect any covenant, condition or agreement to be complied with
or satisfied by them under this Agreement; provided, however, that no such
-------- -------
notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
Section 5.5 No Solicitation. (a) The Company shall not, nor
---------------
shall it permit any of its Subsidiaries to, nor shall it authorize (and shall
use its best efforts not to permit) any officer, director or employee of, or any
investment banker, attorney or other advisor or representative of, the Company
or any of its Subsidiaries to, (i) solicit or initiate, or encourage, directly
or indirectly, any inquiries or the submission of, any Takeover Proposal, (ii)
participate in any discussions or negotiations regarding, or furnish to any
Person any information or data with respect to or access to the properties of,
or take any other action to knowingly facilitate the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Takeover Proposal or
(iii) enter into any agreement with respect to any Takeover Proposal or approve
or resolve to approve any Takeover Proposal; provided, that nothing contained in
-------- ----
this Section 5.5 or any other provision hereof shall prohibit the Company or the
Company's Board of Directors from (i) taking and disclosing to the Company's
stockholders a position with respect to a tender or exchange offer by a third
party pursuant to Rules 14d-9 and 14e-2 promulgated under the Exchange Act, or
(ii) making such disclosure to the Company's stockholders as, in the good faith
judgment of the Company's Board of Directors, after receiving written advice
from outside counsel, is required under applicable Law, provided that the
Company may not, except as permitted by Section 5.5(b), withdraw or modify, or
propose to withdraw or modify, its position with respect to the Offer or the
Merger or approve
39
or recommend, or propose to approve or recommend any Takeover Proposal, or enter
into any agreement with respect to any Takeover Proposal. Upon execution of this
Agreement, the Company will immediately cease any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. Notwithstanding the foregoing, prior to the time of
acceptance of Shares for payment pursuant to the Offer, the Company may furnish
information concerning its business, properties or assets to any Person or group
and may negotiate and participate in discussions and negotiations with such
Person or group concerning a Takeover Proposal if:
(x) such Person or group has submitted a Superior Proposal;
and
(y) the Board of Directors of the Company determines
in good faith after consultation with outside legal counsel that such
action is necessary for the Board of Directors of the Company to comply
with its fiduciary duty under Applicable Law.
The Company will promptly (but in no case later than 24 hours) notify Parent of
the existence of any proposal, discussion, negotiation or inquiry received by
the Company regarding any Takeover Proposal, and the Company will immediately
communicate to Parent the terms of any proposal, discussion, negotiation or
inquiry which it may receive regarding any Takeover Proposal and the identity of
the party making such proposal or inquiry or engaging in such discussion or
negotiation. The Company will promptly provide to Parent any non-public
information concerning the Company provided to any other Person in connection
with any Takeover Proposal which was not previously provided to Parent. The
Company will keep Parent informed of the status and details of any such Takeover
Proposal and of any amendments or proposed amendments to any Takeover Proposal
and will promptly (but in no case later than 24 hours) notify Parent of any
determination by the Company's Board of Directors that a Superior Proposal has
been made.
(b) Except as set forth in this Section 5.5(b), neither the
Board of Directors of the Company nor any committee thereof shall (i) withdraw
or modify, or propose to withdraw or modify, in a manner adverse to Parent or
Purchaser, the approval or recommendation by the Board of Directors of the
Company or any such committee of the Offer, this Agreement or the Merger, (ii)
approve or recommend, or propose to approve or recommend, any Takeover Proposal
or (iii) enter into any agreement with respect to any Takeover Proposal.
Notwithstanding the foregoing,
40
subject to compliance with the provisions of this Section 5.5, prior to the time
of acceptance for payment of Shares pursuant to the Offer, the Company's Board
of Directors may withdraw or modify its approval or recommendation of the Offer,
this Agreement or the Merger, approve or recommend a Superior Proposal, or enter
into an agreement with respect to a Superior Proposal, in each case at any time
after the fifth business day following Parent's receipt of written notice
(including by facsimile) from the Company advising Parent that the Board of
Directors of the Company has received a Superior Proposal which it intends to
accept, specifying the material terms and conditions of such Superior Proposal
and identifying the Person making such Superior Proposal, but only if the
Company shall have caused its financial and legal advisors to negotiate with
Parent to make such adjustments to the terms and conditions of this Agreement as
would enable the Company to proceed with the Transactions on such adjusted
terms.
Section 5.6 Publicity. Except as required by Law or as
---------
permitted by Section 5.5, so long as this Agreement is in effect, neither the
Company, Parent nor any of their respective affiliates shall issue or cause the
publication of any press release or other announcement with respect to the
Merger, this Agreement or the other Transactions without the prior consultation
of the other party.
Section 5.7 Transfer Taxes. All liability for transfer or
--------------
other similar Taxes arising out of or related to the Offer and the Merger or the
consummation of any other Transaction, and due to the property owned by the
Company or any of its Subsidiaries or affiliates ("Transfer Taxes") shall be
borne by the Company, and the Company shall file or cause to be filed all Tax
Returns relating to such Transfer Taxes which are due.
Section 5.8 State Takeover Laws. Notwithstanding any other
-------------------
provision in this Agreement, in no event shall the Section 203 Approval be
withdrawn, revoked or modified by the Board of Directors of the Company. If any
state takeover statute other than Section 203 of the DGCL becomes or is deemed
to become applicable to the Company Option Agreement, the Offer, the acquisition
of Shares pursuant to the Offer or the Merger, the Company shall take all action
necessary to render such statute inapplicable to all of the foregoing.
Section 5.9 Indemnification and Insurance.
-----------------------------
(a) The Company shall, to the fullest extent permitted under
applicable Delaware Law, the terms of the Company's Certificate of Incorporation
or
41
By-Laws and regardless of whether the Merger becomes effective, indemnify and
hold harmless, and, after the Effective Time, the Surviving Corporation shall,
to the fullest extent permitted under applicable Delaware Law, the terms of the
Surviving Corporation's Certificate of Incorporation or By-Laws, indemnify and
hold harmless, each present and former director, officer or employee of the
Company or any of its Subsidiaries (collectively, the "Indemnified Parties")
against any costs or expenses (including reasonable attorneys' fees), judgments,
losses, claims, damages and liabilities incurred in connection with, and amounts
paid in settlement of, any claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or investigative and wherever asserted,
brought or filed, (x) arising out of or pertaining to the Transactions or (y)
otherwise with respect to any acts or omissions or alleged acts or omissions
occurring at or prior to the Effective Time, in each case for a period of six
years after the date hereof. In the event of any such claim, action, suit,
proceeding or investigation (whether arising before or after the Effective
Time), (i) any counsel retained by the Indemnified Parties for any period after
the Effective Time must be reasonably satisfactory to the Surviving Corporation,
(ii) after the Effective Time, the Surviving Corporation shall pay the
reasonable fees and expenses of such counsel, promptly after statements
therefor are received, and (iii) the Surviving Corporation will cooperate in the
defense of any such matter; provided, however, that the Surviving Corporation
-------- -------
shall not be liable for any settlement effected without its written consent
(which consent shall not be unreasonably withheld or delayed); and provided,
--------
further, that, in the event that any claim or claims for indemnification are
-------
asserted or made within such six year period, all rights to indemnification in
respect of any such claim or claims shall continue until the disposition of any
and all such claims. The Indemnified Parties as a group may retain only one law
firm to represent them with respect to any single action unless there is, under
applicable standards of professional conduct, a conflict on any significant
issue between the positions of any two or more Indemnified Parties. The
indemnity agreements of the Surviving Corporation in this Section 5.9(b) shall
extend, on the same terms to, and shall inure to the benefit of and shall be
enforceable by, each Person or entity who controls, or in the past controlled,
any present or former director, officer or employee of the Company or any of its
Subsidiaries.
(b) For a period of thirty-six months after the Effective
Time, Parent shall cause the Surviving Corporation to maintain in effect, if
available, directors' and officers' liability insurance covering those Persons
who are currently covered by the Company's directors' and officers' liability
insurance policy (a copy of which has been made available to Parent) on terms
(including the amounts of coverage and the amounts of deductibles, if any) that
are no less favorable to the
42
terms now applicable to them under the Company's current policies; provided,
--------
however, that in no event shall Parent or the Surviving Corporation be required
-------
to expend in excess of 150% of the annual premium currently paid by the Company
for such coverage; and provided further, that, if the premium for such coverage
----------------
exceeds such amount, Parent or the Surviving Corporation shall purchase a policy
with the greatest coverage available for such 150% of the annual premium.
(c) This Section 5.9 shall survive the consummation of the
Merger at the Effective Time, is intended to benefit the Company, the Surviving
Corporation and the Indemnified Parties, shall be binding on all successors and
assigns of the Surviving Corporation and shall be enforceable by the Indemnified
Parties.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect
-----------------------------------------------
the Merger. The respective obligation of each party to effect the Merger shall
----------
be subject to the satisfaction on or prior to the Effective Time of each of the
following conditions, any and all of which may be waived in whole or in part by
the Company, Parent or Purchaser, as the case may be, to the extent permitted by
applicable Law:
(a) this Agreement shall have been approved and adopted
by the requisite vote of the holders of Shares, if required by applicable Law
and the Certificate of Incorporation, in order to consummate the Merger;
(b) no statute, rule, regulation, order, decree or
injunction shall have been enacted, promulgated or issued by any Governmental
Entity precluding, restraining, enjoining or prohibiting consummation of the
Merger; and
(c) Parent, Purchaser or their affiliates shall have
purchased Shares pursuant to the Offer.
43
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated and
-----------
the Merger contemplated herein may be abandoned at any time prior to the
Effective Time, whether before or after approval of matters presented in
connection with the Merger by the stockholders of the Company:
(a) By the mutual written consent of Parent and the
Company; provided, however, that if Parent shall have a majority of the
-------- -------
directors pursuant to Section 1.4, such consent of the Company may only be given
if approved by the Continuing Directors.
(b) By either of Parent or the Company if (i) a
statute, rule or executive order shall have been enacted, entered or promulgated
prohibiting the Transactions on the terms contemplated by this Agreement or (ii)
any Governmental Entity shall have issued an order, decree or ruling or taken
any other action (which order, decree, ruling or other action the parties hereto
shall use their reasonable efforts to lift), in each case permanently
restraining, enjoining or otherwise prohibiting the Transactions and such order,
decree, ruling or other action shall have become final and non-appealable.
(c) By either of Parent or the Company if the
Effective Time shall not have occurred on or before December 31, 1999; provided,
--------
that the party seeking to terminate this Agreement pursuant to this Section
7.1(c) shall not have breached in any material respect its obligations under
this Agreement in any manner that shall have proximately contributed to the
failure to consummate the Merger on or before such date.
(d) By the Company:
(i) if the Company has entered into an
agreement with respect to a Superior Proposal or has approved or
recommended a Superior Proposal in accordance with Section 5.5(b),
provided the Company has complied with all provisions thereof,
including the notice provisions therein, and that it simultaneously
terminates this Agreement and makes simultaneous payment to the Parent
of the Expenses and the Termination Fee; or
44
(ii) if Parent or Purchaser shall have terminated the Offer
or the Offer expires without Parent or Purchaser, as the case may be,
purchasing any Shares pursuant thereto; provided that the Company may
not terminate this Agreement pursuant to this Section 7.1(d)(ii) if the
Company is in material breach of this Agreement or the Company Option
Agreement;
(iii) if Parent, Purchaser or any of their affiliates shall
have failed to commence the Offer on or prior to five business days
following the date of the initial public announcement of the Offer;
provided, that the Company may not terminate this Agreement pursuant to
this Section 7.1(d)(iii) if the Company is in material breach of this
Agreement or the Company Option Agreement; or
(iv) if there shall be a material breach by Parent or
Purchaser of any of their representations, warranties, covenants or
agreements contained in this Agreement or the Company Option Agreement.
(e) By Parent or Purchaser:
(i) (A) if prior to the purchase of the Shares pursuant to
the Offer, the Board of Directors of the Company shall have withdrawn,
or modified or changed in a manner adverse to Parent or Purchaser, its
approval or recommendation of the Offer, this Agreement or the Merger
or shall have recommended or approved a Takeover Proposal; or
(B) there shall have been a material breach of any provision
of Section 5.5; or
(ii) if Parent or Purchaser shall have terminated the Offer
without Parent or Purchaser purchasing any Shares thereunder, provided
--------
that Parent or Purchaser may not terminate this Agreement pursuant to
this Section 7.1(e)(ii) if Parent or Purchaser is in material breach of
this Agreement; or
(iii) if, due to an occurrence that if occurring after the
commencement of the Offer would result in a failure to satisfy any of
the conditions set forth in Annex A hereto, Parent, Purchaser or any of
their affiliates shall have failed to commence the Offer on or prior to
five business days following the date of the initial public
announcement of the Offer; or
45
(iv) any Person or "group" (within the meaning of
Section 13(d)(3) of the Exchange Act), other than Parent, Purchaser or
their affiliates or any group of which any of them is a member, shall
have acquired or announced its intention to acquire beneficial
ownership (as determined pursuant to Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of the Shares; or
(v) if the Company receives a Takeover Proposal from
any Person (other than Parent or Purchaser), and the Company's Board of
Directors takes a neutral position or makes no recommendation with
respect to such Takeover Proposal after a reasonable amount of time
(and in no event more than five business days following such receipt)
has elapsed for the Company's Board of Directors to review and make a
recommendation with respect to such Takeover Proposal; or
(vi) if there shall be a material breach by the Company
of any of its representations, warranties, covenants or agreements
contained in this Agreement or the Company Option Agreement.
Section 7.2 Effect of Termination. In the event of termination
---------------------
of this Agreement by either the Company or Parent or Purchaser as provided in
Section 7.1, this Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Parent, Purchaser or the
Company, other than the provisions of Section 3.21, 4.5, 5.2, this Section 7.2
and Article VIII and except to the extent that such termination results from the
breach by a party of any of its representations, warranties, covenants or
agreements set forth in this Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Fees and Expenses. (a) Except as provided below, all
-----------------
fees and expenses incurred in connection with the Offer, the Merger, this
Agreement and the Transactions shall be paid by the party incurring such fees or
expenses, whether or not the Offer or the Merger is consummated.
(b) If (x) Parent or Purchaser terminates this
Agreement pursuant to Section 7.1(e)(i) or 7.1(e)(v) or (y) the Company
terminates this Agree-
46
ment pursuant to Section 7.1(d)(i), then in each case, the Company shall pay, or
cause to be paid to Parent, at the time of termination, an amount equal to
$7,000,000 (the "Termination Fee") and an amount equal to Parent's and
Purchaser's actual and reasonably documented out-of-pocket expenses incurred by
Parent or Purchaser in connection with the Offer, the Merger, this Agreement and
the consummation of the Transactions, including, without limitation, the fees
and expenses payable to all banks, investment banking firms, and other financial
institutions and Persons and their respective agents and counsel incurred in
connection with acting as Parent's or Purchaser's financial advisor with respect
to, or arranging or committing to provide or providing any financing for, the
Transactions up to $1,500,000 (the "Expenses").
(c) In addition, if this Agreement is terminated (i) by either Parent
or the Company pursuant to Section 7.1(c) at any time when there is pending a
Superior Proposal, (ii) by Parent pursuant to Section 7.1(e)(ii), (iii) or (vi)
(other than by reason of a breach of Section 5.5) or (iii) by the Company
pursuant to Section 7.1(d)(ii) (except, in the case of Sections 7.1(e)(ii),
7.1(e)(iii) and 7.1(d)(ii), by reason of a failure of the conditions in
paragraphs (c) or (i) of Annex A) and at the time of any such termination,
Parent is not in material breach of this Agreement, then the Company shall pay
to Parent, at the time of termination, the Expenses. If, within 9 months after
any termination referred to in this paragraph (c), the Company shall enter into
an agreement with respect to a Takeover Proposal or any Person shall acquire 40%
of the outstanding Shares, then the Company shall pay the Termination Fee
concurrently with entering into any such agreement or, if sooner, within one day
after such acquisition.
(d) Any payments required to be made pursuant to this Section 8.1 shall
be made by wire transfer of same day funds to an account designated by Parent.
Section 8.2 Amendment and Modification. Subject to applicable
--------------------------
Law, this Agreement may be amended, modified and supplemented in any and all
respects, whether before or after any vote of the stockholders of the Company
contemplated hereby, by written agreement of the parties hereto (which in the
case of the Company shall include approvals as contemplated in Section 1.4(c)),
at any time prior to the Closing Date with respect to any of the terms contained
herein; provided, however, that after the approval of this Agreement by the
-------- -------
stockholders of the Company, no such amendment, modification or supplement shall
reduce the amount or change the form of the Merger Consideration or otherwise
adversely affect the rights of stockholders.
47
Section 8.3 Nonsurvival of Representations and Warranties.
---------------------------------------------
None of the representations and warranties in this Agreement or in any schedule,
instrument or other document delivered pursuant to this Agreement shall survive
the Effective Time. This Section 8.3 shall not limit any covenant or agreement
of the parties which by its terms contemplates performance after the Effective
Time.
Section 8.4 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given upon receipt, and shall
be given to the parties at the following addresses or telecopy numbers (or at
such other address or telecopy number for a party as shall be specified by like
notice):
(a) if to Parent or Purchaser, to:
The ▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
(b) if to the Company, to:
Optek Technology, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ and ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Section 8.5 Interpretation. (a) The words "hereof," "herein" and
--------------
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless otherwise specified. Whenever the words
"include," "includes" or "including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation." All terms defined in
this Agreement shall have the defined meanings contained herein 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 agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements and instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and all attachments
thereto and instruments incorporated therein. References to a Person are also to
its permitted successors and assigns.
(b) The phrases "the date of this Agreement," "the
date hereof" and terms of similar import, unless the context otherwise requires,
shall be deemed to refer to the date first written above. The phrase "made
available" in this Agreement shall mean that the information referred to has
been actually delivered to the party to whom such information is to be made
available.
49
(c) The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any
provisions of this Agreement.
Section 8.6 Counterparts. This Agreement may be executed in
------------
two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties.
Section 8.7 Entire Agreement; No Third Party Beneficiaries;
----------------------------------------------
Rights of Ownership. This Agreement, the Confidentiality Agreement and the
-------------------
Company Option Agreement: (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 hereof and (b) except as provided in Section
5.9, are not intended to confer upon any Person other than the parties hereto
any rights or remedies hereunder.
Section 8.8 Severability. Any term or provision of this
------------
Agreement that is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable in any situation in any jurisdiction shall
not affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction or other authority declares that any term or
provision hereof is invalid, void or unenforceable, the parties agree that the
court making such determination shall have the power to reduce the scope,
duration, area or applicability of the term or provision, to delete specific
words or phrases, or to replace any invalid, void or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision.
Section 8.9 Governing Law. This Agreement shall be governed by
-------------
and construed in accordance with the Laws of the State of Delaware without
giving effect to the principles of conflicts or choice of law thereof or of any
other jurisdiction.
Section 8.10 Assignment. Neither this Agreement nor any of
----------
the rights, interests or obligations hereunder shall be assigned by any of the
parties
50
hereto (whether by operation of Law or otherwise) without the prior written
consent of the other parties, except that Purchaser may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
Parent or to any direct or indirect wholly owned Subsidiary of Parent. 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 8.11 Enforcement. The parties agree that irreparable
-----------
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the
United States located in the State of Delaware or in Delaware state court, 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 any Federal court located in the State of Delaware
or any Delaware state court in the event any dispute arises out of this
Agreement or any of the Transactions, (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 any of the Transactions in any court other than a Federal or
state court sitting in the State of Delaware.
Section 8.12 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) waive any
inaccuracies in the representations and warranties of the other parties
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) subject to the proviso of Section 8.2, waive compliance by the
other parties with any of the agreements or conditions contained in this
Agreement. 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 those
rights.
Section 8.13 Certain Undertakings of Parent. Parent shall
------------------------------
perform, or cause to be performed, any obligation of Purchaser under this
Agreement which shall have been breached by Purchaser.
51
Section 8.14 Definitions. For purposes of this Agreement:
-----------
"Affiliate" has the meaning set forth in Rule 12b-2 of the Exchange
Act.
"Benefit Plans" has the meaning assigned thereto in Section 3.10.
"By-laws" means the by-laws of the Company as in effect on the date of
this Agreement.
"Certificate of Incorporation" means the certificate of incorporation
of the Company as in effect on the date of this Agreement.
"Certificate of Merger" has the meaning assigned thereto in Section
2.2.
"Certificates" has the meaning assigned thereto in Section 2.5.
"Closing" has the meaning assigned thereto in Section 2.3.
"Closing Date" has the meaning assigned thereto in Section 2.3.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Optek Technology, Inc., a Delaware corporation.
"Company Disclosure Schedule" has the meaning assigned thereto in
Article III.
"Company Material Contract" has the meaning assigned thereto in Section
3.16.
"Company Option Agreement" has the meaning assigned thereto in the
recitals.
"Company's SEC Documents" has the meaning assigned thereto in Section
3.5.
"Computer Programs" means:
52
(i) any and all computer software programs, including all
source and object code,
(ii) databases and compilations, including any and all
data and collections of data, whether machine
readable or otherwise,
(iii) billing, reporting, engineering and other management
information systems,
(iv) all descriptions, flow-charts and other work product
used to design, plan, organize and develop any of the
foregoing,
(v) all content contained on any Internet site(s), and
(vi) all documentation, including user manuals and
training materials, relating to any of the
foregoing.
"Confidentiality Agreement" has the meaning assigned thereto in Section
5.2.
"Continuing Director" means (i) any member of the Board of Directors of
the Company as of the date hereof or (ii) any successor of a Continuing Director
who is (A) unaffiliated with, and not a designee or nominee of, Parent or
Purchaser, and (B) recommended to succeed a Continuing Director by a majority of
the Continuing Directors then on the Board of Directors of the Company, and in
each case under clauses (i) and (ii), who is not an employee of the Company.
"Defect" means a defect or impurity of any kind, whether in design,
manufacture, processing, or otherwise, including, without limitation, any
dangerous propensity associated with any reasonably foreseeable use of a
Product, or the failure to warn of the existence of any defect, impurity, or
dangerous propensity.
"DGCL" means the Delaware General Corporation Law, as amended.
"Dissenting Shares" has the meaning assigned thereto in Section 2.8.
"Dissenting Stockholders" has the meaning assigned thereto in Section
2.8.
"Effective Time" has the meaning assigned thereto in Section 2.2.
53
"Environmental Laws" means all foreign, Federal, state and local Laws
relating to pollution or protection of human health, safety or the environment,
including, without limitation, Laws relating to Releases or threatened Releases
of Hazardous Materials into the indoor or outdoor environment (including,
without limitation, ambient air, surface water, groundwater, land, surface and
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, Release, transport or handling of
Hazardous Materials, and all Laws and regulations with regard to record keeping,
notification, disclosure and reporting requirements respecting Hazardous
Materials, and all Laws relating to endangered or threatened species of fish,
wildlife and plants and the management or use of natural resources.
"Environmental Liabilities and Costs" means all liabilities,
obligations, responsibilities, obligations to conduct cleanup, losses, damages,
deficiencies, punitive damages, consequential damages, treble damages, costs and
expenses (including, without limitation, all reasonable fees, disbursements and
expenses of counsel, expert and consulting fees and costs of investigations and
feasibility studies and responding to government requests for information or
documents), fines, penalties, restitution and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present or
future, resulting from any claim or demand, by any Person or entity, whether
based in contract, tort, implied or express warranty, strict liability, joint
and several liability, criminal or civil statute, including any Environmental
Law, or arising from environmental, health or safety conditions, or the Release
or threatened Release of Hazardous Materials into the environment.
"ERISA" has the meaning assigned thereto in Section 3.10.
"ERISA Affiliate" has the meaning assigned thereto in Section 3.10.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expenses" has the meaning assigned thereto in Section 8.1(b).
"Fee Properties"means all real property and interests in real property
owned in fee by the Company or one of its Subsidiaries.
"GAAP" has the meaning assigned thereto in Section 3.5.
54
"Governmental Entity" means any (i) nation, state, county, city, town,
village, district or other jurisdiction of any nature; (ii) federal, state,
local, municipal, foreign or other government; (iii) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official or entity and any court or other tribunal); or (iv)
body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory or taxing authority or power of any
nature.
"Hazardous Materials" means all substances defined as hazardous
substances in the National Oil and Hazardous Substances Pollution Contingency
Plan, 40 C.F.R. (S) 300.5, or substances defined as hazardous substances,
hazardous materials, toxic substances, hazardous wastes, pollutants or
contaminants, under any Environmental Law, or substances regulated under any
Environmental Law, including, but not limited to, petroleum (including crude oil
or any fraction thereof), asbestos and polychlorinated biphenyls.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"Indemnified Parties" has the meaning assigned thereto in Section 5.9.
"Knowledge" or "knowledge" means, with respect to the Company and/or
any Subsidiary thereof, the knowledge of any vice president, chief financial
officer, controller, and any officer superior to any of the foregoing and what
should have been known by any such Person after the conduct of a reasonable
investigation.
"Laws" means any administrative order, constitution, law, ordinance,
principle of common law, rule, regulation, statute, treaty, judgment, decree,
license or permit enacted, promulgated, issued, enforced or entered by any
Governmental Entity.
"Leased Properties" means all real property and interests in real
property leased by the Company or one of its Subsidiaries.
"Licenses" has the meaning assigned thereto in Section 3.14(c) hereof.
"Lien" means any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, lien, mortgage, pledge,
reservation, restriction, security interest, title retention or other security
arrangement, or any
55
adverse right or interest, charge or claim of any nature whatsoever of, on, or
with respect to, any asset, property or property interest.
"Material Adverse Change" or "Material Adverse Effect" means, when used
in connection with the Company or Parent, any change or effect (or any
development that, insofar as can reasonably be foreseen, is likely to result in
any change or effect) that is materially adverse to the business, properties,
assets, prospects, financial condition or results of operations of such party
and its Subsidiaries taken as a whole.
"Merger" has the meaning assigned thereto in Section 2.1.
"Merger Consideration" has the meaning assigned thereto in Section 2.4.
"Minimum Condition" has the meaning assigned thereto in Annex A.
"Occurrence" means any accident, happening or event which is caused or
allegedly caused by any alleged hazard or alleged defect in manufacture, design,
materials or workmanship including, without limitation, any alleged failure to
warn or any breach of express or implied warranties or representations with
respect to, or any such accident, happening or event otherwise involving, a
product (including any parts or components) which results or is alleged to have
resulted in injury or death to any person or damage to or destruction of
property, or other consequential damages, at any time.
"Offer" has the meaning assigned thereto in Section 1.1.
"Offer Documents" has the meaning assigned thereto in Section 1.3.
"Offer Price" has the meaning assigned thereto in Section 1.1.
"Offer to Purchase" has the meaning assigned thereto in Section 1.1.
"Option Plans" has the meaning assigned thereto in Section 2.7.
"Option" has the meaning assigned thereto in Section 2.7.
"Other Intellectual Property" shall mean all intellectual property
rights used in the business of the Company or any of its Subsidiaries as
currently conducted, including but not limited to all patents and patent
applications; copyrights, copyright
56
registrations and applications (including copyrights in Computer Programs);
Computer Programs; technology, trade secrets, know-how, confidential
information, proprietary processes and formulae; "semiconductor chip product"
and "mask works" (as such terms are defined in 17 U.S.C. 901); and rights of
publicity and privacy relating to the use of the names, signatures, likenesses,
voices and biographical information of real persons; together with any and all
rights of renewal thereof and the right to ▇▇▇ for past, present or future
infringements or misappropriations thereof.
"Paying Agent" has the meaning assigned thereto in Section 2.5(a).
"Parent" means The ▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇ Corporation, a Delaware
corporation.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permit" means any Federal, state, local and foreign governmental
approval, authorization, certificate, filing, franchise, license, notice, permit
or right.
"Person" means an individual, corporation, partnership, joint venture,
association, joint stock company, limited liability company, labor union,
estate, trust, unincorporated organization or other entity, including any
Governmental Entity.
"Preferred Shares" has the meaning assigned thereto in Section 3.3.
"Product" means any product designed, manufactured, shipped, sold,
marketed, distributed and/or otherwise introduced into the stream of commerce by
or on behalf of the Company or any of its past or present Subsidiaries.
"Proxy Statement" has the meaning assigned thereto in Section 5.3.
"Purchaser" means DKM Acquisition Corp., a Delaware corporation.
"Real Property" means the Leased Properties and the Fee Properties.
"Recalls" has the meaning assigned thereto in Section 3.18
"Release" means any release, spill, emission, discharge, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment (including, without limitation,
ambient air, surface
57
water, groundwater, and surface or subsurface strata) or into or out of any
property of any Hazardous Material, including the movement of Hazardous
Materials through or in the air, soil, surface water, groundwater or property.
"Representative" means, with respect to any Person, such Person's
officers, directors, employees, agents and representatives (including any
investment banker, financial advisor, accountant, legal counsel, agent,
representative or expert retained by or acting on behalf of such Person or its
Subsidiaries).
"Schedule 14D-1" has the meaning assigned thereto in Section 1.3.
"Schedule 14D-9" has the meaning assigned thereto in Section 1.3.
"SEC" means the United States Securities and Exchange Commission or any
successor agency.
"SEC Documents" means reports, proxy statements, forms, and other
documents required to be filed with the SEC under the Securities Act and the
Exchange Act.
"Secretary of State" has the meaning assigned thereto in Section 2.2.
"Section 203 Approval" has the meaning assigned thereto in Section 1.2.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" has the meaning assigned thereto in the recitals.
"Significant Subsidiaries" has the meaning assigned thereto in Rule
1-02 of Regulation S-X of the SEC.
"Special Meeting" has the meaning assigned thereto in Section 5.3.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, joint venture or other entity, whether incorporated or
unincorporated, of which such Person or any other Subsidiary of such Person (i)
owns, directly or indirectly, 50% or more of the outstanding voting securities
or equity interests, (ii) is entitled to elect at least a majority of the Board
of Directors or similar governing body or (iii) is a
58
general partner (excluding such partnerships where such Person or any Subsidiary
of such Person do not have a majority of the voting interests in such
partnership).
"Superior Proposal" means an unsolicited bona fide proposal by a Third
Party to acquire, directly or indirectly, for consideration consisting of cash
and/or securities, more than a majority of the Shares then outstanding or all or
substantially all of the assets of the Company or to acquire, directly or
indirectly, the Company by merger or consolidation, and otherwise on terms which
the Board of Directors of the Company determines in good faith to be more
favorable to the Company's stockholders (taking into account the time period
reasonably believed necessary to consummate such transaction) than the Offer and
the Merger (based on advice of the Company's independent financial advisor that
the value of the consideration provided for in such proposal is superior to the
value of the consideration provided for in the Offer and the Merger), for which
financing, to the extent required, is then committed and which, in the good
faith reasonable judgment of the Board of Directors of the Company, is
reasonably likely to be consummated.
"Surviving Corporation" has the meaning assigned thereto in Section
2.1.
"Takeover Proposal" means any bona fide proposal or offer, whether in
writing or otherwise, from any Person other than Parent, Purchaser or any
affiliates thereof (a "Third Party") to acquire beneficial ownership (as
determined pursuant to Rule 13d-3 promulgated under the Exchange Act) of all or
a material portion of the assets of the Company or any of its Subsidiaries or
20% or more of any class of equity securities of the Company or any of its
Subsidiaries pursuant to a merger, consolidation or other business combination,
sale of shares of capital stock, sale of assets, tender offer, exchange offer or
similar transaction with respect to either the Company or any of its
Subsidiaries, including any single or multi-step transaction or series of
related transactions, which is structured to permit such Third Party to acquire
beneficial ownership of any material portion of the assets of or 20% or more of
the equity interest in either the Company or any of its Subsidiaries.
"Tax" or "Taxes" mean all taxes, charges, fees, levies, penalties or
other assessments imposed by any federal, state, local or foreign Taxing
Authority including but not limited to net income, gross income, receipts,
windfall profit, severance, property, production, sales, use, license, excise,
franchise, employment, payroll, withholding, alternative or add-on minimum, ad
valorem, transfer, stamp or environmental tax, or any other tax, custom, duty,
governmental fee or other like
59
assessment or charge of any kind whatsoever, together with any interest or
penalty, addition to tax or additional amount imposed by any Governmental
Entity.
"Taxing Authority" shall mean a governmental authority or any
subdivision, agency, commission or authority thereof, any judicial body, or any
quasi-governmental or private body having jurisdiction over the assessment,
determination, collection or imposition of any Tax (including, without
limitation, the Internal Revenue Service).
"Tax Returns" mean all returns, reports or statements required to be
filed with any Governmental Entity with respect to any Tax (including any
attachments thereto), including, without limitation, any consolidated, unitary
or similar return, information return, claim for refund, amended return or
declaration of estimated Tax.
"Termination Fee" has the meaning assigned thereto in Section 8.1(b).
"Third Party" has the meaning assigned thereto in this Section 8.15
under "Takeover Proposal."
"Trademarks" shall mean all United States and foreign trademarks
(including service marks and trade names, whether registered or at common law),
registrations and applications therefor, owned or licensed by the Company or its
Subsidiaries, and the goodwill of the Company's and each of its Subsidiaries'
respective businesses associated therewith, together with any and all (i) rights
of renewal thereof and (ii) rights to ▇▇▇ for past, present and future
infringements or misappropriation thereof.
"Transactions" has the meaning assigned thereto in Section 1.2(a).
"Transfer Taxes" has the meaning assigned thereto in Section 5.7.
60
IN WITNESS WHEREOF, Parent, Purchaser and the Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
THE ▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Chief Executive
Officer
DKM ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Chief Executive
Officer
OPTEK TECHNOLOGY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman and Chief Executive
Officer
ANNEX A
-------
CONDITIONS TO THE OFFER
Capitalized terms used but not defined herein shall have the meanings
set forth in the Agreement and Plan of Merger of which this Annex A is a part.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Purchaser's obligation to pay for or return tendered Shares promptly after
termination or withdrawal of the Offer), pay for, and may delay the acceptance
for payment of or, subject to the restriction referred to above, the payment
for, any tendered Shares, and may amend the Offer consistent with the terms of
the Merger Agreement or terminate the Offer and not accept for payment any
tendered Shares, if (i) there shall not have been validly tendered and not
withdrawn prior to the expiration of the Offer such number of Shares which, when
added to the Shares, if any, beneficially owned by Parent or Purchaser, would
constitute at least a majority of the Shares outstanding on a fully diluted
basis (the "Minimum Condition"), (ii) any applicable waiting period under the
HSR Act has not expired or been terminated or any material consent required from
a foreign Governmental Entity has not been obtained, or (iii) at any time on or
after the date of the Merger Agreement and prior to the expiration of the Offer,
any of the following events shall occur:
(a) there shall be threatened by a Governmental Entity or
pending any suit, action or proceeding (i) seeking to prohibit or impose any
material limitations on Parent's or Purchaser's ownership or operation (or that
of any of their respective Subsidiaries or Affiliates) of all or a material
portion of their or the Company's businesses or assets, (ii) seeking to compel
Parent or Purchaser or their respective Subsidiaries and Affiliates to dispose
of or hold separate any material portion of the business or assets of the
Company or Parent and their respective Subsidiaries, in each case taken as a
whole, (iii) challenging the acquisition by Parent or Purchaser of any Shares
pursuant to the Offer or the Company Option Agreement, (iv) seeking to restrain
or prohibit the making or consummation of the Offer or the Merger or the
performance of any of the other Transactions, (v) seeking to obtain from the
Company any damages that would be reasonably likely to have a Material Adverse
Effect on the Company, (vi) seeking to impose material limitations on the
ability of Purchaser, or rendering Purchaser unable, to accept for payment, pay
for or purchase some or all of the Shares pursuant to the Offer and the Merger,
(vii) seeking
A-1
to impose material limitations on the ability of Purchaser or Parent effectively
to exercise full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by it on all matters properly
presented to the Company's stockholders, or (viii) which otherwise is reasonably
likely to have a Material Adverse Effect on the Company or, as a result of the
Transactions, Parent and its Subsidiaries; or
(b) there shall be any statute, rule, regulation, judgment, order
or injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, or any other action shall be taken by any Governmental
Entity, other than the application to the Offer or the Merger of applicable
waiting periods under the HSR Act, that is reasonably likely to result, directly
or indirectly, in any of the consequences referred to in clauses (i) through
(viii) of paragraph (a) above; or
(c) there shall have occurred (1) any general suspension of
trading in, or limitation on prices for, securities on the Nasdaq National
Market System, for a period in excess of three hours (excluding suspensions or
limitations resulting solely from physical damage or interference with such
exchanges not related to market conditions), (2) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States (whether or not mandatory), (3) the commencement of a war, armed
hostilities or other international or national calamity directly or indirectly
involving the United States, (4) any limitation or proposed limitation (whether
or not mandatory) by any United States governmental authority or agency that has
a material adverse effect generally on the extension of credit by banks or other
financial institutions, (5) any change in general financial bank or capital
market conditions which has a material adverse effect the ability of financial
institutions in the United States to extend credit or syndicate loans, (6) any
decline in either the Dow ▇▇▇▇▇ Industrial Average or the Standard & Poor's
Index of 500 Industrial Companies by an amount in excess of 20% measured from
the close of business on the date of this Agreement or (7) in the case of any of
the situations in clauses (1) through (6) inclusive, existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof; or
(d) the representations and warranties of the Company set
forth in the Merger Agreement shall not be true and accurate as of any date up
to and including the date of consummation of the Offer as though made on or as
of such date (except for those representations and warranties that address
matters only as of a particular date or only with respect to a specific period
of time which need only be true and accurate as of such date or with respect to
such period) or the Company shall
A-2
have breached or failed to perform or comply with any obligation, agreement or
covenant required by the Merger Agreement to be performed or complied with by it
except, in each case where the failure of such representations and warranties to
be true and accurate (without giving effect to any limitation as to "knowledge,"
"materiality" or "material adverse effect" set forth therein), or the failure
to perform or comply with such obligations, agreements or covenants, do not,
individually or in the aggregate, have a Material Adverse Effect on the Company
or a materially adverse effect on the ability to consummate the Offer or the
Merger; or
(e) there shall have occurred any events or changes which have
had or which are reasonably likely to have or constitute, individually or in the
aggregate, a Material Adverse Effect on the Company; or
(f) the Company's Board of Directors (i) shall have withdrawn, or
modified or changed in a manner adverse to Parent or Purchaser (including by
amendment of the Schedule 14D-9) its recommendation of the Offer, the Merger
Agreement, or the Merger, (ii) shall have recommended a Takeover Proposal, (iii)
shall have adopted any resolution to effect any of the foregoing or (iv) upon
request of Purchaser, shall fail to reaffirm its approval or recommendation of
the Offer, the Merger Agreement, or the Merger; or
(g) any Person or "group" (within the meaning of Section 13(d)(3)
of the Exchange Act), other than Parent, Purchaser or their affiliates or any
group of which any of them is a member, shall have acquired or announced its
intention to acquire beneficial ownership (as determined pursuant to Rule 13d-3
promulgated under the Exchange Act) of 20% or more of the Shares; or
(h) the Company shall have breached or failed to perform any of
its agreements under the Company Option Agreement or breached any of its
representations and warranties in such agreement or such agreement shall not be
valid, binding and enforceable, except for such breaches or failures or failures
to be valid, binding and enforceable that do not materially and adversely affect
the benefits expected to be received by Parent and Purchaser under the Merger
Agreement or the Company Option Agreement; or
(i) the Merger Agreement shall have been terminated in accordance
with its terms;
A-3
which, in the sole judgment of Parent or Purchaser, in any such case, and
regardless of the circumstances (including any action or inaction by Parent or
Purchaser) giving rise to such condition, makes it inadvisable to proceed with
the Offer and/or with such acceptance for payment of or payments for Shares.
The foregoing conditions are for the sole benefit of Parent and
Purchaser and may be waived by Parent or Purchaser, in whole or in part, at any
time and from time to time, in the sole discretion of Parent or Purchaser. The
failure by Parent or Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
A-4