EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
By and Among
Acxiom Corporation,
ACX Acquisition Co., Inc.
and
May & ▇▇▇▇, Inc.
Dated as of May 26, 1998
TABLE OF CONTENTS
-----------------
ARTICLE I
THE MERGER.................................................................... 3
Section 1.1 The Merger...................................................... 3
Section 1.2 Effective Time of the Merger.................................... 3
ARTICLE II
THE SURVIVING CORPORATION..................................................... 4
Section 2.1 Certificate of Incorporation.................................... 4
Section 2.2 By-Laws......................................................... 4
Section 2.3 Directors and Officers of Surviving Corporation................. 4
ARTICLE III
CONVERSION OF SHARES.......................................................... 5
Section 3.1 Exchange Ratio.................................................. 5
Section 3.2 Exchange of Shares.............................................. 6
Section 3.3 Dividends; Transfer Taxes....................................... 6
Section 3.4 No Fractional Securities........................................ 7
Section 3.5 Certain Adjustments............................................. 8
Section 3.6 Closing of Company Transfer Books............................... 8
Section 3.7 Closing......................................................... 9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT...................................... 9
Section 4.1 Organization.................................................... 9
Section 4.2 Capitalization.................................................. 10
Section 4.3 Subsidiaries.................................................... 11
Section 4.4 Authority Relative to this Agreement............................ 12
Section 4.5 Consents and Approvals; No Violations........................... 13
Section 4.6 Reports and Financial Statements................................ 14
Section 4.7 Absence of Certain Changes or Events............................ 15
Section 4.8 Litigation...................................................... 15
Section 4.9 Patents, Trademarks, Etc........................................ 16
Section 4.10 Information in Disclosure Documents and Registration Statement.. 16
Section 4.11 Absence of Undisclosed Liabilities.............................. 17
Section 4.12 No Default...................................................... 18
Section 4.13 Title to Properties; Encumbrances............................... 18
Section 4.14 Compliance with Applicable Law.................................. 19
Section 4.15 Labor Matters................................................... 19
Section 4.16 Employee Benefit Plans; ERISA................................... 20
Section 4.17 Vote Required................................................... 24
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Section 4.18 Opinion of Financial Advisor.................................... 25
Section 4.19 Ownership of Company Common Stock............................... 25
Section 4.20 Pooling......................................................... 25
Section 4.21 ................................................................ 25
Section 4.22 Contracts....................................................... 28
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY................................... 29
Section 5.1 Organization.................................................... 29
Section 5.2 Capitalization.................................................. 30
Section 5.3 Subsidiaries.................................................... 31
Section 5.4 Authority Relative to this Agreement............................ 32
Section 5.5 Consents and Approvals; No Violations........................... 33
Section 5.6 Reports and Financial Statements................................ 34
Section 5.7 Absence of Certain Changes or Events............................ 35
Section 5.8 Litigation...................................................... 35
Section 5.9 Patents, Trademarks, Etc........................................ 36
Section 5.10 Information in Disclosure Documents and Registration Statement.. 36
Section 5.11 Absence of Undisclosed Liabilities.............................. 37
Section 5.12 No Default...................................................... 37
Section 5.13 Taxes........................................................... 38
Section 5.14 Title to Properties; Encumbrances............................... 40
Section 5.15 Compliance with Applicable Law.................................. 41
Section 5.16 Labor Matters................................................... 41
Section 5.17 Employee Benefit Plans; ERISA................................... 41
Section 5.18 Contracts....................................................... 46
Section 5.19 Vote Required................................................... 47
Section 5.20 Opinion of Financial Advisor.................................... 47
Section 5.21 Takeover Statute................................................ 48
Section 5.22 The Company Rights Agreement.................................... 48
Section 5.23 Ownership of Parent Common Stock................................ 49
Section 5.24 Pooling......................................................... 49
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER.......................................... 49
Section 6.1 Conduct of Business by the Company Pending the Merger........... 49
Section 6.2 Conduct of Business by Parent Pending the Merger................ 52
Section 6.3 Conduct of Business of Sub...................................... 54
ARTICLE VII
ADDITIONAL AGREEMENTS........................................................... 54
Section 7.1 Access and Information.......................................... 54
Section 7.2 Acquisition Proposals........................................... 55
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Section 7.3 Registration Statement.......................................... 57
Section 7.4 Proxy Statements; Stockholder Approvals......................... 58
Section 7.5 Affiliate Agreements............................................ 60
Section 7.6 Antitrust Laws.................................................. 61
Section 7.7 Proxies......................................................... 61
Section 7.8 Employees, Employee Benefits.................................... 62
Section 7.9 Stock Options................................................... 63
Section 7.10 Public Announcements............................................ 65
Section 7.11 By-Law Indemnification and Insurance........................... 65
Section 7.12 Expenses........................................................ 66
Section 7.13 Additional Agreements........................................... 68
Section 7.14 Control of the Company's and Parent's Operations................ 68
Section 7.15 Company Rights Plan............................................. 69
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER........................................ 69
Section 8.1 Conditions to Each Party's Obligation to Effect the Merger...... 69
Section 8.2 Conditions to Obligation of the Company to Effect the Merger.... 70
Section 8.3 Conditions to Obligations of Parent and Sub to Effect the Merger 71
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER............................................... 72
Section 9.1 Termination..................................................... 72
Section 9.2 Effect of Termination........................................... 75
Section 9.3 Amendment....................................................... 75
Section 9.4 Waiver.......................................................... 76
ARTICLE X
GENERAL PROVISIONS.............................................................. 76
Section 10.1 Survival of Representations, Warranties and Agreements.......... 76
Section 10.2 Brokers......................................................... 77
Section 10.3 Notices......................................................... 77
Section 10.4 Descriptive Headings............................................ 78
Section 10.5 Entire Agreement; Assignment.................................... 78
Section 10.6 Governing Law................................................... 79
Section 10.7 Specific Performance............................................ 79
Section 10.8 Counterparts.................................................... 79
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Exhibit A-1 Irrevocable Proxy
Exhibit A-2 Irrevocable Proxy
Exhibit A-3 Irrevocable Proxy
Exhibit B Form of Company Rights Plan Amendment
Exhibit C Form of Affiliate Letter for Affiliates of the Company
Exhibit D Form of Affiliate Letter for Affiliates of Parent
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of May 26, 1998, by and among
Acxiom Corporation, a Delaware corporation ("Parent"), ACX Acquisition Co.,
Inc., a Delaware corporation and a wholly owned subsidiary of Parent ("Sub"),
and May & ▇▇▇▇, Inc., a Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of Parent and Sub and the Company
deem it advisable and in the best interests of their respective stockholders
that Parent combine with the Company, and such Boards of Directors have approved
the merger (the "Merger") of Sub with and into the Company upon the terms and
subject to the conditions set forth herein; and
WHEREAS, concurrently with the execution and delivery of this
Agreement, and as a condition and inducement to the Company's willingness to
enter into this Agreement, a holder of shares of Parent's common stock, par
value $.10 per share (the "Parent Common Stock") is granting the Company an
irrevocable proxy in the form attached hereto as Exhibit A-1 (the "Parent Stock
Proxy"), to vote such shares of Parent Common Stock; and
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to Parent's and Sub's willingness to
enter into this Agreement, certain holders of shares of the Company's Common
Stock, par value $.01 per share (the "Company Common Stock"), are granting
Parent irrevocable proxies, in the forms attached hereto as Exhibits A-2 and A-3
(the "Company Stock Proxies" and, together with the Parent Stock Proxy, the
"Proxies"), to vote such shares of Company Common Stock; and
WHEREAS, immediately following the execution and delivery of this
Agreement, the Company and Parent will enter into a stock option agreement (the
"Company Option Agreement"), pursuant to which the Company will grant Parent the
option to purchase shares of Company Common Stock, upon the terms and subject to
the conditions set forth therein; and
WHEREAS, immediately following the execution and delivery of this
Agreement, the Company and Parent will enter into a stock option agreement (the
"Parent Option Agreement"), pursuant to which Parent will grant the Company the
option to purchase shares of Parent Common Stock, upon the terms and subject to
the conditions set forth therein; and
WHEREAS, for U.S. federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code") and this Agreement is
hereby adopted as a plan of reorganization for purposes of Section 368 of the
Code; and
WHEREAS, for financial accounting purposes, it is intended that the
Merger shall be accounted for as a pooling of interests under United States
generally accepted accounting principles.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Proxies, the parties hereto agree as follows:
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ARTICLE I
THE MERGER
----------
Section 1.1 The Merger. Upon the terms and subject to the conditions
set forth herein, at the Effective Time (as defined in Section 1.2 hereof), Sub
shall be merged with and into the Company and the separate existence of Sub
shall thereupon cease, and the name of the Company, as the surviving corporation
in the Merger (the "Surviving Corporation"), shall by virtue of the Merger be
"May & ▇▇▇▇, Inc." The Merger shall have the effects set forth in Section 259 of
the General Corporation Law of the State of Delaware (the "GCL").
Section 1.2 Effective Time of the Merger. The Merger shall become
effective when a properly executed certificate of merger (the "Certificate of
Merger") is duly filed with the Secretary of State of the State of Delaware,
which filing shall be made as soon as practicable after the closing of the
transactions contemplated by this Agreement in accordance with Section 3.6
hereof. When used in this Agreement, the term "Effective Time" shall mean the
date and time at which the Certificate of Merger is so filed.
ARTICLE II
THE SURVIVING CORPORATION
-------------------------
Section 2.1 Certificate of Incorporation. The Certificate of
Incorporation of Sub in effect immediately prior to the Effective Time shall be
the Certificate of Incorporation of the Surviving Corporation (except that
Article I of the Certificate of Incorporation shall be amended as of the
Effective Time to read as follows "The name of the Corporation is May & ▇▇▇▇,
Inc.").
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Section 2.2 By-Laws. Subject to Section 7.11 hereof, the By-Laws of
Sub as in effect immediately prior to the Effective Time shall be the By-Laws of
the Surviving Corporation.
Section 2.3 Directors and Officers of Surviving Corporation. (a) The
directors of Sub immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation and shall hold office from the Effective
Time until their respective successors are duly elected or appointed and qualify
in the manner provided in the Certificate of Incorporation and By-Laws of the
Surviving Corporation or as otherwise provided by law.
(b) The officers of the Company immediately prior to the Effective
Time shall be the initial officers of the Surviving Corporation and shall hold
office from the Effective Time until their respective successors are duly
elected or appointed and qualify in the manner provided in the Certificate of
Incorporation and By-Laws of the Surviving Corporation, or as otherwise provided
by law.
ARTICLE III
CONVERSION OF SHARES
--------------------
Section 3.1 Exchange Ratio. At the Effective Time, by virtue of the
Merger and without any action on the part of the holders of any of the capital
stock of Sub or the Company:
(a) Each share of Company Common Stock (the "Shares") issued and
outstanding immediately prior to the Effective Time (other than Shares held by
Parent or any direct or indirect wholly owned subsidiary of Parent or Shares to
be cancelled pursuant to Section 3.1(b)) shall be converted into the right to
receive .80 (the "Exchange Ratio") of a validly issued, fully paid and non-
assessable share of common stock, par value $.10 per share, of Parent ("Parent
Shares"), payable
4
upon the surrender of the certificate formerly representing such Share. Holders
of Shares shall also have the right to receive together with each Parent Share
issued in the Merger, one associated preferred stock purchase right (a "Parent
Right") in accordance with the Rights Agreement dated as of January 28, 1998
(the "Parent Rights Agreement"), between Parent and First Chicago Trust Company
of New York. References herein to the Parent Shares issuable in the Merger shall
be deemed to include the associated Parent Rights.
(b) Each Share held in the treasury of the Company and each Share
held by Parent or any direct or indirect wholly owned subsidiary of Parent
immediately prior to the Effective Time shall be cancelled and retired and cease
to exist and no consideration shall be delivered in exchange therewith.
(c) Each share of Common Stock, par value $.01 per share, of Sub
issued and outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and non-assessable
share of common stock, par value $.01 per share, of the Surviving Corporation,
and the Surviving Corporation shall be a wholly owned subsidiary of Parent.
Section 3.2 Exchange of Shares. Parent shall authorize one or more
persons (reasonably satisfactory to the Company) to act as exchange agent
hereunder (the "Exchange Agent"). As soon as practicable after the Effective
Time, Parent shall make available, and each holder of Shares will be entitled to
receive, upon surrender to the Exchange Agent of one or more certificates
representing such Shares for cancellation, certificates representing the number
of Parent Shares into which such Shares are converted in the Merger. The Parent
Shares into which the Shares shall be converted in the Merger shall be deemed to
have been issued at the Effective Time.
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Section 3.3 Dividends; Transfer Taxes. No dividends that are declared
on Parent Shares will be paid to persons entitled to receive certificates
representing Parent Shares until such persons surrender their certificates
representing Shares. Upon such surrender, there shall be paid to the person in
whose name the certificates representing such Parent Shares shall be issued, any
dividends which shall have become payable with respect to such Parent Shares
between the Effective Time and the time of such surrender. In no event shall the
person entitled to receive such dividends be entitled to receive interest on
such dividends. If any certificates for any Parent Shares are to be issued in a
name other than that in which the certificate representing Shares surrendered in
exchange therefor is registered it shall be a condition of such exchange that
the person requesting such exchange shall pay to the Exchange Agent any transfer
or other taxes required by reason of the issuance of certificates for such
Parent Shares in a name other than that of the registered holder of the
certificate surrendered or shall establish to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable. Notwithstanding the
foregoing, neither the Exchange Agent nor any party hereto shall be liable to a
holder of Shares for any Parent Shares or dividends thereon or, in accordance
with Section 3.4 hereof, proceeds of the sale of fractional interests, delivered
to a public official pursuant to applicable escheat laws.
Section 3.4 No Fractional Securities. No certificates or scrip
representing fractional Parent Shares shall be issued upon the surrender for
exchange of certificates representing Shares pursuant to this Article III and no
dividend, stock split-up or other change in the capital structure of the Company
shall relate to any fractional security, and such fractional interests shall not
entitle the owner thereof to vote or to any rights of a security holder. In lieu
of any such fractional securities, each holder of Shares who would otherwise
have been entitled to a fraction of
6
a Parent Share upon surrender of stock certificates for exchange pursuant to
this Article III will be paid cash upon such surrender in an amount equal to the
product of such fraction multiplied by the closing sale price of Parent Shares
on the National Association of Securities Dealers Automated Quotations National
Market System (the "NASDAQ") on the day of the Effective Time, or, if the Parent
Shares are not so traded on such day, the closing sale price on the next
preceding day on which such stock was traded on the NASDAQ.
Section 3.5 Certain Adjustments. If between the date hereof and the
Effective Time, the outstanding shares of Parent Common Stock or of Company
Common Stock shall be changed into a different number of shares by reason or
reclassification, recapitalization, split-up, combination or exchange of shares,
or any dividend payable in stock or other securities shall be declared thereon
with a record date within such period, the Exchange Ratio shall be adjusted
accordingly to provide the holders of Company Common Stock, the same economic
effect as contemplated by this Agreement prior to such reclassification,
recapitalization, split-up, combination, exchange or dividend.
Section 3.6 Closing of Company Transfer Books. At the Effective Time,
the stock transfer books of the Company shall be closed and no transfer of
Shares shall thereafter be made. From and after the Effective Time, the holders
of the Shares issued and outstanding immediately prior to the Effective Time
shall cease to have any rights with respect to such Shares, except as otherwise
provided herein. If, after the Effective Time, certificates representing Shares
are presented to the Surviving Corporation, they shall be cancelled and
exchanged for certificates representing Parent Shares and cash in lieu of any
fractional shares in accordance with Section 3.4 hereof.
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Section 3.7 Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 a.m.,
local time, on the later of (a) the date of the stockholders' meetings referred
to in Section 7.4 hereof or (b) the day on which all of the conditions set forth
in Article VIII hereof are satisfied or waived, or at such other date, time and
place as Parent and the Company shall agree.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
----------------------------------------
Parent represents and warrants to the Company as follows:
Section 4.1 Organization. Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the corporate power to carry on its business as it is now being
conducted or presently proposed to be conducted. Parent is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities make such qualification necessary, except where
such failures to be so qualified would not in the aggregate have a material
adverse effect on the business, assets, liabilities, condition (financial or
otherwise) or results of operations of Parent and its subsidiaries, taken as a
whole (a "Parent Material Adverse Effect"). Sub is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Sub has not engaged in any business since the date of its incorporation.
Section 4.2 Capitalization. The authorized capital stock of Parent
consists of 200,000,000 shares of Common Stock, par value $.10 per share, and
1,000,000 shares of Preferred Stock, par value $.01 per share ("Parent Preferred
Stock"), of which 200,000 shares have been
8
designated as Participating Preferred Stock (the "Participating Preferred
Stock"). As of the date hereof, (i) 52,446,883 Parent Shares were issued and
outstanding and (ii) no shares of Parent Preferred Stock were issued and
outstanding. Except as set forth on Schedule 4.2 hereto, all of the issued and
outstanding Parent Shares are validly issued, fully paid and nonassessable and
free of preemptive rights. All of the Parent Shares issuable in exchange for
Shares at the Effective Time in accordance with this Agreement will be, when so
issued, duly authorized, validly issued, fully paid and nonassessable. The
authorized capital stock of Sub consists of 1,000 shares of Common Stock, par
value $.01 per share, 100 shares of which are validly issued and outstanding,
fully paid and nonassessable and are owned by Parent. Except as set forth in
Schedule 4.2 hereto, there are no outstanding options, warrants, subscriptions,
calls, rights, convertible securities or other agreements or commitments
obligating Parent to issue, transfer or sell any of its securities other than:
(i) rights to acquire shares of Participating Preferred Stock pursuant to the
Parent Rights Agreement, and (ii) options to receive or acquire 7,725,516 Parent
Shares pursuant to employee incentive or benefit plans, programs and
arrangements ("Parent Employee Stock Options") and (iii) the Parent Option
Agreement.
Section 4.3 Subsidiaries. Schedule 4.3 hereto sets forth each direct
or indirect interest owned by Parent in any other corporation, partnership,
joint venture or other business association or entity, foreign or domestic, of
which Parent or any of its other Parent Subsidiaries owns, directly or
indirectly, greater than fifty percent of the shares of capital stock or other
equity interests (including partnership interests) entitled to cast at least a
majority of the votes that may be cast by all shares or equity interests having
ordinary voting power for the election of directors or other governing body of
such entity (each such entity is hereinafter referred to as a "Parent
9
Subsidiary" and are hereinafter collectively referred to as the "Parent
Subsidiaries"). Each Parent Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each Parent Subsidiary is duly qualified as a foreign corporation
to do business, and is in good standing, in each jurisdiction where the
character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary except where the failure to be so
qualified will not have a Parent Material Adverse Effect. Each Parent Subsidiary
has the corporate power to carry on its business as it is now being conducted or
presently proposed to be conducted. All of the outstanding shares of capital
stock of the Parent Subsidiaries are validly issued, fully paid and
nonassessable. Except as set forth on Schedule 4.3, all of the outstanding
shares of capital stock of, or other ownership interests in, each of the Parent
Subsidiaries are owned by Parent or by a Parent Subsidiary free and clear of any
liens, claims, charges or encumbrances. There are not now, and at the Effective
Time there will not be, any outstanding options, warrants, subscriptions, calls,
rights, convertible securities or other agreements or commitments obligating
Parent or any Parent Subsidiary to issue, transfer or sell any securities of any
Parent Subsidiary. There are not now, and at the Effective Time there will not
be, any voting trusts or other agreements or understandings to which Parent or
any of the Parent Subsidiaries is a party or is bound with respect to the voting
of the capital stock of Parent or any of the Parent Subsidiaries.
Section 4.4 Authority Relative to this Agreement. Each of Parent and
Sub has the corporate power to enter into this Agreement, the Parent Option
Agreement and the Company Option Agreement, to carry out its obligations
hereunder and thereunder and to consummate the Merger. The execution and
delivery of this Agreement, the Parent Option Agreement and the Company
10
Option Agreement by Parent and Sub, the consummation by Parent and Sub of the
transactions contemplated hereby and thereby and the consummation of the Merger
have been duly authorized by the Boards of Directors of Parent and Sub, and by
the Disinterested Directors (pursuant to Article Tenth, Section (b) of Parent's
Certificate of Incorporation) and by Parent as the sole stockholder of Sub, and,
except for the approvals of Parent's stockholders to be sought at the
stockholders' meeting contemplated by Section 7.4(b) hereof no other corporate
proceedings on the part of Parent or Sub are necessary to authorize this
Agreement or the transactions contemplated hereby. This Agreement, the Parent
Option Agreement and the Company Option Agreement have been duly and validly
executed and delivered by each of Parent and Sub and, assuming the due
authorization, execution and delivery by the other party hereto and thereto,
this Agreement, the Parent Option Agreement and the Company Option Agreement
constitute valid and binding agreements of each of Parent and Sub, enforceable
against Parent and Sub in accordance with their respective terms, except insofar
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or principles governing the availability of equitable remedies.
Section 4.5 Consents and Approvals; No Violations. Except for
applicable requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"), the Securities Act of 1933, as amended (the "Securities
Act"), the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the
rules and regulations of NASDAQ, state securities or blue sky laws, and the
filing and recordation of a Certificate of Merger as required by the GCL, no
filing with, and no permit, authorization, consent or approval of, any public
body or authority is necessary for the consummation by Parent and Sub of the
transactions contemplated by this Agreement, the Parent
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Option Agreement and the Company Option Agreement. Except as set forth on
Schedule 4.5, neither the execution and delivery of this Agreement, the Parent
Option Agreement or the Company Option Agreement by Parent or Sub nor the
consummation by Parent or Sub of the transactions contemplated hereby or
thereby, nor compliance by Parent or Sub with any of the provisions hereof or
thereof will (a) conflict with or result in any breach of any provisions of the
Certificate of Incorporation or By-Laws of Parent or of Sub, (b) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, contract, agreement or other instrument or
obligation to which Parent or any of its subsidiaries is a party or by which any
of them or any of their properties or assets may be bound or (c) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to
Parent, any of its subsidiaries or any of their properties or assets, except in
the case of clauses (b) and (c) for violations, breaches or defaults which would
not individually or in the aggregate have a Parent Material Adverse Effect.
Section 4.6 Reports and Financial Statements. Parent has filed all
reports required to be filed with the Securities and Exchange Commission (the
"SEC") pursuant to the Exchange Act since March 31, 1996 (such reports together
with all registration statements, prospectuses and information statements filed
by the Company since March 31, 1996 being hereinafter collectively referred to
as the "Parent SEC Reports"), and has previously furnished the Company with true
and complete copies of all such Parent SEC Reports. None of such Parent SEC
Reports, as of their respective dates, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
12
circumstances under which they were made, not misleading. As of their respective
dates, all such Parent SEC Reports complied as to form in all material respects
with the applicable requirements of the Securities Act. Each of the balance
sheets (including the related notes) included in the Parent SEC Reports fairly
presents the consolidated financial position of Parent and its subsidiaries as
of the respective dates thereof, and the other related statements (including the
related notes) included therein fairly present the results of operations and the
changes in financial position of Parent and its subsidiaries for the respective
periods or as of the respective dates set forth therein (subject, where
appropriate, to normal year-end adjustments), all in conformity with generally
accepted accounting principles consistently applied during the periods involved
except as otherwise noted therein.
Section 4.7 Absence of Certain Changes or Events. Except as set forth
in the Parent SEC Reports, since December 31, 1997, neither Parent nor any of
the Parent Subsidiaries has: (a) suffered any change which had or would have a
Parent Material Adverse Effect or (b) subsequent to the date hereof, except as
permitted by Section 6.2 hereof, conducted its business and operations other
than in the ordinary course of business and consistent with past practices.
Section 4.8 Litigation. Except for litigation disclosed in the Parent
SEC Reports and except as set forth on Schedule 4.8, there is no suit, action or
proceeding pending or, to the knowledge of Parent, threatened against or
affecting Parent or any of its subsidiaries, the outcome of which, is reasonably
likely to have a Parent Material Adverse Effect; nor is there any judgment,
decree, injunction, rule or order of any court, governmental department,
commission, agency, instrumentality or arbitrator outstanding against Parent or
any of the Parent Subsidiaries having, or which has or would have, a Parent
Material Adverse Effect.
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Section 4.9 Patents, Trademarks, Etc. Except as set forth on Schedule
4.9, to the knowledge of Parent, Parent and the Parent Subsidiaries own or
possess adequate licenses or other valid rights to use all material patents,
patent rights, trademarks, trademark rights, trade names, trade name rights,
copyrights, service marks, licenses, trade secrets, applications for trademarks
and for service marks, computer software, software programs, know-how and other
proprietary rights and information (collectively,"Proprietary Rights") used or
held for use in connection with the business of Parent and the Parent
Subsidiaries as currently conducted or as contemplated to be conducted, free and
clear of any liens, claims or encumbrances. Except as set forth on Schedule 4.9
hereto, to the knowledge of Parent, the conduct of the business of Parent and
the Parent Subsidiaries as currently conducted does not conflict in any way with
any Proprietary Right of any third party. Except as set forth in Schedule 4.9
hereto, to the knowledge of Parent there are no infringements of any of the
Proprietary Rights owned by or licensed to Parent or any of the Parent
Subsidiaries.
Section 4.10 Information in Disclosure Documents and Registration
Statement. None of the information to be supplied by Parent or Sub for inclusion
in (a) the Registration Statement to be filed with the SEC by Parent on Form S-4
under the Securities Act for the purpose of registering the Parent Shares to be
issued in the Merger (the "Registration Statement") and (b) the joint proxy
statement to be distributed in connection with the Parent's and the Company's
meeting of stockholders to vote upon this Agreement (the "Proxy Statement") will
in the case of the Registration Statement, at the time it becomes effective and
at the Effective Time, or, in the case of the Proxy Statement or any amendments
thereof or supplements thereto, at the time of the mailing of the Proxy
Statement and any amendments or supplements thereto, and at the time of the
meeting of stockholders to be held in connection with the Merger, contain any
untrue statement of a material
14
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Registration Statement will
comply as to form in all material respects with the provisions of the Securities
Act, and the rules and regulations promulgated thereunder.
Section 4.11 Absence of Undisclosed Liabilities
Other than obligations incurred in the ordinary course of business,
neither Parent nor any of the Parent Subsidiaries has any liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise, and
there is no existing condition, situation or set of circumstances which would
reasonably be expected to result in such a liability or obligation which would
be required to be disclosed on a consolidated balance sheet under GAAP, except
(a) liabilities or obligations reflected in the Parent SEC Reports and (b)
liabilities or obligations which would not, individually or in the aggregate,
have a Parent Material Adverse Effect.
Section 4.12 No Default. Neither Parent nor any of the Parent
Subsidiaries is in default or violation (and no event has occurred which with
notice or the lapse of time or both would constitute a default or violation) of
any term, condition or provision of (a) its Certificate of Incorporation or By-
Laws, (b) any note, bond, mortgage, indenture, license, agreement, contract,
lease, commitment or other obligation to which Parent or any of the Parent
Subsidiaries is a party or by which they or any of their properties or assets
may be bound, or (c) any order, writ, injunction, decree, statute, rule or
regulation applicable to Parent or any of the Parent Subsidiaries, except in the
case of clauses (b) and (c) above for defaults or violations which would not
have a Parent Material Adverse Effect.
15
Section 4.13 Title to Properties; Encumbrances.
---------------------------------
Except as described in the following sentence, each of Parent and the
Parent Subsidiaries has good and valid and marketable title to, or a valid
leasehold interest in, all of its properties and assets (real, personal and
mixed, tangible and intangible) material to the operation of Parent's business
and operations, including, without limitation, all such properties and assets
reflected in the consolidated balance sheet of Parent and the Parent
Subsidiaries as of December 31, 1997 included in Parent's Quarterly Report on
Form l0-Q for the period ended on such date (except for properties and assets
disposed of in the ordinary course of business and consistent with past
practices since December 31, 1997). None of such properties or assets are
subject to any liability, obligation, claim, lien, mortgage, pledge, security
interest, conditional sale agreement, charge or encumbrance of any kind (whether
absolute, accrued, contingent or otherwise), except (i) as set forth in the
Parent SEC Reports, and (ii) such encumbrances that do not individually or in
the aggregate have a Parent Material Adverse Effect.
Section 4.14 Compliance with Applicable Law. Each of Parent and the
Parent Subsidiaries is in compliance with all applicable laws (whether statutory
or otherwise), rules, regulations, orders, ordinances, judgments or decrees of
all governmental authorities (federal, state, local, foreign or otherwise)
(collectively "Laws") except where the failure to be in such compliance would
not, individually or in the aggregate, have a Parent Material Adverse Effect.
Section 4.15 Labor Matters. Except as set forth in Schedule 4.15
hereto, neither Parent nor any of the Parent Subsidiaries is a party to, or
bound by, any collective bargaining agreement, contract or other agreement or
understanding with a labor union or labor organization. There is no unfair
labor practice or labor arbitration proceeding pending or, to the knowledge of
16
Parent, threatened against Parent or the Parent Subsidiaries relating to their
business, except for any such preceding which would not have a Parent Material
Adverse Effect. To the knowledge of Parent, there are no organizational efforts
with respect to the formation of a collective bargaining unit presently being
made or threatened involving employees of Parent or any of the Parent
Subsidiaries.
Section 4.16 Employee Benefit Plans; ERISA. (a) Schedule 4.16
hereto contains a true and complete list of each bonus, deferred compensation,
incentive compensation, stock purchase, stock option, severance or termination
pay, hospitalization or other medical, life or other insurance, supplemental
unemployment benefits, profit-sharing, pension, or retirement plan, program,
agreement or arrangement, and each other employee benefit plan, program,
agreement or arrangement (the "Parent Plans"), maintained or contributed to or
required to be contributed to by (i) Parent, (ii) any Parent Subsidiary or (iii)
any trade or business, whether or not incorporated (an "ERISA Affiliate"), that
together with Parent would be deemed a "single employer" 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"), for the benefit
of any employee or former employee of Parent, any Parent Subsidiary or any ERISA
Affiliate. Schedule 4.16 hereto identifies each of the Parent Plans that is an
"employee benefit plan," as that term is defined in Section 3(3) of ERISA (such
plans being hereinafter referred to collectively as the "Parent ERISA Plans").
(b) With respect to each of the Parent Plans, Parent has heretofore
made available to the Company true and complete copies of each of the following
documents:
(i) a copy of the Parent Plan (including all amendments thereto);
17
(ii) a copy of the annual report and actuarial report, if
required under ERISA, with respect to each such Parent Plan for the last
two years;
(iii) a copy of the most recent Summary Plan Description,
together with each Summary of Material Modifications, required under ERISA
with respect to such Parent Plan;
(iv) if the Parent Plan is funded through a trust or any third
party funding vehicle, a copy of the trust or other funding agreement
(including all amendments thereto) and the latest financial statements
thereof; and
(v) the most recent determination letter received from the
Internal Revenue Service with respect to each Parent Plan intended to
qualify under Section 401 of the Code.
(c) No liability under Title IV of ERISA has been incurred by Parent,
any Parent Subsidiary 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 Parent, any Parent Subsidiary or any ERISA Affiliate of
incurring a liability under such Title. To the extent this representation
applies to Sections 4064, 4069 or 4204 of Title IV of ERISA, it is made not only
with respect to the ERISA Plans but also with respect to any employee benefit
plan, program, agreement or arrangement subject to Title IV of ERISA to which
Parent, a Parent Subsidiary or an ERISA Affiliate made, or was required to make,
contributions during the five-year period ending on the Effective Time.
(d) With respect to each Parent ERISA Plan which is subject to Title
IV of ERISA, the present value of accrued benefits under such plan, based upon
the actuarial assumptions used for funding purposes in the most recent actuarial
report prepared by such plan's actuary with
18
respect to such plan did not exceed, as of its latest valuation date, the then
current value of the assets of such plan allocable to such accrued benefits.
(e) No Parent ERISA Plan or any trust established thereunder has
incurred any "accumulated funding deficiency" (as defined in Section 302 of
ERISA and Section 412 of the Code), whether or not waived, as of the last day of
the most recent fiscal year of each Parent ERISA Plan ended prior to the
Effective Time; and all contributions required to be made with respect thereto
(whether pursuant to the term of any Parent ERISA Plan or otherwise) on or prior
to the Effective Time have been timely made.
(f) No Parent ERISA Plan is a "multiemployer pension plan," as
defined in Section 3(37) of ERISA, nor is any Parent ERISA Plan a plan described
in Section 4063(a) of ERISA.
(g) Each Parent ERISA Plan 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.
(h) Each of the Parent Plans has been operated and administered in
all material respects in accordance with applicable laws, including, but not
limited to, ERISA and the Code.
(i) No amounts payable under the Parent Plans will fail to be
deductible for federal income tax purposes by virtue of Section 280G of the
Code.
(j) No Parent Plan provides benefits, including without limitation
death or medical benefits (whether or not insured), with respect to current or
former employees of Parent, any Parent Subsidiary or any ERISA Affiliate beyond
their retirement or other termination of service, other than (i) coverage
mandated by applicable law, (ii) death benefits or retirement benefits under
19
any "employee pension plan", as that term is defined in Section 3(2) of ERISA,
(iii) deferred compensation benefits accrued as liabilities on the books of
Parent, any Parent Subsidiary or any ERISA Affiliate or (iv) benefits the full
cost of which is borne by the current or former employee (or his beneficiary).
(k) The consummation of the transactions contemplated by this
Agreement will not:
(i) entitle any current or former employee or officer of Parent,
any Parent Subsidiary or any ERISA Affiliate to severance pay, unemployment
compensation or any other payment, except as expressly provided in this
Agreement,
(ii) accelerate the time of payment or vesting, or increase the
amount of compensation due any such employee or officer, or
(iii) result in any prohibited transaction described in Section
406 of ERISA or Section 4975 of the Code for which an exemption is not
available.
(l) With respect to each Parent Plan that is funded wholly or
partially through an insurance policy, there will be no material liability of
Parent, any Parent Subsidiary or any ERISA Affiliate, as of the Effective Time,
under any such insurance policy or ancillary agreement with respect to such
insurance policy in the nature of a retroactive rate adjustment, loss sharing
arrangement or other actual or contingent liability arising wholly or partially
out of events occurring prior to the closing.
(m) There are no pending, threatened or anticipated claims by or on
behalf of any of the Parent Plans, by any employee or beneficiary covered under
any such Parent Plan, or otherwise involving any such Parent Plan (other than
routine claims for benefits).
20
(n) Neither Parent, any Parent Subsidiary or any ERISA Affiliate, nor
any of the Parent ERISA Plans, nor any trust created thereunder, nor any trustee
or administrator thereof has engaged in a transaction in connection with which
Parent, any Parent Subsidiary or any ERISA Affiliate, any of the Parent ERISA
Plans, any such trust, or any trustee or administrator thereof, or any party
dealing with the Parent ERISA Plans or any such trust could be subject to either
a material civil liability under Section 409 of ERISA or Section 502(i) of
ERISA, or a material tax imposed pursuant to Section 4975 or 4976 of the Code.
Section 4.17 Vote Required. Approval of the Merger by the
stockholders of Parent will require the approval of a majority of the total
votes cast in person or by proxy at the stockholders' meeting referred to in
Section 7.4. No other vote of the stockholders of Parent, or of the holders of
any other securities of Parent (equity or otherwise), is required by law, the
Certificate of Incorporation or By-laws of Parent or otherwise in order for
Parent to consummate the Merger, the Parent Option Agreement and the
transactions contemplated hereby and thereby.
Section 4.18 Opinion of Financial Advisor. The Board of Directors of
Parent (at a meeting duly called and held) has unanimously determined that the
transactions contemplated hereby are fair to and in the best interests of the
holders of the Parent Shares. Parent has received the opinion of ▇▇▇▇▇▇▇▇ Inc.,
Parent's financial advisor, substantially to the effect that the Exchange Ratio
is fair to Parent from a financial point of view.
Section 4.19 Ownership of Company Common Stock. Except as
contemplated by this Agreement, the Proxies and the Company Option Agreement, as
of the date hereof, neither Parent nor, to its knowledge without independent
investigation, any of its affiliates, (i) beneficially owns (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, or (ii) is party to any
21
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of, in each case, shares of capital stock of the Company.
Section 4.20 Pooling. Neither Parent nor any Parent Subsidiary has
knowledge of any fact or information which causes, or should reasonably cause,
Parent or Subsidiary to believe that the transactions contemplated by this
Agreement could not be accounted for as a pooling of interests under Opinion 16
of the Accounting Principles Board and applicable SEC rules and regulations.
Section 4.21 Taxes. (a) All federal, state, local and foreign Tax
Returns required to be filed by or on behalf of Parent, each of the Parent
Subsidiaries, and each affiliated, combined, consolidated or unitary group of
which Parent or any of its Subsidiaries (i) is a member (a "Current Parent
Group") or (ii) has been a member within six years prior to the date hereof but
is not currently a member, but only insofar as any such Tax Return relates to a
taxable period ending on a date within the last six years (a "Past Parent
Group," together with Current Parent Groups, a "Parent Affiliated Group") have
been timely filed, and all such Tax Returns are complete and accurate except to
the extent any failure to file or any inaccuracies in filed returns would not,
individually or in the aggregate, have a Parent Material Adverse Effect (it
being understood that the representations made in this Section, to the extent
that they relate to Past Parent Groups, are made to the knowledge of Parent).
All Taxes due and owing by Parent, any Parent Subsidiary or any Parent
Affiliated Group have been timely paid, or adequately reserved for, except to
the extent any failure to pay or reserve would not, individually or in the
aggregate, have a Parent Material Adverse Effect. There is no audit
examination, deficiency, refund litigation, proposed adjustment or matter in
controversy with respect to any Taxes due and owing by Parent, any Parent
Subsidiary or any Affiliated Group which would,
22
individually or in the aggregate, have a Parent Material Adverse Effect. All
assessments for Taxes due and owing by Parent, any Parent Subsidiary or any
Parent Affiliated Group with respect to completed and settled examinations or
concluded litigation have been paid. Prior to the date of this Agreement, Parent
has provided the Company with written schedules of (i) the taxable years of
Parent for which the statutes of limitations with respect to U.S. federal income
Taxes have not expired, and (ii) with respect to U.S. federal income Taxes, for
all taxable years for which the statute of limitations has not yet expired,
those years for which examinations have been completed, those years for which
examinations are presently being conducted, and those years for which
examinations have not yet been initiated. Parent and each of the Parent
Subsidiaries have complied in all material respects with all rules and
regulations relating to the payment and withholding of Taxes, except to the
extent any such failure to comply would not, individually or in the aggregate,
have a Parent Material Adverse Effect.
(b) Neither Parent nor any of the Parent Subsidiaries is a party to,
bound by, or has any obligation under any Tax sharing, allocation, indemnity, or
similar contract or arrangement.
(c) Neither Parent nor any of the Parent Subsidiaries knows of any
fact or has taken any action that could reasonably be expected to prevent the
Merger from qualifying as a reorganization with the meaning of Section 368(a) of
the Code.
(d) Schedule 4.21 sets forth (i) the taxable years of Parent for
which the statute of limitations with respect to Material State income Taxes
have not expired, and (ii) with respect to Material State income Taxes, for all
taxable years for which the statute of limitations has not expired, those years
for which examinations have been completed, those years for which examinations
are presently being conducted, and those years for which examinations have not
yet been initiated.
23
(e) For purposes of this Agreement: (i) "Taxes" means any and all
federal, state, local, foreign, provincial, territorial or other taxes, imposts,
rates, levies, assessments and other charges of any kind whatsoever whether
imposed directly or through withholding (together with any and all interest,
penalties, additions to tax and additional amounts applicable with respect
thereto), including, without limitation, income, franchise, windfall or other
profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation,
net worth, excise, withholding, ad valorem and value added taxes, and (ii) "Tax
Return" means any declaration, return, report, schedule, certificate, statement
or other similar document (including relating or supporting information)
required to be filed or, where none is required to be filed with a taxing
authority, the statement or other document issued by a taxing authority in
connection with any Tax, including, without limitation, any information return,
claim for refund, amended return or declaration of estimated Tax. For purposes
of this Section 4.21 "Material State" means any state for which the average
allocation percentage of Parent and the Parent Subsidiaries for the past three
years exceeds ten percent (10%).
Section 4.22 Contracts. Except as set forth on Schedule 4.22 hereto,
neither Parent nor any of the Parent Subsidiaries is party to any agreement
(whether written or oral) that (a) involves performance of services or delivery
of goods or materials of an amount or value in excess of $3 million per year; or
(b) is a software licensing agreement involving an amount or value in excess of
$2,000,000 (the "Parent Contracts"). Each Parent Contract is valid and binding
on Parent and is in full force and effect, and Parent and each of the Parent
Subsidiaries have in all material respects performed all obligations required to
be performed by them to date under each Parent Contract, except where such
noncompliance, individually or in the aggregate, would not have a
24
Parent Material Adverse Effect. Neither Parent nor any of the Parent
Subsidiaries knows of, or has received notice of, any violation or default under
any Parent Contract except for such violations or defaults as would not in the
aggregate have a Parent Material Adverse Effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company represents and warrants to Parent and Sub as follows:
Section 5.1 Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the corporate power to carry on its business as it is now being
conducted or presently proposed to be conducted. The Company is duly qualified
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or held under lease or
the nature of its activities makes such qualification necessary, except such
failures to be so qualified which would not in the aggregate have a material
adverse effect on the business, assets, liabilities, condition (financial or
otherwise) or results of operations of the Company and its subsidiaries taken as
a whole (a "Company Material Adverse Effect").
Section 5.2 Capitalization. The authorized capital stock of the
Company consists of 50,000,000 shares of Common Stock, par value $.01 per share
and 2,000,000 shares of Preferred Stock, no par value ("Company Preferred
Stock"), of which 300,000 shares have been designated as Series A Participating
Preferred Stock. As of the date hereof, 26,073,654 shares of Company Common
Stock were issued and outstanding and no shares of Company Preferred Stock were
issued and outstanding. All of the issued and outstanding Shares are validly
issued, fully paid and
25
nonassessable and free of preemptive rights. Except for (i) the 7,228,153 shares
of Company Common Stock issuable upon the conversion of the 5 1/4% Convertible
Subordinated Notes due 2003, (ii) options to receive or acquire 4,630,003 shares
of Company Common Stock granted (or to be granted pursuant to Section 6.1(c))
pursuant to employee incentive or benefit plans, programs and arrangements of
the Company ("Employee Stock Options"), which options are listed by optionee,
price per share, date of grant and number of shares covered thereby on Schedule
5.2 hereto, (iii) warrants to purchase 180,000 shares of Company Common Stock
and (iv) the rights (the "Company Rights") to acquire shares of Series A
Participating Preferred Stock pursuant to the Rights Agreement between the
Company and ▇▇▇▇▇▇ Trust and Savings Bank dated March 1, 1996 (the "Company
Rights Agreement"), and as otherwise provided for in this Agreement and the
Company Option Agreement, there are not now, and at the Effective Time there
will not be, any shares of capital stock of the Company issued or outstanding or
any options, warrants, subscriptions, calls, rights, convertible securities or
other agreements or commitments obligating the Company to issue, transfer or
sell any shares of its capital stock. Except as provided in this Agreement or in
the Schedules hereto, after the Effective Time, the Company will have no
obligation to issue, transfer or sell any shares of its capital stock pursuant
to any employee benefit plan or otherwise.
Section 5.3 Subsidiaries. Schedule 5.3 hereto sets forth each direct
or indirect interest owned by the Company in any other corporation, partnership,
joint venture or other business association or entity, foreign or domestic, of
which the Company or any of its other Subsidiaries owns, directly or indirectly,
greater than fifty percent of the shares of capital stock or other equity
interests (including partnership interests) entitled to cast at least a majority
of the votes that may be cast by all shares or equity interests having ordinary
voting power for the election of directors or
26
other governing body of such entity (each such entity is hereinafter referred to
as a Subsidiary and are hereinafter collectively referred to as the
"Subsidiaries".) Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each Subsidiary is duly qualified as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary except where the failure to be so qualified will
not have a Company Material Adverse Effect. Each Subsidiary has the corporate
power to carry on its business as it is now being conducted or presently
proposed to be conducted. All of the outstanding shares of capital stock of the
Subsidiaries are validly issued, fully paid and nonassessable and are owned by
the Company or by a Subsidiary free and clear of any liens, claims, charges or
encumbrances. There are not now, and at the Effective Time there will not be,
any outstanding options, warrants, subscriptions, calls, rights, convertible
securities or other agreements or commitments obligating the Company or any
Subsidiary to issue, transfer or sell any securities of any Subsidiary. There
are not now, and at the Effective Time there will not be, any voting trusts or
other agreements or understandings to which the Company or any of the
Subsidiaries is a party or is bound with respect to the voting of the capital
stock of the Company or any of the Subsidiaries.
Section 5.4 Authority Relative to this Agreement. The Company has
the corporate power to enter into this Agreement, the Parent Option Agreement
and the Company Option Agreement, to carry out its obligations hereunder and
thereunder and to consummate the Merger. The execution and delivery of this
Agreement, the Parent Option Agreement and the Company Option Agreement by the
Company, the consummation by the Company of the transactions contemplated hereby
and thereby and the consummation of the Merger have been duly authorized
27
by the Company's Board of Directors and, except for the approval of its
stockholders to be sought at the stockholders meeting contemplated by Section
7.4 hereof and the filing of the Certificate of Merger as required by the GCL,
no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement, the Parent Option Agreement and the Company Option
Agreement, the transactions contemplated hereby and thereby or the consummation
of the Merger. This Agreement, the Parent Option Agreement and the Company
Option Agreement have been duly and validly executed and delivered by the
Company and, assuming due authorization, execution and delivery by the other
parties hereto, this Agreement, the Parent Option Agreement and the Company
Option Agreement constitute valid and binding agreements of the Company,
enforceable against the Company in accordance with their terms, except insofar
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally, or principles governing the availability of equitable remedies.
Section 5.5 Consents and Approvals; No Violations. Except for
applicable requirements of the HSR Act, the Securities Act, the Exchange Act,
state securities or blue sky laws, the rules and regulations of NASDAQ and the
filing and recordation of a Certificate of Merger as required by the GCL, no
filing with, and no permit, authorization, consent or approval of, any public
body or authority is necessary for the consummation by the Company of the
transactions contemplated by this Agreement, the Parent Option Agreement and the
Company Option Agreement. Neither the execution and delivery of this Agreement,
the Parent Option Agreement or the Company Option Agreement by the Company, nor
the consummation by the Company of the transactions contemplated hereby or
thereby, nor compliance by the Company with any of the provisions hereof or
thereof, will (a) conflict with or result in any breach of any provisions of the
Certificate of
28
Incorporation or By-Laws of the Company or any of the Subsidiaries, (b) except
as set forth on Schedule 5.5(b), result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, agreement or other instrument or obligation to which the
Company or any of the Subsidiaries is a party or by which any of them or any of
their properties or assets may be bound or (c) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company, any
of the Subsidiaries or any of their properties or assets, except in the case of
clauses (b) and (c) for violations, breaches or defaults which would not
individually or in the aggregate have a Company Material Adverse Effect.
Section 5.6 Reports and Financial Statements. The Company has filed
all reports required to be filed with the SEC pursuant to the Exchange Act since
March 26, 1996 (such reports, together with all registration statements,
prospectuses and information statements filed by the Company since March 26,
1996, being hereinafter collectively referred to as the "Company SEC Reports"),
and has previously furnished Parent with true and complete copies of all such
Company SEC Reports. None of such Company SEC Reports, as of their respective
dates, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, all such Company SEC Reports complied
as to form in all material respects with the applicable requirements of the
Securities Act. Each of the balance sheets (including the related notes)
included in the Company SEC Reports fairly presents the consolidated financial
position of the Company and the Subsidiaries as of the respective dates
29
thereof, and the other related statements (including the related notes) included
therein fairly present the results of operations and the changes in financial
position of the Company and the Subsidiaries for the respective periods or as of
the respective dates set forth therein (subject, where appropriate, to normal
year-end adjustments), all in conformity with generally accepted accounting
principles consistently applied during the periods involved, except as otherwise
noted therein.
Section 5.7 Absence of Certain Changes or Events. Except as set forth
in Schedule 5.7 hereto or in the Company SEC Reports, since September 30, 1997,
neither the Company nor any of the Subsidiaries has: (a) suffered any change
which had or would have a Company Material Adverse Effect or (b) subsequent to
the date hereof, except as permitted by Section 6.1 hereof, conducted its
business and operations other than in the ordinary course of business and
consistent with past practices.
Section 5.8 Litigation. Except for litigation disclosed in the
Company SEC Reports there is no suit, action or proceeding pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of
its Subsidiaries the outcome of which is reasonably likely to have a Company
Material Adverse Effect; nor is there any judgment, decree, injunction, rule or
order of any court, governmental department, commission, agency, instrumentality
or arbitrator outstanding against the Company or any of its Subsidiaries, which
has or would have a Company Material Adverse Effect.
Section 5.9 Patents, Trademarks, Etc. Except as set forth in
Schedule 5.9, to the knowledge of the Company, the Company and its Subsidiaries
own or possess adequate licenses or other valid rights to use all Proprietary
Rights used or held for use in connection with the business of the Company and
its Subsidiaries as currently conducted or as contemplated to be conducted, free
30
and clear of any liens, clams or encumbrances. Except as set forth in Schedule
5.9, to the knowledge of the Company, the conduct of the business of the Company
and its Subsidiaries as currently conducted does not conflict in any way with
any Proprietary Right of any third party. To the knowledge of the Company there
are no infringements of any of the Proprietary Rights owned by or licensed to
the Company or any of its Subsidiaries.
Section 5.10 Information in Disclosure Documents and Registration
Statement. None of the information to be supplied by the Company for inclusion
in the Proxy Statement or the Registration Statement, other than the information
to be supplied by Parent or Sub, will, in the case of the Registration
Statement, at the time it becomes effective and at the Effective Time, or, in
the case of the Proxy Statement or any amendments thereof or supplements
thereto, at the time of the mailing of the Proxy Statement and any amendments or
supplements thereto, and at the time of the meeting of stockholders of the
Company to be held in connection with the Merger, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act, and the rules and regulations promulgated thereunder.
Section 5.11 Absence of Undisclosed Liabilities. Other than
obligations incurred in the ordinary course of business, neither the Company nor
any of its Subsidiaries has any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise, and there is no existing
condition, situation or set of circumstances which would reasonably be expected
to result in such a liability or obligation which would be required to be
disclosed on a consolidated balance sheet under GAAP, except (a) liabilities or
obligations reflected in the Company SEC Reports and (b) liabilities
31
or obligations which would not, individually or in the aggregate, have a Company
Material Adverse Effect.
Section 5.12 No Default. Neither the Company nor any of the
Subsidiaries is in default or violation (and no event has occurred which with
notice or the lapse of time or both would constitute a default or violation) of
any term, condition or provision of (a) its Certificate of Incorporation or By-
Laws, (b) any note, bond, mortgage, indenture, license, agreement, contract,
lease, commitment or other obligation to which the Company or any of the
Subsidiaries is a party or by which they or any of their properties or assets
may be bound, or (c) any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company or any of the Subsidiaries, except in the
case of clauses (b) and (c) above for defaults or violations which would not
individually or in the aggregate have a Company Material Adverse Effect.
Section 5.13 Taxes. (a) All federal, state, local and foreign Tax
Returns required to be filed by or on behalf of the Company, each of its
Subsidiaries, and each affiliated, combined, consolidated or unitary group of
which the Company or any of its Subsidiaries (i) is a member (a "Current Company
Group") or (ii) has been a member within six years prior to the date hereof but
is not currently a member, but only insofar as any such Tax Return relates to a
taxable period ending on a date within the last six years (a "Past Company
Group," together with Current Company Groups, a "Company Affiliated Group") have
been timely filed, and all such Tax Returns are complete and accurate except to
the extent any failure to file or any inaccuracies in filed returns would not,
individually or in the aggregate, have a Company Material Adverse Effect (it
being understood that the representations made in this Section, to the extent
that they relate to Past Company Groups, are made to the knowledge of the
Company). All Taxes due and owing by the
32
Company, any Subsidiary of the Company or any Company Affiliated Group have been
timely paid, or adequately reserved for, except to the extent any failure to pay
or reserve would not, individually or in the aggregate, have a Company Material
Adverse Effect. There is no audit examination, deficiency, refund litigation,
proposed adjustment or matter in controversy with respect to any Taxes due and
owing by the Company, any Subsidiary or any Affiliated Group which would,
individually or in the aggregate, have a Company Material Adverse Effect. All
assessments for Taxes due and owing by the Company, any Subsidiary or any
Company Affiliated Group with respect to completed and settled examinations or
concluded litigation have been paid. Schedule 5.13 sets forth (i) the taxable
years of the Company for which the statutes of limitations with respect to U.S.
federal income Taxes have not expired, and (ii) with respect to U.S. federal
income Taxes, for all taxable years for which the statute of limitations has not
yet expired, those years for which examinations have been completed, those years
for which examinations are presently being conducted, and those years for which
examinations have not yet been initiated. The Company and each of its
Subsidiaries have complied in all material respects with all rules and
regulations relating to the payment and withholding of Taxes, except to the
extent any such failure to comply would not, individually or in the aggregate,
have a Company Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries is a party to,
bound by, or has any obligation under any Tax sharing, allocation, indemnity, or
similar contract or arrangement.
(c) Neither the Company nor any of its Subsidiaries knows of any fact
or has taken any action that could reasonably be expected to prevent the Merger
from qualifying as a reorganization within the meaning of Section 368(a) of the
Code.
33
(d) Schedule 5.13 sets forth (i) the taxable years of the Company for
which the statute of limitations with respect to Material State income Taxes
have not expired, and (ii) with respect to Material State income Taxes, for all
taxable years for which the statute of limitations has not expired, those years
for which examinations have been completed, those years for which examinations
are presently being conducted, and those years for which examinations have not
yet been initiated.
(e) For purposes of this Section 5.13: "Material State" means any
state for which the average allocation percentage of the Company and its
Subsidiaries for the past three years exceeds ten percent (10%).
Section 5.14 Title to Properties; Encumbrances. Except as described
in the following sentence, each of the Company and the Subsidiaries has good and
marketable title to, or a valid leasehold interest in, all of its properties and
assets (real, personal and mixed, tangible and intangible material to the
operations and business of the Company), including, without limitation, all such
properties and assets reflected in the consolidated balance sheet of the Company
and the Subsidiaries as of March 31, 1998 included in the Company's Quarterly
Report on Form 10-Q for the period ended on such date (except for properties and
assets disposed of in the ordinary course of business and consistent with past
practices since March 31, 1998). None of such properties or assets are subject
to any liability, obligation, claim, lien, mortgage, pledge, security interest,
conditional sale agreement, charge or encumbrance of any kind (whether absolute,
accrued, contingent or otherwise), except (i) as set forth in the Company SEC
Reports or in Schedule 5.14 hereto, and (ii) such encumbrances that do not
individually or in the aggregate have a Company Material Adverse Effect.
34
Section 5.15 Compliance with Applicable Law. Each of the Company and
the Subsidiaries is in compliance with all applicable Laws (whether statutory or
otherwise), except where the failure to be in such compliance would not,
individually or in the aggregate, have a Company Material Adverse Effect.
Section 5.16 Labor Matters. Except as set forth on Schedule 5.16,
neither the Company nor any of the Subsidiaries is a party to, or bound by, any
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization. There is no unfair labor practice or
labor arbitration proceeding pending or, to the knowledge of the Company,
threatened against the Company or the Subsidiaries relating to their business,
except for any such preceding which would not have a Company Material Adverse
Effect. To the knowledge of the Company, there are no organizational efforts
with respect to the formation of a collective bargaining unit presently being
made or threatened involving employees of the Company or any of the
Subsidiaries.
Section 5.17 Employee Benefit Plans; ERISA. (a) Schedule 5.17
hereto contains a true and complete list of each bonus, deferred compensation,
incentive compensation, stock purchase, stock option, severance or termination
pay, hospitalization or other medical, life or other insurance, supplemental
unemployment benefits, profit-sharing, pension, or retirement plan, program,
agreement or arrangement, and each other employee benefit plan, program,
agreement or arrangement (the "Plans"), maintained or contributed to or required
to be contributed to by (i) the Company, (ii) any Subsidiary or (iii) any ERISA
Affiliate, that together with the Company would be deemed a "single employer"
within the meaning of Section 4001 of ERISA, for the benefit of any employee or
former employee of the Company, any Subsidiary or any ERISA Affiliate. Schedule
35
5.17(a) hereto identifies each of the Plans that is an "employee benefit plan,"
as that term is defined in Section 3(3) of ERISA (such plans being hereinafter
referred to collectively as the "ERISA Plans").
(b) With respect to each of the Plans, the Company has heretofore
delivered or will deliver to Parent true and complete copies of each of the
following documents:
(i) a copy of the Plan (including all amendments thereto);
(ii) a copy of the annual report and actuarial report, if
required under ERISA, with respect to each such Plan for the last two
years;
(iii) a copy of the most recent Summary Plan Description,
together with each Summary of Material Modifications, required under ERISA
with respect to such Plan;
(iv) if the Plan is funded through a trust or any third party
funding vehicle, a copy of the trust or other funding agreement (including
all amendments thereto) and the latest financial statements thereof; and
(v) the most recent determination letter received from the
Internal Revenue Service with respect to each Plan intended to qualify
under Section 401 of the Code.
(c) No liability under Title IV of ERISA has been incurred by the
Company, any Subsidiary 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, any Subsidiary or any ERISA Affiliate of incurring
a liability under such Title. To the extent this representation applies to
Sections 4064, 4069 or 4204 of Title IV of ERISA, it is made not only with
respect to the ERISA Plans but also with respect to any employee benefit plan,
program, agreement or arrangement subject
36
to Title IV of ERISA to which the Company, a Subsidiary or an ERISA Affiliate
made, or was required to make, contributions during the five-year period ending
on the Effective Time.
(d) Except as disclosed in Schedule 5.17, with respect to each ERISA
Plan which is subject to Title IV of ERISA, the present value of accrued
benefits under such plan, based upon the actuarial assumptions used for funding
purposes in the most recent actuarial report prepared by such plan's actuary
with respect to such plan did not exceed, as of its latest valuation date, the
then current value of the assets of such plan allocable to such accrued
benefits.
(e) Except as disclosed in Schedule 5.17, no ERISA Plan or any trust
established thereunder has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, as of the last day of the most recent fiscal year of each ERISA Plan
ended prior to the Effective Time; and all contributions required to be made
with respect thereto (whether pursuant to the term of any ERISA Plan or
otherwise) on or prior to the Effective Time have been timely made.
(f) No ERISA Plan is a "multiemployer pension plan," as defined in
Section 3(37) of ERISA, nor is any ERISA Plan a plan described in Section
4063(a) of ERISA.
(g) Each ERISA Plan 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.
(h) Each of the Plans has been operated and administered in all
material respects in accordance with applicable laws, including, but not limited
to, ERISA and the Code.
(i) Except as disclosed in Schedule 5.17, no amounts payable under the
Plans will fail to be deductible for federal income tax purposes by virtue of
Section 280G of the Code.
37
Schedule 5.17 sets forth the aggregate amount of entitlements and other amounts
that could be (i) received (whether in cash or property or the vesting of
property) under any of the Plans as a result of any of the transactions
contemplated by this Agreement by any person which is a "disqualified
individual" (as such term is defined in Section 280G(c) of the Code) and (ii)
characterized as an "excess parachute payment" (as such term is defined in
Section 280G(b)(1) of the Code), plus the amount of any excise taxes that may be
imposed with respect thereto and any additional amounts or gross-ups that may be
paid with respect to such amounts.
(j) Except as disclosed in Schedule 5.17, no Plan provides benefits,
including without limitation death or medical benefits (whether or not insured),
with respect to current or former employees of the Company, any Subsidiary or
any ERISA Affiliate beyond their retirement or other termination of service,
other than (i) coverage mandated by applicable law, (ii) death benefits or
retirement benefits under any "employee pension plan", as that term is defined
in Section 3(2) of ERISA, (iii) deferred compensation benefits accrued as
liabilities on the books of the Company, any Subsidiary or any ERISA Affiliate
or (iv) benefits the full cost of which is borne by the current or former
employee (or his beneficiary).
(k) Except as disclosed on Schedule 5.17, the consummation of the
transactions contemplated by this Agreement will not
(i) entitle any current or former employee or officer of the
Company, any Subsidiary or any ERISA Affiliate to severance pay,
unemployment compensation or any other payment, except as expressly
provided in this Agreement,
(ii) accelerate the time of payment or vesting, or increase the
amount of compensation due any such employee or officer, or
38
(iii) result in any prohibited transaction described in Section
406 of ERISA or Section 4975 of the Code for which an exemption is not
available.
(l) With respect to each Plan that is funded wholly or partially
through an insurance policy, there will be no liability of the Company, any
Subsidiary or any ERISA Affiliate, as of the Effective Time, under any such
insurance policy or ancillary agreement with respect to such insurance policy in
the nature of a retroactive rate adjustment, loss sharing arrangement or other
actual or contingent liability arising wholly or partially out of events
occurring prior to the closing.
(m) There are no pending, threatened or anticipated claims by or on
behalf of any of the Plans, by any employee or beneficiary covered under any
such Plan, or otherwise involving any such Plan (other than routine claims for
benefits).
(n) Neither the Company, any Subsidiary or any ERISA Affiliate, nor
any of the ERISA Plans, nor any trust created thereunder, nor any trustee or
administrator thereof has engaged in a transaction in connection with which the
Company, any Subsidiary or any ERISA Affiliate, any of the ERISA Plans, any such
trust, or any trustee or administrator thereof, or any party dealing with the
ERISA Plans or any such trust could be subject to either a material civil
liability under Section 409 of ERISA or Section 502(i) of ERISA, or a material
tax imposed pursuant to Section 4975 or 4976 of the Code.
Section 5.18 Contracts. Except as set forth on Schedule 5.18 hereto,
neither the Company nor any of its Subsidiaries is party to any agreement
(whether written or oral) that (a) involves performance of services or delivery
of goods or materials of an amount or value in excess of $1 million per year; or
(b) is a software licensing agreement involving an amount or value in excess of
$500,000 (the "Company Contracts"). Each Company Contract is valid and binding
on the
39
Company and is in full force and effect, and the Company and each of its
Subsidiaries have in all material respects performed all obligations required to
be performed by them to date under each Company Contract, except where such
noncompliance, individually or in the aggregate, would not have a Company
Material Adverse Effect. Neither the Company nor any of its Subsidiaries knows
of, or has received notice of, any violation or default under any Company
Contract except for such violations or defaults as would not in the aggregate
have a Company Material Adverse Effect.
Section 5.19 Vote Required. Approval of the Merger by the
stockholders of the Company will require the affirmative vote of the holders of
a majority of the outstanding Shares. No other vote of the stockholders of the
Company, or of the holders of any other securities of the Company (equity or
otherwise), is required by law, the certificate of incorporation or by-laws of
the Company or otherwise in order for the Company to consummate the Merger and
the transactions contemplated hereby and by the Company Option Agreement.
Section 5.20 Opinion of Financial Advisor. The Board of Directors of
the Company (at meetings duly called and held) has unanimously determined that
the transactions contemplated hereby are fair to and in the best interests of
the Company's stockholders. The Company has received the opinion of ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Securities Corporation, the Company's financial advisor,
substantially to the effect that the Exchange Ratio is fair to the holders of
the Company Common Stock from a financial point of view.
Section 5.21 Takeover Statute. The Board of Directors of the Company
has approved this Agreement, the Parent Option Agreement and the Company Option
Agreement and the transactions contemplated hereby and thereby and, assuming the
accuracy of Parent's and Sub's representation and warranty contained in Section
4.19, such approval constitutes approval of the
40
Merger and the other transactions contemplated hereby by such Board of Directors
under the provisions of Section 203 of the GCL such that Section 203 of the GCL
does not apply to this Agreement and the transactions contemplated hereby.
Section 5.22 The Company Rights Agreement. The Board of Directors of
the Company has approved the amendment of the Company Rights Plan in the form
attached hereto as Exhibit B and as a result thereof, none of the execution or
delivery of this Agreement, the Proxies or the Company Option Agreement or the
consummation of the transactions contemplated hereby or thereby will (a) cause
the Company Rights to become exercisable or to separate from the stock
certificates to which they are attached, (b) cause Parent to become an
"Acquiring Person" (as such term is defined in the Company Rights Agreement), or
(c) trigger any other provisions of the Company Rights Agreement.
Section 5.23 Ownership of Parent Common Stock. Except as
contemplated by this Agreement, the Parent Option Agreement and the Parent Stock
Proxy, as of the date hereof, neither the Company nor, to its knowledge without
independent investigation, any of its affiliates, (i) beneficially owns (as
defined in Rule 13d-3 under the Exchange Act, directly or indirectly, or (ii) is
party to any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of, in each case, shares of capital
stock of Parent.
Section 5.24 Pooling. Neither the Company nor any Subsidiary has
knowledge of any fact or information which causes, or should reasonably cause,
the Company or any Subsidiary to believe that the transactions contemplated by
this Agreement could not be accounted for as a pooling of interests under
Opinion 16 of the Accounting Principles Board and applicable SEC rules and
regulations.
41
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
--------------------------------------
Section 6.1 Conduct of Business by the Company Pending the Merger.
Prior to the Effective Time, unless Parent shall otherwise agree in writing, or
as set forth in Schedule 6.1 or may be expressly permitted pursuant to this
Agreement:
(a) the respective businesses of the Company and the Subsidiaries
shall be conducted only in the ordinary and usual course of business and
consistent with past practices, and there shall be no material changes in the
conduct of the Company's operations;
(b) the Company shall not (i) sell or pledge or agree to sell or
pledge any stock owned by it in any of the Subsidiaries; (ii) amend its
Certificate of Incorporation or By-Laws; or (iii) split, combine or reclassify
any shares of its outstanding capital stock or declare, set aside or pay any
dividend or other distribution payable in cash, stock or property, or redeem or
otherwise acquire any shares of its capital stock or shares of the capital stock
of any of the Subsidiaries;
(c) neither the Company nor any of the Subsidiaries shall (i)
authorize for issuance, issue or sell or agree to issue or sell any additional
shares of, or rights of any kind to acquire any shares of, its capital stock of
any class (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise), except for the
4,580,003 unissued Shares reserved for issuance upon the exercise of currently
outstanding employee stock options and except for employee options to purchase
not more than 50,000 shares, the 7,228,153 Shares reserved for issuance upon
conversion of the Company's 5 1/4% Convertible Subordinated Notes due 2003, or
the 180,000 Shares reserved for issuance upon exercise of warrants; (ii)
acquire, dispose of, transfer, lease, license, mortgage, pledge or encumber any
fixed or other
42
assets other than in the ordinary course of business and consistent with past
practices; (iii) except for certain indebtedness not in excess of $15,000,000,
incur, assume or prepay any indebtedness or any other material liabilities other
than in the ordinary course of business and consistent with past practices; (iv)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person
other than a Subsidiary in the ordinary course of business and consistent with
past practices; (v) make any loans, advances or capital contributions to, or
investments in, any other person, other than to Subsidiaries; (vi) authorize
capital expenditures not in the ordinary course of business in excess of
$1,000,000; (vii) make any Tax election or settle or compromise any Tax
liability; (viii) change its fiscal year; (ix) except as disclosed in the
Company SEC Reports filed prior to the date of this Agreement, or as required by
a governmental body or authority, change its methods of accounting (including,
without limitation, make any material write-off or reduction in the carrying
value of any assets) in effect at September 30, 1997, except as required by
changes in GAAP as concurred in by the Company's independent auditors; or (x)
enter into any contract, agreement, commitment or arrangement with respect to
any of the foregoing;
(d) the Company shall use its reasonable best efforts to preserve
intact the business organization of the Company and the Subsidiaries, to keep
available the services of its and their present officers and key employees, and
to preserve the goodwill of those having business relationships with it and the
Subsidiaries;
(e) neither the Company nor any of the Subsidiaries will enter into
any employment agreements with any officers or employees or grant any increases
in the compensation of their respective officers and employees other than
increases in the ordinary course of business and
43
consistent with past practice, or enter into, adopt or amend any Plan (as that
term is defined in Schedule 5.17 hereto); and
(f) neither the Company nor any of the Subsidiaries shall (i) take or
allow to be taken any action which would jeopardize the treatment of Parent's
acquisition of the Company as a pooling of interests for accounting purposes; or
(ii) take any action which would jeopardize qualification of the Merger as a
reorganization within the meaning of Section 368(a) of the Code.
Section 6.2 Conduct of Business by Parent Pending the Merger. Prior
to the Effective Time, unless the Company shall otherwise agree in writing, or
as otherwise expressly permitted by this Agreement:
(a) the respective businesses of Parent and the Parent Subsidiaries
shall be conducted only in the ordinary and usual course of business and
consistent with past practices, and there shall be no material changes in the
conduct of Parent's operations;
(b) Parent shall not (i) sell or pledge or agree to sell or pledge any
stock owned by it in any of the Parent Subsidiaries; (ii) amend its Certificate
of Incorporation or By-Laws; (iii) split, combine or reclassify any shares of
its outstanding capital stock or declare, set aside or pay any dividend or other
distribution payable in cash, stock or property, or redeem or otherwise acquire
any shares of its capital stock or shares of the capital stock of any of the
Parent Subsidiaries or (iv) consolidate with or merge with or into another
company unless at least 50% of the members of the Board of Directors of the
surviving entity are members of the Board of Directors of Parent immediately
prior to such merger or consolidation or are otherwise designated by Parent.
(c) neither Parent nor any of the Parent Subsidiaries shall (i)
authorize for issuance, issue or sell or agree to issue or sell any additional
shares of, or rights of any kind to
44
acquire any shares of, its capital stock of any class (whether through the
issuance or granting of options, warrants, commitments, subscriptions, rights to
purchase or otherwise), except for (a) unissued shares of Parent Common Stock
reserved for issuance upon the exercise of Parent Employee Stock Options, (b)
the shares of Parent Common Stock to be granted pursuant to Parent's Employee
Stock Benefit and Recognition Program, and (c) the shares of Parent Common Stock
reserved for issuance upon the exercise of certain rights by Trans Union
Corporation ("Trans Union") pursuant to the Data Center Management Agreement
between Trans Union and Parent, or (ii) enter into any contract, agreement,
commitment or arrangement with respect to any of the foregoing;
(d) Parent shall use its reasonable best efforts to preserve intact
the business organization of Parent and the Parent Subsidiaries, to keep
available the services of its and their present officers and key employees, and
to preserve the goodwill of those having business relationships with it and the
Parent Subsidiaries;
(e) neither Parent nor any of the Parent Subsidiaries shall (i) take
or allow to be taken any action which would jeopardize the treatment of the
transaction as a pooling of interests for accounting purposes or (ii) take any
action which would jeopardize qualification of the Merger as a reorganization
within the meaning of Section 368(a) of the Code.
(f) Nothing set forth in Section 6.2(a), (b), (c) or (d) above shall
limit Parent's ability to authorize or propose, enter into, or consummate
agreements relating to acquisitions, mergers or other business combinations,
including any such transaction pursuant to which Parent issues shares of its
capital stock; provided that in connection with any such transaction Parent will
not consolidate or merge with or into another company unless at least 50% of the
members of the
45
Board of Directors of the surviving entity are members of the Board of Directors
of Parent immediately prior to such merger or consolidation or otherwise
designated by Parent.
Section 6.3 Conduct of Business of Sub. During the period from the
date of this Agreement to the Effective Time, Sub shall not engage in any
activities of any nature except as provided in or contemplated by this
Agreement.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Access and Information. The Company and Parent shall each
afford to the other and to the other's financial advisors, legal counsel,
accountants consultants and other representatives full access upon reasonable
notice and during normal business hours throughout the period prior to the
Effective Time to all of its books, records, properties, plants and personnel
and, during such period, each shall furnish promptly to the other (a) a copy of
each report, schedule and other document filed or received by it pursuant to the
requirements of federal or state securities laws, and (b) all other information
as such other party may reasonably request, provided that no investigation
pursuant to this Section 7.1 shall affect any representations or warranties made
herein or the conditions to the obligations of the respective parties to
consummate the Merger. Each party shall hold in confidence all nonpublic
information until such time as such information is otherwise publicly available
and, if this Agreement is terminated, each party will deliver to the other all
documents, work papers and other material (including copies) obtained by such
party or on its behalf from the other party as a result of this Agreement or in
connection herewith, whether so obtained before or after the execution hereof.
46
Section 7.2 Acquisition Proposals. From and after the date hereof,
the Company will not and the Company and the Subsidiaries will use their best
efforts to cause their respective directors, officers, employees, financial
advisors, legal counsel, accountants and other agents and representatives not to
initiate or solicit, directly or indirectly, any inquiries or the making of any
proposal or offer with respect to, engage in negotiations concerning, provide
any information or data to, any person relating to any acquisition, business
combination or purchase (including by way of a tender or exchange offer) of (i)
all or any significant portion of the assets of the Company and the
Subsidiaries, (ii) 15% or more of the outstanding shares of Company Common Stock
or (iii) 15% or more of the outstanding shares of capital stock of any
Subsidiary of the Company (a "Takeover Proposal"), other than the Merger;
provided, however, that nothing contained in this Section 7.2 shall prohibit the
Board of Directors of the Company from (i) furnishing information to (but only
pursuant to a confidentiality agreement in customary form) or entering into
discussions or negotiations with any person or group that makes a Superior
Proposal that was not solicited by the Company or which did not otherwise result
from a breach of this Section 7.2, if, and only to the extent that, (A) the
Board of Directors of the Company, based upon the advice of outside legal
counsel, determines in good faith that such action is reasonably necessary for
the Board of Directors to comply with its fiduciary duties to stockholders
imposed by law, (B) concurrently with furnishing such information to, or
entering into discussions or negotiations with, such person or group making this
Superior Proposal, the Company provides written notice to Parent to the effect
that it is furnishing information to, or entering into discussions or
negotiations with, such person or group, and (C) the Company keeps Parent
informed of the status and all material information including the identity of
such person or group with respect to any such discussions or negotiations to the
extent such disclosure would not
47
constitute a violation of any applicable law. For purposes of this Agreement
"Superior Proposal" means any Takeover Proposal which the Board of Directors of
the Company concludes in its good faith judgment (based on the advice of outside
legal counsel and a financial advisor of a nationally recognized reputation) to
be more favorable to the Company's stockholders than the Merger and for which
financing, to the extent required, is fully committed, subject to customary
conditions; provided, however, that the reference to "15%" in clauses (ii) and
(iii) of the definition of Takeover Proposal shall be deemed to be references to
"51%". The Company will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any person conducted
heretofore with respect to any of the foregoing and will notify Parent
immediately in writing if any such inquiries or proposals (including the
material terms and conditions thereof) are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with, the Company. Nothing contained in this Section 7.2
shall prohibit the Company from taking and disclosing to its stockholders a
position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or
from making any disclosure to its stockholders if, in the good faith judgment of
the Board of Directors of the Company, after consultation with outside legal
counsel, failure so to disclose may be inconsistent with its obligations under
applicable law.
Section 7.3 Registration Statement. As promptly as practicable, Parent
and the Company shall prepare and file with the SEC the Proxy Statement and
Parent shall prepare and file with the SEC the Registration Statement. Each of
Parent and the Company shall use its best efforts to have the Registration
Statement declared effective. Parent shall also use its best efforts to take any
action required to be taken under state securities or blue sky laws in
connection with the issuance of the Parent Shares pursuant hereto. Parent and
the Company shall furnish each other with all
48
information concerning Parent and the Company, as the case may be, and the
holders of their capital stock and shall take such other action as each party
may reasonably request in connection with the preparation of the Proxy Statement
and the Registration Statement and issuance of Parent Shares. Each such party
agrees promptly to advise the other if at any time prior to the Effective Time
any information provided by any party hereto in the Proxy Statement becomes
incorrect or incomplete in any material respect, and to provide the information
needed to correct such inaccuracy or omission. To the extent the issuance of
Parent Shares pursuant to the Merger to ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.,
(or to any other stockholder of the Company granting proxies pursuant to Section
7.7) are not permitted by the rules and regulations of the SEC to be registered
on the Registration Statement, Parent will use its best efforts to register such
issuance of Parent Shares to such stockholders of the Company on a Form S-3 or
other appropriate form.
Section 7.4 Proxy Statements; Stockholder Approvals. (a) The
Company, acting through its Board of Directors, shall, in accordance with
applicable law and its Certificate of Incorporation and By-Laws:
(i) promptly and duly call, give notice of, convene and hold
as soon as practicable following the date upon which the Registration
Statement becomes effective a meeting of its stockholders for the purpose
of voting to approve and adopt this Agreement and shall use its reasonable
best efforts to obtain such stockholder approval; and
(ii) recommend approval and adoption of this Agreement by the
stockholders of the Company and include in the Proxy Statement such
recommendation, and take all lawful action to solicit such approval.
49
(b) Parent, acting through its Board of Directors, shall, in
accordance with applicable law and its Certificate of Incorporation and By-Laws:
(i) promptly and duly call, give notice of, convene and hold as
soon as practicable following the date upon which the Registration
Statement becomes effective a meeting of its stockholders for the purpose
of voting to approve the issuance of the Parent Shares pursuant to the
Merger and shall use its reasonable best efforts to obtain such stockholder
approval; and
(ii) recommend approval and adoption of the issuance of the
Parent Shares pursuant to the Merger by the stockholders of Parent and
include in the Proxy Statement such recommendation, and take all lawful
action to solicit such approval.
(c) Parent and the Company shall cause the definitive Proxy Statement
to be mailed to their stockholders as promptly as practicable after the
Registration Statement is declared effective under the Securities Act. At the
stockholders' meetings, each of Parent and the Company shall vote or cause to be
voted in favor of approval and adoption of this Agreement all Shares as to which
it holds proxies at such time.
Section 7.5 Affiliate Agreements. (a) Prior to the mailing of the
Proxy Statement to the stockholders of the Company the Company shall cause to be
delivered to Parent a list in form and substance reasonably satisfactory to
Parent identifying all persons who are at the time of the Company stockholders'
meeting convened in accordance with Section 7.4 hereof, "affiliates" of the
Company as that term is used in Rule 145 under the Securities Act or under
applicable SEC accounting releases with respect to pooling of interests
accounting treatment. The Company shall use its reasonable best efforts to cause
each person who is identified as a possible "affiliate" in the
50
list furnished pursuant to this Section 7.5 to deliver to Parent at or prior to
the mailing of the Proxy Statement a written agreement, in substantially the
form attached hereto as Exhibit C.
(b) Prior to the mailing of the Proxy Statement to the stockholders of
Parent, Parent shall deliver to the Company a list, in form and substance
reasonably satisfactory to the Company, identifying all persons who are, at the
time of the Parent stockholders' meeting convened in accordance with Section 7.4
hereof, "affiliates" of Parent under applicable SEC accounting releases with
respect to pooling of interests accounting treatment. Parent shall use its
reasonable best efforts to cause each person who is identified as a possible
"affiliate" in the list furnished pursuant to this Section 7.5 to deliver to
Parent at or prior to the mailing of the Proxy Statement, a written agreement
substantially in the form of Exhibit D hereto.
Section 7.6 Antitrust Laws. As promptly as practicable, the Company,
Parent and Sub shall make all filings and submissions under the HSR Act as may
be reasonably required to be made in connection with this Agreement and the
transactions contemplated hereby. Subject to Section 7.1 hereof, the Company
will furnish to Parent and Sub, and Parent and Sub will furnish to the Company,
such information and assistance as the other may reasonably request in
connection with the preparation of any such filings or submissions. Subject to
Section 7.1 hereof, the Company will provide Parent and Sub, and Parent and Sub
will provide the Company, with copies of all correspondence, filings or
communications (or memoranda setting forth the substance thereof) between such
party or any of its representatives, on the one hand, and any governmental
agency or authority or members of their respective staffs, on the other hand,
with respect to this Agreement and the transactions contemplated hereby.
51
Section 7.7 Proxies. Concurrently herewith, the Parent is entering
into the Company Stock Proxies with each of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇. in the form attached hereto as Exhibits A-2 and A-3, respectively.
Concurrently herewith, the Company is entering into the Parent Stock Proxy with
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in the form attached hereto as Exhibit A-1. Parent will use
its reasonable best efforts to obtain proxies within ten business days following
the date hereof from the stockholders listed on Schedule 7.7(a) hereto, such
proxies to be substantially in the form of Exhibit A-1. The Company will use its
reasonable best efforts to obtain proxies within ten business days following the
date hereof from the record holders of all shares of Company Common Stock
reflected as being beneficially owned by each of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇, ▇▇., as set forth on Schedule 7.7(b), such proxies to be substantially in
the form of Exhibits A-2 and A-3.
Section 7.8 Employees, Employee Benefits. (a) Parent agrees that
individuals who are employed by the Company as of the Effective Time shall
become employees of the Surviving Corporation following the Effective Time (each
such employee, an "Affected Employee"); provided, however, that nothing
contained in this Section 7.8 shall require the Surviving Corporation to
continue the employment of any Affected Employee for any period of time
following the Effective Time.
(b) Parent shall, or shall cause the Surviving Corporation to, give
Affected Employees full credit for purposes of eligibility, vesting and
determination of the level of benefits (but not for the purpose of benefit
accrual under any defined benefit plan) under any employee benefit plans or
arrangements maintained by the Parent, the Surviving Corporation or any
Subsidiary of the Parent for such Affected Employees' service with the Company
or any Subsidiary of the Company to the same extent recognized by the Company
immediately prior to the Effective Time.
52
(c) Parent shall, or shall cause the Surviving Corporation to, (i)
waive all limitations as to preexisting conditions exclusions and waiting
periods with respect to participation and coverage requirements applicable to
the Affected Employees under any welfare benefit plans that such Affected
Employees may be eligible to participate in after the Effective Time, other than
limitations or waiting periods that are already in effect with respect to such
Affected Employees and that have not been satisfied as of the Effective Time
under any welfare plan maintained for the Affected Employees immediately prior
to the Effective Time, and (ii) provide each Affected Employee with credit for
any co-payments and deductibles paid prior to the Effective Time in satisfying
any applicable deductible or out-of-pocket requirements under any welfare plans
that such Affected Employees are eligible to participate in after the Effective
Time.
Section 7.9 Stock Options. (a) As of the Effective Time, (i) each
outstanding Employee Stock Option shall be converted into an option (an
"Adjusted Option") to purchase the number of Parent Shares equal to the number
of Shares subject to such Employee Stock Option immediately prior to the
Effective Time multiplied by the Exchange Ratio (rounded to the nearest whole
number of Parent Shares), at an exercise price per share equal to the exercise
price for each such Share subject to such option divided by the Exchange Ratio
(rounded down to the nearest whole cent), and all references in each such
Employee Stock Option to the Company shall be deemed to refer to Parent, where
appropriate; provided, however, that the adjustments provided in this clause (i)
with respect to any Employee Stock Options which are "incentive stock options"
(as defined in Section 422 of the Code) or which are described in Section 423 of
the Code, shall be affected in a manner consistent with the requirements of
Section 424(a) of the Code, and (ii) Parent shall assume the obligations of the
Company under the Company's stock option plans pursuant to which such
53
Employee Stock Options were issued. The other terms of each Adjusted Option, and
the plans or agreements under which they were issued, shall continue to apply in
accordance with their terms. The date of grant of each Adjusted Option shall be
the date on which the corresponding Employee Stock Option was granted.
(b) Parent shall (i) reserve for issuance the number of Parent Shares
that will become subject to the benefit plans, programs and arrangements
referred to in this Section 7.9 and (ii) issue or cause to be issued the
appropriate number of Parent Shares pursuant to applicable plans, programs and
arrangements, upon the exercise or maturation of rights existing thereunder on
the Effective Time or thereafter granted or awarded. No later than the Effective
Time, Parent shall prepare and file with the SEC a registration statement on
Form S-8 (or other appropriate form) registering a number of Parent Shares
necessary to fulfill Parent's obligations under this Section 7.9. Such
registration statement shall be kept effective (and the current status of the
prospectus required thereby shall be maintained) for at least as long as
Adjusted Options remain outstanding.
(c) As soon as practicable after the Effective Time, Parent shall
deliver to the holders of Employee Stock Options appropriate notices setting
forth such holders' rights pursuant to the respective Company stock option plans
and the agreements evidencing the grants of such Employee Stock Options and that
such Employee Stock Options and the related agreements shall be assumed by
Parent and shall continue in effect on the same terms and conditions (subject to
the adjustments required by this Section 7.9 after giving effect to the Merger).
Section 7.10 Public Announcements. Parent and Sub, on the one hand,
and the Company, on the other hand, agree that they will not issue any press
release or otherwise make any public statement or respond to any press inquiry
with respect to this Agreement or the transactions
54
contemplated hereby without the prior approval of the other party, except as may
be required by Law.
Section 7.11 By-Law Indemnification and Insurance. Parent shall
cause the Surviving Corporation to keep in effect in its By-Laws a provision for
a period of not less than six years from the Effective Time (or, in the case of
matters occurring prior to the Effective Time which have not been resolved prior
to the sixth anniversary of the Effective Time, until such matters are finally
resolved) which provides for indemnification of the past and present officers
and directors (the "Indemnified Parties") of the Company to the fullest extent
permitted by the GCL. For six years from the Effective Time, Parent shall
indemnify the Indemnified Parties to the same extent as such Indemnified Parties
are entitled to indemnification pursuant to the preceding sentence. For a period
of six years from the Effective Time, Parent shall either cause to be maintained
in effect the current policies of directors' and officers' liability insurance
maintained by the Company or provide substitute policies of at least the same
coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured with respect to claims arising
from facts or events that occurred on or before the Effective Time, except that
in no event shall Parent be required to pay with respect to such insurance
policies in any one year more than $200,000.
Section 7.12 Expenses. (a) Except as set forth in this Section
7.12, whether or not the Merger is consummated all costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby and
thereby shall be paid by the party incurring such expenses; provided that those
expenses incurred in connection with printing the Registration Statement and the
related Proxy Statement, as well as the filing fee relating to the Registration
Statement will be shared equally by Parent and the Company.
55
(b) As a condition and inducement to Parent's and Sub's willingness to
enter this Agreement, (i) if this Agreement is terminated by Parent and Sub
pursuant to Section 9.1(e) or 9.1(g), (ii) if this Agreement is terminated by
Parent and Sub or by the Company pursuant to 9.1(h) or (iii)(x) prior to the
termination of this Agreement, a bona fide Takeover Proposal is commenced,
publicly proposed or publicly disclosed and not withdrawn, (y) this Agreement is
terminated by the Parent and Sub or the Company pursuant to Section 9.1(f) (but
only due to the failure of the Company stockholders to approve the Merger) and
(z) concurrently with or within twelve months after such termination a Takeover
Proposal shall have been consummated, then, in each case, the Company shall (i)
pay to Parent a fee (the "Company Termination Fee") of $20,000,000 in
immediately available funds and (ii) reimburse Parent and Sub for all out-of-
pocket expenses and fees (including, without limitation, the fees and expenses
of their counsel and investment banking firms) incurred by them or on their
behalf in connection with the Merger, this Agreement or the transactions
contemplated hereby; provided, however, that such fees and expenses shall not
exceed $2,500,000. The Company will pay the Company Termination Fee promptly,
but in no event later than the second business day following any such
termination by Parent and Sub and will reimburse Parent and Sub for the
foregoing fees and expenses promptly, but in no event later than the second
business day following submission of statements therefor.
(c) As a condition and inducement to the Company's willingness to
enter this Agreement, if (i) this Agreement is terminated by the Company
pursuant to Section 9.1(i) or (ii) (x) prior to the termination of this
Agreement, a bona fide proposal or offer with respect to any acquisition,
business combination or purchase (including by way of a tender or exchange
offer) of all or any significant portion of the assets of, or 15% or more of the
outstanding shares of capital
56
stock of Parent (a "Parent Takeover Proposal") is commenced, publicly proposed
or publicly disclosed and not withdrawn, (y) this Agreement is terminated by the
Company pursuant to Section 9.1(f) (but only due to the failure of the Parent
stockholders to approve the issuance of Parent Shares pursuant to the Merger)
and (z) concurrently with or within twelve months after such termination a
Parent Takeover Proposal shall have been consummated, then Parent shall (i) pay
to the Company a fee (the "Parent Termination Fee") of $20,000,000 in
immediately available funds, and (ii) reimburse the Company for all out-of-
pocket expenses and fees (including, without limitation, the fees and expenses
of its counsel and investment banking firms) incurred by it or on its behalf in
connection with the Merger, this Agreement or the transactions contemplated
hereby; provided, however, that such fees and expenses shall not exceed
$2,500,000. Parent will pay the Parent Termination Fee promptly, but in no event
later than the second business day following any such termination by the Company
and will reimburse the Company for the foregoing fees and expenses promptly, but
in no event later than the second business day following submission of
statements therefor.
Section 7.13 Additional Agreements. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including using all reasonable efforts to obtain all necessary
waivers, consents and approvals and to effect all necessary registrations and
filings. In case at any time after the Effective Time any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and/or directors of Parent, Sub and the Company shall take all such
necessary action.
57
Section 7.14 Control of the Company's and Parent's Operations.
Nothing contained in this Agreement shall give Parent or the Company, directly
or indirectly, rights to control or direct the operations of the other prior to
the Effective Time. Prior to the Effective Time, each of Parent and the Company
shall exercise, consistent with the terms and conditions of this Agreement,
complete control and supervision of its operations.
Section 7.15 Company Rights Plan. No later than the date hereof, the
Company shall amend the Company Rights Plan to effect the changes thereto
contemplated by the form of amendment attached hereto as Exhibit B. Except as
set forth in Exhibit B, the Company shall not amend, modify or supplement the
Company Rights Plan without the prior written consent of Parent.
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
----------------------------------------
Section 8.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Any waiting period applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated, and no action shall
have been instituted by the Department of Justice or Federal Trade Commission
challenging or seeking to enjoin the consummation of this transaction, which
action shall have not been withdrawn or terminated.
(b) The Registration Statement shall have become effective in
accordance with the provisions of the Securities Act.
58
(c) This Agreement and the transactions contemplated hereby shall have
been approved and adopted by the requisite vote of the stockholders of each of
the Company and Parent in accordance with applicable law.
(d) No preliminary or permanent injunction or other order by any
federal or state court in the United States which prohibits the consummation of
the Merger shall have been issued and remain in effect.
(e) Each of the Company and Parent shall have obtained such consents
from third parties and government instrumentalities in addition to pursuant to
the HSR Act as shall be required and which are material to Parent and the
Company and to consummation of the transactions contemplated hereby.
(f) Parent and Sub and the Company shall have each received a letter
of KPMG Peat Marwick LLP, dated the Effective Time, in form and substance
satisfactory to Parent addressed to Parent and Sub and the Company stating that
the Merger will qualify as a pooling of interests transaction under Opinion No.
16 of the Accounting Principles Board.
Section 8.2 Conditions to Obligation of the Company to Effect the
Merger. The obligation of the Company to effect the Merger shall be subject to
the satisfaction at or prior to the Effective Time of the following additional
conditions:
(a) Each of Parent and Sub shall have performed in all material
respects its obligations under this Agreement required to be performed by it at
or prior to the Effective Time and the representations and warranties of Parent
and Sub contained in this Agreement shall be true and correct in all material
respects at and as of the Effective Time as if made at and as of such time,
59
except as contemplated by this Agreement, and the Company shall have received a
certificate of the Chief Executive Officer or the President of Parent as to the
satisfaction of this condition.
(b) The Company shall have received an opinion of Winston & ▇▇▇▇▇▇,
in form and substance reasonably satisfactory to the Company, dated as of the
Effective Time, substantially to the effect that the Merger will constitute a
reorganization for U.S. federal income tax purposes within the meaning of
Section 368(a) of the Code. The issuance of such opinion shall be conditioned
upon the receipt by Winston & ▇▇▇▇▇▇ of representation letters from each of
Parent, Sub and the Company, in each case, in form and substance reasonably
satisfactory to Winston & ▇▇▇▇▇▇. The specific provisions of each such
representation letter shall be in form and substance reasonably satisfactory to
Winston & ▇▇▇▇▇▇, and each such representation letter shall be dated on or
before the date of such opinion and shall not have been withdrawn or modified in
any material respect.
Section 8.3 Conditions to Obligations of Parent and Sub to Effect the
Merger. The obligations of Parent and Sub to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
additional conditions:
(a) The Company shall have performed in all material respects its
obligations under this Agreement required to be performed by it at or prior to
the Effective Time and the representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
at and as of the Effective Time as if made at and as of such time except as
contemplated by this Agreement, and Parent and Sub shall have received a
Certificate of the Chief Executive Officer or the President of the Company as to
the satisfaction of this condition.
(b) Parent shall have received an opinion of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, in form and substance reasonably satisfactory to Parent,
dated as of the Effective Time,
60
substantially to the effect that the Merger will constitute a reorganization for
U.S. federal income tax purposes within the meaning of Section 368(a) of the
Code. The issuance of such opinion shall be conditioned upon the receipt by such
tax counsel of representation letters from each of Parent, Sub and the Company,
in each case, in form and substance reasonably satisfactory to such tax counsel.
The specific provisions of each such representation letter shall be in form and
substance reasonably satisfactory to such tax counsel, and each such
representation letter shall be dated on or before the date of such opinion and
shall not have been withdrawn or modified in any material respect.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
Section 9.1 Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval by the
stockholders of the Company:
(a) by mutual consent of Parent, Sub and the Company;
(b) by either Parent and Sub, on the one hand, or the Company, on the
other hand, if the Merger shall not have been consummated on or before December
31, 1998;
(c) by the Company if any of the conditions specified in Sections 8.1
and 8.2 hereof has not been met or waived by the Company prior to or at such
time as such condition can no longer be satisfied;
(d) by Parent and Sub if any of the conditions specified in Sections
8.1 and 8.3 hereof has not been met or waived by Parent and Sub prior to or at
such time as such condition can no longer be satisfied;
61
(e) by Parent and Sub if a tender offer or exchange offer for 50% or
more of the outstanding shares of capital stock of the Company is commenced
prior to the meeting of Company stockholders contemplated by Section 7.4(a), and
the Board of Directors of the Company fails to recommend against acceptance of
such tender offer or exchange offer by its stockholders (including by taking no
position with respect to the acceptance of such tender offer or exchange offer
by its stockholders) within the time period specified by Rule 14e-2 of the
Exchange Act;
(f) by either Parent and Sub or the Company if the approvals of the
stockholders of either Parent or the Company contemplated by this Agreement
shall not have been obtained by reason of the failure to obtain the required
vote at a duly held meeting of stockholders or of any adjournment thereof;
(g) by Parent and Sub if the Board of Directors of the Company shall
have withdrawn or modified in a manner adverse to Parent its approval or
recommendation of this Agreement and the transactions contemplated hereby;
(h) by either the Company or Parent and Sub if the Board of Directors
of the Company reasonably determines that a Takeover Proposal constitutes a
Superior Proposal, except that the Company may not terminate this Agreement
pursuant to this clause 7.1(h) unless and until (i) three business days have
elapsed following delivery to Parent of a written notice of such determination
by the Board of Directors of the Company and during such three business day
period the Company (x) informs Parent of the terms and conditions of the
Takeover Proposal and the identity of the person making the Takeover Proposal
and (y) otherwise reasonably cooperates with Parent with respect thereto
(subject, in the case of this clause (y), to the condition that the Board of
Directors of the Company shall not be required to take any action that it
believes, after
62
consultation with outside legal counsel, would present a reasonable possibility
of violating its obligations to the Company or the Company's stockholders under
applicable law) with the intent of providing Parent with the opportunity to
offer to modify the terms and conditions of this Agreement so that the
transactions contemplated hereby may be effected, (ii) at the end of such three
business day period the Board of Directors of the Company continues reasonably
to believe that the Takeover Proposal constitutes a Superior Proposal, (iii)
simultaneously with such termination the Company enters into a definitive
acquisition, merger or similar agreement to effect the Superior Proposal and
(iv) simultaneously with such termination, the Company pays to Parent the
amounts specified and within the time periods specified in Section 7.12(b);
(i) by the Company if the Board of Directors of Parent shall have
withdrawn or modified in a manner adverse to the Company its approval or
recommendation of this Agreement and the transactions contemplated hereby; or
(j) by either the Company or Parent and Sub if there shall have been
a material breach by the other of any of its representations, warranties,
covenants or agreements contained in this Agreement or the Option Agreement,
which if not cured would cause the conditions set forth in Sections 8.2(a) or
8.3(a), as the case may be, not to be satisfied, and such breach shall not have
been cured within 30 days after notice thereof shall have been received by the
party alleged to be in breach.
Section 9.2 Effect of Termination. In the event of termination of
this Agreement as provided above, this Agreement shall forthwith become void and
there shall be no liability on the part of either Parent, Sub or the Company or
their respective officers or directors (i) except as set forth in Section 7.1
hereof and except for Section 7.12 hereof which shall survive the termination
63
and (ii) no such termination shall release any party of any liabilities or
damages resulting from any wilful breach by that party of any provision of this
Agreement.
Section 9.3 Amendment. This Agreement may be amended by action taken
by Parent, Sub and the Company at any time before or after approval hereof by
the stockholders of the Company, but, after any such approval, no amendment
shall be made which alters the Exchange Ratio or which in any way materially
adversely affects the rights of such stockholders, without the further approval
of such stockholders. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties hereto.
Section 9.4 Waiver. At any time prior to the Effective Time, the
parties hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE X
GENERAL PROVISIONS
------------------
Section 10.1 Survival of Representations, Warranties and Agreements.
No representations, warranties or agreements contained herein shall survive
beyond the Effective Time except that the agreements contained in Sections 3.1,
3.2, 3.3, 3.4, 3.5, 3.6, 7.9, 7.11 and 7.12 hereof shall survive beyond the
Effective Time.
64
Section 10.2 Brokers. The Company represents and warrants that, (i)
except for its financial advisors, ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation ("DLJ"), no broker, finder or financial advisor is entitled to any
brokerage, finder's or other fee or commission in connection with the Merger or
the transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Company and (ii) the Company's fee arrangements with DLJ
have been disclosed to Parent. Parent represents and warrants that, except for
its financial advisor, ▇▇▇▇▇▇▇▇ Inc. ("▇▇▇▇▇▇▇▇"), (i) no broker, finder or
financial advisor is entitled to any brokerage finder's or other fee or
commission in connection with the Merger or the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Parent or Sub and
(ii) Parent's fee arrangements with ▇▇▇▇▇▇▇▇ have been disclosed to the Company.
Section 10.3 Notices. All notices, claims, demands and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally or by telex or telegram or mailed by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) If to Parent or Sub, to:
ACXIOM CORPORATION
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
65
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(b) if to the Company, to:
MAY & ▇▇▇▇, INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
with a copy to:
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Section 10.4 Descriptive Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 10.5 Entire Agreement; Assignment. This Agreement (including
the Exhibits, Schedules and other documents and instruments referred to herein)
(a) constitutes the entire agreement and supersedes all other prior agreements
and understandings, both written and oral among the parties or any of them, with
respect to the subject matter hereof; (b) is not intended to confer upon any
other person any rights or remedies hereunder; and (c) shall not be assigned by
operation of law or otherwise, provided that Parent or Sub may assign its rights
and obligations
66
hereunder to a direct or indirect subsidiary of Parent, but no such assignment
shall relieve Parent or Sub, as the case may be, of its obligations hereunder.
Section 10.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the provisions thereof relating to conflicts of law.
Section 10.7 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any of the provisions of this
Agreement were not performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the terms hereof, in
addition to any other remedy at law or equity.
Section 10.8 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of
which shall constitute one and the same agreement.
67
IN WITNESS WHEREFORE, each of Parent, Sub and the Company has caused
this Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the date first above written.
ACXIOM CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Chief Executive Officer and President
ACX ACQUISITION CO., INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: General Counsel and Secretary
MAY & ▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman, President and Chief Executive
Officer
EXHIBIT A-1
-----------
IRREVOCABLE PROXY
IRREVOCABLE PROXY, dated as of May 26, 1998, by and between May & ▇▇▇▇,
Inc., a Delaware corporation (the "Company "), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the
"Stockholder").
WHEREAS, concurrently with the execution and delivery of this Agreement,
Acxiom Corporation, a Delaware Corporation ("Parent"), ACX Acquisition Co., Inc.
a Delaware corporation and a wholly owned subsidiary of Parent ("Sub"), and the
Company are entering into an Agreement and Plan of Merger, dated as of May 26,
1998 (the "Merger Agreement"), providing, among other things, for the merger
(the "Merger") of Sub with and into the Company, as a result of which each of
the outstanding shares of Common Stock, par value $.01 per share, of the Company
(the "Company Common Stock") will be converted into the right to receive .80 of
a share of the Common Stock, par value $.10 per share, of Parent (the "Parent
Common Stock"), and the Company will become a wholly owned subsidiary of Parent;
and
WHEREAS, the Stockholder is the owner beneficially and of record of an
aggregate of 4,112,425 shares (the "Parent Shares") of the Parent Common Stock,
of which 297,654 shares are in respect of options exercisable within 60 days of
the date hereof; and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Company has requested that the Stockholder agree, and the
Stockholder has agreed, to grant the Company an irrevocable proxy (the "Proxy")
with respect to the Parent Shares, upon the terms and subject to the conditions
hereof;
NOW, THEREFORE, to induce the Company to enter into the Merger Agreement
and in consideration of the aforesaid and the mutual representations,
warranties, covenants and agreements set forth herein and in the Merger
Agreement, the parties hereto agree as follows:
1. The Stockholder hereby constitutes and appoints the Company, during the
term of this Agreement as the Stockholder's true and lawful proxy and attorney-
in-fact, with full power of substitution, to vote all of the Parent Shares (and
any and all securities issued or issuable in respect thereof) which Stockholder
is entitled to vote, for and in the name, place and stead of the Stockholder, at
any annual, special or other meeting of the stockholders of the Parent, and at
any adjournment or adjournments thereof, or pursuant to any consent in lieu of a
meeting or otherwise, in favor of any proposal to approve the issuance of the
shares of Common Stock pursuant to the Merger Agreement and any transactions
contemplated thereby. All power and authority hereby conferred is coupled with
an interest and is irrevocable. In the event that the Company is unable to
exercise such power and authority for any reason, the Stockholder agrees that he
will vote all the Parent Shares in favor of approval of the issuance of the
shares of Common Stock pursuant to the Merger Agreement and the transactions
contemplated thereby, at any such meeting or adjournment thereof, or provide his
written consent thereto.
2. The Stockholder hereby covenants and agrees that the Stockholder will
not, and will not agree to, directly or indirectly, sell, transfer, assign,
pledge, hypothecate, cause to be redeemed or otherwise dispose of any of the
Parent Shares or grant any proxy or interest in or with respect to such Parent
Shares or deposit such Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Parent Shares other than in
respect of transactions not prohibited by the terms of the Merger Agreement.
A-2
3. The Stockholder represents and warrants to the Company, that the Parent
Shares consist of 3,814,771 shares of Parent Common Stock owned beneficially and
of record by the Stockholder on the date hereof; such Parent Shares are all of
the securities of the Parent owned of record or beneficially by the Stockholder
on the date hereof, except for 297,654 shares of Parent Common Stock as to which
the Stockholder holds stock options exercisable within 60 days of the date
hereof; the Stockholder owns the Parent Shares free and clear of all liens,
charges, claims, encumbrances and security interests of any nature whatsoever;
and except as provided herein, the Stockholder has not granted any proxy with
respect to the Parent Shares, deposited such Parent Shares into a voting trust
or entered into any voting agreement or other arrangement with respect to such
Parent Shares.
4. Any shares of Parent Common Stock issued to the Stockholder upon the
exercise of any stock options that are currently exercisable or become
exercisable during the term of this Agreement shall be deemed Parent Shares for
purposes of this Agreement.
5. This Proxy shall be governed by and construed in accordance with the
laws of the State of Delaware without giving effect to the provisions thereof
relating to conflicts of law.
6. This Proxy shall be binding upon, inure to the benefit of, and be
enforceable by the successors and permitted assigns of the parties hereto. This
Proxy and the rights hereunder may not be assigned or transferred by the
Company, except that the Company may assign its rights hereunder to any direct
or indirect subsidiary.
7. This Proxy shall terminate at the earlier of (i) the effectiveness of
the Merger, or (ii) the termination of the Merger Agreement in accordance with
its terms, or (iii) upon notice of termination given by the Company to the
Stockholder.
A-3
8. This Proxy is granted in consideration of the execution and delivery of
the Merger Agreement by the Company. The Stockholder agrees that such Proxy is
coupled with an interest sufficient in law to support an irrevocable power and
shall not be terminated by any act of the Stockholder, by lack of appropriate
power or authority or by the occurrence of any other event or events.
9. The parties acknowledge and agree that performance of their respective
obligations hereunder will confer a unique benefit on the other and that a
failure of performance will not be compensable by money damages. The parties
therefore agree that this Proxy shall be specifically enforceable and that
specific enforcement and injunctive relief shall be available to the Company and
the Stockholder for any breach of any agreement, covenant or representation
hereunder. This Proxy shall revoke all prior proxies given by the Stockholder
at any time with respect to the Parent Shares.
10. The Stockholder will, upon request, execute and deliver any additional
documents and take such actions as may reasonably be deemed by the Company to be
necessary or desirable to complete the Proxy granted herein or to carry out the
provisions hereof.
11. If any term, provision, covenant, or restriction of this Proxy is held
by a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Proxy
shall remain in full force and effect and shall not in any way be affected,
impaired or invalidated.
12. This Proxy may be executed in two counterparts, each of which shall be
deemed to be an original but both of which together shall constitute one and the
same document.
A-4
IN WITNESS WHEREOF, the Company and the Stockholder have caused this Proxy
to be duly executed on the date first above written.
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
MAY & ▇▇▇▇, INC.
By
----------------------------
Name:
Title:
EXHIBIT A-2
-----------
IRREVOCABLE PROXY
IRREVOCABLE PROXY, dated as of May 26, 1998, by and between Acxiom
Corporation, a Delaware corporation (the "Parent"), and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ (the
"Stockholder").
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Parent, ACX Acquisition Co., Inc. a Delaware corporation and a
wholly owned subsidiary of Parent ("Sub"), and May & ▇▇▇▇, Inc. (the "Company")
are entering into an Agreement and Plan of Merger, dated as of May 26, 1998 (the
"Merger Agreement"), providing, among other things, for the merger (the
"Merger") of Sub with and into the Company, as a result of which each of the
outstanding shares of Common Stock, par value $.01 per share, of the Company
(the "Company Common Stock") will be converted into the right to receive .80 of
a share of the Common Stock, par value $.10 per share, of Parent (the "Parent
Common Stock"), and the Company will become a wholly owned subsidiary of Parent;
and
WHEREAS, the Stockholder is the owner of record of an aggregate of
70,000 shares (the "Shares") of the Company Common Stock and the Stockholder is
the owner beneficially of an additional 1,759,224 shares of Company Common
Stock; and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Parent has requested that the Stockholder agree, and the Stockholder
has agreed, to grant Parent an irrevocable proxy (the "Proxy") with respect to
the Shares, upon the terms and subject to the conditions hereof;
NOW, THEREFORE, to induce Parent to enter into the Merger Agreement
and in consideration of the aforesaid and the mutual representations,
warranties, covenants and agreements set forth herein and in the Merger
Agreement, the parties hereto agree as follows:
1. The Stockholder hereby constitutes and appoints Parent, during
the term of this Agreement as the Stockholder's true and lawful proxy and
attorney-in-fact, with full power of substitution, to vote all of the Shares
(and any and all securities issued or issuable in respect thereof) which
Stockholder is entitled to vote, for and in the name, place and stead of the
Stockholder, at any annual, special or other meeting of the stockholders of the
Company, and at any adjournment or adjournments thereof, or pursuant to any
consent in lieu of a meeting or otherwise, in favor of any proposal to approve
and adopt the Merger Agreement and any transactions contemplated thereby. All
power and authority hereby conferred is coupled with an interest and is
irrevocable. In the event that Parent is unable to exercise such power and
authority for any reason, the Stockholder agrees that he will vote all the
Shares in favor of approval and adoption of the Merger Agreement and the
transactions contemplated thereby, at any such meeting or adjournment thereof,
or provide his written consent thereto.
2. The Stockholder hereby covenants and agrees that the Stockholder
will not, and will not agree to, directly or indirectly, sell, transfer, assign,
pledge, hypothecate, cause to be redeemed or otherwise dispose of any of the
Shares or grant any proxy or interest in or with respect to such Shares or
deposit such Shares into a voting trust or enter into a voting agreement or
arrangement with respect to such Shares. The Stockholder further covenants and
agrees that the Stockholder will not initiate or solicit, directly or
indirectly, any inquiries or the making of any proposal with respect to engage
in negotiations concerning, provide any confidential information or
A-2-2
data to, or have any discussions with, any person relating to, any acquisition,
business combination or purchase of all or any significant portion of the assets
of, or any equity interest in (other than the Shares), the Company or any
subsidiary thereof; provided, however, nothing contained herein shall be deemed
to prohibit the Stockholder from exercising his fiduciary duties as a director
of the Company pursuant to applicable law.
3. The Stockholder represents and warrants to Parent, that the
Shares consist of 70,000 shares of Company Common Stock owned beneficially and
of record by the Stockholder on the date hereof; such Shares together with the
additional 1,759,224 shares of Company Common Stock owned beneficially by the
Stockholder are all of the securities of the Company owned of record or
beneficially by the Stockholder on the date hereof, the Stockholder owns the
Shares free and clear of all liens, charges, claims, encumbrances and security
interests of any nature whatsoever; and except as provided herein, the
Stockholder has not granted any proxy with respect to the Shares, deposited such
Shares into a voting trust or entered into any voting agreement or other
arrangement with respect to such Shares.
4. Any shares of Company Common Stock issued to the Stockholder upon
the exercise of any stock options that are currently exercisable or become
exercisable during the term of this Agreement shall be deemed Shares for
purposes of this Agreement.
5. This Proxy shall be governed by and construed in accordance with
the laws of the State of Delaware without giving effect to the provisions
thereof relating to conflicts of law.
6. This Proxy shall be binding upon, inure to the benefit of, and be
enforceable by the successors and permitted assigns of the parties hereto. This
Proxy and the rights hereunder
A-2-3
may not be assigned or transferred by Parent, except that Parent may assign its
rights hereunder to any direct or indirect subsidiary.
7. This Proxy shall terminate at the earlier of (i) the
effectiveness of the Merger, or (ii) the termination of the Merger Agreement in
accordance with its terms, or (iii) upon notice of termination given by Parent
to the Stockholder.
8. This Proxy is granted in consideration of the execution and
delivery of the Merger Agreement by Parent. The Stockholder agrees that such
Proxy is coupled with an interest sufficient in law to support an irrevocable
power and shall not be terminated by any act of the Stockholder, by lack of
appropriate power or authority or by the occurrence of any other event or
events.
9. The parties acknowledge and agree that performance of their
respective obligations hereunder will confer a unique benefit on the other and
that a failure of performance will not be compensable by money damages. The
parties therefore agree that this Proxy shall be specifically enforceable and
that specific enforcement and injunctive relief shall be available to Parent and
the Stockholder for any breach of any agreement, covenant or representation
hereunder. This Proxy shall revoke all prior proxies given by the Stockholder
at any time with respect to the Shares.
10. The Stockholder will, upon request, execute and deliver any
additional documents and take such actions as may reasonably be deemed by Parent
to be necessary or desirable to complete the Proxy granted herein or to carry
out the provisions hereof.
11. If any term, provision, covenant, or restriction of this Proxy is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions,
A-2-4
covenants and restrictions of this Proxy shall remain in full force and effect
and shall not in any way be affected, impaired or invalidated.
12. This Proxy may be executed in two counterparts, each of which
shall be deemed to be an original but both of which together shall constitute
one and the same document.
A-2-5
IN WITNESS WHEREOF, Parent and the Stockholder have caused this Proxy
to be duly executed on the date first above written.
-------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
ACXIOM CORPORATION
By -------------------------------
Name:
Title:
EXHIBIT A-3
-----------
IRREVOCABLE PROXY
IRREVOCABLE PROXY, dated as of May 26, 1998, by and between Acxiom
Corporation, a Delaware corporation (the "Parent"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. (the
"Stockholder").
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Parent, ACX Acquisition Co., Inc. a Delaware corporation and a
wholly owned subsidiary of Parent ("Sub"), and May & ▇▇▇▇, Inc. (the "Company")
are entering into an Agreement and Plan of Merger, dated as of May 26, 1998 (the
"Merger Agreement"), providing, among other things, for the merger (the
"Merger") of Sub with and into the Company, as a result of which each of the
outstanding shares of Common Stock, par value $.01 per share, of the Company
(the "Company Common Stock") will be converted into the right to receive .80 of
a share of the Common Stock, par value $.10 per share, of Parent (the "Parent
Common Stock"), and the Company will become a wholly owned subsidiary of Parent;
and
WHEREAS, the Stockholder is the owner of record of an aggregate of
808,801 shares (the "Shares") of the Company Common Stock and the Stockholder is
the owner beneficially of an additional 262,994 shares of Company Common Stock;
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Parent has requested that the Stockholder agree, and the Stockholder
has agreed, to grant Parent an irrevocable proxy (the "Proxy") with respect to
the Shares, upon the terms and subject to the conditions hereof;
A-3-1
NOW, THEREFORE, to induce Parent to enter into the Merger Agreement
and in consideration of the aforesaid and the mutual representations,
warranties, covenants and agreements set forth herein and in the Merger
Agreement, the parties hereto agree as follows:
1. The Stockholder hereby constitutes and appoints Parent, during
the term of this Agreement as the Stockholder's true and lawful proxy and
attorney-in-fact, with full power of substitution, to vote all of the Shares
(and any and all securities issued or issuable in respect thereof) which
Stockholder is entitled to vote, for and in the name, place and stead of the
Stockholder, at any annual, special or other meeting of the stockholders of the
Company, and at any adjournment or adjournments thereof, or pursuant to any
consent in lieu of a meeting or otherwise, in favor of any proposal to approve
and adopt the Merger Agreement and any transactions contemplated thereby. All
power and authority hereby conferred is coupled with an interest and is
irrevocable. In the event that Parent is unable to exercise such power and
authority for any reason, the Stockholder agrees that he will vote all the
Shares in favor of approval and adoption of the Merger Agreement and the
transactions contemplated thereby, at any such meeting or adjournment thereof,
or provide his written consent thereto.
2. The Stockholder hereby covenants and agrees that the Stockholder
will not, and will not agree to, directly or indirectly, sell, transfer, assign,
pledge, hypothecate, cause to be redeemed or otherwise dispose of any of the
Shares or grant any proxy or interest in or with respect to such Shares or
deposit such Shares into a voting trust or enter into a voting agreement or
arrangement with respect to such Shares. The Stockholder further covenants and
agrees that the Stockholder will not initiate or solicit, directly or
indirectly, any inquiries or the making of any proposal with respect to engage
in negotiations concerning, provide any confidential information or
A-3-2
data to, or have any discussions with, any person relating to, any acquisition,
business combination or purchase of all or any significant portion of the assets
of, or any equity interest in (other than the Shares), the Company or any
subsidiary thereof; provided, however, nothing contained herein shall be deemed
to prohibit the Stockholder from exercising his fiduciary duties as a director
of the Company pursuant to applicable law.
3. The Stockholder represents and warrants to Parent, that the
Shares consist of 808,801 shares of Company Common Stock owned beneficially and
of record by the Stockholder on the date hereof; such Shares together with the
additional 262,994 shares of Company Common Stock owned beneficially by the
Stockholder are all of the securities of the Company owned of record or
beneficially by the Stockholder on the date hereof, the Stockholder owns the
Shares free and clear of all liens, charges, claims, encumbrances and security
interests of any nature whatsoever; and except as provided herein, the
Stockholder has not granted any proxy with respect to the Shares, deposited such
Shares into a voting trust or entered into any voting agreement or other
arrangement with respect to such Shares.
4. Any shares of Company Common Stock issued to the Stockholder upon
the exercise of any stock options that are currently exercisable or become
exercisable during the term of this Agreement shall be deemed Shares for
purposes of this Agreement.
5. This Proxy shall be governed by and construed in accordance with
the laws of the State of Delaware without giving effect to the provisions
thereof relating to conflicts of law.
6. This Proxy shall be binding upon, inure to the benefit of, and be
enforceable by the successors and permitted assigns of the parties hereto. This
Proxy and the rights hereunder
A-3-3
may not be assigned or transferred by Parent, except that Parent may assign its
rights hereunder to any direct or indirect subsidiary.
7. This Proxy shall terminate at the earlier of (i) the
effectiveness of the Merger, or (ii) the termination of the Merger Agreement in
accordance with its terms, or (iii) upon notice of termination given by Parent
to the Stockholder.
8. This Proxy is granted in consideration of the execution and
delivery of the Merger Agreement by Parent. The Stockholder agrees that such
Proxy is coupled with an interest sufficient in law to support an irrevocable
power and shall not be terminated by any act of the Stockholder, by lack of
appropriate power or authority or by the occurrence of any other event or
events.
9. The parties acknowledge and agree that performance of their
respective obligations hereunder will confer a unique benefit on the other and
that a failure of performance will not be compensable by money damages. The
parties therefore agree that this Proxy shall be specifically enforceable and
that specific enforcement and injunctive relief shall be available to Parent and
the Stockholder for any breach of any agreement, covenant or representation
hereunder. This Proxy shall revoke all prior proxies given by the Stockholder
at any time with respect to the Shares.
10. The Stockholder will, upon request, execute and deliver any
additional documents and take such actions as may reasonably be deemed by Parent
to be necessary or desirable to complete the Proxy granted herein or to carry
out the provisions hereof.
11. If any term, provision, covenant, or restriction of this Proxy is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remainder of the terms, provisions,
A-3-4
covenants and restrictions of this Proxy shall remain in full force and effect
and shall not in any way be affected, impaired or invalidated.
12. This Proxy may be executed in two counterparts, each of which
shall be deemed to be an original but both of which together shall constitute
one and the same document.
A-3-5
IN WITNESS WHEREOF, Parent and the Stockholder have caused this Proxy
to be duly executed on the date first above written.
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
ACXIOM CORPORATION
By ----------------------------------
Name:
Title:
EXHIBIT B
---------
AMENDMENT TO RIGHTS AGREEMENT
Amendment Number One, dated as of May ___, 1998, to the Rights
Agreement, dated as of March 1, 1996 (the "Rights Agreement"), between MAY &
▇▇▇▇, INC., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇ TRUST AND SAVINGS
BANK, an Illinois banking corporation, as Rights Agent (the "Rights Agent").
WHEREAS, the Company and the Rights Agent entered into the Rights
Agreement specifying the terms of the Rights (as defined therein);
WHEREAS, the Company desires to amend the Rights Agreement in
accordance with Section 27 of the Rights Agreement;
WHEREAS, the Company proposes to enter into an Agreement and Plan of
Merger, dated as of May 26, 1998 (the "Merger Agreement"), among the Company,
Acxiom Corporation ("Parent") and ACX Acquisition Co., Inc. ("Sub").
WHEREAS, as a condition to the Merger Agreement and in order to induce
Parent to enter into the Merger Agreement, the Company proposes to enter into a
Stock Option Agreement, dated as of May ___, 1998, between the Company and
Parent (the "Stock Option Agreement"), pursuant to which the Company will grant
Parent an irrevocable option (the "Option") to purchase up to 19.9% of the
number of shares (the "Option Shares") of common stock, par value $.01 per share
("Common Stock"), of the Company issued and outstanding immediately prior to the
grant of the Option;
WHEREAS, as a condition to the Merger Agreement and in order to induce
Parent to enter into the Merger Agreement, __________________________, holders
of shares of Common Stock (each, a "Stockholder" and collectively, the
"Stockholders"), each propose to enter into an irrevocable proxy, dated as of
May ___, 1998, between such Stockholder and Parent, pursuant to which such
Stockholder will grant Parent an irrevocable proxy (each, a "Proxy" and
collectively, the "Proxies") to vote such Stockholder's shares of Common Stock;
and
WHEREAS, the Board of Directors of the Company has determined it
advisable and in the best interest of the stockholders of the Company to amend
the Rights Agreement to enable the Company to enter into the Merger Agreement
and the Stock Option Agreement and consummate the transactions contemplated
thereby without causing Parent to become an "Acquiring Person" (as defined in
the Rights Agreement).
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein and in the Rights Agreement, the parties hereby agree as
follows:
B-1
1. Definitions. Capitalized terms used and not otherwise defined herein shall
have the meaning assigned to such terms in the Rights Agreement.
2. Amendments to the Rights Agreement. The Rights Agreement is hereby amended
as set forth in this Section 2.
a. Section 1 of the Rights Agreement, "Certain Definitions", is hereby
amended and restated by deleting the definition of "Acquiring Person"
thereof and inserting in lieu thereof the following:
"Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the Common Shares of the
Company then outstanding, but shall not include the Company, any Subsidiary (as
such term is hereinafter defined) of the Company, any employee benefit plan of
the Company or any Subsidiary of the Company, any Person holding Common Shares
for or pursuant to the terms of any such plan, or any Grandfathered Person.
Notwithstanding the foregoing, no Person (including, without limitation, any
Grandfathered Person) shall become an "Acquiring Person" as the result of (a) an
acquisition of Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Shares of the Company then
outstanding; (b) the acquisition by such Person of newly issued Common shares
directly from the Company (it being understood that a purchase from an
underwriter or other intermediary is not directly from the Company); or (c) that
the Parent, and its Affiliates and Associates shall not be deemed to be an
Acquiring Person as a result of either (i) the grant of the Option (as such term
is defined in the Stock Option Agreement) pursuant to the Stock Option
Agreement, or at any time following the exercise thereof and the issuance of
shares of Common Shares in accordance with the terms of the Stock Option
Agreement or (ii) the grant of the Proxies by and between the Stockholders and
Parent, or at any time following the delivery and execution thereof; provided,
however, that if a Person shall become the Beneficial Owner of 15% or more of
the Common Shares of the Company then outstanding by reason of share purchases
by the Company or the receipt of newly issued Common Shares directly from the
Company and shall, after such share purchases or direct issuance by the Company,
become the Beneficial Owner of any additional Common Shares of the Company, then
such Person shall be deemed to be an "Acquiring Person;" provided further,
however, that any transferee from such Person who becomes the Beneficial Owner
of 15% or more of the Common Shares of the Company then outstanding shall
nevertheless be deemed to be an "Acquiring Person." Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith
that a Person who would otherwise be an "Acquiring Person," as defined pursuant
to the foregoing provisions of this paragraph, has become such inadvertently,
and such Person divests as promptly as practicable (and in any event within ten
business days after notification by the Company) a sufficient number of Common
Shares so that such Person would no longer be an Acquiring Person, as defined
pursuant to the foregoing provisions of this paragraph, then such Person shall
not be deemed to be an "Acquiring Person" for any purposes of this Agreement.
B-2
b. Section 7(a) of the Rights Agreement is hereby amended by deleting
subsections 7(a)(i), 7(a)(ii), and 7(a)(iii) and inserting in lieu
thereof the following:
(i) the close of business on the tenth anniversary of the
effective date of this Agreement (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"), (iii) the time immediately prior to the Effective Time
(as such term is defined in that certain Agreement and Plan of Merger dated
as of May 26, 1998, among the Company, Acxiom Corporation and ACX
Acquisition Co., Inc. (the earliest to occur of (i), (ii) and (iii) being
herein referred to as the "Expiration Date"), and (iv) the time at which
such Rights are exchanged as provided in Section 24 hereof.
3. Miscellaneous.
-------------
a. The term "Agreement" as used in the Rights Agreement shall be deemed to
refer to the Rights Agreement as amended hereby.
b. The foregoing amendment shall be effective as of the date first above
written, and, except as set forth herein, the Rights Agreement shall
remain in full force and effect and shall be otherwise unaffected
hereby.
c. This Amendment may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all for which together
shall constitute one and the same instrument.
d. This Amendment shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State.
B-3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Number One to be duly executed and attested, all as of the day and year first
above written.
Attest: MAY & ▇▇▇▇, INC.
By: ________________________ By: ________________________
Name: Name:
Title: Title:
Attest: ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: ________________________ By: ________________________
Name: Name:
Title: Title:
EXHIBIT C
---------
FORM OF AFFILIATE LETTER FOR AFFILIATES OF THE COMPANY
Acxiom Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be deemed
to be an "affiliate" of May & ▇▇▇▇, Inc., a Delaware corporation (the
"Company"), as the term "affiliate" is (i) defined for purposes of paragraphs
(c) and (d) of Rule 145 of the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act"), and/or (ii) used in
and for purposes of Accounting Series Releases No. 130 and No. 135, as amended,
of the SEC. Pursuant to the terms of the Agreement and Plan of Merger, dated as
of May 26, 1998 (the "Merger Agreement"), among Acxiom Corporation, a Delaware
corporation ("Parent"), ACX Acquisition Co., a Delaware corporation (" Sub"),
and the Company, (i) Sub will be merged with and into the Company, with the
Company continuing as the surviving corporation (the "Merger"), (ii) the Company
will become a subsidiary of Parent, and (iii) stockholders of the Company will
become stockholders of Parent. Capitalized terms used in this letter without
definition shall have the meanings assigned to them in the Merger Agreement.
As a result of the Merger, I may receive shares of common stock, par
value $.10 per share, of Parent (the "Parent Common Stock"). I would receive
such Parent Common Stock in exchange for shares (or upon exercise of options for
shares) owned by me of common stock, par value $0.01 per share, of the Company
(the "Company Common Stock").
1. I hereby represent and warrant to, and covenant with Parent that
in the event I receive any shares of Parent Common Stock as a result of the
Merger:
(a) I shall not make any offer, sale, pledge, transfer
or other disposition of shares of Parent Common Stock
in violation of the Securities Act or the Rules and
Regulations.
(b) I have carefully read this letter and the Merger
Agreement and discussed the requirements of such
documents and other applicable limitations upon my
ability to sell, transfer or otherwise dispose of
shares of Parent Common
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Stock, to the extent I felt necessary, with my counsel
or counsel for the Company.
(c) I have been advised that the issuance of shares of
Parent Common Stock to me pursuant to the Merger has
been registered with the SEC under the Securities Act
on a Registration Statement on Form S-4. However, I
have also been advised that, because at the time the
Merger is submitted for a vote of the stockholders of
the Company, (a) I may be deemed to be an affiliate of
the Company and (b) the distribution by me of shares of
Parent Common Stock has not been registered under the
Act, I may not sell, transfer or otherwise dispose of
the shares of Parent Common Stock issued to me in the
Merger unless (i) such sale, transfer or other
disposition is made in conformity with the volume and
other limitations of Rule 145 promulgated by the SEC
under the Securities Act, (ii) such sale, transfer or
other disposition has been registered under the
Securities Act or (iii) in the opinion of counsel
reasonably acceptable to Parent, or a "no action"
letter obtained by the undersigned from the staff of
the SEC such sale, transfer or other disposition is
otherwise exempt from registration under the Securities
Act.
(d) I understand that Parent is under no obligation to
register the sale, transfer or other disposition of
Parent Common Stock by me or on my behalf under the Act
or, except as provided in paragraph 2(A) below, to take
any other action necessary in order to make compliance
with an exemption from such registration available.
(e) I also understand that stop transfer instructions
will be given to the Company's transfer Agent with
respect to shares of Company Common Stock currently
held by me and to Parent's transfer Agent with respect
to shares of Parent Common Stock issued to me in the
Merger, and there will be placed on the certificates
for such shares of Parent Common Stock, a legend
stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES
ACT OF 1933 APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE
MAY ONLY BE TRANSFERRED IN
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ACCORDANCE WITH THE TERMS OF AN AGREEMENT DATED MAY , 1998
BETWEEN THE REGISTERED HOLDER HEREOF AND ACXIOM CORPORATION, A
COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICES OF
ACXIOM CORPORATION."
(f) I also understand that unless a sale or transfer is
made in conformity with the provisions of Rule 145, or
pursuant to a registration statement, Parent reserves
the right to put the following legend on the
certificates issued to my transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE ACQUIRED
FROM A PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH
RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES.
THE SHARES HAVE BEEN ACQUIRED BY THE HOLDER NOT WITH A VIEW TO,
OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN
THE MEANING OF THE SECURITIES ACT OF 1933 AND MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OF 1933."
(g) I further represent to, and covenant with Parent
that I will not sell, transfer or otherwise dispose of
or reduce my risk (as contemplated by the SEC
Accounting Series Release No. 135) with respect to
shares of Company Common Stock that I may hold and,
furthermore, that I will not sell, transfer or
otherwise dispose of or reduce my risk (as contemplated
by SEC Accounting Series Release No. 135) with respect
to the shares of Parent Common Stock received by me in
the Merger or any other shares of the capital stock of
Parent during the 30 days prior to the Effective Time
until after such time as results covering at least 30
days of continued operations of Parent and the Company
have been published by Parent, in the form of a
quarterly earnings report, an effective registration
statement filed with the SEC, a report to the SEC on
Form 10-K, 10-Q or 8-K, or any other public filing or
announcement which includes the combined results of
operations of Parent and the Company (the period
commencing 30 days prior to the Effective Time and
ending
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on the date of the publication of the post-Merger
financial results is referred to herein as the "Pooling
Period"). Parent shall notify the "affiliates" of the
publication of such results. Notwithstanding the
foregoing, I understand that during the Pooling Period
I will be permitted to sell, transfer or otherwise
dispose of or reduce my risk with respect to an amount
of Parent Common Stock and Company Common Stock not
more than the de minimus amount permitted by the SEC in
its rules and releases relating to pooling of interests
accounting treatment and in accordance with Rule
145(d)(i) under the Securities Act, subject to
providing advance written notice to Parent.
(h) Execution of this letter should not be considered
an admission on my part that I am an "affiliate" of the
Company as described in the first paragraph of this
letter, nor as a waiver of any rights I may have to
object to any claim that I am such an affiliate on or
after the date of this letter.
2. By Parent's acceptance of this letter, Parent hereby agrees with
me as follows:
A. For so long as and to the extent necessary to permit me to
sell the shares of Parent Common Stock pursuant to Rule 145 and, to
the extent applicable, Rule 144 under the Act, Parent shall (a) use
its reasonable best efforts to (i) file, on a timely basis, all
reports and data required to be filed with the SEC by it pursuant to
Section 13 of the Securities Exchange Act of 1934, as amended and (ii)
furnish to me upon request a written statement as to whether Parent
has complied with such reporting requirements during the 12 months
preceding any proposed sale of the shares of Parent Common Stock by me
under Rule 145, and (b) otherwise use its reasonable efforts to permit
such sales pursuant to Rule 145 and Rule 144.
B. It is understood and agreed that certificates with the
legends set forth in paragraphs E and F above will be substituted by
delivery of certificates without such legend if (i) one year shall
have elapsed from the date the undersigned acquired the shares of
Parent Common Stock received in the Merger and the provisions of Rule
145(d)(2) are then available to the undersigned, (ii) two years shall
have elapsed from the date the undersigned acquired the shares of
Parent Common Stock received in the Merger and the provisions of Rule
145(d)(3) are then applicable to the undersigned, or (iii) Parent has
received either an opinion of counsel, which opinion and counsel shall
be reasonably satisfactory to Parent, or a "no-action" letter obtained
by the undersigned from the staff of the SEC, to the effect that the
restrictions imposed by Rule 144 and Rule 145 under the Act no longer
apply to the undersigned.
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Very truly yours,
--------------------------------
Name:
C-5
Agreed and accepted this __ day
of _______________ 1998, by
ACXIOM CORPORATION
By: ---------------------------
Name:
Title:
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EXHIBIT D
FORM OF AFFILIATE LETTER FOR AFFILIATES OF PARENT
Acxiom Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be deemed
to be an "affiliate" of Acxiom Corporation, a Delaware corporation ("Parent"),
as the term "affiliate" is defined for purposes of Accounting Series Releases
No. 130 and No. 135, as amended, of the Securities and Exchange Commission (the
"SEC"). Pursuant to the terms of the Agreement and Plan of Merger, dated as of
May 26, 1998 (the "Merger Agreement"), among May & ▇▇▇▇, Inc., a Delaware
corporation (the "Company"), ACX Acquisition Co., a Delaware corporation
("Sub"), and Parent, (i) Sub will be merged with and into the Company, with the
Company continuing as the Surviving Corporation (the "Merger"), (ii) the Company
will become a subsidiary of Parent, and (iii) stockholders of the Company will
become stockholders of Parent.
I hereby represent to, and covenant with Parent that I will not sell,
transfer or otherwise dispose of or reduce my risk (as contemplated by the SEC
Accounting Series Release No. 135) with respect to any shares of common stock,
par value $.10 per share, of Parent (the "Parent Common Stock") that I may hold
and, furthermore, that I will not sell, transfer or otherwise dispose of or
reduce my risk (as contemplated by the SEC Accounting Series Release No. 135)
with respect to any shares of common stock, par value $0.01 per share, of the
Company ("Company Common Stock") that I may hold during the 30 days prior to the
Effective Time (as defined in the Merger Agreement) until after such time as
results covering at least 30 days of combined operations of Parent and the
Company have been published by Parent, in the form of a quarterly earnings
report, an effective registration statement filed with the SEC, a report to the
SEC on Form 10-K, 10-Q or 8-K, or any other public filing or announcement which
includes the combined results of operations of Parent and the Company (the
period commencing 30 days prior to the Effective Time and ending on the date of
the publication of the post-Merger financial results is referred to herein as
the "Pooling Period"). Parent shall notify the "affiliates"of the publication
of such results. Notwithstanding the foregoing, I understand that during the
Pooling Period I will be permitted to sell, transfer or otherwise dispose of or
reduce my risk with respect to an amount of Parent Common Stock and Company
Common Stock not more than the de minimus amount permitted by the SEC in its
rules and releases relating to pooling of interests accounting treatment,
subject to providing advance written notice to Parent.
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Execution of this letter should not be considered an admission on my
part that I am an "affiliate" of Parent as described in the first paragraph of
this letter, nor as a waiver of any rights I may have to object to any claim
that I am such an affiliate on or after the date of this letter.
Very truly yours,
------------------------------
Name:
D-2
Agreed and accepted this __ day
of ___________, 1998, by
ACXIOM CORPORATION
By: -------------------------
Name:
Title:
MAY & ▇▇▇▇, INC.
By: -------------------------
Name:
Title:
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