Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
THERMO ELECTRON CORPORATION
THERMOTREX ACQUISITION CORPORATION
AND
THERMOTREX CORPORATION
DATED AS OF DECEMBER 14, 1999
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of December
14, 1999 is by and among Thermo Electron Corporation, a Delaware corporation
("Thermo Electron"), ThermoTrex Acquisition Corporation, a Delaware corporation
and a wholly-owned subsidiary of Thermo Electron ("Merger Sub"), and ThermoTrex
Corporation, a Delaware corporation (the "Company").
RECITALS
A. Thermo Electron owns approximately 80.14% of the outstanding shares of
common stock, par value $.01 per share, of the Company (the "Company Common
Stock"), and Thermo Electron desires to acquire all of the remaining outstanding
shares of Company Common Stock.
B. Thermo Electron has formed the Merger Sub as a subsidiary with the
intent of causing it to merge with the Company, as described in this Agreement.
C. Upon the terms and subject to the conditions of this Agreement and in
accordance with the Delaware General Corporation Law (the "DGCL"), Thermo
Electron and the Company will enter into a business combination transaction
pursuant to which Merger Sub will merge with and into the Company (the
"Merger").
D. The Board of Directors of Thermo Electron (i) has determined that the
Merger is consistent with and in furtherance of the long-term business strategy
of Thermo Electron and is in the best interests of Thermo Electron and its
stockholders, and (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement.
E. The Board of Directors of the Company, on the recommendation of a
special committee of the Board of Directors (the "Special Committee"),
consisting of two directors of the Company who are not officers or directors of
Thermo Electron or officers of the Company, (i) has determined that this
Agreement, including the Exchange Ratio (as defined below), and the transactions
contemplated by this Agreement, are fair to, and in the best interests of, the
stockholders of the Company (other than Thermo Electron and its subsidiaries),
(ii) has approved and declared the advisability of this Agreement, the Merger
and the other transactions contemplated by this Agreement and (iii) has resolved
to recommend the approval and adoption of this Agreement by the stockholders of
the Company.
▇. ▇▇▇▇▇▇▇▇▇ Associates LLC (the "Financial Advisor") has delivered to the
Special Committee, for its consideration, and for delivery to the stockholders
of the Company, its written opinion that, subject to the various assumptions and
limitations set forth therein, as of the date of such opinion the consideration
to be received by the stockholders of the Company (other than Thermo Electron
and its subsidiaries) is fair to such stockholders from a financial point of
view.
G. Thermo Electron, the Company and Merger Sub desire to make certain
representations and warranties and other agreements in connection with the
Merger.
1
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1. The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the DGCL, Merger Sub shall be merged with and into the
Company, the separate corporate existence of Merger Sub shall cease and the
Company shall continue as the surviving corporation. The Company as the
surviving corporation after the Merger is hereinafter sometimes referred to as
the "Surviving Corporation."
1.2. Effective Time; Closing. Subject to the provisions of this Agreement,
the parties shall cause the Merger to be consummated by filing a Certificate of
Merger (the "Certificate of Merger") with the Secretary of State of the State of
Delaware in accordance with the relevant provisions of the DGCL (the time of
such filing, or such later time as may be agreed in writing by the parties and
specified in the Certificate of Merger, being the "Effective Time" and the date
on which the Effective Time occurs being the "Effective Date") as soon as
practicable on the Closing Date (as herein defined). Unless the context
otherwise requires, the term "Agreement" as used herein refers collectively to
this Agreement and the Certificate of Merger. The closing of the Merger (the
"Closing") shall take place at the executive offices of Thermo Electron at a
time and date to be specified by the parties, which shall be as soon as
practicable after the satisfaction or waiver of the conditions set forth in
Article VI, or at such other time, date and location as the parties hereto agree
in writing (the "Closing Date"). At the Closing, (i) the Company shall deliver
to Thermo Electron the various certificates and instruments required under
Article VI, (ii) Thermo Electron and Merger Sub shall deliver to the Company the
various certificates and instruments required under Article VI and (iii) Merger
Sub and the Company shall execute and file the Certificate of Merger with the
Secretary of State of the State of Delaware, in accordance with the applicable
provisions of the DGCL.
1.3. Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of the
DGCL. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and franchises
of the Company and Merger Sub shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and Merger Sub shall become the
debts, liabilities and duties of the Surviving Corporation.
1.4. Certificate of Incorporation; Bylaws.
(a) Subject to the requirements of Section 5.10 hereof, at the
Effective Time, the Certificate of Incorporation of Merger Sub, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation.
2
(b) Subject to the requirements of Section 5.10 hereof, the Bylaws
of Merger Sub, as in effect immediately prior to the Effective Time, shall be,
at the Effective Time, the Bylaws of the Surviving Corporation until thereafter
amended.
1.5. Directors and Officers. The directors of the Company immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, to serve until their respective successors are duly elected or
appointed and qualified. The officers of the Company immediately prior to the
Effective Time shall be the officers of the Surviving Corporation, to serve
until their successors are duly elected or appointed and qualified.
1.6. Effect on Capital Stock. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, the Company or the
holders of any of the following securities:
(a) Exchange of the Company Common Stock. Subject to the balance of
this Section 1.6 and Section 1.11 hereof, each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time will be
automatically converted into the right to receive 0.5503 share (subject to
adjustment pursuant to Section 1.6(f) hereof, the "Exchange Ratio") of the
common stock, $1.00 par value, of Thermo Electron (the "Thermo Common Stock").
As of the Effective Time, all shares of Company Common Stock shall no longer be
outstanding and shall be automatically canceled and retired and shall cease to
exist, and each holder of a certificate representing any such shares of Company
Common Stock shall cease to have any rights with respect thereto, except the
right to receive the Merger Consideration (as defined in Section 1.7(b)) upon
surrender of the certificate representing such share of Company Common Stock in
the manner provided in Section 1.7 (or in the case of a lost, stolen or
destroyed certificate, upon delivery of an affidavit (and bond, if reasonably
required) in the manner provided in Section 1.9).
(b) Stock Options. The Company and Thermo Electron each shall use
its reasonable best efforts to cause all options to purchase Company Common
Stock outstanding immediately prior to the Effective Time under stock option
plans maintained or assumed by the Company and stock option agreements between
the Company and certain of its employees existing on the date hereof (the
"Company Stock Option Plans"), to be converted into options to purchase Thermo
Common Stock in accordance with Section 5.8 hereof.
(c) Convertible Debentures. All Company convertible debentures (the
"Convertible Debentures") issued pursuant to an Indenture dated as of October
28, 1997, by and among the Company, Thermo Electron, and Bankers Trust Company,
as Trustee (as supplemented by the First Supplemental Indenture dated as of
February 6, 1998) outstanding at the Effective Time shall remain the Convertible
Debentures of the Company, provided however, that in lieu of Company Common
Stock being issuable upon conversion of such Convertible Debentures, after the
Effective Time, Thermo Common Stock shall be issuable upon conversion of such
Convertible Debentures in accordance with the terms of the Indenture as
supplemented. At the Effective Time, the price at which Convertible Debentures
then outstanding will be convertible into Thermo Common Stock shall be adjusted
in accordance with the terms of the Indenture, as supplemented.
3
(d) Capital Stock of Merger Sub. Each share of common stock, par
value $.01 per share, of Merger 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.
(e) Treasury Stock; Stock Held By Thermo Electron. Notwithstanding
any other provision of this Agreement, each share of Company Common Stock issued
and outstanding and owned by Thermo Electron or any wholly-owned subsidiary of
Thermo Electron, together with all shares owned by the Company or any
wholly-owned subsidiary of the Company immediately prior to the Effective Time
shall cease to be outstanding, and shall automatically be cancelled and retired
without payment of any consideration therefor, cash or otherwise, and cease to
exist.
(f) Adjustments to Exchange Ratio. The Exchange Ratio shall be
adjusted to reflect fully the effect of any stock split, reverse stock split,
stock dividend (including any dividend or distribution of securities convertible
into, or exercisable or exchangeable for, Company Common Stock or Thermo Common
Stock, as the case may be), recapitalization or other like change without
receipt of consideration with respect to either the Company Common Stock or the
Thermo Common Stock occurring on or after the date hereof and prior to the
Effective Time.
1.7. Surrender of Certificates.
(a) Exchange Agent. Prior to the Effective Time, Thermo Electron
shall authorize Boston Equiserve to act as the exchange agent (the "Exchange
Agent") in the Merger. At or prior to the Effective Time, Thermo Electron shall
deposit with the Exchange Agent, for the benefit of the holders of shares of
Company Common Stock, for exchange in accordance with the provisions of this
Article I, certificates representing the shares of Thermo Common Stock and cash
in lieu of fractional shares issuable pursuant to this Agreement in exchange for
outstanding shares of Company Common Stock. The Thermo Common Stock into which
Company Common Stock shall be converted pursuant to the Merger shall be deemed
to have been issued at the Effective Time.
(b) Exchange Procedures. As soon as practicable after the Effective
Time, Thermo Electron shall cause the Exchange Agent to mail to each holder of
record (as of the Effective Time) of a certificate (a "Certificate" or the
"Certificates") representing Company Common Stock (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent and shall otherwise be in such form and have such other
provisions as Thermo Electron may reasonably specify and as are reasonably
acceptable to the Company) and (ii) instructions for effecting the exchange of
the Certificates for certificates representing shares of Thermo Common Stock, as
provided herein. Upon surrender of a Certificate for cancellation to the
Exchange Agent, together with such letter of transmittal duly completed and
validly executed in accordance with the instructions thereto, the holders of
Company Common Stock shall be entitled to receive in exchange for their
4
Certificates (x) a certificate representing shares of Thermo Common Stock equal
to the Exchange Ratio multiplied by the number of shares of Company Common Stock
represented by such Certificate (rounded down to the nearest whole share), (y)
any dividends or other distributions to which such holder is entitled pursuant
to Section 1.10 hereof, and (z) a check issued pursuant to Section 1.11 hereof
for any fractional share of Thermo Common Stock, and the Certificate so
surrendered shall forthwith be cancelled. (The consideration specified in
clauses (x), (y) and (z) above are referred to herein, collectively, as the
"Merger Consideration"). In the event of a transfer of ownership of shares of
Company Common Stock which is not registered in the transfer records of the
Company as of the Effective Time, the Merger Consideration, shall be delivered
in accordance with this Article I to a transferee if the Certificate evidencing
such shares is presented to the Exchange Agent, accompanied by all documents
required by law to evidence and effect such transfer pursuant to this Section.
Until so surrendered, each outstanding Certificate will be deemed from and after
the Effective Time, for all corporate purposes, to evidence only the right to
receive shares of Thermo Common Stock equal to the Exchange Ratio for each share
of Company Common Stock represented on such Certificate, and the other Merger
Consideration.
(c) Transfers of Ownership. If payment of the Exchange Ratio is to
be made to any person other than the person in whose name the Certificate
surrendered in exchange therefor is registered, it will be a condition of such
payment that the Certificate so surrendered will be properly endorsed and
otherwise in proper form for transfer and that the person requesting such
payment will have paid to Thermo Electron or any agent designated by it any
transfer or other taxes required by reason of payment to a person other than the
registered holder of the Certificate surrendered, or established to the
reasonable satisfaction of Thermo Electron or any agent designated by it that
such tax has been paid or is not payable.
(d) No Liability. Notwithstanding anything to the contrary in this
Section 1.7, neither the Exchange Agent, Thermo Electron, the Surviving
Corporation nor any party hereto shall be liable to a holder of shares of
Company Common Stock for any amount properly paid to a public official pursuant
to any applicable abandoned property, escheat or similar law.
(e) Responsibility; Term. During the term of its engagement, the
Exchange Agent shall be responsible for delivering certificates representing
Thermo Common Stock and the other Merger Consideration to the holders of
properly endorsed Certificates that are returned to the Exchange Agent. Promptly
following the date that is six months after the Effective Date, the Exchange
Agent shall, upon request by Thermo Electron, deliver to Thermo Electron all
cash, Certificates, certificates representing shares of Thermo Common Stock and
other documents in its possession relating to the transactions described in this
Agreement, and the Exchange Agent's duties shall terminate. Thereafter, each
holder of a Certificate formerly representing shares of Company Common Stock may
surrender such Certificate to Thermo Electron and (subject to applicable
abandoned property, escheat and similar laws) shall receive in exchange therefor
the Merger Consideration represented by such Certificate, without any interest
thereon.
1.8. No Further Ownership Rights in Company Common Stock. The Thermo
Common Stock and cash, if any, delivered to the holders of Company Common Stock
upon the surrender of shares of Company Common Stock in accordance with the
terms hereof shall be deemed to have been delivered in full satisfaction of all
rights pertaining to such shares of Company Common Stock.
5
1.9. Lost, Stolen or Destroyed Certificates. In the event any Certificates
shall have been lost, stolen or destroyed, the Exchange Agent shall deliver the
certificates representing Thermo Common Stock and the other Merger Consideration
in respect of such lost, stolen or destroyed Certificates, upon the making of an
affidavit of that fact by the holder thereof; provided, however, that, as a
condition precedent to the payment thereof, the owner of such lost, stolen or
destroyed Certificates shall deliver a bond in such sum as Thermo Electron or
the Exchange Agent may reasonably direct as indemnity against any claim that may
be made against Thermo Electron or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed, unless Thermo
Electron waives such requirement in writing.
1.10. Dividends. No dividends or other distributions that are payable to a
holder of record of Thermo Common Stock as of a date on or after the Effective
Time shall be paid to the holder of Company Common Stock entitled by reason of
the Merger to receive Thermo Common Stock until such holder surrenders its
Certificates in accordance with Section 1.7(b) or provide an affidavit and
indemnity in accordance with Section 1.9. Upon such surrender, the Exchange
Agent or Thermo Electron (in the event that the Exchange Agent's term has
expired), shall pay or deliver to the persons in whose name the certificates
representing such Thermo Common Stock are issued any dividends or other
distributions that are payable to the holders of record of Thermo Common Stock
as of a date on or after the Effective Time and which were paid or delivered
between the Effective Time and the time of such surrender; provided that no such
person shall be entitled to receive any interest on such dividends or other
distributions.
1.11. Fractional Shares. No certificates or scrip representing fractional
shares of Thermo Common Stock shall be issued to holders of Company Common Stock
upon the surrender for exchange of Certificates, and such holders shall not be
entitled to any voting rights, rights to receive any dividends or distributions
or other rights as a stockholder of Thermo Electron with respect to any
fractional shares of Thermo Common Stock that would otherwise be issued to such
holders. In lieu of any fractional shares of Thermo Common Stock that would
otherwise be issued, each holder of Company Common Stock that would have been
entitled to receive a fractional share of Thermo Common Stock shall, upon proper
surrender of such person's Certificates, receive a cash payment (rounded to the
nearest cent) equal to the closing price per share of Thermo Common Stock as
reported in the consolidated transaction reporting system on the trading day
immediately preceding the Closing Date, multiplied by the fraction of a share
that such holder would otherwise be entitled to receive (rounded to the nearest
hundredth of a share).
1.12. Closing of Transfer Books. At the Effective Time, the stock transfer
books of the Company shall be closed and no transfer of Company Common Stock
shall thereafter be made. If, after the Effective Time, Certificates are
presented to Thermo Electron, they shall be canceled and exchanged for the
Merger Consideration in accordance with Article I.
1.13. Taking of Necessary Action; Further Action. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company and Merger Sub, the officers and directors of the
Surviving Corporation are fully authorized in the name of the Company and Merger
Sub or otherwise to take, and will take, all such lawful and necessary action,
so long as such action is consistent with this Agreement.
6
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Thermo Electron and Merger Sub as
follows:
2.1. Organization of the Company. The Company and each of its subsidiaries
is a corporation or other legal entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization, has the corporate or similar power to own, lease and operate its
property and to carry on its business as now being conducted and as proposed by
the Company to be conducted, and is duly qualified to do business and in good
standing as a foreign corporation or other legal entity in each jurisdiction in
which the failure to be so qualified would have a Material Adverse Effect on the
Company. In this Agreement, the term "Material Adverse Effect" used in reference
to the Company means any event, change or effect, that is or is reasonably
likely to be, individually or in the aggregate with other events, changes or
effects, materially adverse to the financial condition, results of operations or
business of the Company and its subsidiaries, taken as a whole.
2.2. Company Capital Structure. The authorized capital stock of the
Company consists of 50,000,000 shares of Common Stock, par value $.01 per share,
of which there were 22,369,097 shares issued and outstanding as of October 2,
1999, and 933,421 shares in treasury. All outstanding shares of Company Common
Stock are duly authorized, validly issued, fully paid and non-assessable and are
not subject to preemptive rights created by statute, the Certificate of
Incorporation or Bylaws of the Company or any agreement or document to which the
Company is a party or by which it is bound. As of October 2, 1999, an aggregate
of 1,731,685 shares of Company Common Stock, net of exercises, were reserved for
issuance to employees, consultants and non-employee directors pursuant to
Company Stock Option Plans, under which options were outstanding for an
aggregate of 1,020,960 shares as of such date; 3,294,369 shares of Company
Common Stock were reserved for issuance upon the conversion of the Convertible
Debentures, 46,081 shares of Company Stock were reserved for issuance under the
Company Employee Stock Purchase Plan, and 22,500 shares of Company Common Stock
were reserved for issuance under the Company Directors Deferred Compensation
Plan. As of November 8, 1999, 764,178 shares of Company Common Stock were
reserved for issuance under stock option plans maintained or assumed by the
Company relating to the issuance of common stock of Trex Communications
Corporation which have been converted to options to acquire Company Common
Stock. All shares of Company Common Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, would be duly authorized, validly issued, fully paid
and non-assessable.
2.3. Authority.
(a) The Company has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company, subject only to the adoption of
this Agreement by the Company's stockholders by the affirmative vote of the
holders of a majority of the outstanding shares of Company Common Stock (the
"Company Vote") and the filing of the Certificate of Merger pursuant to the
DGCL. Under the DGCL, the Company's stockholders may adopt this Agreement by
vote of the holders of a majority of the outstanding shares of Company Common
Stock. This Agreement has been duly executed and delivered by the Company, and
assuming the due authorization, execution and delivery by Thermo Electron and
Merger Sub, constitutes the valid and binding obligation of the Company,
enforceable in accordance with its terms (except as may be limited by
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting the
rights of creditors generally and the availability of equitable remedies). The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Certificate of Incorporation or Bylaws of the Company or (ii)
subject to obtaining the Company Vote and compliance with the requirements set
forth in Section 2.3(b) below, conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to the Company or any of its
material subsidiaries or by which its or their respective properties is bound,
except, with respect to clause (ii), for any such conflicts, violations,
defaults or other occurrences that would not have a Material Adverse Effect on
the Company or the Surviving Corporation.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other governmental or regulatory body or authority or
instrumentality ("Governmental Entity") is required by or with respect to the
Company in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, except for (i) the filing
of the Certificate of Merger with the Secretary of State of Delaware, (ii) the
filing by the Company and Thermo Electron of the Proxy Statement and the
7
Registration Statement (as defined in Section 5.1), respectively, with the U.S.
Securities and Exchange Commission ("SEC") in accordance with the Securities Act
of 1933, as amended (the "Securities Act") and the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the effectiveness of such Registration
Statement, and (iii) such other consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
federal and state securities laws.
2.4. Board Approval. The Board of Directors of the Company, upon
recommendation of the Special Committee that this Agreement, including the
Exchange Ratio, is fair to, and in the best interests of, the stockholders of
the Company (other than Thermo Electron and its subsidiaries), has, as of the
date of this Agreement, unanimously (i) adopted a resolution approving this
Agreement and declaring its advisability, (ii) determined that the Merger is
fair to, and in the best interests of, the Company and its stockholders (other
than Thermo Electron and its subsidiaries), and (iii) determined to recommend
that the stockholders of the Company vote to adopt this Agreement.
2.5. Fairness Opinion. The Special Committee has received an opinion from
the Financial Advisor dated December 14, 1999 that, as of such date, the
consideration to be received by the Company's stockholders in the Merger is
fair, from a financial point of view, to the Company's stockholders other than
Thermo Electron and its subsidiaries.
8
2.6 Registration Statement, Proxy Statement/Prospectus. The information to
be supplied by or on behalf of the Company for inclusion in the Registration
Statement (including any information incorporated by reference in the
Registration Statement from other filings made by the Company with the SEC)
shall not at the time the Registration Statement becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein not
misleading in light of the circumstances under which they were made. Other than
with respect to the information supplied by or on behalf of Thermo Electron or
the Merger Sub, the Proxy Statement shall not on the date the Proxy Statement is
first mailed to stockholders or at the time of the Company Stockholders' Meeting
(as defined in Section 5.1(b)), 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 statement therein, in light of the circumstances under which
they are made, not false or misleading. The Proxy Statement will comply (other
than with respect to information relating to Thermo Electron and/or Merger Sub)
as to form in all material respects with the provisions of the Exchange Act and
the rules and regulations thereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THERMO ELECTRON AND MERGER SUB
Thermo Electron and Merger Sub, jointly and severally, represent and
warrant to the Company as follows:
3.1. Organization. Thermo Electron is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and Merger Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and each material subsidiary
of Thermo Electron is duly organized, validly existing and in good standing
under the law of the state its organization, each has the corporate power to
own, lease and operate its property and to carry on its business as now being
conducted and as proposed to be conducted, and is duly qualified to do business
and in good standing as a foreign corporation in each jurisdiction in which the
failure to be so qualified would have a Material Adverse Effect on Thermo
Electron. In this Agreement, the term "Material Adverse Effect" used in
reference to Thermo Electron means any event, change or effect, that is or is
reasonably likely to be, individually or in the aggregate with other events,
changes or effects, materially adverse to the financial condition, results of
operations or business of Thermo Electron and its subsidiaries, taken as a
whole.
3.2. Authority.
(a) Each of Thermo Electron and Merger Sub has all requisite
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Thermo Electron and
Merger Sub, subject only to the filing of the Certificate of Merger pursuant to
the DGCL. This Agreement has been duly executed and delivered by each of Thermo
Electron and Merger Sub and, assuming the due authorization, execution and
delivery of this Agreement by the Company, this Agreement constitutes the valid
and binding obligation of each of Thermo Electron and Merger Sub, enforceable in
accordance with its terms (except as may be limited by bankruptcy, insolvency,
9
moratorium, reorganization or similar laws affecting the rights of creditors
generally and the availability of equitable remedies). The execution and
delivery of this Agreement by each of Thermo Electron and Merger Sub do not, and
the performance of this Agreement by each of Thermo Electron and Merger Sub will
not, (i) conflict with or violate the Certificate of Incorporation or Bylaws of
Thermo Electron or the Certificate of Incorporation or Bylaws of Merger Sub or
of any material subsidiary, direct or indirect, of Thermo Electron (including
Merger Sub, but excluding the Company and its subsidiaries) (each, a "Material
Thermo Subsidiary"), (ii) subject to compliance with the requirements set forth
in Section 3.2(c) below, conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Thermo Electron or any Material Thermo
Subsidiaries or by which its or any of their respective properties is bound or
affected, or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
impair Thermo Electron's rights or alter the rights or obligations of any third
party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of Thermo Electron or any
Material Thermo Subsidiaries pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Thermo Electron or any Material Thermo Subsidiaries is a
party or by which Thermo Electron or any Material Thermo Subsidiaries or its or
any of their respective properties are bound or affected, except, with respect
to clauses (ii) and (iii), for any such conflicts, violations, defaults or other
occurrences that would not have a Material Adverse Effect on Thermo Electron.
(b) All shares of Thermo Common Stock issuable in accordance with this
Agreement, and shares of Thermo Common Stock which will be subject to issuance
pursuant to Company Stock Option Plans or the Convertible Debentures will, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights created by statute, the Certificate of
Incorporation or Bylaws of Thermo Electron or any other agreement or document to
which Thermo Electron is a party or by which it is bound.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity is required by or with
respect to Thermo Electron or Merger Sub in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for (i) the filing of the Certificate of Merger with the
Secretary of State of Delaware, (ii) the filing of the Proxy Statement and the
Registration Statement (as defined in Section 5.1) with the SEC in accordance
with the Securities Act and the Exchange Act, and the effectiveness of such
Registration Statement, and (iii) such other consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state securities laws.
3.3. Capitalization
(a) The authorized capital stock of Thermo Electron consists of
350,000,000 shares of Thermo Common Stock, par value $1.00 per share, of which
there were 158,236,781 shares issued and outstanding as of October 2, 1999, and
9,011,451 shares in treasury as of October 2, 1999, and 50,000 shares of
preferred stock, $100 par value per share, of which 40,000 shares have been
designated Series B Junior Participating Preferred Stock, none of which are
issued and outstanding. All of the outstanding shares of Thermo Common Stock are
10
duly authorized, validly issued, fully paid and non-assessable and are not
subject to preemptive rights created by statute, the Certificate of
Incorporation or Bylaws of Thermo Electron or any agreement or document to which
Thermo Electron is a party or by which it is bound. As of October 2, 1999, an
aggregate of 15,653,373 shares of Thermo Common Stock, net of exercises, were
reserved for issuance to employees, consultants and non-employee directors
pursuant to stock option plans maintained by Thermo Electron, under which
options are outstanding for an aggregate of 11,912,116 shares. As of October 2,
1999, an aggregate of 15,476,191 shares of Thermo Common Stock were reserved for
issuance upon the conversion of convertible debentures issued by Thermo
Electron. All shares of Thermo Common Stock subject to issuance as aforesaid,
upon issuance on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly issued, fully paid
and non-assessable. There are no bonds, debentures, notes or other indebtedness
of Thermo Electron issued and outstanding which have rights to vote in the
election of directors of Thermo Electron. Except as described in the Thermo
Reports (as defined in Section 3.4) filed prior to the date of this Agreement,
there are no other material outstanding options, warrants, equity securities,
subscriptions, calls, rights, commitments or agreements of any character to
which Thermo Electron or any of its subsidiaries is a party or by which it is
bound, obligating Thermo Electron to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or other equity
securities of Thermo Electron or obligating Thermo Electron to grant or enter
into any such option, warrant, equity security, call, right, commitment or
agreement.
(b) Since October 2, 1999, there have been no material issuances of
options, warrants, equity securities, subscriptions, calls, rights, commitments
or agreements of any character to which Thermo Electron or any of its
subsidiaries is a party or by which it is bound, obligating Thermo Electron to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other equity securities of Thermo Electron or
obligating Thermo Electron to grant or enter into any such option, warrant,
equity security, call, right, commitment or agreement.
(c) As of the date of this Agreement, no Stock Acquisition Date or other
event that would result in the occurrence of a Distribution Date has occurred
(as such terms are defined in the Rights Agreement dated January 19, 1996, as
amended, by and between Thermo Electron and BankBoston, N.A. (the "Rights
Agreement")), with respect to the rights to purchase a unit consisting of one
ten-thousandth of a share of Thermo Electron's Series B Junior Participating
Preferred Stock pursuant to the Rights Agreement.
3.4 Reports and Financial Statements. Thermo Electron has made available
to the Company complete and accurate copies, as amended or supplemented, of (a)
its Annual Report on Form 10-K for the fiscal year ended January 3, 1998 as
filed with the SEC, and (b) all other reports filed by Thermo Electron with the
SEC under Sections 13 or 14 of the Exchange Act since January 3, 1998 (such
reports are collectively referred to herein as the "Thermo Reports"). Since
October 2, 1999, there has been no change in the business, financial condition
or results of operations of Thermo Electron that has resulted or is reasonably
likely to result in a Material Adverse Effect on Thermo Electron. As of their
respective dates, the Thermo Reports (i) complied in all material respects with
the requirements of the Exchange Act and the applicable rules of the SEC
thereunder and (ii) did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
11
the statements therein, in light of the circumstances under which they were
made, not misleading. The audited financial statements and unaudited interim
financial statements of Thermo Electron included in the Thermo Reports (in each
case including the notes thereto) (i) comply as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, (ii) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods covered thereby (except as may be indicated therein or in
the notes thereto, and in the case of quarterly financial statements, as
permitted by Form 10-Q under the Exchange Act), (iii) fairly present, in all
material respects, the consolidated financial condition, results of operation
and cash flows of Thermo Electron as of the respective dates thereof and for the
periods referred to therein, and (iv) are consistent with the books and records
of Thermo Electron. There are no liabilities of Thermo Electron which are not
disclosed in the Thermo Reports which would be reasonably likely to have a
Material Adverse Effect on Thermo Electron.
3.5 Merger Sub. Since the date of its incorporation, Merger Sub has not
engaged in any activities other than in connection with or as contemplated by
this Agreement.
3.6 Registration Statement; Proxy Statement/Prospectus. Other than with
respect to the information supplied or on behalf of by the Company, the
Registration Statement shall not, at the time the Registration Statement becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements included therein not misleading. The information supplied by or on
behalf of Thermo Electron for inclusion in the Proxy Statement (including any
information incorporated by reference in the Proxy Statement from other filings
made by Thermo Electron with the SEC) shall not, on the date the Proxy Statement
is first mailed to stockholders or at the time of the Company Stockholders'
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
false or misleading. The Proxy Statement will comply (with respect to
information relating to Thermo Electron) as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
thereunder.
3.7 Compliance with Law. Except as described in the Thermo Reports, there
is no suit, claim, action, proceeding, arbitration, review or investigation
pending or threatened in writing against Thermo Electron, Merger Sub or any
subsidiary of Thermo Electron (other than the Company and its subsidiaries)
before any governmental entity that, individually or in the aggregate, is
reasonably likely to have a Material Adverse Effect on Thermo Electron. Except
as described in the Thermo Reports, none of Thermo Electron, Merger Sub or any
subsidiary of Thermo Electron (other than the Company and its subsidiaries) is
in conflict with, or in default or violation of, (i) any law applicable to it or
by which any of its properties or assets is bound or affected or (ii) any
franchise, grant, authorization, license, permit, easement, variance, exception,
consent, certificate, approval or order of any governmental entity necessary for
Thermo Electron, Merger Sub or any subsidiary of Thermo Electron (other than the
Company and its subsidiaries) to own, lease and operate its properties or to
carry on its business as it is now being conducted, except for any such
conflicts, defaults or violations that would not reasonably be expected to have
a Material Adverse Effect on Thermo Electron or to prevent or materially delay
the performance of this Agreement by Thermo Electron and Merger Sub.
12
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1. Conduct of Business by the Company. During the period from the date
of this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Effective Time, the Company shall, except
for such actions which are contemplated by this Agreement or reasonably
appropriate in connection with the transactions contemplated by this Agreement,
and except as consented to by Thermo Electron, carry on its business in the
usual, regular and ordinary course, in substantially the same manner as
heretofore conducted, pay its debts and taxes when due subject to good faith
disputes over such debts or taxes, pay or perform other material obligations
when due, and use its commercially reasonable efforts consistent with past
practices and policies to preserve intact its present business organization,
keep available the services of its present officers and employees and preserve
its relationships with customers, suppliers, distributors, licensors, licensees,
and others with which it has business dealings.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1. Registration Statement; Other Filings.
(a) As promptly as practicable after the execution of this
Agreement, the Company and Thermo Electron will jointly prepare and file with
the SEC a preliminary proxy statement (with appropriate requests for
confidential treatment) relating to the Merger and this Agreement (such proxy
statement, as amended or supplemented, the "Proxy Statement"), and Thermo
Electron will prepare and file with the SEC a registration statement on Form S-4
(as amended or supplemented, the "Registration Statement"), in which the Proxy
Statement shall be included as a prospectus. Thermo Electron will use
commercially reasonable efforts to cause the Registration Statement to be
declared effective under the Securities Act as soon as practicable after such
filing, and will take all actions required under applicable federal or state
securities laws in connection with the issuance of Thermo Common Stock in the
Merger. Each party will notify the other promptly upon the receipt of any
comments from the SEC or its staff and of any request by the SEC or its staff or
any other government officials for amendments or supplements to the Proxy
Statement, the Registration Statement or any other filing or for additional
information and will supply the other party with copies of all correspondence
between such party or any of its representatives, on the one hand, and the SEC,
or its staff or any other government officials, on the other hand, with respect
to the Registration Statement, the Proxy Statement or the Merger. Whenever any
event occurs that is required to be set forth in an amendment or supplement to
the Registration Statement or the Proxy Statement, the relevant party will
promptly inform the other party of such occurrence and cooperate in filing with
the SEC or its staff or any other government officials, and/or mailing to
stockholders of the Company, such amendment or supplement.
(b) The information supplied by the Company for inclusion in the
Registration Statement (including any information incorporated by reference in
the Registration Statement from other filings made by the Company with the SEC)
will not, at the time the Registration Statement (including any amendments or
supplements thereto) is declared effective by the SEC, contain any untrue
13
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The information
supplied by the Company for inclusion in the Proxy Statement to be sent to the
stockholders of the Company in connection with the meeting of the Company's
stockholders to consider the adoption of this Agreement and approval of the
Merger (the "Company Stockholders' Meeting") (including any information
incorporated by reference in the Proxy Statement from other filings made by the
Company with the SEC) will not, on the date the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to the Company
stockholders and at the time of the Company Stockholders' Meeting, contain any
statement which, at such time and in light of the circumstances under which it
shall be made, is false or misleading with respect to any material fact, or
shall omit to state any material fact necessary in order to make the statements
made therein not false or misleading in light of the circumstances under which
they were made, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Company Stockholders' Meeting which has become false or
misleading.
(c) The information supplied by Thermo Electron and Merger Sub for
inclusion in the Registration Statement (including any information incorporated
by reference in the Registration Statement from other filings made by Thermo
Electron with the SEC) will not, at the time the Registration Statement
(including any amendments or supplements thereto) is declared effective by the
SEC, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The information supplied by Thermo Electron and Merger Sub for
inclusion in the Proxy Statement to be sent to the stockholders of the Company
in connection with the Company Stockholders' Meeting (including any information
incorporated by reference in the Proxy Statement from other filings made by
Thermo Electron with the SEC) will not, on the date the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to the Company
stockholders and at the time of the Company Stockholders' Meeting, contain any
statement which, at such time and in light of the circumstances under which it
shall be made, is false or misleading with respect to any material fact, or
shall omit to state any material fact necessary in order to make the statements
made therein not false or misleading in light of the circumstances under which
they were made, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Company Stockholders' Meeting which has become false or
misleading.
(d) The Proxy Statement will include the recommendation of the
Special Committee in favor of approval of this Agreement (except that the
Special Committee may withdraw, modify or refrain from making such
recommendation to the extent that the Special Committee determines after
consultation with outside legal counsel that failure to do so would violate the
Special Committee's fiduciary duties under applicable law).
(e) The Proxy Statement will include the recommendation of the Board
of Directors of the Company in favor of approval of this Agreement (except that
the Board of Directors of the Company may withdraw, modify or refrain from
making such recommendation to the extent that the Board determines after
consultation with outside legal counsel that failure to do so would violate the
Board's fiduciary duties under applicable law).
14
(f) To the extent that the Special Committee or the Board withdraws,
modifies or refrains from making their respective recommendations pursuant to
Sections 5.1(d) or (e) hereof, the Proxy Statement will reflect such action.
5.2. Meeting of the Company Stockholders. Promptly after the date hereof,
the Company will, in accordance with the DGCL and its Certificate of
Incorporation and Bylaws, use its reasonable best efforts to convene the Company
Stockholders' Meeting to be held as promptly as practicable for the purpose of
voting upon this Agreement. Unless the Special Committee determines after
consultation with outside legal counsel that to do so would be inconsistent with
the Board's or the Special Committee's fiduciary duties under applicable law,
the Company will use its reasonable best efforts to solicit from its
stockholders proxies in favor of the approval of this Agreement and the Merger
and to take all other reasonable action necessary or advisable to secure the
vote or consent of its stockholders required by the DGCL to obtain such
approvals. Thermo Electron shall vote, or cause to be voted, all of the Company
Common Stock then owned by it and any of its subsidiaries in favor of the
approval of this Agreement and the Merger.
5.3. Access to Information. Subject to applicable legal restrictions, the
Company will afford Thermo Electron and its accountants, counsel and other
representatives reasonable access during normal business hours to its
properties, books, records and personnel during the period prior to the
Effective Time to obtain all information concerning its businesses, including
the status of its product development efforts, properties, results of operations
and personnel, as Thermo Electron may reasonably request. Thermo Electron hereto
agrees that it will, and will cause its representatives and agents to, keep all
such information confidential and will not, and will cause its representatives
or agents not to, use any information obtained pursuant to this Section 5.3 for
any purpose unrelated to the consummation of the transactions contemplated by
this Agreement. Notwithstanding the foregoing, Thermo Electron shall not be
required to keep confidential any information (i) which is or becomes generally
available to the public, other than by wrongful disclosure by the disclosing
party in violation of this Agreement or (ii) which becomes available to the
disclosing party on a nonconfidential basis from a source other than the
nondisclosing party or any officer or director of such party.
5.4. Public Disclosure. Thermo Electron and the Company will consult with
each other before issuing any press release or otherwise making any public
statement with respect to the Merger or this Agreement and will not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by law or any listing agreement with a national
securities exchange. Promptly upon the execution hereof, the parties shall
jointly make a press release with respect to the transactions contemplated by
this Agreement, in form reasonably satisfactory to the Special Committee.
5.5. Legal Requirements. Each of Thermo Electron, Merger Sub and the
Company will use its reasonable best efforts to take all reasonable actions
necessary or desirable to comply promptly with all legal requirements that may
be imposed on them with respect to the consummation of the transactions
contemplated by this Agreement (including furnishing all information required in
connection with approvals of or filings with any Governmental Entity, and
including using its reasonable best efforts to defend any litigation prompted
hereby) and will promptly cooperate with and furnish information to any party
hereto necessary in connection with any such requirements imposed upon any of
them or their respective subsidiaries in connection with the consummation of the
transactions contemplated by this Agreement.
15
5.6. Notification of Certain Matters. Subject to the terms of this
Agreement, Thermo Electron and Merger Sub will give prompt notice to the
Company, and the Company will give prompt notice to Thermo Electron, of the
occurrence, or failure to occur, of any event, which occurrence or failure to
occur would be reasonably likely to cause (a) any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at any time from the date of this Agreement to the Effective Time, or (b) any
material failure of Thermo Electron and Merger Sub or the Company, as the case
may be, or of any officer, director, employee or agent thereof, to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement. Notwithstanding the above, the delivery of any
notice pursuant to this section will not limit or otherwise affect the remedies
available hereunder to the party receiving such notice or the conditions to such
party's obligation to consummate the Merger.
5.7. Best Efforts and Further Assurances. Subject to the respective rights
and obligations of Thermo Electron and the Company under this Agreement, each of
the parties to this Agreement will use its reasonable best efforts to effectuate
the Merger and the other transactions contemplated hereby and to fulfill and
cause to be fulfilled the conditions to closing under this Agreement, it being
understood that such efforts shall not include any obligation to settle any
litigation prompted hereby. Subject to the terms hereof, each party hereto, at
the reasonable request of another party hereto, will execute and deliver such
other instruments and do and perform such other acts and things as may be
reasonably necessary or desirable for effecting completely the consummation of
the transactions contemplated hereby.
5.8. Stock Option Plans; Reservation of Shares.
(a) At the Effective Time, each outstanding option to purchase shares of
the Company Common Stock (each a "Company Stock Option") under the Company Stock
Option Plans, whether or not exercisable, will be assumed by Thermo Electron.
Each Company Stock Option so assumed by Thermo Electron under this Agreement
will continue to have, and be subject to, the same terms and conditions set
forth in the applicable Company Stock Option Plan immediately prior to the
Effective Time (including, without limitation, any repurchase rights), except
that (i) each Company Stock Option will be exercisable (or will become
exercisable in accordance with its terms) for that number of whole shares of
Thermo Common Stock equal to the product of the number of shares of Company
Common Stock that were issuable upon exercise of such Company Stock Option
immediately prior to the Effective Time multiplied by the Exchange Ratio,
rounded to the nearest whole share, and (ii) the per share exercise price for
the shares of Thermo Common Stock issuable upon exercise of such assumed Company
Stock Option will be equal to the quotient determined by dividing the exercise
price per share of Company Common Stock at which such Company Stock Option was
exercisable immediately prior to the Effective Time by the Exchange Ratio,
rounded to the nearest whole cent. After the Effective Time, Thermo Electron
will issue to each holder of an outstanding Company Stock Option a notice
describing the foregoing assumption of such Company Stock Option by Thermo
Electron.
16
(b) Thermo Electron will reserve sufficient shares of Thermo Common Stock
for issuance under this Section 5.8 and pursuant to conversion of the
Convertible Debentures.
5.9. Thermo Electron Form S-8. Thermo Electron agrees to file a
registration statement on Form S-8 or, if possible, an amendment to Thermo
Electron's then effective registration statement on Form S-8, for the shares of
Thermo Common Stock issuable with respect to the assumed Company Stock Options
and shall use its best efforts to keep such registration statement effective for
so long as any such options remain outstanding.
5.10. Indemnification; Insurance.
(a) The Certificate of Incorporation and Bylaws of the Surviving
Corporation will contain the provisions with respect to indemnification and
elimination of liability for monetary damages set forth in the Certificate of
Incorporation and Bylaws of the Company, which provisions will not be amended,
repealed or otherwise modified for a period of six (6) years from the Effective
Time in any manner that would adversely affect the rights thereunder of
individuals who, as of the date hereof and at any time from the date hereof to
the Effective Time, were directors or officers of the Company, unless such
modification is required by law. The Surviving Corporation shall, and Thermo
Electron will cause the Surviving Corporation to, fulfill and honor in all
respects the indemnification obligations of the Company pursuant to the
provisions of the Certificate of Incorporation and the Bylaws of the Company as
in effect on the date of this Agreement.
(b) For a period of six (6) years after the Effective Time, Thermo
Electron shall cause the Surviving Corporation to, either directly or through
participation in Thermo Electron's umbrella policy, maintain in effect a
directors' and officers' liability insurance policy covering those Company
directors and officers currently covered by Thermo Electron's liability
insurance policy with coverage no less favorable in amount and scope than
existing coverage for such Company directors and officers (which coverage may be
an endorsement extending the period in which claims may be made under such
existing policy); provided, however, that in no event shall the Surviving
Corporation be required to expend to maintain or procure insurance coverage
pursuant to this Section 5.10, directly or through participation in Thermo
Electron's policy, an amount per annum in excess of 175% of the current annual
premiums, as adjusted for inflation each year, allocable and payable by the
Company (the "Maximum Premium") with respect to such insurance; provided that if
the cost of such insurance exceeds the Maximum Premium, Thermo Electron shall,
and shall cause the Surviving Company to, obtain the maximum amount of coverage
that can be purchased or maintained for the Maximum Premium.
(c) This Section 5.10 shall survive the Effective Time for a period
of six (6) years and is intended to benefit the Company, the Surviving
Corporation and those individuals who, at the Effective Time, were directors or
officers of the Company and his or her heirs and representatives (each of whom
shall be entitled to enforce this Section 5.10 against Thermo Electron or the
Surviving Corporation) and shall be binding on all successors and assigns of
Thermo Electron and the Surviving Corporation.
17
5.11. Deferred Compensation Plan. At the Effective Time, the Company
Directors Deferred Compensation Plan will terminate, and the Company will
distribute to each participant Thermo Common Stock in amounts determined by
multiplying the Exchange Ratio by the balance of stock units credited to such
participant's deferred compensation account under the Company Directors Deferred
Compensation Plan as of the Effective Time.
5.12 Compliance by Merger Sub. Thermo Electron shall cause Merger Sub to
timely perform and comply with all of its obligations under or related to this
Agreement.
5.13 NYSE Listing. Thermo Electron shall use its best efforts to cause all
shares of Thermo Common Stock issuable (i) to stockholders of the Company in the
Merger, (ii) upon conversion of the Convertible Debentures, and (iii) pursuant
to Company Stock Option Plans as assumed by Thermo Electron pursuant to this
Agreement, to be authorized for listing on the New York Stock Exchange prior to
the Effective Time.
5.14 Exemption from Liability Under Section 16(b). Assuming that the
Company delivers to Thermo Electron the Section 16 Information (as defined
below) in a timely fashion prior to the Effective Time, the Board of Directors
of Thermo Electron, or a committee of Non-Employee Directors thereof (as such
term is defined for purposes of Rule 16b-3(d) under the Exchange Act), shall
reasonably promptly thereafter and in any event prior to the Effective Time
adopt a resolution providing that the receipt by the Company Insiders (as
defined below) of Thermo Common Stock in exchange for shares of Company Common
Stock, and of options to purchase shares of Thermo Common Stock upon conversion
of options to purchase shares of Company Common Stock, in each case pursuant to
the transactions contemplated hereby and to the extent such securities are
listed in the Section 16 Information, are approved by such Board of Directors or
by such committee thereof, and are intended to be exempt from liability pursuant
to Section 16(b) under the Exchange Act, such that any such receipt shall be so
exempt. As used herein, "Company Insiders" shall mean those officers and
directors of the Company subject to the reporting requirements of Section 16(a)
of the Exchange Act and who are listed in the Section 16 Information, and
"Section 16 Information" shall mean accurate information regarding Company
Insiders, the number of shares of Company Common Stock held or to be held by
each such Company Insider expected to be exchanged for Thermo Common Stock in
the Merger, and the number and description of the options to purchase shares of
Company Common Stock held by each such Company Insider and expected to be
converted into options to purchase shares of Thermo Common Stock in connection
with the Merger.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1. Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) No Order. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is in effect and which has the effect of making the Merger illegal or
otherwise prohibiting consummation of the Merger.
18
(b) Registration Statements. The Registration Statement shall have
been declared effective by the SEC and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the SEC.
(c) NYSE Listing. The Thermo Common Stock issuable (i) to holders of
Company Common Stock, (ii) upon conversion of the Convertible Debentures, and
(iii) pursuant to Company Stock Option Plans as assumed by Thermo Electron
pursuant to this Agreement, shall have been authorized for listing on the New
York Stock Exchange.
(d) Rights Agreement. No Stock Acquisition Date or other event that
would result in the occurrence of a Distribution Date shall have occurred (as
such terms are defined in the Rights Agreement), with respect to the rights to
purchase a unit consisting of one ten-thousandth of a share of Thermo Electron's
Series B Junior Participating Preferred Stock pursuant to the Rights Agreement.
6.2. Additional Conditions to Obligations of the Company. The obligations
of the Company to consummate and effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of each of the following
conditions, any of which may be waived, in writing, exclusively by the Company
(provided that the Special Committee shall have consented in writing to any such
waiver):
(a) Representations and Warranties. The representations and
warranties of Thermo Electron and Merger Sub contained in this Agreement shall
be true and correct in all material respects (other than those already qualified
by a materiality standard, which shall be true and correct in all respects) on
and as of the Effective Time, except for changes expressly contemplated by this
Agreement and except for those representations and warranties that address
matters only as of a particular date (which shall remain true and correct as of
such particular date), with the same force and effect as if made on and as of
the Effective Time; and the Company shall have received a certificate to such
effect signed on behalf of Thermo Electron by the President, Chief Executive
Officer or Vice President of Thermo Electron.
(b) Agreements and Covenants. Thermo Electron and Merger Sub shall
have performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by them on
or prior to the Effective Time, and the Company shall have received a
certificate to such effect signed on behalf of Thermo Electron by the President,
Chief Executive Officer or Vice President of Thermo Electron.
(c) Stockholder Approval. This Agreement shall have been approved
and adopted by the requisite vote under the DGCL by the stockholders of the
Company.
6.3. Additional Conditions to the Obligations of Thermo Electron and
Merger Sub. The obligations of Thermo Electron and Merger Sub to consummate and
effect the Merger shall be subject to the satisfaction at or prior to the
Effective Time of each of the following conditions, any of which may be waived,
in writing, exclusively by Thermo Electron and Merger Sub:
19
(a) Representations and Warranties. The representations and
warranties of the Company contained in this Agreement shall be true and correct
on and as of the Effective Time, except for changes contemplated by this
Agreement and except for those representations and warranties that address
matters only as of a particular date (which shall remain true and correct as of
such particular date), with the same force and effect as if made on and as of
the Effective Time, except, in all such cases, where the failure to be so true
and correct would not have a Material Adverse Effect on the Company; and Thermo
Electron and Merger Sub shall have received a certificate to such effect signed
on behalf of the Company by the President, Chief Executive Officer or Vice
President of the Company.
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time, and Thermo Electron shall have received a certificate to such
effect signed on behalf of the Company by the President, Chief Executive Officer
or Vice President of the Company.
(c) No Withdrawal of Special Committee Recommendation. The Special
Committee shall not have withdrawn its recommendation to the Board of Directors
to approve this Agreement.
(d) Certificate Regarding No Material Adverse Change. Thermo
Electron and Merger Sub shall have received a certificate signed on behalf of
the Company by the President, Chief Executive Officer or Vice President of the
Company stating that there has been no change since July 3, 1999 in the
business, financial condition, or results of operations of the Company that has
resulted in or is reasonably likely to result in a Material Adverse Effect on
the Company.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1. Termination. This Agreement may be terminated at any time prior to
the Effective Time of the Merger, whether before or after approval of this
Agreement by the stockholders of the Company:
(a) by mutual written consent duly authorized by the Boards of
Directors of Merger Sub and the Company (with the concurrence of the Special
Committee);
(b) by either the Company (with the concurrence of the Special
Committee) or Merger Sub if the Merger shall not have been consummated by May
31, 2000; provided, however, that the right to terminate this Agreement under
this Section 7.1(b) shall not be available to any party whose action or failure
to act has been a principal cause of or resulted in the failure of the Merger to
occur on or before such date if such action or failure to act constitutes a
breach of this Agreement;
(c) by either the Company (with the concurrence of the Special
Committee) or Merger Sub if a court of competent jurisdiction or governmental,
regulatory or administrative agency or commission shall have issued an order,
decree or ruling or taken any other action (an "Order"), in any case having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Merger, which order, decree or ruling is final and nonappealable;
20
(d) by the Company (with the concurrence of the Special Committee)
if the required approval of the stockholders of the Company contemplated by this
Agreement shall not have been obtained by reason of the failure to obtain the
required vote upon a vote taken at a meeting of stockholders duly convened
therefor or at any adjournment thereof (provided that the right to terminate
this Agreement under this Section 7.1(d) shall not be available to the Company
where the failure to obtain stockholder approval of the Company shall have been
caused by the action or failure to act of the Company in breach of this
Agreement);
(e) by the Company (with the concurrence of the Special Committee),
upon a breach of any representation, warranty, covenant or agreement on the part
of Thermo Electron or Merger Sub set forth in this Agreement, if (i) as a result
of such breach the conditions set forth in Section 6.2(a) or Section 6.2(b)
would not be satisfied as of the time of such breach and (ii) such breach shall
not have been cured by Thermo Electron or Merger Sub within thirty (30) business
days following receipt by Thermo Electron of written notice of such breach from
the Company;
(f) by Merger Sub, upon a breach of any representation, warranty,
covenant or agreement on the part of the Company set forth in this Agreement, if
(i) as a result of such breach the conditions set forth in Section 6.3(a) or
Section 6.3(b) would not be satisfied as of the time of such breach and (ii)
such breach shall not have been cured by the Company within thirty (30) business
days following receipt by the Company of written notice of such breach from
Merger Sub;
(g) by Merger Sub upon the Company's inability to provide the
certificate required by Section 6.3(e) hereof and its continuing inability to
provide such certificate within forty-five (45) business days following receipt
by the Company of written notice from Merger Sub; or
7.2. Notice of Termination; Effect of Termination. Any termination of this
Agreement under Section 7.1 above will be effective immediately upon the
delivery of written notice by the terminating party to the other parties hereto
(or, in the case of a termination pursuant to Section 7.1(e), 7.1(f), or 7.1(g),
the expiration of the periods referred to therein). In the event of the
termination of this Agreement as provided in Section 7.1, this Agreement shall
be of no further force or effect, except that (i) the confidentiality
obligations of each party hereto contained in Section 5.3, and the provisions of
Sections 7.2, 7.3 and 8.1 shall survive any such termination and (ii) nothing
herein shall relieve any party from liability for any material breach of this
Agreement.
7.3. Fees and Expenses. All fees and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses, whether or not the Merger is consummated.
7.4. Amendment. Subject to applicable law, this Agreement may be amended
by the parties hereto at any time by execution of an instrument in writing
signed on behalf of each of the parties hereto; provided, however, that the
Company may not amend this Agreement without the concurrence of the Special
Committee.
21
7.5. Extension; Waiver. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein; provided, however, that the Company may not take
any such actions without the concurrence of the Special Committee. 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 VIII
GENERAL PROVISIONS
8.1. Non-Survival of Representations and Warranties. The representations
and warranties of the Company, Thermo Electron and Merger Sub contained in this
Agreement shall terminate at the Effective Time, and only the covenants that by
their terms, or as the context requires, survive the Effective Time shall
survive the Effective Time.
8.2. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
(a) if to Thermo Electron or Merger Sub, to:
Thermo Electron Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Thermo Electron Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, to
ThermoTrex Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
22
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
8.3. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
8.4. Entire Agreement. This Agreement and the documents and instruments
and other agreements among the parties hereto as contemplated by or referred to
herein (a) constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof; and (b) are not intended to confer upon any other person any rights or
remedies hereunder, except as set forth herein.
8.5. Severability. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto so long as the economic or legal
substance of the transactions contemplated hereby are not materially adversely
affected. The parties further agree to negotiate in good faith to replace such
void or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of such void or unenforceable provision.
8.6. Other Remedies; Specific Performance. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
23
8.7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, regardless of the
laws that might otherwise govern under applicable principles of conflicts of law
thereof, except to the extent that the DGCL applies.
8.8. Assignment. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other parties.
8.9 Headings. The headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
[remainder of page intentionally left blank]
24
IN WITNESS WHEREOF, Thermo Electron, Merger Sub and the Company have
caused this Agreement to be signed by themselves or their duly authorized
respective officers, all as of the date first written above.
THERMO ELECTRON CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇
Title: Vice President and
Chief Financial Officer
THERMOTREX ACQUISITION
CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
THERMOTREX CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Treasurer
25
TABLE OF CONTENTS
Page
ARTICLE I THE MERGER.........................................................2
1.1. The Merger.............................................................2
1.2. Effective Time; Closing................................................2
1.3. Effect of the Merger...................................................2
1.4. Certificate of Incorporation; Bylaws...................................2
1.5. Directors and Officers.................................................3
1.6. Effect on Capital Stock................................................3
1.7. Surrender of Certificates..............................................4
1.8. No Further Ownership Rights in Company Common Stock....................5
1.9. Lost, Stolen or Destroyed Certificates.................................6
1.10. Dividends..............................................................6
1.11. Fractional Shares......................................................6
1.12. Closing of Transfer Books..............................................6
1.13. Taking of Necessary Action; Further Action.............................6
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................7
2.1. Organization of the Company............................................7
2.2. Company Capital Structure..............................................7
2.3. Authority..............................................................7
2.4. Board Approval.........................................................8
2.5. Fairness Opinion.......................................................8
2.6 Registration Statement; Proxy Statement/Prospectus.....................9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THERMO ELECTRON AND
MERGER SUB.............................................................9
3.1. Organization...........................................................9
3.2. Authority..............................................................9
3.3. Capitalization........................................................10
Reports and Financial Statements............................................11
3.5 Merger Sub............................................................12
3.6 Registration Statement; Proxy Statement/Prospectus....................12
-i-
3.7 Compliance with Law...................................................12
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME..............................13
4.1. Conduct of Business by the Company....................................13
ARTICLE V ADDITIONAL AGREEMENTS.............................................13
5.1. Registration Statement; Other Filings.................................13
5.2. Meeting of the Company Stockholders...................................15
5.3. Access to Information.................................................15
5.4. Public Disclosure.....................................................15
5.5. Legal Requirements....................................................16
5.6. Notification of Certain Matters.......................................16
5.7. Best Efforts and Further Assurances...................................16
5.8. Stock Option Plans; Reservation of Shares.............................16
5.9. Thermo Electron Form S-8..............................................17
5.10. Indemnification; Insurance............................................17
5.11. Deferred Compensation Plan............................................18
Compliance by Merger Sub....................................................18
5.14 NYSE Listing..........................................................18
5.14 Exemption from Liability Under Section 16(b)..........................18
ARTICLE VI CONDITIONS TO THE MERGER.........................................19
6.1. Conditions to Obligations of Each Party to Effect the Merger..........19
6.2. Additional Conditions to Obligations of the Company...................19
6.3. Additional Conditions to the Obligations of Thermo Electron and
Merger Sub............................................................20
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER...............................20
7.1. Termination...........................................................20
7.2. Notice of Termination; Effect of Termination..........................21
7.3. Fees and Expenses.....................................................22
7.4. Amendment.............................................................22
7.5. Extension; Waiver.....................................................22
ARTICLE VIII GENERAL PROVISIONS.............................................22
8.1. Non-Survival of Representations and Warranties........................22
8.2. Notices...............................................................22
8.3. Counterparts..........................................................23
-ii-
8.4. Entire Agreement......................................................23
8.5. Severability..........................................................23
8.6. Other Remedies; Specific Performance..................................24
8.7. Governing Law.........................................................24
8.8. Assignment............................................................24
8.9 Headings..............................................................24
-iii-
