Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER
Dated as of January 27, 2005
among
The Procter & ▇▇▇▇▇▇ Company,
Aquarium Acquisition Corp.
and
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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TABLE OF CONTENTS
Page
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ARTICLE 1
THE MERGER; CERTAIN RELATED MATTERS
Section 1.01 The Merger.....................................................1
Section 1.02 Closing........................................................2
Section 1.03 Effective Time.................................................2
Section 1.04 Effects of the Merger..........................................2
Section 1.05 Certificate of Incorporation...................................2
Section 1.06 Bylaws.........................................................2
Section 1.07 Officers and Directors.........................................2
Section 1.08 Effect on Capital Stock........................................2
Section 1.09 Company Stock Options and Other Equity-based Awards............3
Section 1.10 Certain Adjustments............................................5
ARTICLE 2
EXCHANGE OF SHARES
Section 2.01 Exchange Fund..................................................5
Section 2.02 Exchange Procedures............................................5
Section 2.03 Distributions with Respect to Unexchanged Shares...............6
Section 2.04 No Further Ownership Rights in Company Common Stock............6
Section 2.05 No Fractional Shares of Parent Common Stock....................6
Section 2.06 Termination of Exchange Fund...................................7
Section 2.07 No Liability...................................................7
Section 2.08 Investment of the Exchange Fund................................7
Section 2.09 Lost Certificates..............................................7
Section 2.10 Withholding Rights.............................................7
Section 2.11 Further Assurances.............................................8
Section 2.12 Stock Transfer Books...........................................8
Section 2.13 Affiliates.....................................................8
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of Parent.......................8
Section 3.02 Representations and Warranties of the Company.................15
Section 3.03 Representations and Warranties of Parent and Merger Sub.......26
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ARTICLE 4
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.01 Covenants of Parent...........................................26
Section 4.02 Covenants of the Company......................................28
Section 4.03 Governmental Filings..........................................31
Section 4.04 Control of Other Party's Business.............................31
ARTICLE 5
ADDITIONAL AGREEMENTS
Section 5.01 Preparation of Proxy Statement; Stockholders Meetings.........32
Section 5.02 Access to Information/Employees...............................35
Section 5.03 Commercially Reasonable Efforts...............................35
Section 5.04 Acquisition Proposals.........................................37
Section 5.05 Fees And Expenses.............................................38
Section 5.06 Directors' And Officers' Indemnification And Insurance........38
Section 5.07 Public Announcements..........................................39
Section 5.08 Accountant's Letters..........................................39
Section 5.09 Listing of Shares of Parent Common Stock......................40
Section 5.10 Dividends.....................................................40
Section 5.11 Affiliates....................................................41
Section 5.12 Section 16 Matters............................................41
Section 5.13 Tax Treatment.................................................41
Section 5.14 Notification of Certain Matters...............................42
Section 5.15 Employee Matters..............................................42
Section 5.16 Director Resignations.........................................44
Section 5.17 Appraisal Rights..............................................44
ARTICLE 6
CONDITIONS PRECEDENT
Section 6.01 Conditions to Each Party's Obligation to Effect the Merger....44
Section 6.02 Additional Conditions to Obligations of Parent and Merger
Sub..........................................................45
Section 6.03 Additional Conditions to Obligations of the Company...........46
ARTICLE 7
TERMINATION AND AMENDMENT
Section 7.01 General.......................................................47
Section 7.02 Obligations in Event of Termination...........................48
Section 7.03 Amendment.....................................................49
Section 7.04 Extension; Waiver.............................................50
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ARTICLE 8
GENERAL PROVISIONS
Section 8.01 Non-Survival of Representations, Warranties and Agreements....50
Section 8.02 Notices.......................................................50
Section 8.03 Interpretation................................................51
Section 8.04 Counterparts..................................................51
Section 8.05 Entire Agreement; No Third Party Beneficiaries................51
Section 8.06 Governing Law.................................................52
Section 8.07 Severability..................................................52
Section 8.08 Assignment....................................................52
Section 8.09 Submission To Jurisdiction; Waivers...........................52
Section 8.10 Enforcement...................................................53
Section 8.11 Definitions...................................................53
LIST OF EXHIBITS
Exhibit Title
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5.11 Form of Affiliate Letter
6.02(c)(1) Form of Tax Opinion of Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
6.02(c)(2) Form of Parent Tax Representations Letter to Cadwalader, ▇▇▇▇▇▇▇▇▇▇
& ▇▇▇▇ LLP
6.02(c)(3) Form of Company Tax Representations Letter to Cadwalader, ▇▇▇▇▇▇▇▇▇▇
& ▇▇▇▇ LLP
6.03(c)(1) Form of Tax Opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
6.03(c)(2) Form of Parent Tax Representations Letter to ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
6.03(c)(3) Form of Company Tax Representations Letter to ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
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AGREEMENT AND PLAN OF MERGER, dated as of January 27, 2005 (this
"Agreement"), among The Procter & ▇▇▇▇▇▇ Company, an Ohio corporation
("Parent"), Aquarium Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Parent ("Merger Sub"), and ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, a
Delaware corporation (the "Company" and collectively with Parent and Merger Sub,
the "parties").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of the Company and Parent deem
it advisable and in the best interests of each corporation and its respective
stockholders that the Company and Parent engage in a business combination in
order to advance the long-term strategic business interests of the Company and
Parent;
WHEREAS, the combination of the Company and Parent shall be effected by
the terms of this Agreement through a merger as outlined below (the "Merger");
WHEREAS, in furtherance thereof, the respective Boards of Directors of the
Company and Parent have approved the Merger, upon the terms and subject to the
conditions set forth in this Agreement, pursuant to which each share of common
stock, par value $1.00 per share, of the Company ("Company Common Stock") issued
and outstanding immediately prior to the Effective Time (as defined in Section
1.03), other than shares owned or held directly or indirectly by Parent or
directly or indirectly by the Company, will be converted into the right to
receive shares of common stock, without par value, of Parent ("Parent Common
Stock") as set forth in Section 1.08; and
WHEREAS, for 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 the regulations
promulgated thereunder.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, and intending to be legally bound hereby, the parties agree as
follows:
ARTICLE 1
THE MERGER; CERTAIN RELATED MATTERS
Section 1.01 The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL"), Merger Sub shall be merged with and into the Company at the
Effective Time. Following the Merger, the separate corporate existence of Merger
Sub shall cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation").
Section 1.02 Closing. Upon the terms and subject to the conditions set
forth in Article 6, the closing of the Merger (the "Closing") will take place on
the first Business Day
after the satisfaction or waiver (subject to applicable law) of the conditions
(excluding conditions that, by their nature, cannot be satisfied until the
Closing Date, but subject to the fulfillment or waiver of those conditions at
the Closing) set forth in Article 6, unless this Agreement has been previously
terminated pursuant to its terms or unless another time or date is agreed to in
writing by the parties (the actual date of the Closing being referred to herein
as the "Closing Date"). The Closing shall be held at the offices of Cadwalader,
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
unless another place is agreed to in writing by the parties.
Section 1.03 Effective Time. At the Closing the parties shall file a
certificate of merger (the "Certificate of Merger") in such form as is required
by and executed in accordance with the relevant provisions of the DGCL. The
Merger shall become effective at such time as the Certificate of Merger is duly
filed with the Delaware Secretary of State or at such subsequent time as Parent
and the Company shall agree and as shall be specified in the Certificate of
Merger (the time the Merger becomes effective being the "Effective Time").
Section 1.04 Effects of the Merger. At and after the Effective Time, the
Merger will have the effects set forth in 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 be vested 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.
Section 1.05 Certificate of Incorporation. The certificate of
incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the certificate of incorporation of the Surviving Corporation,
until thereafter changed or amended as provided therein or by applicable law.
Section 1.06 Bylaws. The bylaws of Merger Sub, as in effect immediately
prior to the Effective Time, shall be the bylaws of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable law.
Section 1.07 Officers and Directors. From and after the Effective Time,
until successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the directors of Merger Sub at the Effective Time shall be
the directors of the Surviving Corporation and (ii) the officers of the Company
at the Effective Time shall be the officers of the Surviving Corporation.
Section 1.08 Effect on Capital Stock.
(a) At the Effective Time, by virtue of the Merger and without any action
on the part of the holder thereof, each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than shares of
Company Common Stock owned by Parent or Merger Sub or owned by the Company
(other than those held by the Company in a fiduciary or representative
capacity), all of which shall be canceled as provided in Section 1.08(c)),
together with the associated Company Rights (as defined in Section 3.02(b)) (the
"Shares"), shall be converted into the right to receive 0.975 shares (the
"Exchange Ratio")
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of validly issued, fully paid and non-assessable Parent Common Stock (the
"Merger Consideration").
(b) As a result of the Merger and without any action on the part of the
holders thereof, at the Effective Time, all shares of Company Common Stock
(together with the associated Company Rights) shall cease to be outstanding and
shall be canceled and retired and shall cease to exist, and each holder of a
certificate or certificates which immediately prior to the Effective Time
represented any such shares of Company Common Stock shall thereafter cease to
have any rights with respect to such shares of Company Common Stock (together
with the associated Company Rights), except as provided herein or by law.
(c) Each share of Company Common Stock issued and owned by Parent, Merger
Sub or any other wholly-owned Subsidiary of Parent or owned by the Company
(other than those held by the Company in a fiduciary or representative capacity)
at the Effective Time shall, by virtue of the Merger, cease to be outstanding
and shall be canceled and retired and no stock of Parent or other consideration
shall be delivered in exchange therefor.
(d) At the Effective Time, by virtue of the Merger and without any action
on the part of the holder thereof, 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 one validly issued, fully paid and
non-assessable share of common stock, par value $1.00 per share, of the
Surviving Corporation.
Section 1.09 Company Stock Options and Other Equity-based Awards.
(a) Prior to the Effective Time, the Company shall amend the Company Stock
Option Plans (as defined in Section 3.02(b)), to provide that (i) each person
who holds a Company Stock Option (as defined in Section 3.02(b)) at the
Effective Time agrees prior to the Effective Time to be bound by the terms and
conditions that parallel the terms and conditions of Parent's 2001 Stock and
Incentive Compensation Plan with respect to non-compete agreements prohibiting
such holder's competing with Parent and the Company but only with respect to (A)
any business conducted by the Company immediately prior to the Effective Time or
(B) any business of Parent or an Affiliate in which the holder was employed from
the Effective Time through the termination of the holder's employment; (ii) with
respect to each Company Stock Option, a termination of employment for Good
Reason after the Effective Time shall be treated for all purposes under the
Company Stock Option Plans the same as (A) a "Special Separation," or (B) in the
case of a retirement eligible holder under the Company's Benefit Plans, as a
"Retirement," in each case under Parent's 2001 Stock and Incentive Compensation
Plan; and (iii) each holder of a Company Stock Option shall enter into an
agreement with the Company (an "Option Agreement") pursuant to which Company and
each such holder shall agree to the foregoing.
(b) Prior to the Effective Time, the Company shall amend the Company Stock
Option Plans to provide each Company Stock Option that was granted pursuant to
the Company Stock Option Plans prior to the Effective Time (other than Company
Stock Options granted pursuant to the terms of Section 4.02(c), the vesting and
exercisability of which shall not accelerate prior to or upon the Effective
Time) and which remains outstanding immediately prior to the Effective Time
(whether or not previously vested and exercisable) shall be vested and
exercisable effective
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immediately prior to the Effective Time, and that pursuant to a procedure to be
implemented by the Company, such holder may exercise such Option immediately
prior to the Effective Time, in whole or in part, and in respect thereof shall
be entitled to receive, at the holder's election, either (i) the Merger
Consideration with respect to the Shares issuable as a result of such exercise
(the "Merger Shares" ) or (ii) a cash payment equal to the product of (A) the
excess (if any) of the per share value of the Merger Shares over the per share
exercise price, multiplied by (B) the number of Shares with respect to which a
Company Stock option is exercised, in each case subject to applicable
withholding taxes.
(c) Each Company Stock Option which remains outstanding at the Effective
Time shall cease to represent a right to acquire shares of Company Common Stock
and shall be converted, at the Effective Time, into an option to acquire, on the
same terms and conditions as were applicable under the Company Stock Option (but
taking into account any changes thereto, provided for in the Company Stock
Option Plans or in such option by reason of this Agreement or the transactions
contemplated hereby), that number of shares of Parent Common Stock determined by
multiplying the number of shares of Company Common Stock subject to such Company
Stock Option by the Exchange Ratio, rounded, if necessary, to the nearest whole
share of Parent Common Stock, at a price per share (rounded to the nearest
one-hundredth of a cent) equal to the per share exercise price specified in such
Company Stock Option divided by the Exchange Ratio; provided, however, that in
the case of any Company Stock Option to which Section 421 of the Code applies by
reason of its qualification under Section 422 of the Code, the option price, the
number of shares subject to such option and, except to the extent otherwise
required by this Section 1.09, the terms and conditions of exercise of such
option shall be determined in a manner consistent with the requirements of
Section 424(a) of the Code. On or prior to the Effective Time, the Company will
take all actions necessary such that all Company Stock Options outstanding at
the Effective Time under the Company Stock Option Plans are treated in
accordance with the immediately preceding sentences.
(d) Subject to the execution and delivery to Parent of the Option
Agreement prior to the Effective Time, effective at the Effective Time Parent
shall assume, on the terms and conditions set forth in this Section 1.09, each
Company Stock Option Plan and each Company Stock Option granted thereunder that
was not exercised prior to the Effective Time. To the extent permitted by law
but not in derogation of the provisions of this Section 1.09, Parent shall take
such reasonable steps as may be necessary to cause the Company Stock Options
which qualified under Section 422 of Code as incentive stock options prior to
the Effective Time to continue to qualify as incentive stock options of Parent
after the Effective Time.
(e) Prior to the Closing, Parent shall take all corporate action necessary
to reserve for issuance a sufficient number of shares of Parent Common Stock for
delivery upon exercise of Company Stock Options or in connection with restricted
shares or in connection with the settlement of stock accounts in accordance with
this Section 1.09. Promptly after the Effective Time, but no later than five (5)
Business Days after the Effective Time, Parent shall file a registration
statement on Form S-3 or Form S-8, as the case may be (or any successor or other
appropriate forms), with respect to the shares of Parent Common Stock subject to
such options or restricted shares or stock accounts and shall use commercially
reasonable efforts to maintain the effectiveness of such registration statement
or registration statements (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as such options, restricted
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shares or stock accounts remain outstanding or for so long as such registration
statement is required with respect to any other Company Benefit Plan. With
respect to those individuals who subsequent to the Merger will be subject to the
reporting requirements under Section 16(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), where applicable, Parent shall administer
the Company Stock Option Plans in a manner consistent with the exemptions
provided by Rule 16b-3 promulgated under the Exchange Act.
Section 1.10 Certain Adjustments. If, between the date of this Agreement
and the Effective Time, the outstanding Parent Common Stock or Company Common
Stock shall have been changed into a different number of shares or different
class by reason of any reclassification, recapitalization, stock split,
split-up, combination or exchange of shares or a stock dividend or dividend
payable in any other securities shall be declared with a record date within such
period, or any similar event shall have occurred (other than exchange of Company
Stock Options or Parent Stock Options), the Exchange Ratio shall be
appropriately adjusted to provide to the holders of Company Common Stock the
same economic effect as contemplated by this Agreement prior to such event.
ARTICLE 2
EXCHANGE OF SHARES
Section 2.01 Exchange Fund. Prior to the Effective Time, Parent shall
appoint a commercial bank or trust company to act as exchange agent hereunder
for the purpose of exchanging Shares for the Merger Consideration (the "Exchange
Agent"). At or prior to the Effective Time, Parent shall deposit with the
Exchange Agent, in trust for the benefit of holders of shares of Company Common
Stock, certificates representing the Parent Common Stock issuable pursuant to
Section 1.08. Parent agrees to make available directly or indirectly to the
Exchange Agent from time to time as needed, cash sufficient to pay cash in lieu
of fractional shares pursuant to Section 2.05 and any dividends and other
distributions pursuant to Section 2.03. Any cash and certificates of Parent
Common Stock deposited with the Exchange Agent shall hereinafter be referred to
as the "Exchange Fund."
Section 2.02 Exchange Procedures. Promptly after the Effective Time, the
Surviving Corporation shall cause the Exchange Agent to mail to each holder of
Shares (i) a letter of transmittal which shall specify that delivery shall be
effected, and risk of loss and title to the Shares shall pass, only upon proper
delivery of the Shares to the Exchange Agent, and which letter shall be in
customary form and have such other provisions as Parent may reasonably specify
(such letter to be reasonably acceptable to the Company prior to the Effective
Time) and (ii) instructions for effecting the surrender of such Shares in
exchange for the Merger Consideration. Upon surrender of the Shares to the
Exchange Agent together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, and such other documents
as may reasonably be required by the Exchange Agent, the holder of such Shares
shall be entitled to receive in exchange therefor (A) one or more shares of
Parent Common Stock (which shall be in uncertificated book-entry form unless a
physical certificate is requested by such holder) representing, in the
aggregate, the whole number of shares of Parent Common Stock that such holder
has the right to receive pursuant to Section 1.08 (after taking into account all
shares of Company Common Stock then held by such holder) and (B) a check in the
amount equal to the cash that such holder has the right to receive pursuant to
the provisions
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of this Article 2, consisting of cash in lieu of any fractional shares of Parent
Common Stock pursuant to Section 2.05 and dividends and other distributions
pursuant to Section 2.03 ("Cash Payments"). No interest will be paid or will
accrue on any Cash Payments. In the event of a transfer of ownership of Company
Common Stock which is not registered in the transfer records of the Company, the
Merger Consideration and any Cash Payments to which such holder is entitled, may
be issued with respect to such Company Common Stock to such a transferee if the
Shares are presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid.
Section 2.03 Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made with respect to shares of
Parent Common Stock with a record date after the Effective Time shall be paid to
the holder of any unsurrendered Shares with respect to the shares of Parent
Common Stock that such holder would be entitled to receive upon surrender of
such Shares and no cash payment in lieu of fractional shares of Parent Common
Stock shall be paid to any such holder pursuant to Section 2.05 until such
holder shall surrender such Shares in accordance with Section 2.02. Subject to
the effect of applicable laws, following surrender of any such Shares, there
shall be paid to such holder of shares of Parent Common Stock issuable in
exchange therefor, without interest, (a) promptly after the time of such
surrender, the amount of any cash payable in lieu of fractional shares of Parent
Common Stock to which such holder is entitled pursuant to Section 2.05 and the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such whole shares of Parent
Common Stock, and (b) at the appropriate payment date, the amount of dividends
or other distributions with a record date after the Effective Time but prior to
such surrender and a payment date subsequent to such surrender payable with
respect to such shares of Parent Common Stock.
Section 2.04 No Further Ownership Rights in Company Common Stock. All
shares of Parent Common Stock issued and cash paid upon conversion of shares of
Company Common Stock in accordance with the terms of Article 1 and this Article
2 (including any cash paid pursuant to Section 2.03 or 2.05) shall be deemed to
have been issued or paid in full satisfaction of all rights pertaining to such
shares of Company Common Stock.
Section 2.05 No Fractional Shares of Parent Common Stock. (a) No
certificates or scrip or shares of Parent Common Stock representing fractional
shares of Parent Common Stock or book-entry credit of the same shall be issued
upon the surrender for exchange of the Shares and such fractional share
interests will not entitle the owner thereof to vote or to have any rights of a
stockholder of Parent or a holder of shares of Parent Common Stock.
(b) Notwithstanding any other provision of this Agreement, each holder of
shares of Company Common Stock exchanged pursuant to the Merger who would
otherwise have been entitled to receive a fraction of a share of Parent Common
Stock (after taking into account all Shares delivered by such holder) shall
receive, in lieu thereof, cash (without interest) in an amount equal to the
product of (i) such fractional part of a share of Parent Common Stock multiplied
by (ii) the closing price for a share of Parent Common Stock on the New York
Stock Exchange, Inc. ("NYSE") Composite Transactions Tape on the Closing Date.
Such payment of cash consideration in lieu of fractional shares of Parent Common
Stock is not expected to exceed, in the aggregate, 1% of the total merger
consideration.
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(c) As promptly as practicable after the determination of the amount of
cash, if any, to be paid to holders of fractional interests, the Exchange Agent
shall so notify Parent, and Parent shall deposit or cause the Surviving
Corporation to deposit such amount with the Exchange Agent and shall cause the
Exchange Agent to forward payments to such holders of fractional interests
subject to and in accordance with the terms hereof.
Section 2.06 Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the holders of Shares for six months after
the Effective Time shall be delivered to Parent, and any holders of the Shares
who have not theretofore complied with this Article 2 shall thereafter look only
to Parent for the Merger Consideration with respect to such Shares (including
any Cash Payments). Any such portion of the Exchange Fund remaining unclaimed by
holders of shares of Company Common Stock five years after the Effective Time
(or such earlier date immediately prior to such time as such amounts would
otherwise escheat to or become property of any Governmental Entity (as defined
in Section 3.01(c)(iii)) shall, to the extent permitted by law, become the
property of the Surviving Corporation free and clear of any claims or interest
of any Person previously entitled thereto.
Section 2.07 No Liability. None of Parent, Merger Sub, the Company, the
Surviving Corporation or the Exchange Agent shall be liable to any Person in
respect of any Merger Consideration from the Exchange Fund delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
Section 2.08 Investment of the Exchange Fund. The Exchange Agent shall
invest any cash included in the Exchange Fund as directed by Parent on a daily
basis; provided, that no gain or loss thereon shall affect the amounts payable
to the Company stockholders pursuant to Article 1 and the other provisions of
this Article 2. Any interest and other income resulting from such investments
shall promptly be paid to Parent.
Section 2.09 Lost Certificates. If any certificate for Shares shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming such certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond in
such reasonable amount as the Surviving Corporation may direct as indemnity
against any claim that may be made against it with respect to such certificate,
the Exchange Agent will deliver in exchange for such lost, stolen or destroyed
certificate the applicable Merger Consideration (including any Cash Payments)
with respect to the shares of the Company Common Stock formerly represented
thereby.
Section 2.10 Withholding Rights. Each of the Surviving Corporation and
Parent shall be entitled to deduct and withhold from the consideration otherwise
payable pursuant to this Agreement to any holder of shares of Company Common
Stock, Company Stock Options or any other equity rights in the Company such
amounts as it is required to deduct and withhold with respect to the making of
such payment under the Code and the rules and regulations promulgated
thereunder, or any provision of state, local or foreign tax law. To the extent
that amounts are so withheld by the Surviving Corporation or Parent, as the case
may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the shares of Company Common
Stock in respect of which such deduction and withholding was made by the
Surviving Corporation or Parent, as the case may be.
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Section 2.11 Further Assurances. After the Effective Time, the officers
and directors of the Surviving Corporation will be authorized to execute and
deliver, in the name and on behalf of the Company or Merger Sub, any deeds,
bills of sale, assignments or assurances and to take and do, in the name and on
behalf of the Company or Merger Sub, any other actions and things to vest,
perfect or confirm of record or otherwise in the Surviving Corporation any and
all right, title and interest in, to and under any of the rights, properties or
assets acquired or to be acquired by the Surviving Corporation as a result of,
or in connection with, the Merger.
Section 2.12 Stock Transfer Books. The stock transfer books of the Company
shall be closed immediately upon the Effective Time and there shall be no
further registration of transfers of shares of Company Common Stock thereafter
on the records of the Company. On or after the Effective Time, any Shares
presented to the Exchange Agent or Parent for any reason shall be converted into
the Merger Consideration with respect to the shares of Company Common Stock
formerly represented thereby (including any cash in lieu of fractional shares of
Parent Common Stock to which the holders thereof are entitled pursuant to
Section 2.05) and any dividends or other distributions to which the holders
thereof are entitled pursuant to Section 2.03.
Section 2.13 Affiliates. Notwithstanding anything to the contrary herein,
to the fullest extent permitted by law, no certificates representing shares of
Parent Common Stock or cash shall be delivered to a Person who is an "affiliate"
of the Company in accordance with Section 5.11 until such Person has executed
and delivered an Affiliate Agreement (as defined in Section 5.11) to Parent.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations and Warranties of Parent. Except as set forth
in the Parent disclosure schedule delivered by Parent to the Company prior to
the execution of this Agreement (the "Parent Disclosure Schedule"), Parent
represents and warrants to the Company as follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Each of Parent and each of its Subsidiaries (as defined in
Section 8.11) is duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation or organization, has
the requisite corporate (or similar) power and authority to own, lease and
operate its properties and to carry on its business as now being
conducted, except where the failures to be so organized, existing or in
good standing or to have such power and authority, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect (as defined in Section 8.11) on Parent, and is duly qualified and
in good standing to do business in each jurisdiction in which the nature
of its business or the ownership or leasing of its properties makes such
qualification necessary except where the failures so to qualify or to be
in good standing, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect on Parent. The copies of the
amended articles of incorporation and regulations of Parent which were
previously furnished or made available to the Company are true, complete
and correct copies of such documents as in effect on the date of this
Agreement.
-8-
(ii) Exhibit 21 to Parent's Annual Report on Form 10-K for the year
ended June 30, 2004 includes all the Subsidiaries of Parent which as of
the date thereof were Significant Subsidiaries (as defined in Rule 1-02 of
Regulation S-X of the SEC). All the outstanding shares of capital stock
of, or other equity interests in, each such Significant Subsidiary have
been validly issued and are fully paid and non-assessable and are, except
as set forth in Exhibit 21, owned directly or indirectly by Parent, free
and clear of all pledges, claims, liens, charges, encumbrances and
security interests of any kind or nature whatsoever (collectively,
"Liens") (including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other ownership interests),
except for restrictions imposed by applicable laws.
(b) Capital Structure.
(i) As of December 31, 2004, the authorized capital stock of Parent
consisted of (A) 10,000,000,000 shares of Parent Common Stock of which
2,522,583,573 shares were outstanding and 453,866,904 shares were held in
the treasury of Parent, (B) 600,000,000 shares of Class A Preferred Stock,
without par value, of which (i) 89,248,669 shares have been designated
Series A ESOP Convertible Class A Preferred Stock, all of which were
outstanding, and (ii) 69,126,896 shares have been designated Series B ESOP
Convertible Class A Preferred Stock, all of which were outstanding, and
(C) 200,000,000 shares of Class B Preferred Stock, without par value, none
of which are outstanding. All issued and outstanding shares of the capital
stock of Parent are, and when shares of Parent Common Stock are issued in
the Merger or upon exercise of stock options converted in the Merger
pursuant to Section 1.09, such shares will be, duly authorized, validly
issued, fully paid and non-assessable and free of any preemptive rights.
There were outstanding as of December 31, 2004, no options, warrants or
other rights to acquire capital stock from Parent other than options,
restricted stock and other rights to acquire capital stock from Parent
representing in the aggregate the right to purchase 270,623,943 shares of
Parent Common Stock (collectively, the "Parent Stock Options") under
Parent's 2001 Stock and Incentive Compensation Plan, Parent's 1992 Stock
Plan, Parent's 1993 Non-Employee Directors' Stock Plan, Parent's Future
Shares Plan and Parent's 2003 Non-Employee Directors' Stock Plan
(collectively, the "Parent Stock Option Plans").
(ii) No bonds, debentures, notes or other indebtedness of Parent
having the right to vote on any matters on which holders of capital stock
of Parent may vote ("Parent Voting Debt") are issued or outstanding.
(iii) Except as disclosed in the Parent SEC Reports filed prior to
the date hereof or as otherwise set forth in this Section 3.01(b) and as
contemplated by Section 1.08 and Section 1.09, as of January 24, 2005,
there are no securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which Parent or
any of its Significant Subsidiaries is a party or by which any of them is
bound obligating Parent or any of its Significant Subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of Parent or any of its
Significant Subsidiaries or obligating Parent or any of its Significant
Subsidiaries to issue, grant, extend or enter into any such security,
-9-
option, warrant, call, right, commitment, agreement, arrangement or
undertaking. Except as disclosed in the Parent SEC Reports filed prior to
the date hereof, as of the date of this Agreement, there are no
outstanding obligations of Parent or any of its Significant Subsidiaries
to repurchase, redeem or otherwise acquire any shares of capital stock of
Parent or any of its Significant Subsidiaries. Except as disclosed in the
Parent SEC Reports filed prior to the date hereof, there are not
outstanding any stock-appreciation rights, security-based performance
units, "phantom" stock or other security rights or other agreements,
arrangements or commitments of any character (contingent or otherwise)
pursuant to which any Person is or may be entitled to receive any payment
or other value based on the revenues, earnings or financial performance,
stock price performance or other attribute of Parent or any of its
Subsidiaries or assets or calculated in accordance therewith (other than
payments or commissions to employees or agents of Parent or any of its
Subsidiaries in the ordinary course of business consistent with past
practices) or to cause Parent or any of its Subsidiaries to file a
registration statement under the Securities Act or which otherwise relate
to the registration of any securities of Parent or its Subsidiaries.
(c) Authority; No Conflicts.
(i) Parent has all requisite corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated
hereby, subject to obtaining the requisite stockholder approval (the
"Parent Stockholder Approval") of this Agreement and the issuance of the
shares of Parent Common Stock to be issued in the Merger (the "Share
Issuance"). 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 Parent,
subject to obtaining the Parent Stockholder Approval. This Agreement has
been duly executed and delivered by Parent and constitutes a valid and
binding agreement of Parent, enforceable against it in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws relating to or
affecting creditors generally or by general equity principles (regardless
of whether such enforceability is considered in a proceeding in equity or
at law).
(ii) The execution and delivery of this Agreement by Parent does not
or will not, as the case may be, and the consummation by Parent of the
Merger and the other transactions contemplated hereby will not, conflict
with, or result in any violation of, or constitute a default (with or
without notice or lapse of time, or both) under, or give rise to a right
of, or result by its terms in the, termination, material amendment,
cancellation or acceleration of any material obligation or the loss of a
material benefit under, or the creation of a lien, pledge, security
interest, charge or other encumbrance on, or the loss of, any material
assets (any such conflict, violation, default, right of termination,
amendment, cancellation or acceleration, loss or creation, a "Violation")
pursuant to: (A) any provision of the amended articles of incorporation or
regulations of Parent or except as, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on
Parent, any provision of the certificate of incorporation or bylaws of any
Significant Subsidiary (as defined in Rule 1-02 of Regulation S-X of the
SEC) of Parent, or (B) except as, individually or in the aggregate, would
not reasonably be
-10-
expected to have a Material Adverse Effect on Parent, subject to obtaining
or making the consents, approvals, orders, authorizations, registrations,
declarations and filings referred to in paragraph (iii) below, any loan or
credit agreement, note, mortgage, bond, indenture, lease, benefit plan or
other agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Parent or any Subsidiary of Parent or their
respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any supranational, national,
state, municipal, local or foreign government, any instrumentality,
subdivision, court, administrative agency or commission or other authority
thereof, or any quasi-governmental or private body exercising any
regulatory, taxing, importing or other governmental or quasi-governmental
authority (a "Governmental Entity"), is required by or with respect to
Parent or any Subsidiary of Parent in connection with the execution and
delivery of this Agreement by Parent or Merger Sub or the consummation of
the Merger and the other transactions contemplated hereby, except for
those required under or in relation to (A) the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), (B) state securities
or "blue sky" laws (the "Blue Sky Laws"), (C) the Securities Act, (D) the
Exchange Act, (E) the DGCL with respect to the filing of the Certificate
of Merger, (F) rules and regulations of the NYSE, (G) antitrust or other
competition laws, of the European Union or other jurisdictions, and (H)
such other consents, approvals, orders, authorizations, registrations,
declarations and filings the failures of which to make or obtain,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect on Parent. Consents, approvals, orders,
authorizations, registrations, declarations and filings required under or
in relation to any of the foregoing clauses (A) through (G) are
hereinafter referred to as "Specified Consents."
(d) Reports and Financial Statements.
(i) Parent has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other documents
required to be filed by it with the SEC since June 30, 2003 (collectively,
including all exhibits thereto, the "Parent SEC Reports"). No Subsidiary
of Parent is required to file any form, report, registration statement,
prospectus or other document with the SEC. None of the Parent SEC Reports,
as of their respective dates (and, if amended or superseded by a filing
prior to the date of this Agreement or the Closing Date, then on the date
of such filing), contained or will contain any untrue statement of a
material fact or omitted or will omit 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. Each of the
financial statements (including the related notes) included in the Parent
SEC Reports presents fairly, in all material respects, the consolidated
financial position and consolidated results of operations and cash flows
of Parent and its consolidated Subsidiaries as of the respective dates or
for the respective periods set forth therein, all in conformity with
generally accepted accounting principles ("GAAP") consistently applied
during the periods involved except as otherwise noted therein, and
subject, in the case of the unaudited interim financial statements, to the
absence of notes and normal year-end adjustments that have not been and
are not expected to be material in amount. All of
-11-
such Parent SEC Reports, as of their respective dates (and as of the date
of any amendment to the respective Parent SEC Report), complied as to form
in all material respects with the applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations
promulgated thereunder.
(ii) Except as disclosed in the Parent SEC Reports filed prior to
the date hereof, since December 31, 2003, Parent and its Subsidiaries have
not incurred any liabilities that are of a nature that would be required
to be disclosed on a balance sheet of Parent and its Subsidiaries or the
footnotes thereto prepared in conformity with GAAP, other than (A)
liabilities incurred in the ordinary course of business and (B)
liabilities that, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect on Parent.
(e) Information Supplied.
(i) None of the information supplied or to be supplied by Parent for
inclusion or incorporation by reference in (A) the Form S-4 (as defined in
Section 5.01) will, at the time the Form S-4 is filed with the SEC, at any
time it is amended or supplemented or at the time it becomes effective
under the Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (B) the Joint
Proxy Statement/Prospectus will, on the date it is first mailed to the
Company stockholders or Parent stockholders or at the time of the Company
Stockholders Meeting or the Parent Stockholders Meeting (each as defined
in Section 5.01), 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.
(ii) Notwithstanding the foregoing provisions of this Section
3.01(e), no representation or warranty is made by Parent with respect to
statements made or incorporated by reference in the Form S-4 or the Joint
Proxy Statement/Prospectus based on information supplied by the Company
for inclusion or incorporation by reference therein.
(f) Board Approval. The Board of Directors of Parent, by resolutions duly
adopted by unanimous vote at a meeting duly called and held (the "Parent Board
Approval"), has duly (i) determined that this Agreement and the Merger are
advisable and are fair to and in the best interests of Parent and its
stockholders, (ii) approved this Agreement, the Merger and the Share Issuance
and (iii) recommended that the stockholders of Parent approve this Agreement and
the Share Issuance and directed that this Agreement and the Share Issuance be
submitted for consideration by Parent's stockholders at the Parent Stockholders
Meeting.
(g) Vote Required. The affirmative vote of the holders of a majority of
the outstanding shares of Parent Common Stock to adopt this Agreement and
approve the Share Issuance is the only vote of the holders of any class or
series of Parent capital stock necessary to adopt this Agreement and approve the
Share Issuance.
-12-
(h) Litigation; Compliance with Laws.
(i) Except as disclosed in the Parent SEC Reports filed prior to the
date of this Agreement, there are no suits, actions, claims, arbitrations,
proceedings or investigations (collectively "Actions") pending or, to the
knowledge of Parent, threatened, against or affecting Parent or any
Subsidiary of Parent which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Parent, nor
are there any judgments, decrees, injunctions, rules or orders of any
Governmental Entity or arbitrator outstanding against Parent or any
Subsidiary of Parent which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Parent.
(ii) Except as disclosed in the Parent SEC Reports filed prior to
the date of this Agreement and except as, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on Parent, (A) Parent and its Subsidiaries hold all permits,
licenses, variances, exemptions, orders and approvals of all Governmental
Entities which are necessary for the operation of the businesses of Parent
and its Subsidiaries, taken as a whole (the "Parent Permits"), and (B) no
Parent Permit is subject to any pending revocation or forfeiture. Parent
and its Subsidiaries are in compliance with the terms of the Parent
Permits, except where the failures to so comply, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on Parent. Except as disclosed in the Parent SEC Reports filed
prior to the date of this Agreement, neither Parent nor any of its
Subsidiaries is in violation of, and Parent and its Subsidiaries have not
received any notices of violations with respect to, any laws, ordinances
or regulations of any Governmental Entity, except for violations which,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect on Parent.
(i) Absence of Certain Changes or Events. Except for liabilities incurred
in connection with this Agreement or the transactions contemplated hereby,
except as disclosed in the Parent SEC Reports filed prior to the date of this
Agreement, and except as permitted by Section 4.01, since September 30, 2004,
Parent and its Subsidiaries have conducted their business only in the ordinary
course and there have not been any changes, circumstances or events which,
individually or in the aggregate, have had, or would reasonably be expected to
have, a Material Adverse Effect on Parent.
(j) Brokers or Finders. No agent, broker, investment banker, financial
advisor or other firm or Person is or will be entitled to any broker's or
finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement, based upon arrangements made by
or on behalf of Parent, except ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), whose fees and expenses will be paid by Parent.
(k) Opinions of Parent Financial Advisors. Parent has received the opinion
of ▇▇▇▇▇▇▇ ▇▇▇▇▇, dated the date of this Agreement, to the effect that, as of
such date, the Exchange Ratio is fair from a financial point of view to Parent.
-13-
(l) Employee Benefit Plans. Except as disclosed in the Parent SEC Reports,
there are no Benefit Plans maintained by Parent covering only Parent executive
officers. Each Benefit Plan maintained by Parent has been operated and
administered in accordance with its terms and applicable law, except where
failure to do so would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Parent. The execution of this
Agreement and the consummation of the Merger will not constitute an event under
any Benefit Plan maintained by Parent that will or may result in any payment,
acceleration, termination, forgiveness of indebtedness, vesting, distribution,
increase in compensation or benefits or obligation to fund benefits with respect
to any Parent employee with such exceptions which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
Parent.
(m) Taxes.
(i) Parent and each of its Subsidiaries has timely filed, or has
caused to be timely filed, all Tax Returns required to be filed, and all
such Tax Returns are true, complete and accurate, except to the extent any
failure to file or any inaccuracies in any filed Tax Returns would not,
individually or in the aggregate, have a Material Adverse Effect on
Parent. All Taxes shown to be due on such Tax Returns, or otherwise owed,
have been timely paid, except to the extent that any failure to pay,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Material Adverse Effect on Parent.
(ii) The most recent financial statements contained in Parent SEC
Reports reflect an adequate reserve for all Taxes payable by Parent and
its Subsidiaries for all Taxable periods and portions thereof through the
date of such financial statements. No deficiency with respect to any Taxes
has been proposed, asserted or assessed against Parent or any of its
Subsidiaries, and no requests for waivers of the time to assess any such
Taxes are pending, except to the extent any such deficiency or request for
waiver, individually or in the aggregate, has not had and would not
reasonably be expected to have a Material Adverse Effect on Parent.
(iii) The Federal income Tax Returns of Parent and each of its
Subsidiaries consolidated in such Returns have been examined by and
settled with the United States Internal Revenue Service for all years
through 1998. All material assessments for Taxes due with respect to such
completed and settled examinations or any concluded litigation have been
fully paid.
(iv) There are no material Liens for Taxes (other than for current
Taxes not yet due and payable) on the assets of Parent or any of its
Subsidiaries. (v) Neither Parent nor any of its Subsidiaries has been a
party to any distribution occurring during the previous three (3) years in
which the parties to such distribution treated the distribution as one to
which Section 355 applied.
(vi) For purposes of this Agreement:
-14-
(A) "Taxes" includes all forms of taxation, whenever created
or imposed, and whether of the United States or elsewhere, and
whether imposed by a local, municipal, governmental, state, foreign,
Federal or other Governmental Entity, including all interest,
penalties and additions imposed with respect to such amounts.
(B) "Tax Return" means all Federal, state, local, provincial
and foreign Tax returns, declarations, statements, reports,
schedules, forms and information returns and any amended Tax return
relating to Taxes.
(n) Certain Contracts. As of the date hereof, except as set forth in
Parent SEC Reports filed prior to the date of this Agreement or except as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Parent, neither Parent nor any of its Subsidiaries is a party
to or bound by any "material contracts" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC).
Section 3.02 Representations and Warranties of the Company. Except as set
forth in the Company Disclosure Schedule delivered by the Company to Parent
prior to the execution of this Agreement (the "Company Disclosure Schedule"),
the Company represents and warrants to Parent as follows:
(a) Organization, Standing and Power; Subsidiaries.
(i) Each of the Company and each of its Subsidiaries is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, has the requisite corporate
(or similar) power and authority to own, lease and operate its properties
and to carry on its business as now being conducted, except where the
failures to be so organized, existing or in good standing or to have such
power and authority, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company,
and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary except where
the failures so to qualify or to be in good standing, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Company. The copies of the certificate of incorporation and
bylaws of the Company which were previously furnished or made available to
Parent are true, complete and correct copies of such documents as in
effect on the date of this Agreement.
(ii) Exhibit 21 to the Company's Annual Report on Form 10K for the
year ended December 31, 2003 includes all the Subsidiaries of the Company
which as of the date thereof were Significant Subsidiaries (as defined in
Rule 1-02 of Regulation S-X of the SEC). All the outstanding shares of
capital stock of, or other equity interests in, each such Significant
Subsidiary have been validly issued and are fully paid and non-assessable
and are, except as set forth in Exhibit 21, owned directly or indirectly
by the Company, free and clear of all Liens (including any restriction on
the right to vote, sell or otherwise dispose of such capital stock or
other ownership interests), except for restrictions imposed by applicable
laws.
-15-
(b) Capital Structure.
(i) As of December 31, 2004, the authorized capital stock of the
Company consisted of (A) 2,325,000,000 shares of Company Common Stock, of
which 989,820,024 shares were outstanding and 391,859,869 shares were held
in the treasury of the Company and (B) 5,000,000 shares of Preferred
Stock, no par value, of which 400,000 shares of which have been designated
Series A Junior Participating Preferred Stock and reserved for issuance
upon exercise of the rights (the "Company Rights") distributed to the
holders of Company Common Stock pursuant to the Renewed Rights Agreement,
dated as of December 14, 1995, between the Company and The Bank of New
York (as amended, the "Company Rights Agreement"). All issued and
outstanding shares of the capital stock of the Company are duly
authorized, validly issued, fully paid and non-assessable, and no class of
capital stock is entitled to preemptive rights. There were outstanding as
of December 31, 2004, no options, warrants or other rights to acquire
capital stock from the Company other than (x) Company Rights and (y)
options and other rights to acquire capital stock of the Company
representing in the aggregate the right to purchase 84,040,668 shares of
Company Common Stock (collectively, the "Company Stock Options") under the
Company's 1971 Stock Option Plan, as amended, the Company's 2004 Long-Term
Incentive Plan and the ▇▇▇▇▇ ▇. ▇▇▇▇▇ Non-Statutory Stock Option Plan
(collectively, the "Company Stock Option Plans"). Section 3.02(b) of the
Company Disclosure Schedule sets forth a complete and correct list, as of
January 24, 2005, of the number of shares of Company Common Stock subject
to Company Stock Options or other rights to purchase or receive Company
Common Stock granted under the Company Benefit Plans or otherwise, the
dates of grant and the exercise prices thereof.
(ii) No bonds, debentures, notes or other indebtedness of the
Company having the right to vote on any matters on which stockholders may
vote ("Company Voting Debt") are issued or outstanding.
(iii) Except as disclosed in the Company SEC Reports filed prior to
the date hereof or as otherwise set forth in this Section 3.02(b), as of
January 24, 2005, there are no securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any kind
to which the Company or any of its Significant Subsidiaries is a party or
by which any of them is bound obligating the Company or any of its
Significant Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting
securities of the Company or any of its Significant Subsidiaries or
obligating the Company or any of its Significant Subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. Except as
disclosed in the Company SEC Reports filed prior to the date hereof, as of
the date of this Agreement, there are no outstanding obligations of the
Company or any of its Significant Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of the Company or any of its
Significant Subsidiaries. Except as disclosed in the Company SEC Reports
filed prior to the date hereof, there are no outstanding
stock-appreciation rights, security-based performance units, "phantom"
stock or other security rights or other agreements, arrangements or
commitments of any character (contingent or otherwise) pursuant to
-16-
which any Person is or may be entitled to receive any payment or other
value based on the revenues, earnings or financial performance, stock
price performance or other attribute of the Company or any of its
Subsidiaries or assets or calculated in accordance therewith (other than
payments or commissions to employees or agents of the Company or any of
its Subsidiaries in the ordinary course of business consistent with past
practices) or to cause the Company or any of its Subsidiaries to file a
registration statement under the Securities Act or which otherwise relate
to the registration of any securities of the Company or its Subsidiaries.
(c) Authority; No Conflicts.
(i) The Company has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby, subject in the case of the consummation of the Merger to the
adoption of this Agreement by the Company Stockholder Approval (as defined
in Section 3.02(g)). 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 in the case of the consummation of the Merger to the adoption of
this Agreement by the Company Stockholder Approval. This Agreement has
been duly executed and delivered by the Company and constitutes a valid
and binding agreement of the Company, enforceable against it in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws
relating to or affecting creditors generally or by general equity
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(ii) The execution and delivery of this Agreement by the Company
does not or will not, as the case may be, and the consummation by the
Company of the Merger and the other transactions contemplated hereby will
not, conflict with, or result in a Violation pursuant to: (A) any
provision of the certificate of incorporation or bylaws of the Company or
except as, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on the Company, any provision
of the certificate of incorporation or bylaws of any Significant
Subsidiary (as defined in Rule 1-02 of Regulation S-X of the SEC) of the
Company or (B) except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company
or, subject to obtaining or making the consents, approvals, orders,
authorizations, registrations, declarations and filings referred to in
paragraph (iii) below, any loan or credit agreement, note, mortgage, bond,
indenture, lease, benefit plan or other agreement, obligation, instrument,
permit, concession, franchise, license, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to the Company or any
Subsidiary of the Company or their respective properties or assets.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is
required by or with respect to the Company or any Subsidiary of the
Company in connection with the execution and delivery of this Agreement by
the Company or the consummation of the Merger and the other transactions
contemplated hereby, except the Specified Consents and such other
consents,
-17-
approvals, orders, authorizations, registrations, declarations and filings
the failure of which to make or obtain, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on the
Company.
(d) Reports and Financial Statements.
(i) The Company has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other documents
required to be filed by it with the SEC since January 1, 2003
(collectively, including all exhibits thereto, the "Company SEC Reports").
No Subsidiary of the Company is required to file any form, report,
registration statement or prospectus or other document with the SEC. None
of the Company SEC Reports, as of their respective dates (and, if amended
or superseded by a filing prior to the date of this Agreement or the
Closing Date, then on the date of such filing), contained or will contain
any untrue statement of a material fact or omitted or will omit 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. Each of the financial statements (including the
related notes) included in the Company SEC Reports presents fairly, in all
material respects, the consolidated financial position and consolidated
results of operations and cash flows of the Company and its consolidated
Subsidiaries as of the respective dates or for the respective periods set
forth therein, all in conformity with GAAP consistently applied during the
periods involved except as otherwise noted therein, and subject, in the
case of the unaudited interim financial statements, to the absence of
notes and normal year-end adjustments that have not been and are not
expected to be material in amount. All of such Company SEC Reports, as of
their respective dates (and as of the date of any amendment to the
respective Company SEC Report), complied as to form in all material
respects with the applicable requirements of the Securities Act and the
Exchange Act and the rules and regulations promulgated thereunder.
(ii) Except as disclosed in the Company SEC Reports filed prior to
the date hereof, since December 31, 2003, the Company and its Subsidiaries
have not incurred any liabilities that are of a nature that would be
required to be disclosed on a balance sheet of the Company and its
Subsidiaries or the footnotes thereto prepared in conformity with GAAP,
other than (A) liabilities incurred in the ordinary course of business and
(B) liabilities that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company.
(iii) Since the enactment of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 (the
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act"), the Company has been and is in compliance in all
material respects with (A) the applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act and (B) the applicable listing and corporate governance rules and
regulations of the NYSE. Section 3.01(d)(iii) of the Company Disclosure
Letter sets forth, as of the date hereof, a schedule of all officers and
directors of the Company who may have outstanding loans from the Company,
and there has been no default on, or forgiveness or waiver of, in whole or
in part, any such loan during the two years immediately preceding the date
hereof.
-18-
(iv) The Company has designed disclosure controls and procedures to
ensure that material information relating to the Company, including its
consolidated Subsidiaries, is made known to the chief executive officer
and the chief financial officer of the Company by others within those
entities.
(v) The Company has disclosed, based on its most recent evaluation
prior to the date hereof, to the Company's auditors and the audit
committee of the Company's Board of Directors (A) any significant
deficiencies and material weaknesses in the design or operation of
internal controls over financial reporting which are reasonably likely to
adversely affect in any material respect the Company's ability to record,
process, summarize and report financial information and (B) any fraud,
whether or not material, that involves management or other employees who
have a significant role in the Company's internal controls over financial
reporting.
(vi) As of the date hereof, the Company has not identified any
material control deficiencies other than as disclosed in Section
3.01(d)(vi) of the Company Disclosure Letter. To the knowledge of the
Company, there is no reason to believe that its auditors and its chief
executive officer and chief financial officer will not be able to give the
certifications and attestations required pursuant to the rules and
regulations adopted pursuant to Section 404 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act,
without qualification, when next due.
(e) Information Supplied.
(i) None of the information supplied or to be supplied by the
Company for inclusion or incorporation by reference in (A) the Form S-4
will, at the time the Form S-4 is filed with the SEC, at any time it is
amended or supplemented or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and (B) the Joint Proxy
Statement/Prospectus will, on the date it is first mailed to the Company
stockholders or Parent stockholders or at the time of the Company
Stockholders Meeting or the Parent 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 were made, not
misleading.
(ii) Notwithstanding the foregoing provisions of this Section
3.02(e), no representation or warranty is made by the Company with respect
to statements made or incorporated by reference in the Form S-4 or the
Joint Proxy Statement/Prospectus based on information supplied by Parent
or Merger Sub for inclusion or incorporation by reference therein.
(f) Board Approval. The Board of Directors of the Company, by resolutions
duly adopted by unanimous vote of those voting at a meeting duly called and held
(the "Company Board Approval"), has duly (i) determined that this Agreement and
the Merger are advisable and are fair to and in the best interests of the
Company and its stockholders, (ii) approved this Agreement and the Merger and
(iii) recommended that the stockholders of the Company adopt this Agreement and
approve the Merger and directed that this Agreement and the transactions
-19-
contemplated hereby be submitted for consideration by the Company's stockholders
at the Company Stockholders Meeting.
(g) Vote Required. The affirmative vote of the holders of a majority of
the outstanding shares of Company Common Stock to adopt this Agreement and
approve the Merger (the "Company Stockholder Approval") is the only vote of the
holders of any class or series of the Company capital stock necessary to adopt
this Agreement and approve the Merger and the other transactions contemplated
hereby.
(h) Litigation; Compliance with Laws.
(i) Except as disclosed in the Company SEC Reports filed prior to
the date of this Agreement, there are no Actions pending or, to the
knowledge of the Company, threatened, against or affecting the Company or
any Subsidiary of the Company which, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect on the
Company, nor are there any judgments, decrees, injunctions, rules or
orders of any Governmental Entity or arbitrator outstanding against the
Company or any Subsidiary of the Company which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect
on the Company.
(ii) Except as disclosed in the Company SEC Reports filed prior to
the date of the Agreement and except as would, individually or in the
aggregate, not reasonably be expected to have a Material Adverse Effect on
the Company, (A) the Company and its Subsidiaries hold all permits,
licenses, variances, exemptions, orders and approvals of all Governmental
Entities which are necessary for the operation of the businesses of the
Company and its Subsidiaries, taken as a whole (the "Company Permits"),
and (B) no Company Permit is subject to any pending revocation or
forfeiture. The Company and its Subsidiaries are in compliance with the
terms of the Company Permits, except where the failures to so comply,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect on the Company. Except as disclosed in the
Company SEC Reports filed prior to the date of this Agreement, neither the
Company nor its Subsidiaries is in violation of, and the Company and its
Subsidiaries have not received any notices of violations with respect to,
any laws, ordinances or regulations of any Governmental Entity, except for
violations which, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect on the Company.
(i) Absence of Certain Changes or Events. Except for liabilities incurred
in connection with this Agreement or the transactions contemplated hereby,
except as disclosed in the Company SEC Reports filed prior to the date of this
Agreement and except as permitted by Section 4.02, since September 30, 2004, the
Company and its Subsidiaries have conducted their business only in the ordinary
course and there have not been any changes, circumstances or events which,
individually or in the aggregate, have had, or would reasonably be expected to
have, a Material Adverse Effect on the Company.
(j) Environmental Matters.
-20-
(i) Except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company
and except as disclosed in the Company SEC Reports filed prior to the date
of this Agreement, (i) the operations of the Company and its Subsidiaries
are in compliance with all Environmental Laws and with all licenses
required by Environmental Laws, (ii) there are no pending or, to the
knowledge of the Company, threatened, Environmental Claims under or
pursuant to Environmental Laws against the Company or its Subsidiaries,
(iii) to the knowledge of the Company, the Company and its Subsidiaries
have not incurred any Environmental Liabilities and no facts,
circumstances or conditions attributable to any real property currently or
previously owned, operated or leased, or to which Hazardous Materials were
sent, by the Company or its Subsidiaries or any predecessors thereof, or
operations thereon would reasonably be expected to result in the
incurrence of any Environmental Liabilities and (iv) all real property now
or previously owned and, to the knowledge of the Company, all real
property now or previously operated or leased by the Company or its
Subsidiaries is free of contamination from Hazardous Material that
violates or is required to be remediated under any Environmental Laws, and
(v) to the knowledge of the Company, there are no facts or circumstances
likely to delay or prevent implementation of this Agreement, or to require
any remediation, in each case pursuant to environmental transfer statutes
including without limitation the Connecticut Transfer Act, Conn. Gen.
Stat. ▇▇.▇▇. 22a-134, et. seq. and the New Jersey Industrial Site Recovery
Act, N.J.S.A. 13:1K-6, et seq.
(ii) For purposes of this Agreement, the following terms shall have
the following meanings:
"Environmental Claim" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters,
directives, orders, claims, liens, investigations, requests for
information, proceedings, or written notices of noncompliance or violation
by any person (including, without limitation, any Governmental Entity)
alleging liability or potential liability arising out of, based on or
resulting from (A) the presence, release or disposal or threatened release
or disposal, of any Hazardous Materials at any location, or (B) any
violation or alleged violation of any Environmental Law or permit
thereunder, or (C) any and all claims by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief resulting from exposure to or the presence, release, or disposal or
threat thereof of any Hazardous Materials.
"Environmental Law" means any applicable law, regulation, code,
license, permit, order, judgment, decree or injunction promulgated by any
Governmental Entity, (A) for the protection of human health or the
environment (including air, water, soil and natural resources) or (B)
regulating the use, storage, handling, release or disposal of any
chemical, material, waste or hazardous substance.
"Hazardous Material" means any substance listed, defined, designated
or regulated pursuant to any applicable Environmental Law including
petroleum products and byproducts, asbestos and polychlorinated biphenyls.
-21-
"Environmental Liabilities" means all liabilities, remedial
obligations, losses, damages, fines, penalties and sanctions arising under
any Environmental Law.
(k) Intellectual Property. Except as, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on the
Company and except as disclosed in the Company SEC Reports filed prior to the
date of the Agreement: (i) the Company and each of its Subsidiaries owns, or is
licensed to use (in each case, free and clear of any Liens), all Intellectual
Property used in or necessary for the conduct of its business as currently
conducted; (ii) the use of any Intellectual Property by the Company and its
Subsidiaries does not infringe on or otherwise violate the rights of any Person
and is in accordance with any applicable license pursuant to which the Company
or any Subsidiary acquired the right to use any Intellectual Property; (iii) to
the knowledge of the Company, no Person is challenging, infringing on or
otherwise violating any right of the Company or any of its Subsidiaries with
respect to any Intellectual Property owned by and/or licensed to the Company or
its Subsidiaries; (iv) neither the Company nor any of its Subsidiaries has
received any written notice or otherwise has knowledge of any pending claim,
order or proceeding with respect to any Intellectual Property used by the
Company and its Subsidiaries and to its knowledge no Intellectual Property owned
and/or licensed by the Company or its Subsidiaries is being used or enforced in
a manner that would reasonably be expected to result in the abandonment,
cancellation or unenforceability of such Intellectual Property; and (v) the
execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby will not breach, violate or
conflict with any instrument or agreement that the Company is party to, will not
cause the forfeiture or termination or give rise to a right of forfeiture or
termination of any Intellectual Property Right of the Company or impair the
right of Parent to develop, use, sell, license or dispose of, or to bring any
action for the infringement of, any Intellectual Property Right of the Company.
For purposes of this Agreement, "Intellectual Property" shall mean trademarks,
service marks, brand names, certification marks, trade dress and other
indications of origin, the goodwill associated with the foregoing and
registrations in any jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or renewal of any
such registration or application; inventions and discoveries, whether patentable
or not, in any jurisdiction; patents, applications for patents (including,
without limitation, divisions, continuations, continuations in part and renewal
applications), and any renewals, extensions or reissues thereof, in any
jurisdiction; trade secrets and confidential information and rights in any
jurisdiction to limit the use or disclosure thereof by any person; writings and
other works, whether copyrightable or not, in any jurisdiction, and any and all
copyright rights, whether registered or not; and registrations or applications
for registration of copyrights in any jurisdiction, and any renewals or
extensions thereof; moral rights, database rights, design rights, industrial
property rights, publicity rights and privacy rights; and any similar
intellectual property or proprietary rights.
(l) Brokers or Finders. No agent, broker, investment banker, financial
advisor or other firm or Person is or will be entitled to any broker's or
finder's fee or any other similar commission or fee in connection with any of
the transactions contemplated by this Agreement, based upon arrangements made by
or on behalf of the Company except ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and UBS Warburg LLC,
each of whose fees and expenses will be paid by the Company in accordance with
the Company's agreements with such firms, copies of which have been provided to
Parent.
-22-
(m) Opinions of the Company Financial Advisor. The Company has received
the opinions of ▇▇▇▇▇▇▇, Sachs & Co. and UBS Warburg LLC, each dated the date of
this Agreement, and each to the effect that, as of such date, the Exchange Ratio
is fair, from a financial point of view, to the holders of Company Common Stock.
(n) Taxes.
(i) The Company and each of its Subsidiaries has timely filed, or
has caused to be timely filed, all Tax Returns required to be filed, and
all such Tax Returns are true, complete and accurate, except to the extent
any failure to file or any inaccuracies in any filed Tax Returns would
not, individually or in the aggregate, have a Material Adverse Effect on
the Company. All Taxes shown to be due on such Tax Returns, or otherwise
owed, have been timely paid, except to the extent that any failure to pay,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Material Adverse Effect on the Company.
(ii) The most recent financial statements contained in the Company
SEC Reports reflect an adequate reserve for all Taxes payable by the
Company and its Subsidiaries for all Taxable periods and portions thereof
through the date of such financial statements. No deficiency with respect
to any Taxes has been proposed, asserted or assessed against the Company
or any of its Subsidiaries, and no requests for waivers of the time to
assess any such Taxes are pending, except to the extent any such
deficiency or request for waiver, individually or in the aggregate, has
not had and would not reasonably be expected to have a Material Adverse
Effect on the Company.
(iii) The Federal income Tax Returns of the Company and each of its
Subsidiaries consolidated in such Returns have been examined by and
settled with the United States Internal Revenue Service for all years
through 1990. All material assessments for Taxes due with respect to such
completed and settled examinations or any concluded litigation have been
fully paid.
(iv) There are no material Liens for Taxes (other than for current
Taxes not yet due and payable) on the assets of the Company or any of its
Subsidiaries.
(v) Neither the Company nor any of its Subsidiaries has been a party
to any distribution occurring during the previous three (3) years in which
the parties to such distribution treated the distribution as one to which
Section 355 applied.
(o) Certain Contracts. As of the date hereof, except as set forth in the
Company SEC Reports filed prior to the date of this Agreement or except as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company (or Parent, in the case of clause (iii) below),
neither the Company nor any of its Subsidiaries is a party to or bound by (i)
any "material contracts" (as such term is defined in Item 601(b)(10) of
Regulation S-K of the SEC) (ii) any derivative contract or instrument or (iii)
any non-competition agreements or any other agreements or arrangements that
would, after the Effective Time, to the knowledge of the Company, limit or
restrict Parent or any of its affiliates (including the Surviving Corporation)
or any successor thereto, from engaging or competing in
-23-
any line of business or in any geographic area, other than exclusive
distribution agreements or similar arrangements or exclusive Intellectual
Property licensing agreements.
(p) Employee Benefit Plans.
(i) Section 3.02(p) of the Company Disclosure Schedule sets forth
all Benefit Plans maintained by the Company, true, complete and correct
copies of which have been provided or otherwise made available to Parent.
Except as disclosed in the Company SEC Reports, there are no Benefit Plans
maintained by the Company covering only the Company executive officers.
(ii) Except where failure to comply, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect on the Company, each Benefit Plan maintained by the Company has
been operated and administered in compliance with its terms and applicable
law.
(iii) The execution of this Agreement and the consummation of the
Merger will not constitute an event under any Benefit Plan maintained by
the Company that will or may result in any payment, acceleration,
termination, forgiveness of indebtedness, vesting, distribution, increase
in compensation or benefits or obligation to fund benefits with respect to
any Company Employee which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on the Company.
Except as would not be reasonably expected to result in a Material Adverse
Effect on the Company, neither the Company nor any of its Subsidiaries
maintains or contributes to any plan or arrangement which contains life
insurance, health insurance, pension benefits or other employee benefits
after termination of employment, and neither the Company nor any of its
Subsidiaries has ever represented or promised that such benefits would be
provided.
(q) Labor Matters. Except where failure to comply would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect on
the Company, the Company is and has been in compliance with all applicable laws
of the United States, or of any state or local government or any subdivision
thereof or of any foreign government respecting employment and employment
practices, terms and conditions of employment and wages and hours, including,
without limitation, ERISA, the Code, the Immigration Reform and Control Act, the
WARN Act, any laws respecting employment discrimination, sexual harassment,
disability rights or benefits, equal opportunity, plant closure issues,
affirmative action, workers' compensation, employee benefits, severance
payments, COBRA, labor relations, employee leave issues, wage and hour
standards, occupational safety and health requirements and unemployment
insurance and related matters, and is not engaged in any unfair labor practices.
(r) Foreign Corrupt Practices and International Trade Sanctions. Except
where failure to comply would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on the Company, neither the
Company, nor any of its Subsidiaries, nor any of their respective directors,
officers, agents, employees or any other Persons acting on their behalf has, in
connection with the operation of their respective businesses, (i) used any
corporate or other funds for unlawful contributions, payments, gifts or
entertainment, or made any unlawful expenditures relating to political activity
to government officials, candidates or
-24-
members of political parties or organizations, or established or maintained any
unlawful or unrecorded funds in violation of Section 104 of the FCPA or any
other similar applicable foreign, Federal or state law, (ii) paid, accepted or
received any unlawful contributions, payments, expenditures or gifts, or (iii)
violated or operated in noncompliance with any export restrictions, anti-boycott
regulations, embargo regulations or other applicable domestic or foreign laws
and regulations.
(s) Products. With such exceptions as would not individually or in the
aggregate, have a Material Adverse Effect on the Company, (i) there are no
claims, statements or decisions by any Governmental Entity or arbitrator that
any products sold, offered for sale or distributed by the Company or any of its
Subsidiaries ("Products") is defective or dangerous or fails to meet any
standards promulgated by any Governmental Entity, (ii) within the last three
years, there have been no recalls ordered by any Governmental Entity nor have
there been any voluntary recalls by the Company with respect to any Product and
(iii) to the knowledge of the Company, (x) there are no facts or circumstances
relating to any Products that may give rise to a requirement to recall any
Products or a duty to warn customers of a defect in any Products, and (y) there
are no latent or overt design, production, manufacturing or other defects in any
Products.
(t) Company Stockholder Rights Plan. The Board of Directors of the Company
has amended the Company Rights Agreement in accordance with its terms to render
it inapplicable to the transactions contemplated by this Agreement. Company has
delivered to the Parent a true and correct copy of the Company Rights Agreement,
as amended, in effect as of execution and delivery of this Agreement.
(u) Takeover Statutes. The Board of Directors of the Company has taken the
necessary action to render the restrictions on business combinations contained
in Section 203 of the DGCL inapplicable to this Agreement and the transactions
contemplated hereby. To the knowledge of the Company, except for Section 203 of
the DGCL, no state anti-takeover law is applicable to this Agreement or any
transactions contemplated hereby.
(v) Disclosure. As of the date hereof, to the knowledge of ▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, there is no technological change,
regulatory action or other event, circumstance or fact (which is not publicly
known) which is reasonably likely to render obsolete traditional shaving
products or batteries or otherwise materially adversely affect the business and
prospects of the blades/razors and/or battery businesses of the Company and its
Subsidiaries.
Section 3.03 Representations and Warranties of Parent and Merger Sub.
Parent and Merger Sub represent and warrant to the Company as follows:
(a) Organization. Merger Sub is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware. Merger Sub is a
wholly-owned Subsidiary of Parent.
(b) Corporate Authorization. Merger Sub has all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby.
-25-
The execution, delivery and performance by Merger Sub of this Agreement and the
consummation by Merger Sub of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Merger Sub.
This Agreement has been duly executed and delivered by Merger Sub and
constitutes a valid and binding agreement of Merger Sub, enforceable against it
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors generally or by general equity principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(c) Non-Contravention. The execution, delivery and performance by Merger
Sub of this Agreement and the consummation by Merger Sub of the transactions
contemplated hereby do not and will not contravene or conflict with the
certificate of incorporation or bylaws of Merger Sub.
(d) No Business Activities. Merger Sub has not conducted any activities
other than in connection with the organization of Merger Sub, the negotiation
and execution of this Agreement and the consummation of the transactions
contemplated hereby. Merger Sub has no Subsidiaries.
ARTICLE 4
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 4.01 Covenants of Parent. During the period from the date of this
Agreement and continuing until the Effective Time, Parent agrees as to itself
and its Subsidiaries that (except as expressly contemplated or permitted by this
Agreement (including pursuant to the Parent Share Repurchase (as defined below))
or the Parent Disclosure Schedule or as required by a Governmental Entity of
competent jurisdiction or to the extent that the Company shall otherwise consent
in writing:
(a) Ordinary Course. Parent and its Subsidiaries shall carry on their
respective businesses in the ordinary course in all material respects, and shall
use commercially reasonable efforts to preserve intact their business, maintain
their rights and franchises and preserve their relationships with customers,
suppliers and others having business dealings with them.
(b) Dividends; Changes in Share Capital. Parent shall not (i) declare or
pay any dividends or distributions on or make other distributions in respect of
any of its capital stock, except the declaration and payment of regular cash
dividends in amounts consistent with past practice (subject to normal increases
consistent with past practice) with usual record and payment dates for such
dividends in accordance with past dividend practice, or (ii) split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for, shares of its capital stock.
(c) Governing Documents. Except to the extent required to comply with
their respective obligations hereunder or with applicable law, Parent and Merger
Sub shall not amend or propose to so amend the amended articles of incorporation
or regulations of Parent (other than amendments related to the composition or
structure of the Board of Directors or committees thereof or other
governance-related matters) or the certificate of incorporation or bylaws of
Merger Sub.
-26-
(d) No Acquisitions. Other than (i) acquisitions disclosed on the Parent
Disclosure Schedule and (ii) acquisitions where the consideration to be paid by
Parent or its Subsidiary, is not, individually or in the aggregate, more than
$15 billion, and none of which acquisitions presents, (A) a significant risk of
making it more difficult to obtain any approval or authorization required in
connection with the Merger under Regulatory Laws, or (B) a risk of significantly
delaying or impairing the consummation of the Merger, Parent shall not, and
shall not permit any of its Subsidiaries to, engage in or agree to engage in any
Control Acquisition; provided, however, that the foregoing shall not prohibit
(x) internal reorganizations or consolidations involving existing Subsidiaries
of Parent or (y) the creation of new Subsidiaries of Parent organized to conduct
or continue activities otherwise permitted by this Agreement. For the purposes
hereof, the term "Control Acquisition" shall mean (i) the acquisition by merger
or consolidation, or by purchasing an equity interest, in any business,
corporation, partnership, association or business organization after which
Parent or any of its Subsidiaries shall own more than 10% of the voting power of
any such business, corporation, partnership, association or business
organization and (ii) the acquisition of all or substantially all of the assets
of any business, corporation, partnership, association or business organization.
Notwithstanding the foregoing, a Control Acquisition shall not include any
agreement or understanding on the part of Parent to enter into a license or to
jointly promote, market or develop any products with any other Person; provided
that any such agreement or understanding does not present (A) a significant risk
of making it more difficult to obtain any approval or authorization required in
connection with the Merger under Regulatory Laws, or (B) a risk of significantly
delaying or impairing the consummation of the Merger.
(e) Accounting Methods. Except as disclosed in Parent SEC Reports filed
prior to the date of this Agreement, or as required by a Governmental Entity,
Parent shall not change its methods of accounting, except (i) as required by
changes in GAAP as concurred in by Parent's independent public accountants
(including the right to early-adopt such required changes), or (ii) as permitted
by GAAP and which change would not reasonably be expected to have a Material
Adverse Effect on Parent.
(f) No Related Actions. Parent shall not, and shall not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing.
Notwithstanding the foregoing, prior to the Closing Date, Parent and/or
one or more of its Affiliates may acquire, without limitation, shares of Parent
Common Stock through open market transactions, block trades or other means (the
"Parent Share Repurchase").
Section 4.02 Covenants of the Company. During the period from the date of
this Agreement and continuing until the Effective Time, the Company agrees as to
itself and its Subsidiaries that (except as expressly contemplated or permitted
by this Agreement, the Company Disclosure Schedule or as required by a
Governmental Entity of competent jurisdiction or to the extent that Parent shall
otherwise consent in writing):
(a) Ordinary Course.
(i) The Company and its Subsidiaries shall carry on their respective
businesses in the ordinary course in all material respects, and shall use
commercially
-27-
reasonable efforts to preserve intact their business, maintain their
rights and franchises and preserve their relationships with customers,
suppliers and others having business dealings with them.
(ii) Other than in connection with acquisitions permitted by Section
4.02(e), the Company shall not, and shall not permit any of its
Subsidiaries to, (A) enter into any material licensing agreement, except
for licensing agreements (1) set forth in Section 4.02(a)(ii) of the
Company Disclosure Schedule or (2) entered into for the purpose of
settling or avoiding an action, suit or claim against the Company or any
of its Subsidiaries, (B) enter into or terminate any material contract or
agreement or make any material change in any material lease or contract,
other than in the ordinary course of business; (C) enter into any new line
of business; (D) incur or commit to any capital expenditures or any
obligations or liabilities in connection therewith other than Permitted
Capital Expenditures (as defined below) and obligations or liabilities in
connection therewith or (E) enter into any contract, agreement or other
arrangement for the sale of inventories or for the furnishing of services
by the Company or any of its Subsidiaries which contract, agreement or
other arrangement may give rise to commitments which may extend beyond
twelve months from the date of such contract, agreement or arrangement,
unless, such contract, agreement or arrangement can be terminated by the
Company or its Subsidiary, as the case may be, by giving less than 60
days' notice and without incurring an obligation to pay any material
premium or penalty or suffering any other material detriment. As used
herein, a "Permitted Capital Expenditure" is a capital expenditure which
is up to $775 million in the aggregate for all capital expenditures
incurred in any twelve-month period.
(b) Dividends; Changes in Share Capital. The Company shall not, and shall
not permit any of its Subsidiaries to, and shall not propose to, (i) declare or
pay any dividends on or make other distributions in respect of any of its
capital stock, except (A) the declaration and payment of regular quarterly cash
dividends not in excess of $0.1625 per share of Company Common Stock with usual
record and payment dates for such dividends in accordance with past dividend
practice; and (B) dividends or distributions by Subsidiaries of the Company,
(ii) split, combine or reclassify any of its capital stock or issue or authorize
or propose the issuance of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock, except for any such transaction
by a wholly owned Subsidiary of the Company which remains a wholly owned
Subsidiary after consummation of such transaction, or (iii) repurchase, redeem
or otherwise acquire any shares of its capital stock or any securities
convertible into or exercisable for any shares of its capital stock except for
any such transaction by a wholly owned Subsidiary of the Company which remains a
wholly owned Subsidiary after consummation of such transaction in connection
with actions permitted by an "Agreed Plan" or a "Parent Proposed Plan" (as such
terms are defined in Section 5.10(b) of this Agreement) and except for the
purchase from time to time by the Company of Company Common Stock (and the
associated Company Rights) in the ordinary course of business consistent with
past practice in connection with the Company Benefit Plans and except for the
redemption or exchange of Company Rights in accordance with Company Rights
Agreement.
(c) Issuance of Securities. The Company shall not, and shall not permit
any of its Significant Subsidiaries to, issue, deliver or sell, or authorize or
propose the issuance, delivery or
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sale of, any shares of its capital stock of any class, any of the Company Voting
Debt or any securities convertible into or exercisable for, or any rights,
warrants, calls or options to acquire, any such shares or the Company Voting
Debt, or enter into any commitment, arrangement, undertaking or agreement with
respect to any of the foregoing, other than (i) the issuance of Company Common
Stock (and the associated Company Rights) upon the exercise of Company Stock
Options or in connection with other stock-based benefits plans outstanding on
the date hereof, in each case in accordance with their present terms or pursuant
to Company Stock Options or other stock based awards granted pursuant to clause
(iii) below, (ii) issuances by a wholly owned Subsidiary of the Company of
capital stock to such Subsidiary's parent or another wholly owned Subsidiary of
the Company, (iii) the granting of Company Stock Options or other stock based
awards to acquire shares of Company Common Stock granted under stock based
benefit plans outstanding on the date hereof in the ordinary course of business
consistent with past practice not in excess of the amounts set forth in Section
4.02(c) of the Company Disclosure Schedule, (iv) pursuant to acquisitions
permitted by Section 4.02(e), (v) issuances in accordance with Company Rights
Agreement, or (vi) as contemplated by Section 4.02(c) of the Company Disclosure
Schedule.
(d) Governing Documents. Except to the extent required to comply with its
obligations hereunder or with applicable law, the Company shall not amend or
propose to so amend its respective certificates of incorporation or bylaws.
(e) No Acquisitions. Other than (i) acquisitions disclosed on the Section
4.02(e) of the Company Disclosure Schedule and (ii) acquisitions for cash in
existing or related lines of business of the Company and its Subsidiaries, the
fair market value of the total consideration (including the value of
indebtedness acquired or assumed) for which does not exceed $150 million for any
individual acquisition, or $250 million in the aggregate for all such
acquisitions, and none of which acquisitions referred to in this clause (ii)
presents, (A) a significant risk of making it more difficult to obtain any
approval or authorization required in connection with the Merger under
Regulatory Laws, or (B) a risk of significantly delaying or impairing the
consummation of the Merger, the Company shall not, and shall not permit any of
its Subsidiaries to, acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial equity interest in or a substantial portion
of the assets of, or by any other manner, any business (including by acquisition
of assets) or any corporation, partnership, association or other business
organization or division thereof; provided, however, that the foregoing shall
not prohibit (x) internal reorganizations or consolidations involving existing
Subsidiaries of the Company or (y) the creation of new Subsidiaries of the
Company organized to conduct or continue activities otherwise permitted by this
Agreement.
(f) No Dispositions. Other than (i) internal reorganizations or
consolidations involving wholly owned Subsidiaries of the Company, (ii)
dispositions referred to in the Company SEC Reports filed prior to the date of
this Agreement, (iii) dispositions in connection with Specified Efforts, or (iv)
as may be required by or in conformance with law or regulation in order to
permit or facilitate the consummation of the transactions contemplated hereby
and with Parent's consent or the transactions disclosed in the Company
Disclosure Schedule, the Company shall not, and shall not permit any of its
Subsidiaries to, sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, assets constituting a line of business or
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brand of the Company or any of its Subsidiaries (including capital stock of
Subsidiaries of the Company but excluding factories and inventory in the
ordinary course of business).
(g) Investments; Indebtedness. The Company shall not, and shall not permit
any of its Subsidiaries to, other than in connection with actions permitted by
Section 4.02(e), (i) make any loans, advances or capital contributions to, or
investments in, any other Person, other than (w) in connection with actions
permitted by an "Agreed Plan" or a "Parent Proposed Plan" (as such terms are
defined in Section 5.10(b) of this Agreement), (x) by the Company or a
Subsidiary of the Company to or in the Company or any Subsidiary of the Company,
(y) pursuant to any contract or other legal obligation of the Company or any of
its Subsidiaries existing at the date of this Agreement or (z) in the ordinary
course of business consistent with past practice (provided that none of such
transactions referred to in this clause (z) presents, (A) a significant risk of
making it more difficult to obtain any approval or authorization required in
connection with the Merger under Regulatory Laws or (B) a risk of significantly
delaying or impairing the consummation of the Merger), or (ii) other than in
connection with actions permitted by an "Agreed Plan" or a "Parent Proposed
Plan" (as such terms are defined in Section 5.10(b) of this Agreement), create,
incur, assume or suffer to exist any indebtedness, issuances of debt securities,
guarantees, loans or advances not in existence as of the date of this Agreement
except in the ordinary course of business consistent with past practice.
(h) Compensation. Other than as contemplated by Section 4.02(c) or Section
4.02(g) of the Company Disclosure Schedule, the Company shall not (i) enter into
any new, or amend any existing, employment, severance, consulting or salary
continuation agreements with or for the benefit of any officers, directors or
employees of the Company, (ii) grant any increases in the compensation, bonuses
or benefits to officers, directors and employees (other than normal compensation
increases to persons who are not non-employee directors in the ordinary course
of business consistent with past practices), (iii) make any increase in or
commitment to increase any employee benefits, (iv) issue any additional Company
Stock Options, (v) adopt or make any commitment to adopt any additional employee
benefit plan or (vi) make any contribution, other than regularly scheduled
contributions, to any Company Benefit Plan, except in the case of clause (i),
but only with respect to employees under such clause, and clauses (iii) through
(vi), in the ordinary course of business consistent with past practice or as
required by an existing agreement.
(i) Accounting Methods; Income Tax Elections. Except as disclosed in the
Company SEC Reports filed prior to the date of this Agreement, or as required by
a Governmental Entity, the Company shall not change its methods of accounting,
except as required by changes in GAAP as concurred in by the Company's
independent public accountants. The Company shall not (i) change its fiscal
year, (ii) make or change any material tax election, or (iii) settle or
compromise any material tax liability or claim for refund without Parent's
written consent, which consent will not be unreasonably withheld or delayed.
Notwithstanding the foregoing, the Company shall take and perform all accounting
actions and steps necessary to effectuate its obligations pursuant to Section
5.10(b).
(j) Certain Agreements. Except in the ordinary course of business, the
Company shall not, and shall not permit any of its Subsidiaries to enter into
any agreements or arrangements that limit or otherwise restrict the Company or
any of its Subsidiaries or any of
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their respective affiliates or any successor thereto, or that, after the
Effective Time, limits or restricts Parent or any of its affiliates (including
the Surviving Corporation) or any successor thereto, from engaging or competing
in any line of business or in any geographic area.
(k) Settlement of Litigation. Prior to settling or compromising any
pending material action, suit or claim, or entering into any consent decree,
injunction or similar restraint or form of equitable relief in settlement of any
pending material action, suit or claim, the Company shall consult with, and
consider in good faith the view of Parent. To the extent permitted by applicable
law, the Company shall not settle or compromise any material action, suit or
claim which is not pending as of the date hereof and is not related to any
action, suit or claim so pending, or enter into any consent decree, injunction
or similar restraint or form of equitable relief in settlement of any material
action, suit or claim which is not pending as of the date hereof and is not
related to any action, suit or claim so pending, except with the prior consent
of Parent, which consent shall not be unreasonably withheld or delayed.
(l) No Related Actions. The Company shall not, and shall not permit any of
its Subsidiaries to, agree or commit to any of the foregoing.
Section 4.03 Governmental Filings. Each party shall (a) confer on a
regular and frequent basis with the other and (b) report to the other (to the
extent permitted by law or regulation or any applicable confidentiality
agreement) on operational matters. The Company and Parent shall file all reports
required to be filed by each of them with the SEC (and all other Governmental
Entities) between the date of this Agreement and the Effective Time and shall
(to the extent permitted by law or regulation or any applicable confidentiality
agreement) deliver to the other party copies of all such reports, announcements
and publications filed with the SEC promptly after the same are filed.
Section 4.04 Control of Other Party's Business. Nothing contained in this
Agreement shall give the Company, directly or indirectly, the right to control
or direct Parent's operations prior to the Effective Time. Nothing contained in
this Agreement shall give Parent, directly or indirectly, the right to control
or direct the Company's operations prior to the Effective Time. Prior to the
Effective Time, each of the Company and Parent shall exercise, consistent with
the terms and conditions of this Agreement, complete control and supervision
over its respective operations.
ARTICLE 5
ADDITIONAL AGREEMENTS
Section 5.01 Preparation of Proxy Statement; Stockholders Meetings.
(a) As promptly as reasonably practicable following the date hereof,
Parent and the Company shall prepare and file with the SEC mutually acceptable
proxy materials which shall constitute the Joint Proxy Statement/Prospectus
(such proxy statement/prospectus, and any amendments or supplements thereto, the
"Joint Proxy Statement/Prospectus") and Parent shall prepare and file a
registration statement on Form S-4 with respect to the issuance of Parent Common
Stock in the Merger (the "Form S-4"). The Joint Proxy Statement/Prospectus will
be included in and will constitute a part of the Form S-4 as Parent's
prospectus. The Form S-4 and
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the Joint Proxy Statement/Prospectus shall comply as to form in all material
respects with the applicable provisions of the Securities Act and the Exchange
Act and the rules and regulations thereunder. Each of Parent and the Company
shall use reasonable best efforts to have the Form S-4 declared effective by the
SEC and to keep the Form S-4 effective as long as is necessary to consummate the
Merger and the transactions contemplated thereby. Parent and the Company shall,
as promptly as practicable after receipt thereof, provide the other party copies
of any written comments and advise the other party of any oral comments, with
respect to the Joint Proxy Statement/Prospectus received from the SEC. Parent
shall provide the Company with a reasonable opportunity to review and comment on
any amendment or supplement to the Form S-4 and any communications (other than
any communications filed pursuant to Rule 425 of the Securities Act) prior to
filing such with the SEC, and will provide the Company with a copy of all such
filings and communications made with the SEC. Notwithstanding any other
provision herein to the contrary, no amendment or supplement (including by
incorporation by reference) to the Joint Proxy Statement/Prospectus or the Form
S-4 shall be made without the approval of both parties, which approval shall not
be unreasonably withheld or delayed; provided that, with respect to documents
filed by a party which are incorporated by reference in the Form S-4 or Joint
Proxy Statement/Prospectus, this right of approval shall apply only with respect
to information relating to the other party or its business, financial condition
or results of operations; and provided, further, that Parent, in connection with
a Change in the Parent Recommendation (as defined in Section 5.01(c)), and the
Company, in connection with a Change in the Company Recommendation (as defined
in Section 5.01(b)), may amend or supplement the Joint Proxy
Statement/Prospectus or Form S-4 (including by incorporation by reference)
pursuant to a Qualifying Amendment (as defined below) to effect such a Change in
the Company Recommendation or a Change in the Parent Recommendation (as the case
may be), and in such event, this right of approval shall apply only with respect
to information relating to the other party or its business, financial condition
or results of operations, and shall be subject to the right of the Company or
Parent (as the case may be) to have its Board of Directors' deliberations and
conclusions to be accurately described. A "Qualifying Amendment" means an
amendment or supplement to the Joint Proxy Statement/Prospectus or Form S-4
(including by incorporation by reference) to the extent it contains (i) a Change
in the Parent Recommendation or a Change in the Company Recommendation (as the
case may be), (ii) a statement of the reasons of the Board of Directors of
Parent or the Company (as the case may be) for making such Change the Parent
Recommendation or Change in the Company Recommendation (as the case may be) and
(iii) additional information reasonably related to the foregoing. Parent will
use reasonable best efforts to cause the Joint Proxy Statements/Prospectus to be
mailed to Parent's stockholders, and the Company will use reasonable best
efforts to cause the Joint Proxy Statement/Prospectus to be mailed to the
Company's stockholders, in each case after the Form S-4 is declared effective
under the Securities Act. Parent shall also take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified or to file a general consent to service of process) required to be
taken under any applicable state securities laws in connection with the Share
Issuance and the Company shall furnish all information concerning the Company
and the holders of Company Common Stock as may be reasonably requested in
connection with any such action. Each party will advise the other party,
promptly after it receives notice thereof, of the time when the Form S-4 has
become effective, the issuance of any stop order, the suspension of the
qualification of the Parent Common Stock issuable in connection with the Merger
for offering or sale in any jurisdiction, or any request by the SEC for
amendment of the Joint Proxy
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Statement/Prospectus or the Form S-4. If at any time prior to the Effective Time
any information relating to Parent or the Company, or any of their respective
affiliates, officers or directors, should be discovered by Parent or the Company
which should be set forth in an amendment or supplement to any of the Form S-4
or the Joint Proxy Statement/Prospectus so that any of such documents would not
include any misstatement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, the party which discovers such information
shall promptly notify the other party hereto and, to the extent required by law,
rules or regulations, an appropriate amendment or supplement describing such
information shall be promptly filed with the SEC and disseminated to the
stockholders of Parent and the Company.
(b) The Company shall duly take all lawful and commercially reasonable
action to call, give notice of, convene and hold a meeting of its stockholders
on a date as soon as reasonably practicable (the "Company Stockholders Meeting")
for the purpose of obtaining the Company Stockholder Approval with respect to
the adoption of this Agreement and shall take all lawful and commercially
reasonable action to solicit the adoption of this Agreement by the Company
Stockholder Approval; and the Board of Directors of the Company shall recommend
adoption of this Agreement by the stockholders of the Company to the effect as
set forth in Section 3.02(f) (the "Company Recommendation"), and shall not
withdraw, modify or qualify (a "Change") in any manner adverse to Parent such
recommendation (collectively, a "Change in the Company Recommendation");
provided the foregoing shall not prohibit accurate disclosure (and such
disclosure shall not be deemed to be a Change in the Company Recommendation) of
factual information regarding the business, financial condition or results of
operations of Parent or the Company or the fact that an Acquisition Proposal has
been made, the identity of the party making such proposal or the material terms
of such proposal (provided that the Board of Directors of the Company does not
withdraw, modify or qualify in any manner adverse to Parent its recommendation)
in the Form S-4 or the Joint Proxy Statement/Prospectus or otherwise, to the
extent such factual information is required to be disclosed under applicable
law; and, provided further, that the Board of Directors of the Company may make
a Change in the Company Recommendation prior to the Company Stockholders Meeting
(x) following receipt of any Acquisition Proposal with respect to which the
Board of Directors of the Company believes in good faith, after consultation
with its independent financial advisor, there is a reasonable likelihood that
such Acquisition Proposal could result in a Superior Proposal or (y) if a
Material Adverse Effect has occurred with respect to Parent, and, in the case of
either (x) or (y), the Board of Directors of the Company determines in good
faith that the failure to effect such Change in the Company Recommendation could
be reasonably expected to result in a breach of the fiduciary duties of the
Company Board of Directors under applicable law. Notwithstanding any Change in
the Company Recommendation, this Agreement shall be submitted to the
stockholders of the Company at the Company Stockholders Meeting for the purpose
of adopting the Agreement and approving the Merger; provided that this Agreement
shall not be required to be submitted to the stockholders of the Company at the
Company Stockholders Meeting if this Agreement has been terminated pursuant to
Section 7.01 hereof.
(c) Parent shall duly take all lawful and commercially reasonable action
to call, give notice of, convene and hold a meeting of its stockholders on a
date as soon as reasonably practicable (the "Parent Stockholders Meeting") for
the purpose of obtaining the Parent Stockholder Approval and shall take all
lawful and commercially reasonable action to solicit the
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approval of this Agreement and the Share Issuance and the Board of Directors of
Parent shall recommend approval of this Agreement and the Share Issuance by the
stockholders of Parent to the effect as set forth in Section 3.01(f) (the
"Parent Recommendation"), and shall not Change in any manner adverse to the
Company such recommendation (collectively, a "Change in the Parent
Recommendation"); provided the foregoing shall not prohibit accurate disclosure
(and such disclosure shall not be deemed to be a Change in the Parent
Recommendation) of factual information regarding the business, financial
condition or operations of Parent or the Company (provided that the Board of
Directors of Parent does not withdraw, modify or qualify in any manner adverse
to the Company its recommendation) in the Form S-4 or the Joint Proxy
Statement/Prospectus or otherwise, to the extent such factual information, is
required to be disclosed under applicable law; and provided further, that the
Board of Directors of Parent may make a Change in the Parent Recommendation
prior to Parent Stockholders Meeting if a Material Adverse Effect has occurred
with respect to the Company. Notwithstanding any Change in the Parent
Recommendation, a proposal to approve this Agreement and the Share Issuance
shall be submitted to the stockholders of Parent at the Parent Stockholders
Meeting for the purpose of obtaining the Parent Stockholder Approval; provided
that this Agreement shall not be required to be submitted to the stockholders of
Parent at the Parent Stockholders Meeting if this Agreement has been terminated
pursuant to Section 7.01 hereof.
(d) For purposes of this Agreement, a Change in the Company Recommendation
shall be deemed to include, without limitation, a recommendation by the Company
Board of Directors of a third party Acquisition Proposal with respect to the
Company.
(e) Parent and the Company shall cause the Company Stockholders Meeting
and the Parent Stockholders Meeting to be held on the same day.
Section 5.02 Access to Information/Employees.
(a) Upon reasonable notice, each party shall (and shall cause its
Subsidiaries to) afford to the officers, employees, accountants, counsel,
financial advisors and other representatives of the other party reasonable
access during normal business hours, during the period prior to the Effective
Time, to all its properties, books, contracts, commitments, records, business
plans, systems, officers and employees (provided that the Company's access to
the employees of Parent and its Subsidiaries shall be limited to confirming the
accuracy of Parent's and Merger Sub's representations and warranties contained
in this Agreement) and, during such period, such party shall (and shall cause
its Subsidiaries to) furnish promptly to the other party (a) a copy of each
report, schedule, registration statement and other document filed, published,
announced or received by it during such period pursuant to the requirements of
Federal or state securities laws, as applicable (other than documents which such
party is not permitted to disclose under applicable law), and (b) all other
information concerning it and its business, properties and personnel as such
other party may reasonably request (including consultation on a regular basis
with such parties, agents, advisors, attorneys and representatives with respect
to litigation matters); provided, however, that either party may restrict the
foregoing access to the extent that (a) any law, treaty, rule or regulation of
any Governmental Entity applicable to such party requires such party or its
Subsidiaries to restrict or prohibit access to any such properties or
information or (b) the information is subject to confidentiality obligations to
a third party (provided that Parent or the Company shall use its commercially
reasonable efforts, as the case
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may be, to obtain the consent of such third party to disclose such information).
Information obtained pursuant to this Section 5.02 shall be subject to the
provisions of the Confidentiality Agreement (as amended or supplemented from
time to time in accordance with the terms thereof), the terms of which are
incorporated herein by reference.
(b) The Company shall use its reasonable best efforts to facilitate
Parent's efforts in connection with its transition and integration planning.
(c) After the date hereof Parent and the Company shall establish a
mechanism reasonably acceptable to both parties by which Parent will be
permitted, prior to the Effective Time and subject to applicable law, to
communicate directly with the Company employees regarding employee related
matters after the Effective Time.
Section 5.03 Commercially Reasonable Efforts.
(a) Subject to the terms and conditions of this Agreement, each party will
use its commercially reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable under this Agreement and applicable laws and regulations to consummate
the Merger and the other transactions contemplated by this Agreement as soon as
practicable after the date hereof, including (i) preparing and filing as
promptly as practicable all documentation to effect all necessary applications,
notices, petitions, filings, tax ruling requests and other documents and to
obtain as promptly as practicable all consents, waivers, licenses, orders,
registrations, approvals, permits, tax rulings and authorizations necessary or
advisable to be obtained from any third party and/or any Governmental Entity in
order to consummate the Merger or any of the other transactions contemplated by
this Agreement and (ii) taking all reasonable steps as may be necessary to
obtain all such material consents, waivers, licenses, registrations, permits,
authorizations, tax rulings, orders and approvals. In furtherance and not in
limitation of the foregoing, each party hereto agrees to make an appropriate
filing of a Notification and Report Form pursuant to the HSR Act and any other
Regulatory Law (as defined in Section 5.03(b) below) with respect to the
transactions contemplated hereby as promptly as practicable after the date
hereof and to supply as promptly as practicable any additional information and
documentary material that may be requested pursuant to the HSR Act and any other
Regulatory Law and to take all other actions necessary to cause the expiration
or termination of the applicable waiting periods under the HSR Act as soon as
practicable. If necessary to obtain any regulatory approval pursuant to any
Regulatory Law, or if any administrative or judicial action or proceeding,
including any proceeding by a private party, is instituted (or threatened to be
instituted by a Governmental Entity), challenging the Merger or any other
transaction contemplated by this Agreement as violative of any Regulatory Law,
each of Parent and the Company shall cooperate with each other and, if necessary
to (I) obtain any regulatory approval, (II) contest, resist or resolve any such
action or proceeding, or (III) have vacated, lifted, reversed or overturned any
decree, judgment, injunction, or other order (whether temporary, preliminary or
permanent): (x) Parent shall take any and all actions with respect to its assets
or the assets of any of its Subsidiaries (including selling, holding separate,
licensing or otherwise disposing of such assets, or agreeing to, or permitting,
any of the foregoing with respect to such assets); and (y) Parent shall direct
the Company, and the Company at the direction of the Parent shall take any and
all actions with respect to its assets or the assets of any of its Subsidiaries
(including selling, holding separate,
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licensing or otherwise disposing of such assets, or agreeing to, or permitting
any of the foregoing with respect to such assets); provided, however, that
neither Parent nor the Company shall be required to take any of the actions
pursuant to clauses (x) and (y) to the extent that the assets to be sold, held
separate, licensed or otherwise disposed of generated, in calendar year 2004
(based on the internal financial records of the Company or Parent, as the case
may be) more than $1.9 billion in net sales (each of the actions set forth in
clauses (x) or (y) (subject to the foregoing proviso) being referred to as
"Specified Efforts").
(b) Each of Parent and the Company shall, in connection with the efforts
referenced in Section 5.03(a) obtain all requisite material approvals and
authorizations for the transactions contemplated by this Agreement under the HSR
Act or any other Regulatory Law, use its commercially reasonable efforts to (i)
cooperate in all respects with each other in connection with any filing or
submission and in connection with any investigation or other inquiry, including
any proceeding initiated by a private party, (ii) promptly inform the other
party of any communication received by such party from, or given by such party
to, the Antitrust Division of the Department of Justice (the "DOJ"), the Federal
Trade Commission (the "FTC") or any other Governmental Entity and of any
material communication received or given in connection with any proceeding by a
private party, in each case regarding any of the transactions contemplated
hereby, and (iii) permit the other party to review any communication given by it
to, and consult with each other in advance of any meeting or conference with,
the DOJ, the FTC or any such other Governmental Entity or, in connection with
any proceeding by a private party, with any other Person. For purposes of this
Agreement, "Regulatory Law" means the ▇▇▇▇▇▇▇ Act, as amended, Council
Regulation No. 139/2004 of the European Community, as amended (the "EC Merger
Regulation"), the ▇▇▇▇▇▇▇ Act, as amended, the HSR Act, the Federal Trade
Commission Act, as amended, and all other Federal, state and foreign, if any,
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines and other laws that are designed or intended to prohibit, restrict or
regulate (i) foreign investment or (ii) actions having the purpose or effect of
monopolization or restraint of trade or lessening of competition.
(c) If any objections are asserted with respect to the transactions
contemplated hereby under any Regulatory Law or if any suit is instituted by any
Governmental Entity or any private party challenging any of the transactions
contemplated hereby as violative of any Regulatory Law, each of Parent and the
Company shall use its commercially reasonable efforts to resolve any such
objections or challenge as such Governmental Entity or private party may have to
such transactions under such Regulatory Law so as to permit consummation of the
transactions contemplated by this Agreement. For the avoidance of doubt, it is
agreed that for purposes of this Agreement "Specified Efforts" constitute
"commercially reasonable efforts."
Section 5.04 Acquisition Proposals. The Company agrees that neither it nor
any of its Subsidiaries nor any of the officers and directors of it or its
Subsidiaries shall, and that it shall use its commercially reasonable efforts to
cause its and its Subsidiaries' employees, agents and representatives (including
any investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, initiate, solicit, encourage or
knowingly facilitate (including by way of furnishing information) any inquiries
or the making of any proposal or offer with respect to a merger, reorganization,
share exchange, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving it, or any purchase or
sale of the consolidated assets (including without limitation stock of
Subsidiaries) of
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the Company and its Subsidiaries, taken as a whole, having an aggregate value
equal to 10% or more of the market capitalization of the Company, or any
purchase or sale of, or tender or exchange offer for, 10% or more of the equity
securities of the Company (any such proposal or offer (other than a proposal or
offer made by the other party or an affiliate thereof or any proposal or offer
made in conjunction with Specified Efforts) being hereinafter referred to as an
"Acquisition Proposal"). The Company further agrees that neither it nor any of
its Subsidiaries nor any of the officers and directors of it or its Subsidiaries
shall, and that it shall use its commercially reasonable efforts to cause its
and its Subsidiaries' employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) not to, directly or indirectly, have any discussion with or
provide any confidential information or data to any Person relating to an
Acquisition Proposal, or engage in any negotiations concerning an Acquisition
Proposal, or knowingly facilitate any effort or attempt to make or implement an
Acquisition Proposal or accept an Acquisition Proposal. Notwithstanding anything
in this Agreement to the contrary, the Company or the Company's Board of
Directors shall be permitted to (A) to the extent applicable, comply with Rule
14d-9 and Rule 14e-2 promulgated under the Exchange Act with regard to an
Acquisition Proposal, (B) effect a Change in the Company Recommendation in
accordance with Section 5.01(b), or (C) engage in any discussions or
negotiations with, or provide any information to, any Person in response to an
unsolicited bona fide written Acquisition Proposal by any such Person, if and
only to the extent that, in any such case as is referred to in clause (C), (i)
the Company's Stockholders Meeting shall not have occurred, (ii) the Company's
Board of Directors concludes in good faith (I) after consultation with its
independent financial advisor, that there is a reasonable likelihood that such
Acquisition Proposal could result in a Superior Proposal, and (II) after
consultation with its outside legal counsel, that failure to take such action
could be reasonably expected to result in a breach of its fiduciary duties under
applicable law, (iii) prior to providing any information or data to any Person
in connection with an Acquisition Proposal by any such Person, the Company's
Board of Directors receives from such Person an executed confidentiality
agreement customary for a transaction of this type (provided that such agreement
shall not be required to contain standstill provisions), and (iv) prior to
providing any information or data to any Person or entering into discussions or
negotiations with any Person, the Company notifies Parent promptly of such
inquiries, proposals or offers received by, any such information requested from,
or any such discussions or negotiations sought to be initiated or continued
with, any of its representatives indicating, in connection with such notice, the
name of such Person and the material terms and conditions of any inquiries,
proposals or offers. The Company agrees that it will promptly keep Parent
informed of the status and terms of any such proposals or offers and the status
and terms of any such discussions or negotiations. The Company agrees that it
will, and will cause its officers, directors and representatives to, immediately
cease and cause to be terminated any activities, discussions or negotiations
existing as of the date of this Agreement with any parties conducted heretofore
with respect to any Acquisition Proposal. The Company agrees that it will use
commercially reasonable efforts to promptly inform its directors, officers, key
employees, agents and representatives of the obligations undertaken in this
Section 5.04. Nothing in this Section 5.04 shall (x) permit Parent or the
Company to terminate this Agreement (except as specifically provided in Article
7 hereof) or (y) affect any other obligation of Parent or the Company under this
Agreement.
Section 5.05 Fees And Expenses. Subject to Section 7.02, whether or not
the Merger is consummated, all Expenses incurred in connection with this
Agreement and the transactions
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contemplated hereby shall be paid by the party incurring such Expenses, except
(a) if the Merger is consummated, the Surviving Corporation or its relevant
Subsidiary shall pay, or cause to be paid, any and all property or transfer
taxes imposed on the Company or its Subsidiaries, (b) Expenses incurred in
connection with the filing, printing and mailing of the Joint Proxy
Statement/Prospectus, which shall be paid 50% by Parent and 50% by the Company,
and (c) filing fees payable pursuant to the HSR Act, regulatory laws and other
filing fees incurred in connection with this Agreement, which shall be paid 50%
by Parent and 50% by the Company. As used in this Agreement, "Expenses" includes
all out-of-pocket expenses (including, without limitation, all fees and expenses
of counsel, accountants, investment bankers, experts and consultants to a party
hereto and its affiliates) incurred by a party or on its behalf in connection
with or related to the authorization, preparation, negotiation, execution and
performance of this Agreement and the transactions contemplated hereby,
including the preparation, printing, filing and mailing of the Joint Proxy
Statement/Prospectus and the solicitation of stockholder approvals and all other
matters related to the transactions contemplated hereby.
Section 5.06 Directors' And Officers' Indemnification And Insurance. The
Surviving Corporation shall, and Parent shall cause the Surviving Corporation
to, (a) indemnify and hold harmless, and provide advancement of expenses to, all
past and present directors, officers and employees of the Company and its
Subsidiaries (in all of their capacities) (i) to the same extent such persons
are indemnified or have the right to advancement of expenses as of the date of
this Agreement by the Company pursuant to the Company's (or such Subsidiary's)
certificate of incorporation, bylaws and indemnification agreements, if any, in
existence on the date hereof with any directors, officers and employees of the
Company and its Subsidiaries and (ii) without limitation to clause (i), to the
fullest extent permitted by law, in each case for acts or omissions occurring at
or prior to the Effective Time (including for acts or omissions occurring in
connection with the approval of this Agreement and the consummation of the
transactions contemplated hereby), (b) include and cause to be maintained in
effect in the Surviving Corporation's (or any successor's) certificate of
incorporation and bylaws, the current provisions regarding elimination of
liability of directors, indemnification of officers, directors and employees and
advancement of expenses contained in the certificate of incorporation and bylaws
of the Company and (c) cause to be maintained for a period of six years after
the Effective Time the current policies of directors' and officers' liability
insurance and fiduciary liability insurance maintained by the Company (provided
that the Surviving Corporation (or any successor) may substitute therefor
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; provided, however, that in no event shall Parent be required
to pay aggregate annual premiums for insurance under this Section 5.06 in excess
of 250% of the annual premiums paid by the Company as of the date hereof (the
"Current Premium") and if such premiums for such insurance at any time exceed
250% of the Current Premium, then Parent shall cause to be maintained policies
of insurance that provide the maximum coverage available at an annual premium
equal to 250% of the Current Premium. The obligations of the Surviving
Corporation under this Section 5.06 shall not be terminated or modified in such
a manner as to adversely affect any indemnitee to whom this Section 5.06 applies
without the consent of such affected indemnitee (it being expressly agreed that
the indemnitees to whom this Section 5.06 applies shall be third party
beneficiaries of this Section 5.06).
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Section 5.07 Public Announcements. Parent and the Company shall use
commercially reasonable efforts to develop a joint communications plan and each
party shall use commercially reasonable efforts to ensure that all press
releases and other public statements with respect to the transactions
contemplated hereby shall be consistent with such joint communications plan.
Unless otherwise required by applicable law or by obligations pursuant to any
listing agreement with or rules of any securities exchange, (x) prior to the
issuance by the Company of any press release or other public statement or
disclosure concerning this Agreement or the transactions contemplated hereby,
the Company shall obtain the consent of Parent, and (y) prior to the issuance by
Parent of any press release or other public statement or disclosure concerning
this Agreement or the transactions contemplated hereby, Parent shall obtain the
consent of the Company. In addition to the foregoing, except to the extent
disclosed in or consistent with the Joint Proxy Statement/Prospectus in
accordance with the provisions of Section 5.01, neither Parent nor the Company
shall issue any press release or otherwise make any public statement or
disclosure concerning the other party or the other party's business, financial
condition or results of operations without the consent of the other party, which
consent shall not be unreasonably withheld or delayed.
Section 5.08 Accountant's Letters.
(a) Parent shall use commercially reasonable efforts to cause to be
delivered to the Company two letters from Parent's independent public
accountants, one dated approximately the date on which the Form S-4 shall become
effective and one dated the Closing Date, each addressed to Parent and the
Company, in form reasonably satisfactory to the Company and customary in scope
for comfort letters delivered by independent public accountants in connection
with registration statements similar to the Form S-4.
(b) The Company shall use commercially reasonable efforts to cause to be
delivered to Parent two letters from the Company's independent public
accountants, one dated approximately the date on which the Form S-4 shall become
effective and one dated the Closing Date, each addressed to the Company and
Parent, in form reasonably satisfactory to Parent and customary in scope for
comfort letters delivered by independent public accountants in connection with
registration statements similar to the Form S-4.
Section 5.09 Listing of Shares of Parent Common Stock. Parent shall use
its commercially reasonable efforts to cause the shares of Parent Common Stock
to be issued in the Merger and the shares of Parent Common Stock to be reserved
for issuance upon exercise of the Company Stock Options to be approved for
listing on the NYSE, subject to official notice of issuance, prior to the
Closing Date.
Section 5.10 Dividends.
(a) After the date of this Agreement, each of Parent and the Company shall
coordinate with the other the payment of dividends with respect to the Parent
Common Stock and Company Common Stock and the record dates and payment dates
relating thereto, it being the intention of the parties that holders of Parent
Common Stock and Company Common Stock shall not receive two dividends, or fail
to receive one dividend, for any single calendar quarter with respect to their
shares of Parent Common Stock and/or Company Common Stock or any
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shares of Parent Common Stock that any such holder receives in exchange for such
shares of Company Common Stock in the Merger.
(b) (i) After the date of this Agreement, the Company and Parent shall use
their best efforts to develop and agree on a plan for cash payments, prior to
the earlier of (a) the Closing and (b) December 31, 2005, by the foreign
Subsidiaries of the Company to the Company or its U.S. Subsidiaries that (x)
constitute dividends for U.S. federal income tax purposes and (y) are intended
to qualify for the temporary dividends received deduction under Section
965(a)(1) of the Code (each such dividend, a "Section 965 Dividend"). The
parties agree that such plan shall maximize, to the extent commercially
practicable, the amount of Section 965 Dividends. In the event that the Company
and Parent reach agreement on all or any aspects of such a plan (an "Agreed
Plan"), the Company shall timely take all actions reasonably necessary to
implement such Agreed Plan, including but not limited to the payment of all
Section 965 Dividends contemplated by the Agreed Plan, making any necessary
election on any Tax Return and obtaining approval of a plan providing for the
reinvestment of each Section 965 Dividend in the United States for a permitted
purpose.
(ii) In the event that the Company and Parent are unable to reach
agreement on all or any aspects of such a plan, Parent shall provide to the
Company in writing a proposed plan for the payment of Section 965 Dividends that
are not part of an Agreed Plan (the "Parent Proposed Plan"). Upon the written
request of Parent, the Company shall (a) prior to the satisfaction of the
conditions set forth in Sections 6.01(a) and 6.02(g) (the "Specified
Conditions"), use its best efforts to take all preparatory actions or steps
contemplated by the Parent Proposed Plan other than such actions or steps that
the Company reasonably believes would impose material costs on or other material
detriment to the Company or any of its Subsidiaries that the Company and its
Subsidiaries would not otherwise incur in connection with the payment of Section
965 Dividends, and (b) if the Specified Conditions are satisfied on or before
December 15, 2005, use its best efforts to take the remaining actions or steps
contemplated by the Parent Proposed Plan, including the payment of all Section
965 Dividends contemplated by the Parent Proposed Plan, as promptly as possible
after the satisfaction of such conditions, and timely take all actions
reasonably necessary to qualify such Section 965 Dividends for the temporary
dividends received deduction under Section 965(a)(1) of the Code, including but
not limited to making any necessary election on any Tax Return and obtaining
approval of a plan providing for the reinvestment of each Section 965 Dividend
in the United States for a permitted purpose.
(iii) The Company shall not cause or permit any of its foreign
Subsidiaries to pay any Section 965 Dividend that is not part of an Agreed Plan,
provided that, if the Specified Conditions have not been satisfied on or before
December 15, 2005, with the written consent of Parent (not to be unreasonably
withheld or delayed), the Company shall be permitted to cause or permit one or
more of its foreign Subsidiaries to pay a Section 965 Dividend that is not part
of an Agreed Plan, and shall timely take all actions reasonably necessary to
qualify such Section 965 Dividends for the temporary dividends received
deduction under Section 965(a)(1) of the Code, including but not limited to
making any necessary election on any Tax Return and obtaining approval of a plan
providing for the reinvestment of each Section 965 Dividend in the United States
for a permitted purpose.
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Section 5.11 Affiliates. Not less than 45 days prior to the Effective
Time, the Company shall deliver to Parent a letter identifying all persons who,
in the judgment of the Company, may be deemed at the time this Agreement is
submitted for adoption by the stockholders of the Company, "affiliates" of the
Company for purposes of Rule 145 under the Securities Act and applicable SEC
rules and regulations, and such list shall be updated as necessary to reflect
changes from the date thereof. The Company shall use commercially reasonable
efforts to cause each person identified on such list to deliver to Parent not
less than 30 days prior to the Effective Time, a written agreement substantially
in the form attached as Exhibit 5.11 hereto (an "Affiliate Agreement").
Section 5.12 Section 16 Matters. Prior to the Effective Time, each of
Parent and the Company shall take all such steps as may be required to cause any
dispositions of Company Common Stock (including derivative securities with
respect to Company Common Stock) or acquisitions of Parent Common Stock
(including derivative securities with respect to Parent Common Stock) resulting
from the transactions contemplated by Article 1 or Article 2 of this Agreement
by each individual who is subject to the reporting requirements of Section 16(a)
of the Exchange Act with respect to the Company, to be exempt under Rule 16b-3
promulgated under the Exchange Act, such steps to be taken in accordance with
the No-Action Letter dated January 12, 1999, issued by the SEC to Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP.
Section 5.13 Tax Treatment. Parent and the Company intend the Merger to
qualify as a reorganization under Section 368(a) of the Code. Each of Parent and
the Company, and each of their respective affiliates shall use their best
efforts to cause the Merger to so qualify and to obtain the opinions of
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ referred to in
Sections 6.02(c) and 6.03(c) of this Agreement. For purposes of the Tax opinions
described in Sections 6.02(c) and 6.03(c) of this Agreement, each of Parent and
the Company shall use their best efforts to provide representation letters
substantially in the form of Exhibits 6.02(c)(2) and 6.02(c)(3) hereto, each
dated on or about the date the Form S-4 shall become effective, and
subsequently, on the Closing Date. Each of Parent, Merger Sub and the Company
and each of their respective affiliates shall use their best efforts not to take
any action, shall not fail to take any action, cause any action to be taken or
not taken, or suffer to exist any condition, which action or failure to take
action or condition would prevent, or would be reasonably likely to prevent, the
Merger from qualifying as a reorganization within the meaning of Section 368(a)
of the Code.
Section 5.14 Notification of Certain Matters. The Company shall give
prompt notice to Parent and Merger Sub, and Parent or Merger Sub, as the case
may be, shall give prompt notice to the Company, of the occurrence, or
non-occurrence, of any event the occurrence, or non-occurrence, of which is
likely to (a) to cause any representation or warranty of such party contained in
this Agreement to be untrue or inaccurate if made as of any time at or prior to
the Effective Time and (b) to result in any failure of such party at Closing to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied hereunder; provided, however, that the delivery of any notice
pursuant to this Section 5.14 shall not limit or otherwise affect the remedies
available hereunder to any of the parties sending or receiving such notice.
Section 5.15 Employee Matters. (a) Parent shall and shall cause its
Subsidiaries (including the Surviving Corporation) to:
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(i) assume and honor the terms of all Benefit Plans of the
Company and its Subsidiaries set forth on Section 3.02(p) of the Company
Disclosure Schedule and to pay or provide, or cause its Subsidiaries to
pay or provide, the benefits required thereunder, recognizing that the
consummation of the transactions contemplated hereby will constitute a
"change in control" for purposes of such Benefit Plans that include a
provision for modifications to benefits in the event of a "change in
control";
(ii) until the second anniversary of the Effective Time (the
"Benefits Maintenance Period"), with respect to employees of the Company
and the Subsidiaries as of the Effective Time ("Company Employees") (other
than those subject to collective bargaining obligations or agreements),
provide a level of aggregate employee benefits and compensation (excluding
equity-based awards), taking into account all such Company Benefit Plans
and other programs sponsored or maintained by the Company and its
Subsidiaries (other than equity-based plans) that is substantially
comparable in the aggregate to the aggregate employee benefits and
compensation provided, with respect to service to the Company or any of
its Subsidiaries, to Company Employees immediately prior to the Effective
Time; and
(iii) following the Benefit Maintenance Period, Parent shall make
no alteration or modification of any retiree welfare benefit covering any
retired Company Employees or any Company Employee who, immediately prior
to the Effective Time, is entitled to retiree welfare benefits and who
retires during the Benefit Maintenance Period which would result in such
individual (or such individual's eligible dependents) receiving retiree
welfare benefits that are less favorable in the aggregate than those
provided to such persons immediately prior to the Effective Time or upon
retirement during the Benefits Maintenance Period (as applicable);
provided that Parent may reduce or terminate the foregoing benefits to the
extent Parent reduces or terminates retiree welfare benefits for similarly
situated employees of Parent.
(b) If Company Employees are included in any Benefit Plan, sponsored or
maintained by Parent or any of its Subsidiaries following the Effective Time,
the Company Employees shall receive credit for service with the Company and its
Subsidiaries and their predecessors prior to the Effective Time to the same
extent and for the same purposes thereunder as such service was counted under
similar Benefit Plans set forth on Section 3.02(p) of the Company Disclosure
Schedule for all purposes (except that, with respect to benefit accrual, such
service shall not be counted to the extent that it would result in a duplication
of benefits and shall not be counted for purposes of benefit accrual under any
defined benefit plan); provided, however, that service of Company Employees
subject to collective bargaining agreements or obligations shall be determined
under such collective bargaining agreements or obligations. If Company Employees
or their dependents are included in any medical, dental or health plan (a
"Successor Plan") other than the plan or plans in which they participated
immediately prior to the Effective Time (a "Prior Plan"), any such Successor
Plan shall not include any restrictions or limitations with respect to
pre-existing condition exclusions or any actively-at-work requirements (except
to the extent such exclusions were applicable under any similar Prior Plan at
the Effective Time) and any eligible expenses incurred by any Company Employee
and his or her covered dependents during the portion of the plan year of such
Prior Plan ending on the date such employee's participation in such Successor
Plan begins shall be taken into account under such Successor
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Plan for purposes of satisfying all deductible, coinsurance and maximum
out-of-pocket requirements applicable to such Company Employee and his or her
covered dependents for the applicable plan year as if such amounts had been paid
in accordance with such Successor Plan. Without limiting the generality of the
foregoing, for purposes of determining severance pay and benefits under any
applicable Severance Plan covering a Company Employee at or after the Effective
Time, each Company Employee shall receive credit for service prior to the
Effective Time with the Company and its Subsidiaries and their predecessors to
the same extent and for the same purposes as such service was counted under the
applicable Company Severance Plans as in effect before the Effective Time, as
well as for service from and after the Effective Time with Parent and any of its
Subsidiaries (including the Surviving Corporation).
(c) Prior to the Effective Time, the Company shall determine which Benefit
Plans may be subject to the excise tax and penalties of Section 409A of the Code
and shall take such reasonable measures as may be necessary with respect to such
Benefit Plans to avoid the imposition of such tax and penalties; provided,
however, that to the extent any such change would accelerate the payment of any
amounts, or would, individually or in the aggregate, materially increase the
cost to, or liability of, the Company under any Benefit Plan(s), the Company
shall only take such actions with the consent of Parent (which consent shall not
be unreasonably withheld).
Section 5.16 Director Resignations. On the Closing Date, the Company shall
cause to be delivered to Parent duly executed resignations, effective as of the
Effective Time, of each member of the Board of Directors of the Company and
shall take such other action as is necessary to accomplish the foregoing.
Section 5.17 Dissenters' Rights. Parent shall give the Company prompt
notice of any demands received by Parent for the fair cash value of Parent
Common Stock. Parent shall (i) not, without the prior written consent of the
Company, waive any requirement under or compliance with the laws of the State of
Ohio applicable to any stockholder of Parent demanding the fair cash value of
shares of Parent Common Stock (a "Dissenting Stockholder") and (ii) require each
Dissenting Stockholder holding shares of Parent Common Stock in certificated
form to deliver such shares to Parent, and Parent shall endorse on such shares a
legend to the effect that a demand for the fair cash value of such shares has
been made.
ARTICLE 6
CONDITIONS PRECEDENT
Section 6.01 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of the Company, Parent and Merger Sub to effect the
Merger are subject to the satisfaction or waiver on or prior to the Closing Date
of the following conditions:
(a) Stockholder Approval. (i) The Company shall have obtained the Company
Stockholder Approval and (ii) Parent shall have obtained the Parent Stockholder
Approval.
(b) No Injunctions or Restraints, Illegality. No Laws shall have been
adopted or promulgated, and no temporary restraining order, preliminary or
permanent injunction or other order, judgment, decision, opinion or decree
issued by a court or other Governmental Entity of
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competent jurisdiction in the United States or the European Union shall be in
effect, having the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger.
(c) Governmental Actions. Without prejudice to the obligations of the
parties to undertake Specified Efforts, there shall not have been instituted and
continuing or pending any action or proceeding by any Governmental Entity of
competent jurisdiction in the United States or the European Union seeking to
make the Merger illegal or otherwise prohibiting consummation of the Merger.
(d) HSR Act; EC Merger Regulation. Each of (i) the waiting period (and any
extension thereof) applicable to the Merger under the HSR Act shall have been
terminated or shall have expired, and (ii) the approval of the Merger by the
European Commission shall have been granted pursuant to the EC Merger
Regulation.
(e) NYSE Listing. The shares of Parent Common Stock to be issued in the
Merger and such other shares to be reserved for issuance in connection with the
Merger shall have been approved for listing on the NYSE, subject to official
notice of issuance.
(f) Effectiveness of the Form S-4. The Form S-4 shall have been declared
effective by the SEC under the Securities Act. No stop order suspending the
effectiveness of the Form S-4 shall have been issued by the SEC and no
proceedings for that purpose shall have been initiated or threatened by the SEC.
Section 6.02 Additional Conditions to Obligations of Parent and Merger
Sub. The obligations of Parent and Merger Sub to effect the Merger are subject
to the satisfaction of, or waiver by Parent, on or prior to the Closing Date of
the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the Company set forth in this Agreement that is qualified as to
Material Adverse Effect shall be true and correct, and each of the
representations and warranties of the Company set forth in this Agreement that
is not so qualified shall be true and correct, except where the failure to be so
true and correct, individually or in the aggregate, would not have a Material
Adverse Effect on the Company, in each case as of the date of this Agreement and
as of the Closing Date as though made on and as of the Closing Date (except to
the extent in either case that such representations and warranties speak as of
another date and except as such representations and warranties are affected by
actions explicitly permitted by this Agreement), and Parent shall have received
a certificate of the chief executive officer and the chief financial officer of
the Company to such effect.
(b) Performance of Obligations of the Company. The Company shall have
performed or complied with all agreements and covenants required to be performed
by it under this Agreement at or prior to the Closing Date that are qualified as
to Material Adverse Effect and shall have performed or complied in all material
respects with all other agreements and covenants required to be performed by it
under this Agreement at or prior to the Closing Date that are not so qualified,
and Parent shall have received a certificate of the chief executive officer and
the chief financial officer of the Company to such effect.
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(c) Tax Opinions. Parent shall have received from Cadwalader, ▇▇▇▇▇▇▇▇▇▇ &
▇▇▇▇ LLP, counsel to Parent, on or about the date the Form S-4 shall become
effective, and subsequently, on the Closing Date, written opinions dated as of
such dates substantially in the form of Exhibit 6.02(c)(1). In rendering such
opinions, counsel to Parent shall be entitled to rely upon representations
provided by Parent and the Company substantially in the form of Exhibits
6.02(c)(2) and 6.02(c)(3) (allowing for such amendments to the representations
as counsel to Parent deems reasonably necessary).
(d) The Company Rights Agreement. The Company Rights Agreement shall have
been amended so that no Stock Acquisition Date or Distribution Date (as such
terms are defined in Company Rights Agreement) shall have occurred pursuant to
Company Rights Agreement.
(e) Governmental and Regulatory Approvals. Without prejudice to the
obligations of the parties to undertake Specified Efforts, other than the filing
provided for under Section 1.03 and filings pursuant to the HSR Act, EC Merger
Regulation and other regulatory laws (which are addressed in Section 6.01(d)),
all consents, approvals and actions of, filings with and notices to any
Governmental Entity required of Parent, the Company or any of their Subsidiaries
to consummate the Merger, the Share Issuance and the other transactions
contemplated hereby, the failure of which to be obtained or taken, individually
or in the aggregate, would reasonably be expected to have a Material Adverse
Effect on Parent and its Subsidiaries (including the Surviving Corporation and
its Subsidiaries), taken together after giving effect to the Merger, shall have
been obtained.
(f) No Material Adverse Change. Since the date of this Agreement, there
shall not have been any state of facts, change, development, effect, condition
or occurrence that, individually or in the aggregate, has had or would
reasonably be expected to have, a Material Adverse Effect on the Company.
(g) Dissenters. Holders of not more than 5% of the outstanding Parent
Common Stock shall have exercised their dissenters' rights under the Ohio
General Corporation Law.
Section 6.03 Additional Conditions to Obligations of the Company. The
obligations of the Company to effect the Merger are subject to the satisfaction
of, or waiver by the Company, on or prior to the Closing Date of the following
additional conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Parent set forth in this Agreement that is qualified as to
Material Adverse Effect shall be true and correct, and each of the
representations and warranties of Parent set forth in this Agreement that is not
so qualified shall be true and correct, except where the failure to be so true
and correct, individually or in the aggregate, would not have a Material Adverse
Effect on the Parent, in each case as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing Date (except to the
extent in either case that such representations and warranties speak as of
another date and except as such representations and warranties are affected by
actions explicitly permitted by this Agreement), and the Company shall have
received a certificate of the chief executive officer and the chief financial
officer of Parent to such effect.
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(b) Performance of Obligations of Parent. Parent shall have performed or
complied with all agreements and covenants required to be performed by it under
this Agreement at or prior to the Closing Date that are qualified as to Material
Adverse Effect and shall have performed or complied in all material respects
with all other agreements and covenants required to be performed by it under
this Agreement at or prior to the Closing Date that are not so qualified, and
the Company shall have received a certificate of the chief executive officer and
the chief financial officer of Parent to such effect.
(c) Tax Opinions. The Company shall have received from ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel to the Company, on or about the date the Form S-4 shall become
effective, and subsequently, on the Closing Date, written opinions dated as of
such dates substantially in the form of Exhibit 6.03(c)(1). In rendering such
opinion, counsel to the Company shall be entitled to rely upon representations
provided by Parent and the Company substantially in the form of Exhibits
6.02(c)(2) and 6.02(c)(3) (allowing for such amendments to the representations
as counsel to the Company deems reasonably necessary).
(d) No Material Adverse Change. Since the date of this Agreement, there
shall not have been any state of facts, change, development, effect, condition
or occurrence that, individually or in the aggregate, has had or would
reasonably be expected to have, a Material Adverse Effect on the Parent.
ARTICLE 7
TERMINATION AND AMENDMENT
Section 7.01 General. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Effective Time notwithstanding approval thereof by the stockholders of the
Company:
(a) by mutual written consent duly authorized by the Boards of the Company
and Parent;
(b) by the Company or Parent, if the Closing shall not have occurred on or
before November 30, 2005 (the "Termination Date" which term shall include the
date of any extension under this Section 7.01(b)); provided, however, that if on
the Termination Date the conditions to Closing set forth in Sections 6.01(c),
6.01(d) or 6.02(e) shall not have been fulfilled but all other conditions to
Closing shall or shall be capable of being fulfilled, then the Termination Date
shall be automatically extended to February 28, 2006; and provided, further,
that the right to terminate this Agreement under this Section 7.01(b) shall not
be available to any party whose failure to fulfill any material obligation under
this Agreement has been the cause of, or resulted in, the failure of the Closing
to occur before such date;
(c) by the Company, if Parent shall have breached in any material respect
any of its representations or warranties or failed to perform in any material
respect any of its covenants or other agreements contained in this Agreement,
which breach or failure to perform (1) is incapable of being cured by Parent
prior to the Termination Date and (2) renders any condition under Sections
6.03(a) or 6.03(b) incapable of being satisfied prior to the Termination Date;
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(d) by Parent, if the Company shall have breached in any material respect
any of its representations or warranties or failed to perform in any material
respect any of its covenants or other agreements contained in this Agreement,
which breach or failure to perform (1) is incapable of being cured by the
Company prior to the Termination Date and (2) renders any condition under
Sections 6.02(a) or 6.02(b) incapable of being satisfied prior to the
Termination Date;
(e) by the Company or Parent, upon written notice to the other party, if a
Governmental Entity of competent jurisdiction in the United States or the
European Union shall have issued an order, judgment, decision, opinion, decree
or ruling (which the party seeking to terminate shall have used its best efforts
to resist, resolve or lift, as applicable, subject to the provisions of Section
5.03) permanently enjoining or otherwise prohibiting the consummation of the
transactions contemplated by this Agreement, and such order, decree or ruling
shall have become final and non-appealable; provided, however, that the party
seeking to terminate this Agreement pursuant to this clause (e) has fulfilled
its obligations under Section 5.03;
(f) by the Company if (i) the Board of Directors of Parent shall have
withdrawn or changed or modified the Parent Recommendation in a manner adverse
to the Company or (ii) Parent materially breaches its obligations under this
Agreement by reason of a failure to call the Parent Stockholders Meeting in
accordance with Section 5.01(c);
(g) by Parent if (i) the Board of Directors of the Company shall have
withdrawn or changed or modified the Company Recommendation in a manner adverse
to Parent or (ii) the Company materially breaches its obligations under this
Agreement by reason of a failure to call the Company Stockholders Meeting in
accordance with Section 5.01(b);
(h) by the Company, if the (i) Board of Directors of the Company
authorizes the Company, subject to complying with the terms of this Agreement,
to enter into a binding written agreement concerning a transaction that
constitutes a Superior Proposal to the Company and the Company notifies Parent
in writing that it intends to enter into such an agreement, attaching the most
current version of such agreement (or a description of all material terms and
conditions thereof) to such notice, (ii) Parent does not make, within four
Business Days of receipt of the Company's written notification of its intention
to enter into a binding agreement for such Superior Proposal, an offer that the
Board of Directors of the Company determines, in good faith after consultation
with a financial advisor of nationally recognized reputation, is at least as
favorable to the Company's stockholders as such Superior Proposal, it being
understood that the Company shall not enter into any such binding agreement
during such four Business-Day period, and (iii) the Company, at or prior to any
termination pursuant to this Section 7.01(h), pays Parent the Termination Fee
(as defined below) set forth in Section 7.02;
(i) by the Company or Parent, if the Parent Stockholder Approval shall not
have been received at a duly held meeting of the stockholders of Parent called
for such purpose (including any adjournment or postponement thereof); and
(j) by the Company or Parent, if the Company Stockholder Approval shall
not have been received at a duly held meeting of the stockholders of the Company
called for such purpose (including any adjournment or postponement thereof).
-47-
Section 7.02 Obligations in Event of Termination.
(a) In the event of any termination of this Agreement as provided in
Section 7.01, this Agreement shall forthwith become wholly void and of no
further force and effect and there shall be no liability on the part of the
Company or Parent, except with respect to Section 3.01(j), Section 3.02(l),
Section 5.02, Section 5.05, this Section 7.02 and Article 8 shall remain in full
force and effect, and except that, subject to Section 7.02(e), termination shall
not preclude any party from suing the other party for breach of this Agreement.
(b) If this Agreement is terminated (i) by Parent pursuant to Section
7.01(g); (ii) by Parent or the Company pursuant to Section 7.01(j) because of
the failure to obtain the Company Stockholder Approval and prior to the Company
Stockholder Meeting there has been an offer or proposal for, or an announcement
of any intention with respect to, a transaction that would constitute a Business
Combination involving the Company, in each case of a bona fide nature (and such
offer, proposal, or announcement has not been rejected or withdrawn prior to the
time of such meeting); (iii) by Parent or the Company pursuant to Section
7.01(b) because the Merger shall not have been consummated at or prior to the
Termination Date, and at the time of the termination such Company Stockholder
Approval shall not have been obtained and there shall have been an offer or
proposal for, or an announcement of such intention with respect to, a
transaction that would constitute a Business Combination involving the Company
(and such offer, proposal or announcement has not been rejected or withdrawn
prior to the Termination Date); or (iv) by the Company pursuant to Section
7.01(h), then (A) in the case of clauses (b)(i), (b)(ii) and (b)(iii), if within
twelve months of termination of this Agreement, the Company or its Subsidiaries
enters into a definitive agreement with any third party making the offer or
proposal with respect to a Business Combination or any Business Combination with
respect to the Company or its Subsidiaries is consummated, then the Company
shall pay to Parent, not later than one Business Day after the earlier of the
date such agreement is entered into or such Business Combination is consummated,
a termination fee of $1,920,000,000 (the "Termination Fee") and (B) in the case
of clause (b)(iv), the Company shall pay to Parent, at or prior to such
termination pursuant to Section 7.01(h), the Termination Fee.
(c) For the purposes of this Section 7.02(c), "Business Combination" means
with respect to the Company, (i) a merger, reorganization, consolidation, share
exchange, business combination, recapitalization, liquidation, dissolution or
similar transaction involving such party as a result of which either (A) the
Company's stockholders prior to such transaction (by virtue of their ownership
of such party's shares) in the aggregate cease to own at least 50% of the voting
securities of the entity surviving or resulting from such transaction (or the
ultimate parent entity thereof) or, regardless of the percentage of voting
securities held by such stockholders, if any Person shall beneficially own,
directly or indirectly, at least 35% of the voting securities of such ultimate
parent entity, or (B) the individuals comprising the Board of Directors of the
Company prior to such transaction do not constitute a majority of the Board of
Directors of such ultimate parent entity, (ii) a sale, lease, exchange, transfer
or other disposition of at least 50% of the assets of the Company and its
Subsidiaries, taken as a whole, in a single transaction or a series of related
transactions, or (iii) the acquisition, directly or indirectly, by a Person of
beneficial ownership of 35% or more of the common stock of the Company whether
by merger, consolidation, share exchange, business combination, tender or
exchange offer or otherwise (other than a merger, reorganization, consolidation,
share exchange, business combination,
-48-
recapitalization, liquidation, dissolution or similar transaction upon the
consummation of which the Company's stockholders would in the aggregate
beneficially own greater than 50% of the voting securities of such Person).
(d) All payments under this Section 7.02 shall be made by wire transfer of
immediately available funds to an account designated by Parent.
(e) The parties each agree that the agreements contained in Section
7.02(b) are an integral part of the transaction contemplated by this Agreement
and constitute liquidated damages and not a penalty. Acceptance by Parent of the
payment referred to in Section 7.02(b) shall constitute conclusive evidence that
this Agreement has been validly terminated and upon acceptance of the payment of
such amount, the Company shall be fully released and discharged from any
liability or obligation resulting from or under this Agreement.
Section 7.03 Amendment. This Agreement may be amended by the parties, by
action taken or authorized by their respective Boards of Directors, at any time
before or after approval of the matters presented in connection with the Merger
by the stockholders of the Company and Parent, but, after any such approval, no
amendment shall be made which by law or in accordance with the rules of any
relevant stock exchange requires further approval by such stockholders without
such further approval. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties.
Section 7.04 Extension; Waiver. At any time prior to the Effective Time,
the parties, by action taken or authorized by their respective Boards of
Directors, 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, (ii)
waive any inaccuracies in the representations and warranties contained herein or
in any document delivered pursuant hereto and (iii) 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
a written instrument signed on behalf of such party. The failure of any party to
this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of those rights.
ARTICLE 8
GENERAL PROVISIONS
Section 8.01 Non-Survival of Representations, Warranties and Agreements.
None of the representations, warranties, covenants and other agreements in this
Agreement or in any instrument delivered pursuant to this Agreement, including
any rights arising out of any breach of such representations, warranties,
covenants and other agreements, shall survive the Effective Time, except for
those covenants and agreements contained herein and therein (including Section
5.06) that by their terms apply or are to be performed in whole or in part after
the Effective Time and this Article 8.
Section 8.02 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or by telecopy or facsimile, upon confirmation of receipt,
(b) on the first Business Day following the date of dispatch if delivered by a
recognized next-day courier service, or (c) on the tenth
-49-
Business Day following the date of mailing if delivered by registered or
certified mail, return receipt requested, postage prepaid. All notices hereunder
shall be delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the party to receive such notice:
(i) if to Parent or Merger Sub, to:
The Procter & ▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
with a copy to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Block, Esq.
(ii) if to the Company, to:
Prudential ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq.
Section 8.03 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The words "stockholder" or "stockholders" shall be deemed to
include the words "shareholder" or "shareholders" and vice versa and the word
"stock" shall be deemed to include the word "share" or "shares" and vice versa.
All parties will be considered drafters of this Agreement and accordingly any
ambiguity shall not be construed against any particular party.
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Section 8.04 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 both
parties need not sign the same counterpart.
Section 8.05 Entire Agreement; No Third Party Beneficiaries.
(a) This Agreement (including the Exhibits and Schedules hereto) and the
Confidentiality Agreement constitute the entire agreement, and supersede all
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
(b) This Agreement shall be binding upon and inure solely to the benefit
of each party hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement, other than
Section 5.06 (which is intended to be for the benefit of the Persons covered
thereby and may be enforced by such Persons).
Section 8.06 Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware (without giving effect to
choice of law principles thereof).
Section 8.07 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
Section 8.08 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties, in
whole or in part (whether by operation of law or otherwise), without the prior
written consent of the other party, and any attempt to make any such assignment
without such consent shall be null and void, except that Merger Sub may assign,
in its sole discretion, any or all of its rights, interests and obligations
under this Agreement to any wholly owned Subsidiary of Parent without the
consent of the Company, but no such assignment shall relieve Merger Sub of any
of its obligations under this Agreement. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns. Parent agrees to cause
the Merger Sub to fulfill all of its obligations hereunder.
Section 8.09 Submission To Jurisdiction; Waivers. Each of Parent and the
Company irrevocably agrees that any legal action or proceeding with respect to
this Agreement or for recognition and enforcement of any judgment in respect
hereof brought by the other party hereto or its successors or assigns shall be
brought and determined exclusively in the Court of Chancery
-51-
of the State of Delaware, and each of Parent and the Company hereby irrevocably
submits with regard to any such action or proceeding for itself and in respect
to its property, generally and unconditionally, to the exclusive jurisdiction of
the aforesaid court. Each of Parent and the Company hereby irrevocably waives,
and agrees not to assert, by way of motion, as a defense, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (a) any
claim that it is not personally subject to the jurisdiction of the above-named
court for any reason other than the failure to lawfully serve process, (b) that
it or its property is exempt or immune from jurisdiction of any such court or
from any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), and (c) to the fullest extent
permitted by applicable law, that (i) the suit, action or proceeding in any such
court is brought in an inconvenient forum, (ii) the venue of such suit, action
or proceeding is improper and (iii) this Agreement, or the subject matter
hereof, may not be enforced in or by such court. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of the above-named court. Without limiting
the foregoing, each party agrees that service of process on such party as
provided in Section 8.02 shall be deemed effective service of process on such
party.
Section 8.10 Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms. It is accordingly agreed that
the parties shall be entitled to specific performance of the terms hereof, this
being in addition to any other remedy to which they are entitled at law or in
equity.
Section 8.11 Definitions. As used in this Agreement:
(a) "beneficial ownership" or "beneficially own" shall have the meaning
under Section 13(d) of the Exchange Act and the rules and regulations
thereunder.
(b) "Benefit Plans" means, with respect to any Person, each material
employee benefit plan, program, arrangement and contract (including, without
limitation, any "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and any
material bonus, deferred compensation, stock bonus, stock purchase, restricted
stock, stock option, employment, termination, stay agreement or bonus, change in
control and severance plan, program, policy, arrangement and contract) in effect
on the date of this Agreement or disclosed on the Company Disclosure Schedule or
the Parent Disclosure Schedule, as the case may be, to which such Person or its
Subsidiary is a party, which is maintained or contributed to by such Person, or
with respect to which such Person could incur material liability under Section
4069, 4201 or 4212(c) of ERISA.
(c) "Board of Directors" means the Board of Directors of any specified
Person and any committees thereof.
(d) "Business Day" means any day on which banks are not required or
authorized to close in the City of New York.
-52-
(e) "Confidentiality Agreement" means the letter agreement, dated November
16, 2004 between Parent and the Company.
(f) "known" or "knowledge" means, with respect to any party, the actual
knowledge of such party's officers and senior employees involved in the
negotiation of this Agreement.
(g) "Material Adverse Effect" means, with respect to any entity, any
event, change, circumstance or effect that is or is reasonably likely to be
materially adverse to (i) the business, assets, operations, financial condition
or results of operations of such entity and its Subsidiaries taken as a whole,
other than any event, change, circumstance or effect relating (v) to the economy
or financial markets in general, (w) to the industries in which such entity
operates (provided that, the impact on the entity in question is not
disproportionate to the impact on other similarly situated entities), (x) to
changes in GAAP, (y) to announcement of this Agreement and transactions
contemplated hereby, or (z) to the commencement, occurrence, continuation or
intensification of any war, armed hostilities or acts of terrorism; or (ii) the
ability of such entity to consummate the transactions contemplated by this
Agreement. All references to Material Adverse Effect on Parent or its
Subsidiaries contained in this Agreement shall be deemed to refer solely to
Parent and its Subsidiaries without including its ownership of the Company and
its Subsidiaries after the Merger, unless otherwise specified.
(h) "other party" means, with respect to the Company, Parent and means,
with respect to Parent, the Company, unless the context otherwise requires.
(i) "Person" means an individual, corporation, limited liability company,
partnership, association, trust, unincorporated organization, other entity or
group (as defined in the Exchange Act).
(j) "SEC" means the Securities and Exchange Commission.
(k) "Securities Act" means the Securities Act of 1933, as amended.
(l) "Subsidiary" when used with respect to any party means any corporation
or other organization, whether incorporated or unincorporated, (i) of which such
party or any other Subsidiary of such party is a general partner (excluding
partnerships, the general partnership interests of which held by such party or
any Subsidiary of such party do not have a majority of the voting interests in
such partnership) or (ii) at least a majority of the securities or other
interests of which having by their terms ordinary voting power to elect a
majority of the Board of Directors or others performing similar functions with
respect to such corporation or other organization is directly or indirectly
owned or controlled by such party or by any one or more of its Subsidiaries, or
by such party and one or more of its Subsidiaries.
(m) "Superior Proposal" means any bona fide written offer that is not
subject to any conditions to the parties' obligation to consummate the
transaction (other than conditions that are in the aggregate as likely to result
in the consummation of such transaction as the aggregate of the conditions
contained in this Agreement) made by a third party in respect of a transaction
(or series of related transactions) that if consummated would result in such
third party (or in the case of a direct merger between such third party and the
Company or one of its Subsidiaries, the stockholders of such third party)
acquiring, directly or indirectly, all or substantially all of the
-53-
voting power of the Company Common Stock or all or substantially all the assets
of the Company and its Subsidiaries, taken as a whole, which transaction the
Board of Directors of the Company determines in its good faith judgment (after
consultation with a financial advisor of nationally recognized reputation)
(taking into account the person making the offer, the consideration offered, the
likelihood of consummation (including the legal, financial and regulatory
aspects of the offer) as well as any other factors deemed relevant by the Board
of Directors of the Company) to be more favorable from a financial point of view
to the stockholders of the Company than the Merger, taking into account any
changes to the terms of this Agreement offered by Parent in response to such
Superior Proposal or otherwise.
-54-
IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
The Procter & ▇▇▇▇▇▇ Company
By: /s/ ▇. ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇
Title: Chairman of the Board,
President and Chief Executive
Aquarium Acquisition Corp.
By: /s/ ▇. ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇
Title: President
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman of the Board,
President and Chief Executive
Officer
Index
-----
Page
----
Acquisition Proposal.......................................................37
Actions....................................................................13
Affiliate Agreement........................................................41
Agreed Plan................................................................40
Agreement...................................................................1
beneficial ownership.......................................................52
beneficially own...........................................................52
Benefit Plans..............................................................52
Benefits Maintenance Period................................................42
Blue Sky Laws..............................................................11
Board of Directors.........................................................52
Business Combination.......................................................48
Business Day...............................................................52
Cash Payments...............................................................6
Certificate of Merger.......................................................2
Change.....................................................................33
Change in the Company Recommendation.......................................33
Change in the Parent Recommendation........................................34
Closing.....................................................................1
Closing Date................................................................2
Code........................................................................1
Company.....................................................................1
Company Board Approval.....................................................19
Company Common Stock........................................................1
Company Disclosure Schedule................................................15
Company Employees..........................................................42
Company Permits............................................................20
Company Recommendation.....................................................33
Company Rights.............................................................16
Company Rights Agreement...................................................16
Company SEC Reports........................................................18
Company Stock Option Plans.................................................16
Company Stock Options......................................................16
Company Stockholder Approval...............................................20
Company Stockholders Meeting...............................................33
Company Voting Debt........................................................16
Confidentiality Agreement..................................................53
Control Acquisition........................................................27
Current Premium............................................................38
DGCL........................................................................1
Dissenting Stockholder.....................................................43
DOJ........................................................................36
EC Merger Regulation.......................................................36
Index-1
Effective Time..............................................................2
employee benefit plan......................................................52
Environmental Claim........................................................21
Environmental Law..........................................................21
Environmental Liabilities..................................................22
ERISA......................................................................52
Exchange Act................................................................5
Exchange Agent..............................................................5
Exchange Fund...............................................................5
Exchange Ratio..............................................................2
Expenses...................................................................38
Form S-4...................................................................31
FTC........................................................................36
GAAP.......................................................................11
Governmental Entity........................................................11
Hazardous Material.........................................................21
HSR Act....................................................................11
Joint Proxy Statement/Prospectus...........................................31
knowledge..................................................................53
known......................................................................53
Liens.......................................................................9
Material Adverse Effect....................................................53
material contracts.........................................................23
Merger......................................................................1
Merger Consideration........................................................3
Merger Shares...............................................................4
Merger Sub..................................................................1
NYSE........................................................................6
Option Agreement............................................................3
other party................................................................53
Parent......................................................................1
Parent Board Approval......................................................12
Parent Common Stock.........................................................1
Parent Disclosure Schedule..................................................8
Parent Permits.............................................................13
Parent Proposed Plan.......................................................40
Parent Recommendation......................................................34
Parent SEC Reports.........................................................11
Parent Share Repurchase....................................................27
Parent Stock Option Plans...................................................9
Parent Stock Options........................................................9
Parent Stockholder Approval................................................10
Parent Stockholders Meeting................................................33
Parent Voting Debt..........................................................9
parties.....................................................................1
Permitted Capital Expenditure..............................................28
Index-2
Person.....................................................................53
Prior Plan.................................................................42
Products...................................................................25
Qualifying Amendment.......................................................32
Regulatory Law.............................................................36
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act.........................................................18
SEC........................................................................53
Section 965 Dividend.......................................................40
Securities Act.............................................................53
Share Issuance.............................................................10
Shares......................................................................2
Specified Conditions.......................................................40
Specified Consents.........................................................11
Specified Efforts..........................................................36
Subsidiary.................................................................53
Successor Plan.............................................................42
Superior Proposal..........................................................53
Surviving Corporation.......................................................1
Tax Return.................................................................15
Taxes......................................................................15
Termination Date...........................................................46
Termination Fee............................................................48
Violation..................................................................10
Index-3