AGREEMENT AND PLAN OF MERGER BY AND AMONG OPLINK COMMUNICATIONS, INC. OPLINK ACQUISITION CORPORATION and OPTICAL COMMUNICATION PRODUCTS, INC. Dated as of June 19, 2007
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
OPLINK
COMMUNICATIONS, INC.
OPLINK ACQUISITION CORPORATION
and
OPTICAL COMMUNICATION PRODUCTS, INC.
Dated as of June 19, 2007
TABLE OF CONTENTS
| Page | ||||||||||
| ARTICLE I THE MERGER | 2 | |||||||||
| 1.1 | The Merger | 2 | ||||||||
| 1.2 | Effective Time; Closing | 2 | ||||||||
| 1.3 | Effect of the Merger | 2 | ||||||||
| 1.4 | Certificate of Incorporation and Bylaws of Surviving Corporation | 3 | ||||||||
| 1.5 | Directors and Officers of Surviving Corporation | 3 | ||||||||
| 1.6 | Effect on Capital Stock | 4 | ||||||||
| 1.7 | Dissenting Shares | 6 | ||||||||
| 1.8 | Surrender of Certificates | 7 | ||||||||
| 1.9 | No Further Ownership Rights in Company Common Stock | 9 | ||||||||
| 1.10 | Lost, Stolen or Destroyed Certificates | 9 | ||||||||
| 1.11 | Adjustments | 9 | ||||||||
| 1.12 | Taking of Necessary Action; Further Action | 10 | ||||||||
| ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY | 10 | |||||||||
| 2.1 | Organization and Qualification; Subsidiaries | 10 | ||||||||
| 2.2 | Certificate of Incorporation and Bylaws | 11 | ||||||||
| 2.3 | Authority Relative to this Agreement | 11 | ||||||||
| 2.4 | No Conflict; Required Filings and Consents | 12 | ||||||||
| 2.5 | Proxy Statement | 13 | ||||||||
| 2.6 | Board Approval | 14 | ||||||||
| 2.7 | Opinion of Financial Advisor | 14 | ||||||||
| 2.8 | Financial Advisor | 14 | ||||||||
| 2.9 | State Takeover Statutes | 14 | ||||||||
| ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB | 14 | |||||||||
| 3.1 | Corporate Organization | 15 | ||||||||
| 3.2 | Authority Relative to this Agreement | 15 | ||||||||
| 3.3 | No Conflict; Required Filings and Consents | 15 | ||||||||
| 3.4 | Proxy Statement | 16 | ||||||||
TABLE OF CONTENTS
(Continued)
| Page | ||||||||||
| 3.5 | Sufficient Funds | 16 | ||||||||
| 3.6 | No Prior Merger Sub Operations | 17 | ||||||||
| 3.7 | Ownership of the Company | 17 | ||||||||
| ARTICLE IV ADDITIONAL AGREEMENTS | 17 | |||||||||
| 4.1 | Proxy Statement and Other Filings | 17 | ||||||||
| 4.2 | Meeting of Company Stockholders | 19 | ||||||||
| 4.3 | Confidentiality; Access to Information | 20 | ||||||||
| 4.4 | No Solicitation | 21 | ||||||||
| 4.5 | Public Disclosure | 25 | ||||||||
| 4.6 | Reasonable Efforts | 26 | ||||||||
| 4.7 | Takeover Statutes | 27 | ||||||||
| 4.8 | FIRPTA Compliance | 27 | ||||||||
| 4.9 | Company Stock Option Plan; Company ESPP | 27 | ||||||||
| 4.10 | Indemnification of Directors and Officers | 28 | ||||||||
| 4.11 | Board of Directors | 29 | ||||||||
| ARTICLE V CONDITIONS TO THE MERGER | 31 | |||||||||
| 5.1 | Conditions to Obligations of Each Party to Effect the Merger | 31 | ||||||||
| 5.2 | Additional Conditions to Obligations of the Company | 31 | ||||||||
| 5.3 | Additional Conditions to the Obligations of Parent and Merger Sub | 32 | ||||||||
| ARTICLE VI TERMINATION, AMENDMENT AND WAIVER | 33 | |||||||||
| 6.1 | Termination | 33 | ||||||||
| 6.2 | Notice of Termination; Effect of Termination | 35 | ||||||||
| 6.3 | Fees and Expenses | 35 | ||||||||
| 6.4 | Amendment | 36 | ||||||||
| 6.5 | Extension; Waiver | 36 | ||||||||
| ARTICLE VII GENERAL PROVISIONS | 36 | |||||||||
| 7.1 | Non-Survival of Representations and Warranties | 36 | ||||||||
-ii-
TABLE OF CONTENTS
(Continued)
| Page | ||||||||||
| 7.2 | Notices | 36 | ||||||||
| 7.3 | Interpretation | 37 | ||||||||
| 7.4 | Counterparts | 40 | ||||||||
| 7.5 | Entire Agreement; Third Party Beneficiaries | 40 | ||||||||
| 7.6 | Severability | 40 | ||||||||
| 7.7 | Other Remedies; Specific Performance | 40 | ||||||||
| 7.8 | Governing Law | 41 | ||||||||
| 7.9 | Rules of Construction | 42 | ||||||||
| 7.10 | Assignment | 42 | ||||||||
| 7.11 | Waiver of Jury Trial | 42 | ||||||||
-iii-
INDEX OF EXHIBITS
EXHIBIT
A Bylaw Amendment
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made and entered into as of June 19, 2007 (the
“Agreement”), by and among Oplink Communications, Inc., a Delaware corporation (“Parent”), Oplink
Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger
Sub”), and Optical Communication Products, Inc., a Delaware corporation (the “Company”).
RECITALS
WHEREAS, the Boards of Directors of Parent, Merger Sub and the Company (upon the unanimous
recommendation of a special committee of disinterested directors of the Company (the “Special
Committee”)) have each determined that it is in the best interests of their respective stockholders
for Parent to acquire the outstanding shares of capital stock of the Company that it does not
already own upon the terms and subject to the conditions set forth herein.
WHEREAS, the Board of Directors of the Company (the “Board”), upon the unanimous
recommendation of the Special Committee, has unanimously (i) determined that the Agreement and the
Merger (as defined in Section 1.1) is advisable and fair to, and in the best interests of,
the stockholders of the Company, (ii) approved this Agreement and the other transactions
contemplated by this Agreement, including the Merger, and (iii) determined to recommend that the
stockholders of the Company adopt this Agreement.
WHEREAS, the Board of Directors of Parent and Merger Sub have (i) determined that the Merger
is advisable and fair to, and in the best interest of, Parent and its stockholders, and (ii)
approved this Agreement and the other transactions contemplated by this Agreement, including the
Merger.
WHEREAS, Parent, Merger Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to prescribe certain
conditions to the Merger.
NOW, THEREFORE, in consideration of the covenants, promises and representations set forth
herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and subject
to and upon the terms and conditions of this Agreement and the applicable provisions of the
Delaware General Corporation Law (“Delaware Law”), Merger Sub shall be merged with and into the
Company (the “Merger”), the separate corporate existence of Merger Sub shall cease and the Company
shall continue as the surviving corporation. The Company, as the surviving corporation after the
Merger, is hereinafter sometimes referred to as the “Surviving Corporation.”
1.2 Effective Time; Closing. Upon the terms and subject to the conditions of this
Agreement, the parties hereto shall cause the Merger to be consummated by filing with the Secretary
of State of the State of Delaware a certificate of merger (the “Certificate of Merger”) executed in
accordance with the relevant provisions of Delaware Law (the time of such filing, or such later
time as may be agreed in writing by the Company and Parent and specified in the Certificate of
Merger, being the “Effective Time”) as soon as practicable on or after the Closing Date (as herein
defined). The closing of the Merger (the “Closing”) shall take place at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Professional Corporation, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, at
a time and date to be specified by the parties hereto, which shall be no later than the second
business day after the satisfaction or waiver of the conditions set forth in Article V
(other than those conditions, which by their terms, are to be satisfied or waived on the Closing
Date, but subject to the satisfaction or waiver thereof), or at such other time, date and location
as the parties hereto agree in writing (the “Closing Date”).
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement and
the applicable provisions of Delaware Law. Without limiting the generality of the foregoing, and
subject thereto, at the Effective Time, all of the assets, properties, rights, privileges, powers
and franchises of the Company and Merger Sub shall vest in the Surviving
-2-
Corporation, and all of
the debts, liabilities, obligations, restrictions and duties of the Company and Merger Sub shall
become the debts, liabilities, obligations, restrictions and duties of the Surviving Corporation.
1.4 Certificate of Incorporation and Bylaws of Surviving Corporation.
(a) Certificate of Incorporation. As of the Effective Time, by virtue of the Merger
and without any action on the part of Merger Sub or the Company, the Certificate of Incorporation
of the Surviving Corporation shall be amended and restated to read the same as the Certificate of
Incorporation of Merger Sub, as in effect immediately prior to the Effective Time, until thereafter
amended in accordance with Delaware Law and such Certificate of Incorporation; provided, however,
that as of the Effective Time the Certificate of Incorporation shall provide that the name of the
Surviving Corporation is “Optical Communication Products, Inc.”
(b) Bylaws. As of the Effective Time, the Bylaws of the Surviving Corporation shall
be amended and restated to read the same as the Bylaws of Merger Sub, as in effect immediately
prior to the Effective Time, until thereafter amended in accordance with Delaware Law, the
Certificate of Incorporation of the Surviving Corporation and such Bylaws; provided, however, that
all references in such Bylaws to Merger Sub shall be amended to refer to “Optical Communication
Products, Inc.”
1.5 Directors and Officers of Surviving Corporation.
(a) Directors. The initial directors of the Surviving Corporation shall be the
directors of Merger Sub as of immediately prior to the Effective Time, until their respective
successors are duly elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Certificate of Incorporation and the Bylaws of the Surviving
Corporation.
(b) Officers. The initial officers of the Surviving Corporation shall be the officers
of Merger Sub as of immediately prior to the Effective Time, until their respective successors are
duly appointed and qualified or until their earlier death, resignation or removal in accordance
with the Certificate of Incorporation and the Bylaws of the Surviving Corporation.
-3-
1.6 Effect on Capital Stock. Upon the terms and subject to the conditions of this
Agreement, at the Effective Time, by virtue of the Merger and without any action on the part of
Merger Sub, the Company or the holders of any of the following securities, the following shall
occur:
(a) Conversion of Shares. Each share of Class A common stock, par value $0.001 per
share, of the Company (“Company Common Stock”) issued and outstanding immediately prior to the
Effective Time (other than any shares of Company Common Stock to be canceled pursuant to
Section 1.6(b) and any Dissenting Shares, as defined in Section 1.7), will be
canceled and extinguished and automatically converted into the right to receive, upon surrender of
the certificate(s) representing such Company Common Stock in the manner provided in Section
1.8 (or in the case of a lost, stolen or destroyed certificate, upon delivery of an affidavit,
and bond, if required, in the manner provided in Section 1.10), cash in an amount equal to
$1.65 per share, without interest (the “Per Share Merger Consideration” and the aggregate of all
Per Share Merger Consideration, the “Merger Consideration”).
(b) Cancellation of Treasury and Parent-Owned Shares. All Company Common Stock and
Class B common stock, par value $0.001 per share, of the Company (“Class B Common Stock” and
together with the Company Common Stock, the “Common Shares”) held by the Company or owned by Merger
Sub, Parent or any direct or indirect wholly-owned subsidiary of the Company or of Parent or, with
respect to Class B Common Stock, held or owned by any other person immediately prior to the
Effective Time shall be canceled and extinguished without any conversion thereof.
(c) Capital Stock of Merger Sub. Each share of common stock, par value $0.01 per
share, of Merger Sub (the “Merger Sub Common Stock”) issued and outstanding immediately prior to
the Effective Time shall be converted into one validly issued, fully paid and nonassessable share
of common stock, par value $0.01 per share, of the Surviving Corporation. Each certificate evidencing
ownership of shares of Merger Sub Common Stock outstanding immediately prior to the Effective Time
shall evidence ownership of such shares of capital stock of the Surviving Corporation.
-4-
(d) Company Stock Options.
(i) Subject to Section 1.6(d)(ii), at the Effective Time, all rights with respect to
each option to purchase Company Common Stock that was granted under the Company Stock Option Plan
(as defined in Section 4.9(a); each a “Company Stock Option”) then outstanding, whether
vested or unvested, shall be converted into and become rights with respect to Parent Common Stock
and Parent shall assume each such Company Stock Option (as so assumed, an “Assumed Option”). From
and after the Effective Time, each Assumed Option shall continue to be subject to the same terms
and conditions as were applicable to such Company Stock Option immediately prior to the Effective
Time in accordance with the Company Stock Option Plan under which it was issued and the stock
option agreement by which it is evidenced, except that (i) each reference in such plan and
agreement to the Company shall be deemed to refer to Parent, (ii) each Assumed Option may be
exercised solely for shares of Parent Common Stock, (iii) the number of shares of Parent Common
Stock subject to each Assumed Option shall be equal to the number of shares of Company Common Stock
remaining unexercised under and subject to such Company Stock Option immediately prior to the
Effective Time multiplied by the result obtained by dividing (A) $1.65 by (B) the average of the
closing price of a share of common stock of Parent on the NASDAQ Global Market (“NASDAQ”) for the
five (5) trading days ending two business days prior to the Closing Date (the “Option Exchange
Ratio”), as it may be adjusted to reflect any reclassification, stock split, reverse stock split,
stock dividend, reorganization, recapitalization or other like change with respect to common stock,
$0.001 par value per share, of Parent (“Parent Common Stock”) or Company Common Stock occurring (or
for which the record date is established) after the date of this Agreement and prior to the
Effective Time, rounding down to the nearest whole share, (iv) the per share exercise price under
each Assumed Option shall be adjusted by dividing the per share exercise price under such Company
Stock Option by the Option Exchange Ratio, rounding up to the nearest cent, and (v) each Assumed
Option shall, in accordance with its terms, be subject to further adjustment as appropriate to
reflect any stock split, stock dividend, reverse stock split, reclassification,
recapitalization or other similar transaction subsequent to the Effective Time. To the extent
that a Company Stock Option qualifies as an “incentive stock option” within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the “Code”), the option exercise price, the
number of shares of Parent Common Stock purchasable pursuant to the Assumed Option and the terms
and
-5-
conditions of exercise of the Assumed Option shall be determined in order to comply with
Section 424(a) of the Code. To the extent a Company Stock Option is a nonstatutory stock option,
the option exercise price, the number of shares of Parent Common Stock purchasable pursuant to the
Assumed Option and the terms and conditions of exercise of the Assumed Option shall be determined
in order to comply with Section 409A of the Code.
(ii) In lieu of assuming outstanding Company Stock Options in accordance with Section
1.6(d)(i), Parent may, in its discretion, issue reasonably equivalent replacement stock options
in substitution for outstanding Company Stock Options, provided that the number of shares of Parent
Common Stock subject to and the per share exercise price under each such replacement option shall
be determined in the same manner as set forth in Section 1.6(d)(i).
1.7 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the contrary, shares of Company Common
Stock that are outstanding immediately prior to the Effective Time and that are held by
stockholders who shall have not voted in favor of the Merger and who shall have demanded properly
in writing appraisal for such Company Common Stock in accordance with Section 262 of Delaware Law
(collectively, the “Dissenting Shares”) shall not be converted into, or represent the right to
receive, the Per Share Merger Consideration payable for each such share of Company Common Stock.
Such stockholders shall be entitled to receive payment of the appraised value of such Company
Common Stock held by them in accordance with the provisions of such Section 262, except that all
Dissenting Shares held by stockholders who shall have failed to perfect or who effectively shall
have withdrawn or lost their rights to appraisal of such Company Common Stock under such Section
262 shall thereupon be deemed to have been converted into, and to have become exchangeable for, as
of the Effective Time, the right to receive the Per Share Merger Consideration payable for each
such share of Company Common Stock, without any interest thereon, upon surrender, in the manner
provided in Section 1.8, of the certificate or certificates that formerly evidenced such
Company Common Stock.
(b) The Company shall give Parent (i) prompt notice of any demands for appraisal received by
the Company, withdrawals of such demands, and any other instruments served pursuant to Delaware Law
and received by the
-6-
Company and (ii) the opportunity to direct all negotiations and proceedings
with respect to demands for appraisal under Delaware Law. The Company shall not, except with the
prior written consent of Parent, make any payment with respect to any demands for appraisal or
offer to settle or settle any such demands.
1.8 Surrender of Certificates.
(a) Paying Agent. Prior to the Effective Time, Parent shall select a bank or trust
company reasonably acceptable to the Company to act as agent (the “Paying Agent”) for the holders
of Company Common Stock to receive the funds to which holders of Company Common Stock shall become
entitled pursuant to Section 1.6(a). Immediately prior to the Effective Time, Parent shall
deposit with the Paying Agent in immediately available funds the Merger Consideration. Such funds
shall be invested by the Paying Agent as directed by Parent; earnings from such investments shall
be the sole and exclusive property of Parent and the Surviving Corporation, and no part of such
earnings shall accrue to the benefit of holders of the shares of Company Common Stock.
(b) Payment Procedures. As soon as reasonably practicable after the Effective Time,
Parent shall cause the Paying Agent to mail to each holder of record (as of the Effective Time) of
a certificate or certificates (the “Certificates”), which immediately prior to the Effective Time
represented the outstanding shares of Company Common Stock converted into the right to receive the
portion of the Merger Consideration payable for such Company Common Stock, (i) a letter of
transmittal in customary form (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Paying
Agent and shall contain such other provisions as Parent shall reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange for the portion of
the Merger Consideration payable upon surrender of said Certificates. Parent shall use reasonable
efforts to cause such mailings to occur no later than three (3) business days after the Effective
Time. Upon surrender of Certificates for cancellation to the Paying Agent or to such other agent
or agents as may be appointed by Parent, together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions thereto, and such other documents as may
be required pursuant to those instructions, the holders of such Certificates formerly representing
the Company Common Stock shall be entitled to receive in exchange therefor the portion of the
Merger Consideration payable
-7-
for such shares of Company Common Stock, and the Certificates so
surrendered shall forthwith be canceled. Until so surrendered, outstanding Certificates shall be
deemed from and after the Effective Time, for all corporate purposes, to evidence only the
ownership of the respective portion of the Merger Consideration to which the record holder of such
Certificates is entitled by virtue thereof. Promptly following surrender of any such Certificates
and the duly executed letters of transmittal, the Paying Agent shall deliver to the record holders
thereof, without interest, the portion of the Merger Consideration to which such holder is entitled
upon surrender of said Certificates, subject to the restrictions set forth herein.
(c) Payments with respect to Unsurrendered Company Common Stock; No Liability. At any
time following one day after the first anniversary of the Effective Time, the Surviving Corporation
shall be entitled to require the Paying Agent to deliver to it any funds which had been made
available to the Paying Agent and not disbursed to holders of Company Common Stock (including all
interest and other income received by the Paying Agent in respect of all funds made available to
it), and, thereafter, such holders shall be entitled to look to Parent (subject to abandoned
property, escheat and other similar laws) only as general creditors thereof with respect to any
portion of the Merger Consideration that may be payable upon due surrender of the Certificates held
by them. Notwithstanding the foregoing, none of Parent, the Surviving Corporation or the Paying
Agent shall be liable to any former holder of Company Common Stock for any portion of the Merger
Consideration properly delivered in respect of such Company Common Stock to a public official
pursuant to any applicable abandoned property, escheat or other similar Legal Requirement.
(d) Transfers of Ownership. If the payment of the portion of the Merger Consideration
to which such holder is entitled is to be paid to a person other than the person in whose name the Certificates surrendered in exchange therefor are
registered, it will be a condition of payment that the Certificates so surrendered be properly
endorsed and otherwise in proper form for transfer (including, if requested by Parent or the Paying
Agent, a medallion guarantee), and that the persons requesting such payment will have paid to
Parent or any agent designated by it any transfer or other taxes required by reason of the payment
of a portion of the Merger Consideration to a person other than the registered holder of the
Certificates surrendered, or established to the satisfaction of Parent or any agent designated by
it that such tax has been paid or is not applicable.
-8-
(e) Required Withholding. Each of the Paying Agent, Parent and the Surviving
Corporation shall be entitled to deduct and withhold from any consideration payable or otherwise
deliverable pursuant to this Agreement to any holder or former holder of the Company Common Stock
such amounts as may be required to be deducted or withheld therefrom under the Code or under any
provision of state, local or foreign tax law or under any other applicable Legal Requirement. To
the extent such amounts are so deducted or withheld, such amounts shall be treated for all purposes
under this Agreement as having been paid to the person to whom such amounts would otherwise have
been paid.
1.9 No Further Ownership Rights in Company Common Stock. Payment of the Merger
Consideration shall be deemed to have been paid in full satisfaction of all rights pertaining to
the Company Common Stock, and after the Effective Time, there shall be no further registration of
transfers on the records of the Surviving Corporation of the shares of Company Common Stock which
were outstanding immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Surviving Corporation for any reason, they shall be canceled and
exchanged as provided in this ARTICLE I.
1.10 Lost, Stolen or Destroyed Certificates. In the event that any Certificates shall
have been lost, stolen or destroyed, the Paying Agent shall pay in exchange for such lost, stolen
or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof, the
portion of the Merger Consideration payable with respect thereto; provided, however, that Parent or
the Paying Agent may, in its discretion and as a condition precedent to the payment of such portion
of the Merger Consideration, require the owner of such lost, stolen or destroyed Certificates to
deliver a bond (at the sole expense of the holder of such Certificates) in such reasonable and customary
amount as it may direct as indemnity against any claim that may be made against Parent, the
Surviving Corporation or the Paying Agent with respect to the Certificates alleged to have been
lost, stolen or destroyed.
1.11 Adjustments. In the event of any stock split, reverse stock split, stock
dividend (including any dividend or distribution of securities convertible into Company Common
Stock, whether directly or indirectly), reorganization, reclassification, combination,
recapitalization or other like change with respect to the Company Common Stock occurring after the
date of this Agreement and prior to the Effective Time, all references in this Agreement to
specified numbers of
-9-
shares of any class or series affected thereby, and all calculations provided
for that are based upon numbers of shares of any class or series (or trading prices therefor)
affected thereby, shall be equitably adjusted to the extent necessary to provide the parties the
same economic effect as contemplated by this Agreement prior to such stock split, reverse stock
split, stock dividend, reorganization, reclassification, combination, recapitalization or other
like change.
1.12 Taking of Necessary Action; Further Action. If, at any time after the Effective
Time, any further action is necessary or desirable to carry out the purposes of this Agreement and
to vest the Surviving Corporation with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of the Company and Merger Sub, the officers and directors
of the Surviving Corporation will take all such lawful and necessary action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company hereby represents and warrants to Parent and Merger Sub as follows:
2.1 Organization and Qualification; Subsidiaries.
(a) Each of the Company and its subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and has the requisite
corporate power and authority to own, lease and operate its assets and properties and to carry on
its business as it is now being conducted.
(b) Each of the Company and its subsidiaries is duly qualified to do business as a foreign
corporation, and is in good standing, under the laws of all jurisdictions where the character of
the properties owned, leased or operated by it or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified and in good standing has not
had, and would not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect on the Company.
-10-
2.2 Certificate of Incorporation and Bylaws. The Certificate of Incorporation and
Bylaws of the Company, each as amended to date (together, the “Company Charter Documents”), and the
equivalent organizational documents of each subsidiary of the Company are in full force and effect.
The Company is not in violation of any of the provisions of the Company Charter Documents, and no
subsidiary of the Company is in violation of its equivalent organizational documents.
2.3 Authority Relative to this Agreement. The Company has all necessary corporate
power and authority to execute and deliver this Agreement, to perform its obligations hereunder and
to consummate the Merger and other transactions contemplated herein (collectively, the
“Transactions”), subject, with respect to the Merger, to the Company Stockholder Approval (as
defined below). The execution and delivery of this Agreement by the Company and the consummation
by the Company of the Transactions have been duly and validly authorized by all necessary corporate
action on the part of the Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the Transactions other than (a) with respect
to the Merger, the filing with the Securities and Exchange Commission (the “SEC”) of a proxy
statement with respect to, and the receipt of, the Company Stockholder Approval, (b) obtaining
the Company Stockholder Approval and (c) the filing of the Certificate of Merger as required
by Delaware Law. The affirmative vote of (i) the holders of a majority of the outstanding voting
power of Company Common Stock and (ii) the holders of 66 2/3% of the voting power of the Common
Shares not “owned” (as defined in Section 203 of the Delaware Law) by the Parent or its
“affiliates” or “associates” (as defined in Section 203 of the Delaware Law) is the only vote of
the holders of capital stock of the Company necessary to adopt this Agreement and approve the
Merger under applicable Legal Requirements (as defined below) and the Company Charter Documents
(the “Company Stockholder Approval”). This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and delivery by Parent and
Merger Sub, constitutes the legal and binding obligation of the Company, enforceable against the
Company in accordance with its terms. “Legal Requirements” means any federal, state, local,
municipal, foreign or other law, statute, legislation, constitution, principle of common law,
resolution, ordinance, code, edict, order, injunction, judgment, decree, rule, regulation, ruling
or requirement issued, enacted, adopted,
-11-
promulgated, implemented or otherwise put into effect by
or under the authority of any Governmental Entity (as defined in Section 2.4(b) hereof).
2.4 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company does not, and the performance
of this Agreement by the Company will not, (i) result in the creation of any Encumbrance (as
defined below) on any of the properties or assets of the Company or any of its subsidiaries, (ii)
conflict with or violate the Company Charter Documents or the equivalent organizational documents
of any of the Company’s subsidiaries, (iii) subject, (A) with respect to the Merger, to the Company
Stockholder Approval and (B) to compliance with the requirements set forth in Section
2.4(b), conflict with or violate any Legal Requirements applicable to the Company or any of its
subsidiaries or by which its or any of their respective properties is bound or affected, or (iv)
conflict with or violate, or result in any breach, impermissible assignment or non-transferability
of or constitute a default (or an event that with notice or lapse of time or both would become a
default) under, or impair the Company’s or any of its subsidiaries’ rights or alter the rights or
obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of any written, oral,
express or implied agreement, contract, subcontract, lease, mortgage, indenture, understanding,
arrangement, instrument, note, bond, option, warranty, purchase order, license, sublicense,
insurance policy, benefit plan, permit, franchise or other instrument, obligation or commitment or
undertaking of any nature (“Contract”) to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or its or any of their respective properties are
bound or affected, excluding from the foregoing clauses (i), (iii) or (iv) such Encumbrances,
conflicts, violations, breaches, impermissible assignments, non-transferabilities, defaults,
impairments, alterations, or rights which would not individually or in the aggregate have a
Material Adverse Effect on the Company. For the purposes of this Agreement, “Encumbrance” means,
with respect to any asset, any mortgage, deed of trust, lien, pledge, charge, security interest,
title retention device, conditional sale or other security arrangement, collateral assignment,
claim, charge, adverse claim of title, ownership or right to use, restriction or other encumbrance
of any kind in respect of such asset (including any restriction on (1) the voting of any security
or the transfer of any security or other asset, (2) the receipt of any income derived from
-12-
any asset, (3) the use of any asset, and (4) the possession, exercise or transfer of any other
attribute of ownership of any asset).
(b) The execution and delivery of this Agreement by the Company does not, and the performance
of this Agreement by the Company shall not, require any consent, approval, authorization or permit
of, or filing with or notification to, any supranational, national, state, municipal, local or
foreign government, any instrumentality, subdivision, court, administrative agency or commission or
other governmental authority or instrumentality, or any quasi-governmental or private body
exercising any regulatory, taxing, importing or other governmental or quasi-governmental authority
(a “Governmental Entity”), except (i) for applicable requirements, if any, of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), state securities laws (“Blue Sky Laws”) and
state takeover laws, the rules and regulations of NASDAQ, and the filing of the Certificate of
Merger as required by Delaware Law, (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, (A) would not, individually or
in the aggregate, be material to the Company or its subsidiaries or, following the Effective Time,
Parent, or prevent consummation of the Transactions or (B) otherwise prevent the parties hereto
from performing their obligations under this Agreement.
2.5 Proxy Statement. The proxy statement to be sent to the stockholders of the
Company in connection with the Stockholders’ Meeting (as defined in Section 4.2) (such
proxy statement, as amended or supplemented, being referred to herein as the “Proxy Statement”),
shall not, at the date the Proxy Statement (or any amendment or supplement thereto) is first mailed
to stockholders of the Company and at the time of the Stockholders’ Meeting, contain any statement
which, at such time and in light of the circumstances under which it was made, is false or
misleading with respect to any material fact, or which omits to state any material fact necessary
in order to make the statements therein not false or misleading or necessary to correct any
statement in any earlier communication with respect to the solicitation of proxies, if any, for the
Stockholders’ Meeting which shall have become false or misleading. Notwithstanding the foregoing,
the Company makes no representation or warranty with respect to any information supplied by Parent,
Merger Sub or any of Parent’s or Merger Sub’s representatives in writing for inclusion in the Proxy
Statement. The Proxy Statement shall comply in all material respects as to form with the
requirements of the Exchange Act and the rules and regulations thereunder.
-13-
2.6 Board Approval. Subject to the terms of Section 4.4(d), the full Board
(upon the unanimous recommendation of the Special Committee), by resolutions duly adopted (and such
resolutions not thereafter modified or rescinded) as of the date of this Agreement, has unanimously
(a) approved this Agreement and the Merger and determined that this Agreement and the Merger are
advisable and fair to, and in the best interests of, the stockholders of the Company, and (b)
directed that adoption of this Agreement be submitted to the Company stockholders for consideration
and recommended that the stockholders of the Company adopt this Agreement.
2.7 Opinion of Financial Advisor. The Special Committee has been advised in writing
by its financial advisor, Bear, ▇▇▇▇▇▇▇ & Co. Inc., that in its opinion, as of the date of this
Agreement, the Per Share Merger Consideration is fair, from a financial point of view, to the
stockholders of the Company other than Parent and its affiliates and associates.
2.8 Financial Advisor. Except for Bear, ▇▇▇▇▇▇▇ & Co. Inc., no broker, finder or
investment banker is entitled to any brokerage, finder’s or other fee or commission in connection
with the Merger or any of the other Transactions based upon arrangements made by or on behalf the
Company. The Company will pay the fees and expenses of Bear, ▇▇▇▇▇▇▇ & Co. Inc. in accordance with
the Company’s agreement with such firm.
2.9 State Takeover Statutes. Other than Section 203 of the Delaware Law, no other
state takeover statute or similar statute or regulation or anti-takeover provision in the Company
Charter Documents applies to, purports to apply or at the Effective Time will be applicable to the
Merger, this Agreement or the Transactions.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
AND MERGER SUB
AND MERGER SUB
Parent and Merger Sub hereby jointly and severally represent and warrant to the Company as
follows:
-14-
3.1 Corporate Organization. Each of Parent and Merger Sub is a corporation duly
organized, validly existing and in good standing under the laws of the State of Delaware and has
the requisite corporate power and authority and all necessary governmental approvals to own, lease
and operate its properties and to carry on its business as it is now being conducted, except where
the failure to be so organized, existing or in good standing or to have such power, authority and
governmental approvals would not prevent or materially delay consummation of the Merger, or
otherwise prevent Parent or Merger Sub from performing their respective material obligations under
this Agreement.
3.2 Authority Relative to this Agreement. Each of Parent and Merger Sub has all necessary corporate power and authority to execute
and deliver this Agreement, and to perform its obligations hereunder and to consummate the
Transactions. The execution and delivery of this Agreement by Parent and Merger Sub and the
consummation by Parent and Merger Sub of the Transactions have been duly and validly authorized by
all necessary corporate action on the part of Parent and Merger Sub, and subject to approval of the
Agreement by Parent in its capacity as sole stockholder of Merger Sub, which approval shall be
given immediately following execution of the Agreement, no other corporate proceedings on the part
of Parent or Merger Sub are necessary to authorize this Agreement, or to consummate the
Transactions (other than, with respect to the Merger, the filing of the Certificate of Merger as
required by Delaware Law). This Agreement has been duly and validly executed and delivered by
Parent and Merger Sub and, assuming the due authorization, execution and delivery by the Company,
constitutes a legal and binding obligation of Parent and Merger Sub, enforceable against Parent and
Merger Sub in accordance with its terms.
3.3 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Parent and Merger Sub does not, and the
performance of this Agreement by Parent and Merger Sub will not, (i) conflict with or violate
Parent’s or Merger Sub’s Certificate of Incorporation or Bylaws, each as amended to date, (ii)
subject to compliance with the requirements set forth in Section 3.3(b) hereof, conflict
with or violate any Legal Requirements applicable to Parent or Merger Sub or by which any of their
respective properties is bound or affected, or (iii) conflict with or violate, result in any breach
of or constitute a default (or an event that with notice or lapse of time or both would become a
default) under, or impair Parent’s
-15-
or Merger Sub’s rights under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the creation of a material
Encumbrance on any of the material properties or assets of Parent pursuant to any Contract to which
Parent or Merger Sub is a party or by which Parent or Merger Sub or their respective properties are
bound or affected, excluding from the foregoing clauses (ii) or (iii) such conflicts, violations,
breaches, defaults, impairments or other effects which would not, individually or in the aggregate,
prevent or materially delay consummation of the Transactions or otherwise
prevent Parent or Merger Sub from performing their respective material obligations under this
Agreement.
(b) The execution and delivery of this Agreement by Parent and Merger Sub does not, and the
performance of this Agreement by Parent and Merger Sub shall not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental Entity except (i)
for applicable requirements, if any, of the Exchange Act, Blue Sky Laws and state takeover laws,
the rules and regulations of NASDAQ, and the filing of the Certificate of Merger as required by
Delaware Law and (ii) where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not, individually or in the aggregate,
prevent or materially delay consummation of the Transactions or otherwise prevent Parent or Merger
Sub from performing their respective material obligations under this Agreement.
3.4 Proxy Statement. The information supplied by Parent and Merger Sub for inclusion
in the Proxy Statement shall not, at the date the Proxy Statement (or any amendment or supplement
thereto) is first mailed to stockholders of the Company and at the time of the 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 false or misleading, or necessary to correct any
statement in any earlier communication with respect to the solicitation of proxies for the
Stockholders’ Meeting which shall have become false or misleading. Notwithstanding the foregoing,
Parent and Merger Sub make no representation or warranty with respect to any information supplied
by the Company or any of its representatives for inclusion in the Proxy Statement.
3.5 Sufficient Funds. Parent has and will have at the Effective Time sufficient cash
or cash-equivalent funds to consummate the Transactions,
-16-
including acquiring all of the outstanding shares of Company Common Stock in the Merger.
3.6 No Prior Merger Sub Operations. Merger Sub was formed solely for the purpose of effecting the Merger and has not engaged in
any business activities or conducted any operations other than in connection with the Merger
contemplated hereby.
3.7 Ownership of the Company. As of the date hereof and on the record date and on the
meeting date for the Stockholders’ Meeting, Parent and its affiliates and associates own
beneficially and of record 66,000,100 shares of Company Common Stock. Except as set forth in the
preceding sentence, neither Parent nor any of its affiliates or associates owns beneficially or of
record any voting securities of the Company or any other securities convertible or exchangeable
into voting securities of the Company.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 Proxy Statement and Other Filings.
(a) As promptly as practicable after the execution of this Agreement, the Company shall
prepare, and file with the SEC, a Schedule 13E-3 if required under applicable Legal Requirements
(which Schedule 13E-3 shall be a joint filing by the Company and Parent), and preliminary proxy
materials relating to (i) the Company Stockholder Approval and (ii) the removal of the existing
board of directors of the Company and election of directors designated by Parent, which removal and
appointment shall be effective upon the failure to obtain the Company Stockholder Approval. Parent
shall provide promptly to the Company such information concerning Parent and the director nominees
as, in the reasonable judgment of the Company, Parent and their respective counsel, may be required
or appropriate for inclusion in the Proxy Statement and the Schedule 13E-3 (if applicable), or in
any amendments or supplements thereto. At the earliest practicable time following the later of (i)
receipt and resolution of SEC comments thereon, or (ii) the expiration of the 10-day waiting period
provided in Rule 14a-6(a) promulgated under the Exchange Act, the Company shall file definitive
proxy materials with the SEC and cause the Proxy Statement to be mailed to its stockholders. The
Company will cause all documents that it is
-17-
responsible for filing with the SEC or other regulatory authorities in connection with the
Merger (or as required or appropriate to facilitate the Merger) to comply in all material respects
with all applicable Legal Requirements. Prior to filing the preliminary proxy materials,
definitive proxy materials, the Schedule 13E-3 (if applicable) or any other filing with the SEC or
any other Governmental Entity, the Company shall provide Parent (which term shall in all instances
in this Section 4.1 also include Parent’s counsel) with reasonable opportunity to review
and comment on each such filing in advance and the Company shall in good faith consider including
in such filings all comments reasonably proposed by Parent.
(b) The Company will notify Parent promptly of the receipt of any comments from the SEC or its
staff (or of notice of the SEC’s intent to review the Proxy Statement) and of any request by the
SEC or its staff or any other government officials for amendments or supplements to the Proxy
Statement, the Schedule 13E-3 (if applicable) or any other filing or for additional/supplemental
information, and will supply Parent with copies of all correspondence between the Company or any of
its representatives, on the one hand, and the SEC, or its staff or any other government officials,
on the other hand, with respect to the Proxy Statement, the Schedule 13E-3 (if applicable) or other
filing. The Company and its outside counsel shall permit Parent and its outside counsel to
participate in all communications with the SEC and its staff (including all meetings and telephone
conferences) relating to the Proxy Statement, the Schedule 13E-3 (if applicable), this Agreement or
the Merger. The Company shall consult with Parent prior to responding to any comments or inquiries
by the SEC or any other Governmental Entity with respect to any filings related to (or necessary or
appropriate to facilitate) the Merger, shall provide Parent with reasonable opportunity to review
and comment on any such written response in advance and shall include in such response all comments
reasonably proposed by Parent. Whenever any event occurs that is required to be set forth in an
amendment or supplement to the Proxy Statement, the Schedule 13E-3 (if applicable) or any other
filing, the Company shall promptly inform Parent of such occurrence, provide Parent with reasonable
opportunity to review and comment on any such amendment or supplement in advance, shall in good
faith consider including in such amendment or supplement all comments reasonably proposed by
Parent, and shall cooperate in filing with the SEC or its staff or any other government officials,
and/or mailing to the stockholders of the Company, such amendment or supplement.
-18-
4.2 Meeting of Company Stockholders.
(a) Promptly after the date hereof, the Company shall take all action necessary in accordance
with Delaware Law, the rules of NASDAQ and the Company Charter Documents to convene a special
meeting of its stockholders for the purpose of considering and taking action with respect to (i)
the Company Stockholder Approval (the “Stockholders’ Meeting”) and (ii) the removal of the existing
board of directors of the Company and election of directors designated by Parent, which removal and
appointment shall be effective upon the failure to obtain the Company Stockholder Approval, to be
held as promptly as practicable. Subject to the fiduciary duties of the directors, the Company
shall use all commercially reasonable efforts to solicit from its stockholders proxies in favor of
the adoption of this Agreement and to take all other action necessary or advisable to secure the
vote or consent of its stockholders required by the rules and regulations of NASDAQ or Delaware Law
to obtain such approvals. Notwithstanding anything to the contrary contained in this Agreement,
the Company may adjourn or postpone the Stockholders’ Meeting to the extent necessary to ensure
that any necessary supplement or amendment to the Proxy Statement is provided to the Company’s
stockholders in advance of a vote on this Agreement or, if as of the time for which the
Stockholders’ Meeting is originally scheduled (as set forth in the Proxy Statement) there are
insufficient shares of Company Common Stock represented (either in person or by proxy) to
constitute a quorum necessary to conduct the business of the Stockholders’ Meeting or to approve
this Agreement and the Merger. Subject to the Bylaw Amendment, the Company shall ensure that the
Stockholders’ Meeting is called, noticed, convened, held and conducted, and that all proxies
solicited by the Company in connection with the Stockholders’ Meeting are solicited, in compliance
with Delaware Law, the Company Charter Documents, the rules and regulations of NASDAQ and all other
applicable Legal Requirements.
(b) Subject to the terms of Sections 4.4(d) and (e): (i) the Board shall unanimously
recommend that the Company’s stockholders adopt and approve this Agreement and approve the Merger
at the Stockholders’ Meeting; (ii) the Proxy Statement shall include (A) the fairness opinion
referred to in Section 2.7 and (B) a statement to the effect that the Board has unanimously
recommended that the Company’s stockholders vote in favor of the Company
Stockholder Approval at the Stockholders’ Meeting; and (iii) neither the Board nor any
committee thereof shall withdraw, amend, change or modify, or propose
-19-
or resolve to withdraw,
amend, change or modify in any manner adverse to Parent, the unanimous recommendation of the Board
that the Company’s stockholders vote in favor of the Company Stockholder Approval. For purposes of
this Agreement, said recommendation of the Board shall be deemed to have been modified in a manner
adverse to Parent if said recommendation shall no longer be unanimous. Following the appointment
of Parent’s designees to the Board pursuant to Section 4.11(a), Parent agrees not to take
any action in its capacity as stockholder of the Company that would cause the Company not to be in
compliance with this Section 4.2(b).
(c) At the Stockholders’ Meeting, Parent shall vote, and shall cause each of its affiliates to
vote, all Common Shares owned beneficially or of record by Parent, Merger Sub or any of Parent’s
affiliates, in favor of the adoption of this Agreement and approval of the Merger, and any other
matter to be approved by the holders of the Common Shares pursuant to the terms hereof and in
connection with the Merger.
4.3 Confidentiality; Access to Information.
(a) The parties acknowledge that Parent and the Company have previously executed a letter
agreement, dated as of September 22, 2005 (the “Confidentiality Agreement”), which Confidentiality
Agreement will continue in full force and effect in accordance with its terms, and each of Parent
and the Company will hold, and will cause their respective directors, officers, employees, agents
and advisors (including attorneys, accountants, consultants, bankers, and financial advisors) to
hold any Confidential Information (as defined in the Confidentiality Agreement) confidential in
accordance with the terms thereof.
(b) The Company shall: (i) afford Parent and its accountants, counsel, advisors and other
representatives reasonable access, upon reasonable notice, to the properties (including for the
purpose of performing such environmental tests and investigations as Parent may desire), books,
records and personnel of the Company during the period prior to the Effective Time to obtain all
information concerning the business, including the status of product development efforts,
properties, financial positions, results of operations and personnel of the Company, as Parent may reasonably request, and (ii) furnish Parent on a
timely basis with such financial and operating data and other
-20-
information with respect to the
business, operations and properties of the Company and its subsidiaries as Parent may from time to
time reasonably request.
(c) No information or knowledge obtained by Parent in any investigation pursuant to this
Section 4.3 will affect or be deemed to modify any representation or warranty contained
herein or the conditions to the obligations of the parties to consummate the Transactions.
4.4 No Solicitation.
(a) No Solicitation. The Company and its subsidiaries shall not, nor shall they
permit any of their respective officers and directors (or authorize any affiliates of any such
officers and directors), affiliates, or employees or any investment banker, attorney, accountant or
other advisor or representative retained by (or otherwise working on behalf of) the Company or any
of its subsidiaries (collectively, “Representatives”) to directly or indirectly: (i) solicit,
initiate or knowingly encourage, knowingly facilitate or knowingly induce any inquiry with respect
to, or the making, submission or announcement of, any Acquisition Proposal (as defined in
Section 4.4(h)(i)) with respect to the Company or any of its subsidiaries, (ii) participate
or otherwise engage in any discussions or negotiations regarding, or furnish to any person any
nonpublic information with respect to, or take any other action (including granting any person a
waiver or release under any standstill or similar agreement with respect to any class of equity
security of the Company or any of its subsidiaries other than as contemplated by this Agreement) to
facilitate any inquiries or the making of any proposal that constitutes or may reasonably be
expected to lead to, any Acquisition Proposal with respect to the Company or any of its
subsidiaries, (iii) engage in discussions with any person with respect to any Acquisition Proposal
with respect to the Company or any of its subsidiaries, except as to the existence of these
provisions, (iv) approve, endorse or recommend any Acquisition Proposal with respect to the Company
or any of its subsidiaries (except to the extent specifically permitted pursuant to Section
4.4(d)), or (v) enter into any letter of intent or similar document or any Contract
contemplating or otherwise relating to any Acquisition Proposal or transaction contemplated thereby
with respect to the Company or any of its subsidiaries. The Company and its subsidiaries will immediately cease,
and will cause its Representatives to immediately cease, any and all existing activities,
discussions
-21-
or negotiations with any third parties conducted heretofore with respect to any
Acquisition Proposal.
(b) Notification of Unsolicited Acquisition Proposals. As promptly as practicable
(but in no event more than 1 business day) after receipt of any Acquisition Proposal or any request
for nonpublic information or inquiry which it reasonably believes would lead to an Acquisition
Proposal, the Company shall provide to Parent a copy of such Acquisition Proposal, request or
inquiry if made in writing or a written summary of the material terms and conditions of such
Acquisition Proposal, including the identity of the person or group making any such Acquisition
Proposal, to the extent not made in writing. The Company shall provide to Parent as promptly as
practicable (but in no event more than 1 business day thereafter) notice setting forth material
amendments or proposed material amendments of any such Acquisition Proposal, request or inquiry and
shall promptly provide to Parent a copy of all written materials, if any, setting forth such
amendments.
(c) Superior Offers. Notwithstanding anything to the contrary contained in
Section 4.4, in the event that the Company or any of its subsidiaries receives a bona fide
written Acquisition Proposal from a third party that is not solicited or otherwise procured in
violation of Section 4.4(a) that the Special Committee has in good faith concluded
(following the receipt of the advice of its outside legal counsel and its financial advisor) is, or
is reasonably likely to lead to, a Superior Offer (as defined in Section 4.4(h)(ii)), it
may then take the following actions (but only if and to the extent that the Special Committee
concludes in good faith, after receipt of advice of its outside legal counsel and financial
adviser, that failing to take such actions is reasonably likely to be a violation of directors’
fiduciary duties to the Company’s stockholders under applicable Legal Requirements):
(i) Furnish nonpublic information to the third party making such Acquisition Proposal,
provided that (A) it receives from the third party an executed confidentiality and standstill
agreement, the terms of which are at least as restrictive as the terms contained in the
Confidentiality Agreement; and (B) contemporaneously with furnishing any such nonpublic information
to such third party, the Company furnishes such nonpublic information to Parent (to the extent such
nonpublic information has not been previously so furnished); and
-22-
(ii) Engage in negotiations and discussions with the third party with respect to the
Acquisition Proposal.
(d) Change of Recommendation in Connection with a Superior Offer. In response to
receipt of a Superior Offer, the Board (upon recommendation of the Special Committee) and/or the
Special Committee may change, withhold, withdraw, amend or modify its recommendation in favor of
the Agreement and the Merger, and, in the case of a tender or exchange offer made directly to its
stockholders, may recommend that its stockholders accept the tender or exchange offer (any of the
foregoing actions, whether by the Board (upon recommendation of the Special Committee) or the
Special Committee, a “Change of Recommendation”), if all of the following conditions in clauses
(i) through (iii) are met and the Board (upon recommendation by the Special Committee) or the
Special Committee has concluded in good faith, after receipt of advice of its outside legal counsel
and financial adviser, that failing to make such Change of Recommendation is reasonably likely to
be a violation of directors’ fiduciary duties to the Company’s stockholders under applicable Legal
Requirements:
(i) A Superior Offer with respect to the Company has been made and has not been withdrawn;
(ii) The Stockholders’ Meeting has not occurred; and
(iii) The Company shall have (A) provided to Parent five business days prior written notice
which shall state expressly (1) that the Company has received a Superior Offer, (2) the material
terms and conditions of the Superior Offer and the identity of the person or group making the
Superior Offer, and (3) that the Board or the Special Committee, as the case may be, intends to
effect a Change of Recommendation and the manner in which it intends to do so, (B) provided to
Parent a copy of the relevant proposed transaction agreements and (C) during such five business day
period, engaged in good faith negotiations to amend this Agreement in a manner as would enable the
Company to proceed with the Board’s recommendation to the Company’s stockholders in favor of the
Company Stockholder Approval with respect to this Agreement, as it may be amended (and the Company shall make the Chairman of its Special Committee and its
senior executives available for discussions with Parent).
-23-
(e) Change of Recommendation Not in Connection with a Superior Offer. If the Board
(upon recommendation by the Special Committee) or the Special Committee, in each case not in
connection with receipt of a Superior Offer or an Acquisition Proposal, has concluded in good
faith, after receipt of advice of its outside legal counsel and financial adviser, that failing to
make such Change of Recommendation is reasonably likely to be a violation of the directors’
fiduciary duties to the Company’s stockholders under applicable Legal Requirements, the Board
and/or the Special Committee, as the case may be, may make a Change of Recommendation.
(f) Continuing Obligation to Call, Hold and Convene Stockholders’ Meeting; No Other
Vote. Notwithstanding anything to the contrary contained in this Agreement, the obligation of
the Company to call, give notice of, convene and hold the Stockholders’ Meeting shall not be
limited or otherwise affected by the commencement, disclosure, announcement or submission to it of
any Acquisition Proposal with respect to it, or by any Change of Recommendation. The Company shall
not submit to the vote of its stockholders any Acquisition Proposal, or propose to do so.
(g) Compliance with Tender Offer Rules. Nothing contained in this Agreement shall
prohibit the Board from taking and disclosing to its stockholders a position contemplated by Rules
14d-9 and 14e-2(a) promulgated under the Exchange Act; provided that the content of any such
disclosure shall be governed by the terms of this Agreement. Without limiting the foregoing
proviso, the Company shall not effect a Change of Recommendation unless specifically permitted
pursuant to the terms of Section 4.4(d).
(h) Certain Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:
(i) “Acquisition Proposal” shall mean any offer or proposal (whether written, oral or
otherwise), relating to any transaction or series of related transactions involving: (A) any
purchase or acquisition by any person or “group” (as defined under Section 13(d) of the Exchange
Act and the rules and regulations thereunder) of more than a ten percent (10%) interest in the
total outstanding voting securities of the Company or any tender offer or exchange
offer that if consummated would result in any person or group beneficially owning ten percent
(10%) or more of the total outstanding voting securities of the
-24-
Company or any merger,
consolidation, business combination or similar transaction involving the Company, (B) any sale,
lease (other than in the ordinary course of business), exchange, transfer, license (other than in
the ordinary course of business), acquisition or disposition of more than ten percent (10%) of the
assets of the Company (including its subsidiaries taken as a whole), or (C) any liquidation or
dissolution of the Company; and
(ii) “Superior Offer” means a bona fide written offer that is not solicited or otherwise
procured in violation of Section 4.4(a) that is made by a third party to acquire, directly
or indirectly, pursuant to a tender offer, exchange offer, merger, consolidation or other business
combination, all or substantially all of the assets of the Company or a majority of the total
outstanding voting securities of the Company and as a result of which, if adopted and approved, the
stockholders of the Company immediately preceding such transaction would hold less than fifty
percent (50%) of the equity interests in the surviving or resulting entity of such transaction or
any direct or indirect parent or subsidiary thereof, on terms that the Board has in good faith
concluded (following the receipt of advice of its outside legal counsel and its financial adviser),
taking into account, among other things, all legal, financial, regulatory and other aspects of the
offer and the person making the offer, to be more favorable, from a financial point of view, to the
Company’s stockholders (in their capacities as stockholders) than the terms of the Merger (as they
may be amended in accordance with Section 4.4(d)(iii)(D)) and is reasonably capable of
being consummated if adopted and approved and for which financing, to the extent required, is then
fully committed or reasonably determined by the Special Committee to be available to consummate
such a transaction.
(i) Without limiting the foregoing, it is understood that any violation of the restrictions
set forth above by any officer, director, agent, representative or affiliate of the Company shall
be deemed to be a breach of this Agreement by the Company.
4.5 Public Disclosure.
(a) The initial press release with respect to the execution of this Agreement shall be a joint
press release to be reasonably agreed upon by Parent and the Company. Thereafter, neither Parent
nor the Company shall issue or cause the publication of any press release or other public
announcement (to the extent
-25-
not previously issued or made in accordance with this Agreement) with
respect to the Merger, this Agreement or the other Transactions without consulting in advance with
the other party to the extent reasonably practicable; provided that the Company or the Board (or
any committee thereof) may issue any press release or other public announcement pursuant to and
consistent with Sections 4.4(d) and (e) without consulting with Parent.
(b) The Company shall consult with Parent before issuing any press release or otherwise making
any public statement with respect to the Company’s earnings or results of operations, and shall not
issue any such press release or make any such public statement prior to such consultation.
4.6 Reasonable Efforts. Upon the terms and subject to the conditions set forth in
this Agreement, each of the parties agrees to use all commercially reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Transactions, including using all
reasonable efforts to accomplish the following: (i) the taking of all reasonable acts necessary to
cause the conditions precedent set forth in Article V to be satisfied, (ii) the obtaining
of all necessary actions or non-actions, waivers, consents, approvals, orders and authorizations
from Governmental Entities and the making of all necessary registrations, declarations and filings
(including registrations, declarations and filings with Governmental Entities, if any) and the
taking of all reasonable steps as may be necessary to avoid any suit, claim, action, investigation
or proceeding by any Governmental Entity, (iii) the obtaining of all consents, approvals or waivers
from third parties required as a result of the Transactions, (iv) the defending of any suits,
claims, actions, investigations or proceedings, whether judicial or administrative, challenging
this Agreement or the consummation of the Transactions, including seeking to have any stay or
temporary restraining order entered by any Governmental Entity vacated or reversed, and (v) the
execution or delivery of any additional instruments reasonably necessary to consummate the
Transactions, and to fully carry out the purposes of, this Agreement. In connection with and
without limiting the foregoing, subject to the fiduciary duties of its Board, the Company and its
Board shall, if any state takeover statute or similar statute or regulation is or becomes
applicable to the Transactions or this Agreement, use all reasonable efforts to ensure that the
Transactions may be consummated as promptly as practicable on
-26-
the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on the Transactions
and this Agreement.
4.7 Takeover Statutes. If any “fair price”, “moratorium”, “control share acquisition”
or other form of anti-takeover statute or regulation shall become applicable to the Transactions,
the Company and the members of the Board shall grant such approvals and take such actions as are
reasonably necessary so that the Transactions may be consummated as promptly as practicable on the
terms contemplated hereby and otherwise act to eliminate or minimize the effects of such statute or
regulation on the Transactions.
4.8 FIRPTA Compliance. On the Closing Date, the Company shall deliver to Parent a
properly executed statement prepared in accordance with the certification requirements set forth in
Treasury Regulations Section 1.1445-2(c)(3) certifying that the Company Common Stock are not U.S.
real property interests.
4.9 Company Stock Option Plan; Company ESPP.
(a) As soon as practicable after the Effective Time, Parent shall deliver to the participants
in the 2000 Stock Incentive Plan of the Company (the “Company Stock Option Plan”) an appropriate
notice setting forth such participants’ rights pursuant to the Assumed Options (or replacement
options permitted by Section 1.6(d)(ii)), as provided in Section 1.6(d).
(b) Parent shall take all corporate action reasonably necessary to reserve for issuance a
sufficient number of shares of Parent Common Stock for delivery upon exercise of the Assumed
Options (or replacement options permitted
by Section 1.6(d)(ii)) and to file all documents required to be filed to cause the
shares of Parent Common Stock issuable upon exercise of the Assumed Options or replacement options
to be listed on NASDAQ. As soon as reasonably practicable after the Effective Time or, if sooner,
the termination of this Agreement in accordance with its terms, Parent shall file a registration
statement on Form S-8 (or any successor form) or another appropriate form with respect to the
shares of Parent Common Stock subject to such options and shall use its 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 remain outstanding.
-27-
(c) Prior to the Effective Time, the Company shall, in accordance with the requirements of the
Company’s Employee Stock Purchase Plan (the “Company ESPP”), take all actions that are necessary to
(i) cause the ending date of the then current Purchase Period under the Company ESPP (as such term
is defined therein) to occur on or before the last trading day prior to the Effective Time (the
“Final Purchase Date”), (ii) cause all then existing offerings under the Company ESPP to terminate
immediately following the purchase on the Final Purchase Date, (iii) suspend all future offerings
that would otherwise commence under the Company ESPP following the Final Purchase Date and (iv)
cease all further payroll deductions under the Company ESPP effective as of the Final Purchase
Date. On the Final Purchase Date, the Company shall apply the funds credited as of such date under
the Company ESPP within each participant’s payroll withholding account to the purchase of whole
shares of Company Common Stock in accordance with the terms of the Company ESPP.
(d) The Company shall take all such action, including the adoption of any necessary
resolutions by the Board or any appropriate committee thereof, necessary or appropriate to effect
the transactions contemplated by this Section 4.9.
4.10 Indemnification of Directors and Officers.
(a) All rights to indemnification, exculpation and advancement of expenses existing in favor
of those persons who are or were directors and officers of the Company and its subsidiaries (the
“Indemnified Persons”) for acts and omissions occurring prior to the Effective Time, as provided in the Company Charter
Documents (as in effect as of the date of this Agreement) and as provided in any indemnification
agreements between the Company and said Indemnified Persons (as in effect as of the date of this
Agreement), shall survive the Merger and shall be observed and fully complied with by the Surviving
Corporation, and Parent shall take all action necessary to cause the Surviving Corporation to
observe such rights, to the fullest extent permitted by Delaware Law and Parent hereby guarantees
the payment obligations, if any, of the Surviving Corporation to the Indemnified Persons pursuant
to such rights, subject to applicable Legal Requirements.
(b) The obligations of Parent and the Surviving Corporation under this Section 4.10
shall not be terminated or modified in such a manner as to
-28-
adversely affect any Indemnified Person
to whom this Section 4.10 applies without the consent of such affected Indemnified Person
(it being expressly agreed that the Indemnified Person to whom this Section 4.10 applies
shall be third party beneficiaries of this Section 4.10).
(c) Parent and the Surviving Corporation shall not amend, repeal or otherwise modify the
certificate of incorporation and bylaws of the Surviving Corporation in any manner that would
adversely affect the rights thereunder of the Indemnified Persons. If Parent or the Surviving
Corporation or any of their respective successors or assigns (i) shall consolidate with or merge
into any other corporation or entity and shall not be the continuing or surviving corporation or
entity of such consolidation or merger or (ii) shall transfer all or substantially all of its
properties and assets to any individual, corporation or other entity, then, and in each such case,
proper provisions shall be made so that the successors and assigns of Parent or the Surviving
Corporation shall assume all of the obligations of Parent and the Surviving Corporation set forth
in this Section 4.10.
(d) Prior to the Effective Time, the Company shall purchase an extended reporting period
endorsement or “tail” policy under the Company’s existing directors’ and officers’ liability
insurance policy to provide those persons who are currently covered by such policy with liability
insurance coverage in an amount and scope at least as favorable to such persons as the Company’s
existing coverage for six (6) years following the Effective Time; provided, however, that if such
“tail” policy is not available at a cost not greater than two hundred percent
(200%) of the annual premiums paid as of the date hereof under the Company’s existing coverage
(the “Insurance Cap”), then the Company shall obtain as much comparable insurance as can reasonably
be obtained in its good faith judgment at a cost up to but not exceeding the Insurance Cap.
4.11 Board of Directors.
(a) Prior to or simultaneously with the execution and delivery of this Agreement: (i) the
Board shall have adopted the amendment to the Company’s bylaws attached hereto as Exhibit A
(the “Bylaw Amendment”); (ii) the Board shall have fixed the number of directors on the Board at
nine (9); (iii) ▇▇. ▇▇▇▇ ▇. ▇▇▇▇ shall resign from the Board effective immediately; and (iv) the
Company shall take all action necessary in accordance with Delaware Law and
-29-
the Company Charter
Documents to appoint as directors ▇▇▇▇▇▇ ▇. ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and
▇▇▇▇▇ ▇. ▇▇▇▇.
(b) Parent acknowledges and agrees that following the appointment of Parent’s designees to the
Board pursuant to Section 4.11(a), and until the termination of this Section 4.11
pursuant to Section 4.11(e), the approval of a majority of the Special Committee Directors
(as defined below) shall be required to authorize: (i) any amendment to or termination of this
Agreement by the Company; (ii) any extension of time for the performance of any of the obligations
or other acts of Parent or Merger Sub; (iii) any waiver of compliance with any covenant of Parent
or Merger Sub or any condition to any obligation of the Company or any waiver of any right of the
Company under this Agreement; (iv) any Change of Recommendation (as defined in Section
4.4(d)) by the Board; (v) any other consent or action by the Board with respect to this
Agreement, or any of the Transactions; and (vi) the filling of any vacancies on the Special
Committee. “Special Committee Directors” shall mean Hobart Birmingham, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇.
(c) Following the appointment of Parent’s designees to the Board pursuant to Section
4.11(a), until the termination of this Section 4.11 pursuant to Section
4.11(e), Parent agrees not to take any action in its capacity as stockholder of the Company
that is reasonably likely to materially and adversely affect the supermajority voting requirements
of the Board as set forth in Section 4.11(b) and in the Bylaw Amendment, and the delegation of authority to the Special
Committee pursuant to the Bylaw Amendment or otherwise.
(d) Following the appointment of Parent’s designees to the Board pursuant to Section
4.11(a), until the termination of this Section 4.11 pursuant to Section
4.11(e), Parent agrees (i) not to vote in its capacity as stockholder of the Company to remove
the members of the Special Committee from the Board or the Special Committee, or amend the
Company’s bylaws and (ii) at any election of directors to vote to reelect the members of the
Special Committee; provided, however, that nothing in this Section 4.11, or this Agreement,
or the Bylaw Amendment shall be deemed or construed as limiting or preventing Parent from voting
its shares of Company Common Stock at the Stockholders’ Meeting in favor of the election of persons
designated by it to be directors of the Company, or the Merger and this Agreement.
-30-
(e) The provisions of this Section 4.11 shall terminate and be of no further force and
effect immediately upon the earlier of (i) any termination of this Agreement in accordance with its
terms and (ii) the Effective Time.
ARTICLE V
CONDITIONS TO THE MERGER
5.1 Conditions to Obligations of Each Party to Effect the Merger. The respective
obligations of each party to this Agreement to effect the Merger shall be subject to the
satisfaction at or prior to the Closing Date of each of the following conditions, any and all of
which may be waived in whole or in part by Parent, Merger Sub and the Company, as the case may be,
to the extent permitted by applicable Legal Requirements:
(a) Company Stockholder Approval. The Company Stockholder Approval shall have been
obtained.
(b) No Order. No Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) which is in effect and which has the effect of
making the Merger illegal or otherwise prohibiting consummation of the Merger; provided, however,
that the right to assert this condition shall not be available to any party whose breach of
any provision of this Agreement results in the imposition of any such statute, rule, regulation,
executive order, decree, injunction or other order or the failure of any the foregoing to be
resisted, resolved or lifted, as applicable.
(c) Governmental Approvals. All applicable clearances of Governmental Entities under
any applicable material foreign or other Legal Requirements (including other antitrust laws) in
connection with this Agreement and the transactions contemplated hereby (including the Merger)
(other than the filing of the Certificate of Merger) shall have been obtained, and if the SEC shall
have reviewed and/or provided comments to the Proxy Statement, such comments and any related issues
or matters with the SEC shall have been resolved.
5.2 Additional Conditions to Obligations of the Company. The obligation of the
Company to consummate and effect the Merger shall be subject
-31-
to the satisfaction at or prior to the
Closing Date of each of the following conditions, any of which may be waived, in writing,
exclusively by the Company:
(a) Representations and Warranties. The representations and warranties of Parent
contained in this Agreement shall be true and correct at and as of the Closing Date as though made
at and as of the Closing Date, except for such failures to be true and correct at and as of the
Closing Date as would not have, in each case or in the aggregate, a Material Adverse Effect on
Parent (it being understood and agreed that, all materiality qualifications and other
qualifications based on the word “material”, “Material Adverse Effect” or similar phrases contained
in such representations and warranties shall be disregarded). The Company shall have received a
certificate to such effect signed on behalf of Parent by the Chief Executive Officer and the Chief
Financial Officer of Parent.
(b) Agreements and Covenants. Parent and Merger Sub shall have performed or complied
in all material respects with all agreements and covenants required by this Agreement to be
performed or complied with by them on or prior to the Closing Date, and the Company shall have
received a certificate to such effect signed on behalf of Parent by an authorized officer of
Parent.
5.3 Additional Conditions to the Obligations of Parent and Merger Sub. The obligations of Parent and Merger Sub to consummate and effect the Merger shall be
subject to the satisfaction at or prior to the Closing Date of each of the following conditions,
any of which may be waived, in writing, exclusively by Parent:
(a) Representations and Warranties. The representations and warranties of the Company
contained in this Agreement shall be true and correct at and as of the Closing Date as though made
at and as of the Closing Date, except for such failures to be true and correct as would not have,
in each case or in the aggregate, a Material Adverse Effect on the Company as of the Closing Date
(it being understood and agreed that, all materiality qualifications and other qualifications based
on the word “material”, “Material Adverse Effect” or similar phrases contained in such
representations and warranties shall be disregarded and any purported update of or modification to
the Company Disclosure Letter made after the execution of this Agreement shall be disregarded).
Parent shall have received a certificate to such effect signed on behalf of the Company by the
Chief Executive Officer and the Chief Financial Officer of the Company.
-32-
(b) Agreements and Covenants. The Company shall have performed or complied in all
material respects with all agreements and covenants required by this Agreement to be performed or
complied with by it at or prior to the Closing Date, and Parent shall have received a certificate
to such effect signed on behalf of the Company by the Chief Executive Officer and Chief Financial
Officer of the Company.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
6.1 Termination. This Agreement may be terminated at any time prior to the Effective
Time, and the Merger may be abandoned, notwithstanding any requisite adoption of this Agreement by
the stockholders of the Company:
(a) by mutual written consent of the Company and Parent;
(b) by either the Company or Parent if the Effective Time shall not have occurred on or before
October 31, 2007 for any reason; provided, however, that the right to terminate this Agreement under this Section 6.1(b) shall
not be available to any party whose action or failure to act has been a principal cause of or
resulted in the failure of the Effective Time to occur on or before such date and such action or
failure to act constitutes a material breach of this Agreement;
(c) by either the Company or Parent if any Legal Requirement makes consummation of the Merger
illegal or if a Governmental Entity of competent jurisdiction shall have issued an order, decree or
ruling or taken any other action, in any case having the effect of permanently restraining,
enjoining or otherwise prohibiting the Merger, which order, decree, ruling or other action is final
and nonappealable;
(d) by either the Company or Parent if the Company Stockholder Approval shall not have been
obtained by reason of the failure to obtain the required vote at the Stockholders’ Meeting or at
any adjournment or postponement thereof; provided, however, that the right to terminate this
Agreement under this Section 6.1(d) shall not be available to any party where the failure
to obtain the Company Stockholder Approval shall have been caused by
-33-
the action or failure to act
of such party and such action or failure to act constitutes a material breach by such party of this
Agreement;
(e) by the Company, upon a breach of any representation, warranty, covenant or agreement on
the part of Parent set forth in this Agreement, or if any representation or warranty of Parent
shall have become untrue, in either case such that the conditions set forth in Section
5.2(a) or Section 5.2(b) would not be satisfied as of the time of such breach or as of
the time such representation or warranty shall have become untrue; provided, however, that if such
inaccuracy in Parent’s representations and warranties or breach by Parent is curable by Parent
through the exercise of all reasonable efforts, then the Company may not terminate this Agreement
under this Section 6.1(e) for 30 days after delivery of written notice from the Company to
Parent of such breach or inaccuracy, provided Parent continues to exercise all reasonable efforts
to cure such breach or inaccuracy (it being understood that the Company may not terminate this
Agreement pursuant to this Section 6.1(e) if it shall have materially breached this
Agreement or if such breach or inaccuracy by Parent is cured during such 30-day period);
(f) by Parent, upon a breach of any representation, warranty, covenant or agreement on the
part of the Company set forth in this Agreement, or if any representation or warranty of the
Company shall have become untrue, in either case such that the conditions set forth in Section
5.3(a) or Section 5.3(b) would not be satisfied as of the time of such breach or as of
the time such representation or warranty shall have become untrue; provided, however, that if such
inaccuracy in the Company’s representations and warranties or breach by the Company is curable by
the Company through the exercise of all reasonable efforts, then Parent may not terminate this
Agreement under this Section 6.1(f) for 30 days after delivery of written notice from
Parent to the Company of such breach or inaccuracy, provided the Company continues to exercise all
reasonable efforts to cure such breach or inaccuracy (it being understood that Parent may not
terminate this Agreement pursuant to this Section 6.1(f) if such breach or inaccuracy by
the Company is cured during such 30-day period); or
(g) by Parent if a Triggering Event (as defined below) shall have occurred. For the purposes
of this Agreement, a “Triggering Event” shall be deemed to have occurred if: (i) there is a Change
of Recommendation; (ii) the Company shall have failed to include in the Proxy Statement the
unanimous
-34-
recommendation of the Board that holders of Company Common Stock vote in favor of the
adoption of this Agreement; (iii) the Special Committee shall have approved or recommended any
Acquisition Proposal; (iv) a tender or exchange offer relating to securities of the Company shall
have been commenced by a person unaffiliated with Parent and the Company shall not have sent to its
securityholders pursuant to Rule 14e-2 promulgated under the Exchange Act, within ten (10) business
days after such tender or exchange offer is first published sent or given, a statement disclosing
that the Special Committee recommends rejection of such tender or exchange offer, or the Special
Committee shall subsequently amend or change its recommendation in a manner adverse to Parent; or
(v) the Company shall have willfully and materially breached Section 4.4; provided,
however, that in the event any such action by the Company (not just the Special Committee) that
would otherwise constitute a Triggering Event shall not be considered a Triggering Event if such
action was approved by any of the directors of the Board designated by Parent.
6.2 Notice of Termination; Effect of Termination. Any termination of this Agreement under and in accordance with Section 6.1 will be
effective immediately upon (subject to, in the case of Section 6.1(e) or Section
6.1(f), if the proviso therein is applicable, prior delivery of notice of the breach or
inaccuracy 30 days prior to notice of termination) the delivery of written notice of the
terminating party to the other parties hereto. In the event of the termination of this Agreement
as provided in Section 6.1, this Agreement shall be of no further force or effect and there
shall be no liability to any party hereunder in connection with the Agreement or the Transactions,
except (i) as set forth in Section 4.3(a), Section 4.10 (other than Parent’s
guarantee of the obligations of the Company contained therein), this Section 6.2,
Section 6.3 and Article VII, each of which shall survive the termination of this
Agreement, and (ii) nothing herein shall relieve any party from liability for any intentional or
willful breach of, or any intentional misrepresentation made in this Agreement. No termination of
this Agreement shall affect the obligations of the parties contained in the Confidentiality
Agreement, all of which obligations shall survive termination of this Agreement in accordance with
their terms.
6.3 Fees and Expenses. All fees and expenses incurred in connection with this
Agreement and the Transactions shall be paid by the party incurring such expenses whether or not
the Merger is consummated.
-35-
6.4 Amendment. Subject to applicable law, this Agreement may be amended by the
parties hereto at any time by execution of an instrument in writing signed on behalf of each of
Parent and the Company.
6.5 Extension; Waiver. At any time prior to the Effective Time, the Company, on the
one hand, or Parent and Merger Sub, on the other hand, may, to the extent legally allowed, (i)
extend the time for the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties made to such party
contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any
of the agreements or conditions for the benefit of such party contained herein; provided that any
condition set forth in Section 5.1(a) may not be waived without the express
written consent of Parent and the Company. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. Delay in exercising any right under this Agreement shall not constitute a
waiver of such right.
ARTICLE VII
GENERAL PROVISIONS
7.1 Non-Survival of Representations and Warranties. The representations and
warranties of the Company, Parent and Merger Sub contained in this Agreement and the other
agreements, certificates and documents contemplated hereby shall terminate and be of no further
force or effect at, and as of, the Effective Time, and only the covenants and agreements of the
Company in this Agreement and the other agreements, certificates and documents contemplated hereby
that by their terms survive the Effective Time shall survive the Effective Time.
7.2 Notices. All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial delivery service, or sent via
telecopy (receipt confirmed) to the parties at the following addresses or telecopy numbers (or at
such other address or telecopy numbers for a party as shall be specified by like notice):
(a) if to Parent or Merger Sub, to:
Oplink Communications, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Oplink Communications, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Professional Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Professional Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Company, to:
Optical Communication Products, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Optical Communication Products, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
7.3 Interpretation.
(a) When a reference is made in this Agreement to Exhibits, such reference shall be to an
Exhibit to this Agreement unless otherwise indicated. When a reference is made in this Agreement
to Articles or Sections,
-37-
such reference shall be to an Article or Section, respectively, of this
Agreement unless otherwise indicated. Unless otherwise indicated the words “include,” “includes”
and “including” when used herein shall be deemed in each case to be followed by the words “without
limitation.” As used herein, an item shall be deemed to have been “furnished” to Parent if such
item has been sent to Parent or its representatives, provided to Parent or its representatives or
made available to Parent or its representatives for review, in a data room or otherwise. 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. When reference is made
herein to “the business of” an entity, such reference shall be deemed to include the business of
all direct and indirect subsidiaries of such entity. Reference to the subsidiaries of an entity
shall be deemed to include all direct and indirect subsidiaries of such entity. Where a reference
is made to a law, such reference is to such law, as amended, and all rules and regulations
promulgated thereunder, unless the context requires otherwise.
(b) For purposes of this Agreement, the term “Material Adverse Effect” when used in connection
with any person, means any change, event, violation, inaccuracy, circumstance or effect (any such
item, an “Effect”), individually or when taken together with all other Effects, that is or is
reasonably likely to (i) be materially adverse to the business, assets (including intangible
assets), liabilities, capitalization, financial condition or results of operations of such person,
taken as a whole with its subsidiaries, other than any Effect primarily resulting from (A) changes
affecting the United States or world economy generally which changes do not disproportionately
affect such person taken as a whole with its subsidiaries when compared to other companies in the
same industry, (B) changes affecting the industry in which such person and its subsidiaries operate
generally which changes do not disproportionately affect such person taken as a whole with its
subsidiaries, (C) a change in such person’s stock price or the trading volume in such stock, as
applicable (provided that this clause (C) shall not exclude any underlying Effect which may have
caused such change in stock price or trading volume), (D) acts of terrorism or war which changes do
not disproportionately affect such person taken as a whole with its subsidiaries when compared to
other companies in the same industry, (E) resulting from the announcement of this Agreement and the
transactions contemplated hereby (including suspension or delay of customer orders, the threat of
suspension of future customer orders, a slowdown in the rate of new orders
-38-
from existing channels
or the suspension of supplier relationships), (F) a failure to meet internal or published revenue
or earnings predictions for such person for any period ending (or for which revenues or earnings
are released) on or after the date of this Agreement (provided that this clause (F) shall not
exclude the revenues or earnings of such person itself, as applicable, or any Effect which may have
affected such person’s revenues or earnings, as applicable), or (G) changes in applicable laws or
in United States generally accepted accounting principles first publicly disclosed after the date hereof; or (ii) materially and adversely affect the
necessary corporate power and authority of such entity to consummate the Transactions or Merger in
accordance with the terms of this Agreement and applicable Legal Requirements.
(c) For purposes of this Agreement, the term “person” shall mean any individual, corporation
(including any non-profit corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization, entity or Governmental
Entity.
(d) For purposes of this Agreement, the term “business day” shall mean each day that is not a
Saturday, Sunday or other day on which banking institutions located in San Francisco, California
are authorized or obligated by law or executive order to close, and the term “day” when not
immediately preceded by the word “business” shall mean a calendar day.
(e) For purposes of this Agreement, the terms “subsidiary” and “subsidiaries” with respect to
any party shall mean any corporation, partnership, association, trust or other form of legal entity
of which (i) more than 50% of the outstanding voting securities are directly or indirectly owned by
such party, or (ii) such party or any subsidiary of such party is a general partner (excluding
partnerships in which such party or any subsidiary of such party does not have a majority of the
voting interest of such partnership).
(f) Unless the context of this Agreement otherwise requires: (i) words of any gender include
each other gender; (ii) words using the singular or plural number also include the plural or
singular number, respectively; and (iii) the terms “hereof,” “herein,” “hereunder” and derivative
or similar words refer to this entire Agreement.
-39-
7.4 Counterparts. This Agreement may be executed in two or more counterparts, all of
which shall be considered one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other party, it being
understood that all parties need not sign the same counterpart.
7.5 Entire Agreement; Third Party Beneficiaries. This Agreement and the documents and
instruments and other agreements among the parties hereto as contemplated by or referred to herein,
(a) constitute the entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, it being understood that the Confidentiality Agreement shall
continue in full force and effect and shall survive any termination of this Agreement as modified
by Section 4.4(a); and (b) are not intended to confer, and shall not be construed as
conferring, upon any other person any rights or remedies hereunder provided that (A) the
Indemnified Persons shall be third party beneficiaries of Section 4.10 and (B) the Special
Committee Directors shall be third-party beneficiaries of Section 4.11 until the earlier of
the termination of this Agreement in accordance with its terms and the Effective Time.
Notwithstanding the foregoing, no rights of any third party beneficiaries shall interfere with,
limit or constrain in any manner the rights of any party hereto to terminate or amend this
Agreement in accordance with its terms.
7.6 Severability. In the event that any provision of this Agreement, or the
application thereof, becomes or is declared by a court of competent jurisdiction to be illegal,
void or unenforceable, the remainder of this Agreement will continue in full force and effect and
the application of such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable provision that will
achieve, to the extent possible, the economic, business and other purposes of such void or
unenforceable provision.
7.7 Other Remedies; Specific Performance. Except as otherwise provided herein, any
and all remedies herein expressly conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the
exercise by a party of any
-40-
one remedy will not preclude the exercise of any other remedy, and
nothing in this Agreement shall be deemed a waiver by any party of any right to specific
performance or injunctive relief. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or
injunctions without the necessity of proving the inadequacy of money damages as a remedy and
without the necessity of posting any bond or other security in order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
7.8 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, regardless of the laws that might otherwise govern under
applicable principles of conflicts of law thereof. The parties hereto hereby irrevocably submit to
the exclusive jurisdiction of the Court of Chancery in the State of Delaware (and any appellate
courts therefrom), or if such jurisdiction shall be unavailable, any court in the State of Delaware
and the Federal courts of the United States of America, each located within New Castle County in
the State of Delaware, solely in respect of the interpretation, application and enforcement of the
provisions of this Agreement and of the documents referred to in this Agreement, and in respect of
the transactions contemplated hereby and thereby, and hereby waive, and agree not to assert, as a
defense in any action, suit or proceeding for the interpretation or enforcement hereof or thereof,
that it is not subject thereto or that such action, suit or proceeding may not be brought or is not
maintainable in said courts or that the venue thereof may not be appropriate or that this Agreement
or any such document may not be enforced in or by such courts, and the parties hereto irrevocably
agree that all claims with respect to such action or proceeding shall be heard and determined in
the Court of Chancery in the State of Delaware or, if jurisdiction is not available in the Court of
Chancery, any other Delaware state court or Federal court, each located in New Castle County,
Delaware. The parties hereby consent to and grant any such court jurisdiction over the person of
such parties and over the subject matter of such dispute and agree that mailing of process or other
papers in connection with any such action or proceeding in the manner provided in Section
7.2 or in such other manner as may be permitted by applicable law, shall be valid and
sufficient service thereof. With respect to any
-41-
particular action, suit or proceeding, venue shall
lie solely in New Castle County, Delaware.
7.9 Rules of Construction. The parties hereto agree that they have been represented
by counsel during the negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing that ambiguities in
an agreement or other document will be construed against the party drafting such agreement or
document.
7.10 Assignment. No party may assign or delegate, in whole or in part, by operation
of law or otherwise, either this Agreement or any of the rights, interests, or obligations
hereunder without the prior written approval of the other parties, and any such assignment without
such prior written consent shall be null and void, except that Parent may assign its rights (but
not its obligations) under this Agreement to any direct or indirect wholly-owned subsidiary of
Parent without the prior written consent of the Company. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
7.11 Waiver of Jury Trial. EACH OF PARENT, COMPANY AND MERGER SUB HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT,
COMPANY OR MERGER SUB IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
[Remainder of Page Intentionally Left Blank]
-42-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of Merger to be
executed by their duly authorized respective officers as of the date first written above.
| OPLINK COMMUNICATIONS, INC. |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇ | |||
| Title: | President and Chief Executive Officer | |||
| OPLINK ACQUISITION CORPORATION |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇ | |||
| Title: | President and Chief Executive Officer | |||
| OPTICAL COMMUNICATION PRODUCTS, INC. |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇▇ | |||
| Title: | President and Chief Executive Officer | |||
SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER
EXHIBIT A
Bylaw Amendment
AMENDMENT NUMBER TWO TO
BYLAWS
OF
OPTICAL COMMUNICATION PRODUCTS, INC.
a Delaware corporation
This is to certify that I am the duly elected, qualified and acting Secretary of Optical
Communication Products, Inc., a Delaware corporation (the “Company”), and that, by action at a
meeting of the Company’s Board of Directors held on June 19, 2007, the Bylaws of the Company were
amended and restated to add Article X as follows:
ARTICLE X
MERGER AGREEMENT WITH OPLINK COMMUNICATIONS
MERGER AGREEMENT WITH OPLINK COMMUNICATIONS
Section 1. Merger Agreement. Reference is made to that certain Agreement and Plan of
Merger, dated as of June 19, 2007 (the “Agreement”) by and among the corporation, Oplink
Communications, Inc., a Delaware corporation (“Parent”) and Oplink Acquisition Corporation, a
Delaware corporation and wholly-owned subsidiary of Parent (“Merger Sub”). Capitalized terms used
and not otherwise defined in this Article X shall have their respective meanings as set forth in
the Agreement. Reference is also made to the special committee of disinterested directors of the
corporation (the “Special Committee”) comprised of Hobart Birmingham, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇
▇▇▇▇▇▇ (the “Special Committee Directors”).
Section 2. Special Committee Delegation. From the effective date of this Article X
until the Effective Time, the power of the Board of Directors to take the following actions is, to
the fullest extent permitted by law, delegated to the Special Committee in addition to all powers
previously delegated: (i) authorize the taking of any action on behalf of the corporation in connection
with the Agreement, including, without limitation, action (A) to amend, terminate or enforce the
Agreement; (B) to authorize any extension of time for the performance of any of the obligations or
other acts of Parent or Merger Sub; (C) to waive the compliance with any covenant by Parent or
Merger Sub or any condition to any obligation of the corporation or waive any right of the
corporation under the Agreement; and (D) to authorize a Change of Recommendation; (ii) approve and
pay all transaction expenses incurred by the corporation or the Special Committee in connection
with the Agreement and the transactions contemplated thereby; or (iii) to fill any vacancies on the
Special Committee.
Section 3. Supermajority Approval. Notwithstanding any other provision of these
Bylaws, from the effective date of this Article X until the Effective Time, the Board of Directors
of the corporation shall not, without the approval of at least eight directors: (i) authorize the
taking of any action on behalf of the corporation in connection with the Agreement, including, without
limitation, action (A) to amend, terminate or enforce the Agreement; (B) to authorize any extension
of time for the performance of any of the obligations or other acts of Parent or Merger Sub; (C) to
waive the compliance with any covenant by Parent or Merger Sub or any
condition to any obligation of the corporation or waive any right of the corporation under the
Agreement; (D) to authorize a Change of Recommendation; (ii) authorize any action inconsistent with
or in contravention of the Agreement, or any of the transactions contemplated thereby; (iii) change
or remove any of the current or future financial and legal advisors to the Special Committee or the
corporation or retain any new legal counsel for the corporation; (iv) change or remove any member
of corporation’s senior management team, including but not limited to the Chief Executive Officer,
the Chief Financial Officer, the Controller, ▇.▇. ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇
▇▇▇▇▇▇▇▇; (v) terminate or change the composition of, or terminate the existence of the following
committees of the Board of Directors: the Special Committee, the audit committee, the compensation
committee and the special stock option committee (provided that any action by the compensation
committee or the special stock option committee shall be subject to further approval by the Board
of Directors); (vi) amend, or propose to adopt amendments inconsistent or in contravention with,
the charter documents of any committee to the Board of Directors; (vii) change or remove the
corporation’s auditors; (viii) change the composition of the Special Committee or the number of
directors of the corporation (ix) amend or repeal this Article X of the Bylaws, (x) change the
date, time or place for the Stockholders’ Meeting or authorize or
approve any adjournment of such meeting, or (xi) create, authorize or otherwise empower any new
committee of the Board of Directors. The requirement of a supermajority vote for certain actions
is not intended to limit the power of the Special Committee to take those actions to the extent
that the power has been delegated to the Special Committee.
Section 4. Amendment. Notwithstanding Article IX or anything else in these Bylaws to
the contrary, neither Section 2 of Article III of these Bylaws nor this Article X may be repealed
or amended by stockholders without the approval of the holders of at 80% of the outstanding shares
of stock of the corporation.
Section 5. Termination. Notwithstanding Article IX or anything else in these Bylaws
to the contrary, the provisions of this Article X shall terminate and be of no further force and
effect upon the earliest to occur of (i) termination of the Agreement in accordance with its terms
and (ii) the Effective Time.
IN WITNESS WHEREOF, I have hereunto set my hand as of June 19, 2007.
| By: | /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
|
|||||
| ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||||||
| Senior Vice President, | ||||||
| Chief Financial Officer and Secretary | ||||||