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EXHIBIT A
AGREEMENT AND PLAN OF MERGER
AMONG
MEDUSA CORPORATION,
SOUTHDOWN, INC.
AND
BEDROCK MERGER CORP.,
MARCH 17, 1998
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TABLE OF CONTENTS
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ARTICLE I
THE MERGER
1.1 The Merger............................................
1.2 Closing...............................................
1.3 Effective Date........................................
1.4 Effect of the Merger..................................
1.5 Articles of Incorporation and Code of Regulations.....
1.6 Directors and Officers of Subcorp.....................
ARTICLE II
CONVERSION OF SECURITIES
2.1 Conversion of Capital Stock...........................
2.2 Exchange of Certificates..............................
2.3 Treatment of Stock Options............................
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
3.1 Organization and Standing.............................
3.2 Subsidiaries..........................................
3.3 Capitalization of Parent..............................
3.4 Authorization of Additional Common Stock..............
3.5 Corporate Power and Authority.........................
3.6 Conflicts, Consents and Approval......................
3.7 Brokerage and Finder's Fees...........................
3.8 Opinion of Financial Advisor..........................
3.9 Accounting Matters....................................
3.10 Parent SEC Documents..................................
3.11 Registration Statement................................
3.12 Board Meeting.........................................
3.13 Operation of Parent's Business........................
3.14 Company Stock Ownership...............................
3.15 Vote Required.........................................
3.16 Parent Rights Agreement...............................
3.17 No Material Adverse Change............................
3.18 Undisclosed Liabilities...............................
3.19 Antitakeover Statutes Not Applicable..................
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
4.1 Organization and Standing.............................
4.2 Subsidiaries..........................................
4.3 Capitalization of Company.............................
4.4 Corporate Power and Authority.........................
4.5 Conflicts, Consents and Approval......................
4.6 Brokerage and Finder's Fees...........................
4.7 Opinion of Financial Advisor..........................
4.8 Accounting Matters....................................
4.9 Employee Benefit Plans................................
4.10 Company SEC Documents.................................
4.11 Taxes.................................................
4.12 Registration Statement................................
4.13 Compliance with Law...................................
4.14 Litigation............................................
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4.15 No Material Adverse Change............................
4.16 Board Meeting.........................................
4.17 Undisclosed Liabilities...............................
4.18 Labor Relations.......................................
4.19 Operation of Company's Business.......................
4.20 Permits; Compliance...................................
4.21 Environmental Matters.................................
4.22 Company Stock Ownership...............................
4.23 Contracts.............................................
4.24 Vote Required.........................................
4.25 Company Rights Agreement..............................
4.26 Antitakeover Statutes Not Applicable..................
ARTICLE V
COVENANTS OF THE PARTIES
5.1 Mutual Covenants......................................
5.2 Covenants of Parent...................................
5.3 Covenants of Company..................................
ARTICLE VI
CONDITIONS
6.1 Mutual Conditions.....................................
6.2 Conditions to Obligations of Company..................
6.3 Conditions to Obligations of Parent and Subcorp.......
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination...........................................
7.2 Amendment.............................................
7.3 Extension; Waiver.....................................
7.4 Effect of Termination.................................
ARTICLE VIII
MISCELLANEOUS
8.1 Survival of Representations and Warranties............
8.2 Notices...............................................
8.3 Interpretation........................................
8.4 Counterparts..........................................
8.5 Entire Agreement......................................
8.6 Third Party Beneficiaries.............................
8.7 Governing Law.........................................
8.8 Jurisdiction..........................................
8.9 Waiver of Jury Trial..................................
8.10 Specific Performance..................................
8.11 Assignment............................................
8.12 Expenses and Fees.....................................
8.13 Severability..........................................
8.14 Definitions and Usage.................................
EXHIBIT INDEX
Exhibit A Form of Parent Affiliate Letter
Exhibit B Form of Company Affiliate Letter
Exhibit C Form of Letter Agreement and Irrevocable Proxy
Exhibit D Form of Incentive Plan Letter Agreement
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INDEX OF DEFINED TERMS
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Action......................................................
Affiliate...................................................
Agreement...................................................
Alternative Proposal........................................
Applicable Laws.............................................
Beneficial Ownership........................................
Beneficially Own............................................
Business Day................................................
Certificate of Merger.......................................
Certificates................................................
Change in Control...........................................
Class C Preferred Shares....................................
Closing.....................................................
Closing Date................................................
Code........................................................
Commission..................................................
Common Stock................................................
Common Stock Authorizations.................................
Common Stock Index..........................................
Company.....................................................
Company Affiliate...........................................
Company Articles and Code of Regulations....................
Company Common Shares.......................................
Company Competing Transaction...............................
Company Contract............................................
Company Dissenting Shares...................................
Company Material Adverse Effect.............................
Company Option..............................................
Company Plan................................................
Company Preferred Shares....................................
Company Rights..............................................
Company Rights Agreement....................................
Company SEC Documents.......................................
Company Shareholders........................................
Confidentiality Agreement...................................
Control.....................................................
Controlled Group Liability..................................
Effective Date..............................................
Employees...................................................
Environmental Laws..........................................
ERISA.......................................................
ERISA Affiliate.............................................
Exchange Act................................................
Exchange Agent..............................................
Exchange Ratio..............................................
Exchange Trust..............................................
Former Employees............................................
Fractional Shares...........................................
Governmental Authority......................................
Hazardous Materials.........................................
HSR Act.....................................................
Incentive Plan..............................................
Indemnified Liabilities.....................................
Indemnified Parties.........................................
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▇.▇. ▇▇▇▇▇▇.................................................
Joint Proxy Statement.......................................
Justice Department..........................................
Knowledge...................................................
▇▇▇▇▇▇ Brothers.............................................
Material Adverse Effect.....................................
Merger......................................................
Merger Consideration........................................
Multiemployer Plan..........................................
Multiple Employer Plan......................................
National Exchange...........................................
NYSE........................................................
Officer.....................................................
OGCL........................................................
Ohio Secretary of State.....................................
Parent......................................................
Parent Affiliate............................................
Parent Amendment............................................
Parent Articles and Bylaws..................................
Parent Exchange Option......................................
Parent Material Adverse Effect..............................
Parent Preferred Stock......................................
Parent Rights...............................................
Parent Rights Agreement.....................................
Parent SEC Documents........................................
Parent Series C Preferred Stock.............................
Parent Shareholder Authorizations...........................
Parent Shareholders.........................................
Parent Shareholders' Meeting................................
PBGC........................................................
Peer Group..................................................
Peer Group Composite Index..................................
Pension Plans...............................................
Permits.....................................................
Person......................................................
Prior Event.................................................
Prospectus..................................................
Qualified Company Plan......................................
Registration Statement......................................
Securities Act..............................................
Subcorp.....................................................
subsidiaries................................................
subsidiary..................................................
Surviving Corporation.......................................
Tax.........................................................
Taxes.......................................................
Test Period.................................................
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger ("Agreement") is made and entered into as
of the 17th day of March, 1998, among Medusa Corporation, an Ohio corporation
("Company"), Southdown, Inc., a Louisiana corporation ("Parent"), and Bedrock
Merger Corp., a newly formed Ohio corporation and wholly-owned subsidiary of
Parent ("Subcorp").
RECITALS
WHEREAS, the Boards of Directors of Company and Parent have unanimously
determined that the combination of Company and Parent is in the best interests
of the shareholders of Company and Parent, respectively;
WHEREAS, Company and Parent desire to make certain representations,
warranties, covenants and agreements in connection with this Agreement;
WHEREAS, Company and Parent intend that the Merger constitute a tax-free
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended ("Code");
WHEREAS, Company and Parent intend that the Merger be accounted for as a
pooling of interests for financial accounting purposes;
WHEREAS, the Boards of Directors of Company, Parent and Subcorp by
resolutions duly adopted, have unanimously approved and adopted this Agreement;
and
WHEREAS, by resolutions duly adopted, the Board of Directors of the Parent
has unanimously recommended that the Parent Shareholders approve the Parent
Shareholder Authorizations and the Board of Directors of the Company has
unanimously recommended that the Company Shareholders vote in favor of the
Merger; and
WHEREAS, certain terms capitalized herein have the meanings given to
therein in Section 8.14 of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of these premises and the mutual and
dependent promises hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions hereof, and in
accordance with the provisions of the Ohio General Corporation Law ("OGCL"), on
the Effective Date (as hereinafter defined), Subcorp shall be merged ("Merger")
with and into Company, whereupon the separate corporate existence of Subcorp
shall cease and Company shall continue its existence under the laws of the State
of Ohio. Company, in its capacity as the corporation surviving the Merger, is
hereinafter sometimes referred to as the "Surviving Corporation."
1.2 Closing. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
7.1, and subject to satisfaction or, to the extent permitted hereunder, waiver
(where applicable) of the conditions set forth in Article VI, the closing of the
Merger ("Closing") will take place at the offices of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
L.L.P., South Tower Pennzoil Place, Suite 2900, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, at 10:00 a.m., local time, on the third business day following
satisfaction of the conditions set forth in Sections 6.1(b), (c) and (d) and the
satisfaction or waiver of the conditions set forth in Section 6.3(d), unless
another date, time or place is agreed to in writing by the parties hereto, which
agreement will not be unreasonably withheld ("Closing Date"). At
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the Closing there shall be delivered to Parent, Subcorp and Company the
certificates and other documents and instruments required to be delivered under
Article VI.
1.3 Effective Date. As soon as practicable after satisfaction or, to the
extent permitted hereunder, waiver of all conditions to the Merger set forth
herein, but in no event sooner than the Closing, the Merger shall be consummated
by filing with the Secretary of State of the State of Ohio ("Ohio Secretary of
State") a certificate of merger in such form as is required by and executed in
accordance with Section 1701.81 of the OGCL ("Certificate of Merger") and by
making all other filings or recordings required by Ohio law in connection with
the Merger. The Merger shall become effective when the Certificate of Merger has
been filed with the Ohio Secretary of State or at such later date as may be
agreed in writing by the parties hereto and specified in the Certificate of
Merger ("Effective Date").
1.4 Effect of the Merger. From and after the Effective Date, the Surviving
Corporation shall possess all rights, assets, powers, privileges and franchises
and shall be subject to all obligations, liabilities, restrictions and
disabilities of Company and Subcorp, all as provided under Ohio law.
1.5 Articles of Incorporation and Code of Regulations. The Certificate of
Merger shall provide that on the Effective Date (i) the Articles of
Incorporation of the Surviving Corporation, as in effect immediately prior to
the Effective Date, shall be the Articles of Incorporation of Company, except
for Article I thereof which shall read "The name of the corporation is
"Southdown Medusa", and (ii) the Code of Regulations of the Surviving
Corporation in effect immediately prior to the Effective Date shall be in the
Code of Regulations of Company immediately prior thereto; in each case until
amended in accordance with applicable law.
1.6 Directors and Officers of Subcorp. From and after the Effective Date,
until successors are duly elected or appointed and qualified in accordance with
applicable law, (i) the directors of Subcorp on the date of execution of this
Agreement shall be the directors of the Surviving Corporation and (ii) the
officers of Subcorp on the date of execution of this Agreement shall be the
officers of the Surviving Corporation, subject to the exclusive right of the
Parent to remove or replace any such directors or officers.
ARTICLE II
CONVERSION OF SECURITIES
2.1 Conversion of Capital Stock. On the Effective Date, by virtue of the
Merger and without any action on the part of Parent, Subcorp or Company:
(a) Conversion of Company Common Shares. Each common share, without
par value, of Company ("Company Common Shares") outstanding immediately
prior to the Effective Date shall (other than shares to be canceled in
accordance with the last sentence of this paragraph (a) and other than
Company Dissenting Shares) be converted into the right to receive .88 fully
paid and non-assessable shares of common stock ("Exchange Ratio"), $1.25
par value, of Parent ("Common Stock") ("Merger Consideration"). The Merger
Consideration is subject to appropriate adjustment in the event of any
change in Common Stock during the period between the date of this Agreement
and the Effective Date, by reason of any reclassification,
recapitalization, stock split or combination, exchange or adjustment of
issued and outstanding shares, or any stock dividend thereon with a record
date during such period. Each Company Common Share, if any, owned by Parent
or any subsidiary of Parent or held in treasury by the Company or any
subsidiary of the Company immediately prior to the Effective Date shall be
canceled, and no consideration shall be paid in exchange therefor and shall
cease to exist from and after the Effective Date.
(b) Conversion of Subcorp Shares. Each common share of Subcorp
outstanding immediately prior to the Effective Date shall be converted into
and become one common share of the Surviving Corporation with the same
rights, powers and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation.
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2.2 Exchange of Certificates.
(a) Exchange Agent. At or prior to the Effective Date, Parent shall
deposit with an exchange agent designated by Parent and reasonably
acceptable to Company ("Exchange Agent"), for the benefit of Company
Shareholders and for exchange in accordance with this Section 2.2,
certificates representing shares of Common Stock issuable pursuant to
Section 2.1 in exchange for outstanding Company Common Shares.
(b) Exchange Procedures. Promptly and, in any event, within three (3)
business days after the Effective Date, Parent shall cause the Exchange
Agent to mail to each holder of record of a certificate or certificates
("Certificates") that immediately prior to the Effective Date represented
outstanding Company Common Shares, whose shares were converted into the
right to receive shares of Common Stock pursuant to Section 2.1, (i) a
letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Exchange Agent and shall be in such
form and have such other provisions as Parent may reasonably specify), and
(ii) instructions for effecting the surrender of the Certificates in
exchange for certificates representing shares of Common Stock. Upon
surrender of a Certificate for cancellation to the Exchange Agent, together
with a duly executed letter of transmittal, the holder of such Certificate
shall be entitled to receive in exchange therefor (i) a certificate
representing that whole number of shares of Common Stock which such holder
has the right to receive pursuant to Section 2.1, and (ii) cash in lieu of
any fractional shares in the manner and amount as determined pursuant to
Section 2.2(c).
(c) No Fractional Shares. No certificates or scrip representing
fractional Common Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests will not entitle the
owner thereof to vote, to receive dividends or to any other rights of a
shareholder of the Parent. Notwithstanding any other provision of this
Agreement, each holder of a Certificate exchanged in the Merger who would
otherwise have been entitled to receive a fraction of a share of Common
Stock shall receive, from the Exchange Agent in accordance with the
provisions of this Section 2.2(c), a cash payment in lieu of such
fractional share of Common Stock representing such holder's proportionate
interest, if any, in the net proceeds from the sale by the Exchange Agent
in one or more transactions (which sale transactions shall be made at such
time or times, in such manner and on such terms as the Exchange Agent shall
determine in its sole discretion are reasonable) on behalf of all such
holders of the aggregate of the fractional shares of Common Stock which
would otherwise have been issued ("Fractional Shares"). The sale of the
Fractional Shares by the Exchange Agent shall be executed on the New York
Stock Exchange ("NYSE") or such other nationally recognized securities
exchange (collectively, a "National Exchange") on which the Common Stock is
traded through one or more member firms of the NYSE or a National Exchange
and shall be executed in round lots to the extent practicable. Until the
net proceeds of such sale or sales shall have been distributed to the
holders of fractional shares, the Exchange Agent will hold such proceeds in
trust ("Exchange Trust") for the holders of fractional shares. The Parent
shall pay all commissions, transfer taxes and other out-of-pocket
transactions costs, including the expenses and compensation of the Exchange
Agent, incurred in connection with the sale of the Fractional Shares. As
soon as practicable after the determination of the amount of cash, if any,
to be paid to holders of fractional shares in lieu of any fractional shares
of Common Stock, the Exchange Agent shall make available such amounts to
such holders of fractional shares without interest.
(d) Unregistered Transfers. In the event of a transfer of ownership of
shares of Company Common Shares which is not registered on the transfer
records of Company, a certificate representing the proper number of shares
of Common Stock, together with cash in lieu of fractional shares, if any,
or any unpaid dividends and distributions may be issued to such transferee
if the Certificate representing such Company Common Shares held by such
transferee is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.2, each Certificate shall be deemed at any
time after the Effective Date to represent only the right to receive upon
surrender a certificate representing shares of Common Stock and cash in
lieu of any fractional share, if any, or any unpaid dividends and
distributions as provided in this Article II.
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(e) Distributions with Respect to Unexchanged Shares. Notwithstanding
any other provisions of this Agreement, no dividends or other distributions
declared or made after the Effective Date with respect to shares of Common
Stock and having a record date after the Effective Date shall be paid to
the holder of any unsurrendered Certificate, and no cash payment in lieu of
fractional shares shall be paid to any such holder, until the holder shall
surrender such Certificate as provided in this Section 2.2. Subject to the
effect of Applicable Laws, following surrender of any such Certificate,
there shall be paid to the holder of the certificates representing whole
shares of Common Stock issued in exchange therefor, without interest, (i)
at the time of such surrender, the amount of dividends or other
distributions with a record date after the Effective Date theretofor
payable with respect to such whole shares of Common Stock and not paid,
less the amount of any withholding taxes which may be required thereon, and
(ii) at the appropriate payment date subsequent to surrender, the amount of
dividends or other distributions with a record date after the Effective
Date but prior to surrender and a payment date subsequent to surrender
payable with respect to such whole shares of Common Stock, less the amount
of any withholding taxes which may be required thereon.
(f) No Further Ownership Rights in Company Common Shares. All shares
of Common Stock issued upon surrender of Certificates in accordance with
the terms hereof (including any cash paid pursuant to this Article II)
shall be deemed to have been issued in full satisfaction of all rights
pertaining to such Company Common Shares represented thereby, and from and
after the Effective Date there shall be no further registration of
transfers on the stock transfer books of Company of Company Common Shares.
If, after the Effective Date, Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as
provided in this Section 2.2.
(g) Lost Certificate. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required
by the Surviving Corporation, the posting by such Person of a bond, in such
reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made with respect to such Certificate, Parent
will issue in exchange for such lost, stolen or destroyed Certificate the
Merger Consideration to be paid in respect of the Company Common Shares
represented by such Certificates as contemplated by this Article II.
(h) Termination of Exchange Trust. Any portion of the Exchange Trust
which remains undistributed to Company Shareholders for one (1) year after
the Effective Date shall be delivered to Parent, upon demand thereby, and
holders of Company Common Shares who have not theretofor complied with this
Section 2.2 shall thereafter look only to Parent for payment of any claim
to shares of Common Stock, cash in lieu of fractional shares thereof, or
dividends or distributions, if any, in respect thereof.
(i) No Liability. None of Parent, the Surviving Corporation or the
Exchange Agent shall be liable to any person in respect of any Company
Common Shares (or, in each case, dividends or distributions with respect
thereto) or cash from the Exchange Trust delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If
any Certificates shall not have been surrendered prior to seven years after
the Effective Date of the Merger (or immediately prior to such earlier date
on which any cash, any cash in lieu of fractional shares or any dividends
or distributions with respect to whole Company Common Shares in respect of
such Certificate would otherwise escheat to or become the property of any
court, arbitral tribunal, administrative agency or commission or other
governmental or regulatory body, agency, instrumentality or authority)
("Governmental Authority"), any such cash, dividends or distributions in
respect of such Certificate shall, to the extent permitted by Applicable
Law, become the property of Parent, free and clear of all claims or
interest of any person previously entitled thereto.
(j) Investment of Exchange Trust. The Exchange Agent shall invest any
cash included in the Exchange Trust, as directed by Parent, on a daily
basis. Any interest and other income resulting from such investments shall
be paid to Parent upon termination of the Exchange Trust pursuant to
Section 2.2(h).
(k) Dissenters' Rights. The holder of any Company Common Shares
outstanding immediately prior
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to the Merger that has validly exercised such holder's dissenters' rights
under the OGCL ("Company Dissenting Shares") shall not be entitled to
receive Common Stock, in respect of Company Dissenting Shares as to which
such holder has validly exercised dissenters' rights, unless and until such
holder shall have failed to perfect, shall have validly withdrawn or shall
have lost or had terminated such holder's right to payment for such
holder's Company Dissenting Shares as provided by the OGCL. In such event,
such holder shall be entitled to receive, without interest, the Common
Stock such holder would have been entitled to receive had such holder not
exercised dissenters' rights.
(l) Parent Rights. Each share of Common Stock issued to holders of
Company Common Shares in the Merger shall be issued together with one
associated Parent Right in accordance with the Parent Rights Agreement.
References herein to the shares of Common Stock issuable in the Merger
shall be deemed to include the associated Parent Rights.
2.3 Treatment of Stock Options.
(a) Prior to the Effective Date, Company and Parent shall take all
such actions as may be necessary to cause each unexpired and unexercised
option or right to purchase shares of Company Common Shares under stock
option plans and stock purchase plans of Company in effect on the date
hereof which has been granted by Company to current or former directors,
officers or Employees of Company or its subsidiaries (each, a "Company
Option") to be automatically converted on the Effective Date into an option
(each, a "Parent Exchange Option") to purchase that number of shares of
Common Stock equal to the number of shares of Company Common Shares
issuable immediately prior to the Effective Date upon exercise of the
Company Option (without regard to actual restrictions on exercisability)
multiplied by the Exchange Ratio, with an exercise price equal to the
exercise price which existed under the corresponding Company Option divided
by the Exchange Ratio, and with other terms and conditions that are the
same as the terms and conditions of such Company Option immediately before
the Effective Date (including, without limitation, the acceleration of the
exercisability of each such option upon the consummation of the Merger and
the length of the period of continuing exercisability of each such option
after any termination of the employment of the respective optionee);
provided that with respect to any Company Option that is an "incentive
stock option" within the meaning of Section 422 of the Code, the foregoing
conversion shall be carried out in a manner satisfying the requirements of
Section 424(a) of the Code. In connection with the issuance of Parent
Exchange Options, Parent shall (i) reserve for issuance the number of
shares of Common Stock that will become subject to Parent Exchange Options
pursuant to this Section 2.3, and (ii) from and after the Effective Date,
upon exercise of Parent Exchange Options, make available for issuance all
shares of Common Stock covered thereby, subject to the terms and conditions
applicable thereto. Each director, officer or Employee of Company who is
required to execute and who executes the letter agreement contemplated in
Section 5.3(e) and whose employment is terminated following the Merger
shall have the expiration date of his Parent Exchange Option extended until
the 90th day following the date that such director, officer or Employee of
Company is first permitted to sell, transfer or otherwise dispose of Common
Stock under the terms of such letter agreement. Parent shall cause the
committee administering its stock incentive plan to grant Parent Exchange
Options in accordance with this Section 2.3.
(b) Company agrees to issue treasury shares of Company, to the extent
available, upon the exercise of Company Options prior to the Effective
Date.
(c) Parent agrees to file with the Securities and Exchange Commission
("Commission") as soon as reasonably practicable after the Closing Date a
registration statement on Form S-8 or other appropriate form under the
Securities Act to register shares of Common Stock issuable upon exercise of
the Parent Exchange Options and use its best efforts to cause such
registration statement to remain effective until the exercise or expiration
of such options.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents, warrants, covenants and agrees as follows:
3.1 Organization and Standing. Parent is a corporation duly organized,
validly existing and in good standing under the laws of the State of Louisiana
with full power and authority (corporate and other) to own, lease, use and
operate its properties and to conduct its business as and where now owned,
leased, used, operated and conducted. Parent is duly qualified to do business
and in good standing in each jurisdiction in which the nature of the business
conducted by it or the property it owns, leases or operates makes such
qualification necessary, except where the failure to be so qualified or in good
standing in such jurisdiction would not have a Parent Material Adverse Effect.
Neither Parent nor any of its subsidiaries is in default in the performance,
observance or fulfillment of any provision of, in the case of Parent, its
Articles of Incorporation, as amended and restated, or Bylaws ("Parent Articles
and Bylaws"), or, in the case of any subsidiary of Parent, its Articles of
Incorporation, Bylaws or other organizational documents.
3.2 Subsidiaries. Section 3.2 of the Parent Disclosure Schedule lists the
name and jurisdiction of organization of each subsidiary of Parent and the
jurisdictions in which each such subsidiary is qualified or holds licenses to do
business as a foreign corporation or other organization as of the date hereof.
Each of Parent's subsidiaries is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, is duly qualified
to do business as a foreign entity and is in good standing in the jurisdictions
set forth in Section 3.2 of the Parent Disclosure Schedule, which includes each
jurisdiction in which the character of such subsidiary's properties owned or
leased by it or the nature of its business makes such qualification necessary,
except in jurisdictions, if any, where the failure to be so qualified would not,
individually or in the aggregate, result in a Parent Material Adverse Effect.
Each of Parent's subsidiaries has all requisite corporate (or other
organizational) power and authority to own, use or lease its properties and to
carry on its business as it is now being conducted. Parent has made available to
Company a complete and correct copy of the charter documents and bylaws (or
similar organizational documents) of each of Parent's subsidiaries, each as
amended to date, and the charter documents and bylaws (or similar organizational
documents) as so delivered are in full force and effect.
3.3 Capitalization of Parent. As of February 28, 1998, Parent's authorized
capital stock consisted of (i) 40,000,000 shares of common stock, $1.25 par
value per share of which (a) 23,607,047 shares were issued and outstanding, (b)
1,166,100 shares were issued and held in treasury (which does not include the
shares reserved for issuance as set forth in clause (i)(c) below) and (c)
1,622,935 shares were reserved for issuance upon the exercise or conversion of
options, warrants or convertible securities granted or issuable by Parent, and
(ii) 10,000,000 shares of preferred stock, $.05 par value per share ("Parent
Preferred Stock"), none of which are outstanding or designated except as
provided in the next sentence. As of the date hereof, 400,000 shares are
designated Preferred Stock, Cumulative Junior Participating Series C ("Parent
Series C Preferred Stock") and are reserved for issuance in accordance with the
Rights Agreement dated as of March 4, 1991, by and between Parent and ▇▇▇▇▇
▇▇▇▇▇▇ Shareholder Services, L.L.C., as Rights Agent ("Parent Rights
Agreement"), pursuant to which Parent has issued rights ("Parent Rights") to
purchase shares of Parent Series C Preferred Stock. Each outstanding share of
Parent capital stock is, and all shares of Common Stock to be issued in
connection with the Merger will be, duly authorized and validly issued, fully
paid and nonassessable, and no outstanding share of Parent capital stock has
been, and no shares of Common Stock to be issued in connection with the Merger
will be issued in violation of any preemptive or similar rights. As of the date
hereof, other than as set forth in the Parent SEC Documents, pursuant to the
Parent Rights Agreement or in Section 3.3 to the Parent Disclosure Schedule,
there are no outstanding subscriptions, options, warrants, puts, calls,
agreements, understandings, claims or other commitments or rights of any type
relating to the issuance, sale or transfer by Parent or any of its subsidiaries
of any securities of Parent, nor are there outstanding any securities which are
convertible into or exchangeable for any shares of capital stock of Parent, and
Parent has no obligation of any kind to issue any additional securities or to
pay for securities of Parent or any predecessor. Parent has no outstanding
bonds, debentures, notes or other similar obligations the holders of which have
the right to vote generally with holders of Parent Common Stock.
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3.4 Authorization of Additional Common Stock. The Board of Directors, at a
meeting duly called and held, has by the required vote of the directors then in
office, approved the authorization of an additional 160 million shares of Common
Stock ("Parent Amendment"), adopted a resolution declaring the advisability of
such action and directed that such action be submitted for consideration by the
Parent Shareholders. Subject to authorization by the holders of Common Stock
("Parent Shareholders") ("Common Stock Authorizations"), Parent will obtain all
necessary consents, approvals or authorizations necessary to effect the Parent
Amendment.
3.5 Corporate Power and Authority. Each of Parent and Subcorp has all
requisite corporate power and authority to enter into this Agreement and,
subject to the Common Stock Authorizations and the authorization of the issuance
of shares of Common Stock in connection with the Merger as required by the NYSE
(collectively, "Parent Shareholder Authorizations") by the Parent Shareholders,
to consummate the transactions contemplated by this Agreement and no other
corporate proceedings on the part of either of Parent or Subcorp or their
stockholders are necessary to authorize the execution, delivery and performance
of this Agreement by Parent and Subcorp and the consummation by Parent and
Subcorp of the transactions contemplated hereby, other than obtaining the Parent
Shareholder Authorizations. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of each of Parent and Subcorp,
subject to the Parent Shareholder Authorizations. This Agreement has been duly
executed and delivered by each of Parent and Subcorp, and constitutes the legal,
valid and binding obligation of each of Parent and Subcorp enforceable against
each of them in accordance with its terms.
3.6 Conflicts, Consents and Approval. Neither the execution and delivery of
this Agreement by Parent or Subcorp nor the consummation of the transactions
contemplated hereby will:
(a) conflict with, or result in a breach of any provision of the
Parent Articles and Bylaws or the Articles of Incorporation or Code of
Regulations of Subcorp;
(b) except as disclosed in Section 3.6(b) to the Parent Disclosure
Schedule, violate, or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which, with the giving of notice,
the passage of time or otherwise, would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time or
otherwise) to terminate, accelerate, modify or call a default under, or
result in the termination, acceleration or cancellation of, or result in
the creation of any lien, security interest, charge or encumbrance upon any
of the properties or assets of Parent or any of its subsidiaries under any
of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, contract, undertaking, agreement, lease
or other instrument or obligation to which Parent or any of its
subsidiaries is a party;
(c) violate any order, writ, injunction, decree, statute, rule or
regulation, applicable to Parent or any of its subsidiaries or their
respective properties or assets; or
(d) require any action or consent or approval of, or review by, or
registration or filing by Parent or any of its affiliates with any third
party or any Governmental Authority other than: (i) the Parent Shareholder
Authorizations; (ii) actions required by the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder ("HSR Act"); and (iii) registrations or other
actions required under federal and state securities laws as are
contemplated by this Agreement; all except for any of the foregoing that
are set forth in Section 3.6(d) to the Parent Disclosure Schedule and, in
the case of (b), (c) and (d), any of the foregoing that would not,
individually or in the aggregate, have a Parent Material Adverse Effect.
3.7 Brokerage and Finder's Fees. Except for Parent's obligation to ▇▇▇▇▇▇
Brothers Inc. ("▇▇▇▇▇▇ Brothers"), Parent has not incurred and will not incur,
directly or indirectly, any brokerage, finder's or similar fee in connection
with the transactions contemplated by this Agreement. Other than the foregoing
obligation to ▇▇▇▇▇▇ Brothers, Parent is not aware of any claim for payment of
any finder's fees, brokerage or agent's commissions or other like payments
payable by Parent and its affiliates in connection with the negotiation of this
Agreement or in connection with the transactions contemplated hereby.
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3.8 Opinion of Financial Advisor. Parent has received the opinion of ▇▇▇▇▇▇
Brothers to the effect that, as of the date hereof, the Exchange Ratio is fair
to the Parent from a financial point of view, and a true and complete copy of
such opinion has been delivered to Company prior to the execution of this
Agreement.
3.9 Accounting Matters. To the best Knowledge of Parent, neither Parent nor
any of its Affiliates has taken, agreed to take or failed to take any action
that (without giving effect to any actions taken or agreed to be taken by
Company or any of its affiliates) would prevent Parent from accounting for the
business combination to be effected by the Merger as a pooling of interests for
financial accounting purposes in accordance with Accounting Principles Board
Opinion No. 16, the interpretative releases issued pursuant thereto, and the
pronouncements of the Commission thereon.
3.10 Parent SEC Documents. Parent has timely filed with the Commission all
forms, registrations and proxy statements, reports, schedules and statements
required to be filed by it since December 31, 1996 under the Securities Exchange
Act of 1934, as amended (together with the rules and regulations thereunder,
"Exchange Act") or the Securities Act of 1933, as amended ("Securities Act")
(all documents filed since such date, collectively, "Parent SEC Documents"). The
Parent SEC Documents, including, without limitation, any financial statements or
schedules included therein, at the time filed (in the case of registration
statements and proxy statements, solely on the dates of effectiveness and the
dates of mailing, respectively) (i) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (ii) complied in all material
respects with the applicable requirements of the Exchange Act and the Securities
Act, as the case may be. The financial statements of Parent included in the
Parent SEC Documents at the time filed (and, in the case of registration
statements and proxy statements, on the date of effectiveness and the date of
mailing, respectively) complied as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the Commission with respect thereto, were prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited statements, as permitted by Form 10-Q of the Commission), and
fairly present (subject in the case of unaudited statements to normal, recurring
and year-end audit adjustments) in all material respects the consolidated
financial position of Parent at the dates thereof and the consolidated results
of its operations and cash flows for the periods then ended.
3.11 Registration Statement. The information provided by Parent for
inclusion in the registration statement on Form S-4 to be filed with the
Commission by Parent under the Securities Act, including the prospectus (as
amended, supplemented or modified, "Prospectus") relating to shares of Common
Stock to be issued in the Merger and the joint proxy statement and form of
proxies relating to the vote of Company Shareholders with respect to the Merger
and the vote of Parent Shareholders with respect to the Parent Shareholder
Authorizations (collectively and as amended, supplemented or modified, "Joint
Proxy Statement") contained therein (such registration statement as amended,
supplemented or modified, "Registration Statement"), at the time the
Registration Statement becomes effective or, in the case of the Joint Proxy
Statement, at the date of mailing, will not 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 not misleading in light of
the circumstances under which they are made. Each of the Registration Statement
and Joint Proxy Statement, except for such portions thereof that relate to
Company and its subsidiaries, will comply as to form in all material respects
with the provisions of the Securities Act and Exchange Act.
3.12 Board Meeting. The Board of Directors of Parent, at a meeting duly
called and held, has by the required vote of the directors then in office
determined that this Agreement and the transactions contemplated hereby,
including the Merger and the Parent Amendment, taken together, are fair to and
in the best interests of Parent and the Parent Shareholders.
3.13 Operation of Parent's Business. Since December 31, 1997 through the
date of this Agreement, none of Parent or any of its subsidiaries has engaged in
any transaction which, if closed after execution of this Agreement, would
violate Section 5.2(c) hereof except as described or reflected in the Parent SEC
Documents or as set forth in Section 3.13 to the Parent Disclosure Schedule.
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3.14 Company Stock Ownership. Except as set forth in Section 3.14 to the
Parent Disclosure Schedule, neither Parent nor any of its subsidiaries owns any
Company Common Shares or other securities convertible into Company Common
Shares.
3.15 Vote Required. The affirmative vote of the holders of record of at
least a majority of the outstanding shares of Common Stock with respect to the
adoption of the Parent Amendment and the affirmative vote of at least a majority
of the votes cast by the holders of record of shares of Common Stock with
respect to the approval of the issuance of Common Stock (provided that the total
votes cast on the proposal represents more than 50% of the outstanding shares of
Common Stock entitled to vote thereon) in connection with the Merger are the
only votes of the holders of any class or series of the capital stock of Parent
required to approve the Merger and the other transactions contemplated hereby.
3.16 Parent Rights Agreement. As of the date hereof and after giving effect
to the execution and delivery of this Agreement, each Parent Right is
represented by the certificate representing the associated share of Common Stock
and is not exercisable or transferable apart from the associated share of Common
Stock, and the consummation of the transactions contemplated by this Agreement
will not result in a "Distribution Date" or a "Triggering Event" (as defined in
the Parent Rights Agreement), assuming that no "Person," together with all
"Affiliates" and "Associates" of such Person, shall be the "Beneficial Owner"
(as such terms are defined in the Parent Rights Agreement) of 15% or more of the
shares of Common Stock issuable in the Merger.
3.17 No Material Adverse Change. Except as set forth in or contemplated by
the Parent SEC Documents filed with the Commission as of the date hereof or in
Section 3.17 to the Parent Disclosure Schedule, since December 31, 1997, each of
Parent and its subsidiaries has conducted its business in the ordinary course,
consistent with past practice, and there has been no: (i) material adverse
change in the business or financial condition of Parent and its subsidiaries
taken as a whole, other than those occurring as a result of general economic or
financial conditions or other developments which are not unique to Parent and
its subsidiaries but also affect other Persons who participate or are engaged in
the lines of business of which Parent and its subsidiaries participate or are
engaged; (ii) material adverse effect on the ability of Parent to consummate the
transactions contemplated hereby; (iii) declaration, setting aside or payment of
any dividend or other distribution with respect to its capital stock; or (iv)
material change in its accounting principles, practices or methods.
3.18 Undisclosed Liabilities. Except: (i) as and to the extent disclosed or
reserved against on the consolidated balance sheet of Parent as of December 31,
1997 or the notes thereto included in the Parent SEC Documents or otherwise
disclosed in the Parent SEC Documents filed with the Commission as of the date
hereof; (ii) as incurred after the date thereof in the ordinary course of
business consistent with prior practice and not prohibited by this Agreement; or
(iii) as set forth in Section 3.18 to the Parent Disclosure Schedule, neither
Parent nor any of its subsidiaries have any liabilities or obligations of any
nature, whether known or unknown, absolute, accrued, contingent or otherwise and
whether due or to become due that would be required by generally accepted
accounting principles to be disclosed and that, individually or in the
aggregate, have or would reasonably be expected to have a Parent Material
Adverse Effect.
3.19 Antitakeover Statutes Not Applicable. Parent has taken all necessary
actions so that no "fair price", "moratorium", "control share acquisition" or
other similar antitakeover statute or regulation will apply to this Agreement,
the Merger or the other transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents, warrants, covenants and agrees as follows:
4.1 Organization and Standing. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Ohio with
full power and authority (corporate and other) to own, lease, use and operate
its properties and to conduct its business as and where now owned, leased, used,
operated and
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conducted. Company is duly qualified to do business and in good standing in each
jurisdiction in which the nature of the business conducted by it or the property
it owns, leases or operates makes such qualification necessary, except where the
failure to be so qualified or in good standing in such jurisdiction would not
have a Company Material Adverse Effect. Neither Company nor any of its
subsidiaries is in default in the performance, observance or fulfillment of any
provision of, in the case of Company, its Articles of Incorporation, as amended
and restated or Code of Regulations ("Company Articles and Code of
Regulations"), or, in the case of any subsidiary of Company, its Articles of
Incorporation, Bylaws or other organizational documents.
4.2 Subsidiaries. Section 4.2 of the Company Disclosure Schedule lists the
name and jurisdiction of organization of each subsidiary of Company and the
jurisdictions in which each such subsidiary is qualified or holds licenses to do
business as a foreign corporation or other organization as of the date hereof.
Each of Company's subsidiaries is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, is duly qualified
to do business as a foreign entity and is in good standing in the jurisdictions
set forth in Section 4.2 of the Company Disclosure Schedule, which includes each
jurisdiction in which the character of such subsidiary's properties owned or
leased by it or the nature of its business makes such qualification necessary,
except in jurisdictions, if any, where the failure to be so qualified would not,
individually or in the aggregate, result in a Company Material Adverse Effect.
Each of Company's subsidiaries has all requisite corporate (or other
organizational) power and authority to own, use or lease its properties and to
carry on its business as it is now being conducted. Company has made available
to Parent a complete and correct copy of the charter documents and bylaws (or
similar organizational documents) of each of Company's subsidiaries, each as
amended to date, and the charter documents and bylaws (or similar organizational
documents) as so delivered are in full force and effect. Other than Company
subsidiaries, Company does not beneficially own or control, directly or
indirectly, any class of equity or similar securities of any corporation or
other organization, whether incorporated or unincorporated.
4.3 Capitalization of Company. As of February 28, 1998, Company's
authorized capital shares consisted of (i) 50,000,000 shares of common stock,
without par value, of which (a) 16,672,757 shares were issued and outstanding,
(b) 1,962,656 shares were issued and held in treasury (which does not include
the shares reserved for issuance as set forth in clause (i)(c) below) and (c)
625,025 shares were reserved for issuance upon the exercise or conversion of
options, warrants or convertible securities granted or issuable by Company
pursuant to the Company's Incentive Plan, and (ii) 3,000,000 shares of preferred
stock, without par value ("Company Preferred Shares"). As of the date of this
Agreement, Company has designated as to series: (i) 1,000,000 shares of "Class A
Serial Preferred", none of which is issued and outstanding; (ii) 1,000,000
shares of "Class B Serial Preferred", none of which is issued and outstanding;
and (iii) 1,000,000 shares of "Class C Preferred", none of which is issued and
outstanding. As of the date hereof, the series of "Class C Preferred" ("Class C
Preferred Shares") is reserved for issuance in accordance with the Rights
Agreement, dated as of October 13, 1988, as amended, by and between Company and
First Chicago Trust Company of New York (successor to Society National Bank,
successor to National City Bank), as Rights Agent ("Company Rights Agreement"),
pursuant to which Company has issued rights ("Company Rights") to purchase
shares of Class C Preferred Shares. Each outstanding share of Company capital
stock is a common share, duly authorized and validly issued, fully paid and
nonassessable, and no outstanding share of Company capital stock has been issued
in violation of any preemptive or similar rights. As of the date hereof, other
than as set forth in the Company SEC Documents, pursuant to the Company Rights
Agreement or in Section 4.3 to the Company Disclosure Schedule, there are no
outstanding subscriptions, options, warrants, puts, calls, agreements,
understandings, claims or other commitments or rights of any type relating to
the issuance, sale or transfer by Company or any of its subsidiaries of any
securities of Company, nor are there outstanding any securities which are
convertible into or exchangeable for any shares of capital stock of Company, and
Company has no obligation of any kind to issue any additional securities or to
pay for securities of Company or any predecessor. Company has no outstanding
bonds, debentures, notes or other similar obligations the holders of which have
the right to vote generally with holders of Company Common Shares.
4.4 Corporate Power and Authority. Company has all requisite corporate
power and authority to enter into this Agreement and, subject to authorization
of the Merger and the transactions contemplated hereby by
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the holders of Company Common Shares ("Company Shareholders"), to consummate the
transactions contemplated by this Agreement and no other corporate proceedings
on the part of either Company or Company Shareholders are necessary to authorize
the execution, delivery and performance of this Agreement by Company and the
consummation by Company of the transactions contemplated hereby, other than
obtaining the affirmative vote of Company shareholders owning a majority of the
Company Common Shares. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Company, subject to
authorization of the Merger and the transactions contemplated hereby by Company
Shareholders. This Agreement has been duly executed and delivered by Company,
and constitutes the legal, valid and binding obligation of Company enforceable
against Company in accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights and
general principles of equity.
4.5 Conflicts, Consents and Approval. Neither the execution and delivery of
this Agreement by Company nor the consummation of the transactions contemplated
hereby will:
(a) conflict with, or result in a breach of any provision of the
Company Articles or Code of Regulations;
(b) except as disclosed in Section 4.5(b) to the Company Disclosure
Schedule, violate, or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which, with the giving of notice,
the passage of time or otherwise, would constitute a default) under, or
entitle any party (with the giving of notice, the passage of time or
otherwise) to terminate, accelerate, modify or call a default under, or
result in the termination, acceleration or cancellation of, or result in
the creation of any lien, security interest, charge or encumbrance upon any
of the properties or assets of Company or any of its subsidiaries under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, contract, undertaking, agreement, lease
or other instrument or obligation to which Company or any of its
subsidiaries is a party;
(c) violate any order, writ, injunction, decree, statute, rule or
regulation, applicable to Company or any of its subsidiaries or their
respective properties or assets; or
(d) require any action or consent or approval of, or review by, or
registration or filing by Company or any of its Affiliates with any third
party or any Governmental Authority other than: (i) authorization of the
Merger and the transactions contemplated hereby by Company Shareholders;
(ii) actions required by the HSR Act; and (iii) registrations or other
actions required under federal and state securities laws as are
contemplated by this Agreement; except for any of the foregoing that are
set forth in Section 4.5(d) to the Company Disclosure Schedule and, in the
case of (b), (c) and (d), any of the foregoing that would not, individually
or in the aggregate, have a Company Material Adverse Effect.
4.6 Brokerage and Finder's Fees. Except for Company's obligation to ▇.▇.
▇▇▇▇▇▇ ("▇.▇. ▇▇▇▇▇▇") (a copy of the written agreement relating to such
obligation having previously been provided to Parent), Company has not incurred
and will not incur, directly or indirectly, any brokerage, finder's or similar
fee in connection with the transactions contemplated by this Agreement. Other
than the foregoing obligation to ▇.▇. ▇▇▇▇▇▇, Company is not aware of any claim
for payment of any finder's fees, brokerage or agent's commissions or other like
payments payable by Company and its Affiliates in connection with the
negotiation of this Agreement or in connection with the transactions
contemplated hereby.
4.7 Opinion of Financial Advisor. Company has received the opinion of ▇.▇.
▇▇▇▇▇▇ to the effect that, as of the date hereof, the Exchange Ratio is fair to
the Company Shareholders from a financial point of view, and a true and complete
copy of such opinion has been delivered to Parent prior to the execution of this
Agreement.
4.8 Accounting Matters. To the best Knowledge of Company, neither Company
nor any of its Affiliates has taken, agreed to take or failed to take any action
that (without giving effect to any actions taken or agreed to be taken by Parent
or any of its Affiliates) would prevent Parent from accounting for the business
combination to be effected by the Merger as a pooling of interests for financial
accounting purposes in
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accordance with Accounting Principles Board Opinion No. 16, the interpretative
releases issued pursuant thereto, and the pronouncements of the Commission
thereon.
4.9 Employee Benefit Plans.
(a) Section 4.9(a) to the Company Disclosure Schedule lists all
Company Plans. With respect to each Company Plan, Company has made
available to Parent a true, correct and complete copy of: (i) each writing
constituting a part of such Company Plan, including without limitation all
plan documents, benefit schedules, trust agreements, and insurance
contracts and other funding vehicles; (ii) the most recent Annual Report
(Form 5500 Series) and accompanying schedule, include if any; (iii) the
current summary plan description, if any; (iv) the most recent annual
financial report, if any; and (v) the most recent determination letter from
the Internal Revenue Service, if any.
(b) Company has made available each favorable determination letter
from the Internal Revenue Service with respect to each Company Plan that is
intended to be a "qualified plan" within the meaning of Section 401(a) of
the Code ("Qualified Company Plan") and, to the Knowledge of Company, there
are no existing circumstances nor any events that have occurred that would
be likely to adversely affect the qualified status of any Qualified Company
Plan or the related trust.
(c) All contributions required to be made to any Company Plan by
Applicable Laws or by any plan document or other contractual undertaking,
and all premiums due or payable with respect to insurance policies funding
any Company Plan, for any period through the date hereof have been timely
made or paid in full and through the Closing Date will be timely made or
paid in full or, to the extent not required to be made or paid on or before
the date hereof or the Closing Date, as applicable, have been or will be
reflected in accordance with generally accepted accounting principles in
the Company SEC Documents filed or to be filed with the Commission.
(d) Company and its subsidiaries have complied, and are now in
compliance, in all material respects, with all provisions of ERISA, the
Code and all laws and regulations applicable to the Company Plans (except
where the failure to do so would not have a Company Material Adverse
Effect). There is not now, and, to the Knowledge of the Company, there are
no existing circumstances that could give rise to, any requirement for the
posting of security with respect to a Company Plan or the imposition of any
material lien on the assets of Company or any of its subsidiaries under
ERISA or the Code.
(e) Except as set forth in Section 4.9(e) to the Company Disclosure
Schedule, no Company Plan is subject to Title IV or Section 302 of ERISA or
Section 412 of the Code, nor has Company or any of its subsidiaries or any
of their respective ERISA Affiliates, at any time within the last five
years before the date hereof, contributed to or been obligated to
contribute to any employee pension benefit plan subject to Title IV of
ERISA or Section 302 of ERISA or Section 412 of the Code. Except as set
forth in Section 4.9(e) to the Company Disclosure Schedule, no Company Plan
is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA
("Multiemployer Plan") or a plan that has two or more contributing sponsors
at least two of whom are not under common control, within the meaning of
Section 4001(a)(3) of ERISA ("Multiple Employer Plan"), nor has Company or
any of its subsidiaries or any of their respective ERISA Affiliates, at any
time within five years before the date hereof, contributed to or been
obligated to contribute to any Multiemployer Plan or Multiple Employer
Plan.
(f) All Company Plans which are employee pension benefit plans, within
the meaning of Section 3(2) of ERISA ("Pension Plans") have been funded,
where required by applicable law, in compliance with the minimum funding
standards of ERISA, and Company has not sought a waiver of the minimum
funding standards under Code Section 412.
(g) With respect to each Pension Plan which is not a Multiemployer
Plan but which is subject to the provisions of Title IV of ERISA, to the
Company's Knowledge, there exists no ground upon which the Pension Benefit
Guaranty Corporation ("PBGC") would demand termination of such plan or
appointment of itself or its nominee as trustee thereunder.
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(h) As of the Closing Date, except as set forth in Section 4.9(h) to
the Company Disclosure Schedule, no liability to the PBGC has been incurred
with respect to the Pension Plans other than premiums due and not yet
payable. All premiums due and payable to the PBGC with respect to the
Pension Plans have been paid in full. The PBGC has not instituted
proceedings to terminate any of the Pension Plans.
(i) No notice of a reportable event has been required to be filed with
the PBGC under Section 4043 of ERISA and the regulations thereunder with
respect to any of the Pension Plans, other than those waived, and except as
set forth in Section 4.9(i) to the Company Disclosure Schedule, there has
been no event described in Section 4062(e) of ERISA which would have a
Company Material Adverse Effect.
(j) Except as set forth in Section 4.9(j) to the Company Disclosure
Schedule, none of the Pension Plans have been terminated or partially
terminated nor have the contributions to any Pension Plans been
discontinued, within the meaning of Section 411(d)(3) of the Code, nor, to
the Knowledge of the Company, have there been any events with regard to
such Pension Plans or their related funding instruments which constitutes
grounds for such a termination, partial termination or discontinuance of
contributions.
(k) Except as set forth in Section 4.9(k) to the Company Disclosure
Schedule, as of December 31, 1997, and using reasonable actuarial
assumptions, the fair market value of assets for each Pension Plan which is
subject to Title IV of ERISA (other than Multiemployer Plans) and which
constitute a "single plan" (as defined in Treasury Regulation Section
1.414(l) -- 1(b)(1)) exceeds the present value of benefits on a projected
benefit obligation basis.
(l) Except as set forth in Section 4.9(l) to the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries has incurred,
within 5 years before the date hereof, any withdrawal liability under Title
IV of ERISA with respect to any Multiemployer Plan.
(m) Neither Company nor any of its subsidiaries nor any of their
respective ERISA Affiliates has engaged in any transaction described in
Section 4204 of ERISA within six (6) years before the date hereof which
would have a Company Material Adverse Effect.
(n) Except as disclosed in Section 4.9(n) of the Company Disclosure
Schedule, or in the Company SEC Documents filed with the Commission as of
the date hereof, and except for health continuation coverage as required by
Section 4980B of the Code or Part 6 of Title I of ERISA, neither Company
nor any of its subsidiaries has any liability for life, health, medical or
other welfare benefits to former Employees or beneficiaries or dependents
thereof which would have a Company Material Adverse Effect. Except as set
forth in Section 4.9(n) to the Company Disclosure Schedule, each Company
Plan disclosed in Section 4.9(a) of the Company Disclosure Schedule
provides that it may be amended or terminated in accordance with its terms.
(o) Except as set forth in Section 4.9(o) of the Company's Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will result in, cause
the accelerated vesting or delivery of, or increase the amount or value of,
any payment or benefit to any Employee of Company or any of its
subsidiaries. Without limiting the generality of the foregoing and except
as set forth in Section 4.9(o) to the Company Disclosure Schedule, no
amount paid or payable by Company or any of its subsidiaries in connection
with the transactions contemplated hereby either solely as a result thereof
or as a result of such transactions in conjunction with any other events
will be an "excess parachute payment" within the meaning of Section 280G of
the Code.
(p) There are no pending or, to the Knowledge of the Company,
threatened claims (other than claims for benefits in the ordinary course),
lawsuits or arbitrations which have been asserted or instituted against the
Company Plans, any fiduciaries thereof with respect to their duties to the
Company Plans or the assets of any of the trusts under any of the Company
Plans which could reasonably be expected to result in any material
liability of Company or any of its subsidiaries to the PBGC, the Department
of Treasury, the Department of Labor or any Multiemployer Plan.
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(q) With respect to each Company Plan which is an employee benefit
plan under Section 3(3) of ERISA, no prohibited transaction (as defined in
Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary
duty has occurred which would be a material liability of Company or any of
its subsidiaries following the Closing.
4.10 Company SEC Documents. Company has timely filed with the Commission
all forms, registrations and proxy statements, reports, schedules and statements
required to be filed by it since December 31, 1996 under the Exchange Act or the
Securities Act (all documents filed since such date, collectively "Company SEC
Documents"). The Company SEC Documents, including, without limitation, any
financial statements or schedules included therein, at the time filed (in the
case of registration statements and proxy statements, solely on the dates of
effectiveness and the dates of mailing, respectively) (i) did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, and (ii)
complied in all material respects with the applicable requirements of the
Exchange Act and the Securities Act, as the case may be. The financial
statements of Company included in the Company SEC Documents at the time filed
(and, in the case of registration statements and proxy statements, on the date
of effectiveness and the date of mailing, respectively) complied as to form in
all material respects with applicable accounting requirements and with the
published rules and regulations of the Commission with respect thereto, were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited statements, as permitted by Form
10-Q of the Commission), and fairly present (subject in the case of unaudited
statements to normal, recurring and year-end audit adjustments) in all material
respects the consolidated financial position of Company as at the dates thereof
and the consolidated results of its operations and cash flows for the periods
then ended.
4.11 Taxes. Except as set forth in Section 4.11 to the Company Disclosure
Schedule: (i) Company has duly filed all federal, state, local and foreign
income, franchise, excise, sales, use, gross receipts, severance, real and
personal property and other Tax returns and reports (including, but not limited
to, those filed on a consolidated, combined or unitary basis) required to have
been filed by Company prior to the date hereof, taking into account applicable
extensions, except for such failures to file as would not have a Company
Material Adverse Effect; (ii) all of the foregoing returns and reports are true
and correct in all respects except as would not have a Material Adverse Effect,
and Company has paid or, prior to the Effective Date, will pay all Taxes
required to be paid in respect of the periods covered by such returns or reports
to any federal, state, foreign, local or other taxing authority; (iii) Company
has paid or made adequate provision (in accordance with generally accepted
accounting principles) in the financial statements of Company included in the
Company SEC Documents for all Taxes payable in respect of all periods ending on
or prior to September 30, 1997; (iv) neither Company nor any of its subsidiaries
will have any material liability for any Taxes in excess of the amounts so paid
or reserves so established; (v) no deficiencies for any Tax, assessment or
governmental charge have been proposed in writing, asserted or assessed
(tentatively or definitely), in each case, by any Taxing authority, against
Company or any of its subsidiaries for which there are not adequate reserves (in
accordance with generally accepted accounting principles) except for those that
would not have a Material Adverse Effect; (vi) as of the date of this Agreement,
there are no pending requests for waivers of the time to assess any such Tax,
other than those made in the ordinary course and for which payment has been made
or there are adequate reserves (in accordance with generally accepted accounting
principles); (vii) the federal income Tax returns of Company and its
subsidiaries have been audited by the Internal Revenue Service through the
fiscal year ending December 31, 1992; (viii) Company has not filed an election
under Section 341(f) of the Code to be treated as a consenting corporation; and
(ix) Company Plans, to the extent intended by their express terms to provide
compensation that qualifies as "performance-based compensation" within the
meaning of Section 162(m) of the Code meet the requirements for such treatment
under Section 162(m) of the Code.
4.12 Registration Statement. None of the information provided by Company
for inclusion in the Registration Statement, including the Prospectus, and
relating to the Joint Proxy Statement with respect to the Merger and the vote of
Company Shareholders with respect to the Merger contained therein at the time
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the Registration Statement becomes effective or, in the case of the Joint Proxy
Statement, at the date of mailing, will contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. Each of the
Registration Statement and Joint Proxy Statement, except for such portions
thereof that relate only to Parent and its subsidiaries, will comply as to form
in all material respects with the provisions of the Securities Act and Exchange
Act.
4.13 Compliance with Law. Except as set forth in Section 4.13 to the
Company Disclosure Schedule, each of Company and its subsidiaries is in
compliance with all applicable laws, statutes, orders, rules, regulations,
policies or guidelines promulgated, or judgments, decisions or orders entered by
any Governmental Authority (collectively, "Applicable Laws"), relating to it or
its business or properties, except for any such failures to be in compliance
therewith which, individually or in the aggregate, would not reasonably be
expected to have a Company Material Adverse Effect and its subsidiaries taken as
a whole.
4.14 Litigation. Except as set forth in Section 4.14 to the Company
Disclosure Schedule or in the Company SEC Documents, there is no suit, claim,
action, proceeding or investigation ("Action") pending or, to the Knowledge of
Company, threatened against Company or any of its subsidiaries which,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Company or a material adverse effect on the ability
of Company to consummate the transactions contemplated hereby. Neither Company
nor any of its subsidiaries is subject to any outstanding order, writ,
injunction or decree which, individually or in the aggregate, insofar as can be
reasonably foreseen, would have a Company Material Adverse Effect or a material
adverse effect on the ability of Company to consummate the transactions
contemplated hereby.
4.15 No Material Adverse Change. Except as set forth in or contemplated by
the Company SEC Documents filed with the Commission as of the date hereof or in
Section 4.15 to the Company Disclosure Schedule, since September 30, 1997, each
of Company and its subsidiaries has conducted its business in the ordinary
course, consistent with past practice, and there has been no: (i) material
adverse change in the business or financial condition of Company and its
subsidiaries taken as a whole, other than those occurring as a result of general
economic or financial conditions or other developments which are not unique to
Company and its subsidiaries but also affect other Persons who participate or
are engaged in the lines of business of which Company and its subsidiaries
participate or are engaged; (ii) material adverse effect on the ability of
Company to consummate the transactions contemplated hereby; (iii) declaration,
setting aside or payment of any dividend or other distribution with respect to
its capital stock; or (iv) material change in its accounting principles,
practices or methods.
4.16 Board Meeting. The Board of Directors of Company, at a meeting duly
called and held, has by the required vote of the directors then in office
determined that this Agreement and the transactions contemplated hereby,
including the Merger, taken together, are fair to and in the best interests of
Company and the Company Shareholders.
4.17 Undisclosed Liabilities. Except: (i) as and to the extent disclosed or
reserved against on the consolidated balance sheet of Company as of September
30, 1997 or the notes thereto included in the Company SEC Documents or otherwise
disclosed in the Company SEC Documents filed with the Commission as of the date
hereof; (ii) as incurred after the date thereof in the ordinary course of
business consistent with prior practice and not prohibited by this Agreement; or
(iii) as set forth in Section 4.17 to the Company Disclosure Schedule, neither
Company nor any of its subsidiaries have any liabilities or obligations of any
nature, whether known or unknown, absolute, accrued, contingent or otherwise and
whether due or to become due, and that would be required by generally accepted
accounting principles to be disclosed and that, individually or in the
aggregate, have or would reasonably be expected to have a Company Material
Adverse Effect.
4.18 Labor Relations. There is no unfair labor practice complaint against
Company or any of its subsidiaries pending before the NLRB and there is no labor
strike, dispute, slowdown or stoppage, or any union organizing campaign,
actually pending or, to the Knowledge of Company, threatened against Company or
any of its subsidiaries, except for any such proceedings which would not
reasonably be expected to have a
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Company Material Adverse Effect. Except as disclosed in the Company SEC
Documents or as set forth in Section 4.18 to the Company Disclosure Schedule,
neither Company nor any of its subsidiaries is a party to, or bound by, any
collective bargaining agreement, contract or other agreement or understanding
with a labor union or labor organization. To the Knowledge of Company, there are
no organizational efforts with respect to the formation of a collective
bargaining unit presently being made or threatened involving Employees of
Company.
4.19 Operation of Company's Business. Since September 30, 1997 through the
date of this Agreement, none of Company or any of its subsidiaries has engaged
in any transaction which, if closed after execution of this Agreement, would
violate Section 5.3(c) hereof except as described or reflected in the Company
SEC Documents or as set forth in Section 4.19 to the Company Disclosure
Schedule.
4.20 Permits; Compliance. Each of Company and its subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
(collectively, "Permits") necessary to own, lease and operate its properties and
to carry on its business as it is now being conducted, except for any such
Permits the failure of which to possess, individually or in the aggregate, would
not reasonably be expected to have a Company Material Adverse Effect.
4.21 Environmental Matters.
(a) As used herein, the term "Environmental Laws" means all federal,
state, local or foreign laws relating to pollution or protection of human
health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or industrial,
toxic or hazardous substances or wastes (collectively, "Hazardous
Materials") into the environment, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal transport or
handling of Hazardous Materials, as well as all authorizations, codes,
decrees, demands or demand letters, injunctions, judgments, licenses,
notices or notice letters, orders, permits, plans or regulations issued,
entered, promulgated or approved thereunder.
(b) Except as set forth in the Company SEC Documents filed with the
Commission as of the date hereof or in Section 4.21(b) to the Company
Disclosure Schedule, there are, with respect to Company, its subsidiaries
or any predecessor of the foregoing, no past or present violations of
Environmental Laws, releases of any material into the environment, actions,
activities, circumstances, conditions, events, incidents, or contractual
obligations which may give rise to any common law environmental liability
or any liability under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 or similar federal, state, local or
foreign laws, other than those which, individually or in the aggregate,
would not reasonably be expected to have a Company Material Adverse Effect,
and none of Company and its subsidiaries has received any notice with
respect to any of the foregoing, nor is any Action pending or the Company's
Knowledge threatened in connection with any of the foregoing.
(c) To Company's Knowledge, except as set forth in the Company SEC
Documents filed with the Commission as of the date hereof or in Section
4.21(c) to the Company Disclosure Schedule, no Hazardous Materials are
contained on or about any real property currently owned, leased or used by
Company or any of its subsidiaries and no Hazardous Materials were released
on or about any real property previously owned, leased or used by Company
or any of its subsidiaries during the period the property was so owned,
leased or used, except in the normal course of Company's business except,
in any case, as could reasonably be expected not to have a Company Material
Adverse Effect.
4.22 Company Stock Ownership. Except as set forth in Section 4.22 to the
Company Disclosure Schedule, neither Company nor any of its subsidiaries owns
any shares of Common Stock or other securities convertible into Common Stock.
4.23 Contracts. Except as set forth in Section 4.23 to the Company
Disclosure Schedule, none of Company, any of its subsidiaries, or, to the
Knowledge of Company, any other party thereto is in violation of or in default
in respect of, nor has there occurred an event or condition which with the
passage of time or giving
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of notice (or both) would constitute a default by Company under, any contract,
agreement, guarantee, lease or executory commitment ("Company Contract")to which
it is a party, except such violations or defaults under such Company Contracts
which, individually or in the aggregate, would not have a Company Material
Adverse Effect.
4.24 Vote Required. The affirmative vote of the holders of record of at
least a majority of the outstanding Company Common Shares with respect to the
Merger are the only votes of the holders of any class or series of the capital
stock of Company required to approve the Merger and the other transactions
contemplated hereby.
4.25 Company Rights Agreement. As of the date hereof and after giving
effect to the execution and delivery of this Agreement, each Company Right is
represented by the certificate representing the associated Company Common Share
and is not exercisable or transferable apart from the associated share of
Company Common Share, and the execution and delivery of this Agreement will not
result in Parent becoming an "Acquiring Person" and the execution and delivery
of, and the consummation of the transactions contemplated by, this Agreement
will not result in a "Distribution Date" or a "Shares Acquisition Date" (each,
as defined in the Company Rights Agreement).
4.26 Antitakeover Statutes Not Applicable. Company has taken all necessary
actions so that no "fair price", "moratorium", "control share acquisition" or
other similar antitakeover statute or regulation will apply to this Agreement,
the Merger or the other transactions contemplated hereby.
ARTICLE V
COVENANTS OF THE PARTIES
The parties hereto agree as follows with respect to the period from and
after the execution of this Agreement.
5.1 Mutual Covenants.
(a) General. Company and Parent shall use, respectively, their best
commercial efforts to take all action and to do all things necessary,
proper or advisable to consummate the Merger and the transactions
contemplated by this Agreement; including, without limitation, using,
respectively, their best efforts to cause the conditions set forth in
Article VI to the other's obligations to be satisfied as soon as reasonably
practicable and will not take or fail to take any action that could
reasonably be expected to result in nonfulfillment of such condition, and
to prepare, execute and deliver such further instruments and take or cause
to be taken such other and further action as any other party hereto shall
reasonably request to consummate the Merger.
(b) HSR Act. Within ten (10) Business Days after the date hereof,
Company and Parent will make such filings as may be required by the HSR Act
with respect to the consummation of the transactions contemplated by this
Agreement and will use best efforts to obtain early termination of any
waiting period under the HSR Act. Company and Parent will file or cause to
be filed as promptly as practicable with the United States Department of
Justice ("Justice Department") any supplemental information which may be
requested pursuant to the HSR Act. All filings referred to in this Section
5.1(b) will comply in all material respects with the requirements of the
respective laws pursuant to which they are made.
Without limiting the generality or effect of the foregoing, and
notwithstanding any provision herein to the contrary, Company and Parent
will: (i) use best efforts to comply as expeditiously as possible with all
lawful requests of Governmental Authorities for additional information and
documents pursuant to the HSR Act; (ii) not (A) extend any waiting period
under the HSR Act or (B) enter into any voluntary agreement with any
Governmental Authorities not to consummate the transactions contemplated by
this Agreement, except with the prior consent of the other; and (iii)
cooperate with each other and use best efforts to obtain the requisite
approval of the FTC and Justice Department, including, without limitation,
(A) the removal, dissolution, stay, or dismissal of any temporary
restraining order which prevents the consummation of the transactions
contemplated by this Agreement or requires as a condition thereto that
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all or any part of the Business be held separate, or (B) the pursuit of
necessary litigation or administrative proceedings (including, if
necessary, participation in proceedings through the trial court level).
(c) Other Governmental Matters. Company and Parent shall use their
best efforts to take any additional action that may be necessary, proper or
advisable in connection with any other notices to, filings with, and
authorizations, consents and approvals of any Governmental Authority and
any third parties that it may be required to give, make or obtain.
(d) Pooling-of-Interests. Company and Parent shall not knowingly take
or fail to take any action that would cause the Merger not to qualify for
pooling of interests accounting treatment for financial reporting purposes.
(e) Tax-Free Treatment. Company and Parent shall not take or fail to
take any action that would cause the Merger not to constitute a Tax-free
"reorganization" under Section 368(a) of the Code.
(f) Public Announcements. Unless otherwise required by Applicable Laws
or requirements of the National Association of Securities Dealers or the
NYSE (and in that event only if time does not permit), at all times prior
to the earlier of the Effective Date or termination of this Agreement
pursuant to Section 7.1, Company and Parent shall not issue any press
release with respect to the Merger without the consent of the other, whose
consent shall not be unreasonably withheld.
(g) Access. From and after the date of this Agreement until the
Effective Date (or the termination of this Agreement), Company and Parent
shall permit representatives of the other to have appropriate access at all
reasonable times to the other's premises, properties, books, records,
contracts, tax records, documents, customers and suppliers in a manner that
will not unreasonably interfere with the other operations. Information
obtained by Parent and Company pursuant to this Section 5.1(g) shall be
subject to the provisions of the confidentiality agreement between them
dated January 20, 1998 ("Confidentiality Agreement"), which agreement
remains in full force and effect.
(h) Certain Actions. Without limiting the generality of, with respect
to Company, Section 5.3(c), and with respect to Parent, Section 5.2(c),
during the period from the date of this Agreement to the Effective Date or
the earlier termination of this Agreement pursuant to Section 7.1, neither
Company nor Parent shall, except as otherwise expressly contemplated by
this Agreement and the transactions contemplated hereby or as set forth in
Section 5.1(h) to each of the parties respective disclosure schedules,
without the prior written consent of the other party, which consent shall
not be unreasonably withheld:
(i) do or effect any of the following actions with respect to its
securities: (A) adjust, split, combine or reclassify its capital stock;
(B) make, declare or pay any dividend or distribution (except for the
declaration and payment of regular quarterly cash dividends on Company
Common Shares and Common Stock, respectively, in each case with usual
record and payment dates for such dividends in accordance with past
dividend practices) on, or directly or indirectly redeem, purchase or
otherwise acquire, any shares of its capital stock or any securities or
obligations convertible into or exchangeable for any shares of its
capital stock (except in connection with the use of shares of capital
stock to pay the exercise price or tax withholding in connection with
stock-based employee benefit plans of the parties or any of their
respective subsidiaries); (C) grant any person any right or option to
acquire any shares of its capital stock other than pursuant to a
currently authorized stock option plan; (D) issue, deliver or sell or
agree to issue, deliver or sell any additional shares of its capital
stock or such securities (except pursuant to the exercise of outstanding
convertible securities, warrants, options or rights to purchase Common
Stock or Company Common Shares and other than the issuance of Parent
Rights and reservation of Parent Series C Preferred Stock pursuant to
the Parent Rights Agreement in accordance with the terms thereof); or
(E) enter into any agreement, understanding or arrangement with respect
to the sale or voting of its capital stock other than pursuant to the
provisions of this Agreement.
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(ii) sell, transfer, lease, pledge, mortgage, encumber or otherwise
dispose of any of its property or assets which are material,
individually or in the aggregate, other than in the ordinary course of
business consistent with past practice;
(iii) make or propose any changes in its Articles of Incorporation
or Bylaws (or other similar organizational documents), each as amended
and restated, or other organizational documents, other than the Parent
Amendment;
(iv) merge or consolidate with any other person or acquire a
material amount of assets or capital stock of any other person other
than in connection with this Agreement and the transactions contemplated
hereby;
(v) incur, create, assume or otherwise become liable for
indebtedness for borrowed money, other than in the ordinary course of
business consistent with past practice, or assume, guarantee, endorse or
otherwise as an accommodation become responsible or liable for
obligations of any other individual, corporation or other entity, other
than in the ordinary course of business consistent with past practice;
(vi) enter into or modify any employment, severance, termination or
similar agreements or arrangements with, or grant any bonuses, salary
increases, severance or termination pay to, any officer, director,
consultant or employee other than salary increases and bonuses granted,
or modifications made, in the ordinary course of business consistent
with past practice, or otherwise increase the compensation or benefits
provided to any officer, director, consultant or employee except as may
be required by Applicable Law, this Agreement, any applicable collective
bargaining agreement or a binding written contract in effect on the date
of this Agreement;
(vii) materially change its method of doing business or materially
change any method or principle of accounting in a manner that is
inconsistent with past practice;
(viii) settle any Actions, whether now pending or hereafter made or
brought involving an amount in excess of $250,000;
(ix) except in the ordinary course of business, modify, amend or
terminate, or waive, release or assign any material rights or claims
with respect to, any material contract to which either is a party or any
confidentiality agreement to which either is a party;
(x) incur or commit to any capital expenditures, obligations or
liabilities in respect thereof, other than in the ordinary course of
business consistent with past practice or pursuant to a capital
expenditure program previously approved by the Board of Directors or
otherwise currently underway;
(xi) take any action to exempt under or make not subject to any
applicable state takeover law or state law that purports to limit or
restrict business combinations or the ability to acquire or vote shares,
any person or entity (other than between the parties or their
subsidiaries) or any action taken thereby, which person, entity or
action would have otherwise been subject to the restrictive provisions
thereof and not exempt therefrom;
(xii) permit or cause any subsidiary to do any of the foregoing or
agree or commit to do any of the foregoing; or
(xiii) agree in writing or otherwise to take any of the foregoing
actions.
(i) Brokers or Finders. Each of Parent and Company shall indemnify and
hold the other harmless from and against any and all claims, liabilities or
obligations with respect to any brokerage, finders or similar fee or
commission or expenses related to ▇▇▇▇▇▇ Brothers, in the case of Parent,
and ▇.▇. ▇▇▇▇▇▇, in the case of Company, or asserted by any person on the
basis of any act or statement alleged to have been made by such party or
its Affiliate.
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5.2 Covenants of Parent.
(a) Parent Shareholders' Meeting. Parent shall take all action in
accordance with Applicable Laws and the Parent Articles and Bylaws
necessary to convene a meeting of Parent Shareholders as promptly as
practicable to consider and vote upon the Parent Shareholder
Authorizations.
(b) Preparation of Joint Proxy Statement. Parent shall cooperate with
Company to, and shall, as soon as is reasonably practicable, prepare and
file a Joint Proxy Statement and Registration Statement and all required
amendments and supplements with the Commission and shall cooperate with
Company to, and shall, use all reasonable efforts to respond to comments
and to have the Registration Statement declared effective by the Commission
as promptly as practicable and to maintain the effectiveness of the
Registration Statement through the Effective Date. Parent shall use its
best commercial efforts to mail at the earliest practicable date to Parent
Shareholders the Joint Proxy Statement, which shall include all information
required under Applicable Laws to be furnished to Parent Shareholders in
connection with the Merger, the transactions contemplated thereby and the
authorization of additional shares. Parent shall advise Company promptly
after it receives notice of (i) the Registration Statement being declared
effective or any supplement or amendment thereto being filed with the
Commission, (ii) the issuance of any stop order in respect of the
Registration Statement, and (iii) the receipt of any correspondence,
comments or requests from the Commission in respect of the Registration
Statement (copies of which it shall furnish to Company). Parent shall give
Company and its counsel the opportunity to review the Joint Proxy Statement
and the Registration Statement and all responses to requests for additional
information by and replies to comments of the SEC before their being filed
with or sent to the SEC. Parent also shall cooperate with Company to, and
shall, take such other reasonable actions (other than qualifying to do
business in any jurisdiction in which it is not so qualified) required to
be taken under any applicable state securities laws in connection with the
issuance of shares of Parent Common Stock in the Merger.
(c) Conduct of Parent's Operations. During the period from the date of
this Agreement to the Effective Date, and except as set forth in Section
5.2(c) to the Parent Disclosure Schedule, Parent shall conduct its
operations in the ordinary course except as expressly contemplated by this
Agreement and the transactions contemplated hereby and shall use its best
commercial efforts to maintain and preserve its business organization and
its material rights and franchises and to retain the services of its
officers and key Employees and maintain relationships with customers,
suppliers and other third parties to the end that their goodwill and
ongoing business shall not be impaired in any material respect.
(d) Indemnification. Parent shall cause the Surviving Corporation to
keep in effect provisions in its Articles of Incorporation and Code of
Regulations providing for exculpation of director and officer liability and
indemnification of the Indemnified Parties to the fullest extent permitted
under Applicable Law, which provisions shall not be amended except as
required by Applicable Law or except to make changes permitted by law that
would enlarge the Indemnified Parties' right of indemnification and shall
cause the Surviving Corporation to indemnify in accordance therewith. In
the event of any actual or threatened claim, action, suit, proceeding or
investigation in respect of such acts or omissions, (i) Parent shall cause
the Surviving Corporation to pay the reasonable fees and expenses of
counsel selected by the indemnified party, which counsel shall be
reasonably acceptable to Parent, in advance of the final disposition of any
such action to the full extent permitted by Applicable Law, upon receipt of
any undertaking required by Applicable Law, and (ii) Parent shall cause the
Surviving Corporation to cooperate in the defense of any such matter;
provided, however, that the Surviving Corporation shall not be liable for
any settlement effected without its written consent (which consent shall
not be unreasonably withheld).
(e) Directors' and Officers' Insurance. Parent agrees to use its best
commercial efforts to cause the Surviving Corporation to maintain in effect
for not less than six years after the Effective Date the current policies
of directors' and officers' liability insurance maintained by Company with
respect to matters occurring prior to the Effective Date; provided,
however, that (i) the Surviving Corporation may substitute therefor
policies of comparable coverage containing terms and conditions which, when
taken as a whole, are no less advantageous to the covered officers and
directors and (ii) the Surviving Corporation shall not be required to pay
an annual premium for such insurance coverage in excess of 200% of the
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current annual premium paid by Company for its existing coverage, but in
such case shall purchase as much coverage as possible for such amount.
(f) Employee Benefits. Without limiting the effect of Section 2.3
Parent covenants and agrees that, from and after the Effective Date, it
will cause the Surviving Corporation and its subsidiaries to provide for
the benefit of employees of the Surviving Corporation and its subsidiaries
either (i) benefits that are no less favorable, in the aggregate, as those
provided to Employees or Former Employees of Company or its subsidiaries
immediately prior to the date of this Agreement, or (ii) benefits that are
no less favorable, in the aggregate, as those provided to employees of
Parent or its subsidiaries after the Effective Date. If any Employee (as
defined below) becomes a participant in any employee benefit or
compensation plan of Parent, a Parent subsidiary (other than the Surviving
Corporation) or a Parent affiliate, such Employee shall be given credit
under such plan for all service with Company and its subsidiaries,
affiliates and predecessors which is recognized by Company under a similar
Company Plan and is rendered prior to the time the Employee becomes such a
participant, for all purposes; provided, however, such service credit shall
not result in a duplication of benefits. To the extent employee benefit
plans of Parent or its subsidiaries or affiliates provide medical or dental
welfare benefits to Employees or Former Employees (as defined below) after
the Effective Date, such plans shall waive any preexisting conditions,
medical certifications and actively-at-work exclusions and shall provide
that any expenses incurred on or before the Effective Date shall be taken
into account under such plans for purposes of satisfying applicable
deductible, coinsurance and maximum out-of-pocket provisions. For purposes
of the foregoing, (i) "Employees" shall mean the employees of Company or a
subsidiary of Company whose terms of employment are not subject to a
collective bargaining agreement immediately prior to the Effective Date,
including, without limitation, any employee who is absent at the Effective
Date on short-term disability, long-term disability, Workers' Compensation
or an authorized leave (such as maternity, military, family and medical
leaves or other leaves where return to work is subject to statutory
requirements), and (ii) "Former Employees" shall mean any former Employees
of Company or a Company subsidiary whose employment terminated prior to the
Effective Date (whether by retirement or otherwise).
Parent shall cause the Surviving Corporation and its subsidiaries to
honor all Company's existing agreements with any Employee.
(g) Notification of Certain Matters. Parent shall give prompt notice
to Company of and will use all commercially reasonable efforts to cure (i)
the occurrence or non-occurrence of any event the occurrence or
non-occurrence of which would cause any Parent or Subcorp representation or
warranty contained in this Agreement to be untrue or inaccurate at or prior
to the Effective Date and (ii) any material failure of Parent to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any
notice pursuant to this Section 5.2(g) shall not limit or otherwise affect
the remedies available hereunder to Company.
(h) Parent Shareholders' Approvals. Parent shall, as promptly as
practicable, submit the issuance of Parent Common Stock in the Merger as
required by the NYSE for the approval of its shareholders at a meeting of
its shareholders ("Parent Shareholders' Meeting") and shall, subject to the
fiduciary duties of the Board of Directors of Parent under Louisiana Law,
use its reasonable best efforts to obtain the Parent Shareholder
Authorizations. Parent shall, through its Board of Directors (i) subject to
the fiduciary duties of the members thereof under Louisiana Law, recommend
to its shareholders approval of Parent Shareholder Authorizations and (ii)
authorize and cause an officer of Parent to vote Parent's shares of common
stock of the Subcorp for approval and adoption of this Agreement and the
transactions contemplated hereby and shall take all additional actions as
the sole shareholder of Subcorp necessary to approve and adopt this
Agreement and the transactions contemplated hereby.
(i) Affiliates of Parent. The Persons named in Section 5.2(i) to the
Parent Disclosure Schedule are, to Parent's Knowledge, the only Persons who
may be deemed Affiliates of Parent under Rule 145 of the 1933 Act. Each
person named in Section 5.2(i) to the Parent Disclosure Schedule has
executed a written agreement substantially in the form of Exhibit A. At
least 30 days prior to the Effective Date, Parent shall deliver to the
Company a list of names and addresses of those Persons who were, in
Parent's
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reasonable judgment, at the record date for the Parent Shareholders'
Meeting, Affiliates of Parent within the meaning of Rule 145 of the 1933
Act (each such person, "Parent Affiliate"). Parent shall use all reasonable
efforts to deliver or cause to be delivered to the Company, prior to the
Effective Date, from each of the Parent Affiliates identified in the
foregoing list, a written agreement substantially in the form of Exhibit A.
(j) Change in Control. Parent agrees that the consummation of the
Merger shall constitute a "Change in Control" of Company for all purposes
within the meaning of all compensation or benefit plans or agreements of
Company and its subsidiaries.
(k) Directors of Parent. Parent shall cause its Board of Directors to
take such action as may be necessary to increase the size of Parent's Board
of Directors from ten (10) to thirteen (13) members and shall cause to be
appointed to the Board of Directors of Parent ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇., effective immediately following the Effective Date. At the next
annual meeting of Parent Shareholders thereafter, the Board of Directors of
Parent shall cause to be nominated (i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. for election as
a Class III Director with a term of office expiring in 2000, and (ii)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ for election as a Class I Director with a term of office
expiring in 2001.
5.3 Covenants of Company.
(a) Company Shareholders' Meeting. Company shall take all action in
accordance with Applicable Laws and its Articles of Incorporation and Code
of Regulations, each as amended and restated, necessary to convene a
meeting of Company Shareholders as promptly as practicable to consider and
vote upon the approval of the Merger, this Agreement and the transactions
contemplated hereby.
(b) Information for the Registration Statement and Preparation of
Joint Proxy Statement. Company shall promptly furnish Parent with all
information concerning it as may be required for inclusion in the
Registration Statement. Company shall cooperate with Parent in the
preparation of the Registration Statement in a timely fashion and in
Parent's efforts to have the Registration Statement declared effective by
the Commission as promptly as practicable. If at any time prior to the
Effective Date, any information pertaining to Company contained in or
omitted from the Registration Statement makes such statements contained in
the Registration Statement false or misleading, Company shall promptly so
inform Parent and provide Parent with the information necessary to make
statements contained therein not false and misleading. Company shall use
all reasonable efforts to mail at the earliest practicable date to Company
Shareholders the Joint Proxy Statement, which shall include all information
required under Applicable Laws to be furnished to Company Shareholders in
connection with the Merger and the transactions contemplated thereby.
(c) Conduct of Company's Operations. During the period from the date
of this Agreement to the Effective Date, Company shall conduct its
operations in the ordinary course except as expressly contemplated by this
Agreement and the transactions contemplated hereby and shall use its best
commercial efforts to maintain and preserve its business organization and
its material rights and franchises and to retain the services of its
officers and key employees and maintain relationships with customers,
suppliers and other third parties to the end that their goodwill and
ongoing business shall not be impaired in any material respect.
(d) No Solicitation. Company agrees that, during the term of this
Agreement, it shall not, and shall not authorize or permit any of its
subsidiaries or any of its or its subsidiaries' directors, officers,
employees, agents or representatives, directly or indirectly, to: (i)
solicit, initiate, encourage or facilitate, or furnish or disclose
non-public information in furtherance of, any inquiries or the making of
any proposal with respect to any recapitalization, merger, consolidation or
other business combination involving Company, or acquisition of 10% or more
of the capital stock or any material portion of the assets (except as set
forth in Section 5.3(d) to the Company Disclosure Schedule and except for
acquisition of assets in the ordinary course of business consistent with
past practice) of Company, or any combination of the foregoing ("Company
Competing Transaction"); (ii) negotiate, explore or otherwise engage in
discussions with any person (other than Parent, Subcorp or their respective
directors, officers,
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employees, agents and representatives) with respect to any Company
Competing Transaction; or (iii) enter into any agreement, arrangement or
understanding requiring it to abandon, terminate or fail to consummate the
Merger or any other transactions contemplated by this Agreement; provided,
however, that nothing contained in this Section 5.3(d) shall prohibit the
Board of Directors of Company from (i) furnishing information to (but only
pursuant to a confidentiality agreement in customary form and having terms
and conditions no less favorable to Company than the Confidentiality
Agreement) or entering into discussions or negotiations with any person or
group that makes an unsolicited bona fide written proposal for a Company
Competing Transaction (an "Alternative Proposal"), if, and only to the
extent that, (A) the Board of Directors of Company, based upon the written
opinion of outside counsel (a copy of which shall be provided promptly to
Parent), determines in good faith that such action is required for the
Board of Directors to comply with its fiduciary duties to shareholders
imposed by law, (B) such Alternative Proposal is not conditioned on the
receipt of financing, the Board of Directors has reasonably concluded in
good faith that the person or group making such Alternative Proposal will
have adequate sources of financing to consummate such Alternative Proposal
and that such Acquisition Proposal is more favorable to the Company's
shareholders than the Merger, and the Board of Directors has received a
written opinion from a nationally-recognized investment banking firm (a
copy of which shall be provided promptly to Parent) to the effect that the
consideration to be received by shareholders of Company in connection with
such Alternative Proposal is superior, from a financial point of view, to
the consideration to be received by them in the Merger, (C) prior to
furnishing such information to, or entering into discussions or
negotiations with, such person or entity, Company provides written notice
to Parent to the effect that it is furnishing information to, or entering
into negotiations with, such Person, and (D) Company keeps Parent informed
of the status and all material information with respect to any such
discussions or negotiations, and (ii) to the extent applicable, complying
with Rule 14e-2 promulgated under the Exchange Act with regard to an
Alternative Proposal.
(e) Affiliates of Company. The Persons named in Section 5.3(e) to the
Company Disclosure Schedule are, to Company's Knowledge, the only Persons
who may be deemed Affiliates of Company under Rule 145 of the 1933 Act.
Each person in Section 5.3(e) to the Company Disclosure Schedule has
executed a written agreement substantially in the form of Exhibit B. At
least 30 days prior to the Effective Date, Company shall deliver to Parent
a list of names and addresses of those Persons who were, in Company's
reasonable judgment, at the record date for the Company's Shareholders'
Meeting, affiliates of Company within the meaning of Rule 145 of the 1933
Act (each such person, "Company Affiliate"). Company shall use all
reasonable efforts to deliver or cause to be delivered to the Parent, prior
to the Effective Date, from each of the Company Affiliates identified in
the foregoing list, a written agreement substantially in the form of
Exhibit B.
(f) Notification of Certain Matters. Company shall give prompt notice
to Parent of (i) the occurrence or non-occurrence of any event the
occurrence or non-occurrence of which would cause any Company
representation or warranty contained in this Agreement to be untrue or
inaccurate at or prior to the Effective Date and (ii) any material failure
of Company to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder; provided, however, that
the delivery of any notice pursuant to this Section 5.3(f) shall not limit
or otherwise affect the remedies available hereunder to Parent.
(g) Letter Agreement and Irrevocable Proxy. Each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇, R. ▇▇▇▇▇ ▇▇▇▇▇, and each other person
who is a member of the Board of Directors of Company (other than ▇▇▇▇
▇▇▇▇▇▇▇ III and ▇▇▇▇ ▇▇▇▇▇▇), shall have executed as of the date of this
Agreement a letter in the form attached hereto as Exhibit C.
(h) Incentive Plan Letter Agreement. Each person who is a participant
in Company's 1991 Long-Term Incentive Plan ("Incentive Plan") and who is
subject to the provisions of Section 16(b) of the Exchange Act shall have
executed as of the date of this Agreement a letter in the form attached as
Exhibit D to the effect that such person has waived his or her right, as
contemplated in Section 6.05 of the Incentive Plan, to surrender for
cancellation following the Change of Control (as defined in the
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Incentive Plan) contemplated by this Agreement any Option (as defined in
the Incentive Plan) held by such person and to receive a cash payment
therefor.
(i) Company Rights Agreement. The Board of Directors of Company has
approved and Company has executed, and promptly after the execution of this
Agreement the Company will cause the Rights Agent under the Company Rights
Agreement to execute and deliver, an amendment to the Company Rights
Agreement which provides and specifically confirms that: (i) neither this
Agreement, the Merger nor any of the other transactions contemplated hereby
(A) will cause Parent to become an "Acquiring Person," or result in the
occurrence of a "Shares Acquisition Date" or the occurrence of a
"Distribution Date" (as defined in the Company Rights Agreement), (B) will
permit any Person to have the right under the Company Rights Agreement to
acquire, or to make the Company Rights ever exercisable for, any securities
of Parent, or (C) will require the sending of any notices under the Company
Rights Agreement; (ii) the Rights (as such term is defined in the Company
Rights Agreement) will expire immediately prior to or simultaneously with
the Effective Date; and (iii) this Agreement, the Merger, the other
transactions and all actions of Parent and its Affiliates contemplated
hereby will be excluded and exempt from the operation of and will not
trigger the provisions of the Company Rights Agreement (including, without
limitation, Sections 11(a) and 13 and all similar provisions).
ARTICLE VI
CONDITIONS
6.1 Mutual Conditions. The obligations of the parties to consummate the
Merger shall be subject to fulfillment of the following conditions:
(a) No temporary restraining order, preliminary or permanent
injunction or other order or decree which prevents the consummation of the
Merger shall have been issued and remain in effect, and no statute, rule or
regulation shall have been enacted by any Governmental Authority which
prevents the consummation of the Merger.
(b) All waiting periods applicable to the consummation of the Merger
under the HSR Act shall have expired or been terminated and all other
consents, approvals, permits or authorizations required to be obtained
prior to the Effective Date from any Governmental Authority in connection
with the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby shall have been obtained, failure to
obtain which would reasonably be expected to have a Parent Material Adverse
Effect following the Effective Date.
(c) The Merger and the transactions contemplated hereby shall have
been approved by the Company Shareholders in the manner required by any
Applicable Law.
(d) The Parent Shareholder Authorizations shall have been approved by
the Parent Shareholders in the manner required by any Applicable Law.
(e) The Commission shall have declared the Registration Statement
effective. On the Closing Date and at the Effective Date, no stop order or
similar restraining order shall have been threatened by the Commission or
entered by the Commission or any state securities administrator prohibiting
the Merger.
(f) Parent shall have received an opinion of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
L.L.P. and Company shall have received an opinion of Milbank, Tweed, ▇▇▇▇▇▇
& ▇▇▇▇▇▇ substantially to the effect that, on the basis of the facts,
representations and assumptions set forth in such opinion which are
consistent with the state of the facts then existing, under Applicable Law,
for Federal income tax purposes, the Merger will constitute a
reorganization under Section 368(a) of the Code. In rendering such
opinions, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P. and Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
may require and rely on representations contained in certificates of
Parent, Company, Subcorp and others, as they deem reasonably appropriate.
(g) Parent shall have received a letter, in form and substance
reasonably satisfactory to Parent, from Deloitte and Touche LLP, dated the
Closing Date, stating that Deloitte & Touche LLP concurs
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with the Parent's conclusion that, as of the date of their report, no
conditions exist that would preclude the Parent's accounting for the Merger
as a pooling of interests.
(h) Company shall have received a letter, in form and substance
reasonably satisfactory to Company, from Deloitte & Touche LLP, dated the
Closing Date, stating that Deloitte & Touche LLP concurs with the Company's
conclusion that, as of the date of their report, no conditions exist that
would preclude the Company's ability to be a party in a business
combination to be accounted for as a pooling of interests.
(i) The shares of Parent Common Stock to be issued in the Merger shall
have been authorized for listing on the NYSE, subject to official notice of
issuance.
6.2 Conditions to Obligations of Company. The obligations of Company to
consummate the Merger and the transactions contemplated hereby shall be subject
to the fulfillment of the following conditions unless waived by Company:
(a) The representations and warranties of each of Parent and Subcorp
set forth in Article IV shall be true and correct on the date hereof and on
and as of the Closing Date as though made on and as of the Closing Date
(except for representations and warranties made as of a specified date,
which need be true and correct only as of the specified date), except as
affected by the transactions contemplated by this Agreement and except for
such inaccuracies which have not had and would not reasonably be expected
to have in the reasonably foreseeable future a Parent Material Adverse
Effect.
(b) Each of Parent and Subcorp shall have performed in all material
respects each obligation and agreement and shall have complied in all
material respects with each covenant to be performed and complied with by
it hereunder at or prior to the Effective Date.
(c) Each of Parent and Subcorp shall have furnished Company with a
certificate dated the Closing Date signed on behalf of it by the Chairman,
President or any Vice President to the effect that the conditions set forth
in Sections 6.2(a) and (b) have been satisfied.
(d) On or prior to the Closing Date, the Parent Rights shall not have
become exercisable or transferable apart from the associated shares of
Common Stock, no "Stock Acquisition Date" or "Distribution Date" (each as
defined in the Parent Rights Agreement) shall have occurred and the Parent
Rights shall not have become nonredeemable, in each case other than as a
result of actions by Company or any of its Affiliates.
6.3 Conditions to Obligations of Parent and Subcorp. The obligations of
Parent to consummate the Merger and the other transactions contemplated hereby
shall be subject to the fulfillment of the following conditions unless waived by
each of Parent and Subcorp:
(a) The representations and warranties of Company set forth in Article
III shall be true and correct on the date hereof and on and as of the
Closing Date as though made on and as of the Closing Date (except for
representations and warranties made as of a specified date, which need be
true and correct only as of the specified date), except as affected by the
transactions contemplated by this Agreement and except for such
inaccuracies which have not had and would not reasonably be expected to
have in the reasonably foreseeable future a Company Material Adverse
Effect.
(b) Company shall have performed in all material respects each
obligation and agreement and shall have complied in all material respects
with each covenant to be performed and complied with by it hereunder at or
prior to the Effective Date.
(c) Company shall have furnished Parent with a certificate dated the
Closing Date signed on its behalf by its Chairman, President or any Vice
President to the effect that the conditions set forth in Sections 6.3(a),
(b) and (d) have been satisfied.
(d) Company shall not have received, prior to the end of the ten (10)
day period set out in section 1701.85(A)(2) of the OGCL, notice from the
holder or holders of more than five percent (5%),
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on a fully diluted common stock basis, of the Company Shares issued and
outstanding on the record date for the determination of Company
Shareholders entitled to vote on the Merger who have not voted in favor of
the Merger, have perfected their appraisal rights under the OGCL and have
not withdrawn or lost such rights that such holders have exercised or
intend to exercise their appraisal rights under Sections 1701.84 and
1701.85 of the OGCL. Company will give prompt notice to Parent of any such
notice and deliver copies to Parent the next business day after any such
notice is received.
(e) On or prior to the Closing Date, the Company Rights shall not have
become exercisable or transferable apart from the associated shares of
Company Common Shares, no "Shares Acquisition Date" or "Distribution Date"
(each as defined in the Company Rights Agreement) shall have occurred and
the Company Rights shall not have become nonredeemable, in each case other
than as a result of actions by Parent or any of its Affiliates.
ARTICLE VII
TERMINATION AND AMENDMENT
7.1 Termination. This Agreement may be terminated at any time prior to the
Effective Date, whether before or after approval and adoption of this Agreement
by Company Shareholders and approval of the Parent Shareholder Authorizations:
(a) by mutual consent of Company and Parent;
(b) by either Company or Parent if any permanent injunction or other
order or decree of a court or other competent Governmental Authority
preventing the consummation of the Merger shall have become final and
nonappealable, provided that the party seeking to terminate this Agreement
under Section 7.1(b) shall have used its best commercial efforts to remove
such injunction, order or decree;
(c) by either Company or Parent if the Merger shall not have been
consummated before September 30, 1998, unless extended by the Boards of
Directors of both Company and Parent (provided that the right to terminate
this Agreement under this Section 7.1(c) shall not be available to any
party whose failure or whose affiliate's failure to perform any material
covenant or obligation under this Agreement has been the cause of or
resulted in the failure of the Merger to occur on or before such date);
(d) by either Company or Parent if at the meeting of Company
Shareholders held for such purpose (including any adjournment or
postponement thereof) the requisite vote of the Company Shareholders to
approve the Merger and the transactions contemplated hereby shall not have
been obtained;
(e) by either Company or Parent if at the meeting of Parent
Shareholders held for such purpose (including any adjournment or
postponement thereof) the requisite vote of the Parent Shareholders to
approve the Parent Shareholder Authorizations shall not have been obtained;
(f) by either Company or Parent (provided that the terminating party
is not then in material breach of any representation, warranty, covenant or
other agreement contained herein) if there shall have been a material
breach of any of the covenants or agreements or any of the representations
or warranties set forth in this Agreement on the part of the other party,
which breach is not cured within thirty (30) days following written notice
given by the terminating party to the party committing such breach, or
which breach, by its nature, cannot be cured prior to the Closing;
(g) by Company if its Board of Directors shall in good faith determine
that a competing transaction is more favorable to its shareholders in the
aggregate and from a financial point of view than the transactions
contemplated by this Agreement and there shall be delivered to Parent
written notice of the determination by the party's Board of Directors to
terminate this Agreement pursuant to this Section 7.1(g); provided,
however, that neither party may terminate this Agreement pursuant to this
Section 7.1(g) unless (i) five business days shall have elapsed after
delivery of the notice referred to above, and (ii) at the end of such five
business-day period the party's Board of Directors shall continue to
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believe that such competing transaction is more favorable to such party's
shareholders in the aggregate and from a financial point of view than the
transactions contemplated by this Agreement; or
(h) by the Company in the event that the volume weighted average
trading price of Common Stock, rounded to the nearest three decimal places,
for the fifteen consecutive trading days ending on and including the third
trading day prior to the Closing Date ("Test Period"), as reported by
Bloomberg Financial Markets, is less than $57.50, and that the Peer Group
Composite Index outperforms the Common Stock Index by more than 20
percentage points.
7.2 Amendment. This Agreement may be amended by the parties hereto, by
action taken or authorized by their respective Boards of Directors, at any time
before or after adoption of this Agreement by Company Shareholders or
authorization of issuance of shares of Common Stock in the Merger by Parent
Shareholders, but after each such approval or authorization, no amendment shall
be made which by law requires further approval or authorization by the Company
Shareholders or Parent Shareholders, as the case may be, without such further
approval or authorization. Notwithstanding the foregoing, this Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto.
7.3 Extension; Waiver. At any time prior to the Effective Date, Company
(with respect to Parent) and Parent (with respect to Company) by action taken or
authorized by their respective Boards of Directors, may, to the extent legally
allowed: (i) extend the time for the performance of any of the obligations or
other acts of such party; (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in a written instrument signed on behalf
of such party.
7.4 Effect of Termination. If this Agreement is terminated pursuant to
Section 7.1, this Agreement shall become void and of no effect with no liability
on the part of any party hereto, except that (i) the confidentiality provisions
in Sections 5.1(g) and Sections 5.1(i), 8.7, 8.8, 8.9 and 8.12 shall survive the
termination of this Agreement and (ii) such termination shall not relieve any
party hereto of any liability for any willful breach by that party of its
covenants, agreements or other obligations under this Agreement occurring prior
to such termination.
ARTICLE VIII
MISCELLANEOUS
8.1 Survival of Representations and Warranties. The representations and
warranties made herein by the parties hereto shall not survive the Effective
Date. This Section 8.1 shall not limit any covenant or agreement of the parties
hereto, which by its terms contemplates performance after the Effective Date or
the termination of this Agreement.
8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (delivery
of which is confirmed) or received through a nationally recognized overnight
courier service to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Subcorp:
Southdown, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to
▇▇▇▇ ▇. ▇▇▇▇▇▇
Bracewell & ▇▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Company:
Medusa Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
8.3 Interpretation. When a reference is made in this Agreement to an
Article or Section, such reference shall be to an Article or Section of this
Agreement unless otherwise indicated. The headings and the table of contents
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
8.4 Counterparts. This Agreement may be executed in counterparts, which
together shall constitute one and the same Agreement. The parties may execute
more than one copy of the Agreement, each of which shall constitute an original.
8.5 Entire Agreement. This Agreement (including the documents and the
instruments referred to herein), the disclosure schedules of the Company and
Parent and the Confidentiality Agreement constitute the entire agreement among
the parties and supersede all contemporaneous oral and all prior agreements and
understandings, agreements or representations by or among the parties, written
and oral, with respect to the subject matter hereof and thereof. Each of Company
and Parent expressly warrants and represents and does hereby state that no
promise or agreement which is not herein expressed has been made in executing
this Agreement, and that neither Company nor Parent is relying on any statement
or representation of any agent of the parties to this Agreement.
8.6 Third Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended or shall be construed to create any third party
beneficiaries, except for the provisions of Sections 2.3, 5.2(d), 5.2(e),
5.2(f), 5.2(j) and 5.2(k), which may be enforced by the beneficiaries thereof
(the expenses, including reasonable attorneys' fees, that may be incurred
thereby in enforcing such provisions to be paid by Parent).
8.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICTS OF LAW EXCEPT TO THE EXTENT THE OGCL IS MANDATORILY APPLICABLE TO
THE MERGER.
8.8 Jurisdiction. Any legal action, suit, or proceeding in law or equity
arising out of or relating to this Agreement and transactions contemplated by
this Agreement may be instituted in any state or federal court (or if subject
matter jurisdiction is unavailable in such court, then in state court) in
Cleveland, Ohio or ▇▇▇▇▇▇ County, Houston, Texas, and each party agrees not to
assert, by way of motion, as a defense, or otherwise, in any such action, suit,
or proceeding, any claim that it is not subject personally to the jurisdiction
of such court, that its property is exempt or immune from attachment or
execution, that the action, suit, or proceeding is brought in an inconvenient
forum, that the venue of the action, suit, or proceeding is improper or that
this
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Agreement, or the subject matter hereof or thereof may not be enforced in or by
such court. Each party further irrevocably submits to the jurisdiction of any
such court in any such action, suit, or proceeding. Any and all service of
process and any other notice in any such action, suit, or proceeding shall be
effective against any party if given by registered or certified mail, return
receipt requested, or by any other means of mail which requires a signed
receipt, postage prepaid, mailed to such party at the address listed in Section
8.2. Nothing herein contained shall be deemed to affect the right of any party
to serve process in any manner permitted by law or to commence legal proceedings
or otherwise proceed against any other party in any jurisdiction other than Ohio
or Texas.
8.9 Waiver of Jury Trial. COMPANY, PARENT AND SUBCORP HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
8.10 Specific Performance. The transactions contemplated by this Agreement
are unique. Accordingly, each of the parties acknowledges and agrees that, in
addition to all other remedies to which it may be entitled, each of the parties
hereto is entitled to a decree of specific performance, provided that such party
is not in material default hereunder.
8.11 Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns.
8.12 Expenses and Fees.
(a) Company and Parent shall pay their own costs and expenses
associated with the transactions contemplated by this Agreement, except
that Company and Parent shall share equally: (i) the filing fees in
connection with the filing of the Joint Proxy Statement and Registration
Statement with the Commission; (ii) the expenses incurred in connection
with printing and mailing the Joint Proxy Statement to the Company
Shareholders and Parent Shareholders; and (iii) any filing fees incurred
pursuant to Section 5.1(b).
(b) If this Agreement is terminated: (i) by Company pursuant to
Section 7.1(g); (ii) by Parent pursuant to Section 7.1(f) if Company's
material breach of any representation, warranty, covenant or other
agreement under this Agreement is the basis for such termination and a
Prior Event shall have occurred prior thereto; (iii) by Company or Parent
pursuant to Section 7.1(d) if a Prior Event shall have occurred prior to
such termination; or (iv) by Company pursuant to Section 7.1(h); then
Company will, in the case of a termination under clauses (i) or (ii) of
this paragraph, within three business days following such termination, or
in the case of a termination under clause (iii) of this paragraph, within
three business days following the consummation of a Company Competing
Transaction, pay to Parent a termination fee in the amount of $30,000,000,
and in the case of a termination under clause (iv) of this paragraph,
within three business days following such termination, pay to Parent a
termination fee in the amount of $15,000,000, in each case payable in cash
by wire transfer in immediately available funds to an account designated by
Parent.
(c) As used herein, the terms "Beneficial Ownership" and "Beneficially
Own" shall have the meanings ascribed to them in Rule 13d-3 under the
Exchange Act; the term "person" shall have the meaning specified in
sections 3(a)(9) and 13(d)(3) of the Exchange Act. A "Prior Event" shall
mean any of the following events:
(i) any person (other than Parent or its subsidiaries) shall have
commenced (as such term is defined in Rule 14d-2 under the Exchange Act)
or shall have filed a registration statement under the Securities Act,
with respect to, a tender offer or exchange offer to purchase any shares
of Company Common Shares such that, upon consummation of such offer,
such person would Beneficially Own or control 15% or more of the then
outstanding Company Common Shares; or
▇-▇▇
▇▇
(▇▇) Company or any of its subsidiaries shall have entered into,
authorized, recommended, proposed, or publicly announced an intention to
enter into, authorize, recommend or propose an agreement, arrangement or
understanding with any person (other than Parent or any of its
subsidiaries) to, or any person (other than Parent or any of its
subsidiaries) shall have publicly announced an intention to (A) effect
any Company Competing Transaction, (B) purchase, lease or otherwise
acquire 15% or more of the assets of Company or any of its subsidiaries
or (C) purchase or otherwise acquire (including by way of merger,
consolidation, tender or exchange offer or other similar transaction)
Beneficial Ownership of securities representing 15% or more of the
voting power of Company or any of its subsidiaries; or (iii) any person
(other than Parent or its subsidiaries) shall have acquired Beneficial
Ownership of a number of shares of Company Common Shares in addition to
the number of shares of Company Common Shares Beneficially Owned by such
person on the date hereof equal to 15% or more of the voting power of
Company.
8.13 Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
8.14 Definitions and Usage. For the purposes of this Agreement:
"Action" shall have the meaning specified in Section 4.14.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with such Person.
"Agreement" shall have the meaning specified in the introductory
paragraph of this Agreement and Plan of Merger.
"Alternative Proposal" shall have the meaning specified in Section
5.3(d).
"Applicable Laws" shall have the meaning specified in Section 4.13.
"Beneficial Ownership" and "Beneficially Own" shall have the meanings
specified in Section 8.12(c).
"Business Day" shall mean any day other than a Saturday, Sunday or
legal holiday recognized by banking institutions in the State of Texas.
"Certificate of Merger" shall have the meaning specified in Section
1.3.
"Certificates" shall have the meaning specified in Section 2.2(b).
"Change in Control" shall have the meaning specified in Section
5.2(j).
"Class C Preferred" shall have the meaning specified in Section 4.3.
"Closing" shall have the meaning specified in Section 1.2.
"Closing Date" shall have the meaning specified in Section 1.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
any successor thereto.
"Commission" shall have the meaning specified in Section 2.3(c).
"Common Stock" shall have the meaning specified in Section 2.1(a).
"Common Stock Authorizations" shall have the meaning specified in
Section 3.4.
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36
"Common Stock Index" is defined as the percentage change (expressed in
positive or negative percentage points) in the volume weighted average
trading prices of Common Stock, as reported by Bloomberg Financial Markets,
from the date of this Agreement to the last day of the Test Period.
"Company" shall have the meaning specified in the introductory
paragraph of this Agreement and Plan of Merger.
"Company Affiliate" shall have the meaning set forth in Section
5.3(e).
"Company Articles and Code of Regulations" shall have the meaning
specified in Section 4.1.
"Company Common Shares" shall have the meaning specified in Section
2.1(a).
"Company Competing Transaction" shall have the meaning specified in
Section 5.3(d).
"Company Contract" shall have the meaning specified in Section 4.23.
"Company Dissenting Shares" shall have the meaning specified in
Section 2.2(k).
"Company Material Adverse Effect" shall mean any Material Adverse
Effect with respect to the Company and any of its subsidiaries when taken
as a whole.
"Company Option" shall have the meaning specified in Section 2.3(a).
"Company Plan" means all employee benefit plans, programs, policies,
practices, and other arrangements providing benefits which includes, but is
not limited to incentive compensation programs, stock incentive programs,
employment contracts, retention agreements and employee fringe benefit
programs to any Employee or former Employee or beneficiary or dependent
thereof, whether or not written, and whether covering one person or more
than one person, sponsored or maintained by Company or any of its
subsidiaries or to which Company or any of its subsidiaries contributes or
is obligated to contribute. Without limiting the generality of the
foregoing, the term "Company Plans" includes all employee welfare benefit
plans within the meaning of Section 3(1) of ERISA and all employee pension
benefit plans within the meaning of Section 3(2) of ERISA.
"Company Preferred Shares" shall have the meaning specified in Section
4.3.
"Company Rights" shall have the meaning set forth in Section 4.3.
"Company Rights Agreement" shall have the meaning set forth in Section
4.3.
"Company SEC Documents" shall have the meaning specified in Section
4.10.
"Company Shareholders" shall have the meaning specified in Section
4.4.
"Confidentiality Agreement" shall have the meaning specified in
Section 5.1(g).
"Control" means (including the terms "controlling", "controlled by",
and "under common control with") the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting shares, by contract, or
otherwise.
"Controlled Group Liability" means any and all liabilities under: (i)
Title IV of ERISA; (ii) section 302 of ERISA; (iii) sections 412 and 4971
of the Code; (iv) the continuation coverage requirements of section 601 et
seq. of ERISA and section 4980B of the Code; and (v) corresponding or
similar provisions of foreign laws or regulations, in each case other than
pursuant to the Parent Plans as defined below.
"Effective Date" shall have the meaning specified in Section 1.3.
"Employees" shall mean the employees of the Parent or the Company, as
the context may require, except as otherwise defined in Section 5.2(f).
"Environmental Laws" shall have the meaning specified in Section
4.21(a).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations thereunder.
A-31
37
"ERISA Affiliate" means, with respect to any entity, trade or
business, any other entity, trade or business that is a member of a group
described in Section 414(b), (c), (m) or (o) of the Code or Section
4001(b)(1) of ERISA that includes the first entity, trade or business, or
that is a member of the same "controlled group" as the first entity, trade
or business pursuant to Section 4001(a)(14) of ERISA.
"Exchange Act" shall have the meaning specified in Section 3.10.
"Exchange Agent" shall have the meaning specified in Section 2.2(a).
"Exchange Ratio" shall have the meaning specified in Section 2.1(a).
"Exchange Trust" shall have the meaning specified in Section 2.2(c).
"Former Employees" shall have the meaning specified in Section 5.2(f).
"Fractional Shares" shall have the meaning specified in Section
2.2(c).
"Governmental Authority" shall have the meaning specified in Section
2.2(i).
"Hazardous Materials" shall have the meaning specified in Section
4.21(a).
"HSR Act" shall have the meaning specified in Section 3.6(d).
"Incentive Plan" shall have the meaning specified in Section 5.3(h).
"Indemnified Liabilities" shall have the meaning set forth in Section
5.2(d).
"Indemnified Parties" shall mean each person who is now, or has been
at any time prior to the date hereof, an officer, director, employee,
trustee or agent of Company (or any subsidiary or division thereof),
including, without limitation, each person controlling any of the foregoing
persons (individually, "Indemnified Party" and collectively, "Indemnified
Parties")
"Indemnified Party" shall have the meaning set forth in Section
5.2(d).
"▇.▇. ▇▇▇▇▇▇" shall have the meaning specified in Section 4.6.
"Joint Proxy Statement" shall have the meaning specified in Section
3.11.
"Justice Department" shall have the meaning specified in Section
5.1(b).
"Knowledge" when used in relation to any Person shall mean the actual
(but not constructive) knowledge of such Person's executive officers.
"▇▇▇▇▇▇ Brothers" shall have the meaning specified in Section 3.7.
"Material Adverse Effect" means a material adverse effect on the
assets, liabilities, results of operations, business or financial condition
of such party and its subsidiaries, taken as a whole.
"Merger" shall have the meaning specified in Section 1.1.
"Merger Consideration" shall have the meaning specified in Section
2.1(a).
"Multiemployer Plan" shall have the meaning specified in Section
4.9(e).
"Multiple Employer Plan" shall have the meaning specified in Section
4.9(e).
"National Exchange" shall have the meaning specified in Section
2.2(c).
"NYSE" shall have the meaning specified in Section 2.2(c).
"Officer" means in the case of Parent and Company, any executive
officer of Parent or the Company, as applicable, within the meaning of Rule
3b-7 of the 1934 Act.
"OGCL" shall have the meaning specified in Section 1.1.
"Ohio Secretary of State" shall have the meaning specified in Section
1.3.
A-32
38
"Parent" shall have the meaning specified in the introductory
paragraph of this Agreement and Plan of Merger.
"Parent Affiliate" shall have the meaning specified in Section 5.2(i).
"Parent Amendment" shall have the meaning set forth in Section 3.4.
"Parent Articles and Bylaws" shall have the meaning specified in
Section 3.1.
"Parent Exchange Option" shall have the meaning specified in Section
2.3(a).
"Parent Material Adverse Effect" shall mean any Material Adverse
Effect with respect to the Parent and any of its subsidiaries when taken as
a whole.
"Parent Preferred Stock" shall have the meaning specified in Section
3.3.
"Parent Rights" shall have the meaning set forth in Section 3.3.
"Parent Rights Agreement" shall have the meaning set forth in Section
3.3.
"Parent SEC Documents" shall have the meaning specified in Section
3.10.
"Parent Series C Preferred Stock" shall have the meaning set forth in
Section 3.3.
"Parent Shareholder Authorizations" shall have the meaning specified
in Section 3.5.
"Parent Shareholders" shall have the meaning specified in Section 3.4.
"Parent Shareholders' Meeting" shall have the meaning specified in
Section 5.2(h).
"PBGC" shall have the meaning specified in Section 4.9(g)(ii).
"Peer Group" shall mean the following companies: Giant Cement Holding,
Inc., Lafarge Corporation, Lone Star Industries, Inc. and Centex
Construction Products, Inc.
"Peer Group Composite Index" is defined as the percentage change
(expressed in positive or negative percentage points) in the average of the
volume weighted average trading prices of the common stock of each of the
companies in the Peer Group, as reported by Bloomberg Financial Markets,
weighted by the market capitalization of each such company, from the date
of this Agreement to the last day of the Test Period. For this purpose, the
market capitalization of each such company on a given date shall be
determined by multiplying the number of outstanding shares of common stock
of such company, as reflected in the most recently available filings with
the Commission (with appropriate adjustments for any stock splits, stock
dividends or similar events), times the volume weighted average trading
price of such common stock on the such date.
"Pension Plans" shall have the meaning specified in Section 4.9(f).
"Permits" shall have the meaning specified in Section 4.20.
"Person" shall mean an individual, partnership, corporation, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, Governmental Authority or other legal entity
of any kind.
"Prior Event" shall have the meaning specified in Section 8.12(c).
"Prospectus" shall have the meaning specified in Section 3.11.
"Qualified Company Plan" shall have the meaning specified in Section
4.9(b).
"Registration Statement" shall have the meaning specified in Section
3.11.
"Securities Act" shall have the meaning specified in Section 3.10.
"Separation Date" shall have the meaning specified in Section 6.2(d).
"Stock Acquisition Date" shall have the meaning specified in Section
6.2(d).
A-33
39
"Subcorp" shall have the meaning specified in the initial paragraph of
this Agreement and Plan of Merger.
"subsidiary" or "subsidiaries" means, with respect to any Person, any
entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at any time directly or indirectly owned
by such Person.
"Surviving Corporation" shall have the meaning specified in Section
1.1.
"Tax" or "Taxes" shall mean all federal, state, local and foreign
taxes including interest and penalties thereon (including, without
limitation, income, franchise, excise, sales, use, gross receipt,
severance, real and personal property taxes).
"Test Period" shall have the meaning specified in Section 7.1(h).
A reference in this Agreement to any statute shall be to such statute as
amended from time to time, and the rules and regulations promulgated thereunder.
IN WITNESS WHEREOF, Company, Parent and Subcorp have signed this Agreement
as of the date first written above.
MEDUSA CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
SOUTHDOWN, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
BEDROCK MERGER CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
A-34
40
EXHIBIT A
TO THE MERGER
AGREEMENT
SOUTHDOWN, INC. AFFILIATE LETTER
▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Medusa Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Gentlemen:
The undersigned has been advised that as of the date of this letter, the
undersigned may be deemed to be an "affiliate" of Southdown, Inc., a Louisiana
corporation ("Parent"), as the term "affiliate" is defined for purposes of
paragraphs (c) and (d) of Rule 145 of the rules and regulations ("Rules and
Regulations") of the Securities and Exchange Commission ("Commission") under the
Securities Act of 1933, as amended ("Act"). Pursuant to the terms of the
Agreement and Plan of Merger dated March 17, 1998 ("Agreement"), between the
Parent and Medusa Corporation, an Ohio corporation ("Company"), Bedrock Merger
Corp., a newly formed Ohio corporation and wholly-owned subsidiary of Parent,
will be merged with and into the Company with the Company to be the surviving
corporation in the merger ("Merger").
The undersigned represents, warrants, and covenants to Parent and the
Company that:
A. From and after the date that is thirty (30) days prior to the
Effective Date (as such term is defined in the Agreement) the undersigned
shall not offer to sell, sell or otherwise dispose of, or in any other way
reduce the undersigned's risk relative to, any shares of Common Stock or
Company Common Stock (other than by way of conversion into shares of Common
Stock pursuant to the Merger) in any case until an earnings statement
containing at least thirty (30) days of post-Merger combined financial
results of Parent and the Company has been issued in a manner satisfying
the requirements of the Commission's Accounting Release No. 135.
B. The undersigned will not take or fail to take any action reasonably
likely to cause the Merger not to be accounted for as a pooling of
interests for financial accounting purposes.
C. The undersigned understands and agrees that the representations,
warranties, covenants and agreements of the undersigned set forth herein
are for the benefit of Parent, Company and the Surviving Corporation (as
such term is defined in the Agreement) and will be relied upon by such
entities and their respective counsel and accountants.
A-35
41
Southdown, Inc.
Medusa Corporation
March 17, 1998
Execution of this letter should not be considered an admission on the part
of the undersigned that the undersigned is an "affiliate" of the Company as
described in the first paragraph of this letter or as a waiver of any rights the
undersigned may have to object to any claim that the undersigned is such an
affiliate on or after the date of this letter.
Very truly yours,
------------------------------------
Signature
------------------------------------
Print Name
Accepted this day of
, 1998
SOUTHDOWN, INC. MEDUSA CORPORATION
By: ------------------------------------------------ By: ------------------------------------------------
Name: Name:
Title: Title:
Dated: Dated:
▇-▇▇
▇▇
▇▇▇▇▇▇▇ ▇
TO THE MERGER
AGREEMENT
MEDUSA CORPORATION AFFILIATE LETTER
March 17, 1998
Medusa Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Southdown, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Gentlemen:
The undersigned has been advised that as of the date of this letter, the
undersigned may be deemed to be an "affiliate" of Medusa Corporation, an Ohio
corporation ("Company"), as the term "affiliate" is defined for purposes of
paragraphs (c) and (d) of Rule 145 of the rules and regulations ("Rules and
Regulations") of the Securities and Exchange Commission ("Commission") under the
Securities Act of 1933, as amended ("Act"). Pursuant to the terms of the
Agreement and Plan of Merger dated March 17, 1998 ("Agreement"), between the
Company and Southdown, Inc., a Louisiana corporation ("Parent"), Bedrock Merger
Corp., a newly formed Ohio corporation and wholly-owned subsidiary of Parent,
will be merged with and into the Company with the Company to be the surviving
corporation in the merger ("Merger").
As a result of the Merger, the undersigned will receive (i) shares of
common stock, par value $1.25 per share, of Parent ("Common Stock") in exchange
for common shares, without par value, of the Company ("Company Common Shares")
owned by the undersigned, and (ii) options convertible into Common Stock
("Parent Options") in exchange for options convertible into Company Common
Shares.
The undersigned represents, warrants, and covenants to Parent and the
Company that in the event the undersigned received any Common Stock as a result
of the Merger:
A. The undersigned shall not make any sale, transfer or other
disposition of the Common Stock or with respect to the Parent Options in
violation of the Act or the Rules and Regulations.
B. The undersigned has carefully read this letter and the Agreement
and discussed the requirements of such documents and other applicable
limitations upon the undersigned's ability to sell, transfer or otherwise
dispose of the Common Stock and the Parent Options to the extent the
undersigned felt necessary with the undersigned's counsel or counsel for
Company.
C. The undersigned has been advised that the issuance of Common Stock
to the undersigned pursuant to the Merger will be registered with the
Commission under the Act on a Registration Statement on Form S-4. However,
the undersigned has also been advised that, since at the time the Merger is
submitted for a vote of the shareholders of Company, the undersigned may be
deemed to be an affiliate of Company, the undersigned may not sell,
transfer or otherwise dispose of the Common Stock issued to the undersigned
in the Merger unless: (i) such sale, transfer or other disposition has been
registered under the Act; (ii) such sale, transfer or other disposition is
made in conformity with Rule 145 promulgated by the Commission under the
Act; or (iii) in the opinion of counsel reasonably acceptable to Parent or
pursuant to a "no action" letter obtained by the undersigned from the staff
of the Commission, such sale, transfer or other disposition is otherwise
exempt from registration under the Act (in which case Parent shall cause
removal of the legends referred to in Paragragh G below).
D. From and after the date that is thirty (30) days prior to the
Effective Date (as such term is defined in the Agreement) the undersigned
shall not offer to sell, sell or otherwise dispose of, or in any
▇-▇▇
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Inc.
March 17, 1998
other way reduce the undersigned's risk relative to, any shares of Common
Stock or Company Common Stock (other than by way of conversion into shares
of Common Stock pursuant to the Merger) in a manner that would cause the
Merger to be treated in a manner other than as a pooling of interests for
financial accounting purposes, in any case until an earnings statement
containing at least thirty (30) days of post-Merger combined financial
results of Parent and the Company has been issued in a manner satisfying
the requirements of the Commission's Accounting Release No. 135.
E. By its acceptance hereof, Parent agrees, for a period of two years
after the Effective Date, that it will file on a timely basis all reports
required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), so that the public
information provisions of Rule 144(c) under the Exchange Act are satisfied
and the resale provisions of Rules 145(d)(1) and (2) under the Exchange Act
are therefore available to the undersigned in the event the undersigned
desires to transfer any Parent securities issued to undersigned in the
Merger. Parent agrees to publish financial results covering at least 30
days of post Merger operations as soon as practicable and in any event
within 45 days after the end of the month following the month in which the
Effective Date occurs.
F. The undersigned understands and agrees that this letter agreement
shall apply to all shares of the capital stock of the Parent and the
Company that are deemed to be beneficially owned by the undersigned
pursuant to applicable federal securities laws.
G. The undersigned understands and agrees that:
(i) Parent is under no obligation to register the sale, transfer or
other disposition of the shares of Parent Common Stock to be received by
the undersigned in the Merger except as set forth in written agreements,
if any, with the undersigned which have been entered into by Parent or
which have been specifically assumed by Parent.
(ii) Stop transfer instructions will be given to the transfer agent
of Parent with respect to the shares of Parent Common Stock to be
received by the undersigned in the Merger, and there will be placed on
the certificate representing such stock, or any certificates delivered
in substitution therefor, a legend stating in substance:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 UNDER THE SECURITIES ACT OF 1933
(THE "ACT") APPLIES. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH (i) THE
TERMS OF A LETTER AGREEMENT DATED MARCH 17, 1998 AND (ii) RULE
145(D) OF THE ACT OR PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR EXEMPTION FROM REGISTRATION UNDER THE ACT."
(iii) Unless the transfer by the undersigned of the shares of
Parent Common Stock is a sale made in conformity with the provisions of
Rule 145(d), or is made pursuant to a registration statement under the
Securities Act, Parent reserves the right to put an appropriate legend
on the certificate issued to a transferee.
H. The undersigned further understands and agrees that the
representations, warranties, covenants and agreements of the undersigned
set forth herein are for the benefit of Parent, Company and the Surviving
Corporation (as such term is defined in the Agreement) and will be relied
upon by such entities and their respective counsel and accountants.
▇-▇▇
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Inc.
March 17, 1998
Execution of this letter should not be considered an admission on the part
of the undersigned that the undersigned is an "affiliate" of the Company as
described in the first paragraph of this letter or as a waiver of any rights the
undersigned may have to object to any claim that the undersigned is such an
affiliate on or after the date of this letter.
Very truly yours,
------------------------------------
Signature
------------------------------------
Print Name
Accepted this day of
, 1998
MEDUSA CORPORATION SOUTHDOWN, INC.
By: By:
-------------------------------------------- --------------------------------------------
Name: Name:
Title: Title:
Dated: Dated:
A-39
45
EXHIBIT C
TO THE MERGER
AGREEMENT
March 17, 1998
Southdown, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President and Chief Executive Officer
Reference is made to the Agreement and Plan of Merger between Medusa
Corporation ("Company") and Southdown, Inc. ("Parent") dated March 17, 1998 (the
"Agreement"), which provides for the merger of a subsidiary of Parent with and
into the Company (the "Merger"). The undersigned is the beneficial owner (as
that term is defined in the Agreement) of common shares (the "Shares")
of Company and has supported and encouraged the decision by Company to execute
the Agreement and to consummate the Merger.
In that connection, and as an inducement to, and in further consideration
of, Parent's entering into the Agreement, the undersigned hereby grants the
irrevocable proxy provided in paragraph (i), and further covenants and agrees to
the matters set forth in paragraphs (ii) through (v) below:
(i) In consideration of Parent's entering into the Agreement, the
undersigned, being the beneficial owner of Shares, hereby
irrevocably appoints and constitutes ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ as proxies for the undersigned, with full power of substitution, to
vote such Shares, and any other Shares beneficially owned at the time by
the undersigned, at any regular or special meeting of the stockholders of
the Company at which the adoption of the Agreement is to be voted upon, in
favor of adoption of the Agreement. The proxy granted hereby is irrevocable
and coupled with an interest.
(ii) The undersigned will not directly or indirectly (A) solicit,
initiate or encourage the submission of any Alternative Proposal (as
defined in the Agreement) with respect to the Company, (B) enter into any
agreement with respect to any Alternative Proposal with respect to the
Company, or (C) participate in any discussion or negotiation regarding, or
furnish to any person any information with respect to, the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Alternative Proposal with respect to the Company; provided, however, that
the foregoing clause shall not prohibit the undersigned who serves as a
director, officer or employee of the Company from taking any action
(subject to Section 5.3(d) of the Agreement) solely in such capacity.
(iii) The undersigned agrees, for the term of this agreement, not to
sell, convey or dispose of any Shares other than in connection with the
Merger.
(iv) The undersigned agrees to sign the affiliate letter in the form
attached as Exhibit B to the Agreement, as provided in the Agreement.
(v) The proxy provided hereby, and the covenants and agreements
contained herein, shall terminate on the earlier of the date (i) that the
Agreement is terminated for any reason other than pursuant to Section
7.1(g), and (ii) the date set forth in Section 7.1(c) of the Agreement, as
such date may be modified by Company and Parent.
Very truly yours,
[Shareholder]
▇-▇▇
▇▇
▇▇▇▇▇▇▇ ▇
TO THE MERGER
AGREEMENT
WAIVER AGREEMENT
WHEREAS, Medusa Corporation, an Ohio corporation (the "Company"), has
entered into that Agreement and Plan of Merger between Medusa Corporation,
Bedrock Merger Corp. and Southdown, Inc., dated March 17, 1998 (the "Merger");
and
WHEREAS, pursuant to the 1991 Long-Term Incentive Plan, as amended through
March 27, 1995 (the "Plan"), the consummation of the Merger will constitute a
Change in Control, as such term is defined in the Plan; and
WHEREAS, pursuant to Section 6.05(a) of the Plan, upon consummation of the
Merger the undersigned will have certain rights to surrender for cancellation
within sixty days after such Change in Control any Option or portion of an
Option to the extent not exercised and to receive a cash payment in an amount
equal to the excess, if any, of (A) the Adjusted Fair Market Value of the
Company Common Shares subject to the Option or portion thereof surrendered, over
(B) the Purchase Price of such Option; and
WHEREAS, the undersigned acknowledges and agrees that the Merger is
intended to be accounted for as a "pooling of interests" transaction and agrees
that such treatment is of material benefit directly to the consolidated business
and indirectly to the undersigned;
NOW, THEREFORE, the undersigned hereby agrees as follows:
1. The undersigned hereby waives and relinquishes the rights of the
undersigned, if any, with respect to the transactions contemplated by the
Merger, to receive a cash payment with respect to the undersigned's Option
or portion of an option, and acknowledges that the Company and Southdown,
Inc. will rely on such waiver.
2. Except as specified above, this Waiver Agreement does not
constitute a waiver of, nor shall it otherwise affect, the rights of the
undersigned set forth in the Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Waiver Agreement as
of the 17th day of March, 1998.
By:
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