AGREEMENT AND PLAN OF MERGER
dated as of
May 8, 1998
by and between
Monsanto Company
and
Delta and Pine Land Company
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TABLE OF CONTENTS
Page
ARTICLE 1
THE MERGER...............................................................................................1
SECTION 1.01 The Merger....................................................................1
SECTION 1.02 Conversion of Shares..........................................................2
SECTION 1.03 Exchange of Shares............................................................3
SECTION 1.04 Certain Adjustments...........................................................7
SECTION 1.05 Stock Options and Restricted Stock............................................7
ARTICLE 2
THE SURVIVING CORPORATION................................................................................9
SECTION 2.01 Certificate of Incorporation..................................................9
SECTION 2.02 Bylaws. 9
SECTION 2.03 Directors and Officers........................................................9
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................................9
SECTION 3.01 Corporate Organization........................................................9
SECTION 3.02 Authorization.................................................................9
SECTION 3.03 Capital Stock................................................................10
SECTION 3.04 Subsidiaries.................................................................10
SECTION 3.05 Consents and Approvals; No Violation.........................................11
SECTION 3.06 SEC Reports and Financial Statements.........................................11
SECTION 3.07 Absence of Undisclosed Liabilities...........................................12
SECTION 3.08 Changes.12
SECTION 3.09 Investigations; Litigation...................................................13
SECTION 3.10 Contracts and Commitments....................................................14
SECTION 3.11 Environmental and Safety Matters.............................................14
SECTION 3.12 Taxes. 16
SECTION 3.13 Employment Agreements........................................................16
SECTION 3.14 Change of Control Provisions.................................................16
SECTION 3.15 Employee Benefit Plans.......................................................16
SECTION 3.16 Licenses.....................................................................17
SECTION 3.17 Real Estate Leases...........................................................17
SECTION 3.18 Real Property................................................................18
SECTION 3.19 Intellectual Property and Germplasm..........................................18
SECTION 3.20 Compliance with Other Instruments and Laws...................................19
SECTION 3.21 Employees....................................................................19
SECTION 3.22 Information Supplied.........................................................19
SECTION 3.23 Rights Agreement.............................................................20
SECTION 3.24 Certain Fees.................................................................20
SECTION 3.25 Opinion of Financial Advisor.................................................20
SECTION 3.26 Voting Requirements..........................................................20
SECTION 3.27 State Takeover Statutes......................................................20
SECTION 3.28 Affiliates...................................................................21
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER.................................................................21
SECTION 4.01 Corporate Organization.......................................................21
SECTION 4.02 Authorization................................................................21
SECTION 4.03 Capital Stock................................................................21
SECTION 4.04 Information Supplied.........................................................21
SECTION 4.05 Consents and Approvals; No Violations........................................22
SECTION 4.06 Certain Fees.................................................................22
SECTION 4.07 SEC Reports and Financial Statements.........................................23
SECTION 4.08 Absence of Undisclosed Liabilities...........................................23
SECTION 4.09 No Buyer Stockholder Vote....................................................23
ARTICLE 5
COVENANTS OF THE COMPANY................................................................................23
SECTION 5.01 Conduct of Business by the Company Pending the
Merger...............................................................23
SECTION 5.02 Stockholders' Meeting........................................................25
SECTION 5.03 Access to Information........................................................25
SECTION 5.04 No Solicitation..............................................................26
SECTION 5.05 Corporate Organization.......................................................26
SECTION 5.06 Termination Option Agreement.................................................26
ARTICLE 6
COVENANTS OF BUYER......................................................................................27
SECTION 6.01 Confidentiality..............................................................27
SECTION 6.02 Indemnification..............................................................27
SECTION 6.03 Operations After the Effective Time..........................................28
SECTION 6.04 Employee Benefits............................................................28
SECTION 6.05 Employment and Noncompetition Agreements.....................................28
ARTICLE 7
COVENANTS OF BUYER AND THE COMPANY......................................................................29
SECTION 7.01 Best Efforts.................................................................29
SECTION 7.02 Certain Filings..............................................................29
SECTION 7.03 Public Announcements.........................................................29
SECTION 7.04 Further Assurances...........................................................29
SECTION 7.05 Notices of Certain Events....................................................29
SECTION 7.06 Preparation of the Form S-4 and the Company Proxy
Statement............................................................30
SECTION 7.07 Letters of the Company's Accountants.........................................31
SECTION 7.08 Affiliates...................................................................31
SECTION 7.09 NYSE Listing.................................................................31
SECTION 7.10 Tax Treatment................................................................32
SECTION 7.11 Pooling of Interests.........................................................32
SECTION 7.12 Consents33
SECTION 7.13 Confidentiality..............................................................33
SECTION 7.14 Representations..............................................................33
ARTICLE 8
CONDITIONS TO THE MERGER................................................................................34
SECTION 8.01 Conditions to the Obligations of Each Party..................................34
ARTICLE 9
TERMINATION.............................................................................................36
SECTION 9.01 Termination..................................................................36
SECTION 9.02 Waiver 37
SECTION 9.03 Closing.37
SECTION 9.04 Effect of Termination; Termination Fee.......................................37
ARTICLE 10
MISCELLANEOUS...........................................................................................38
SECTION 10.01 Notices.38
SECTION 10.02 Survival of Representations and Warranties...................................39
SECTION 10.03 Amendments; No Waivers.......................................................39
SECTION 10.04 Expenses.....................................................................40
SECTION 10.05 Successors and Assigns.......................................................40
SECTION 10.06 Governing Law................................................................40
SECTION 10.07 Counterparts; Effectiveness..................................................40
SECTION 10.08 Headings.....................................................................40
SECTION 10.09 No Third Party Beneficiaries.................................................40
SECTION 10.10 Remedies.....................................................................40
SECTION 10.11 Entire Agreement.............................................................41
DEFINED TERMS
Term Page Number
Acquisition Transaction..........................................................................................26
Adjusted Option...................................................................................................7
Agreement.........................................................................................................1
Antitrust Division...............................................................................................33
Antitrust Laws...................................................................................................33
Buyer.............................................................................................................1
Buyer Common Stock................................................................................................2
Buyer Listed Securities..........................................................................................22
Buyer Material Adverse Effect....................................................................................22
Buyer Reports....................................................................................................23
Buyer Stock Option Plans..........................................................................................8
CERCLA...........................................................................................................15
Certificate of Merger.............................................................................................2
Certificates......................................................................................................4
Closing..........................................................................................................37
Closing Date.....................................................................................................37
Code..............................................................................................................1
Common Stock Trust................................................................................................5
Company...........................................................................................................1
Company Disclosure Letter.........................................................................................9
Company 10-K.....................................................................................................12
Company 10-Qs....................................................................................................12
Company Award.....................................................................................................8
Company Common Stock..............................................................................................2
Company Disclosure Document......................................................................................20
Company Proxy Statement..........................................................................................11
Company Reports..................................................................................................11
Company Stock Option Plans........................................................................................7
Company Stockholders Meeting.....................................................................................25
Confidentiality Agreements.......................................................................................25
Delaware Law......................................................................................................1
Effective Time....................................................................................................2
Environmental and Safety Requirements............................................................................14
Environmental Lien...............................................................................................15
ERISA............................................................................................................16
Excess Shares.....................................................................................................5
Exchange Act.....................................................................................................11
Exchange Agent....................................................................................................3
Exchange Fund.....................................................................................................3
Exchange Ratio....................................................................................................2
Final Average Closing Price.......................................................................................3
Form S-4.........................................................................................................19
FTC..............................................................................................................33
TABLE OF CONTENTS
Page
Governmental Entity..............................................................................................11
▇▇▇▇▇ Agreement..................................................................................................10
HSR Act..........................................................................................................11
Indemnified Parties..............................................................................................27
Initial Average Closing Price.....................................................................................3
Intellectual Property............................................................................................18
Investigation....................................................................................................13
knowledge of the Company.........................................................................................13
Licenses.........................................................................................................17
Lien.............................................................................................................18
Material Adverse Change in the Company...........................................................................12
Material Adverse Effect...........................................................................................9
Measurement Date..................................................................................................3
Merger............................................................................................................1
Merger Consideration..............................................................................................2
NYSE..............................................................................................................3
Permitted Lien...................................................................................................18
Plans............................................................................................................16
Pooling Affiliate................................................................................................31
Release..........................................................................................................15
Rights............................................................................................................2
Rights Agreement.................................................................................................20
Rule 145 Affiliates..............................................................................................21
SEC..............................................................................................................11
Securities Act...................................................................................................11
Series M Preferred Stock..........................................................................................2
Shares............................................................................................................2
Subsidiaries.....................................................................................................10
Subsidiary.......................................................................................................10
Surviving Corporation.............................................................................................1
Termination Notice................................................................................................3
Termination Option Agreement......................................................................................1
Trading Day.......................................................................................................3
Transaction.......................................................................................................1
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made
and entered into as of May 8, 1998, by and between Monsanto Company, a Delaware
corporation ("Buyer"), and Delta and Pine Land Company, a Delaware corporation
(the "Company").
RECITALS
WHEREAS, the Boards of Directors of Buyer and the Company deem
it advisable and in the best interests of the stockholders of such corporations
to effect the merger of Buyer and the Company pursuant to this Agreement;
WHEREAS, the respective Boards of Directors of Buyer and the
Company have approved the acquisition of the Company by Buyer, and the Board of
Directors of the Company has unanimously resolved to recommend that it be
approved by the stockholders of the Company;
WHEREAS, for U.S. federal income tax purposes, it is intended
that the Merger will qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and the
rules and regulations promulgated thereunder; and
WHEREAS, concurrently with the execution and delivery of this
Agreement and as a condition and inducement to Buyer's willingness to enter into
this Agreement, Buyer and the Company have entered into a Termination Option
Agreement dated as of the date of this Agreement and attached hereto as Exhibit
A (the "Termination Option Agreement"), pursuant to which the Company granted
Buyer an option to purchase shares of common stock of the Company under certain
circumstances;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual representations, warranties, covenants and agreements set forth herein,
the parties agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.01 The Merger.
(a) At the Effective Time (as defined in Section
1.01(b) hereof), the Company shall be merged (the "Merger") with and
into Buyer in accordance with the Delaware General Corporation Law
("Delaware Law"), whereupon the separate existence of the Company shall
cease, and Buyer shall be the surviving corporation (the "Surviving
Corporation"). The Merger is sometimes hereinafter referred to as the
"Transaction."
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(b) As soon as practicable after satisfaction or, to
the extent permitted hereunder, waiver of all conditions to the Merger,
the Company and Buyer will file a certificate of merger with the
Secretary of State of the State of Delaware (the "Certificate of
Merger") and make all other filings or recordings required by Delaware
Law in connection with the Merger. The Merger shall become effective at
such time as the Certificate of Merger is duly filed with the Secretary
of State of the State of Delaware and any additional requirements of
Delaware Law are complied with or at such later time as is specified in
the Certificate of Merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving
Corporation shall possess all the assets, rights, privileges, powers
and franchises and be subject to all of the liabilities, restrictions,
disabilities and duties of the Company, all as provided under Delaware
Law.
SECTION 1.02 Conversion of Shares.
(a) At the Effective Time and by virtue of the Merger
and without any action on the part of the holders thereof:
(i) each share of common stock of the Company, $0.10 par value
per share ("Company Common Stock"), and Series M Convertible
Non-Voting Preferred Stock of the Company ("Series M Preferred
Stock") held by the Company as treasury stock or owned by
Buyer or any subsidiary of Buyer immediately prior to the
Effective Time shall be canceled, and no payment shall be made
with respect thereto; provided, however, that any shares of
Company Common Stock (A) held by the Company or Buyer in
connection with any market making or proprietary trading
activity or for the account of another person, (B) as to which
the Company or Buyer is or may be required to act as a
fiduciary or in a similar capacity or (C) the cancellation of
which would violate any legal duties or obligations of the
Company or Buyer, in each case shall not be canceled but,
instead, shall be treated as set forth in Section 1.02(a)(ii)
below;
(ii) subject to Section 1.03(e) hereof, each share of Company
Common Stock, and the associated preferred stock purchase
right (the "Rights"), and each share of Series M Preferred
Stock (collectively, the "Shares") outstanding immediately
prior to the Effective Time shall, except as otherwise
provided in clause (i) of this subsection, be converted into
the right to receive .8625 (subject to adjustment pursuant to
Section 1.02(a)(iii) below, the "Exchange Ratio") fully paid
and nonassessable shares of common stock, par value $2.00 per
share (the "Buyer Common Stock"), of Buyer (the "Merger
Consideration"). As of the Effective Time, all such Shares
shall no longer be outstanding and shall automatically be
canceled and retired and shall cease to exist, and each holder
of a certificate representing any such Company Common Stock
shall cease to have any rights with respect thereto, except
the right to receive the Merger Consideration and any cash in
lieu of fractional shares of Buyer Common Stock to be issued
or paid in consideration therefor upon surrender of such
certificate in accordance with Section 1.03 hereof, without
interest; and
(iii) no adjustment to the Exchange Ratio shall be made in the
event that the average of the closing prices (the "Final
Average Closing Price") of Buyer Common Stock on the New York
Stock Exchange (the "NYSE") Composite Transaction Tape on the
30 consecutive Trading Days ending on the earlier of (A) the
90th day after the date hereof and (B) the second Trading Day
prior to the date of the Company Stockholders Meeting (the
earlier of such dates being referred to as the "Measurement
Date"), is not more than 25% greater or less than the average
of the closing prices (the "Initial Average Closing Price") of
Buyer Common Stock on the NYSE Composite Transaction Tape on
the 30 consecutive Trading Days ending on the first Trading
Day immediately preceding the date hereof. In the event that
the Final Average Closing Price is more than 25% greater than
the Initial Average Closing Price, then the Exchange Ratio
will not be .8625 but rather will be reduced to the product of
(A) .8625 and (B) the quotient of (1) 1.25 times the Initial
Average Closing Price and (2) the Final Average Closing Price.
In the event that the Final Average Closing Price is more than
25% less than the Initial Average Closing Price, then the
Company will have the right to terminate this Agreement by
giving written notice (the "Termination Notice") of its
election to do so to Buyer prior to 5:00 p.m., New York City
time, on the second Trading Day after the Measurement Date;
provided, however, that the Termination Notice will be deemed
to be rescinded and will have no effect if, prior to 5:00
p.m., New York City time, on the second Trading Day after the
date of Buyer's receipt of such Termination Notice, Buyer has
given the Company written notice that it has agreed to
increase the Exchange Ratio to the product of (A) .8625 and
(B) the quotient of (1) 0.75 times the Initial Average Closing
Price and (2) the Final Average Closing Price. If the Company
does not deliver a Termination Notice as provided in the
immediately preceding sentence, then there shall be no
adjustment made to the Exchange Ratio. If any adjustment is
made to the Exchange Ratio pursuant to this Section
1.02(a)(iii), then such adjusted Exchange Ratio shall be
rounded to four decimal places, rounding upward from 0.00005.
"Trading Day" means any day on which the NYSE is open for
trading.
SECTION 1.03 Exchange of Shares.
(a) As of the Effective Time, Buyer shall enter into
an agreement with First Chicago Trust Company of New York (or such
other bank or trust company as shall be selected by Buyer in its sole
discretion) as exchange agent for the Merger (the "Exchange Agent"),
which shall provide that Buyer shall deposit with the Exchange Agent as
of the Effective Time, for the benefit of the holders of Shares, for
exchange in accordance with this Article 1, through the Exchange Agent,
certificates representing the shares of Buyer Common Stock (such shares
of Buyer Common Stock, together with any dividends or distributions
with respect thereto with a record date after the Effective Time, any
Excess Shares (as defined in Section 1.03(e) hereof) and any cash
(including cash proceeds from the sale of the Excess Shares) payable in
lieu of any fractional shares of Buyer Common Stock being hereinafter
referred to as the "Exchange Fund") issuable pursuant to Section 1.02
hereof in exchange for outstanding Shares.
(b) As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record
of a certificate or certificates which immediately prior to the
Effective Time represented outstanding Company Common Stock (the
"Certificates") whose shares were converted into the right to receive
the Merger Consideration, pursuant to Section 1.02 hereof, (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 Buyer may reasonably specify)
and (ii) instructions for use in surrendering the Certificates in
exchange for the Merger Consideration, as applicable. Upon surrender of
a Certificate for cancellation to the Exchange Agent, together with
such letter of transmittal, duly executed, and such other documents as
may reasonably be required by the Exchange Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of Buyer Common
Stock which such holder has the right to receive pursuant to the
provisions of this Article 1, certain dividends or other distributions
in accordance with Section 1.03(c) hereof and cash in lieu of any
fractional share of Buyer Common Stock in accordance with Section
1.03(e) hereof, and the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of Shares which is
not registered in the transfer records of the Company, a certificate
representing the proper number of shares of Buyer Common Stock may be
issued to a person other than the person in whose name the Certificate
so surrendered is registered if such Certificate is properly endorsed
or otherwise in proper form for transfer and the person requesting such
issuance pays any transfer or other taxes required by reason of the
issuance of shares of Buyer Common Stock to a person other than the
registered holder of such Certificate or establishes to the
satisfaction of Buyer that such tax has been paid or is not applicable.
Until surrendered as contemplated by this Section 1.03 hereof, each
Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the Merger
Consideration, which the holder thereof has the right to receive in
respect of such Certificate pursuant to the provisions of this Article
1, certain dividends or other distributions in accordance with Section
1.03(c) hereof and cash in lieu of any fractional share of Buyer Common
Stock in accordance with Section 1.03(e) hereof. No interest shall be
paid or will accrue on any cash payable to holders of Certificates
pursuant to the provisions of this Article 1.
(c) No dividends or other distributions with respect
to Buyer Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Certificate with respect to
the shares of Buyer Common Stock represented thereby, and, in the case
of Certificates representing Company Common Stock, no cash payment in
lieu of fractional shares shall be paid to any such holder pursuant to
Section 1.03(e) hereof, and all such dividends, other distributions and
cash in lieu of fractional shares of Buyer Common Stock shall be paid
by Buyer to the Exchange Agent and shall be included in the Exchange
Fund, in each case until the surrender of such Certificate in
accordance with this Article 1. Subject to the effect of applicable
escheat or similar laws, following surrender of any such Certificate
there shall be paid to the holder of the certificate representing whole
shares of Buyer 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 Time
theretofore paid with respect to such whole shares of Buyer Common
Stock, and, in the case of Certificates representing Company Common
Stock, the amount of any cash payable in lieu of a fractional share of
Buyer Common Stock to which such holder is entitled pursuant to Section
1.03(e) hereof, and (ii) at the appropriate payment date, the amount of
dividends or other distributions with a record date after the Effective
Time but prior to such surrender and with a payment date subsequent to
such surrender payable with respect to such whole shares of Buyer
Common Stock.
(d) All shares of Buyer Common Stock issued upon the
surrender for exchange of Certificates in accordance with the terms of
this Article 1 (including any cash paid pursuant to this Article 1)
shall be deemed to have been issued (and paid) in full satisfaction of
all rights pertaining to the Company Common Stock theretofore
represented by such Certificates, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other
distributions with a record date prior to the Effective Time which may
have been declared or made by the Company on such shares of Company
Common Stock which remain unpaid at the Effective Time, and there shall
be no further registration of transfers on the stock transfer books of
the Surviving Corporation of the shares of Company Common Stock which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation
or the Exchange Agent for any reason, they shall be canceled and
exchanged as provided in this Article 1, except as otherwise provided
by law.
(e) (i) No certificates or scrip representing
fractional shares of Buyer Common Stock shall be issued upon the
surrender for exchange of Certificates, no dividend or distribution of
Buyer shall relate to such fractional share interests and such
fractional share interests will not entitle the owner thereof to vote
or to any rights of a stockholder of Buyer.
(ii) As promptly as practicable following the Effective Time,
Buyer shall cause the Exchange Agent to determine the excess
of (A) the number of whole shares of Buyer Common Stock
delivered to the Exchange Agent by Buyer pursuant to Section
1.03(a) hereof over (B) the aggregate number of whole shares
of Buyer Common Stock to be distributed to former holders of
Company Common Stock pursuant to Section 1.03(b) hereof (such
excess being herein called the "Excess Shares"). Following the
Effective Time, the Exchange Agent shall, on behalf of former
holders of Certificates representing Company Common Stock,
sell the Excess Shares at then-prevailing prices on the NYSE,
all in the manner provided in Section 1.03(e)(iii) hereof;
(iii) The sale of the Excess Shares by the Exchange Agent
shall be executed on the NYSE through one or more member firms
of the NYSE and shall be executed in round lots to the extent
practicable. Buyer shall cause the Exchange Agent to use
reasonable efforts to complete the sale of the Excess Shares
as promptly following the Effective Time as, in the Exchange
Agent's sole judgment, is practicable consistent with
obtaining the best execution of such sales in light of
prevailing market conditions. Until the net proceeds of such
sale or sales have been distributed to the holders of
Certificates formerly representing Company Common Stock, the
Exchange Agent shall hold such proceeds in trust for such
holders (the "Common Stock Trust"). The Surviving Corporation
shall pay all commissions, transfer taxes and other
out-of-pocket transaction costs, including the expenses and
compensation of the Exchange Agent incurred in connection with
such sale of the Excess Shares. The Exchange Agent shall
determine the portion of the Common Stock Trust to which each
former holder of Company Common Stock is entitled, if any, by
multiplying the amount of the aggregate net proceeds
comprising the Common Stock Trust by a fraction, the numerator
of which is the amount of the fractional share interest to
which such former holder of Company Common Stock is entitled
(after taking into account all shares of Company Common Stock
held at the Effective Time by such holder) and the denominator
of which is the aggregate amount of fractional share interests
to which all former holders of Company Common Stock are
entitled.
(iv) Notwithstanding the provisions of Section 1.03(e)(ii) and
(iii) hereof, the Surviving Corporation may elect at its
option, exercised prior to the Effective Time, in lieu of the
issuance and sale of Excess Shares and the making of the
payments hereinabove contemplated, to pay each former holder
of Company Common Stock an amount in cash equal to the product
obtained by multiplying (A) the fractional share interest to
which such former holder (after taking into account all shares
of Company Common Stock held at the Effective Time by such
holder) would otherwise be entitled by (B) the closing price
for a share of Buyer Common Stock as reported on the NYSE
Composite Transaction Tape (as reported in The Wall Street
Journal, or, if not reported thereby, any other authoritative
source) on the Closing Date, and, in such case, all references
herein to the cash proceeds of the sale of the Excess Shares
and similar references shall be deemed to mean and refer to
the payments calculated as set forth in this Section
1.03(e)(iv).
(v) As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of Certificates
formerly representing Company Common Stock with respect to any
fractional share interests, Buyer shall cause the Exchange
Agent to make available such amounts to such holders of
Certificates formerly representing Company Common Stock
subject to and in accordance with the terms of Section 1.03(c)
hereof. For purposes of this Section 1.03, shares of Company
Common Stock of any holder represented by two or more
Certificates may be aggregated, and in no event shall any
holder be paid an amount in cash in respect of more than one
share of Buyer Common Stock.
(f) Any portion of the Exchange Fund which remains
undistributed to the holders of the Certificates for six months after
the Effective Time shall be delivered to Buyer, upon demand, and any
holders of the Certificates who have not theretofore complied with this
Article 1 shall thereafter look only to Buyer for payment of their
claims for Merger Consideration, any dividends or distributions with
respect to Buyer Common Stock, as applicable, and any cash in lieu of
fractional shares of Buyer Common Stock.
(g) Neither Buyer, the Company nor the Exchange Agent
shall be liable to any person in respect of any shares of Buyer Common
Stock, any dividends or distributions with respect thereto, any cash in
lieu of fractional shares of Buyer Common Stock or any cash from the
Exchange Fund, in each case, delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law. If any
Certificate shall not have been surrendered prior to two years after
the Effective Time (or immediately prior to such earlier date on which
any Merger Consideration, any dividends or distributions payable to the
holder of such Certificate or any cash payable to the holder of such
Certificate formerly representing Company Common Stock pursuant to this
Article 1, would otherwise escheat to or become the property of any
Governmental Entity (as defined in Section 3.05 hereof)), any such
Merger Consideration, dividends or distributions in respect of such
Certificate or such cash shall, to the extent permitted by applicable
law, become the property of the Surviving Corporation, free and clear
of all claims or interest of any person previously entitled thereto.
(h) The Exchange Agent shall invest any cash included
in the Exchange Fund, as directed by Buyer, on a daily basis. Any
interest and other income resulting from such investments shall be paid
to Buyer.
(i) 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 against it with
respect to such Certificate, the Exchange Agent shall issue in exchange
for such lost, stolen or destroyed Certificate the Merger Consideration
and, if applicable, any unpaid dividends and distributions on shares of
Buyer Common Stock deliverable in respect thereof and any cash in lieu
of fractional shares, in each case, due to such person pursuant to this
Agreement.
SECTION 1.04 Certain Adjustments. If after the date hereof and
on or prior to the Effective Time the outstanding shares of Buyer Common Stock
or Company Common Stock shall be changed into a different number, class or
series of shares or any other security by reason of any reclassification,
recapitalization, reorganization, merger, business combination, split-up, stock
split, combination or exchange of shares, or any dividend payable in stock or
other securities shall be declared thereon with a record date within such
period, or any similar event shall occur, the Exchange Ratio (and/or the
security or securities to be issued to the holders of Company Common Stock)
shall be appropriately adjusted as contemplated by this Agreement prior to such
reclassification, recapitalization, reorganization, merger, business
combination, split-up, combination, exchange or dividend or similar event.
SECTION 1.05 Stock Options and Restricted Stock.
(a) As of the Effective Time, (i) each outstanding
employee stock option to purchase Company Common Stock granted under
the Company's 1993 Stock Option Plan or the Company's 1995 Long-Term
Incentive Plan (collectively, the "Company Stock Option Plans"), shall
be converted into an option (an "Adjusted Option") to purchase the
number of shares of Buyer Common Stock equal to the number of Company
Common Stock shares subject to such options immediately prior to the
Effective Time multiplied by the Exchange Ratio (rounded to the nearest
whole number of shares of Buyer Common Stock), at an exercise price per
share equal to the exercise price for each such share of Company Common
Stock subject to such option divided by the Exchange Ratio (rounded
down to the nearest whole cent), and all references in each such option
to the Company shall be deemed to refer to Buyer, where appropriate;
provided, however, that the adjustments provided in this clause (i)
with respect to any options which are "incentive stock options" (as
defined in Section 422 of the Code) or which are described in Section
423 of the Code shall be effected in a manner consistent with the
requirements of Section 424(a) of the Code and (ii) Buyer shall assume
the obligations of the Company under the Company Stock Option Plans.
The other terms of each Adjusted Option, and the plans or agreements
under which they were issued, shall continue to apply in accordance
with their terms. The date of grant of each Adjusted Option shall be
the date on which the corresponding option was granted.
(b) As of the Effective Time, (i) each outstanding
award (including restricted stock, deferred stock, phantom stock, stock
equivalents and stock units) (each a "Company Award") under the Company
Stock Option Plans shall be converted into the same instrument of
Buyer, in each case with such adjustments (and no other adjustments) to
the terms of such Company Awards as are necessary to preserve the value
inherent in such Company Awards without any detrimental effect to the
holder thereof and (ii) Buyer shall assume the obligations of the
Company under the Company Awards. The other terms of each Company
Award, and the plans or agreements under which they were issued, shall
continue to apply in accordance with their terms.
(c) The Company and Buyer agree that each of the
Company Stock Option Plans and each of the applicable Buyer stock
option plans (the "Buyer Stock Option Plans") shall be amended, to the
extent necessary, to reflect the transactions contemplated by this
Agreement, including, but not limited to the conversion of each Share
of Company Common Stock held or to be awarded or paid pursuant to such
benefit plans, programs or arrangements into shares of Buyer Common
Stock on a basis consistent with the transactions contemplated by this
Agreement. The Company and Buyer agree to submit the amendments to the
Buyer Stock Option Plans or the Company Stock Option Plans to their
respective stockholders, if such submission is determined to be
necessary by counsel to the Company or Buyer after consultation with
one another; provided, however, that such approval shall not be a
condition to the consummation of the Merger.
(d) Buyer shall (i) reserve for issuance the number
of shares of Buyer Common Stock that will become subject to the benefit
plans, programs and arrangements referred to in this Section 1.05 and
(ii) issue or cause to be issued the appropriate number of shares of
Buyer Common Stock pursuant to applicable plans, programs and
arrangements, upon the exercise or maturation of rights existing
thereunder on the Effective Time or thereafter granted or awarded. No
later than the Effective Time, Buyer shall prepare and file with the
SEC a registration statement on Form S-8 (or other appropriate form)
registering a number of shares of Buyer Common Stock necessary to
fulfill Buyer's obligations under this Section 1.05. Such registration
statement shall be kept effective (and the current status of the
prospectus required thereby shall be maintained), if then required by
the SEC, for at least as long as Adjusted Options or Company Awards
remain outstanding.
(e) As soon as practicable after the Effective Time,
Buyer shall deliver to the holders of the options granted under the
Company Stock Option Plans and Company Awards appropriate notices
setting forth such holders' rights pursuant to the respective Company
Stock Option Plans and the agreements evidencing the grants of such
options and Company Awards and that such options and Company Awards and
the related agreements shall be assumed by Buyer and shall continue in
effect on the same terms and conditions (subject to the adjustments
required by this Section 1.05 after giving effect to the Merger).
ARTICLE 2
THE SURVIVING CORPORATION
SECTION 2.01 Certificate of Incorporation. The certificate of
incorporation of Buyer in effect at the Effective Time shall be the certificate
of incorporation of the Surviving Corporation until amended in accordance with
applicable law.
SECTION 2.02 Bylaws. The bylaws of Buyer in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable law.
SECTION 2.03 Directors and Officers. From and after the
Effective Time, until successors are duly elected or appointed in accordance
with applicable law, (a) the directors of Buyer at the Effective Time shall
constitute the directors of the Surviving Corporation, and (b) the officers of
Buyer at the Effective Time shall be the officers of the Surviving Corporation.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Buyer that, except as
set forth in the disclosure letter (the "Company Disclosure Letter") delivered
by the Company to the Buyer prior to the execution of this Agreement:
SECTION 3.01 Corporate Organization. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and has all requisite corporate power and authority to
own, operate and lease its properties and assets and to carry on its business as
it is now being conducted. The Company is duly qualified to do business and is
in good standing in each jurisdiction in which the character of its properties
owned or held under lease or the nature of its activities makes such
qualification necessary except where the failure to be so qualified or to be in
good standing will not, individually or in the aggregate, have a material
adverse effect on the business, assets or financial condition of the Company and
the Subsidiaries taken as a whole, except for any effect resulting from or
relating to (i) conditions or circumstances generally affecting the cotton and
soybean planting seed industries which are not the result of acts or omissions
of the Company, (ii) the sale of seed containing technology licensed by the
Company from Buyer or any of Buyer's affiliates or (iii) any of the litigation
matters or investigations specifically described in the Company Disclosure
Letter (a "Material Adverse Effect").
SECTION 3.02 Authorization. The Company has the necessary
corporate power and authority to enter into this Agreement and the Termination
Option Agreement and to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and the Termination Option Agreement by
the Company, the performance by the Company of its obligations hereunder and
thereunder and the consummation by the Company of the transactions contemplated
hereby and thereby have been duly and validly authorized by the Company's Board
of Directors, have been unanimously approved by the Board of Directors prior to
Buyer becoming an "Interested Stockholder" as defined in Section 203 of Delaware
Law and have been approved as otherwise required by the Company's certificate of
incorporation, as amended. Except for the approval of this Agreement, the
Termination Option Agreement and the Merger by the Company's stockholders, no
other corporate proceeding on the part of the Company is necessary for the
execution and delivery of this Agreement and the Termination Option Agreement by
the Company, the performance of the Company's obligations hereunder and
thereunder or the consummation by the Company of the transactions contemplated
hereby and thereby. This Agreement and the Termination Option Agreement have
been duly and validly executed and delivered by the Company and are legal, valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or other laws
affecting creditors' rights generally or by the availability of equitable
remedies generally.
SECTION 3.03 Capital Stock. The authorized capital stock of the
Company consists of: (a) 100,000,000 shares of Company Common Stock, of which,
as of May 8, 1998, there were (i) 38,264,617 shares issued and outstanding, (ii)
1,0666,666 shares reserved for issuance upon conversion of Series M Preferred
Stock, and (iii) 114,267 shares held in the Company's treasury, (b) 2,000,000
shares of preferred stock, $0.10 par value per share, consisting of (i) 429,319
shares designated, for issuance upon the exercise of the Rights, as Series A
Junior Participating Preferred Stock, of which no shares are issued or
outstanding, and (ii) 1,066,666 shares designated as Series M Preferred Stock,
of which 800,000 shares are issued and outstanding and (c) rights outstanding to
acquire 266,666 shares of Series M Preferred Stock and such number of shares of
Company Common Stock as shall be determined in accordance with the formula set
forth in the ▇▇▇▇▇ Cotton Acquisition Agreement, dated February 2, 1996, among
Buyer, the Company, ▇▇▇▇▇ Cotton, Inc. and Paymaster Technology Corp. (the
"▇▇▇▇▇ Agreement"). All of the outstanding capital stock of the Company and all
of the outstanding shares of capital stock of the Company's Subsidiaries (as
defined in Section 3.04 hereof) have been validly issued and are fully paid,
nonassessable and free of preemptive rights with no personal liability attaching
to the ownership thereof. As of May 8, 1998, except for the Rights, Series M
Preferred Stock, the rights referred to in subsection (c) above and options to
acquire not more than 3,425,758 shares of Company Common Stock pursuant to the
Company Stock Option Plans, there were no outstanding subscriptions, options,
warrants, rights, contracts or other arrangements or commitments obligating the
Company to issue any shares of its capital stock or any securities convertible
into or exchangeable for shares of its capital stock.
SECTION 3.04 Subsidiaries. The Company Disclosure Letter lists
all direct and indirect subsidiaries of the Company (each, a "Subsidiary" and
collectively, the "Subsidiaries") and the jurisdiction of incorporation of each
Subsidiary. The Company does not directly or indirectly own any interest in any
other corporation, partnership, joint venture or other business association or
entity. Each Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
all requisite corporate power and authority to own, operate and lease its
properties and assets and to carry on its business as it is now being conducted.
Each Subsidiary is duly qualified to do business and is in good standing in each
jurisdiction in which the character of its properties owned or held under lease
or the nature of its activities makes such qualification necessary, except where
the failure to be so qualified or to be in good standing will not, individually
or in the aggregate, have a Material Adverse Effect. All outstanding shares of
capital stock of each Subsidiary are validly issued, fully paid and
nonassessable and are owned by the Company or another Subsidiary free and clear
of any liens, claims or encumbrances.
SECTION 3.05 Consents and Approvals; No Violation. Except for
(a) applicable requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder (the "Exchange Act"), including the
filing with and clearing by the United States Securities and Exchange Commission
(the "SEC") of a proxy statement relating to the Company Stockholders Meeting
(as defined in Section 5.02 hereof), as amended or supplemented from time to
time (the "Company Proxy Statement"), (b) the filing of a Pre-Merger
Notification and Report Form by the Company and the expiration or termination of
the waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (c) the filing of the Certificate of Merger as
required by Delaware Law, (d) such filings and consents as may be required under
any environmental law pertaining to any notification, disclosure or required
approval triggered by the Merger or the transactions contemplated by this
Agreement, (e) filing with the NYSE and the SEC with respect to the delisting
and deregistration of the shares of Company Common Stock and (f) such consents,
approvals, orders, authorizations, notifications, registrations, declarations
and filings as may be required under the corporation, takeover or blue sky laws
of various states of the United States and jurisdictions outside the United
States, no filing with or prior notice to, and no permit, authorization, consent
or approval of, any federal, state, local, foreign or other governmental
department, commission, board, bureau, agency or instrumentality (each, a
"Governmental Entity") is necessary for the consummation by the Company of the
transactions contemplated by this Agreement. Neither the execution and delivery
of this Agreement by the Company nor the consummation by the Company of the
transactions contemplated hereby nor compliance by the Company with any of the
provisions hereof will (i) conflict with or result in any violation of any
provision of the articles of incorporation, as amended, or bylaws of the Company
or any Subsidiary, (ii) result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation to which the Company or any
Subsidiary is a party or by which any of them or any of their properties or
assets may be bound, or, (iii) violate any federal, state, local or foreign
order, writ, injunction, decree, statute, rule or regulation applicable to the
Company, any Subsidiary or any of their properties or assets, excluding from the
foregoing clauses (ii) and (iii) violations, breaches or defaults which, either
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
SECTION 3.06 SEC Reports and Financial Statements.
(a) Since August 31, 1994, the Company has filed all
required forms, reports and documents with the SEC required to be filed
by it pursuant to the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder (the "Securities Act") and the
Exchange Act (hereinafter collectively referred to as the "Company
Reports"), all of which have complied in all material respects with all
applicable requirements of the Securities Act and the Exchange Act. The
Company has previously furnished to Buyer copies of all such Company
Reports.
(b) None of the Company Reports, including, without
limitation, any financial statements or schedules included therein, at
the time filed, contained any untrue statement of a material fact or
omitted 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.
(c) The consolidated balance sheets and the related
consolidated statements of income, cash flow and stockholders' equity
(including, without limitation, the related notes thereto) of the
Company and its consolidated subsidiaries included in the financial
statements contained in the Company's Annual Report on Form 10-K for
the year ended August 31, 1997 (the "Company 10-K") and in the
Company's Quarterly Reports on Form 10-Q for the quarters ended
November 30, 1997 and February 28, 1998 (the "Company 10-Qs"), present
fairly the consolidated financial position of the Company and its
consolidated subsidiaries as of their respective dates, and the results
of consolidated operations and cash flows for the periods then ended,
all in conformity with generally accepted accounting principles applied
on a consistent basis, except as otherwise noted therein, and in the
case of unaudited interim financial statements subject to normal
year-end audit adjustments and except for certain footnote disclosures
required by generally accepted accounting principles.
SECTION 3.07 Absence of Undisclosed Liabilities. Neither the
Company nor any Subsidiary has any liabilities (whether absolute, accrued or
contingent), except: (a) liabilities, obligations or contingencies that are
accrued and reserved against in the consolidated balance sheet of the Company
and the Subsidiaries as of August 31, 1997 or reflected in the notes thereto,
(b) liabilities incurred since August 31, 1997 in the ordinary course of
business, (c) liabilities which, individually or in the aggregate, are not
required under generally accepted accounting principles to be set forth on a
balance sheet of Buyer and its consolidated subsidiaries and (d) liabilities
incurred after the date hereof as specifically permitted by this Agreement.
SECTION 3.08 Changes. Since the date of the Company 10-K, and
except as set forth in the Company 10-K or the Company 10-Qs, and except as
otherwise disclosed in the Company Disclosure Letter or as permitted by this
Agreement:
(a) there has been no material adverse change in the
business, assets or financial condition of the Company and its
Subsidiaries, taken as a whole, except for any change resulting from or
relating to (i) conditions or circumstances generally affecting the
cotton and soybean planting seed industries which are not the result of
acts or omissions of the Company, (ii) the sale of seed containing
technology licensed by the Company from Buyer or any of Buyer's
affiliates or (iii) any of the litigation matters or investigations
specifically described in the Company Disclosure Letter (a "Material
Adverse Change in the Company");
(b) there has been no direct or indirect redemption,
purchase or other acquisition of any shares of the Company's capital
stock, or any declaration, setting aside or payment of any dividend or
other distribution by the Company in respect of the Company's capital
stock, or any issuance of any shares of capital stock of the Company,
or any granting to any person of any option to purchase or other right
to acquire shares of capital stock of the Company or any stock split or
other change in the Company's capitalization;
(c) neither the Company nor any Subsidiary has
entered into or agreed to enter into any new or amended contract with
any labor unions representing employees of the Company or any
subsidiary;
(d) neither the Company nor any Subsidiary has
entered into or agreed to enter into any new or amended contract with
any of the officers thereof or otherwise increased the compensation
payable to the officers or directors of any such entity; and
(e) neither the Company nor any Subsidiary has (i)
entered into or amended any bonus, incentive compensation, deferred
compensation, profit sharing, retirement, pension, group insurance or
other benefit plan except as required by law or regulations or (ii)
made any contribution to any such plan except for contributions
specifically required pursuant to the terms thereof.
SECTION 3.09 Investigations; Litigation.
(a) Other than reviews pursuant to the HSR Act, there
are no pending investigations, reviews or inquiries by any Governmental
Entity with respect to the Company or any Subsidiary or with respect to
the activities of any officer, director or employee of the Company (an
"Investigation"), nor to the knowledge of the Company is an
Investigation threatened, nor has any Governmental Entity indicated to
the Company or any executive officer of the Company an intention to
conduct an Investigation, other than Investigations which, if the
resolution thereof were adverse, would not, individually or in the
aggregate, have a Material Adverse Effect. For the purpose of this
Agreement, "knowledge of the Company" and similar phrases means the
actual knowledge, after due inquiry, of any executive officer of the
Company included in the "Company Knowledge Group" set forth in the
Company Disclosure Letter.
(b) (i) There are no actions or proceedings pending
or, to the knowledge of the Company, threatened against the Company by
any Governmental Entity which seek to enjoin the Merger or would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, (ii) there are no outstanding domestic or
foreign judgments, decrees or orders against the Company or any
Subsidiary enjoining any of them in respect of, or the effect of which
is to prohibit, any business practice or the acquisition of any
property or the conduct of business in any area that, individually or
in the aggregate, would reasonably be expected to have a Material
Adverse Effect, (iii) neither the Company nor any Subsidiary is in
violation of, and none of them has received any claim or notice that it
is in violation of, any federal, state, local or foreign laws,
statutes, rules, regulations or orders promulgated or judgments entered
by any federal, state, local or foreign court or governmental authority
or instrumentality, which violations, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect; and
(iv) there are no actions pending, or to the knowledge of the Company,
threatened against the directors or any director of the Company
alleging a breach of such directors' or director's fiduciary duties.
SECTION 3.10 Contracts and Commitments.
(a) Except as permitted by this Agreement after the
date hereof, the Company is not, nor is any Subsidiary, with respect to
its business, a party to any oral or written contract:
(i) that prohibits the Company or any of its
Subsidiaries from freely engaging or
competing in its line of business anywhere in the world;
(ii) between the Company and any of its affiliates (other than
Subsidiaries), directors or officers that is not on
arms-length terms;
(iii) that involves an amount in excess of $1,000,000 and
pursuant to which the Company or any of its Subsidiaries has
incurred or accrued losses;
(iv) that by its terms may be terminated upon a change in
control of the Company or any of its Subsidiaries;
(v) that commits the Company or any of its Subsidiaries to
purchase or sell any properties or assets outside of the
ordinary course of business for consideration in excess of
$1,000,000; or
(vi) that involves an unfulfilled obligation, individually or
in the aggregate, in excess of $1,000,000 and is incurred
outside the ordinary course of business and is not terminable
by the Company or any of its Subsidiaries upon less than 60
calendar days' notice for a cost of not less than $1,000,000.
(b) Buyer has been supplied with a true and correct
copy of all written contracts which are referred to on the Company
Disclosure Letter, together with all amendments, exhibits, attachments,
waivers or other changes thereto.
. Except as would not be reasonably likely, individually or in
the aggregate, to result in any loss, obligation, expense, damage or liability
in excess of $15,000,000:
(a) The Company and its Subsidiaries have complied
and are in compliance with all applicable Environmental and Safety
Requirements. "Environmental and Safety Requirements" means all
federal, state, local and foreign statutes, regulations, ordinances and
other provisions having the force or effect of law, all judicial and
administrative orders and determinations and all common law in each
case concerning public health and safety, worker health and safety, and
pollution or protection of the environment (including without
limitation all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, Release or
threatened Release (whether onsite or offsite), control, or cleanup of
any hazardous materials, substances or wastes, chemical substances or
mixtures, pesticides, pollutants, contaminants, toxic chemicals,
petroleum products or byproducts, asbestos, polychlorinated biphenyls,
noise or radiation). "Release" has the meaning set forth in CERCLA.
(b) Without limiting the generality of the foregoing,
the Company and its Subsidiaries have obtained and complied in all
material respects with, and are in compliance in all material respects
with, all permits, licenses and other authorizations that are required
pursuant to Environmental and Safety Requirements for the occupation of
their facilities and the operation of their business.
(c) The Company and its Subsidiaries have not
received any written or oral notice, report or other information
regarding any liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise) or investigatory, removal, remedial or
corrective obligations, relating to the Company or its Subsidiaries,
any of their respective current or former properties and facilities or
any current or former offsite properties and facilities used in the
business of the Company or its Subsidiaries, and arising under
Environmental and Safety Requirements.
(d) No landfills, surface impoundments, waste piles
or other waste management, treatment, storage or disposal areas exist
at any property or facility currently owned or operated by the Company
or its Subsidiaries.
(e) The Company and its Subsidiaries have not
treated, stored, disposed of, arranged for or permitted the disposal
of, transported, handled, or Released, either onsite or offsite, any
substance, including without limitation any hazardous substance, or
owned, operated or used in any facility or property (and no such
property or facility is contaminated by any such substance), so as to
give rise to liabilities of the Company or its Subsidiaries for
response costs or natural resource damages pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA"), as amended, or similar state Environmental and Safety
Requirements.
(f) Neither the Company nor its Subsidiaries have,
either expressly or by operation of law, assumed or undertaken any
liability, including without limitation any obligation for removal,
corrective or remedial action, of any other person relating to any
Environmental and Safety Requirements.
(g) No Environmental Lien has attached to any
property currently owned, leased or operated by the Company or any
Subsidiary. "Environmental Lien" means a lien, either recorded or
unrecorded, in favor of any governmental entity, relating to any
liability arising under Environmental and Safety Requirements.
(h) Without limiting the foregoing, no facts, events
or conditions relating to the past or present facilities, properties or
operations of the Company or its Subsidiaries, or, to the Company's
knowledge, any predecessor or affiliate thereof, will prevent, hinder
or limit continued compliance in all material respects by the Company
with applicable Environmental and Safety Requirements, give rise to any
material investigatory, removal, remedial or corrective obligations
pursuant to Environmental and Safety Requirements, or give rise to any
other liabilities (whether accrued, absolute, contingent, unliquidated
or otherwise) pursuant to Environmental and Safety Requirements,
including without limitation any relating to onsite or offsite Releases
or threatened Releases of hazardous materials, substances or wastes,
personal injury, property damage or natural resource damage.
The Company and each of the Subsidiaries has timely filed
(or has or will have had filed on its behalf) all material federal, state, local
and foreign income and other tax returns, reports and declarations which are or
were required by applicable law to have been filed at or before the Effective
Time. Each of the Company and the Subsidiaries has timely paid or will timely
pay (or has or will have paid on its behalf), or where payment is not required
to be made, has made or will make adequate provision in reserves established on
its financial statements and accounts for the payment of, all material taxes
(including, without limitation, all taxes required to be withheld, or any
interest and penalties on any taxes), in respect of the periods covered by said
returns, reports and declarations or any other taxable period ending on or
before the Effective Time. All returns, reports and declarations required to be
made, including, without limitation, any amendments to date, have been prepared
in good faith and are complete and accurate in all material respects. No
deficiencies for any material tax, assessment or governmental charge have been
asserted or assessed against the Company or any of the Subsidiaries which have
not been paid, settled or adequately provided for through reserves established
in the financial statements and accounts and, to the knowledge of the Company,
there is no basis for any such deficiency, assessment or charge which would be
material to the Company and the Subsidiaries taken as a whole. No election under
Section 341(f) of the Code has been or shall hereafter be made to treat the
Company or any of the Subsidiaries as a consenting corporation (as defined in
Section 341(f) of the Code).
Except as disclosed in the Company Reports, there are no
written employment, consulting or severance agreements between the Company or
any Subsidiary, on the one hand, and any directors, officers or other employees
of the Company or any Subsidiary, on the other hand, which provide for annual
remuneration or other payments in excess of $100,000.
Except as disclosed in the Company Reports or as required
under the terms of this Agreement, none of the agreements described in Section
3.13 hereof and none of the Plans and no compensation plan maintained by the
Company or any Subsidiary for the benefit of their respective current or former
employees, directors or consultants contains any provision that would entitle
any such employee, director or consultant to any additional or accelerated
payments or benefits as a result of the consummation of the Merger or the
transactions contemplated by this Agreement.
All employee benefit plans within the meaning of Section
3(3) of the Employment Retirement Income Security Act of 1974, as amended
("ERISA"), maintained by the Company or any of the Subsidiaries since August 31,
1997 (collectively, the "Plans") are in compliance with, and have been
administered and operated in accordance with, the terms of such Plans and
applicable law, except for any failure to so comply, operate or administer the
Plans that would not, individually or in the aggregate, result in a Material
Adverse Effect. The Internal Revenue Service has issued a determination letter
to the effect that each such Plan which is intended to be "qualified" within the
meaning of Section 401(a) of the Code is so qualified. No event which
constitutes a "reportable event" as defined in Section 4043 of ERISA has
occurred and is continuing with respect to any Plan subject to Title IV of ERISA
which presents a material risk of the termination or partial termination of any
such Plan or would reasonably be expected to result in a material liability of
the Company or any Subsidiary. No Plan has been terminated pursuant to Title IV
of ERISA in connection with which any liability has been incurred which has not
been satisfied in full. Full payment has been made, or provision has been made
therefor, of all amounts which the Company or any of the Subsidiaries were
required under the terms of the Plans to have paid as contributions to such
Plans on or prior to the date hereof and no Plan which is subject to Part 3 of
Subtitle B of Title I of ERISA has incurred any "accumulated funding deficiency"
(within the meaning of Section 302 of ERISA or Section 412 of the Code), whether
or not waived. Neither the Company nor any of the Subsidiaries has engaged in
any nonexempt prohibited transactions in connection with any Plan (or its
related trust) with respect to which the Company, any of the Subsidiaries, or
any officer, director, employee of the Company or any of the Subsidiaries would
be subject to either a penalty pursuant to Section 502(i) of ERISA or a tax
imposed by Section 4975 of the Code nor, to the knowledge of the Company, will
the consummation of the transactions contemplated by this Agreement constitute
such a transaction which penalty or tax would, individually or in the aggregate,
result in a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has incurred any liability under the fiduciary provisions of ERISA,
other than any liability that would not individually, or in the aggregate,
result in a Material Adverse Effect. No claim, action or litigation has been
made, commenced or, to the knowledge of the Company, threatened with respect to
any Plan that would, if adversely determined, result in a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries has participated in or
contributed to any multiemployer plan as defined in Section 337 of ERISA at any
time during the prior six years. With respect to each employee pension benefit
plan (as defined in Section 3(2) of ERISA) which is a defined benefit plan and
is not a multiemployer plan, the assets of such Plan available to meet the
accrued liabilities of such Plan would exceed such liabilities, based on the
actuarial assumptions used for plan termination.
The Company and its Subsidiaries have obtained all permits,
concessions, grants, franchises, licenses and other federal, state, local or
foreign governmental authorizations and approvals material, individually or in
the aggregate, to the conduct of the business as now conducted of the Company
and the Subsidiaries (collectively, "Licenses"), except where the failure to so
obtain any such License would not reasonably be expected to have a Material
Adverse Effect. All of the Licenses are in full force and effect and, to the
best of the Company's knowledge, will not be impaired or adversely affected by
the transactions contemplated by this Agreement in a manner or to a degree that
is reasonably likely to have a Material Adverse Effect.
The Company Disclosure Letter sets forth a list of all
material leases and subleases existing as of the date hereof under which the
Company and its Subsidiaries is lessor or lessee of any real property together
with all amendments, supplements, nondisturbance agreements and other agreements
pertaining thereto. As to such leases, subleases and other agreements referred
to above, (a) there exists no breach or default, and no event has occurred which
with notice or passage of time would constitute such a breach or default or
permit termination, notification or acceleration, on the part of the Company or
any Subsidiary, or on the part of any other party thereto, and (b) as of the
Effective Time, no material third party consent, approval or authorization shall
be required for the consummation of the Merger, except where such breach or
default or failure to obtain any such consent, approval or authorization would
not reasonably be expected to have a Material Adverse Effect. To the Company's
knowledge, there is no lien, claim, option, charge, security interest,
limitation, encumbrance or restriction of any kind (any of the foregoing being a
"Lien") on any of the leasehold interests set forth in the Company Disclosure
Letter except for (a) Liens reflected in the balance sheet included in the
Company's Form 10-K for the period ended August 31, 1997, (b) Liens of record
consisting of zoning or planning restrictions, easements, permits and other
restrictions or limitations on the use of real property which do not materially
detract from the value of, or a materially impair the use of, such property by
the Company and its Subsidiaries in the operation of their respective
businesses, (c) Liens for current taxes, assessments or governmental charges or
levies on property not yet delinquent or being contested in good faith and for
which appropriate reserves have been established in accordance with United
States generally acceptable accounting principles (which contested levies are
described in the Company Disclosure Letter), (d) Liens imposed by law, such as
materialman's, mechanic's, carrier's, workers' and repairmen's Liens securing
obligations not yet delinquent or being contested in good faith and for which
appropriate reserves have been established in accordance with United States
generally acceptable accounting principles or securing obligations not being
paid in the ordinary course of business in accordance with customary and
commercially reasonable practice, and (e) Liens that do not materially adversely
affect the use or enjoyment of the assets or properties of the Company or its
Subsidiaries (collectively, "Permitted Liens").
The Company Disclosure Letter lists all real property owned
by the Company and its Subsidiaries as of the date hereof. Each of the Company
and its Subsidiaries has good title in fee simple to its respective real
properties set forth in the Company Disclosure Letter, in each case, to the
Company's knowledge, free and clear of all Liens, except for Permitted Liens.
SECTION 3.19 Intellectual Property and Germplasm
(a) The Company Disclosure Letter lists all of the
patents, certificates of plant variety protection, registered
trademarks, registered service marks, registered copyrights,
application for any of the foregoing and material unregistered
trademarks, service marks, copyrights, trade names and corporate names
used in the conduct of the business of the Company or its Subsidiaries
as of the date hereof (collectively, "Intellectual Property") and all
varieties and hybrids of cotton and soybeans which the Company or its
Subsidiaries are presently selling or reasonably anticipates selling
within two years of the date of this Agreement. The Company and its
Subsidiaries own and possess all right, title and interest in and to,
or possess the valid right to use, the Intellectual Property. The
Company owns and possesses all right, title and interest in and to, or
possesses the valid right to use, in the manner used by the Company,
all germplasm used in the Company's breeding or research programs. The
Company has not received any notice of, and neither the Company nor any
of its Subsidiaries has any knowledge of any potential claim of any,
infringement of any patent or certificate of plant variety protection
or misappropriation from any third party with respect to the
Intellectual Property or any germplasm in the Company's breeding or
research programs. To the actual knowledge of the Company (without any
inquiry), each item of Intellectual Property is valid and enforceable.
To the knowledge of the Company, the Company or its Subsidiaries are
not currently infringing and have not infringed any intellectual
property of any other person and the transactions contemplated by this
Agreement will not impair any such patent, trademark, trade name,
copyright or other similar item of Intellectual Property.
(b) None of the computer software, computer firmware,
computer hardware (whether general or special purpose) or other similar
or related items of automated, computerized or software systems that
are used or relied on by the Company or by any of its Subsidiaries in
the conduct of its business will malfunction, will cease to function,
will generate incorrect data or will produce incorrect results when
processing, providing or receiving (i) date-related data from, onto and
between the twentieth and twenty-first centuries or (ii) date-related
data in connection with any valid date in the twentieth and
twenty-first centuries, except where any such malfunction or generation
of incorrect data or results would not reasonably be expected to have a
Material Adverse Effect.
Section 3.20 Compliance with Other Instruments and Laws.
Neither the Company nor any Subsidiary is in violation of
any term of its certificate of incorporation, as amended, or bylaws, or in
violation of any mortgage, indenture, instrument or agreement relating to
indebtedness for borrowed money or of any judgment, decree or order which names
the Company or any Subsidiary or in violation of any term of any other material
instrument, contract or agreement to which it is a party or by which it or any
of its properties or assets is bound, except to the extent that any such
violation would not be reasonably expected to have a Material Adverse Effect.
The Company's and each Subsidiary's businesses are in compliance in all material
respects with all federal, state, local or foreign statutes, laws, ordinances,
rules, governmental regulations, permits, concessions, grants, franchises,
licenses or other governmental authorizations or approvals applicable to the
operation of such business, except to the extent that the failure of such
compliance would not reasonably be expected to have a Material Adverse Effect.
Section 3.21 Employees.
To the actual knowledge of the Company (without any due
inquiry), as of the date of this Agreement, no key employee, or group of
employees of the Company has any plans to terminate employment with the Company
other than employees with plans to retire. Without limiting the generality of
Section 3.20 hereof, the Company has complied in all material respects with all
laws relating to the employment of labor, including provisions thereof relating
to wages, hours, equal opportunity and collective bargaining, and, to the
knowledge of the Company, it does not have any material labor relations problems
(including without limitation threatened or actual strikes or work stoppages or
material grievances).
Section 3.22 Information Supplied.
None of the information supplied or to be supplied by the
Company specifically for inclusion or incorporation by reference in (i) the
registration statement on Form S-4 to be filed with the SEC by Buyer in
connection with the issuance of Buyer Common Stock in the Merger (the "Form
S-4") will, at the time the Form S-4 is filed with the SEC, at any time it is
amended or supplemented or at the time it becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading or (ii) the Company Proxy Statement will, at the date it is first
mailed to the Company's stockholders or at the time of the Company Stockholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Company Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act, except that no
representation or warranty is made by the Company with respect to statements
made or incorporated by reference therein based on information supplied by Buyer
specifically for inclusion or incorporation by reference in the Company Proxy
Statement. At the time of the filing of any disclosure document filed after the
date hereof pursuant to the Securities Act, the Exchange Act or any state
securities law (each a "Company Disclosure Document") other than the Company
Proxy Statement, each such Company Disclosure Document (as supplemented or
amended) will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they were made, not misleading.
Section 3.23 Rights Agreement.
The Company's Board of Directors has taken all necessary
action to provide that Buyer will not become an "Acquiring Person," that no
"Shares Acquisition Date" or "Distribution Date" (as such terms are defined in
the Rights Agreement, dated as of August 13, 1996, between the Company and
▇▇▇▇▇▇ Trust and Savings Bank, as Rights Agent (the "Rights Agreement")) will
occur, and that the Rights Agreement will not be applicable to the execution or
delivery of this Agreement or any amendment hereto or the consummation of the
Merger and other transactions contemplated hereby. The Company has provided to
Buyer written evidence, reasonably satisfactory to Buyer, of the foregoing.
Section 3.24 Certain Fees.
Except in connection with the engagement of ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., neither the Company nor any Subsidiary has employed any broker or finder or
incurred any liability for any financial advisory, brokerage or finders' fees or
commissions in connection with the transactions contemplated hereby.
SECTION 3.25 Opinion of Financial Advisor
The Company has received the opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
dated the date hereof, to the effect that, as of such date, the Merger
Consideration to be received in the Merger by the Company's stockholders is fair
to the Company's stockholders from a financial point of view, a copy of which
opinion has been delivered to Buyer.
SECTION 3.26 Voting Requirements
The affirmative vote of the holders of a majority of the
outstanding shares of Company Common Stock at the Company Stockholders Meeting
to adopt this Agreement is the only vote of the holders of any class or series
of Company's capital stock necessary to approve and adopt this Agreement and the
transactions contemplated hereby. The Board of Directors of the Company has duly
and validly approved and has taken or, prior to the Effective Time, will have
taken, all corporate action required to be taken by the Company Board of
Directors for the consummation of the transactions contemplated by this
Agreement.
SECTION 3.27 State Takeover Statutes
The Board of Directors of the Company has approved this
Agreement and the consummation of the Merger and the other transactions
contemplated hereby and such approval constitutes approval of the Merger and the
other transactions contemplated by this Agreement by the Board of Directors of
the Company under the provisions of Section 203 of Delaware Law such that
Section 203 of Delaware Law does not apply to the Merger or the other
transactions contemplated by this Agreement. To the knowledge of the Company, no
other state takeover statute is applicable to the Merger or the other
transactions contemplated by this Agreement.
SECTION 3.28 Affiliates.
The Company Disclosure Letter identifies all persons who, to
the knowledge of the Company, may be deemed affiliates of the Company under Rule
145 of the Securities Act (the "Rule 145 Affiliates"), including, without
limitation, all directors and executive officers of the Company.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represent and warrant to the Company as follows:
SECTION 4.01. Corporate Organization. Buyer is a corporation duly organized
validly existing and
in good standing under the laws of Delaware, with all requisite corporate power
and authority to own, operate and lease its properties and assets and to carry
on its businesses as now being conducted.
SECTION 4.02 Authorization. Buyer has the necessary corporate power and
authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement by Buyer, the performance by Buyer of
its obligations hereunder and the consummation by Buyer of the transactions
contemplated hereby have been duly and validly authorized by the Board of
Directors of Buyer, and no other corporate proceeding on the part of Buyer is
necessary for the execution and delivery of this Agreement by Buyer, the
performance of its obligations hereunder and the consummation by Buyer of the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Buyer and is a legal, valid and binding obligation of
Buyer, enforceable against it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or other laws affecting creditors' rights generally or by the
availability of equitable remedies generally.
SECTION 4.03 Capital Stock.The authorized capital stock of Buyer consists of:(a)
1,000,000,000 shares of Buyer Common Stock, of which, as of May 6, 1998, there
were 599,842,187 shares were issued and outstanding (and 222,128,783 shares held
in the Company's treasury) and (b) 10,000,000 shares of preferred stock, without
par value, of which, as of May 6, 1998, there were no shares issued and
outstanding. All of the outstanding shares have been validly issued and are
fully paid, nonassessable and free of preemptive rights with no personal
liability attaching to the ownership thereof. As of May 6, 1998, except for
options to acquire not more than 110,000,000 shares of Buyer Common Stock
pursuant to the Buyer Stock Option Plans, there were no outstanding
subscriptions, options, warrants, rights, contracts or other arrangements or
commitments obligating Buyer to issue any shares of its capital stock or any
securities convertible into or exchangeable for shares of its capital stock.
SECTION 4.04 Information Supplied. None of the information supplied or to be
supplied by Buyer
specifically for inclusion or incorporation by reference in (i) the Form S-4
will, at the time the Form S-4 is filed with the SEC, at any time it is amended
or supplemented or at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading or (ii)
the Company Proxy Statement will, at the date it is first mailed to the
Company's stockholders or at the time of the Company Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Form S-4 will comply as to form in all material respects with
the requirements of the Securities Act, except that no representation or
warranty is made by Buyer with respect to statements made or incorporated by
reference in either the Form S-4 or the Company Proxy Statement based on
information supplied by the Company specifically for inclusion or incorporation
by reference therein.
SECTION 4.05 Consents and Approvals; No Violations.
Except for (a) applicable requirements of the Exchange Act,
(b) filing with and clearing by the SEC of the Form S-4, (c) expiration or
termination of the waiting period under the HSR Act, (d) the filing of the
Certificate of Merger as required by Delaware Law (e) such filings and consents
as may be required under any environmental law pertaining to any notification,
disclosure or required approval triggered by the Merger or the transactions
contemplated by this Agreement, (f) filing with the NYSE to permit the shares of
Buyer Common Stock that are to be issued in the Merger and under the Company
Stock Option Plans (the "Buyer Listed Securities"), to be approved for listing
on the NYSE, subject to official notice of issuance, and to continue to be
listed on the NYSE following the Merger, and (g) such consents, approvals,
orders, authorizations, notifications, registrations, declarations and filings
as may be required under the corporation, takeover or blue sky laws of various
states or non-U.S. change-in-control laws or regulations, no filing or
registration with, no notice to and no permit, authorization, consent or
approval of any public or governmental body or authority is necessary for the
consummation by Buyer of the transactions contemplated by this Agreement.
Neither the execution and delivery of this Agreement by Buyer nor the
consummation by Buyer of the transactions contemplated hereby nor compliance by
Buyer with any of the provisions hereof will (i) conflict with or result in any
breach of any provision of the articles or certificate of incorporation or
bylaws of Buyer, (ii) at the Effective Time, result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation or acceleration or
otherwise change the existing rights or obligations of any party thereto) under,
any of the terms, conditions or provisions of any note, bond, mortgage
indenture, license, agreement or other instrument or obligation to which Buyer
is a party or by which Buyer, or any of its properties or assets may be bound,
or (iii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Buyer or any of its properties or assets, excluding
from the foregoing clauses (ii) and (iii) violations, breaches or defaults which
would not, individually or in the aggregate, have a material adverse effect on
the business, assets or financial condition of Buyer and its Subsidiaries taken
as a whole, except for any effect resulting from or relating to conditions or
circumstances generally affecting the industries in which Buyer currently
operates which are not the result of acts or omissions of Buyer (a "Buyer
Material Adverse Effect").
Section 4.06 Certain Fees. Except for BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, whose fees
will be paid by Buyer, there is no investment banker, broker, finder or other
intermediary who might be entitled to any fee or commission upon consummation of
the transactions contemplated by this Agreement.
SECTION 4.07 SEC Reports and Financial Statements.
(a) Since January 1, 1995, Buyer has filed all
required forms, reports and documents with the SEC required to be filed
by it pursuant to the Securities Act and the Exchange Act (hereinafter
collectively referred to as the "Buyer Reports"), all of which have
complied in all material respects with all applicable requirements of
the Securities Act and the Exchange Act.
(b) None of the Buyer Reports, at the time filed,
contained any untrue statement of a material fact or omitted 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.
(c) The consolidated balance sheets and the related
consolidated statements of operations, stockholders' equity and changes
in financial position (including, without limitation, the related notes
thereto) of Buyer and its consolidated subsidiaries included in the
financial statements contained in Buyer's Annual Report on Form 10-K
for the year ended December 31, 1997 present fairly the consolidated
financial position of Buyer and its consolidated subsidiaries as of
their respective dates, and the results of consolidated operations and
changes in consolidated financial position for the periods then ended,
all in conformity with generally accepted accounting principles applied
on a consistent basis, except as otherwise noted therein, and in the
case of unaudited interim financial statements subject to normal
year-end audit adjustments and except for certain footnote disclosures
required by generally accepted accounting principles.
SECTION 4.08 Absence of Undisclosed Liabilities.
Buyer and its consolidated subsidiaries have no liabilities
(whether absolute, accrued or contingent), except: (a) liabilities, obligations
or contingencies that are accrued and reserved against in the consolidated
balance sheet of Buyer and its consolidated subsidiaries as of December 31, 1997
or reflected in the notes thereto, (b) liabilities incurred since December 31,
1997 that would not have a Buyer Material Adverse Effect, or (c) liabilities
which, individually or in the aggregate, are not required under generally
accepted accounting principles to be set forth on a balance sheet of Buyer and
its consolidated subsidiaries.
SECTION 4.09 No Buyer Stockholder Vote.
No vote of the stockholders of Buyer is required under
Delaware Law, the applicable rules and regulations of the NYSE or any other
applicable law or regulation, or pursuant to the terms of Buyer's certificate of
incorporation, in order to authorize the consummation by Buyer of the
transactions contemplated hereby.
ARTICLE 5
COVENANTS OF THE COMPANY
SECTION 5.01 Conduct of Business by the Company Pending the Merger.
The Company covenants and agrees that prior to the Effective
Time or the date, if any, on which this Agreement is earlier terminated pursuant
to Section 9.01 hereof, unless Buyer shall otherwise consent in writing (such
consent not to be unreasonably withheld) or except as otherwise contemplated by
this Agreement:
(a) the businesses of the Company and the
Subsidiaries will be conducted only in the ordinary and usual course;
the Company will use its best efforts to preserve intact its business
organization and goodwill, keep available the services of its officers
and employees and maintain satisfactory relationships with suppliers,
distributors, customers and others having business relationships with
it and the Subsidiaries; and the Company will promptly notify Buyer of
any event or occurrence or emergency not in the ordinary and usual
course of the business of the Company or any Subsidiary or material to
the business of the Company and the Subsidiaries, taken as a whole;
(b) the Company will not (i) amend its certificate of
incorporation or bylaws or (ii) split, combine or reclassify the
outstanding Shares or declare, set aside or pay any dividend payable in
cash, stock or property with respect to the Shares, provided that the
Company may declare and pay to holders of the Shares regular quarterly
dividends not more than $0.03 per share;
(c) except as provided in the ▇▇▇▇▇ Agreement,
neither the Company nor any Subsidiary will issue or agree to issue any
additional shares of, or rights of any kind to acquire shares of, its
capital stock of any class other than the issuance of shares of capital
stock of a Subsidiary to the Company or, with respect to the Company,
Shares issuable upon exercise of outstanding options pursuant to the
Company Stock Option Plans;
(d) neither the Company nor any Subsidiary will enter
into or agree to enter into any new or amended contract or agreement
with any labor unions representing employees of the Company or any
Subsidiary;
(e) except as contemplated by Section 5.04 hereto,
the Company will not authorize, recommend, propose or announce an
intention to authorize, recommend or propose, or enter into an
agreement in principle or an agreement with respect to any merger,
consolidation or business combination (other than the Merger), any
acquisition or disposition of a material amount of assets or securities
(including, without limitation, the assets or securities of any
Subsidiary and other than inventory in the ordinary course of
business);
(f) except as set forth in the Company Disclosure
Letter, the Company will not, and will not permit any Subsidiary to,
(i) enter into or amend any employment, severance or change-in-control
agreement, or any bonus, incentive compensation, deferred compensation,
profit sharing, retirement, pension, group insurance or other benefit
plan except as required by law or regulations, or as expressly provided
by this Agreement or in the ordinary course or (ii) make any
contribution to any such plan except for contributions specifically
required pursuant to the terms thereof;
(g) the Company will not (i) except as set forth in
the Company Disclosure Letter or in the ordinary course of business,
create, incur or assume any debt (including, without limitation,
obligations in respect of capital leases) other than under existing or
approved lines of credit or to fund out-of-pocket costs incurred in
connection with the transactions contemplated hereby; (ii) except as
set forth in the Company Disclosure Letter, assume, guarantee, endorse
or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person
except majority-owned Subsidiaries of the Company in the ordinary
course of business; or (iii) make any loans, advances or capital
contributions to, or investments in, any other person other than a
majority-owned Subsidiary (other than trade credit or customary
advances to employees and short-term investments pursuant to customary
cash management systems of the Company in the ordinary course and
consistent with past practice);
(h) the Company will neither amend the Rights
Agreement nor redeem any of the rights granted under the Rights
Agreement without the written consent of Buyer; and
(i) neither the Company nor any Subsidiary shall
agree in writing or otherwise to take (i) any action that it is
prohibited from taking by this Section 5.01, or (ii) any action that
would constitute or is likely to cause or result in a breach of any
covenant, agreement, or representation or warranty set forth herein.
SECTION 5.02 Stockholders' Meeting. The Company shall cause a meeting of its
stockholders (the
"Company Stockholders Meeting") to be duly called and held as soon as reasonably
practicable for the purpose of voting on the approval and adoption of this
Agreement and the Merger. The Board of Directors of the Company will (a)
unanimously recommend approval and adoption of this Agreement by the Company's
stockholders hereof and (b) use reasonable best efforts to obtain the necessary
approval by the Company's stockholders of this Agreement and the transactions
contemplated hereby.
SECTION 5.03 Access to Information.
Subject to the terms hereof and of the existing
confidentiality agreements, dated April 28, 1998 and March 14, 1998, between the
Company and Buyer (together, the "Confidentiality Agreements"), in compliance
with applicable law, during normal business hours, upon reasonable notice and in
a manner as shall not unreasonably interfere with the conduct of the Company or
Buyer, the Company will give Buyer, its counsel, financial advisors, auditors
and other authorized representatives reasonable access throughout the period
prior to the Effective Time to all of the offices, properties, business and
marketing plans, books, files and records of the Company and the Subsidiaries,
will furnish to Buyer, its counsel, financial advisors, auditors and other
authorized representatives such financial and operating data and other
information as such persons may reasonably request and will instruct the
Company's employees, counsel and financial advisors to cooperate with Buyer in
its investigation of the business of the Company and its Subsidiaries. The
Company will furnish promptly to Buyer (a) a copy of each report, schedule and
other document filed or received by it pursuant to the requirements of Federal
or state securities laws, and (b) all such other information concerning its
business, properties and personnel as Buyer may reasonably request; provided
that no investigation pursuant to this Section 5.03 shall affect any
representation or warranty contained herein or the conditions to the obligations
of the parties to consummate the Merger. Notwithstanding the foregoing, nothing
in this Agreement shall require any person to disclose any information in
violation of any applicable law, regulation or administrative order or decree
and nothing in this Agreement shall relieve any party of any existing
contractual obligations with respect to the use and/or disclosure of such
information.
SECTION 5.04 No Solicitation.
(a) The Company agrees that, prior to the Effective
Time or, in the event that this Agreement is terminated, for 90 days
following the effective date of such termination, 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 solicit, initiate or
encourage (including by way of furnishing or disclosing non-public
information) any inquiries or the making of any proposal with respect
to any merger, consolidation or other business combination involving
the Company or the acquisition of all or substantially all of the
assets or capital stock of the Company (an "Acquisition Transaction")
or negotiate, explore or otherwise engage in substantive discussions
with any person (other than Buyer or its directors, officers,
employees, agents and representatives), or enter into any agreement,
with respect to any Acquisition Transaction or 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 that the Company may, prior to
the date of the Company Stockholders Meeting, in response to a bona
fide unsolicited written proposal with respect to an Acquisition
Transaction from a credible third party that is not subject to any
material financing uncertainties and that the Board of Directors
determines in the exercise of its fiduciary duties is more favorable to
the stockholders of the Company than the Merger, furnish or disclose
non-public information to, and negotiate, explore or otherwise engage
in substantive discussions with, or enter into such an agreement with,
such third party (provided that it shall concurrently with entering
into such agreement pay or cause to be paid to Buyer the amount
specified in Section 9.04(b) hereof).
(b) After the date hereof, the Company shall
immediately advise Buyer in writing of the receipt, directly or
indirectly, of any inquiries or proposals, and of its intention to
enter into any agreement, relating to an Acquisition Transaction and
any actions taken pursuant to Section 5.04(a) hereof and furnish to
Buyer either a copy of such proposal or a written summary of such
proposal.
Section 5.05 Corporate Organization.
Notwithstanding anything to the contrary contained in this
Agreement or in the Company Disclosure Letter, the Company and each Subsidiary
shall take all actions necessary in order to be duly qualified and in good
standing on the Effective Date with the Secretary of State in each jurisdiction
in which the character of its properties owned or held under lease or the nature
of its activities makes such qualification necessary (it being understood and
agreed that no breach of this covenant shall form the basis for any liability of
the Company under this Agreement).
SECTION 5.06 Termination Option Agreement.
The Company will fully perform its obligations under the Termination
Option Agreement.
ARTICLE 6
COVENANTS OF BUYER
Buyer agrees that:
SECTION 6.01 Confidentiality.
Buyer will hold, and will use its reasonable best efforts to
cause its officers, directors, employees, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all trade secrets and confidential
information concerning the Company and the Subsidiaries furnished to Buyer in
connection with the transactions contemplated by this Agreement, except to the
extent that such information can be shown to have been (a) previously known on a
nonconfidential basis by Buyer, (b) in the public domain through no fault of
Buyer or (c) lawfully available to Buyer from sources other than the Company;
provided, however, that Buyer may disclose such information to its officers,
directors, employees, consultants, advisors and agents so long as such persons
are informed by Buyer of the confidential nature of such information and are
directed by Buyer to treat such information confidentially; and provided further
that Buyer shall be responsible for any disclosures of such information by any
such persons. If this Agreement is terminated, such confidence shall be
maintained and Buyer will, and will use its best efforts to cause its officers,
directors, employees, consultants, advisors and agents to, destroy or deliver to
the Company, upon request, all documents and other materials, and all copies
thereof, obtained by Buyer or on its behalf from the Company in connection with
this Agreement that are subject to such confidence.
SECTION 6.02 Indemnification.
(a) Buyer shall cause the Surviving Corporation to
indemnify, to the full extent permitted under Delaware Law, the present
and former directors or officers of the Company and the Subsidiaries
(the "Indemnified Parties") from and against all losses, obligations,
expenses, claims, damages and liabilities arising in respect of actions
taken prior to and including the Effective Time in connection with
their duties as directors or officers of the Company (including the
transactions contemplated hereby) for a period of not less than six
years from the Effective Time; provided that, in the event any claim or
claims are asserted or made within such six-year period, all rights to
indemnification in respect of any such claim or claims shall continue
until final disposition of any and all such claims. Without limitation
of the foregoing, in the event any Indemnified Party becomes involved
in such capacity in any action, proceeding or investigation in
connection with any matter, including the transactions contemplated
hereby, occurring prior to and including the Effective Time, the
Surviving Corporation, to the extent permitted and on such conditions
as may be required by applicable law, will periodically reimburse such
Indemnified Party for his legal and other out-of-pocket expenses
(including the cost of any investigation and preparation) incurred in
connection therewith.
(b) For not less than six years after the Effective
Time, Buyer or the Surviving Corporation shall maintain in effect
directors' and officers' liability insurance covering the Indemnified
Parties who are currently covered by the Company's existing directors'
and officers' liability insurance, on terms and conditions no less
favorable to such directors and officers than those in effect on the
date hereof with respect to Buyer's officers and directors.
SECTION 6.03 Operations After the Effective Time.
Buyer currently intends to maintain offices, facilities and
operations of the Company at their current locations. Buyer looks forward to
continuing the strong relationship developed by the Company with the community
in ▇▇▇▇▇, Mississippi.
SECTION 6.04 Employees Benefits.
From and after the Closing Date, Buyer will honor, pay and
perform all obligations under all employment, severance, retention and change of
control agreements with or for employees of the Company or any Subsidiary in
accordance with the terms thereof. Buyer will maintain and fund in accordance
with ERISA, the Code and any other applicable law for a period of two years
after the Effective Time employee benefit and compensation plans and
arrangements which, in the aggregate, provide benefits and compensation to
employees of the Surviving Corporation which are no less favorable in the
aggregate than those provided pursuant to the employee benefit plans and
arrangements in effect for such individuals on the date hereof. From and after
the Effective Time, if any employees of the Surviving Corporation or any
Subsidiary will participate in any employee benefit plan of Buyer or any of its
subsidiaries, Buyer will, and will cause its subsidiaries to, cause such
employee benefit plans to (i) recognize the service of the affected employees of
the Company or its Subsidiaries completed prior to the Effective Time for
participation, vesting and eligibility for early retirement under such plans of
Buyer or any of its Subsidiaries and (ii) waive any pre-existing condition
limitations or exclusions under such plans of Buyer or its subsidiaries. If the
Closing Date occurs more than three months after the end of the Company's last
completed fiscal year, then the amount of bonuses payable, if any, to each
employee of the Company or any of its Subsidiaries who is eligible to
participate in a bonus plan or arrangement sponsored or maintained by the
Company or any of its Subsidiaries for the fiscal year of the Company that
includes the Closing Date shall be determined consistent with past practices of
the Company and shall be payable no later than November 15 of the fiscal year of
the Surviving Corporation next succeeding the fiscal year that includes the
Closing Date.
SECTION 6.05 Employment and Noncompetition Agreements
. As soon as practicable after the date hereof, Buyer shall
offer to those employees of the Company or its Subsidiaries whose names are
included in the list of the "Key Executive Group" set forth in the Company
Disclosure Letter a Key Executive Employment Protection and Noncompetition
Agreement, in the form attached as an exhibit to the Company Disclosure Letter,
to be and become effective as of the Effective Time. As soon as practicable
after the date hereof, Buyer shall offer to the employees of the Company or its
Subsidiaries whose names are included in the list of the "Key Employee Group"
set forth in the Company Disclosure Letter, a Key Employee Employment Protection
and Retention and Noncompetition Agreement in the form attached as an exhibit to
the Company Disclosure Letter, to be and become effective as of the Effective
Time.
ARTICLE 7
COVENANTS OF BUYER AND THE COMPANY
The parties hereto agree that:
SECTION 7.01 Best Efforts
Subject to the terms and conditions of this Agreement, each
party will use its best efforts to take, or cause to be taken, all action and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate the transactions contemplated by
this Agreement. The Company and Buyer shall each furnish to one another and to
one another's counsel all such information as may be required in order to
accomplish the foregoing actions. If any state takeover statute or similar
statute or regulation becomes applicable to the Merger, this Agreement or any of
the other transactions contemplated hereby, the Company and Buyer will take all
action necessary to ensure that the Merger and the other transactions
contemplated hereby may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Merger and the other transactions contemplated by
this Agreement.
SECTION 7.02 Certain Filings
The Company and Buyer shall cooperate with one another (a)
in connection with the preparation of the Form S-4, the Company Proxy Statement
and the Company Disclosure Documents, (b) in determining whether any other
action by or in respect of, or filing with, any governmental body, agency or
official, or authority or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts in connection
with the consummation of the transactions contemplated by this Agreement and (c)
in seeking any such actions, consents, approvals or waivers or making any such
filings, furnishing information required in connection therewith or with the
Form S-4, the Company Proxy Statement and the Company Disclosure Documents and
seeking timely to obtain any such actions, consents, approvals or waivers.
SECTION 7.03 Public Announcements
Buyer and the Company will consult with each other before
issuing any press release or making any public statement with respect to this
Agreement and the transactions contemplated hereby and, except as may be
required by applicable law or any listing agreement with any national securities
exchange, will not issue any such press release or make any such public
statement prior to obtaining the other party's consent to any such public
statement.
SECTION 7.04 Further Assurances
At and after the Effective Time, the officers and directors
of the Surviving Corporation will be authorized to execute and deliver, in the
name and on behalf of the Company, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf the Company, any other
actions and things to vest, perfect or confirm of record or otherwise in the
Surviving Corporation any and all right, title and interest in, to and under any
of the rights, properties or assets of the Company acquired or to be acquired by
the Surviving Corporation as a result of, or in connection with, the Merger.
SECTION 7.05 Notices of Certain Events
The Company and Buyer shall promptly notify the other of:
(a) any notice or other communication from any person
alleging that the consent of such person is or may be required in
connection with the transactions contemplated by this Agreement;
(b) any notice or other communication from any
governmental or regulatory agency or authority in connection with the
transactions contemplated by this Agreement;
(c) any actions, suits, claims, investigations or
proceedings commenced or, to the best of its knowledge threatened
against, relating to or involving or otherwise affecting the Company or
any Subsidiary, on the one hand, or Buyer, on the other hand, which
relate to the consummation of the transactions contemplated by this
Agreement; and
(d) any action, event or occurrence that would
constitute a breach of any representation, warranty, covenant or
agreement of it set forth in this Agreement.
SECTION 7.06 Preparation of the Form S-4 and the Company
Proxy Statement
(a) As soon as practicable following the date of this
Agreement, the Company shall prepare and file with the SEC the Company
Proxy Statement and Buyer shall prepare and file with the SEC the Form
S-4, in which the Company Proxy Statement will be included as a
prospectus. Each of the Company and Buyer shall use best efforts to
have the Form S-4 declared effective under the Securities Act as
promptly as practicable after such filing. The Company will use all
best efforts to cause the Company Proxy Statement to be mailed to the
Company's stockholders as promptly as practicable after the Form S-4 is
declared effective under the Securities Act. Buyer shall also take any
action (other than qualifying to do business in any jurisdiction in
which it is not now so qualified or to file a general consent to
service of process) required to be taken under any applicable state
securities laws in connection with the issuance of the Buyer Common
Stock in the Merger and the Company shall furnish all information
concerning the Company and the holders of the Shares as may be
reasonably requested in connection with any such action. No filing of,
or amendment or supplement to, the Form S-4 will be made by Buyer or to
the Company Proxy Statement will be made by the Company without
providing the other party the opportunity to review and comment
thereon. Buyer will advise the Company, promptly after it receives
notice thereof, of the time when the Form S-4 has become effective or
any supplement or amendment has been filed, the issuance of any stop
order, the suspension of the qualification of the Buyer Common Stock
issuable in connection with the Merger for offering or sale in any
jurisdiction, or any request by the SEC for amendment of the Company
Proxy Statement or the Form S-4 or comments thereon and responses
thereto or requests by the SEC for additional information. If at any
time prior to the Effective Time any information relating to the
Company or Buyer, or any of their respective affiliates, officers or
directors, should be discovered by the Company or Buyer which should be
set forth in an amendment or supplement to any of the Form S-4 or the
Company Proxy Statement, so that any of such documents would not
include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, the party
which discovers such information shall promptly notify the other party
hereto and an appropriate amendment or supplement describing such
information shall be promptly filed with the SEC and, to the extent
required by law, disseminated to the stockholders of the Company and
Buyer.
SECTION 7.07 Letters of the Company's Accountants
The Company shall use its reasonable best efforts to cause
to be delivered to Buyer two letters from the Company's independent accountants,
one dated a date within two business days before the date on which the Form S-4
shall become effective and one dated a date within two business days before the
Closing Date, each addressed to Buyer, in form and substance reasonably
satisfactory to Buyer and customary in scope and substance for comfort letters
delivered by independent public accountants in connection with registration
statements similar to the Form S-4.
SECTION 7.08 Affiliates
(a) Not less than 45 days prior to the Effective
Time, the Company shall deliver to Buyer a list of names and addresses
of each person who, in the Company's reasonable judgment, is an
affiliate within the meaning of Rule 145 of the rules and regulations
promulgated under the Securities Act or otherwise applicable SEC
accounting releases with respect to pooling of interests accounting
treatment (each such person, a "Pooling Affiliate") of the Company. The
Company shall provide Buyer such information and documents as Buyer
shall reasonably request for purposes of reviewing such list. The
Company shall use its reasonable best efforts to deliver or cause to be
delivered to Buyer, not later than 30 days prior to the Effective Time,
an affiliate letter in the form attached hereto as Exhibit 7.08(a),
executed by each of the Pooling Affiliates of the Company identified in
the foregoing list. Buyer shall be entitled to place legends as
specified in such affiliate letters on the certificates evidencing any
of the Buyer Common Stock to be received by the Pooling Affiliates of
the Company pursuant to the terms of this Agreement, and to issue
appropriate stop transfer instructions to the transfer agent for the
Buyer Common Stock, consistent with the terms of such letters.
(b) Not less than 45 days prior to the Effective
Time, Buyer shall deliver to the Company a list of names and addresses
of each person who, in Buyer's reasonable judgment, is a Pooling
Affiliate of Buyer. Buyer shall provide the Company such information
and documents as the Company shall reasonably request for purposes of
reviewing such list. Buyer shall use its reasonable best efforts to
deliver or cause to be delivered to the Company, not later than 30 days
prior to the Effective Time, an affiliate letter in the form attached
hereto as Exhibit 7.08(b), executed by each Pooling Affiliate of Buyer
identified in the foregoing list.
SECTION 7.09 NYSE Listing
Buyer shall use its reasonable best efforts to cause the
Buyer Listed Securities to be approved for listing on the NYSE, subject to
official notice of issuance, as promptly as practicable after the date hereof,
and in any event prior to the Closing Date and to continue to be listed on the
NYSE following the Merger.
SECTION 7.10 Tax Treatment
(a) The Company and Buyer shall each reasonably
cooperate in connection with obtaining the opinions of counsel
described in Section 8.01 including, without limitation, providing to
each counsel such representations as are reasonably required by such
counsel to enable it to render such opinion.
(b) The parties intend for the Merger to qualify as a
reorganization under Section 368(a) of the Code. If, as a result of
circumstances arising after the date hereof, the Merger, if
consummated, would fail to qualify as a reorganization within the
meaning of Section 368(a) of the Code, each party and its affiliates
shall use its reasonable best efforts to restructure the Transaction
contemplated hereby in a form that will so qualify or that will
otherwise enable the Transaction to proceed in a manner consented to by
Buyer and the Company, such consent not to be unreasonably withheld.
Notwithstanding anything to the contrary in this Agreement but subject
to the last sentence of this Section 7.10(b), either party may postpone
for up to six months the date after which the other party may terminate
this Agreement pursuant to Section 9.01(b) hereof in order to permit
the Transaction to proceed as a tax-free reorganization, provided that,
in the reasonable opinion of tax counsel to the party seeking such
postponement, the postponement offers a reasonably likely opportunity
for such result. In the event Buyer elects to pay and does pay to the
Company the amounts referred to in clause (y) of Section 9.04(c)
hereof, such date will not be postponed.
(c) Buyer shall pay any stamp duties, transfer taxes
and similar charges imposed by any jurisdiction (and any penalties and
interest with respect to such duties, taxes and charges), which become
payable in connection with the Merger, without any offset, deduction,
counterclaim or deferment of the consideration to be paid for the
Shares pursuant to the Merger. Buyer shall be responsible for the
preparation and filing of any required returns with respect to such
taxes (including returns on behalf of the stockholders of the Company)
and the Company shall cooperate in preparation and filing such returns.
SECTION 7.11 Pooling of Interests
Each of Buyer and the Company shall use their respective
reasonable best efforts to cause the transactions contemplated by this
Agreement, including the Merger, to be accounted for as a pooling of interests
under Opinion 16 of the Accounting Principles Board and applicable SEC rules and
regulations, and such accounting treatment to be accepted by each of the
Company's and Buyer's independent certified public accountants, respectively,
and to be accepted by the SEC. The Company agrees to consult with Buyer prior to
taking any action or forebearing from taking any action, the effect of which
could reasonably be expected to cause pooling of interest accounting treatment
not to be obtained, and to take such actions in connection with pooling
treatment (whether or not specifically in respect of the Merger) reasonably
requested by Buyer as would not be materially disadvantageous to the Company or
its stockholders.
SECTION 7.12 Consents
(a) Buyer and the Company shall use their
commercially reasonable efforts to obtain all material consents of
third parties (which, in any event, shall include consents to the
assignment of the contracts listed under the heading "Consents" in the
Company Disclosure Letter) and Governmental Entities, and to make all
governmental filings, necessary to the consummation of the transactions
contemplated by this Agreement. The Company and Buyer shall as soon as
practicable file Pre-Merger Notification and Report Forms under the HSR
Act with the Federal Trade Commission (the "FTC") and the Antitrust
Division of the Department of Justice (the "Antitrust Division") and
shall use their reasonable best efforts to respond as fully and as
promptly as practicable to all inquiries received from the FTC or the
Antitrust Division for additional information or documentation.
(b) In furtherance and not in limitation of the
foregoing, Buyer and the Company will furnish to the other such
information and assistance as the other reasonably may request in
connection with the preparation of any submissions to, or agency
proceedings by, any Governmental Entity under the HSR Act or any
comparable laws of foreign jurisdictions, and each of Buyer and the
Company shall keep the other promptly apprised of any communications
with, and inquiries or requests for information from, such Governmental
Entities. Each of Buyer and the Company shall use their commercially
reasonable efforts to resolve any objections asserted with respect to
the transactions contemplated by this Agreement under any antitrust,
competition or trade regulatory laws, rules or regulations of any
domestic or foreign government or Governmental Entity or any
multinational authority (the "Antitrust Laws"). Buyer shall take such
action, within the scope of such reasonable efforts, as may be required
(i) by any applicable government or Governmental Entity or
multinational authority (including, without limitation, the Antitrust
Division or the FTC) in order to resolve such objections as such
government or authority may have to such transactions under any
Antitrust Law or (ii) by any domestic or foreign court or similar
tribunal, in any action brought by a private party, Governmental Entity
or multinational authority challenging the transactions contemplated by
this Agreement as violative of any Antitrust Law, in order to avoid the
entry of, or to effect the dissolution of, any injunction, temporary
restraining order or other order that has the effect of preventing the
consummation of any of such transactions.
SECTION 7.13. The Confidentiality Agreements will remain in full force and
effect until their expiration in accordance with the terms thereof.
SECTION 7.14. Each of the Company, on the one hand, and Buyer, on the
other, (a) will use their reasonable best efforts to take all action necessary
to render true and correct as of the Closing its representations and warranties
contained in this Agreement, (b) will refrain from taking any action that would
render any such representation or warranty untrue or incorrect as of such time,
and (c) will perform or cause to be satisfied each agreement, covenant or
condition to be performed or satisfied by it.
ARTICLE 8
CONDITIONS TO THE MERGER
SECTION 8.01 Conditions to the Obligations of Each Party.
The obligations of the Company and Buyer to consummate
the Merger are subject to the
satisfaction of the following conditions:
(a) this Agreement shall have been approved and
adopted by the stockholders of the Company in accordance with Delaware
Law;
(b) any applicable waiting period under the HSR Act
relating to the Merger shall have expired or been terminated;
(c) no provision of any applicable law or regulation
and no judgment, injunction, order or decree shall prohibit the
consummation of the Merger;
(d) with respect to the obligations of Buyer, the
representations and warranties of the Company as set forth in this
Agreement shall be true and correct (after allowing for developments in
the business of the Company arising in the ordinary course) as if made
on and as of the Effective Time (other than those representations and
warranties which address matters only as of a certain date, which shall
be true and correct in all material respects as of such certain date),
except to the extent that the failures in the aggregate of such
representations and warranties (disregarding any qualifications as to
materiality contained therein) to be true and correct would not
reasonably be expected to have, and have not had, a Material Adverse
Effect, and Buyer shall have received a certificate of the chief
executive officer, president or vice president/finance of the Company
to such effect;
(e) with respect to the obligations of the Company,
the representations and warranties of Buyer as set forth in this
Agreement shall be true and correct (after allowing for developments in
the business of Buyer arising in the ordinary course) as if made on and
as of the Effective Time (other than those representations and
warranties which address matters only as of a certain date, which shall
be true and correct in all material respects as of such certain date),
except to the extent that the failures in the aggregate of such
representations and warranties (disregarding any qualifications as to
materiality contained therein) to be true and correct would not
reasonably be expected to have, and have not had, a Buyer Material
Adverse Effect, and the Company shall have received a certificate of
the president, chief financial officer or any vice president of Buyer
to such effect;
(f) the Form S-4 shall have become effective under
the Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order;
(g) the shares of Buyer Listed Securities issuable to
the Company's stockholders as contemplated by this Agreement shall have
been approved for listing on the NYSE, subject to official notice of
issuance;
(h) with respect to the obligations of Buyer, there
shall not have been any Material Adverse Change in the Company since
the date hereof; and, with respect to the obligations of the Company,
there shall not have been any material adverse change in the business,
assets or financial condition of Buyer and its subsidiaries, taken as a
whole, since the date hereof, except for any change resulting from or
relating to conditions or circumstances generally affecting the
industries in which Buyer currently operates which are not the result
of acts or omissions of the Company;
(i) with respect to the obligations of the Company,
the Company shall have received an opinion of Debevoise & ▇▇▇▇▇▇▇▇, or
other counsel of national repute, in form and substance reasonably
satisfactory to the Company, dated on or about the date of the mailing
to stockholders of the Company Proxy Statement, which opinion shall be
reconfirmed as of the Effective Time, substantially to the effect that
the Merger will constitute a reorganization for U.S. federal income tax
purposes within the meaning of Section 368(a) of the Code. In rendering
such opinion, counsel may require and rely upon reasonable
representations contained in certificates of officers of Buyer, the
Company and others;
(j) with respect to the obligations of Buyer, Buyer
shall have received an opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇, special tax counsel
to Buyer, or other counsel of national repute, in form and substance
reasonably satisfactory to Buyer, dated on or about the date of the
mailing to stockholders of the Company Proxy Statement, which opinion
shall be reconfirmed as of the Effective Time, substantially to the
effect that the Merger will constitute a reorganization for U.S.
federal income tax purposes within the meaning of Section 368(a) of the
Code. In rendering such opinion, counsel may require and rely upon
reasonable representations contained in certificates of officers of
Buyer, the Company and others;
(k) the Company shall have transferred (subject to
the Company's ability, using reasonable best efforts, to obtain such
third party consents to such transfers as are required) to D&PL
International Technology Corp. all of its right, title and interest in
and to all of the Intellectual Property and all of the varieties and
hybrids of cotton and soybeans in which the Company owns any interest,
shall have effected the recordation of each such transfer in all
jurisdictions where the Company currently operates and shall have
provided to Buyer evidence, reasonably satisfactory to Buyer, that such
transfer has been effected; and
(l) this Agreement shall not have been terminated in
accordance with its terms.
ARTICLE 9
TERMINATION
SECTION 9.01 Termination. This Agreement may be terminated and the
Transaction may be
abandoned at any time prior to the Effective Time (notwithstanding any approval
of this Agreement by the stockholders of the Company):
(a) by mutual written consent of the Company and
Buyer;
(b) by either the Company or Buyer, if the Merger has
not been consummated by June 30, 1999; provided that if the condition
set forth in Section 8.01(b) hereof shall not have been satisfied prior
to such date, the Company may, in its sole discretion and upon notice
to Buyer, extend such date to a date not later than December 31, 1999;
and provided, further, that no party may terminate this Agreement
pursuant to this subsection if such party's failure to fulfill any of
its obligations under this Agreement shall have been the reason that
the Effective Time shall not have occurred on or before said date;
(c) by either the Company or Buyer, if there shall be
any law or regulation that makes consummation of the Transaction
illegal or otherwise prohibited or if any judgment, injunction, order
or decree enjoining Buyer or the Company from consummating the
Transaction is entered and such judgment, injunction, order or decree
shall become final and nonappealable;
(d) by Buyer, if the Company's Board of Directors
shall withdraw, modify or change its recommendation or approval in
respect of this Agreement or the Merger in a manner adverse to Buyer;
(e) by Buyer, if any corporation, partnership,
person, other entity or group (as defined in Section 13(d)(3) of the
Exchange Act) other than Buyer or any of its subsidiaries or affiliates
and other than any of the entities included in the "Institutional
Investor Group" set forth in the Company Disclosure Letter, shall have
become the beneficial owner of more than 15% of the outstanding Shares
(either on a primary or a fully diluted basis);
(f) by the Company prior to the date of the Company
Stockholders Meeting, to allow the Company to enter into an agreement
in respect of an Acquisition Transaction which the Board has determined
in the exercise of its fiduciary duties is more favorable to the
Company and its stockholders than the transactions contemplated hereby
(provided that the termination described in this subsection (f) shall
not be effective unless and until the Company shall have paid to Buyer
the fee described in Section 9.04(b) hereof); or
(g) by the Company in accordance with the terms of
Section 1.02(a)(iii) hereof.
Such right of termination shall be exercised by written notice of termination
given by the terminating party to the other parties hereto in the manner
hereinafter provided. Any such right of termination shall not be an exclusive
remedy hereunder but shall be in addition to any other legal or equitable
remedies that may be available to any non-defaulting party hereto arising out of
any default hereunder by any other party hereto.
SECTION 9.02 Waiver.
. At any time prior to the Effective Time, the parties hereto,
by action taken by or pursuant to resolutions of their respective Boards of
Directors, may (a) extend the time for the performance of any of the obligations
or other acts of the parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, and (c) except for approval of the holders of Shares and, in
connection with all HSR Act filings, of the Federal Trade Commission and the
Department of Justice, 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 if set forth in an instrument in writing
signed on behalf of such party.
SECTION 9.03 Closing.
Subject to the satisfaction of the conditions contained in
Section 8.01 hereof, the closing of the Merger contemplated by this Agreement
(the "Closing") shall take place at the offices of Debevoise & ▇▇▇▇▇▇▇▇ in New
York, New York as soon as practicable after the satisfaction or waiver of all of
the conditions to the Merger contained in Section 8.01 hereof or at such other
time and place as Buyer and the Company shall agree (the "Closing Date").
SECTION 9.04 Effect of Termination; Termination Fee.
(a) If this Agreement is terminated pursuant to
Section 9.01 hereof, this Agreement shall terminate with no liability
on the part of any party hereto, except that the agreements contained
in Sections 6.01, 10.04 and 10.06 hereof shall survive the termination
hereof and the Termination Option Agreement shall survive in accordance
with its terms, and except that no such termination shall relieve any
party from liability for breach of this Agreement or failure by it to
perform its obligations hereunder.
(b) In the event that the Company has willfully
failed to perform any of its obligations under this Agreement or has
breached as of the date hereof any of its representations or warranties
contained herein in any material respect, and, as a result of such
failure or such breach, either the Closing shall not have occurred on
the date determined pursuant to Section 9.03 hereof or this Agreement
shall have been terminated (including pursuant to subsections (d), (e)
or (f) of Section 9.01 hereof), then in any such case, the Company
shall promptly, but in no event later than two Trading Days after the
date of such failure to close or termination, pay Buyer a termination
fee of $40,000,000 plus an amount, not to exceed $1,000,000, equal to
Buyer's actual and reasonably documented out-of-pocket expenses
directly attributable to the proposed acquisition of the Company,
including negotiation and execution of this Agreement and the attempted
financing and completion of the Merger, which fee and amount shall be
payable in same day funds. In no event shall the Company be required to
pay more than one termination fee and reimbursement of expenses
pursuant to this Section 9.04(b).
(c) In the event (i) that the Closing shall not have
occurred on the date determined pursuant to Section 9.03 hereof solely
due to a failure of the condition set forth in Section 8.01(b) or
Section 8.01(c) hereof (with respect to any Antitrust Law) to have been
satisfied (other than because of the breach of this Agreement by the
Company), (ii) that Buyer has willfully failed to perform any of its
obligations under this Agreement or has breached as of the date hereof
any of its representations or warranties contained herein in any
material respect, and, as a result of such failure or such breach,
either the Closing shall not have occurred on the date determined
pursuant to Section 9.03 hereof or this Agreement shall have been
terminated, or (iii) that the election described in the last sentence
of Section 7.10(b) hereof shall have been made, then in any such case,
Buyer shall promptly, but in no event later than two Trading Days after
the date of such failure to close or termination, pay the Company a
termination fee of (x) in the case of clause (i) above, $80,000,000, or
(y) in the case of clause (ii) or (iii) above, $40,000,000, in either
case plus an amount, not to exceed $1,000,000, equal to the Company's
actual and reasonably documented out-of-pocket expenses directly
attributable to the proposed acquisition of the Company, including
negotiation and execution of this Agreement and the completion of the
Merger, which fee and amount shall be payable in same day funds. In no
event shall Buyer be required to pay more than one termination fee and
reimbursement of expenses pursuant to this Section 9.04(c).
ARTICLE 10
MISCELLANEOUS
SECTION 10.01 Notices
All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile, telex or similar writing)
and shall be given,
If to Buyer, to:
Monsanto Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company, to:
Delta and Pine Land Company
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chairman
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and:
Lake ▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address, telecopy or telex number as such party may hereafter
specify for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (a) if given by facsimile or
telex, upon confirmation of receipt, or (b) if given by any other means, when
delivered at the address specified in this Section 10.01.
SECTION 10.02
The representations and warranties contained herein shall
not survive the Effective Time.
SECTION 10.03 Amendments; No Waivers.
(a) Any provision of this Agreement may be amended or
waived prior to the Effective Time if, and only if, such amendment or
waiver is in writing and signed, in the case of an amendment, by the
Company and Buyer or in the case of a waiver, by the party against whom
the waiver is to be effective; provided that after the adoption of this
Agreement by the stockholders of the Company, no such amendment or
waiver shall, without the further approval of such stockholders, alter
or change (i) the amount or kind of consideration to be received in
exchange for any shares of capital stock of the Company, (ii) any term
of the articles of incorporation of the Surviving Corporation or (iii)
any of the terms or conditions of this Agreement if such alteration or
change would adversely affect the holders of any shares of capital
stock of the Company.
(b) No failure or delay by any party in exercising
any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 10.04 Expenses.
Except as provided in this Agreement, each party shall pay
its own costs and expenses relating to this Agreement and the transactions
contemplated hereby, except that each of Buyer and the Company shall bear and
pay one-half of the costs and expenses incurred in connection with the filing,
printing and mailing of the Form S-4 and the Company Proxy Statement (including
SEC filing fees).
SECTION 10.05 Successors and Asigns
This Agreement and the rights and obligations hereunder may
not be assigned, provided that this Agreement may be assigned by Buyer to, and
the rights and obligations hereunder shall be binding upon and inure to the
benefit of, its legal successors and assigns through a reorganization, merger,
business combination or similar transaction.
SECTION 10.06 Governing Law
This Agreement shall be construed in accordance with and
governed by the law of the State of Delaware, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Delaware.
SECTION 10.07 Counterparts; Effectiveness
This Agreement may be signed in any number of counterparts
(including by means of telecopied signature pages), each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement shall become effective when each party
hereto shall have received counterparts hereof signed by all of the other
parties hereto.
SECTION 10.08 Headings
Section headings used in this Agreement are for convenience
only and shall be ignored in the construction and interpretation hereof.
SECTION 10.09 No Third Party Beneficiaries
Except for Section 6.02 hereof, no provision of this
Agreement is intended to, or shall, confer any third party beneficiary or other
rights or remedies upon any person other than the parties hereto.
SECTION 10.10 Remedies
In addition to any remedy to which any party hereto is
specifically entitled by the terms hereof, each party shall be entitled to
pursue any other remedy available to it at law or in equity (including damages,
specific performance or other injunctive relief) in the event that any of the
provisions of this Agreement were not performed in accordance with their terms
or were otherwise breached.
SECTION 10.11 Entire Agreement
This Agreement, including the exhibits hereto, the Company
Disclosure Letter, and the Confidentiality Agreements, embody the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and supersede all prior agreements and understandings,
both written and oral, between the parties with respect to such subject matter.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
MONSANTO COMPANY
By: __/s/ ▇▇▇▇▇ ▇. Berland__________
Name: ______Susan D. Berland___________
Title: __Authorized Representative______
DELTA AND PINE LAND COMPANY
By: __/s/ ▇▇▇▇▇ ▇. Malkin__________
Name: ______Roger ▇. ▇▇▇▇▇▇ _________
Title: ______Chairman_________________