AGREEMENT AND PLAN OF MERGER
BY AND AMONG
HALLIBURTON COMPANY
HALLIBURTON N.C., INC.
AND
DRESSER INDUSTRIES, INC.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.02 Rules of Construction . . . . . . . . . . . . . . . . . .1
ARTICLE II
TERMS OF MERGER
SECTION 2.01 Statutory Merger. . . . . . . . . . . . . . . . . . . . .2
SECTION 2.02 Effective Time. . . . . . . . . . . . . . . . . . . . . .2
SECTION 2.03 Effect of the Merger. . . . . . . . . . . . . . . . . . .2
SECTION 2.04 Certificate of Incorporation; Bylaws. . . . . . . . . . .2
SECTION 2.05 Directors and Officers. . . . . . . . . . . . . . . . . .2
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 3.01 Merger Consideration; Conversion and Cancellation of
Securities. . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 3.02 Exchange of Certificates. . . . . . . . . . . . . . . . .3
SECTION 3.03 Closing . . . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 3.04 Stock Transfer Books. . . . . . . . . . . . . . . . . . .6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01 Organization and Qualification; Subsidiaries. . . . . . .6
SECTION 4.02 Certificate of Incorporation and Bylaws . . . . . . . . .6
SECTION 4.03 Capitalization. . . . . . . . . . . . . . . . . . . . . .6
SECTION 4.04 Authorization of Agreement. . . . . . . . . . . . . . . .8
SECTION 4.05 Approvals . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 4.06 No Violation. . . . . . . . . . . . . . . . . . . . . . .8
SECTION 4.07 Reports . . . . . . . . . . . . . . . . . . . . . . . . .9
SECTION 4.08 No Material Adverse Effect; Conduct . . . . . . . . . . 10
SECTION 4.09 Certain Business Practices. . . . . . . . . . . . . . . 10
SECTION 4.10 Certain Obligations.. . . . . . . . . . . . . . . . . . 10
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SECTION 4.11 Authorizations; Compliance. . . . . . . . . . . . . . . 10
SECTION 4.12 Litigation; Compliance with Laws. . . . . . . . . . . . 11
SECTION 4.13 Employee Benefit Plans. . . . . . . . . . . . . . . . . 11
SECTION 4.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.15 Environmental Matters . . . . . . . . . . . . . . . . . 14
SECTION 4.16 Insurance . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.17 Pooling; Tax Matters. . . . . . . . . . . . . . . . . . 15
SECTION 4.18 Affiliates. . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.19 Opinion of Financial Advisor. . . . . . . . . . . . . . 15
SECTION 4.20 Brokers . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PARENT
SECTION 5.01 Organization and Qualification; Subsidiaries. . . . . . 16
SECTION 5.02 Certificate of Incorporation and Bylaws . . . . . . . . 16
SECTION 5.03 Capitalization. . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.04 Authorization of Agreement. . . . . . . . . . . . . . . 17
SECTION 5.05 Approvals . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.06 No Violation. . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.07 Reports . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.08 No Material Adverse Effect; Conduct . . . . . . . . . . 19
SECTION 5.09 Certain Business Practices. . . . . . . . . . . . . . . 20
SECTION 5.10 Certain Obligations . . . . . . . . . . . . . . . . . . 20
SECTION 5.11 Authorizations; Compliance. . . . . . . . . . . . . . . 20
SECTION 5.12 Litigation; Compliance with Laws. . . . . . . . . . . . 20
SECTION 5.13 Employee Benefit Plans. . . . . . . . . . . . . . . . . 21
SECTION 5.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.15 Environmental Matters . . . . . . . . . . . . . . . . . 24
SECTION 5.16 Insurance.. . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.17 Pooling; Tax Matters. . . . . . . . . . . . . . . . . . 24
SECTION 5.18 Affiliates. . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.19 Brokers . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.20 Opinion of Financial Advisor. . . . . . . . . . . . . 26
SECTION 5.21 Acquiring Person. . . . . . . . . . . . . . . . . . . . 26
ARTICLE VI
COVENANTS
SECTION 6.01 Affirmative Covenants . . . . . . . . . . . . . . . . . 26
SECTION 6.02 Negative Covenants. . . . . . . . . . . . . . . . . . . 27
SECTION 6.03 No Solicitation by the Company. . . . . . . . . . . . . 33
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SECTION 6.04 No Solicitation by the Parent . . . . . . . . . . . . . 34
SECTION 6.05 Access and Information. . . . . . . . . . . . . . . . . 35
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01 Meetings of Stockholders. . . . . . . . . . . . . . . . 35
SECTION 7.02 Registration Statement; Proxy Statements. . . . . . . . 36
SECTION 7.03 Appropriate Action; Consents; Filings . . . . . . . . . 38
SECTION 7.04 Affiliates; Pooling; Tax Treatment. . . . . . . . . . . 40
SECTION 7.05 Public Announcements. . . . . . . . . . . . . . . . . . 40
SECTION 7.06 NYSE Listing. . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.07 Rights Agreement; State Takeover Statutes . . . . . . . 40
SECTION 7.08 Comfort Letters . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.09 Assumption of Obligations to Issue Stock and
Obligations of Employee Benefit Plans; Employees. . . . 41
SECTION 7.10 Indemnification of Directors and Officers . . . . . . . 44
SECTION 7.11 Newco . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.12 Event Notices.. . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.13 Parent Board of Directors; Committees.. . . . . . . . . 46
SECTION 7.14 Transition Management . . . . . . . . . . . . . . . . . 46
SECTION 7.15 Employment Contracts. . . . . . . . . . . . . . . . . . 46
SECTION 7.16 Waiver by Company Joint Venture Partners. . . . . . . . 46
ARTICLE VIII
CLOSING CONDITIONS
SECTION 8.01 Conditions to Obligations of Each Party Under This
Agreement . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.02 Additional Conditions to Obligations of the Parent
Companies . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 8.03 Additional Conditions to Obligations of the Company . . 48
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 Termination . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 9.02 Effect of Termination . . . . . . . . . . . . . . . . . 51
SECTION 9.03 Amendment . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 9.04 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 9.05 Fees, Expenses and Other Payments . . . . . . . . . . . 52
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ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 Effectiveness of Representations, Warranties and
Agreements. . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.03 Headings. . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 10.04 Severability. . . . . . . . . . . . . . . . . . . . . . 55
SECTION 10.05 Entire Agreement. . . . . . . . . . . . . . . . . . . . 55
SECTION 10.06 Assignment. . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 10.07 Parties in Interest . . . . . . . . . . . . . . . . . . 56
SECTION 10.08 Failure or Indulgence Not Waiver; Remedies Cumulative . 56
SECTION 10.09 Governing Law . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.10 Specific Performance. . . . . . . . . . . . . . . . . . 56
SECTION 10.11 Counterparts. . . . . . . . . . . . . . . . . . . . . . 56
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ANNEXES
Annex A Schedule of Defined Terms
Annex B Affiliate's Agreement (Dresser Industries, Inc.) Affiliates)
Annex C Affiliate's Agreement (Halliburton Company) Affiliates)
AGREEMENT AND PLAN OF MERGER
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of February 25, 1998 (this
"Agreement"), is by and among Halliburton Company, a Delaware corporation (the
"Parent"), Halliburton N.C., Inc., a Delaware corporation and a wholly owned
direct subsidiary of the Parent ("Newco"), and Dresser Industries, Inc., a
Delaware corporation (the "Company"). The Parent and Newco are sometimes
referred to herein as the "Parent Companies."
RECITALS:
The Company and the Parent have determined to engage in a business
combination as peer firms in a merger of equals.
In furtherance thereof, the respective Boards of Directors of the
Company, the Parent and Newco have approved this Agreement and the Merger of
Newco with and into the Company.
For federal income tax purposes, it is intended that the Merger will
qualify as a reorganization within the meaning of the provisions of Section
368(a) of the Code.
The Merger is intended to be treated as a "pooling of interests" for
accounting purposes.
The parties hereto acknowledge the execution and delivery of the Stock
Option Agreements concurrently with the execution and delivery of this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. Certain capitalized and other terms used in
this Agreement are defined in Annex A hereto and are used herein with the
meanings ascribed to them therein.
SECTION 1.02 RULES OF CONSTRUCTION. Unless the context otherwise
requires, as used in this Agreement: (a) a term has the meaning ascribed to
it; (b) an accounting term not otherwise defined has the meaning ascribed to
it in accordance with GAAP; (c) "or" is not exclusive; (d) "including" means
"including, without limitation;" (e) words in the singular include the plural;
(f) words in the plural include the singular; (g) words applicable to one
gender shall be construed to apply to each gender; (h) the terms "hereof,"
"herein," "hereby," "hereto" and derivative or similar words refer to this
entire Agreement; and (i) the terms "Article" or "Section" shall refer to the
specified Article or Section of this Agreement.
ARTICLE II
TERMS OF MERGER
SECTION 2.01 STATUTORY MERGER. Subject to the terms and conditions
and in reliance upon the representations, warranties, covenants and
agreements contained herein, Newco shall merge with and into the Company at
the Effective Time. The terms and conditions of the Merger and the mode of
carrying the same into effect shall be as set forth in this Agreement. As a
result of the Merger, the separate corporate existence of Newco shall cease
and the Company shall continue as the Surviving Corporation.
SECTION 2.02 EFFECTIVE TIME. As soon as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in
Article VIII, the parties hereto shall cause the Merger to be consummated by
filing a Certificate of Merger with the Secretary of State of the State of
Delaware, in such form as required by, and executed in accordance with the
relevant provisions of, the GCL.
SECTION 2.03 EFFECT OF THE MERGER. At the Effective Time, the effect
of the Merger shall be as provided in the applicable provisions of the GCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all the property,
rights, privileges, powers and franchises of Newco and the Company shall vest
in the Surviving Corporation, and all debts, liabilities and duties of Newco
and the Company shall become the debts, liabilities and duties of the
Surviving Corporation.
SECTION 2.04 CERTIFICATE OF INCORPORATION; BYLAWS. At the Effective
Time, the certificate of incorporation and the bylaws of the Company, as in
effect immediately prior to the Effective Time, shall be the certificate of
incorporation and the bylaws of the Surviving Corporation.
SECTION 2.05 DIRECTORS AND OFFICERS. The directors of Newco
immediately prior to the Effective Time shall be the directors of the
Surviving Corporation, each to hold office in accordance with the certificate
of incorporation and bylaws of the Surviving Corporation, and the officers of
the Company immediately prior to the Effective Time shall be the officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
ARTICLE III
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 3.01 MERGER CONSIDERATION; CONVERSION AND CANCELLATION OF
SECURITIES. At the Effective Time, by virtue of the Merger and without any
action on the part of the Parent Companies, the Company or the holders of any
of the following securities:
(a) Subject to the other provisions of this Article III, each share
of Company Common Stock, including the associated right to receive or
purchase shares of Series A
AGREEMENT AND PLAN OF MERGER
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Junior Preferred Stock of the Company pursuant to the terms of the
Company's Rights Agreement, issued and outstanding immediately prior to
the Effective Time (excluding any Company Common Stock described in
Section 3.01(c)) shall be converted into one share of Parent Common
Stock. Notwithstanding the foregoing, if between the date of this
Agreement and the Effective Time the outstanding shares of the Parent
Common Stock or the Company Common Stock shall have been changed into a
different number of shares or a different class, by reason of any stock
dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares, the Common Stock Exchange Ratio shall
be correspondingly adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of
shares.
(b) All shares of Company Common Stock shall, upon conversion thereof
into shares of Parent Common Stock at the Effective Time, cease to be
outstanding and shall be automatically canceled and retired, and each
certificate previously evidencing Company Common Stock outstanding
immediately prior to the Effective Time (other than Company Common Stock
described in Section 3.01(c)) shall thereafter be deemed, for all purposes
other than the payment of dividends or distributions, to represent that
number of shares of Parent Common Stock determined pursuant to the Common
Stock Exchange Ratio and, if applicable, the right to receive cash pursuant
to Section 3.02(d) or (e) or both. The holders of certificates previously
evidencing Company Common Stock shall cease to have any rights with respect
to such Company Common Stock except as otherwise provided herein or by law.
(c) Notwithstanding any provision of this Agreement to the contrary,
each share of Company Common Stock held in the treasury of the Company and
each share of Company Common Stock, if any, owned by the Parent or any
direct or indirect wholly owned Subsidiary of the Parent or of the Company
immediately prior to the Effective Time shall be canceled and extinguished
without conversion thereof.
(d) Each share of common stock, par value $1.00 per share, of Newco
issued and outstanding immediately prior to the Effective Time shall be
converted into one share of common stock, par value $.25 per share, of the
Surviving Corporation.
SECTION 3.02 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE FUND. At the Closing, the Parent shall deposit, or
cause to be deposited, with the Exchange Agent, for the benefit of the
former holders of Company Common Stock and for exchange through the
Exchange Agent in accordance with this Article III, certificates evidencing
that number of shares of Parent Common Stock equal to the product of the
Common Stock Exchange Ratio and the number of shares of Company Common
Stock issued and outstanding immediately prior to the Effective Time
(exclusive of any such shares to be canceled pursuant to Section 3.01(c)).
The Exchange Agent shall, pursuant to irrevocable instructions from the
Parent, deliver certificates evidencing Parent Common Stock, together with
any cash to be paid in lieu of fractional interests in shares of Parent
Common Stock pursuant to Section 3.02(e) and any dividends or distributions
related
AGREEMENT AND PLAN OF MERGER
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to such Parent Common Stock to be paid pursuant to Section 3.02(d),
in exchange for certificates theretofore evidencing Company Common Stock
surrendered to the Exchange Agent pursuant to Section 3.02(c). Except as
contemplated by Sections 3.02(f), (g) and (h), the Exchange Fund shall not
be used for any other purpose.
(b) LETTER OF TRANSMITTAL. Not later than five (5) Business Days
after the Effective Time, the Parent will cause the Exchange Agent to send
to each record holder of Company Common Stock immediately prior to the
Effective Time a letter of transmittal and other appropriate materials for
use in surrendering to the Exchange Agent certificates that prior to the
Effective Time evidenced shares of Company Common Stock.
(c) EXCHANGE PROCEDURES. Promptly after the Effective Time, the
Exchange Agent shall distribute to each former holder of Company Common
Stock, upon surrender to the Exchange Agent for cancellation of one or more
certificates that theretofore evidenced shares of Company Common Stock,
certificates evidencing the appropriate number of shares of the Parent
Common Stock into which such shares of Company Common Stock were converted
pursuant to the Merger. If shares of Parent Common Stock are to be issued
to a Person other than the Person in whose name the surrendered certificate
or certificates are registered, it shall be a condition of issuance of
Parent Common Stock that the surrendered certificate or certificates shall
be properly endorsed, with signatures guaranteed, or otherwise in proper
form for transfer and that the Person requesting such payment shall pay any
transfer or other taxes required by reason of the issuance of Parent Common
Stock to a Person other than the registered holder of the surrendered
certificate or certificates or such Person shall establish to the
satisfaction of the Parent that such tax has been paid or is not
applicable.
(d) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES OF COMPANY
COMMON STOCK. No dividends or other distributions declared or made with
respect to the Parent Common Stock with a record date after the Effective
Time shall be paid to the holder of any certificate that theretofore
evidenced shares of Company Common Stock until the holder of such
certificate shall surrender such certificate. Subject to the effect of any
applicable abandoned property, escheat or similar laws, following surrender
of any such certificate, there shall be paid to the holder of the
certificates evidencing whole shares of Parent Common Stock issued in
exchange therefor, without interest, (i) promptly, the amount of any cash
payable with respect to a fractional share of Parent Common Stock to which
such holder is entitled pursuant to Section 3.02(e), (ii) the amount of
dividends or other distributions with a record date after the Effective
Time theretofore paid with respect to such whole shares of Parent Common
Stock and (iii) at the appropriate payment date, the amount of dividends or
other distributions, with a record date after the Effective Time but prior
to surrender and a payment date occurring after surrender, payable with
respect to such whole shares of Parent Common Stock.
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(e) NO FRACTIONAL SHARES. Notwithstanding anything herein to the
contrary, no certificates or scrip evidencing fractional shares of Parent
Common Stock shall be issued in connection with the Merger, and any such
fractional share interests to which a holder of record of Company Common
Stock at the Effective Time would otherwise be entitled shall not entitle
such holder to vote or to any rights of a stockholder of the Parent. In
lieu of any such fractional shares, each holder of record of Company Common
Stock at the Effective Time who but for the provisions of this
Section 3.02(e) would be entitled to receive a fractional interest of a
share of Parent Common Stock by virtue of the Merger shall be paid cash,
without any interest thereon, as hereinafter provided. The Parent shall
instruct the Exchange Agent to determine the number of whole shares and
fractional shares of Parent Common Stock allocable to each holder of record
of Company Common Stock at the Effective Time, to aggregate all such
fractional shares into whole shares, to sell the whole shares obtained
thereby in the open market at then prevailing prices on behalf of holders
who otherwise would be entitled to receive fractional share interests and
to distribute to each such holder such holder's ratable share of the total
proceeds of such sale, after making appropriate deductions of the amount,
if any, required for federal income tax withholding purposes and after
deducting any applicable transfer taxes. All brokers' fees and commissions
incurred in connection with such sales shall be paid by the Parent.
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
that remains unclaimed by the former holders of Company Common Stock for 12
months after the Effective Time shall be delivered to the Parent, upon
demand, and any former holders of Company Common Stock who have not
theretofore complied with this Article III shall thereafter look only to
the Parent for the Parent Common Stock and any cash to which they are
entitled. Notwithstanding any other provisions herein, neither the
Exchange Agent nor any party hereto shall be liable to any former holder of
Company Common Stock for any Parent Common Stock, cash in lieu of
fractional share interests or dividends or distributions thereon delivered
to a public official pursuant to any applicable abandoned property, escheat
or similar law.
(g) WITHHOLDING OF TAX. The Parent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this
Agreement to any former holder of Company Common Stock such amounts as the
Parent (or any affiliate thereof) or the Exchange Agent is required to
deduct and withhold with respect to the making of such payment under the
Code or state, local or foreign tax Law. To the extent that amounts are so
withheld by the Parent, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the former holder of
Company Common Stock in respect of which such deduction and withholding was
made by the Parent.
(h) INVESTMENT OF EXCHANGE FUND. The Exchange Agent may invest any
cash included in the Exchange Fund in deposit accounts or short-term money
market instruments, as directed by the Parent, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
the Parent. The Parent shall deposit with the Exchange Agent as part of
the Exchange Fund cash in an amount equal to any loss of principal
resulting from such investments promptly after the incurrence of such a
loss.
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SECTION 3.03 CLOSING. The Closing shall take place at the offices of
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., 4000 ▇▇▇▇▇▇▇ ▇▇▇▇ Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. on the next Business Day following the date on which
the conditions to the Closing have been satisfied or waived or at such other
place, time and date as the parties hereto may agree. At the conclusion of the
Closing on the Closing Date, the parties hereto shall cause the Certificate of
Merger to be filed with the Secretary of State of the State of Delaware.
SECTION 3.04 STOCK TRANSFER BOOKS. At the close of business on the date
of the Effective Time, the stock transfer books of the Company shall be closed
and there shall be no further registration of transfers of shares of Company
Common Stock thereafter on the records of the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Parent Companies, subject
to the limitations set forth in Section 10.01, that:
SECTION 4.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The Company
and each Significant Subsidiary of the Company are legal entities duly
organized, validly existing and in good standing under the Laws of their
respective jurisdictions of incorporation or organization, have all requisite
corporate power and authority to own, lease and operate their respective
properties and to carry on their businesses as they are now being conducted and
are duly qualified and in good standing to do business in the jurisdictions in
which the nature of the businesses conducted by them or the ownership or leasing
of their respective properties makes such qualification necessary, other than
any matters, including the failure to be so qualified and in good standing, that
could not reasonably be expected to have a Material Adverse Effect on the
Company. Section 4.01 of the Company's Disclosure Letter sets forth a true and
complete list of all the Company's directly or indirectly owned Significant
Subsidiaries, together with (A) a specification of the nature of legal
organization of such Subsidiary, and (B) the jurisdiction of incorporation or
other organization of such Subsidiary.
SECTION 4.02 CERTIFICATE OF INCORPORATION AND BYLAWS. The Company has
heretofore marked for identification and delivered to the Parent complete and
correct copies of the certificate of incorporation and the bylaws, in each case
as amended or restated to the date hereof, of the Company. The Company is not in
violation of any of the provisions of its certificate of incorporation or
bylaws.
SECTION 4.03 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of
(i) 400,000,000 shares of Company Common Stock, of which, as of February
23, 1998, (A) 175,479,962 shares were issued and outstanding, all of which
are duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights created by
AGREEMENT AND PLAN OF MERGER
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statute, the Company's certificate of incorporation or bylaws or any
agreement to which the Company is a party or is bound and (B) 9,385,769
shares were held in the treasury of the Company and (ii) 10,000,000
shares of Preferred Stock, with no par value, of which none are issued
and outstanding but of which 2,000,000 shares have been designated as
Series A Junior Preferred Stock. Since October 31, 1997, except as set
forth in Section 4.03(a) of the Company's Disclosure Letter, (x) no
shares of Company Common Stock have been issued by the Company, except
upon exercise of Company Stock Options outstanding under the Company
Stock Plans and (y) the Company has not granted any options for, or
other rights to purchase, shares of Company Common Stock.
(b) Except for shares reserved for issuance pursuant to the Company
Stock Plans described in Section 4.03(b) of the Company's Disclosure Letter
(which reservations are also listed in detail in Section 4.03(b) of the
Company's Disclosure Letter), no shares of Common Stock are reserved for
issuance, and, except for the Company's Rights Plan and Company Stock
Options, there are no contracts, agreements, commitments or arrangements
obligating the Company (i) to offer, sell, issue or grant any Equity
Security of the Company or (ii) to redeem, purchase or acquire, or offer to
purchase or acquire, any outstanding Equity Security of the Company.
(c) Except as set forth in Section 4.03(c) of the Company's
Disclosure Letter, (i) all the issued and outstanding shares of capital
stock of, or other equity interests in, each Significant Subsidiary of the
Company are owned by the Company or one of its Subsidiaries, have been duly
authorized and are validly issued, and, with respect to capital stock, are
fully paid and nonassessable, and were not issued in violation of any
preemptive or similar rights of any past or present equity holder of such
Subsidiary; (ii) all such issued and outstanding shares, or other equity
interests, that are owned by the Company or one of its Subsidiaries are
owned free and clear of all Liens; (iii) no shares of capital stock of, or
other equity interests in, any Significant Subsidiary of the Company are
reserved for issuance, and there are no contracts, agreements, commitments
or arrangements obligating the Company or any of its Significant
Subsidiaries (A) to offer, sell, issue, grant, pledge, dispose of or
encumber any Equity Securities of any of the Significant Subsidiaries of
the Company or (B) to redeem, purchase or acquire, or offer to purchase or
acquire, any outstanding Equity Securities of any of the Significant
Subsidiaries of the Company or (C) to grant any Lien on any outstanding
shares of capital stock of, or other equity interests in, any of the
Significant Subsidiaries of the Company; except for any matter under
clause (i), (ii) or (iii) of this Section 4.03(c) that could not reasonably
be expected to have a Material Adverse Effect on the Company.
(d) Except for the revocable proxies granted by the Company or its
Subsidiaries with respect to the capital stock of Subsidiaries owned by the
Company or its Subsidiaries, there are no voting trusts, proxies or other
agreements, commitments or understandings of any character to which the
Company or any of its Significant Subsidiaries is a party or by which the
Company or any of its Significant Subsidiaries is bound with respect to the
voting of any shares of capital stock of the Company or any of its
Significant Subsidiaries.
AGREEMENT AND PLAN OF MERGER
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SECTION 4.04 AUTHORIZATION OF AGREEMENT. The Company has all requisite
corporate power and authority to execute and deliver this Agreement and the
Company Stock Option Agreement and, subject, in the case of this Agreement, to
approval of this Agreement by the holders of a majority of the outstanding
shares of Company Common Stock in accordance with the applicable provisions of
the GCL and the Company's certificate of incorporation, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby. The execution and delivery by the Company of this
Agreement and the Company Stock Option Agreement and the performance by the
Company of its obligations hereunder and thereunder have been duly and validly
authorized by all requisite corporate action on the part of the Company (other
than, with respect to the Merger, the approval and adoption of this Agreement by
the holders of a majority of the outstanding shares of Company Common Stock in
accordance with the applicable provisions of the GCL and the Company's
certificate of incorporation). This Agreement and the Company Stock Option
Agreement have been duly executed and delivered by the Company and (assuming due
authorization, execution and delivery hereof by the other parties hereto)
constitute legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the same may be
limited by legal principles of general applicability governing the application
and availability of equitable remedies.
SECTION 4.05 APPROVALS. Except for the applicable requirements, if any,
of (a) the Securities Act, (b) the Exchange Act, (c) state securities or blue
sky laws, (d) the HSR Act, (e) the competition Laws, Regulations and Orders of
foreign Governmental Authorities as set forth in Section 4.05 of the Company's
Disclosure Letter, (f) the NYSE, (g) the filing and recordation of appropriate
merger documents as required by the GCL and (h) those Laws, Regulations and
Orders noncompliance with which could not reasonably be expected to have a
Material Adverse Effect on the Company, no filing or registration with, no
waiting period imposed by and no Authorization of, any Governmental Authority is
required under any Law, Regulation or Order applicable to the Company or any of
its Subsidiaries to permit the Company to execute, deliver or perform this
Agreement or the Company Stock Option Agreement or to consummate the
transactions contemplated hereby or thereby.
SECTION 4.06 NO VIOLATION. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Authorizations of Governmental Authorities
indicated as required in Section 4.05 and receipt of the approval of this
Agreement by the holders of a majority of the outstanding shares of Company
Common Stock as required by the GCL and except as set forth in Section 4.06 of
the Company's Disclosure Letter, neither the execution and delivery by the
Company of this Agreement or the Company Stock Option Agreement nor the
performance by the Company of its obligations hereunder or thereunder will
(a) violate or breach the terms of or cause a default under (i) any Law,
Regulation or Order applicable to the Company, (ii) the certificate of
incorporation or bylaws of the Company or (iii) any contract or agreement to
which the Company or any of its Subsidiaries is a party or by which it or any of
its properties or assets is bound, or (b) with the passage of time, the giving
of notice or the taking of any action by a third Person, have any of the effects
set forth in clause (a) of this Section, except in any such case for any matters
described in this Section (other than clause (ii) hereof) that could not
reasonably be expected to have Material Adverse Effect on the Company. Prior to
the execution of this Agreement, the Board of Directors of the Company has
AGREEMENT AND PLAN OF MERGER
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taken all necessary action to cause this Agreement and the transactions
contemplated hereby to be exempt from the provisions of Section 203 of the
GCL and to ensure that the execution, delivery and performance of this
Agreement by the parties hereto will not cause any rights to be distributed
or to become exercisable under the Company's Rights Agreement. Assuming the
representation of the Parent in Section 5.17(g) is true, neither of the
Parent Companies is (a) an "Acquiring Person" as defined in the Company's
Rights Agreement or (b) will become an "Acquiring Person" as defined therein
as a result of any of the transactions contemplated by this Agreement.
SECTION 4.07 REPORTS.
(a) Since October 31, 1994,(i) the Company has filed all SEC Reports
required to be filed by it with the Commission and (ii) the Company and its
Subsidiaries have filed all other Reports required to be filed by any of
them with any other Governmental Authorities, including state securities
administrators, except where the failure to file any such Reports could not
reasonably be expected to have a Material Adverse Effect on the Company.
Such Reports, including all those filed after the date of this Agreement
and prior to the Effective Time, (x) were prepared in all material respects
in accordance with the requirements of applicable Law (including, with
respect to the SEC Reports, the Securities Act and the Exchange Act, as the
case may be, and the applicable Regulations of the Commission thereunder)
and (y), in the case of the SEC Reports, did not at the time they were
filed contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
(b) The Company's Audited Consolidated Financial Statements and any
consolidated financial statements of the Company (including any related
notes thereto) contained in any SEC Reports filed by the Company with the
Commission after the date of this Agreement (i) have been or will have been
prepared in accordance with GAAP (except (A) to the extent required by
changes in GAAP and (B), with respect to the Company's Audited Consolidated
Financial Statements, as may be indicated in the notes thereto and (C), in
the case of any unaudited interim financial statements, as permitted by
Form 10-Q) and (ii) fairly present the consolidated financial position of
the Company and its Subsidiaries as of the respective dates thereof and the
consolidated results of their operations and cash flows for the periods
indicated (subject, in the case of any unaudited interim financial
statements, to normal and recurring year-end adjustments).
(c) Except as set forth in Section 4.07(c) of the Company's
Disclosure Letter, there exist no liabilities or obligations of the Company
and its Subsidiaries that are Material to the Company, whether accrued,
absolute, contingent or threatened, and that would be required to be
reflected, reserved for or disclosed under GAAP in consolidated financial
statements of the Company as of and for the period ended on the date of
this representation and warranty, other than (i) liabilities or obligations
that are adequately reflected, reserved for or disclosed in the Company's
Audited Consolidated Financial Statements,(ii) liabilities or obligations
incurred in the ordinary course of business of the Company since October
31,
AGREEMENT AND PLAN OF MERGER
-9-
1997, (iii) liabilities or obligations the incurrence of which is
permitted by Section 6.02(a) and (iv) liabilities or obligations that are
not Material to the Company.
SECTION 4.08 NO MATERIAL ADVERSE EFFECT; CONDUCT.
(a) Since October 31, 1997, no event (other than any event that is of
general application to all or a substantial portion of the Company's
industry and other than any event that is expressly subject to any other
representation or warranty contained in Article IV) has, to the Knowledge
of the Company, occurred that, individually or together with other similar
events, could reasonably be expected to constitute or cause a Material
Adverse Effect on the Company.
(b) Except as set forth in Section 4.08(b) of the Company's
Disclosure Letter, during the period from October 31, 1997 to the date of
this Agreement, neither the Company nor any of its Subsidiaries has engaged
in any conduct that is proscribed during the period from the date of this
Agreement to the Effective Time by subsections (i) through (xiv) of
Section 6.02(a).
SECTION 4.09 CERTAIN BUSINESS PRACTICES. As of the date of this
Agreement, neither the Company or any of its Subsidiaries nor any director,
officer, employee or agent of the Company or any of its Subsidiaries has
(a) used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, (b) made any unlawful payment
to any foreign or domestic government official or employee or to any foreign or
domestic political party or campaign or violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended, (c) consummated any transaction, made
any payment, entered into any agreement or arrangement or taken any other action
in violation of Section 1128B(b) of the Social Security Act, as amended, or
(d) made any other unlawful payment, except for any such matters that could not
reasonably be expected to have a Material Adverse Effect on the Company.
SECTION 4.10 CERTAIN OBLIGATIONS. Except for those listed in
Section 4.10 of the Company's Disclosure Letter, neither the Company nor any of
its Subsidiaries is a party to or bound by any (a) Noncompete Agreement or
(b) any agreement that contains change of control or similar provisions that
would give any Person that is a party to any such agreement the right, as a
result of the execution of this Agreement or the consummation of any of the
transactions contemplated hereby, to purchase any Material interest of the
Company in any joint venture, partnership or similar arrangement.
SECTION 4.11 AUTHORIZATIONS; COMPLIANCE. The Company and its
Subsidiaries have obtained all Authorizations that are necessary to carry on
their businesses as currently conducted, except for any such Authorizations as
to which, individually or in the aggregate, the failure to possess could not
reasonably be expected to have a Material Adverse Effect on the Company. Such
Authorizations are in full force and effect, have not been violated in any
respect that could reasonably be expected to have a Material Adverse Effect on
the Company and there is no action, proceeding or investigation pending or, to
the Knowledge of the Company, threatened regarding suspension, revocation or
cancellation of any such Authorizations, except for any suspensions,
AGREEMENT AND PLAN OF MERGER
-10-
revocations or cancellations of any such Authorizations that, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect on the Company.
SECTION 4.12 LITIGATION; COMPLIANCE WITH LAWS. There are no actions,
suits, investigations or proceedings (including any proceedings in arbitration)
pending or, to the Knowledge of the Company, threatened against the Company or
any of its Subsidiaries, at law or in equity, in any Court or before or by any
Governmental Authority, except actions, suits, investigations or proceedings
that are disclosed in the Company's SEC Reports, that are set forth in
Section 4.12 or Section 4.15 of the Company's Disclosure Letter or that,
individually or, with respect to multiple actions, suits or proceedings that
allege similar theories of recovery based on similar facts, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect on the
Company. There are no Material claims pending or, to the Knowledge of the
Company, threatened by any Persons against the Company or any of its
Subsidiaries for indemnification pursuant to any statute, organizational
document, contract or otherwise with respect to any claim, action, suit,
investigation or proceeding pending in any Court or before or by any
Governmental Authority. Except as set forth in Section 4.12 of the Company's
Disclosure Letter and with respect to the matters covered by Sections 4.09,
4.13, 4.14 and 4.15, the Company and its Subsidiaries are in substantial
compliance with all applicable Laws and Regulations and are not in default with
respect to any Order applicable to the Company or any of its Subsidiaries,
except such events of noncompliance or defaults that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect on
the Company.
SECTION 4.13 EMPLOYEE BENEFIT PLANS. Except as set forth in the
Company's SEC Reports or in Section 4.13 of the Company's Disclosure Letter:
(a) With respect to each Company Benefit Plan, no event has occurred
and, to the Knowledge of the Company, there exists no condition or set of
circumstances in connection with which the Company or any of its
Subsidiaries could be subject to any liability under the terms of such
Company Benefit Plan, ERISA, the Code or any other applicable Law, other
than any condition or set of circumstances that could not reasonably be
expected to have a Material Adverse Effect on the Company.
(b) Each Current Company Benefit Plan intended to be qualified under
Section 401 of the Code (i) satisfies in form the requirements of such
Section except to the extent amendments are not required by Law to be made
until a date after the Effective Time, (ii) has received a favorable
determination letter from the IRS regarding such qualified status and
(iii) has not, since the receipt of the most recent favorable determination
letter, been amended other than amendments required by applicable Law.
(c) Except as would not reasonably be expected to result in a
Material Adverse Effect on the Company, there has been no termination or
partial termination of any Current Company Benefit Plan within the meaning
of Section 4.11(d)(3) of the Code and, to the Knowledge of the Company,
each Current Company Benefit Plan has been operated in material compliance
with its provisions and with applicable Law.
AGREEMENT AND PLAN OF MERGER
-11-
(d) Any Terminated Company Benefit Plan intended to have been
qualified under Section 401 of the Code received a favorable determination
letter from the IRS with respect to its termination.
(e) There are no actions, suits or claims pending (other than routine
claims for benefits) or, to the Knowledge of the Company, threatened
against, or with respect to, any Company Benefit Plan or its assets that
could reasonably be expected to have a Material Adverse Effect on the
Company and, to the Knowledge of the Company, no facts or circumstances
exist that could give rise to any such actions, suits or claims, except as
would not reasonably be expected to have a Material Adverse Effect on the
Company.
(f) To the Knowledge of the Company, there is no matter pending
(other than routine qualification determination filings) with respect to
any Company Benefit Plans before the IRS, the Department of Labor, the PBGC
or any other Governmental Authority, except as would not reasonably be
expected to have a Material Adverse Effect on the Company.
(g) All contributions required to be made to Company Benefit Plans
pursuant to their terms and the provisions of ERISA, the Code or any other
applicable Law have been timely made, except as would not reasonably be
expected to have a Material Adverse Effect on the Company.
(h) As to any Current Company Benefit Plan subject to Title IV of
ERISA, (i) there has been no event or condition which presents a
significant risk of plan termination, (ii) no accumulated funding
deficiency, whether or not waived, within the meaning of Section 302 of
ERISA or Section 412 of the Code has been incurred (iii) no reportable
event within the meaning of Section 4043 of ERISA (for which the disclosure
requirements of Regulation section 4043.1, ET SEQ., promulgated by the
PBGC, have not been waived) has occurred within six years prior to the date
of this Agreement, (iv) no notice of intent to terminate such Benefit Plan
has been given under Section 4041 of ERISA, (v) no proceeding has been
instituted under Section 4042 of ERISA to terminate such Benefit Plan,
(vi) no liability to the PBGC has been incurred (other than with respect to
required premium payments) and (vii) the assets of the Benefit Plan equal
or exceed the actuarial present value of the benefit liabilities, within
the meaning of Section 4041 of ERISA, under the Benefit Plan, based upon
reasonable actuarial assumptions and the asset valuation principles
established by the PBGC, except as would not reasonably be expected to have
a Material Adverse Effect on the Company.
(i) In connection with the consummation of the transactions
contemplated by this Agreement, no payment of money or other property,
acceleration of benefits or provision of other rights has been or will be
made under any Current Company Benefit Plan that could reasonably be
expected to be nondeductible under Section 280G of the Code, whether or not
some other subsequent action or event would be required to cause such
payment, acceleration or provision to be triggered.
AGREEMENT AND PLAN OF MERGER
-12-
(j) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby will not (i) require the Company or
any of its Subsidiaries to make a larger contribution to, or pay greater
benefits or provide other rights under, any Current Company Benefit Plan or
any of the programs, agreements, policies or other arrangements described
in the Company's Disclosure Letter in response to paragraph (k) below than
it otherwise would, whether or not some other subsequent action or event
would be required to cause such payment or provision to be triggered or
(ii) create or give rise to any additional vested rights or service credits
under any Current Company Benefit Plan or any of such programs, agreements,
policies or other arrangements, whether or not some other subsequent action
or event would be required to cause such creation or acceleration to be
triggered.
(k) Neither the Company nor any of its Subsidiaries is a party to or
is bound by any severance or change in control agreement, program or policy
(involving $500,000 or more of future payments) with respect to any
employee, officer or director.
(l) No Current Company Benefit Plan (other than a Company Benefit
Plan maintained outside the United States that is either fully insured or
fully funded through a retirement plan) provides retiree medical or retiree
life insurance benefits to any Person and neither the Company nor any of
its Subsidiaries is contractually or otherwise obligated (whether or not in
writing) to provide any Person with life insurance or medical benefits upon
retirement or termination of employment, other than as required by the
provisions of Sections 601 through 608 of ERISA and Section 4980B of the
Code.
(m) Neither the Company nor any of its Subsidiaries contributes or
has an obligation to contribute, and has not within six years prior to the
date of this Agreement contributed, had an obligation to contribute, or had
any other liability to a multiemployer plan within the meaning of
Section 3(37) of ERISA.
(n) The Company has not contributed, transferred or otherwise
provided any cash, securities or other property to any grantee, trust,
escrow or other arrangement that has the effect of providing or setting
aside assets for benefits payable pursuant to any termination, severance or
other change in control agreement.
(o) Except as would not reasonably be expected to have a Material
Adverse Effect on the Company, (i) no collective bargaining agreement is
being negotiated by the Company or any of its Subsidiaries, (ii) there is
no pending or, to the Knowledge of the Company, threatened labor dispute,
strike or work stoppage against the Company or any of its Subsidiaries,
(iii) to the Knowledge of the Company, neither the Company or any of its
Subsidiaries nor any representative or employee of the Company or any of
its Subsidiaries has in the United States committed any Material unfair
labor practices in connection with the operation of the business of the
Company and its Subsidiaries, and (iv) there is no pending or, to the
Knowledge of the Company, threatened charge or complaint against the
Company or any of its Subsidiaries by or before the National Labor
Relations Board or any comparable agency of any state of the United States.
AGREEMENT AND PLAN OF MERGER
-13-
SECTION 4.14 TAXES.
(a) Except for such matters as could not reasonably be expected to
have a Material Adverse Effect on the Company, all returns and reports of
or with respect to any Tax ("Tax Returns") that are required to be filed by
or with respect to the Company or any of its Subsidiaries on or before the
Effective Time have been or will be timely filed, all Taxes that are shown
to be due on such Tax Returns have been or will be timely paid in full, all
withholding Tax requirements imposed on or with respect to the Company or
any of its Subsidiaries have been or will be satisfied in full in all
respects and no penalty, interest or other charge is or will become due
with respect to the late filing of any such Tax Return or late payment of
any such Tax.
(b) There is no claim against the Company or any of its Subsidiaries
for any Taxes, and no assessment, deficiency or adjustment has been
asserted or proposed in writing with respect to any such Tax Return, that,
in either case, could reasonably be expected to have a Material Adverse
Effect on the Company.
SECTION 4.15 ENVIRONMENTAL MATTERS.
(a) Except for matters disclosed in the Company's SEC Reports or in
Section 4.15 of the Company's Disclosure Letter and except for matters
that, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect on the Company, (i) the properties,
operations and activities of the Company and its Subsidiaries are in
compliance with all applicable Environmental Laws; (ii) the Company and its
Subsidiaries and the properties and operations of the Company and its
Subsidiaries are not subject to any existing, pending or, to the Knowledge
of the Company, threatened action, suit, investigation, inquiry or
proceeding by or before any Court or Governmental Authority under any
Environmental Law; (iii) all Authorizations, if any, required to be
obtained or filed by the Company or any of its Subsidiaries under any
Environmental Law in connection with the business of the Company and its
Subsidiaries have been obtained or filed and are valid and currently in
full force and effect; (iv), to the Knowledge of the Company, there has
been no release of any hazardous substance, pollutant or contaminant into
the environment by the Company or its Subsidiaries or in connection with
their properties or operations; and (v) there has been no exposure of any
Person or property to any hazardous substance, pollutant or contaminant in
connection with the properties, operations and activities of the Company
and its Subsidiaries.
(b) The Company and its Subsidiaries have made available to the
Parent all internal and external environmental audits and studies and all
correspondence on environmental matters (in each case relevant to the
Company or any of its Subsidiaries) in the possession of the Company or its
Subsidiaries for such matters as could reasonably be expected to have a
Material Adverse Effect on the Company.
SECTION 4.16 INSURANCE. The Company and its Subsidiaries own and are
beneficiaries under all such insurance policies underwritten by reputable
insurers that, as to risks
AGREEMENT AND PLAN OF MERGER
-14-
insured, coverages and related limits and deductibles, are customary in the
industries in which the Company and its Subsidiaries operate. All premiums
due with respect to all such insurance policies that are Material have been
paid and, to the Knowledge of the Company, all such policies are in full
force and effect.
SECTION 4.17 POOLING; TAX MATTERS. Neither the Company nor, to the
Knowledge of the Company, any of its Affiliates has taken or agreed to take any
action that would prevent (a) the Merger from being treated for financial
accounting purposes as a "pooling of interests" in accordance with GAAP and the
Regulations of the Commission or (b) the Merger from constituting a
reorganization within the meaning of section 368(a) of the Code. Without
limiting the generality of the foregoing:
(a) Prior to and in connection with the Merger, (i) none of the
Company Common Stock will be redeemed, (ii) no extraordinary distribution
will be made with respect to Company Common Stock, and (iii) none of the
Company Common Stock will be acquired by any person related (as defined in
Treas. Reg. Section 1.368-1(e)(3) without regard to Section
1.368-1(e)(3)(i)(A)) to the Company.
(b) The Company and the stockholders of the Company will each pay
their respective expenses, if any, incurred in connection with the Merger.
(c) There is no intercorporate indebtedness existing between the
Company and the Parent or between the Company and Newco that was issued,
acquired or will be settled at a discount.
(d) The Company is not an investment company as defined in section
368(a)(2)(F)(iii) and (iv) of the Code.
(e) The Company is not under the jurisdiction of a court in a title
11 or similar case within the meaning of section 368(a)(3)(A) of the Code.
SECTION 4.18 AFFILIATES. Section 4.18 of the Company's Disclosure Letter
contains a true and complete list of all Persons who are directors or executive
officers of the Company and any other Persons who, to the Knowledge of the
Company, may be deemed to be Affiliates of the Company. Concurrently with the
execution and delivery of this Agreement, the Company has delivered to the
Parent an executed letter agreement, substantially in the form of Annex B
hereto, from each such Person so identified.
SECTION 4.19 OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ on the date of this Agreement to the effect that
the Common Stock Exchange Ratio is fair, from a financial point of view, to the
holders of Company Common Stock.
SECTION 4.20 BROKERS. No broker, finder or investment banker (other than
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of
AGREEMENT AND PLAN OF MERGER
-15-
the Company. Prior to the date of this Agreement, the Company has made
available to the Parent a complete and correct copy of all agreements between
the Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ pursuant to which such firm will be
entitled to any payment relating to the transactions contemplated by this
Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PARENT
The Parent Companies hereby represent and warrant to the Company, subject
to the limitations set forth in Section 10.01, that:
SECTION 5.01 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The Parent,
Newco and each other Significant Subsidiary of the Parent are legal entities
duly organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation or organization, have all requisite
corporate power and authority to own, lease and operate their respective
properties and to carry on their businesses as they are now being conducted and
are duly qualified and in good standing to do business in each jurisdiction in
which the nature of the business conducted by them or the ownership or leasing
of their respective properties makes such qualification necessary, other than
any matters, including the failure to be so qualified and in good standing, that
could not reasonably be expected to have a Material Adverse Effect on the
Parent. Section 5.01 of the Parent's Disclosure Letter sets forth a true and
complete list of all the Parent's directly or indirectly owned Significant
Subsidiaries, together with (A) a specification of the nature of legal
organization of such Subsidiary and (B) the jurisdiction of incorporation or
other organization of such Subsidiary.
SECTION 5.02 CERTIFICATE OF INCORPORATION AND BYLAWS. The Parent has
heretofore marked for identification and furnished to the Company complete and
correct copies of the certificate of incorporation and the bylaws, in each case
as amended or restated to the date hereof, of the Parent. The Parent is not in
violation of any of the provisions of its certificate of incorporation or
bylaws.
SECTION 5.03 CAPITALIZATION.
(a) The authorized capital stock of the Parent consists of
(i) 400,000,000 shares of Parent Common Stock of which as of February 23,
1998, 262,591,336 shares were issued and outstanding, all of which are duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights created by statute, the Parent's certificate of
incorporation or bylaws or any agreement to which the Parent is a party or
is bound, and (ii) 5,000,000 shares of Preferred Stock, without par value,
of which none is issued but of which 2,000,000 shares have been designated
as Series A Junior Participating Preferred Stock. Since December 31, 1997,
except as set forth in Section 5.03(a) of the Parent's Disclosure Letter,
(x) no shares of Parent Common Stock have been issued by the Parent except
the Parent Common Stock issued pursuant to the exercise of outstanding
Parent Stock Options and Parent Restricted Stock and Parent Common Stock
issued otherwise as set forth in Section 5.03(a) of the Parent's Disclosure
Letter and (y) the Parent has not granted any options for, or other rights
to purchase, shares of Parent Common Stock.
AGREEMENT AND PLAN OF MERGER
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(b) Except as set forth in Section 5.03(b) of the Parent's Disclosure
Letter and except for shares reserved for issuance pursuant to the Parent
Stock Plans described in Section 5.03(b) of the Parent's Disclosure Letter,
no shares of Parent Common Stock are reserved for issuance, and, except for
the Parent Stock Options, the Parent Restricted Stock agreements and for
the Parent's obligations under the Parent's Rights Agreement, there are no
contracts, agreements, commitments or arrangements obligating the Parent
(i) to offer, sell, issue or grant any Equity Securities of the Parent or
(ii) to redeem, purchase or acquire, or offer to purchase or acquire, any
outstanding Equity Securities of the Parent or to grant any Lien on any
shares of capital stock of the Parent.
(c) Except as set forth in Section 5.03(c) of the Parent's Disclosure
Letter, (i) all the issued and outstanding shares of capital stock of, or
other equity interests in, each Significant Subsidiary of the Parent are
owned by the Parent or one of its Subsidiaries, have been duly authorized
and are validly issued, and, with respect to capital stock, are fully paid
and nonassessable, and were not issued in violation of any preemptive or
similar rights of any past or present equity holder of such Subsidiary;
(ii) all such issued and outstanding shares, or other equity interests,
that are owned by the Parent or one of its Subsidiaries are owned free and
clear of all Liens; (iii) no shares of capital stock of, or other equity
interests in, any Significant Subsidiary of the Parent are reserved for
issuance, and there are no contracts, agreements, commitments or
arrangements obligating the Parent or any of its Significant Subsidiaries
(A) to offer, sell, issue, grant, pledge, dispose of or encumber any Equity
Securities of any of the Significant Subsidiaries of the Parent or (B) to
redeem, purchase or acquire, or offer to purchase or acquire, any
outstanding Equity Securities of any of the Significant Subsidiaries of the
Parent or (C) to grant any Lien on any outstanding shares of capital stock
of, or other equity interests in, any of the Significant Subsidiaries of
the Parent; except for any matter under clause (i), (ii) or (iii) of this
Section 5.03(c) that could not reasonably be expected to have a Material
Adverse Effect on the Parent.
(d) Except for revocable proxies granted by the Parent or its
Subsidiaries with respect to the capital stock of Subsidiaries owned by the
Parent or its Subsidiaries, there are no voting trusts, proxies or other
agreements, commitments or understandings of any character to which the
Parent or any of its Significant Subsidiaries is a party or by which the
Parent or any of its Significant Subsidiaries is bound with respect to the
voting of any shares of capital stock of the Parent or any of its
Significant Subsidiaries.
SECTION 5.04 AUTHORIZATION OF AGREEMENT. Each of the Parent and Newco
has all requisite corporate power and authority to execute and deliver this
Agreement and, in the case of the Parent, the Parent Stock Option Agreement and
subject, in the case of this Agreement, to approval of the Charter Amendment and
the Share Issuance by the holders of a majority of the outstanding shares of
Parent Common Stock in accordance with the applicable provisions of the GCL and
the Parent's certificate of incorporation, to perform its obligations hereunder
and, in the case of the Parent, thereunder and to consummate the transactions
contemplated hereby and, in the case of the Parent, thereby. The execution and
delivery by each of the Parent and Newco of this Agreement and the execution and
delivery by the Parent of the Parent Stock Option Agreement and the performance
of their respective obligations hereunder and, in the case of the Parent,
thereunder have been duly
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and validly authorized by all requisite corporate action on the part of the
Parent and Newco, respectively (other than, with respect to the Merger, the
approval and adoption of the Charter Amendment and the Share Issuance by the
holders of a majority of the outstanding shares of Parent Common Stock in
accordance with the applicable provisions of the GCL and the Parent's
certificate of incorporation). This Agreement has been duly executed and
delivered by the Parent and Newco and (assuming due authorization, execution
and delivery hereof by the other party hereto) constitutes a legal, valid and
binding obligation of the Parent and Newco, enforceable against the Parent
and Newco in accordance with its terms, except as the same may be limited by
legal principles of general applicability governing the application and
availability of equitable remedies. The Parent Stock Option Agreement has
been duly executed and delivered by the Parent and (assuming due
authorization, execution and delivery thereof by the other party thereto)
constitutes a legal, valid and binding obligation of the Parent enforceable
against the Parent in accordance with its terms, except as the same may be
limited by legal principles of general applicability governing the
application and availability of equitable remedies.
SECTION 5.05 APPROVALS. Except for the applicable requirements, if any,
of (a) the Securities Act, (b) the Exchange Act, (c) state securities or blue
sky laws, (d) the HSR Act, (e) the competition Laws, Regulations and Orders of
foreign Governmental Authorities as set forth in Section 5.05 of the Parent's
Disclosure Letter, (f) the NYSE, (g) the filing and recordation of appropriate
merger documents as required by the GCL and (h) those Laws, Regulations and
Orders noncompliance with which could not reasonably be expected to have a
Material Adverse Effect on the Parent, no filing or registration with, no
waiting period imposed by and no Authorization of, any Governmental Authority is
required under any Law, Regulation or Order applicable to the Parent or Newco to
permit the Parent or Newco to execute, deliver or perform this Agreement or, in
the case of the Parent, the Parent Stock Option Agreement or to consummate the
transactions contemplated hereby or thereby. To the Knowledge of the Parent,
there are no facts or circumstances that could reasonably be expected to
preclude the Parent Common Stock to be issued in the Merger from being approved
for listing on the NYSE.
SECTION 5.06 NO VIOLATION. Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by, and receipt of all Authorizations of, Governmental Authorities
indicated as required in Section 5.05 and receipt of the approval of the Charter
Amendment and the Share Issuance by the holders of a majority of the outstanding
shares of Parent Common Stock as required by the GCL and except as set forth in
Section 5.06 of the Parent's Disclosure Letter, neither the execution and
delivery by the Parent or Newco of this Agreement or by the Parent of the Parent
Stock Option Agreement nor the performance by the Parent or Newco of its
obligations hereunder or thereunder will (a) violate or breach the terms of or
cause a default under (i) any Law, Regulation or Order applicable to the Parent
or Newco, (ii) the certificate of incorporation or bylaws of the Parent or Newco
or (iii) any contract or agreement to which the Parent or any of its
Subsidiaries is a party or by which it or any of its properties or assets is
bound, or (b), with the passage of time, the giving of notice or the taking of
any action by a third Person, have any of the effects set forth in clause (a) of
this Section, except in any such case for any matters described in this Section
(other than clause (ii) hereof) that could not reasonably be expected to have a
Material Adverse Effect on the Parent.
AGREEMENT AND PLAN OF MERGER
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SECTION 5.07 REPORTS.
(a) Since December 31, 1994, the (i) Parent or its predecessor has
filed all SEC Reports required to be filed by the Parent with the
Commission and (ii) the Parent and its Subsidiaries have filed all other
Reports required to be filed by any of them with any other Governmental
Authorities, including state securities administrators, except where the
failure to file any such Reports could not reasonably be expected to have a
Material Adverse Effect on the Parent. Such Reports, including those filed
after the date of this Agreement and prior to the Effective Time, (i) were
prepared in all material respects in accordance with applicable Law
(including, with respect to the SEC Reports, the Securities Act and the
Exchange Act, as the case may be, and the applicable Regulations of the
Commission thereunder) and (ii) in the case of the SEC Reports, did not at
the time they were filed contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(b) The Parent's Audited Consolidated Financial Statements and any
consolidated financial statements of the Parent (including any related
notes thereto) contained in any SEC Reports filed by the Parent with the
Commission after the date of this Agreement (i) have been or will have been
prepared in accordance with the published Regulations of the Commission and
in accordance with GAAP (except (A) to the extent required by changes in
GAAP, (B), with respect to the Parent's Audited Consolidated Financial
Statements, as may be indicated in the notes thereto and (C) in the case of
any unaudited financial statements, as permitted by Form 10-Q) and
(ii) fairly present the consolidated financial position of the Parent and
its Subsidiaries as of the respective dates thereof and the consolidated
results of their operations and cash flows for the periods indicated
(subject, in the case of any unaudited interim financial statements, to
normal and recurring year-end adjustments).
(c) Except as set forth in Section 5.07(c) of the Parent's Disclosure
Letter, there exist no liabilities or obligations of the Parent and its
Subsidiaries that are Material to the Parent, whether accrued, absolute,
contingent or threatened, that would be required to be reflected, reserved
for or disclosed under GAAP in consolidated financial statements of the
Parent as of and for the period ended on the date of this representation
and warranty, other than (i) liabilities or obligations that are adequately
reflected, reserved for or disclosed in the Parent's Audited Consolidated
Financial Statements, (ii) liabilities or obligations incurred in the
ordinary course of business of the Parent since December 31, 1997,
(iii) liabilities or obligations the incurrence of which is permitted by
Section 6.02(b) and (iv) liabilities or obligations that are not Material
to the Parent.
SECTION 5.08 NO MATERIAL ADVERSE EFFECT; CONDUCT.
(a) Since December 31, 1997, no event (other than any event that is
of general application to all or a substantial portion of the Parent's
industries and other than any event that is expressly subject to any other
representation or warranty contained in Article V) has,
AGREEMENT AND PLAN OF MERGER
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to the Knowledge of the Parent, occurred that, individually or together
with other similar events, could reasonably be expected to constitute or
cause a Material Adverse Effect on the Parent.
(b) Except as set forth in Section 5.08(b) of the Parent's Disclosure
Letter, during the period from December 31, 1997, to the date of this
Agreement, neither the Parent nor any of its Subsidiaries has engaged in
any conduct that is proscribed during the period from the date of this
Agreement to the Effective Time by subsections (i) through (xiv) of
Section 6.02(b).
SECTION 5.09 CERTAIN BUSINESS PRACTICES. As of the date of this
Agreement, neither the Parent or any of its Subsidiaries nor any director,
officer, employee or agent of the Parent or any of its Subsidiaries has (a)
used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, (b) made any unlawful
payment to any foreign or domestic government official or employee or to any
foreign or domestic political party or campaign or violated any provision of
the Foreign Corrupt Practices Act of 1977, as amended, (c) consummated any
transaction, made any payment, entered into any agreement or arrangement or
taken any other action in violation of Section 1128B(b) of the Social
Security Act, as amended, or (d) made any other unlawful payment, except for
any such matters that could not reasonably be expected to have a Material
Adverse Effect on the Parent.
SECTION 5.10 CERTAIN OBLIGATIONS. Except for those listed in Section
5.10 of the Parent's Disclosure Letter or filed as Exhibits to the Parent's
SEC Reports, neither the Parent nor any of its Subsidiaries is a party to or
bound by (a) any Noncompete Agreement or (b) any agreement that contains
change of control or similar provisions that would give any Person that is a
party to any such agreement the right, as a result of the execution of this
Agreement or the consummation of any of the transactions contemplated hereby,
to purchase any Material interest of the Parent in any joint venture,
partnership or similar arrangement..
SECTION 5.11 AUTHORIZATIONS; COMPLIANCE. The Parent and its
Subsidiaries have obtained all Authorizations that are necessary to carry on
their businesses as currently conducted, except for any such Authorizations
as to which the failure to possess, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect on the Parent.
Such Authorizations are in full force and effect, have not been violated in
any respect that could reasonably be expected to have a Material Adverse
Effect on the Parent and there is no action, proceeding or investigation
pending or threatened regarding suspension, revocation or cancellation of any
of such Authorizations, except in the case of any suspension, revocation or
cancellation of such Authorizations that could not reasonably be expected to
have a Material Adverse Effect on the Parent.
SECTION 5.12 LITIGATION; COMPLIANCE WITH LAWS. There are no actions,
suits, investigations or proceedings (including any proceedings in
arbitration) pending or, to the Knowledge of the Parent, threatened against
the Parent or any of its Subsidiaries, at law or in equity, in any Court or
before or by any Governmental Authority, except actions, suits, proceedings
or investigations that are disclosed in the Parent's SEC Reports, that are
set forth in Section 5.12 or
AGREEMENT AND PLAN OF MERGER
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Section 5.15 of the Parent's Disclosure Letter or that, individually or, with
respect to multiple actions, suits or proceedings that allege similar
theories of recovery based on similar facts, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on the Parent.
There are no Material claims pending or, to the Knowledge of the Parent,
threatened by any Persons against the Parent or any of its Subsidiaries for
indemnification pursuant to any statute, organizational document, contract or
otherwise with respect to any claim, action, suit, investigation or
proceeding pending in any Court or before or by any Governmental Authority.
Except with respect to the matters covered by Sections 5.09, 5.13, 5.14 and
5.15, the Parent and its Subsidiaries are in substantial compliance with all
applicable Laws and Regulations and are not in default with respect to any
Order applicable to the Parent or any of its Subsidiaries, except such events
of noncompliance or defaults that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect on the Parent.
SECTION 5.13 EMPLOYEE BENEFIT PLANS. Except as set forth in the
Parent's SEC Reports or in Section 5.13 of the Parent's Disclosure Letter:
(a) With respect to each Parent Benefit Plan, no event has occurred
and, to the Knowledge of the Parent, there exists no condition or set of
circumstances in connection with which the Parent or any of its
Subsidiaries could be subject to any liability under the terms of such
Parent Benefit Plan, ERISA, the Code or any other applicable Law, other
than any condition or set of circumstances that could not reasonably be
expected to have a Material Adverse Effect on the Parent.
(b) Each Current Parent Benefit Plan intended to be qualified under
Section 401 of the Code (i) satisfies in form the requirements of such
Section except to the extent amendments are not required by Law to be made
until a date after the Effective Time, (ii) has received a favorable
determination letter from the IRS regarding such qualified status, and
(iii) has not, since the receipt of the most recent favorable determination
letter, been amended other than amendments required by applicable Law.
(c) Except as would not reasonably be expected to result in a
Material Adverse Effect on the Parent, there has been no termination or
partial termination of any Current Parent Benefit Plan within the meaning
of Section 4.11(d)(3) of the Code and, to the Knowledge of the Parent, each
Current Parent Benefit Plan has been operated in material compliance with
its provisions and with applicable Law.
(d) Any Terminated Parent Benefit Plan intended to have been
qualified under Section 401 of the Code received a favorable determination
letter from the IRS with respect to its termination.
(e) There are no actions, suits or claims pending (other than routine
claims for benefits) or, to the Knowledge of the Parent, threatened
against, or with respect to, any Parent Benefit Plan or its assets that
could reasonably be expected to have a Material Adverse Effect on the
Parent and, to the Knowledge of the Parent, no facts or circumstances
AGREEMENT AND PLAN OF MERGER
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exist that could give rise to any such actions, suits or claims, except
as would not reasonably be expected to have a Material Adverse Effect on
the Parent.
(f) To the Knowledge of the Parent, there is no matter pending (other
than routine qualification determination filings) with respect to any
Parent Benefit Plans before the IRS, the Department of Labor, the PBGC or
any other Governmental Authority, except as would not reasonably be
expected to have a Material Adverse Effect on the Parent.
(g) All contributions required to be made to Parent Benefit Plans
pursuant to their terms and the provisions of ERISA, the Code or any other
applicable Law have been timely made, except as would not reasonably be
expected to have a Material Adverse Effect on the Parent.
(h) As to any Current Parent Benefit Plan subject to Title IV of
ERISA, (i) there has been no event or condition which presents a
significant risk of plan termination, (ii) no accumulated funding
deficiency, whether or not waived, within the meaning of Section 302 of
ERISA or Section 412 of the Code has been incurred (iii) no reportable
event within the meaning of Section 4043 of ERISA (for which the disclosure
requirements of Regulation section 4043.1, ET SEQ., promulgated by the PBGC
have not been waived) has occurred within six years prior to the date of
this Agreement, (iv) no notice of intent to terminate such Benefit Plan has
been given under Section 4041 of ERISA, (v) no proceeding has been
instituted under Section 4042 of ERISA to terminate such Benefit Plan,
(vi) no liability to the PBGC has been incurred (other than with respect to
required premium payments) and (vii) the assets of the Benefit Plan equal
or exceed the actuarial present value of the benefit liabilities, within
the meaning of Section 4041 of ERISA, under the Benefit Plan, based upon
reasonable actuarial assumptions and the asset valuation principles
established by the PBGC, except as would not reasonably be expected to have
a Material Adverse Effect on the Parent.
(i) In connection with the consummation of the transactions
contemplated by this Agreement, no payment of money or other property,
acceleration of benefits or provision of other rights has been or will be
made under any Current Parent Benefit Plan that could reasonably be
expected to be nondeductible under Section 280G of the Code, whether or not
some other subsequent action or event would be required to cause such
payment, acceleration or provision to be triggered.
(j) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby will not (i) require the Parent or
any of its Subsidiaries to make a larger contribution to, or pay greater
benefits or provide other rights under, any Current Parent Benefit Plan or
any of the programs, agreements, policies or other arrangements described
in the Parent's Disclosure Letter in response to paragraph (k) below than
it otherwise would, whether or not some other subsequent action or event
would be required to cause such payment or provision to be triggered or
(ii) create or give rise to any additional vested rights or service credits
under any Current Parent Benefit Plan or any of such programs, agreements,
policies or other arrangements, whether or not some other
AGREEMENT AND PLAN OF MERGER
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subsequent action or event would be required to cause such creation or
acceleration to be triggered.
(k) Neither the Parent nor any of its Subsidiaries is a party to or
is bound by any severance or change in control agreement, program or policy
(involving $500,000 or more of future payments) with respect to any
employee, officer or director.
(l) No Current Parent Benefit Plan (other than a Parent Benefit Plan
maintained outside the United States that is either fully insured or fully
funded through a retirement plan) provides retiree medical or retiree life
insurance benefits to any Person and neither the Parent nor any of its
Subsidiaries is contractually or otherwise obligated (whether or not in
writing) to provide any Person with life insurance or medical benefits upon
retirement or termination of employment, other than as required by the
provisions of Sections 601 through 608 of ERISA and Section 4980B of the
Code.
(m) Neither the Parent nor any of its Subsidiaries contributes or has
an obligation to contribute, and has not within six years prior to the date
of this Agreement contributed, had an obligation to contribute, or had any
other liability to a multiemployer plan within the meaning of Section 3(37)
of ERISA.
(n) The Parent has not contributed, transferred or otherwise provided
any cash, securities or other property to any grantee, trust, escrow or
other arrangement that has the effect of providing or setting aside assets
for benefits payable pursuant to any termination, severance or other change
in control agreement.
(o) Except as would not reasonably be expected to have a Material
Adverse Effect on the Parent, (i) no collective bargaining agreement is
being negotiated by the Parent or any of its Subsidiaries, (ii) there is no
pending or, to the Knowledge of the Parent, threatened labor dispute,
strike or work stoppage against the Parent or any of its Subsidiaries,
(iii) to the Knowledge of the Parent, neither the Parent or any of its
Subsidiaries nor any representative or employee of the Parent or any of its
Subsidiaries has in the United States committed any Material unfair labor
practices in connection with the operation of the business of the Parent
and its Subsidiaries, and (iv) there is no pending or, to the Knowledge of
the Parent, threatened charge or complaint against the Parent or any of its
Subsidiaries by or before the National Labor Relations Board or any
comparable agency of any state of the United States.
SECTION 5.14 TAXES.
(a) Except for such matters as could not reasonably be expected to
have a Material Adverse Effect on the Parent, all Tax Returns that are
required to be filed by or with respect to the Parent or any of its
Subsidiaries on or before the Effective Time have been or will be timely
filed, all Taxes that are shown to be due on such Tax Returns have been or
will be timely paid in full, all withholding Tax requirements imposed on or
with respect to the Parent or any of its Subsidiaries have been or will be
satisfied in full in all respects and no
AGREEMENT AND PLAN OF MERGER
-23-
penalty, interest or other charge is or will become due with respect to
the late filing of any such Tax Return or late payment of any such Tax.
(b) There is no claim against the Parent or any of its Subsidiaries
for any Taxes, and no assessment, deficiency or adjustment has been
asserted or proposed in writing with respect to any such Tax Return, that,
in either case, could reasonably be expected to have a Material Adverse
Effect on the Parent.
SECTION 5.15 ENVIRONMENTAL MATTERS. Except for matters disclosed in
the Parent's SEC Reports or in Section 5.15 of the Parent's Disclosure Letter
and except for matters that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on the Parent, (a)
the properties, operations and activities of the Parent and its Subsidiaries
are in compliance with all applicable Environmental Laws; (b) the Parent and
its Subsidiaries and the properties and operations of the Parent and its
Subsidiaries are not subject to any existing, pending or, to the Knowledge of
the Parent, threatened action, suit, investigation, inquiry or proceeding by
or before any Court or Governmental Authority under any Environmental Law;
(c) all Authorizations if any, required to be obtained or filed by the Parent
or any of its Subsidiaries under any Environmental Law in connection with the
business of the Parent and its Subsidiaries have been obtained or filed and
are valid and currently in full force and effect; (d), to the Knowledge of
the Parent, there has been no release of any hazardous substance, pollutant
or contaminant into the environment by the Parent or its Subsidiaries or in
connection with their properties or operations; and (e) there has been no
exposure of any Person or property to any hazardous substance, pollutant or
contaminant in connection with the properties, operations and activities of
the Parent and its Subsidiaries.
SECTION 5.16 INSURANCE. The Parent and its Subsidiaries own and are
beneficiaries under all such insurance policies underwritten by reputable
insurers that, as to risks insured, coverages and related limits and
deductibles, are customary in the industries in which the Parent and its
Subsidiaries operate. All premiums due with respect to all such insurance
policies that are Material have been paid and, to the Knowledge of the
Parent, all such policies are in full force and effect.
SECTION 5.17 POOLING; TAX MATTERS. Neither the Parent nor, to the
Knowledge of the Parent, any of its Affiliates has taken or agreed to take
any action that would prevent (a) the Merger from being treated for financial
accounting purposes as a "pooling of interests" in accordance with GAAP and
the Regulations of the Commission or (b) the Merger from constituting a
reorganization within the meaning of section 368(a) of the Code. Without
limiting the generality of the foregoing:
(a) In connection with the Merger, none of the Company Common Stock
will be acquired by the Parent or a person related (as defined in Treas.
Reg. Section 1.368-1(e)(3)) to the Parent for consideration other than the
Parent Common Stock except for any cash received in lieu of fractional
share interests in the Parent Common Stock pursuant to Section 3.02(e) of
this Agreement.
AGREEMENT AND PLAN OF MERGER
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(b) Following the Merger, the Surviving Corporation will hold at
least 90 percent of the fair market value of the Company's net assets, at
least 70 percent of the fair market value of the Company's gross assets, at
least 90 percent of the fair market value of the net assets of Newco and at
least 70 percent of the fair market value of the gross assets of Newco,
held immediately prior to the Merger, taking into account amounts used to
pay Expenses relating to the Merger and any distributions other than
regular dividends.
(c) The Parent has no plan or intention to (i) liquidate the
Surviving Corporation, (ii) merge the Surviving Corporation with or into
another corporation, (iii) sell or otherwise dispose of the stock of the
Surviving Corporation except for transfers or successive transfers to one
or more corporations controlled (within the meaning of section 368(c) of
the Code) in each case by the transferor corporation, (iv) cause the
Surviving Corporation to issue additional shares of its capital stock that
would result in the Parent's losing control (within the meaning of section
368(c) of the Code) of the Surviving Corporation, (v) cause or permit the
Surviving Corporation to sell or otherwise dispose of any of its assets or
of any of the assets acquired from Newco except for dispositions made in
the ordinary course of business or transfers or successive transfers to one
or more corporations controlled (within the meaning of section 368(c) of
the Code) in each case by the transferor corporation, or (vi) reacquire
or cause any person related to the Parent (as defined in Treas.
Reg. 1.368-1(a)(3)) to acquire any of the Parent Common Stock issued
to the holders of Company Common Stock pursuant to the Merger.
(d) Newco has no liabilities that will be assumed by the Surviving
Corporation in the Merger and will not transfer to the Surviving
Corporation in the Merger any assets subject to liabilities.
(e) Following the Merger, the Surviving Corporation will continue the
historic business of the Company or use a significant portion of its assets
in a business, within the meaning of Treas. Reg. Section 1.368-1(d).
(f) There is no intercorporate indebtedness existing between the
Company and the Parent or between the Company and Newco that was issued,
acquired or will be settled at a discount.
(g) Neither the Parent nor any person related to the Parent (within
the meaning of Treas. Reg. Section 1.368-1(e)(3)) owns, or has owned
during the past five years, any shares of the capital stock of the Company
other than up to 500 shares of Company Common Stock.
SECTION 5.18 AFFILIATES. Section 5.18 of the Parent's Disclosure Letter
contains a true and complete list of all Persons who, to the Knowledge of the
Parent, may be deemed to be Affiliates of the Parent, including all directors
and executive officers of the Parent. Concurrently with the execution and
delivery of this Agreement, the Parent has delivered to the Company an executed
letter agreement, substantially in the form of Annex C hereto, from each such
Person so identified as an Affiliate of the Parent.
AGREEMENT AND PLAN OF MERGER
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SECTION 5.19 BROKERS. Except as set forth in Section 5.19 of the
Parent's Disclosure Letter, no broker, finder or investment banker (other
than SBC Warburg Dillon Read Inc. and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.) is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
or on behalf of the Parent. Prior to the date of this Agreement, the Parent
has made available to the Company a complete and correct copy of all
agreements between the Parent and SBC Warburg Dillon Read Inc. or ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. and pursuant to which either of such firms will be entitled to
any payment relating to the transactions contemplated by this Agreement.
SECTION 5.20 OPINION OF FINANCIAL ADVISOR. The Parent has received
the opinions of SBC Warburg Dillon Read Inc. and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. on the
date of this Agreement to the effect that the Common Stock Exchange Ratio is
fair, from a financial point of view, to the Parent.
SECTION 5.21 ACQUIRING PERSON. Based on the information set forth in
the Company's SEC Reports, no holder of 5% or more of the outstanding Company
Common Stock whose existence is disclosed therein will at the Effective Time
become an "Acquiring Person," as such term is defined in the Parent's Rights
Agreement, as a result of any of the transactions contemplated by this
Agreement.
ARTICLE VI
COVENANTS
SECTION 6.01 AFFIRMATIVE COVENANTS.
(a) The Company hereby covenants and agrees that, prior to the
Effective Time, unless otherwise expressly contemplated by this Agreement
or consented to in writing by the Parent, it will and will cause its
Subsidiaries to:
(i) operate its business in the usual and ordinary course
consistent with past practices;
(ii) use all reasonable efforts to preserve substantially intact
its business organization, maintain its rights and franchises, retain
the services of its respective key employees (subject to its work
force requirements) and maintain its relationships with its respective
customers and suppliers;
(iii) maintain and keep its properties and assets in as good
repair and condition as at present, ordinary wear and tear excepted;
and
(iv) use all reasonable efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to that
currently maintained;
except for any matters that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on the Company.
AGREEMENT AND PLAN OF MERGER
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(b) The Parent hereby covenants and agrees that, prior to the
Effective Time, unless otherwise expressly contemplated by this Agreement
or consented to in writing by the Company, it will and will cause its
Subsidiaries to:
(i) operate its business in the usual and ordinary course
consistent with past practices;
(ii) use all reasonable efforts to preserve substantially intact
its business organization, maintain its rights and franchises, retain
the services of its respective key employees (subject to its work
force requirements) and maintain its relationships with its respective
customers and suppliers;
(iii) maintain and keep its properties and assets in as good
repair and condition as at present, ordinary wear and tear excepted;
and
(iv) use all reasonable efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to that
currently maintained;
except for any matters that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on the Parent.
SECTION 6.02 NEGATIVE COVENANTS.
(a) The Company covenants and agrees that, except as expressly set
forth in the Company's Disclosure Letter, as expressly contemplated by this
Agreement or as otherwise consented to in writing by the Parent, from the
date of this Agreement until the Effective Time, it will not do, and will
not permit any of its Subsidiaries to do, any of the following:
(i) (A) increase the compensation payable to or to become
payable to any director or executive officer, (B) except as otherwise
provided in Section 6.02(a)(ii), grant any severance or termination
pay; (C) amend or otherwise modify the terms of any outstanding
options, warrants or rights the effect of which shall be to make such
terms more favorable to the holders thereof; (D) take any action to
accelerate the vesting of any outstanding Company Stock Options; (E)
amend or take any other actions to increase the amount or accelerate
the payment or vesting of any benefit under any Benefit Plan
(including the acceleration of vesting, waiving of performance
criteria or the adjustment of awards or any other actions permitted
upon a change in control of such party or permitted upon a filing
under Section 13(d) or 14(d) of the Exchange Act with respect to such
party) or (F) contribute, transfer or otherwise provide any cash,
securities or other property to any grantee, trust, escrow or other
arrangement that has the effect of providing or setting aside assets
for benefits payable pursuant to any termination, severance or other
change in control agreement; except (i) pursuant to any contract,
agreement or other legal obligation of the Company or any of its
Subsidiaries existing at the date of this Agreement, (ii) in the case
of severance or termination payments, pursuant to the severance
AGREEMENT AND PLAN OF MERGER
-27-
policy of the Company or its Subsidiaries existing at the date of this
Agreement and (iii) in the case of options, warrants, rights or
Benefit Plans, amendments required by ERISA or other applicable Law.
(ii) (A) enter into any employment or severance agreement with,
any director or executive officer, either individually or as part of a
class of similarly situated persons, or (B) establish, adopt or enter
into any new Benefit Plan; except employment and severance agreements
and Benefit Plans for the benefit of any newly employed or promoted
officers or employees, in which case the terms of such agreements and
Benefit Plans shall be reasonably consistent with those existing at
the date of this Agreement, and except Benefit Plans relating to
health and life insurance benefits established or adopted in the
ordinary course of business consistent with past practice;
(iii) declare or pay any extraordinary dividend on, or make
any other distribution in respect of outstanding shares of capital
stock, except for dividends by a wholly owned Subsidiary of the
Company to the Company or another wholly owned Subsidiary of the
Company and cash dividends on the Company Common Stock payable at
approximately the same times as paid during the fiscal year ended
October 31, 1997 and in amounts per share not to exceed those paid on
the Company Common Stock during the fourth quarter of the fiscal year
ended October 31, 1997;
(iv) (A) redeem, purchase or acquire, or offer to purchase or
acquire, any outstanding Equity Securities of the Company or any of
its Subsidiaries other than (1) any such acquisition by the Company or
any of its wholly owned Subsidiaries directly from any wholly owned
Subsidiary of the Company, (2) any repurchase, forfeiture or
retirement of shares of Company Common Stock or Company Stock Options
occurring pursuant to the terms (as in effect on the date of this
Agreement) of any existing Benefit Plan of the Company or any of its
Subsidiaries, (3) the repurchase or redemption of rights pursuant to
the terms (as in effect on the date of this Agreement) of the Company
Rights Agreement to the extent required by a court of competent
jurisdiction or (4) any periodic purchase of Company Common Stock for
allocation to employee's accounts occurring pursuant to the terms (as
in effect on the date of this Agreement) of any existing employee
stock purchase plan; (B) effect any reorganization or
recapitalization; or (C) split, combine or reclassify any of the
capital stock of, or other equity interests in, the Company or any of
its Subsidiaries or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for,
such Equity Securities;
(v) (A) offer, sell, issue or grant, or authorize the offering,
sale, issuance or grant, of any Equity Securities of the Company or
any of its Subsidiaries, other than issuances of Company Common Stock
(1) upon the exercise of Company Stock Options outstanding at the date
of this Agreement in accordance with the terms thereof (as in effect
on the date of this Agreement), (2) upon the expiration of any
restrictions upon issuance of any grant existing at the date of this
Agreement of
AGREEMENT AND PLAN OF MERGER
-28-
restricted stock or bonus stock pursuant to the terms (as in effect
on the date of this Agreement) of any Benefit Plans of the Company or
any of its Subsidiaries, (3) that constitute periodic issuances of
shares of Company Common Stock required by the terms (as in effect on
the date of this Agreement) of any Benefit Plans of the Company or any
of its Subsidiaries or (4) issuances of Company Common Stock pursuant
to the Company's dividend reinvestment program as in effect on the
date of this Agreement or (B) grant any Lien with respect to any
Equity Securities of any Subsidiary of the Company;
(vi) acquire or agree to acquire, by merging or consolidating
with, by purchasing an equity interest in or all or a portion of the
assets of, or in any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof or otherwise to acquire any assets of any other Person (other
than any such transaction that is not Material to the Company and the
purchase of assets from suppliers or vendors in the ordinary course of
business and consistent with past practice);
(vii) sell, lease, exchange or otherwise dispose of, or grant
any Lien with respect to, any of the assets of the Company or any of
its Subsidiaries that are Material to the Company, except for
dispositions of assets and inventories in the ordinary course of
business and consistent with past practice and dispositions of assets
and purchase money Liens incurred in connection with the original
acquisition of assets and secured by the assets;
(viii) adopt any amendments to its charter or bylaws or other
organizational documents that would alter the terms of its capital
stock or other equity interests or would have a Material Adverse
Effect on the Company;
(ix) (A) change any of its methods of accounting in effect at
October 31, 1997, except as may be required to comply with GAAP,
(B) make or rescind any election relating to Taxes (other than any
election that must be made periodically and that is made consistent
with past practice), (C) settle or compromise any claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or
controversy relating to Taxes or (D) change any of its methods of
reporting income or deductions for federal income tax purposes from
those employed in the preparation of the federal income tax returns
for the taxable year ended October 31, 1996, except, in each case, as
may be required by Law and for matters that could not reasonably be
expected to have a Material Adverse Effect on the Company;
(x) incur any obligations for borrowed money or purchase money
indebtedness that are Material to the Company, whether or not
evidenced by a note, bond, debenture or similar instrument, except
purchase money indebtedness as to which Liens may be granted pursuant
to Section 6.02(a)(vii), drawings under credit lines existing at the
date of this Agreement and borrowings evidenced by obligations
AGREEMENT AND PLAN OF MERGER
-29-
having a term of up to five years issued in the ordinary course of
business consistent with past practice.
(xi) subject to the fiduciary duties of its Board of Directors,
release any third Person from its obligations under any existing
standstill agreement relating to a Competing Transaction or otherwise
under any confidentiality agreement or similar agreement;
(xii) enter into any Material agreement with any third Person
that provides for an exclusive arrangement with that third Person;
(xiii) subject to the fiduciary duties of its Board of
Directors, amend, modify or terminate the Company's Rights Agreement
or redeem any rights to purchase shares of the Company's Series A
Junior Preferred Stock except as may be necessary to consummate the
transactions contemplated by this Agreement; or
(xiv) agree in writing or otherwise to do any of the
foregoing.
(b) The Parent covenants and agrees that, except as expressly set
forth in the Parent's Disclosure Letter, as expressly contemplated by this
Agreement or as otherwise consented to in writing by the Company, from the
date of this Agreement until the Effective Time, it will not do, and will
not permit any of its Subsidiaries to do, any of the following:
(i) (A) increase the compensation payable to or to become
payable to any director or executive officer, (B) except as otherwise
provided in Section 6.02(b)(ii), grant any severance or termination
pay; (C) amend or otherwise modify the terms of any outstanding
options, warrants or rights the effect of which shall be to make such
terms more favorable to the holders thereof; (D) take any action to
accelerate the vesting of any outstanding Parent Stock Options; (E)
amend or take any other actions to increase the amount or accelerate
the payment or vesting of any benefit under any Benefit Plan
(including the acceleration of vesting, waiving of performance
criteria or the adjustment of awards or any other actions permitted
upon a change in control of such party or permitted upon a filing
under Section 13(d) or 14(d) of the Exchange Act with respect to such
party) or (F) contribute, transfer or otherwise provide any cash,
securities or other property to any grantee, trust, escrow or other
arrangement that has the effect of providing or setting aside assets
for benefits payable pursuant to any termination, severance or other
change in control agreement; except (i) pursuant to any contract,
agreement or other legal obligation of the Parent or any of its
Subsidiaries existing at the date of this Agreement, (ii) in the case
of severance or termination payments, pursuant to the severance policy
of the Parent or its Subsidiaries existing at the date of this
Agreement, (iii) in the case of options, warrants, rights or Benefit
Plans, amendments required by ERISA or other applicable Law and (iv)
any such increase, grant, amendment, modification or action that,
taken together with all other such increases, grants, amendments,
modifications and
AGREEMENT AND PLAN OF MERGER
-30-
actions, does not result in a Material increase in compensation or
benefits expense to the Parent and its Subsidiaries, taken as a whole;
(ii) (A) enter into any employment or severance agreement with,
any director or executive officer, either individually or as part of a
class of similarly situated persons, or (B) establish, adopt or enter
into any new Benefit Plan; except employment and severance agreements
and Benefit Plans for the benefit of any newly employed or promoted
officers or employees, in which case the terms of such agreements and
Benefit Plans shall be reasonably consistent with those existing at
the date of this Agreement, and except Benefit Plans relating to
health and life insurance benefits established or adopted in the
ordinary course of business consistent with past practice;
(iii) declare or pay any extraordinary dividend on, or make
any other distribution in respect of outstanding shares of capital
stock, except for dividends by a wholly owned Subsidiary of the Parent
to the Parent or another wholly owned Subsidiary of the Parent and
cash dividends on the Parent Common Stock payable at approximately the
same times and in amounts per share as those paid on the Parent Common
Stock during the fiscal year ended December 31, 1997;
(iv) (A) redeem, purchase or acquire, or offer to purchase or
acquire, any outstanding Equity Securities of the Parent or any of its
Subsidiaries other than (1) any such acquisition by the Parent or any
of its wholly owned Subsidiaries directly from any wholly owned
Subsidiary of the Parent, (2) any repurchase, forfeiture or retirement
of shares of Parent Common Stock or Parent Stock Options occurring
pursuant to the terms (as in effect on the date of this Agreement) of
any existing Benefit Plan of the Parent or any of its Subsidiaries,
(3) the repurchase or redemption of rights pursuant to the terms (as
in effect on the date of this Agreement) of the Parent's Rights
Agreement to the extent required by a court of competent jurisdiction
or (4) any periodic purchase of Parent Common Stock for allocation to
employee's accounts occurring pursuant to the terms (as in effect on
the date of this Agreement) of any existing employee stock purchase
plan; (B) effect any reorganization or recapitalization; or (C) split,
combine or reclassify any of the Equity Securities of the Parent or
any of its Subsidiaries or issue or authorize or propose the issuance
of any other securities in respect of, in lieu of or in substitution
for, such Equity Securities;
(v) (A) offer, sell, issue or grant, or authorize the offering,
sale, issuance or grant, of any Equity Securities of the Parent or any
of its Subsidiaries, other than issuances of Parent Common Stock
(1) upon the exercise of Parent Stock Options outstanding at the date
of this Agreement in accordance with the terms thereof (as in effect
on the date of this Agreement), (2) as Parent Restricted Stock, (3)
upon the expiration of any restrictions upon issuance of any grant
existing at the date of this Agreement of restricted stock or bonus
stock pursuant to the terms (as in effect on the date of this
Agreement) of any Benefit Plans of the Parent or any of its
AGREEMENT AND PLAN OF MERGER
-31-
Subsidiaries or (4) that constitute periodic issuances of shares of
Parent Common Stock required by the terms (as in effect on the date of
this Agreement) of any Benefit Plan of the Parent or any of its
Subsidiaries; or (B) grant any Lien with respect to any Equity
Securities of any Subsidiary of the Parent;
(vi) acquire or agree to acquire, by merging or consolidating
with, by purchasing an equity interest in or all or a portion of the
assets of, or in any other manner, any business or any corporation,
partnership, association or other business organization or division
thereof, or otherwise to acquire any assets of any other Person (other
than any such transaction that is not Material to the Parent and the
purchase of assets from suppliers or vendors in the ordinary course of
business and consistent with past practice);
(vii) sell, lease, exchange or otherwise dispose of, or grant
any Lien with respect to, any of the assets of the Parent or any of
its Subsidiaries that are Material to the Parent, except for
dispositions of assets and inventories in the ordinary course of
business and consistent with past practice and dispositions of assets
and purchase money Liens incurred in connection with the original
acquisition of assets and secured by the assets;
(viii) adopt any amendments to its charter or bylaws or other
organizational documents that would alter the terms of its capital
stock or other equity interests or would have a Material Adverse
Effect on the Parent;
(ix) (A) change any of its methods of accounting in effect at
December 31, 1997, except as may be required to comply with GAAP,
(B) make or rescind any election relating to Taxes (other than any
election that must be made periodically that is made consistent with
past practice), (C) settle or compromise any claim, action, suit,
litigation, proceeding, arbitration, investigation, audit or
controversy relating to Taxes or (D) change any of its methods of
reporting income or deductions for federal income tax purposes from
those employed in the preparation of the federal income tax returns
for the taxable year ended December 31, 1996, except, in each case, as
may be required by Law and for matters that could not reasonably be
expected to have a Material Adverse Effect on the Parent;
(x) incur any obligations for borrowed money or purchase money
indebtedness that are Material to the Parent, whether or not evidenced
by a note, bond, debenture or similar instrument, except purchase
money indebtedness as to which Liens may be granted pursuant to
Section 6.02(b)(vii), drawings under credit lines existing at the date
of this Agreement and borrowings evidenced by obligations having a
term of up to five years issued in the ordinary course of business
consistent with past practice.
(xi) subject to the fiduciary duties of its Board of Directors,
release any third Person from its obligations under any existing
standstill agreement relating to
AGREEMENT AND PLAN OF MERGER
-32-
a Competing Transaction or otherwise under any confidentiality
agreement or similar agreement;
(xii) enter into any Material agreement with any third Person
that provides for an exclusive arrangement with that third Person;
(xiii) subject to the fiduciary duties of its Board of
Directors, amend, modify or terminate the Parent's Rights Agreement or
redeem any rights to purchase shares of the Parent's Series A Junior
Participating Preferred Stock except as may be necessary to consummate
the transactions contemplated by this Agreement; or
(xiv) agree in writing or otherwise to do any of the
foregoing.
SECTION 6.03 NO SOLICITATION BY THE COMPANY. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement pursuant to Section 9.01, the Company agrees that neither the Company
nor any of its Subsidiaries nor any of the directors and officers of the
Company or any of its Subsidiaries shall, and that it shall direct and use its
best efforts to cause the other employees, agents and representatives (including
investment bankers, attorneys and accountants) employed or retained by the
Company or any of its Subsidiaries not to, directly or indirectly, initiate,
solicit, encourage or otherwise facilitate (including by way of furnishing
information or assistance) any Acquisition Proposal or any inquiries that may
reasonably be expected to lead to an Acquisition Proposal. The Company further
agrees that neither the Company nor any of its Subsidiaries nor any of the
directors and officers of the Company or any of its Subsidiaries shall, and that
it shall direct and use its best efforts to cause the other employees, agents
and representatives (including investment bankers, attorneys and accountants)
employed or retained by the Company or any of its Subsidiaries not to, directly
or indirectly, engage in any discussion with or provide any confidential
information or data to any Person that may reasonably be expected to lead to an
Acquisition Proposal or engage in any negotiations concerning, or otherwise
facilitate any effort or attempt to make or implement, an Acquisition Proposal.
Notwithstanding the foregoing, the Board of Directors of the Company shall be
permitted (A), to the extent applicable, to comply, with regard to an
Acquisition Proposal, with Rule 14e-2(a) promulgated under the Exchange Act, (B)
in response to an unsolicited bona fide written Acquisition Proposal from any
Person, to recommend such Acquisition Proposal to the Company's stockholders or
withdraw or modify in any adverse manner its approval or recommendation of this
Agreement, or both, or (C) to engage in any discussions or negotiations with, or
provide any information to, any Person in response to an unsolicited bona fide
written Acquisition Proposal by any such Person, if and only to the extent that,
in any such case described in clause (B) or (C), (i) the Required Company Vote
shall not have been theretofore obtained, (ii) the Board of Directors of the
Company shall have concluded in good faith that such Acquisition Proposal (x) in
the case of that described in clause (B) above would, if consummated, constitute
a Superior Proposal or (y), in the case described in clause (C) above could
reasonably be expected to constitute a Superior Proposal, (iii) the Board of
Directors of the Company shall have determined in good faith on the basis of
advice of outside legal counsel that such action is necessary for such Board of
Directors to act in a manner consistent with its fiduciary duties under
applicable Law and (iv) prior to providing any information or data to any Person
in connection with an Acquisition Proposal by any such Person, the Board of
Directors shall
AGREEMENT AND PLAN OF MERGER
-33-
have received from such Person an executed confidentiality agreement
containing customary terms and provisions. The Company shall promptly notify
the Parent of such inquiries, proposals or offers received by, or any such
discussions or negotiations sought to be initiated or continued with, any of
its representatives indicating, in connection with such notice, the name of
such Person and the material terms and conditions of any proposals or offers.
The Company agrees that it will immediately cease and cause to be terminated
any existing activities, discussions or negotiations with any parties
conducted heretofore with respect to any Acquisition Proposal. Nothing in
this Section 6.03 shall permit the Parent or the Company to terminate this
Agreement (except as specifically provided in Article IX).
SECTION 6.04 NO SOLICITATION BY THE PARENT. From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement pursuant to Section 9.01, the Parent agrees that neither the Parent
nor any of its Subsidiaries nor any of the directors and officers of the Parent
or any of its Subsidiaries shall, and that it shall direct and use its best
efforts to cause the other employees, agents and representatives (including
investment bankers, attorneys and accountants) employed or retained by the
Parent or any of its Subsidiaries not to, directly or indirectly, initiate,
solicit, encourage or otherwise facilitate (including by way of furnishing
information or assistance) any Acquisition Proposal or any inquiries that may
reasonably be expected to lead to an Acquisition Proposal. The Parent further
agrees that neither the Parent nor any of its Subsidiaries nor any of the
directors and officers of the Parent or any of its Subsidiaries shall, and that
it shall direct and use its best efforts to cause the other employees, agents
and representatives (including investment bankers, attorneys and accountants)
employed or retained by the Parent or any of its Subsidiaries not to, directly
or indirectly, engage in any discussion with or provide any confidential
information or data to any Person that may reasonably be expected to lead to an
Acquisition Proposal or engage in any negotiations concerning, or otherwise
facilitate any effort or attempt to make or implement, an Acquisition Proposal.
Notwithstanding the foregoing, the Board of Directors of the Parent shall be
permitted (A), to the extent applicable, to comply, with regard to an
Acquisition Proposal, with Rule 14e-2(a) promulgated under the Exchange Act, (B)
in response to an unsolicited bona fide written Acquisition Proposal from any
Person, to recommend such Acquisition Proposal to the Parent's stockholders or
withdraw or modify in any adverse manner its approval or recommendation of this
Agreement, or both, or (C) to engage in any discussions or negotiations with, or
provide any information to, any Person in response to an unsolicited bona fide
written Acquisition Proposal by any such Person, if and only to the extent that,
in any such case described in clause (B) or (C), (i) the Required Parent Vote
shall not have been theretofore obtained, (ii) the Board of Directors of the
Parent shall have concluded in good faith that such Acquisition Proposal (x) in
the case of that described in clause (B) above would, if consummated, constitute
a Superior Proposal or (y), in the case described in clause (C) above could
reasonably be expected to constitute a Superior Proposal, (iii) the Board of
Directors of the Parent shall have determined in good faith on the basis of
advice of outside legal counsel that such action is necessary for such Board of
Directors to act in a manner consistent with its fiduciary duties under
applicable Law and (iv) prior to providing any information or data to any Person
in connection with an Acquisition Proposal by any such Person, the Board of
Directors shall have received from such Person an executed confidentiality
agreement containing customary terms and provisions. The Parent shall promptly
notify the Company of such inquiries, proposals or offers received by, or any
such discussions or negotiations sought to be initiated or continued with, any
of its representatives indicating, in
AGREEMENT AND PLAN OF MERGER
-34-
connection with such notice, the name of such Person and the material terms
and conditions of any proposals or offers. The Parent agrees that it will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with
respect to any Acquisition Proposal. Nothing in this Section 6.04 shall
permit the Parent or the Company to terminate this Agreement (except as
specifically provided in Article IX).
SECTION 6.05 ACCESS AND INFORMATION.
(a) Each of the Company and the Parent shall, and shall cause its
Subsidiaries to, (i) afford to the other and its officers, directors,
employees, accountants, consultants, legal counsel, agents and other
representatives (collectively, in the case of the Company, the "Company's
Representatives" and, in the case of the Parent, the "Parent's
Representatives") access, at reasonable times upon reasonable prior notice,
to the officers, employees, agents, properties, offices and other
facilities of the other and to its books and records and (ii) furnish
promptly to the other and its Representatives such information concerning
its business, properties, contracts, records and personnel (including
financial, operating and other data and information) as may be reasonably
requested, from time to time, by or on behalf of the other party.
(b) Each party to this Agreement (the Parent Companies being
considered one party for purposes of this Section 6.05(b)) shall hold in
confidence all nonpublic information received from the other party to this
Agreement until such time as such information is otherwise publicly
available. If this Agreement is terminated for any reason pursuant to
Article IX hereof, each of the Company and the Parent shall, within ten
days after a request therefor from the other, return or destroy (and
provide the other party within such ten-day time period with a certificate
of an executive officer certifying such destruction) all of the information
furnished to such party and its Representatives pursuant to the provisions
of Section 6.05(a) and all internal memoranda, analyses, evaluations and
other similar material containing, reflecting or prepared from any such
information, in each case other than information available to the general
public without restriction.
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01 MEETINGS OF STOCKHOLDERS.
(a) The Company shall, promptly after the date of this Agreement,
take all actions necessary in accordance with the GCL and its certificate
of incorporation and bylaws to convene a special meeting of the Company's
stockholders to consider approval and adoption of this Agreement and the
Merger (the "Company Stockholders' Meeting"), and the Company shall consult
with the Parent in connection therewith. Subject to Section 6.03 herein
and to the fiduciary duties of its Board of Directors, the Board of
Directors of the Company shall recommend to the stockholders of the Company
the approval of this Agreement and the Company shall use all reasonable
efforts to solicit from stockholders of
AGREEMENT AND PLAN OF MERGER
-35-
the Company proxies in favor of the approval and adoption of this Agreement
and the Merger and to secure the vote or consent of stockholders required
by the GCL and its certificate of incorporation and bylaws to approve and
adopt this Agreement and the Merger (the "Required Company Vote").
(b) The Parent shall, promptly after the date of this Agreement, take
all actions necessary in accordance with the GCL and its certificate of
incorporation and bylaws to convene a special meeting of the Parent's
stockholders to consider approval of the Charter Amendment and the Share
Issuance (the "Parent Stockholders' Meeting"), and the Parent shall consult
with the Company in connection therewith. Subject to Section 6.04 and to
the fiduciary duties of its Board of Directors, the Board of Directors of
the Parent shall recommend to the stockholders of the Parent the approval
of the Charter Amendment and the Share Issuance and the Parent shall use
all reasonable efforts to solicit from stockholders of the Parent proxies
in favor of the approval of the Charter Amendment and the Share Issuance
and to secure the vote or consent of the stockholders of the Parent
required by the GCL and the rules of the NYSE to approve the Charter
Amendment and the Share Issuance (the "Required Parent Vote").
SECTION 7.02 REGISTRATION STATEMENT; PROXY STATEMENTS.
(a) JOINT PROXY STATEMENT/PROSPECTUS. As promptly as practicable
after the execution of this Agreement, the Parent and the Company shall
jointly prepare and file with the Commission a joint proxy statement and
forms of proxies in connection with (i) the solicitation of proxies to be
voted at the Parent Stockholders' Meeting with respect to the Charter
Amendment and the Share Issuance and (ii) in connection with the
solicitation of proxies to be voted at the Company Stockholders' Meeting
with respect to this Agreement and the Merger (such joint proxy statement,
together with any amendments thereof or supplements thereto effected prior
to the effective date of the Registration Statement, being the "Joint Proxy
Statement"). At such time as the Parent and the Company deem appropriate,
the Parent shall prepare and file with the Commission a registration
statement on Form S-4 (such registration statement, together with any
amendments thereof or supplements thereto, being the "Registration
Statement"), containing a proxy statement for stockholders of the Parent
and a proxy statement/prospectus for stockholders of the Company in
connection with the registration under the Securities Act of the offering,
sale and delivery of the Parent Common Stock to be issued pursuant to this
Agreement in the Merger to stockholders of the Company (the "Joint Proxy
Statement/Prospectus"). The Joint Proxy Statement/Prospectus shall include
substantially all the information included in the Joint Proxy Statement, as
it shall be then amended. Each of the Parent Companies and the Company
shall furnish all information concerning it and the holders of its capital
stock as the other may reasonably request in connection with such actions.
Each of the Parent Companies and the Company will use all reasonable
efforts to have or cause the Registration Statement to become effective as
promptly as practicable, and shall take any action required to be taken
under any applicable federal or state securities Laws in connection with
the issuance of shares of Parent Common Stock in the Merger. As promptly as
practicable after the Registration Statement shall have become effective,
(x) the Parent shall mail the Joint
AGREEMENT AND PLAN OF MERGER
-36-
Proxy Statement/Prospectus to its stockholders entitled to notice of and
to vote at the Parent's Stockholders' Meeting and (y) the Company shall
mail the Joint Proxy Statement/Prospectus to its stockholders entitled
to notice of and to vote at the Company Stockholders' Meeting.
(b) COMPANY INFORMATION. The information supplied by the Company for
inclusion in the Registration Statement shall not, at the time the
Registration Statement is declared effective, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. The information supplied by the Company for inclusion in
(i) the Joint Proxy Statement/Prospectus shall not, at the date the Joint
Proxy Statement/Prospectus (or any supplement thereto) is first mailed to
stockholders of the Parent, at the date (if different) the Joint Proxy
Statement/Prospectus (or any supplement thereto) is first mailed to
stockholders of the Company, at the time of the Parent Stockholders'
Meeting, at the time (if different) of the Company Stockholders' Meeting or
at the Effective Time, 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 the light of the circumstances
under which they were made, not misleading. If at any time prior to the
Effective Time any event or circumstance relating to the Company or any of
its Subsidiaries, or its or their respective officers or directors, should
be discovered by the Company that should be set forth in an amendment to
the Registration Statement or a supplement to the Joint Proxy
Statement/Prospectus, the Company shall promptly inform the Parent. All
documents that the Company is responsible for filing with the Commission in
connection with the transactions contemplated herein shall comply as to
form in all material respects with the applicable requirements of the
Securities Act and the Regulations thereunder and the Exchange Act and the
Regulations thereunder.
(c) THE PARENT COMPANIES INFORMATION. The information supplied by
the Parent Companies for inclusion in the Registration Statement shall not,
at the time the Registration Statement is declared effective, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. Such information supplied by the Parent for
inclusion in (i) the Joint Proxy Statement/Prospectus shall not, at the
date the Joint Proxy Statement/Prospectus (or any supplement thereto) is
first mailed to stockholders of the Parent, at the date (if different) the
Joint Proxy Statement/Prospectus (or any supplement thereto) is first
mailed to stockholders of the Company, at the time of the Parent
Stockholders' Meeting, at the time (if different) of the Company
Stockholders' Meeting or at the Effective Time, 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
the light of the circumstances under which they are made, not misleading.
If at any time prior to the Effective Time any event or circumstance
relating to the Parent or any of its Affiliates, or to their respective
officers or directors, should be discovered by the Parent that should be
set forth in an amendment to the Registration Statement or a supplement to
the Joint Proxy Statement/Prospectus, the Parent shall promptly inform the
Company. All documents that the Parent Companies are responsible for
filing with the Commission in
AGREEMENT AND PLAN OF MERGER
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connection with the transactions contemplated hereby shall comply as to
form in all material respects with the applicable requirements of the
Securities Act and the Regulations thereunder and the Exchange Act and
the Regulations thereunder.
(d) No amendment or supplement to the Registration Statement, the
Joint Proxy Statement or the Joint Proxy Statement/Prospectus shall be made
by the Parent or the Company without the approval of the other party, which
shall not be unreasonably withheld or delayed. The Parent and the Company
each will advise the other, promptly after it receives notice thereof, of
the time when the Registration Statement has become effective or any
supplement or amendment has been filed, the issuance of any stop order
suspending the effectiveness of the Registration Statement or the
solicitation of proxies pursuant to the Joint Proxy Statement/Prospectus,
the suspension of the qualification of the Parent Common Stock issuable in
connection with the Merger for offering or sale in any jurisdiction, any
request by the staff of the Commission for amendment of the Registration
Statement, the Joint Proxy Statement or the Joint Proxy
Statement/Prospectus, the receipt from the staff of the Commission of
comments thereon or any request by the staff of the Commission for
additional information with respect thereto.
SECTION 7.03 APPROPRIATE ACTION; CONSENTS; FILINGS.
(a) The Company and the Parent shall each use all reasonable efforts
(i) to take, or to cause to be taken, all actions, and to do, or to cause
to be done, all things that, in either case, are necessary, proper or
advisable under applicable Law or otherwise to consummate and make
effective the transactions contemplated by this Agreement, (ii) to obtain
from any Governmental Authorities any Authorizations or Orders required to
be obtained by the Parent or the Company or any of their Subsidiaries in
connection with the authorization, execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated
hereby, including the Merger, (iii) to make all necessary filings, and
thereafter make any other required submissions, with respect to this
Agreement and the Merger required under (A) the Securities Act (in the case
of the Parent) and the Exchange Act and the Regulations thereunder, and any
other applicable federal or state securities Laws, (B) the HSR Act and
(C) any other applicable Law. The Parent and the Company shall cooperate
with each other in connection with the making of all such filings,
including providing copies of all such documents to the nonfiling party and
its advisors prior to filings and, if requested, shall accept all
reasonable additions, deletions or changes suggested in connection
therewith. The Company and the Parent shall furnish all information
required for any application or other filing to be made pursuant to any
applicable Law or any applicable Regulations of any Governmental Authority
(including all information required to be included in the Joint Proxy
Statement, the Joint Proxy Statement/Prospectus or the Registration
Statement) in connection with the transactions contemplated by this
Agreement.
(b) Each of the Company and the Parent shall give prompt notice to
the other of (i) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with
the Merger, (ii) any notice or other communication from any Governmental
Authority in connection with the Merger, (iii) any
AGREEMENT AND PLAN OF MERGER
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actions, suits, claims, investigations or proceedings commenced or
threatened in writing against, relating to or involving or otherwise
affecting the Company, the Parent or their Subsidiaries that relate to
the consummation of the Merger; and (iv) any change that is reasonably
likely to have a Material Adverse Effect on the Company or the Parent,
respectively, or is likely to delay or impede the ability of either the
Company or the Parent, respectively, to consummate the transactions
contemplated by this Agreement or to fulfill their respective
obligations set forth herein.
(c) The Parent Companies and the Company agree to cooperate and use
all reasonable efforts vigorously to contest and resist any action,
including legislative, administrative or judicial action, and to have
vacated, lifted, reversed or overturned any Order (whether temporary,
preliminary or permanent) of any Court or Governmental Authority that is in
effect and that restricts, prevents or prohibits the consummation of the
Merger or any other transactions contemplated by this Agreement, including
the vigorous pursuit of all available avenues of administrative and
judicial appeal and all available legislative action. Each of the Parent
Companies and the Company also agree to take any and all actions, including
the disposition of assets or the withdrawal from doing business in
particular jurisdictions, required by any Court or Governmental Authority
as a condition to the granting of any Authorization or Order necessary for
the consummation of the Merger or as may be required to avoid, lift, vacate
or reverse any legislative or judicial action which would otherwise cause
any condition to the Closing not to be satisfied; PROVIDED, HOWEVER, that
in no event shall either party take, or be required to take, any action
that could reasonably be expected to have a Material Adverse Effect on the
Combined Companies.
(d) (i) Each of the Company and the Parent shall give (or shall
cause their respective Subsidiaries to give) any notices to third
Persons, and use, and cause their respective Subsidiaries to use, all
reasonable efforts to obtain any consents from third Persons
(A) necessary, proper or advisable to consummate the transactions
contemplated by this Agreement or to satisfy any of the conditions set
forth in Article VIII, (B) otherwise required under any contracts,
licenses, leases or other agreements in connection with the
consummation of the transactions contemplated hereby or (C) required
to prevent a Material Adverse Effect on the Company from occurring
prior to or after the Effective Time or a Material Adverse Effect on
the Parent from occurring after the Effective Time.
(ii) If any party shall fail to obtain any consent from a third
Person described in subsection (d)(i) above, such party shall use all
reasonable efforts, and shall take any such actions reasonably
requested by the other parties, to limit the adverse effect upon the
Company and the Parent, their respective Subsidiaries, and their
respective businesses resulting, or that could reasonably be expected
to result after the Effective Time, from the failure to obtain such
consent.
AGREEMENT AND PLAN OF MERGER
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SECTION 7.04 AFFILIATES; POOLING; TAX TREATMENT.
(a) The Company shall use all reasonable efforts to obtain from any
Person who may be deemed to have become an Affiliate of the Company after
the date of this Agreement and on or prior to the Closing Date a written
agreement substantially in the form of Annex B hereto as soon as
practicable after attaining such status.
(b) The Parent shall use all reasonable efforts to obtain from any
Person who may be deemed to have become an Affiliate of the Parent after
the date of this Agreement and on or prior to the Closing Date a written
agreement substantially in the form of Annex C hereto as soon as
practicable after attaining such status.
(c) The Parent Companies shall not be required to maintain the
effectiveness of the Registration Statement for the purpose of resale by
stockholders of the Company who may be Affiliates of the Company pursuant
to Rule 145 under the Securities Act.
(d) Each party hereto shall use all reasonable efforts to cause the
Merger to be treated for financial accounting purposes as a Pooling
Transaction, and shall not take, and shall use all reasonable efforts to
prevent any Affiliate of such party from taking, any actions that could
prevent the Merger from being treated for financial accounting purposes as
a Pooling Transaction.
(e) Each party hereto shall use all reasonable efforts to cause the
Merger to qualify, and shall not take, and shall use all reasonable efforts
to prevent any Affiliate of such party from taking, any actions that could
prevent the Merger from qualifying, as a reorganization under the
provisions of Section 368(a) of the Code.
SECTION 7.05 PUBLIC ANNOUNCEMENTS. The Parent and the Company shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to the Merger and shall not issue any such press
release or make any such public statement prior to such consultation.
SECTION 7.06 NYSE LISTING. The Parent shall use all reasonable efforts
to cause the shares of the Parent Common Stock to be issued in the Merger to be
approved for listing (subject to official notice of issuance) on the NYSE prior
to the Effective Time.
SECTION 7.07 RIGHTS AGREEMENT; STATE TAKEOVER STATUTES. The Company
shall take all action (including, if necessary, redeeming all of the outstanding
rights issued pursuant to the Company Rights Agreement or amending or
terminating the Company Rights Agreement) so that the execution, delivery and
performance of this Agreement and the consummation of the Merger and the other
transactions contemplated hereby do not and will not result in the grant of any
rights to any Person under the Company Rights Agreement or enable or require any
outstanding rights to be exercised, distributed or triggered. The Company will
take all steps necessary to exempt the transactions contemplated by this
Agreement from Section 203 of the GCL.
AGREEMENT AND PLAN OF MERGER
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SECTION 7.08 COMFORT LETTERS.
(a) The Company shall use all reasonable efforts to cause Price
Waterhouse LLP, the Company's independent accountants, to deliver a letter
dated as of the date of the Joint Proxy Statement/Prospectus, and addressed
to the Company and the Parent, in form and substance reasonably
satisfactory to the Parent and customary in scope and substance for agreed
upon procedures letters delivered by independent public accountants in
connection with registration statements and proxy statements similar to the
Registration Statement and the Joint Proxy Statement/Prospectus.
(b) The Parent shall use all reasonable efforts to cause ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, the Parent's independent accountants, to deliver a letter
dated as of the date of the Joint Proxy Statement/Prospectus, and addressed
to the Parent and the Company, in form and substance reasonably
satisfactory to the Company and customary in scope and substance for agreed
upon procedures letters delivered by independent public accountants in
connection with registration statements and proxy statements similar to the
Registration Statement and the Joint Proxy Statement/Prospectus.
SECTION 7.09 ASSUMPTION OF OBLIGATIONS TO ISSUE STOCK AND OBLIGATIONS OF
EMPLOYEE BENEFIT PLANS; EMPLOYEES.
(a) At the Effective Time, automatically and without any action on
the part of the holder thereof, each outstanding Company Stock Option shall
be assumed by the Parent and shall become an option to purchase that number
of shares of the Parent Common Stock obtained by multiplying the number of
shares of Company Common Stock issuable upon the exercise of such option by
the Common Stock Exchange Ratio at an exercise price per share equal to the
per share exercise price of such option divided by the Common Stock
Exchange Ratio and otherwise upon the same terms and conditions as such
outstanding option to purchase Company Common Stock; PROVIDED, HOWEVER,
that in the case of any option to which Section 421 of the Internal Revenue
Code applies by reason of the qualifications under Section 422 or 423 of
such Code, the exercise price, the number of shares purchasable pursuant to
such option and the terms and conditions of exercise of such option shall
be determined in a manner that complies with Section 424(a) of the Code.
(b) On or prior to the Effective Time, the Company shall take or
cause to be taken all such actions, reasonably satisfactory to the Parent,
as may be necessary or desirable in order to authorize the transactions
contemplated by subsection (a) of this Section.
(c) The Parent shall take all corporate actions necessary to reserve
for issuance a sufficient number of shares of Parent Common Stock for
delivery upon exercise of the Company Stock Options assumed by the Parent
pursuant to Section 7.09(a) above and shares of Parent Common Stock
otherwise to be issued under other Company Stock Plans.
(d) As promptly as practicable after the Effective Time, the Parent
shall file one or more Registration Statements on Form S-8 (or any
successor or other appropriate form)
AGREEMENT AND PLAN OF MERGER
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with respect to the shares of Parent Common Stock subject to the Company
Stock Options or otherwise issuable under other Company Stock Plans and
shall use its reasonable efforts to maintain the effectiveness of such
registration statement or registration statements (and maintain the
current status of the prospectus or prospectuses contained therein)
for so long as such options remain outstanding and to comply with
applicable state securities and blue sky laws.
(e) Except as provided herein or as otherwise agreed to by the
parties, each of the Company Stock Plans providing for the issuance or
grant of Company Stock Options or Company Common Stock shall be assumed as
of the Effective Time by the Parent with such amendments thereto as may be
required to reflect the Merger.
(f) Provided that the Parent shall not be obligated with respect to
any action taken by the Company or its Subsidiaries with respect to the
Benefit Plans of the Company or its Subsidiaries in violation of the
provisions of Section 6.02(a), the Parent hereby agrees to guarantee from
and after the Effective Time and to cause the Surviving Corporation and
each Subsidiary of the Surviving Corporation to honor and perform all
obligations of the Surviving Corporation and each Subsidiary of the
Surviving Corporation under all Benefit Plans of the Company and such
Subsidiaries and under any agreement or arrangement implemented as provided
in the Company's Disclosure Letter or as otherwise contemplated by this
Agreement and the Company's Disclosure Letter.
(g) The Parent shall and shall cause the Surviving Corporation and
each Subsidiary of the Surviving Corporation to take all corporate action
necessary to:
(i) maintain with respect to eligible participants (as of the
Effective Time) the Company's retiree medical plan, except to the
extent that any modifications thereto are consistent with changes in
the medical plans provided by the Parent and its subsidiaries for
similarly situated active employees;
(ii) maintain the "pension equalizer" contributions to the
Company Retirement Savings Plan, the related nonqualified savings plan
or a successor plan that would provide at least the same level of
benefits as the "pension equalizer" arrangement, with respect to
employees who are eligible participants as of the Effective Time,
after taking into account any retirement benefits provided to such
participants by any plans or programs of the Parent or any of its
Subsidiaries after the Effective Time;
(iii) maintain the Company Executive Deferred Compensation
Plan, except that no additional employee deferrals shall be made under
such plan after the Effective Time and valuation with respect to stock
deferrals existing at such time shall thereafter be based upon the
Parent Common Stock;
AGREEMENT AND PLAN OF MERGER
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(iv) maintain the Company's Executive Life Insurance Program,
except that after the Effective Time no additional participants shall
be covered by such program;
(v) maintain the Company's Supplemental Executive Retirement
Plan with respect to employees that are eligible participants as of
the Effective Time, but the offset under such plan shall take into
account any employer provided retirement benefits under any plans or
programs of the Parent or any of its Subsidiaries after the Effective
Time;
(vi) administer the Performance Stock Unit Program and the
Incentive Stock Unit Plan of the Company in accordance with their
terms, with such adjustments in the performance targets as may be
necessary to reflect the Merger, but no new grants of awards shall be
made under such plans; and
The Company represents that true and complete copies of all of the plans
and programs referred to in this Section 7.09(g) have been delivered to the
Parent.
(h) Subject to Section 7.09(g), until the third anniversary of the
Effective Time (the "Benefits Maintenance Period") the Parent shall and
shall cause the Surviving Corporation and each Subsidiary of the Surviving
Corporation to provide each employee of the Company or any of its
Subsidiaries at the Effective Time ("Company Participants") with employee
benefits and compensation after the Effective Time that are substantially
comparable to similarly situated employees of the Parent and its
Subsidiaries. At the Effective Time, the Parent shall adopt the severance
program described in Section 7.09(h) of the Company's Disclosure Letter and
shall maintain such program for the period set forth in such description.
(i) If Company Participants are included in any benefit plan,
including provision for vacation, of the Parent, the Surviving Corporation
or their Subsidiaries, the Company Participants shall receive credit for
service prior to the Effective Time with the Company and its Subsidiaries
to the same extent such service was counted under similar Benefit Plans of
the Company for purposes of determining eligibility to participate,
vesting, eligibility for retirement and, with respect to vacation,
disability and severance, benefit accrual. If Company Participants or
their dependents are included in any medical, dental or health plan (a
"Successor Plan") other than the plan or plans they participated in at the
Effective Time (a "Predecessor Plan") any such Successor Plan shall not
include pre-existing condition exclusions, except to the extent such
exclusions were applicable under the applicable Predecessor Plan and shall
credit co-pays and deductibles to the same extent credited under the
Predecessor Plan.
(j) Except as otherwise specifically set forth above, nothing
contained herein shall be construed as requiring Parent to continue any
specific Benefit Plan, or to continue the employment of any specific
person.
AGREEMENT AND PLAN OF MERGER
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SECTION 7.10 INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) To the extent, if any, not provided by an existing right of
indemnification or other agreement or policy, from and after the Effective
Time, the Surviving Corporation shall, to the fullest extent permitted by
applicable law, indemnify, defend and hold harmless each person who is now,
or has been at any time prior to the date hereof, or who becomes prior to
the Effective Time, an officer or director of the Company or any of its
Subsidiaries (each an "Indemnified Party" and collectively, the
"Indemnified Parties") against (i) all losses, expenses (including
reasonable attorney's fees and expenses), claims, damages or liabilities
or, subject to the proviso of the next succeeding sentence, amounts paid in
settlement, arising out of actions or omissions occurring at or prior to,
at or after the Effective Time (and whether asserted or claimed prior to,
at or after the Effective Time) that are, in whole or in part, based on or
arising out of the fact that such person is or was a director or officer of
such party (the "Indemnified Liabilities"), and (ii) all Indemnified
Liabilities to the extent they are based on or arise out of or pertain to
the transactions contemplated by this Agreement. In the event of any such
loss, expense, claim, damage or liability arising before the Effective
Time, (i) the Surviving Corporation shall pay the reasonable fees and
expenses of counsel selected by the Indemnified Parties, which counsel
shall be reasonably satisfactory to the Surviving Corporation, promptly
after statements therefor are received and otherwise advance to such
Indemnified Party upon request reimbursement of documented expenses
reasonably incurred, in either case to the extent not prohibited by the
GCL, (ii) the Parent and the Surviving Corporation will cooperate in the
defense of any such matter and (iii) any determination required to be made
with respect to whether an Indemnified Party's conduct complies with the
standards set forth under the GCL and the certificate of incorporation or
by-laws of the Surviving Corporation shall be made by independent counsel
mutually acceptable to the Parent and the Indemnified Party; PROVIDED,
HOWEVER, that the Parent and the Surviving Corporation shall not be liable
for any settlement affected without their written consent (which consent
shall not be unreasonably withheld). The Indemnified Parties as a group
may retain only one law firm with respect to each related matter except to
the extent there is, in the opinion of counsel to an Indemnified Party,
under applicable standards of professional conduct, a conflict on any
significant issue between positions of such Indemnified Party and any other
Indemnified Party or Indemnified Parties.
(b) The Parent agrees to guarantee unconditionally the performance of
the Surviving Corporation's obligations pursuant to Section 7.10(a).
(c) For a period of six years after the Effective Time, the Surviving
Corporation shall cause to be maintained in effect policies of directors
and officers' liability insurance maintained by the Company for the benefit
of those persons who are currently covered by such policies on terms no
less favorable than the terms of such current insurance coverage; PROVIDED,
HOWEVER, that the Surviving Corporation shall not be required to expend in
any year an amount in excess of 200% of the annual aggregate premiums
currently paid by the Company for such insurance; and PROVIDED, FURTHER,
that if the annual premiums of such insurance coverage exceed such amount,
the Surviving Corporation shall be obligated to
AGREEMENT AND PLAN OF MERGER
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obtain a policy with the best coverage available, in the reasonable
judgment of the Board of Directors of the Parent, for a cost not
exceeding such amount.
(d) If the Parent or any of its successors or assigns (i)
consolidates with or merges into any other person or entity and shall not
be the continuing or surviving corporation or entity of such consolidation
or merger or (ii) transfers all of substantially all of its properties and
assets to any person or entity, then and in either such case, proper
provisions shall be made so that the successors and assigns of the Parent
shall assume the obligations set forth in this Section 7.10.
(e) To the fullest extent permitted by law, from and after the
Effective Time, all rights to indemnification as of the date hereof in
favor of the employees, agents, directors and officers of the Company and
its Subsidiaries with respect to their activities as such prior to the
Effective Time, as provided in their respective certificates of
incorporation and by-laws in effect on the date thereof, or otherwise in
effect on the date hereof, shall survive the Merger and shall continue in
full force and effect for a period of not less than six years from the
Effective Time.
(f) The provisions of this Section 7.10 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party, his or her
heirs and his or her representatives.
SECTION 7.11 NEWCO. Prior to the Effective Time, Newco shall not conduct
any business or make any investments other than as specifically contemplated by
this Agreement and will not have any assets (other than the minimum amount of
cash required to be paid to Newco for the valid issuance of its stock to the
Parent).
SECTION 7.12 EVENT NOTICES. From and after the date of this Agreement
until the Effective Time, each party hereto shall promptly notify the other
party hereto of the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would be likely to cause any condition to the obligations
of the latter party to effect the Merger and the other transactions contemplated
by this Agreement not to be satisfied. No delivery of any notice pursuant to
this Section 7.12 shall cure any breach of any representation or warranty of the
party giving such notice contained in this Agreement or otherwise limit or
affect the remedies available hereunder to the party receiving such notice.
SECTION 7.13 PARENT BOARD OF DIRECTORS; COMMITTEES.
(a) The Parent's Board of Directors will take such action as may be
necessary to cause the number of directors comprising the Board of
Directors of the Parent at the Effective Time to be 14 persons, nine of
whom shall be current members of the Board of Directors of the Parent
including ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and five of whom shall be current members of
the Board of Directors of the Company including ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇. The
specific members of the Parent's Board of Directors will be chosen by a
committee
AGREEMENT AND PLAN OF MERGER
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consisting of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and the current
chairman or the Nominating Committee of each of the Parent and the
Company.
(b) At or promptly after the Closing, the Parent's Board of Directors
will take such action as may be necessary so that one or more of such
designees of the Company will be added to each committee of the Parent's
Board of Directors on an approximate proportional basis.
SECTION 7.14 TRANSITION MANAGEMENT. As soon as practicable after the
date of this Agreement, the parties shall create a special transition management
task force (the "Task Force"), which shall be comprised of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. The Task Force shall
examine various alternatives regarding the manner in which to best organize the
business of the Combined Companies after the Effective Time.
SECTION 7.15 EMPLOYMENT CONTRACTS. The Parent shall, as of or prior to
the Effective Time, enter into employment contracts with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ on terms reasonably acceptable to the parties pursuant to which
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall hold the position of Chairman of the Board of
Directors of the Parent and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall hold the office of Vice
Chairman of the Parent and at the Effective Time each of Messrs. Bradford and
▇▇▇▇▇▇ shall be appointed to the Parent's Executive Committee, a non-board
committee comprised of executive officers of the Parent, which after the
Effective Time shall initially consist of such persons and Messrs. ▇▇▇▇▇▇ and
▇▇▇▇▇.
SECTION 7.16 WAIVER BY COMPANY JOINT VENTURE PARTNERS. The Company shall
not amend or modify the written waivers it has received from each of the Company
Joint Venture Partners of any and all rights such partners may have to purchase
any interest of the Company in any of the Company Joint Ventures that arise as a
result of the execution of this Agreement or the consummation of any of the
transactions contemplated hereby.
SECTION 7.17 TRANSFER TAXES. The Company and the Parent shall cooperate
in the preparation, execution and filing of all returns, questionnaires,
applications or other documents regarding any real property transfer or gains,
sales, use, transfer and stamp taxes, any transfer, recording, registration and
other fees and any similar taxes that become payable in connection with the
transactions contemplated by this Agreement ("Transfer Taxes"). The Company
shall pay or cause to be paid any such Transfer Taxes.
ARTICLE VIII
CLOSING CONDITIONS
SECTION 8.01 CONDITIONS TO OBLIGATIONS OF EACH PARTY UNDER THIS
AGREEMENT. The respective obligations of each party to effect the Merger and
the other transactions contemplated hereby shall be subject to the satisfaction
at or prior to the Closing of the following conditions, any or all of which may
be waived by the parties hereto, in whole or in part, to the extent permitted by
applicable Law:
AGREEMENT AND PLAN OF MERGER
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(a) EFFECTIVENESS OF THE REGISTRATION STATEMENT. The Registration
Statement shall have been declared effective by the Commission under the
Securities Act, and the pro forma financial statements contained in the
Registration Statement at the effective date thereof shall reflect the
Merger for financial accounting purposes as a Pooling Transaction. No stop
order suspending the effectiveness of the Registration Statement shall have
been issued by the Commission and no proceedings for that purpose shall
have been initiated by the Commission.
(b) STOCKHOLDER APPROVAL. This Agreement and the Merger shall have
been approved and adopted by the requisite vote of the stockholders of the
Company as required by the GCL. The Charter Amendment and the Share
Issuance shall have been approved and adopted by the requisite vote of the
stockholders of the Parent as required by the GCL and the rules of the
NYSE.
(c) NO ORDER. No Court or Governmental Authority shall have enacted,
issued, promulgated, enforced or entered any Law, Regulation or Order
(whether temporary, preliminary or permanent) that is in effect and has the
effect of making the Merger illegal or otherwise prohibiting consummation
of the Merger.
(d) HSR ACT. The waiting period under the HSR Act applicable to the
Merger shall have expired or been terminated.
(e) FOREIGN GOVERNMENTAL AUTHORITIES. The applicable waiting period
under any competition Laws, Regulations and Orders of foreign Governmental
Authorities, as set forth in the Parent's Disclosure Letter and the
Company's Disclosure Letter, shall have expired or been terminated.
(f) POOLING OF INTERESTS. The Parent and the Company shall have been
advised in writing by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP on the date upon which the
Effective Time is to occur that, in reliance in part on the concurrent
opinion of Price Waterhouse LLP or its successor that the Company is a
"poolable entity," the Merger should, for financial accounting purposes, be
treated as a Pooling Transaction.
(g) The shares of Parent Common Stock to be issued in the Merger
shall have been listed, subject to official notice of issuance, on the
NYSE.
SECTION 8.02 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE PARENT
COMPANIES. The obligations of the Parent Companies to effect the Merger and the
other transactions contemplated hereby shall be subject to the satisfaction at
or prior to the Closing of the following conditions, any or all of which may be
waived by the Parent Companies, in whole or in part, to the extent permitted by
applicable Law:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Company contained in this Agreement that is qualified as
to materiality shall be true and correct, and each of such representations
and warranties that is not so qualified shall be
AGREEMENT AND PLAN OF MERGER
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true and correct in all material respects, as of the date of this Agreement
and as of the Closing Date as though made again on and as of the Closing
Date. The Parent Companies shall have received a certificate of the Chief
Executive Officer and the Chief Financial Officer of the Company, dated
the Closing date, to such effect.
(b) AGREEMENTS AND COVENANTS. The Company shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Closing Date. The Parent Companies shall have received a
certificate of the President and the Chief Executive Officer of the
Company, dated the Closing date, to such effect.
(c) TAX OPINION. The Parent shall have received the opinion dated as
of the Closing Date of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. to the effect that (i) the
Merger will constitute a reorganization under section 368(a) of the Code,
(ii) the Parent, the Company and Newco will each be a party to that
reorganization, and (iii) no gain or loss will be recognized by the Parent,
the Company or Newco by reason of the Merger. In rendering such opinion,
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P. shall receive and may rely upon representations
contained in certificates of the Company and the Parent substantially in
the form of Annexes D and E hereto.
SECTION 8.03 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY. The
obligations of the Company to effect the Merger and the other transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Closing of the following conditions, any or all of which may be waived by the
Company, in whole or in part, to the extent permitted by applicable Law:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Parent contained in this Agreement that is qualified as
to materiality shall be true and correct, and each of such representations
and warranties that is not so qualified shall be true and correct in all
material respects, as of the date of this Agreement and as of the Closing
Date as though made again on and as of the Closing Date. The Company shall
have received a certificate of the Chairman of the Board, the President or
any Vice President and the Chief Financial Officer of each of the Parent
Companies, dated the Closing date, to such effect.
(b) AGREEMENTS AND COVENANTS. The Parent Companies shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by
them on or prior to the Closing Date. The Company shall have received a
certificate of the Chairman of the Board, the President or any Vice
President and the Chief Financial Officer of each of the Parent Companies,
dated the Closing Date, to such effect.
(c) TAX OPINION. The Company shall have received the opinion dated
as of the Closing Date of Weil, Gotshal & ▇▇▇▇▇▇ LLP to the effect that
(i) the Merger will constitute a reorganization under section 368(a) of the
Code, (ii) the Parent, the Company and Newco will each be a party to that
reorganization, and (iii) no gain or loss will be recognized by the
AGREEMENT AND PLAN OF MERGER
-48-
stockholders of the Company upon the receipt of shares of the Parent Common
Stock in exchange for shares of Company Common Stock pursuant to the Merger
except with respect to any cash received in lieu of fractional share
interests. In rendering such opinion, Weil, Gotshal & ▇▇▇▇▇▇ LLP shall
receive and may rely upon the representations contained in certificates of
the Company and the Parent substantially in the form of Annexes D and E
hereto.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.01 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of this Agreement
and the Merger by the stockholders of the Company and before or after approval
of the Charter Amendment and the Share Issuance by the stockholders of the
Parent:
(a) by mutual consent of the Parent and the Company;
(b) by the Parent, upon a breach of any representation, warranty,
covenant or agreement on the part of the Company set forth in this
Agreement or if any representation or warranty of the Company shall have
become untrue, in either case such that the conditions set forth in
Section 8.02(a) or Section 8.02(b) would not be satisfied and such breach
or untruth would result in a Material Adverse Effect on the Company (a
"Terminating Company Breach"); PROVIDED that, if such Terminating Company
Breach is curable by the Company through the exercise of its reasonable
efforts and for so long as the Company continues to exercise such
reasonable efforts, the Parent may not terminate this Agreement under this
Section 9.01(b);
(c) by the Company, upon a breach of any representation, warranty,
covenant or agreement on the part of the Parent Companies set forth in this
Agreement or if any representation or warranty of the Parent Companies
shall have become untrue, in either case, such that the conditions set
forth in Section 8.03(a) or Section 8.03(b) would not be satisfied and such
breach or untruth would result in a Material Adverse Effect on the Parent
(a "Terminating Parent Breach"); PROVIDED that, if such Terminating Parent
Breach is curable by the Parent Companies through the exercise of their
reasonable efforts and for so long as the Parent Companies continue to
exercise such reasonable efforts, the Company may not terminate this
Agreement under this Section 9.01(c);
(d) by either the Parent or the Company, if there shall be any final
and nonappealable Order that prevents the consummation of the Merger,
unless the party relying on such Order has not complied with its
obligations under Section 7.03;
(e) by either the Parent or the Company, if the Merger shall not have
been consummated before December 31, 1998; PROVIDED, HOWEVER, that this
Agreement may be extended by written notice of either the Parent or the
Company to a date not later than
AGREEMENT AND PLAN OF MERGER
-49-
March 31, 1999, if the Merger shall not have been consummated as a result
of the Company or the Parent Companies having failed by December 31, 1998
to receive all required Authorizations and Orders with respect to the
Merger or as a result of the entering of an Order by a Court or
Governmental Authority; and PROVIDED, FURTHER, that, prior to March 31,
1999, no party shall be entitled to terminate this Agreement pursuant to
this Section 9.01(e) if such party is in Material breach of any
representation, warranty, covenant or agreement on the part of such party
set forth in this Agreement;
(f) by either the Parent or the Company, if this Agreement shall fail
to receive the Required Company Vote by the stockholders of the Company at
the Company Stockholders' Meeting;
(g) by either the Parent or the Company, if the Charter Amendment and
the Share Issuance shall fail to receive the Required Parent Vote by the
stockholders of the Parent at the Parent Stockholders' Meeting;
(h) by the Company, at any time prior to receipt of the Required
Company Vote, upon 72 hours prior written notice to the Parent, if (i) the
Board of Directors of the Company shall have concluded in good faith based
on advice of outside counsel that such action is necessary to act in a
manner consistent with its fiduciary duties under applicable law and
(ii) the Parent does not make, within 72 hours of receipt of the Company's
written notification of its intention to terminate this Agreement, an offer
that the Board of Directors of the Company determines, in good faith after
consultation with its financial advisors, is at least as favorable, from a
financial point of view, to the stockholders of the Company as any Superior
Proposal considered by the Board of Directors in making its determination
under clause (i). The Company agrees (x) that it will not enter into a
binding agreement referred to in clause (ii) above until at least 72 hours
after it has provided the notice to the Parent required thereby and (y) to
notify the Parent promptly if its intention to enter into a written
agreement referred to in its notification shall change at any time after
giving such notification;
(i) by the Parent, at any time prior to receipt of the Required
Parent Vote, upon 72 hours prior written notice to the Company, if (i) the
Board of Directors of the Parent shall have concluded in good faith based
on advice of outside counsel that such action is necessary to act in a
manner consistent with its fiduciary duties under applicable law and
(ii) the Company does not make, within 72 hours of receipt of the Parent's
written notification of its intention to terminate this Agreement, an offer
that the Board of Directors of the Parent determines, in good faith after
consultation with its financial advisors, is at least as favorable, from a
financial point of view, to the stockholders of the Parent as any Superior
Proposal considered by the Board of Directors in making its determination
under clause (i). The Parent agrees (x) that it will not enter into a
binding agreement referred to in clause (ii) above until at least 72 hours
after it has provided the notice to the Company required thereby and (y) to
notify the Company promptly if its intention to enter into a written
agreement referred to in its notification shall change at any time after
giving such notification; or
AGREEMENT AND PLAN OF MERGER
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(j) by the Parent, upon two Business Days' prior written notice to
the Company, if the Board of Directors of the Company (A) shall withdraw or
modify in any manner adverse to the Parent the Board's approval or
recommendation of this Agreement and the Merger, (B) shall approve or
recommend any Superior Proposal or (C) shall resolve to take any of the
actions specified in clause (A) or (B).
(k) by the Company, upon two Business Days' prior written notice to
the Parent, if the Board of Directors of the Parent (A) shall withdraw or
modify in any manner adverse to the Company the Board's approval or
recommendation of the Charter Amendment and the Share Issuance, (B) shall
approve or recommend any Superior Proposal or (C) shall resolve to take any
of the actions specified in clause (A) or (B).
The right of any party hereto to terminate this Agreement pursuant to this
Section 9.01 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any Person
controlling any such party or any of their respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.
SECTION 9.02 EFFECT OF TERMINATION. Except as provided in Section 9.05
or Section 10.01 of this Agreement, in the event of the termination of this
Agreement pursuant to Section 9.01, this Agreement shall forthwith become void,
there shall be no liability on the part of the Parent Companies or the Company
or any of their respective officers or directors to the other and all rights and
obligations of any party hereto shall cease, except that nothing herein shall
relieve any party from liability for any misrepresentation or breach of any
covenant or agreement under this Agreement.
SECTION 9.03 AMENDMENT. This Agreement may be amended by the parties
hereto by action authorized by their respective Boards of Directors at any time
prior to the Effective Time; PROVIDED, HOWEVER, that, after approval of the
Merger by the stockholders of the Company, or approval of the Charter Amendment
and Share Issuance by the stockholders of the Parent, no amendment may be made
that would reduce the amount or change the type of consideration into which each
share of Company Common Stock shall be converted pursuant to this Agreement upon
consummation of the Merger or that would otherwise require the approval of the
stockholders of the Company or the Parent under the GCL. This Agreement may not
be amended except by an instrument in writing signed by the parties hereto.
SECTION 9.04 WAIVER. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance by the other party
with any of the agreements or conditions contained herein. Any such extension
or waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby. For purposes of this Section 9.04,
the Parent Companies shall be deemed to be one party.
AGREEMENT AND PLAN OF MERGER
-51-
SECTION 9.05 FEES, EXPENSES AND OTHER PAYMENTS.
(a) Except as provided in this Section 9.05, all Expenses incurred by
the parties hereto shall be borne solely and entirely by the party which
has incurred such Expenses; PROVIDED, HOWEVER, that the allocable share of
the Parent Companies as a group and the Company for all Expenses related to
printing, filing and mailing the Registration Statement, the Joint Proxy
Statement and the Joint Proxy Statement/Prospectus and all Commission and
other regulatory filing fees incurred in connection with the Registration
Statement, the Joint Proxy Statement and the Joint Proxy
Statement/Prospectus shall be one-half each; and PROVIDED, FURTHER,
that the Parent may, at its option, but subject to Section 7.04(e), pay
any Expenses of the Company that are solely and directly related to the
Merger.
(b) If this Agreement is terminated by the Parent pursuant to Section
9.01(j) (change of recommendation), then the Company shall pay to the
Parent a termination fee equal to $50 million.
(c) If this Agreement is terminated by the Company pursuant to
Section 9.01(k) (change of recommendation), then the Parent shall pay to
the Company a termination fee equal to $50 million.
(d) If (i) this Agreement is terminated pursuant to (A) Section
9.01(b) (breach), (B) Section 9.01(h) (fiduciary out), (C) Section 9.01(f)
(failure to obtain stockholder approval), or (D) Section 9.01(j) (change of
recommendation), (ii) at the time of such termination (or in the case of
clause (i)(C) above, prior to the Company Stockholders' Meeting), there
shall have been an Acquisition Proposal involving the Company or any of its
Subsidiaries that, at the time of such termination (or such meeting, as the
case may be), shall not have been (x) rejected by the Company and its Board
of Directors or (y) withdrawn by the Person making such Acquisition
Proposal and (iii) within twelve months of any such termination, the
Company or any of its Subsidiaries accepts a written offer or enters into a
written agreement to consummate an Acquisition Proposal with such Person or
any of its Affiliates and (iv) the Company or such Subsidiary is thereafter
acquired, through merger, consolidation, share exchange, sale of assets
or otherwise, by such Person or any of its Affiliates (a "Company
Acquisition"), then the Company (jointly and severally with its
Subsidiaries) shall at the closing (and as a condition of such closing) of
such Company Acquisition or of such Acquisition Proposal, pay the Parent
immediately a termination fee of $175 million.
(e) If (i) this Agreement is terminated pursuant to (A) Section
9.01(c) (breach), (B) Section 9.01(i) (fiduciary out), (C) Section 9.01(g)
(failure to obtain stockholder approval), or (D) Section 9.01(k) (change of
recommendation), (ii) at the time of such termination (or in the case of
clause (i)(C) above, prior to the Parent Stockholders' Meeting), there
shall have been an Acquisition Proposal involving the Parent or any of its
Subsidiaries that, at the time of such termination (or such meeting, as the
case may be), shall not have been (x) rejected by the Parent and its Board
of Directors or (y) withdrawn by the Person making such Acquisition
Proposal and (iii) within twelve months of any such termination,
AGREEMENT AND PLAN OF MERGER
-52-
the Parent or any of its Subsidiaries accepts a written offer or enters
into a written agreement to consummate an Acquisition Proposal with such
Person or any of its Affiliates and (iv) the Parent or such Subsidiary is
thereafter acquired, through merger, consolidation, share exchange, sale of
assets or otherwise, by such Person or any of its Affiliates (a "Parent
Acquisition"), then the Parent (jointly and severally with its
Subsidiaries) shall at the closing (and as a condition of such closing) of
such Parent Acquisition or of such Acquisition Proposal, pay the Company
immediately a termination fee of $175 million.
(f) If either party shall fail to pay the other party any fee or
other amount due hereunder, the failing party shall pay the costs and
expenses (including legal fees and expenses) of the other party in
connection with any action, including the filing of any lawsuit or other
legal action, taken to collect payment, together with interest on the
amount of any unpaid fee at the publicly announced prime interest rate of
Citibank N.A., in effect from time to time, from the date such fee or other
payment was required to be paid until payment in full.
(g) Notwithstanding anything herein to the contrary, the aggregate
amount payable to the Parent pursuant to Section 9.05 shall not exceed $175
million exclusive of any amounts paid pursuant to Section 9.05(f).
(h) Notwithstanding anything herein to the contrary, the aggregate
amount payable to the Company pursuant to Section 9.05 shall not exceed
$175 million exclusive of any amounts paid pursuant to Section 9.05(f).
(i) Subject to the following sentences, the payments required by this
Section 9.05 shall constitute liquidated damages in full and complete
satisfaction of, and shall be the sole and exclusive remedy of the Parent
or the Company, as the case may be, for, any loss, liability, damage or
claim arising out of or in conjunction with the transactions contemplated
by this Agreement, including any termination of this Agreement pursuant to
Section 9.01 and shall not constitute a penalty. Notwithstanding the
foregoing sentence, if (i) this Agreement is terminated by the Parent as a
result of a willful breach of any representation, warranty, covenant or
agreement by the Company and no termination fee is required to be paid
pursuant to Section 9.05(d), the Parent may pursue any remedies available
to it at law or in equity and shall be entitled to recover such additional
amounts as the Parent may be entitled to receive at law or in equity or
(ii) this Agreement is terminated by the Company as a result of a willful
breach of any representation, warranty, covenant or agreement by the Parent
and no termination fee is required to be paid pursuant to Section 9.05(e),
the Company may pursue any remedies available to it at law or in equity and
shall be entitled to recover such additional amounts as the Parent may be
entitled to receive at law or in equity.
AGREEMENT AND PLAN OF MERGER
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ARTICLE X
GENERAL PROVISIONS
SECTION 10.01 EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) Except as set forth in Section 10.01(b) of this Agreement, the
representations, warranties, covenants and agreements of each party hereto
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any other party hereto, any Person
controlling any such party or any of their officers, directors,
representatives or agents whether prior to or after the execution of this
Agreement.
(b) The representations and warranties in this Agreement shall
terminate at the Effective Time and the representations, warranties,
covenants and agreements of each of the parties hereto shall terminate upon
the termination of this Agreement pursuant to Section 9.01, except that the
covenants and agreements set forth in Sections 6.05, 9.02 and 9.05 and in
Article X hereof shall survive such termination of this Agreement.
SECTION 10.02 NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
if delivered personally, mailed by registered or certified mail (postage
prepaid, return receipt requested) to the parties at the following addresses or
sent by electronic transmission to the telecopier number specified below:
(a) If to any of the Parent Companies, to:
Halliburton Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
and General Counsel
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
First City Tower
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ III
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
AGREEMENT AND PLAN OF MERGER
-54-
(b) If to the Company, to:
Dresser Industries, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Vice President and General Counsel
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Block
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or telecopier number as any party may, from time to
time, designate in a written notice given in a like manner. Notice given by
telecopier shall be deemed delivered on the day the sender receives telecopier
confirmation that such notice was received at the telecopier number of the
addressee. Notice given by mail as set out above shall be deemed delivered
three days after the date the same is postmarked.
SECTION 10.03 HEADINGS. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.04 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so
as to effect the original intent of the parties as closely as possible in an
acceptable manner to the end that transactions contemplated hereby are
fulfilled to the extent possible.
SECTION 10.05 ENTIRE AGREEMENT. This Agreement (together with the
Annexes, the Company's Disclosure Letter and the Parent's Disclosure Letter
and the Stock Option Agreements) constitutes the entire agreement of the
parties, and supersedes all prior agreements and undertakings, both written
and oral, among the parties, with respect to the subject matter hereof
(including the Confidentiality Agreement).
SECTION 10.06 ASSIGNMENT. This Agreement shall not be assigned by
operation of Law or otherwise.
AGREEMENT AND PLAN OF MERGER
-55-
SECTION 10.07 PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in
this Agreement, express or implied, other than Section 7.09(f) (to the extent
of and only with respect to the individuals named in Section 4.13 of the
Company's Disclosure Letter in response to the representation and warranty
set forth in Section 4.13(k) as parties to the severance agreements therein
disclosed and their heirs and representatives) and Section 7.10 which is
intended also to benefit the Indemnified Persons therein referenced, and
their heirs and representatives, is intended to or shall confer upon any
other Person any right, benefit or remedy of any nature whatsoever under or
by reason of this Agreement. Notwithstanding the foregoing and any other
provision of this Agreement, and in addition to any other required action of
the Board of Directors of the Parent a majority of the directors (or their
successors) serving on the Board of Directors of the Parent who are
designated by the Company pursuant to Section 7.13 shall be entitled during
the three year period commencing at the Effective Time (the "Three Year
Period") to enforce the provisions of Sections 7.09 and 7.13 on behalf of the
Company's officers, directors and employees, as the case may be. Such
directors' rights and remedies under the preceding sentence are cumulative
and are in addition to any other rights and remedies that they may have at
law or in equity, but in no event shall this Section 10.07 be deemed to
impose any additional duties on any such directors. The Parent shall pay, at
the time they are incurred, all costs, fees and expenses of such directors
incurred in connection with the assertion of any rights on behalf of the
persons set forth above pursuant to this Section 10.07.
SECTION 10.08 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of any party hereto in the exercise of any
right hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty, covenant or
agreement herein, nor shall any single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights
and remedies existing under this Agreement are cumulative with, and not
exclusive of, any rights or remedies otherwise available.
SECTION 10.09 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the Laws of the State of Delaware, regardless
of the Laws that might otherwise govern under applicable principles of
conflicts of law; PROVIDED, HOWEVER, that any matter involving the internal
corporate affairs of any party hereto shall be governed by the provisions of
the GCL.
SECTION 10.10 SPECIFIC PERFORMANCE. The parties hereby acknowledge and
agree that the failure of any party to this Agreement to perform its
agreements and covenants hereunder, including its failure to take all actions
as are necessary on its part to the consummation of the Merger, will cause
irreparable injury to the other parties to this Agreement for which damages,
even if available, will not be an adequate remedy. Accordingly, each of the
parties hereto hereby consents to the granting of equitable relief (including
specific performance and injunctive relief) by any court of competent
jurisdiction to enforce any party's obligations hereunder. The parties
further agree to waive any requirement for the securing or posting of any
bond in connection with the obtaining of any such equitable relief and that
this Section is without prejudice to any other rights that the parties hereto
may have for any failure to perform this Agreement.
SECTION 10.11 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, and by the different parties hereto in separate counterparts,
each of which when
AGREEMENT AND PLAN OF MERGER
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executed shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
AGREEMENT AND PLAN OF MERGER
-57-
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed as of the date first written above by their respective
officers thereunto duly authorized.
HALLIBURTON COMPANY
By:
----------------------------
HALLIBURTON N.C., INC.
By:
----------------------------
DRESSER INDUSTRIES, INC.
By:
----------------------------
AGREEMENT AND PLAN OF MERGER
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ANNEX A
SCHEDULE OF DEFINED TERMS
The following terms when used in the Agreement shall have the meanings
set forth below unless the context shall otherwise require:
"Acquisition Proposal" shall mean any proposal or offer with respect to
a merger, consolidation, share exchange, business combination,
reorganization, recapitalization, liquidation, dissolution or similar
transaction involving, or any purchase or sale of all or any significant
portion of the assets or 30% or more of the Equity Securities of, the Company
or the Parent, as applicable, or any Significant Subsidiary of the Company or
the Parent, as applicable, that, in any case, could be reasonably expected to
interfere with the consummation of the Merger or the other transactions
contemplated by this Agreement.
"Affiliate" shall, with respect to any specified Person, mean any other
Person that controls, is controlled by or is under common control with the
specified Person.
"Agreement" shall mean the Agreement and Plan of Merger made and entered
into as of February 25, 1998 among the Parent, Newco and the Company,
including any amendments thereto and each Annex (including this Annex A) and
Schedule thereto (including the Parent's Disclosure Letter and the Company's
Disclosure Letter).
"Authorization" shall mean any and all permits, licenses,
authorizations, orders, certificates, registrations or other approvals
granted by any Governmental Authority.
"Benefit Plans" shall mean, with respect to a specified Person, any
employee pension benefit plan (whether or not insured), as defined in Section
3(2) of ERISA, any employee welfare benefit plan (whether or not insured) as
defined in Section 3(1) of ERISA, any plans that would be employee pension
benefit plans or employee welfare benefit plans if they were subject to
ERISA, such as foreign plans and plans for directors, any stock bonus, stock
ownership, stock option, stock purchase, stock appreciation rights, phantom
stock, severance, employment, change-in-control, deferred compensation and
any bonus or incentive compensation plan, agreement, program or policy
(whether qualified or nonqualified, written or oral) sponsored, maintained,
or contributed to by the specified Person or any of its Subsidiaries for the
benefit of any of the present or former directors, officers, employees,
agents, consultants or other similar representatives providing services to or
for the specified Person or any of its Subsidiaries in connection with such
services or any such plans which have been so sponsored, maintained or
contributed to within six years prior to the date of this Agreement;
PROVIDED, HOWEVER, that such term shall not include (a) routine employment
policies and procedures developed and applied in the ordinary course of
business and consistent with past practice, including wage, vacation, holiday
and sick or other leave policies, (b) workers compensation insurance and (c)
directors and officers liability insurance.
"Benefits Maintenance Period" shall have the meaning ascribed to such
term in Section 7.09(h).
"Business Day" means any day other than a day on which banks in the
State of Texas are authorized or obligated to be closed;
"Certificate of Merger" shall have the meaning ascribed to such term in
Section 2.02.
"Charter Amendment" shall mean an amendment to the Restated Certificate
of Incorporation of the Parent to increase the number of authorized shares of
Parent Common Stock to be issued in the Merger.
"Closing" shall mean a meeting, which shall be held in accordance with
Section 3.03, of representatives of the parties to the Agreement at which,
among other things, all documents deemed necessary by the parties to the
Agreement to evidence the fulfillment or waiver of all conditions precedent
to the consummation of the transactions contemplated by the Agreement are
executed and delivered.
"Closing Date" shall mean the date of the Closing as determined pursuant
to Section 3.03.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Combined Companies" shall mean the Parent, the Surviving Corporation
and their Subsidiaries after giving effect to the Merger.
"Commission" shall mean the Securities and Exchange Commission.
"Common Stock Exchange Ratio" shall mean the ratio of conversion of
Company Common Stock into Parent Common Stock pursuant to the Merger as
provided in Section 3.01(a).
"Company Acquisition" shall have the meaning ascribed to such term in
Section 9.05(d).
"Company Annual Report" shall mean the Annual Report on Form 10-K of the
Company for the year ended October 31, 1997 filed with the Commission.
"Company Benefit Plans" shall mean Benefit Plans with respect to the
Company and its Subsidiaries.
"Company Common Stock" shall mean the common stock, par value $0.25 per
share, of the Company.
"Company Joint Venture Partners" shall mean the partners or participants
in the Company Joint Ventures other than the Company.
"Company Joint Ventures" shall mean Dresser-Rand Company, a partnership,
and Ingersoll-Dresser Pump Company, a partnership.
"Company Participants" shall have the meaning ascribed to such term in
Section 7.09(h).
AGREEMENT AND PLAN OF MERGER
ANNEX A-2
"Company Stock Option Agreement" shall mean that certain Stock Option
Agreement of even date herewith between the Company (as grantor) and the
Parent (as grantee).
"Company Stock Options" shall mean stock options granted pursuant to the
Company Stock Plans.
"Company Stock Plans" shall mean the plans described in Section 4.03(b)
of the Company's Disclosure Letter.
"Company Stockholders' Meeting" shall have the meaning ascribed to such
term in Section 7.01(a).
"Company's Audited Consolidated Financial Statements" shall mean the
consolidated balance sheets of the Company and its Subsidiaries as of October
31, 1996 and 1997 and the related consolidated and combined statements of
operations and cash flows for the fiscal years ended October 31, 1995, 1996
and 1997, together with the notes thereto, all as audited by Price Waterhouse
LLP, independent accountants, under their report with respect thereto dated
November 26, 1997 and included in the Company Annual Report.
"Company's Consolidated Balance Sheet" shall mean the consolidated
balance sheet of the Company as of October 31, 1997 included in the
Company's Audited Consolidated Financial Statements.
"Company's Disclosure Letter" shall mean a letter of even date herewith
delivered by the Company to the Parent Companies concurrently with the
execution of the Agreement, which, among other things, shall identify
exceptions to the Company's representations and warranties contained in
Article IV by specific section and subsection references.
"Company's Representatives" shall have the meaning ascribed to such term
in Section 6.05.
"Company's Rights Agreement" shall mean that certain Rights Agreement
dated as of August 16, 1990 between the Company and Bank of New York as
successor to ▇▇▇▇▇▇ Trust Company of New York, as rights agent.
"Competing Transaction" shall mean any merger, consolidation, share
exchange, business combination or similar transaction involving the specified
Person or any of its Subsidiaries or the acquisition in any manner, directly
or indirectly, of a Material equity interest in any voting securities of, or
a substantial portion of the assets of, the specified Person or any of its
Significant Subsidiaries, other than the transactions contemplated by this
Agreement.
"Confidentiality Agreement" shall mean that certain confidentiality
agreement between the Parent and the Company dated February 2, 1998.
"Constituent Corporations" shall mean the Company and Newco.
AGREEMENT AND PLAN OF MERGER
ANNEX A-3
"control" (including the terms "controlled," "controlled by" and "under
common control with") means (except where another definition is expressly
indicated) the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the management or policies
of a Person, whether through the ownership of stock or as trustee or
executor, by contract or credit arrangement or otherwise.
"Court" shall mean any court or arbitration tribunal of the United
States, any foreign country or any domestic or foreign state, and any
political subdivision thereof, and shall include the European Court of
Justice.
"Current Company Benefit Plans" shall mean Benefit Plans that are
sponsored, maintained or contributed to by the Company or any of its
Subsidiaries as of the date of this Agreement.
"Current Parent Benefit Plans" shall mean Benefit Plans that are
sponsored, maintained or contributed to by the Parent or any of its
Subsidiaries as of the date of this Agreement.
"Effective Time" shall mean the date and time of the completion of the
filing of the Certificate of Merger with the Secretary of State of the State
of Delaware in accordance with Section 2.02.
"Environmental Law or Laws" shall mean any and all laws, statutes,
ordinances, rules, regulations, or orders of any Governmental Authority
pertaining to health or the environment currently in effect and applicable to
a specified Person and its Subsidiaries, including the Clean Air Act, as
amended, the Comprehensive Environmental, Response, Compensation, and
Liability Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976 ("RCRA"), as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances
Control Act, as amended, the Hazardous & Solid Waste Amendments Act of 1984,
as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, the Oil
Pollution Act of 1990, as amended ("OPA"), any state or local Laws
implementing the foregoing federal Laws, and all other environmental
conservation or protection Laws. For purposes of the Agreement, the terms
"hazardous substance" and "release" have the meanings specified in CERCLA;
PROVIDED, HOWEVER, that, to the extent the Laws of the state or locality in
which the property is located establish a meaning for "hazardous substance"
or "release" that is broader than that specified in either CERCLA, such
broader meaning shall apply, and the term "hazardous substance" shall include
all dehydration and treating wastes, waste (or spilled) oil, and waste (or
spilled) petroleum products, and (to the extent in excess of background
levels) radioactive material, even if such are specifically exempt from
classification as hazardous substances pursuant to CERCLA or RCRA or the
analogous statutes of any jurisdiction applicable to the specified Person or
its Subsidiaries or any of their respective properties or assets.
"Equity Securities" shall mean, with respect to a specified Person, any
shares of capital stock of, or other equity interests in, or any securities
that are convertible into or exchangeable for any shares of capital stock of,
or other equity interests in, or any options, warrants or rights of any kind
to acquire any shares of capital stock of, or other equity interests in, such
Person.
AGREEMENT AND PLAN OF MERGER
ANNEX A-4
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and the Regulations promulgated thereunder.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the Regulations promulgated thereunder.
"Exchange Agent" shall mean ChaseMellon Shareholder Services, L.L.C.
"Exchange Fund" shall mean the fund of Parent Common Stock, cash in lieu
of fractional share interests and dividends and distributions, if any, with
respect to such shares of Parent Common Stock established at the Exchange
Agent pursuant to Section 3.02(a).
"executive officer" shall mean each "officer," as such term is defined
in Rule 16a-1(f) of the Commission, of the specified Person.
"Expenses" shall mean all reasonable out-of-pocket expenses (including
all reasonable fees and expenses of counsel, accountants, investment bankers,
experts and consultants to a party hereto and its Affiliates) incurred by a
party or on its behalf in connection with or related to the authorization,
preparation, negotiation, execution and performance of this Agreement, the
preparation, printing, filing and mailing of the Registration Statement, the
Joint Proxy Statement/Prospectus and the Joint Proxy Statement, the
solicitation of stockholder approvals and all other matters related to the
consummation of the transactions contemplated hereby.
"GAAP" shall mean accounting principles generally accepted in the United
States as in effect from time to time consistently applied by a specified
Person.
"GCL" shall mean the General Corporation Law of the State of Delaware.
"Governmental Authority" shall mean any governmental agency or authority
(other than a Court) of the United States, any foreign country, or any
domestic or foreign state, and any political subdivision thereof, and shall
include any multinational authority having governmental or quasi-governmental
powers.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"IRS" shall mean the Internal Revenue Service.
"Joint Proxy Statement/Prospectus" shall have the meaning ascribed to
such term in Section 7.02(a).
"Joint Proxy Statement" shall have the meaning ascribed to such term in
Section 7.02(a).
AGREEMENT AND PLAN OF MERGER
ANNEX A-5
"Knowledge" shall mean, with respect to either the Company or the
Parent, the actual knowledge of the chief executive officer, the chief
operating officer, the chief financial officer or the general counsel of such
party.
"Law" shall mean all laws, statutes and ordinances of the United States,
any state of the United States, any foreign country, any foreign state and
any political subdivision thereof, including all decisions of Courts having
the effect of law in each such jurisdiction.
"Lien" shall mean any mortgage, pledge, security interest, adverse
claim, encumbrance, lien or charge of any kind (including any agreement to
give any of the foregoing), any conditional sale or other title retention
agreement, any lease in the nature thereof or the filing of or agreement to
give any financing statement under the Laws of any jurisdiction.
"Material" shall mean material to the (a) consolidated business,
condition (financial and other), results of operations, properties or
prospects of a specified Person and its Subsidiaries, if any, taken as a
whole or (b) to the specified Person's ability to perform its obligations
under this Agreement or fulfill the conditions to Closing; PROVIDED, HOWEVER,
that, as used in this definition the word "material" shall have the meaning
accorded thereto pursuant to Section 11 of the Securities Act.
"Material Adverse Effect" shall mean any change or effect that would be
material and adverse (a) to the consolidated business, condition (financial
or otherwise), results of operations, properties or prospects of a specified
Person and its Subsidiaries, if any, taken as a whole, except for such
changes or effects resulting from changes in general economic, regulatory or
political conditions or changes that affect generally the energy services and
related construction and engineering industry or (b) to the specified
Person's ability to perform its obligations under this Agreement or fulfill
the conditions to Closing; PROVIDED, HOWEVER, that, as used in this
definition the word "material" shall have the meaning accorded thereto
pursuant to Section 11 of the Securities Act.
"Merger" shall mean the merger of Newco with an into the Company as
provided in Article II of this Agreement.
"Newco" shall mean Halliburton N.C., Inc., a Delaware corporation and a
wholly owned Subsidiary of the Parent.
"Noncompete Agreement" shall mean any agreement or arrangement that
materially restricts or limits the specified Person's ability to engage or
participate in any line of business that is Material to such specified Person.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Order" shall mean any judgment, order or decree of any Court or
Governmental Authority, federal, foreign, state or local, of competent
jurisdiction.
AGREEMENT AND PLAN OF MERGER
ANNEX A-6
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Parent Acquisition" shall have the meaning ascribed to such term in
Section 9.05(e).
"Parent Annual Report" shall mean the Annual Report on Form 10-K of the
Parent for the year ended December 31, 1997 filed with the Commission.
"Parent Benefit Plans" shall mean Benefit Plans with respect to the
Parent and its Subsidiaries.
"Parent Common Stock" shall mean the common stock, par value $2.50 per
share, of the Parent.
"Parent Stock Option Agreement" shall mean that certain Stock Option
Agreement of even date herewith between the Parent (as grantor) and the
Company (as grantee).
"Parent Restricted Stock" shall mean the Parent Common Stock issued in
restricted stock awards pursuant to the Parent Stock Plans.
"Parent Stock Options" shall mean stock options granted pursuant to the
Parent Stock Plans.
"Parent Stock Plans" shall mean the plans described in Section 5.03(b)
of the Parent's Disclosure Letter.
"Parent Stockholders' Meeting" shall have the meaning ascribed to such
term in Section 7.01(b).
"Parent's Audited Consolidated Financial Statements" shall mean the
consolidated balance sheets of the Parent and its Subsidiaries as of December
31, 1997 and December 31, 1996 and the related consolidated statements of
operations and cash flows for the fiscal years ended December 31, 1995, 1996
and 1997, together with the notes thereto, all as audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
LLP, independent accountants, under their report with respect thereto dated
January 22, 1998 and included in the Parent Annual Report.
"Parent's Consolidated Balance Sheet" shall mean the consolidated
balance sheet of the Parent as of December 31, 1997 included in the Parent's
Audited Consolidated Financial Statements.
"Parent's Disclosure Letter" shall mean a letter of even date herewith
delivered by the Parent to the Company with the execution of the Agreement,
which, among other things, shall identify exceptions to the Parent's
representations and warranties contained in Article V by specific section and
subsection references.
"Parent's Representatives" shall have the meaning ascribed to such term
in Section 6.05.
AGREEMENT AND PLAN OF MERGER
ANNEX A-7
"Parent's Rights Agreement" shall mean the Restated Rights Agreement
dated December 1, 1996 between the Parent and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent.
"Person" shall mean (i) an individual, partnership, limited liability
company, corporation, joint stock company, trust, estate, joint venture,
association or unincorporated organization, or any other form of business or
professional entity, but shall not include a Court or Governmental Authority,
or (2) any "person" for purposes of Section 13(d)(3) of the Exchange Act.
"Pooling Transaction" shall mean a business combination that is treated
for financial accounting purposes as a "pooling of interests" in accordance
with GAAP and the Regulations of the Commission.
"Predecessor Plan" shall have the meaning ascribed to such term in
Section 7.09(i).
"Registration Statement" shall have the meaning ascribed to such term in
Section 7.02(a).
"Regulation" shall mean any rule or regulation of any Governmental
Authority having the effect of Law or of any rule or regulation of any
self-regulatory organization, such as the NYSE.
"Reports" shall mean, with respect to a specified Person, all reports,
registrations, filings and other documents and instruments required to be
filed by the specified Person or any of its Subsidiaries with any
Governmental Authority (other than the Commission).
"Representatives" shall mean, collectively, the Company's
Representatives and the Parent's Representatives.
"Required Parent Vote" shall have the meaning ascribed to such term in
Section 7.01(b).
"Required Company Vote" shall have the meaning ascribed to such term in
Section 7.01(a).
"SEC Reports" shall mean (1) all Annual Reports on Form 10-K, (2) all
Quarterly Reports on Form 10-Q, (3) all proxy statements relating to meetings
of stockholders (whether annual or special), (4) all Current Reports on Form
8-K and (5) all other reports, schedules, registration statements or other
documents required to be filed during a specified period by a specified
Person with the Commission pursuant to the Securities Act or the Exchange Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Share Issuance" shall mean the issuance of shares of the Parent Common
Stock to be issued in the Merger.
"Significant Subsidiary" means any Subsidiary of the Company or the
Parent, as the case may be, that constitutes a significant subsidiary of such
party as such term is defined in Rule 1-02 of Regulation S-X of the
Commission.
AGREEMENT AND PLAN OF MERGER
ANNEX A-8
"Stock Option Agreements" shall mean the Company Stock Option Agreement
and the Parent Stock Option Agreement.
A "Subsidiary" of a specified Person shall be any corporation,
partnership, limited liability company, joint venture or other legal entity
of which the specified Person (either alone or through or together with any
other Subsidiary) owns, directly or indirectly, 50% or more of the stock or
other equity or partnership interests the holders of which are generally
entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity or of which the
specified Person controls the management.
"Successor Plan" shall have the meaning ascribed to such term in Section
7.09(i).
"Superior Proposal" means a bona fide Acquisition Proposal that the
Board of Directors of the specified Person determines in its good faith
judgment (after consultation with its financial advisers and legal counsel)
(i) would result in a transaction that is more favorable to the specified
Person's stockholders, from a financial point of view, than the transactions
contemplated by this Agreement and (ii) is reasonably capable of being
completed; PROVIDED, HOWEVER, that, for the purposes of this definition, the
term "Acquisition Proposal" shall have the meaning ascribed to it herein
except that the reference therein to 30% shall be deemed to be a reference to
50% and the proposal or offer therein described shall be deemed only to refer
to a transaction involving the Company or the assets of the Company
(including the shares of the Subsidiaries of the Company), taken as a whole,
rather than any transaction relating to any of the Subsidiaries of the
Company alone.
"Surviving Corporation" shall mean the Company as the corporation
surviving the Merger.
"Tax Returns" shall have the meaning ascribed to such term in Section
4.14(a) of the Agreement.
"Taxes" shall mean all taxes, charges, imposts, tariffs, fees, levies or
other similar assessments or liabilities, including income taxes, ad valorem
taxes, excise taxes, withholding taxes, stamp taxes or other taxes of or with
respect to gross receipts, premiums, real property, personal property,
windfall profits, sales, use, transfers, licensing, employment, payroll and
franchises imposed by or under any Law; and such terms shall include any
interest, fines, penalties, assessments or additions to tax resulting from,
attributable to or incurred in connection with any such tax or any contest or
dispute thereof.
"Terminated Company Benefit Plans" shall mean Benefit Plans that were
sponsored, maintained or contributed to by the Company or any of its
Subsidiaries within six years prior to the date of this Agreement but which
have been terminated prior to the date of this Agreement.
"Terminated Parent Benefit Plans" shall mean Benefit Plans that were
sponsored, maintained, or contributed to by the Parent or any of its
Subsidiaries within six years prior to the date of this Agreement but which
have been terminated prior to the date of this Agreement.
AGREEMENT AND PLAN OF MERGER
ANNEX A-9
"Terminating Company Breach" shall have the meaning ascribed to such
term in Section 9.01(b).
"Terminating Parent Breach" shall have the meaning ascribed to such term
in Section 9.10(c).
"Transfer Taxes" shall have the meaning ascribed to such term in Section
7.17.
AGREEMENT AND PLAN OF MERGER
ANNEX A-10
ANNEX B
Dresser Industries, Inc. Affiliates
AFFILIATE'S AGREEMENT
[Date]
Halliburton Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
The undersigned has been advised that, as of the date hereof, the
undersigned may be deemed to be an "affiliate" of Dresser Industries, Inc., a
Delaware corporation (the "Company"), as that term is defined for purposes of
paragraphs (c) and (d) of Rule 145 of the Regulations of the Commission under
the Securities Act.
Pursuant to the terms and subject to the conditions of that certain
Agreement and Plan of Merger by and among Halliburton Company, a Delaware
corporation (the "Parent"), Halliburton N.C., Inc., a newly formed Delaware
corporation and a wholly owned Subsidiary of the Parent ("Newco"), and the
Company dated as of February 25, 1998 (the "Merger Agreement"), providing
for, among other things, the merger of Newco with and into the Company (the
"Merger"), the undersigned will be entitled to receive shares of Parent
Common Stock in exchange for shares of Company Common Stock owned by the
undersigned at the Effective Time of the Merger as determined pursuant to the
Merger Agreement. Capitalized terms used but not defined herein are defined
in Annex A to the Merger Agreement and are used herein with the same meanings
as ascribed to them therein.
The undersigned understands that the Merger will be treated for
financial accounting purposes as a "pooling of interests" in accordance with
generally accepted accounting principles and that the staff of the Commission
has issued certain guidelines that should be followed to ensure the
application of pooling of interests accounting to the transaction.
In consideration of the agreements contained herein, the Parent's
reliance on this letter in connection with the consummation of the Merger and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned hereby represents, warrants
and agrees that the undersigned will not, without the consent of the Parent,
make any sale, gift, transfer or other disposition (including deposit into a
margin account with a brokerage firm) of
AGREEMENT AND PLAN OF MERGER
ANNEX B-1
(i) Company Common Stock during the period (the "Restricted Period") from the
Commencement Date (as defined below) until the earlier of the Effective Time
and the termination of the Merger Agreement (which period, if the Merger is
consummated, will be greater than thirty (30) days), (ii) Parent Common Stock
received by the undersigned pursuant to the Merger or otherwise owned by the
undersigned at any time during the Restricted Period or thereafter until such
time as financial statements that include at least thirty (30) days of
combined operations of the Company and the Parent after the Merger shall have
been publicly reported, unless the undersigned shall have delivered to the
Parent, prior to any such sale, gift, transfer or other disposition, a
written opinion from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent public accountants for
the Parent, or a written no-action letter from the accounting staff of the
Commission, in either case in form and substance reasonably satisfactory to
the Parent, to the effect that such sale, transfer or other disposition will
not cause the Merger not to be treated as a "pooling of interests" for
financial accounting purposes in accordance with generally accepted
accounting principles and the Regulations of the Commission or (iii) the
Parent Common Stock received by the undersigned pursuant to the Merger in
violation of the Securities Act or the Regulations thereunder. For purposes
of this agreement, "Commencement Date" shall mean the date of receipt by the
undersigned of prior written notice from the Parent advising the undersigned
of the commencement of the Restricted Period on a day that is at least 45
days prior to the Closing Date as estimated in good faith by the Parent. The
undersigned has been advised that the offering, sale and delivery of the
shares of Parent Common Stock pursuant to the Merger will have been
registered with the Commission under the Securities Act on a Registration
Statement on Form S-4. The undersigned has also been advised, however, that,
since the undersigned may be deemed to be an Affiliate of the Company at the
time the Merger is submitted for a vote of the stockholders of the Company,
the Parent Common Stock received by the undersigned pursuant to the Merger
can be sold by the undersigned only (i) pursuant to an effective registration
statement under the Securities Act, (ii) in conformity with the volume and
other limitations of Rule 145 promulgated by the Commission under the
Securities Act or (iii) in reliance upon an exemption from registration that
is available under the Securities Act.
The undersigned also understands that instructions will be given to the
transfer agent for the Parent Common Stock with respect to the Parent Common
Stock to be received by the undersigned pursuant to the Merger and that there
will be placed on the certificates representing such shares of Parent Common
Stock, or any substitutions therefor, a legend stating in substance as
follows:
"These shares were issued in a transaction to which Rule 145
promulgated under the Securities Act of 1933, as amended, applies.
These shares may only be transferred in accordance with the terms of
such Rule and an Affiliate's Agreement between the original holder of
such shares and Halliburton Company, a copy of which agreement is on
file at the principal offices of Halliburton Company."
It is understood and agreed that the legend set forth above shall be removed
upon surrender of certificates bearing such legend by delivery of substitute
certificates without such legend if the undersigned shall have delivered to
the Parent an opinion of counsel, in form and substance reasonably
satisfactory to the Parent, to the effect that (i) the sale or disposition of
the shares represented by the surrendered certificates may be effected
without registration of the offering, sale and delivery of such shares under
the Securities Act and (ii) the shares to be so transferred may be
AGREEMENT AND PLAN OF MERGER
ANNEX B-2
publicly offered, sold and delivered by the transferee thereof without
compliance with the registration provisions of the Securities Act.
By its execution hereof, the Parent agrees that it will, as long as the
undersigned owns any shares of Parent Common Stock to be received by the
undersigned pursuant to the Merger that are subject to the restrictions on
sale, transfer or other disposition herein set forth, take all reasonable
efforts to make timely filings with the Commission of all reports required to
be filed by it pursuant to the Exchange Act and will promptly furnish upon
written request of the undersigned a written statement confirming that such
reports have been so timely filed.
If you are in agreement with the foregoing, please so indicate by
signing below and returning a copy of this letter to the undersigned, at
which time this letter shall become a binding agreement between us.
Very truly yours,
By:
-------------------------------
Name:
Title:
Date:
Address:
ACCEPTED this ___ day
of __________, 199__
HALLIBURTON COMPANY
By:
-------------------------------
Name:
Title:
AGREEMENT AND PLAN OF MERGER
ANNEX B-3
ANNEX C
Halliburton Company Affiliates
AFFILIATE'S AGREEMENT
[Date]
Halliburton Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
The undersigned has been advised that, as of the date hereof, the
undersigned may be deemed to be an "affiliate" of Halliburton Company, a
Delaware corporation (the "Parent"), as that term is defined in the
Regulations of the Commission under the Securities Act.
The undertakings contained in this Affiliate's Agreement are being given
by the undersigned in connection with that certain Agreement and Plan of
Merger by and among the Parent, Halliburton N.C., Inc., a newly formed
Delaware corporation and a wholly owned Subsidiary of the Parent ("Newco"),
and Dresser Industries, Inc., a Delaware Corporation (the "Company") dated as
of February 25, 1998 (the "Merger Agreement"), providing for, among other
things, the merger of Newco with and into the Company (the "Merger").
Capitalized terms used but not defined herein are defined in Annex A to the
Merger Agreement and are used herein with the same meanings as ascribed to
them therein.
The undersigned understands that the Merger will be treated for
financial accounting purposes as a "pooling of interests" in accordance with
generally accepted accounting principles and that the staff of the Commission
has issued certain guidelines that should be followed to ensure the
application of pooling of interests accounting to the transaction.
In consideration of the agreements contained herein, the Parent's
reliance on this letter in connection with the consummation of the Merger and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned hereby represents, warrants
and agrees that the undersigned will not, without the consent of the Parent,
make any sale, gift, transfer or other disposition (including deposit into a
margin account with a brokerage firm) of (i) Company Common Stock during the
period (the "Restricted Period") from the Commencement Date (as defined
below) until the earlier of the Effective Time and the termination of the
Merger Agreement (which period, if the Merger is consummated, will be greater
than thirty (30) days) or (ii) Parent Common Stock owned by the undersigned
at any time during the Restricted Period or
AGREEMENT AND PLAN OF MERGER
ANNEX C-1
thereafter until such time as financial statements that include at least
thirty (30) days of combined operations of the Company and the Parent after
the Merger shall have been publicly reported, unless the undersigned shall
have delivered to the Parent, prior to any such sale, gift, transfer or other
disposition, a written opinion from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent public
accountants for the Parent, or a written no-action letter from the accounting
staff of the Commission, in either case in form and substance reasonably
satisfactory to the Parent, to the effect that such sale, transfer or other
disposition will not cause the Merger not to be treated as a "pooling of
interests" for financial accounting purposes in accordance with generally
accepted accounting principles and the Regulations of the Commission. For
purposes of this agreement, "Commencement Date" shall mean the date of
receipt by the undersigned of prior written notice from the Parent advising
the undersigned of the commencement of the Restricted Period on a day that is
at least 45 days prior to the Closing Date as estimated in good faith by the
Parent.
If you are in agreement with the foregoing, please so indicate by
signing below and returning a copy of this letter to the undersigned, at
which time this letter shall become a binding agreement between us.
Very truly yours,
By:
-----------------------------
Name:
Title:
Date:
Address:
ACCEPTED this ___ day
of __________, 199__
HALLIBURTON COMPANY
By:
-----------------------------
Name:
Title:
AGREEMENT AND PLAN OF MERGER
ANNEX C-2